Andrew Hill v. Jevco Insurance Company, 2014 ONFSCDRS 158

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2014 ONFSCDRS 158

Appeal P13-00017

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ANDREW HILL

Appellant

and

JEVCO INSURANCE COMPANY

Respondent

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Ms. Sara Jones for the Appellant, Mr. Andrew Hill

Mr. Darrell March for the Respondent, Jevco Insurance Company

HEARING DATE:

February 20, 2014

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Paragraph 2 of the Arbitrator’s April 30, 2013 decision is rescinded. The issue of entitlement to and, depending on that determination, the quantum of a special award, is returned to arbitration for redetermination.

2. The balance of the Arbitrator’s decision is confirmed.

3. If the parties cannot agree on the legal expenses of this appeal, an expense hearing shall be requested, as set out below, within sixty days of this decision.

October 1, 2014

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. SUMMARY

The Appellant, Mr. Andrew Hill, was injured in a motor vehicle accident on July 19, 2007. As a result, he sought statutory accident benefits under the Schedule¹ from his first-party automobile insurer, the Respondent, Jevco Insurance Company.

An arbitration hearing was held before Arbitrator Sampliner (the “Arbitrator”) as to the Appellant’s entitlement to post-104 week income replacement benefits (“IRBs”) ongoing from March 8, 2010, and to a special award. The Arbitrator’s April 30, 2013 decision awarded the Appellant weekly IRBs restricted to the period March 8, 2010 to September 21, 2012. The Arbitrator declined to order a special award.

The Appellant submits that the Arbitrator erred in not awarding him ongoing IRBs or a special award. In extensive written and oral submissions, the Appellant provided a detailed review of the six days of oral testimony and bankers’ boxes of exhibits. The essence of this appeal is:

1. Notwithstanding that decisions of the Ontario Court of Appeal are binding on a FSCO appellate officer, I should overturn Stranges v. Allstate Insurance Company of Canada, 2010 ONCA 457, regarding benefit entitlement based on an insurer’s procedural error.

2. In the alternative, I should find the Appellant entitled to the ongoing IRBs and special award claimed based on the Appellant’s guided paper review of the evidence. This is notwithstanding that I (unlike the Arbitrator) have never observed the Appellant (other than on surveillance video that the Appellant asks be discounted) or any other witness, and notwithstanding that subsection 283(1) of the Insurance Act, R.S.O. 1990, c. I.8, limits appeals to errors of law.

I am not persuaded of my authority to provide these requests for relief.

Turning to the question of a special award, a key argument advanced by the Appellant was that the Respondent’s continued refusal to pay IRBs was unreasonable in light of, in part, his subsequent examination under oath, the provision of updated clinical notes and records, opinions from a range of treating and expert medical practitioners that the Appellant remained disabled and the Respondent’s own independent adjuster’s advice that IRBs be resumed.

As stated, the Insurance Act restricts appeals from the order of an arbitrator to questions of law. Perell J. stated in Murphy v. Murphy, 2013 ONSC 7015, that “It is an error in law for a judge or tribunal member to fail to provide an explanation of his or her decision that is sufficiently intelligible to permit appellate review,” citing in part, R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869.

The Arbitrator addressed the reasonableness of the Respondent’s decision to terminate IRBs. He failed to explain intelligibly why that termination remained reasonable in light of the argued receipt by the Respondent of further documentation and information. Paragraph 2 of the Arbitrator’s April 30, 2013 decision, denying the Appellant a special award, is rescinded. The issue of entitlement to and, depending on that determination, the quantum of a special award is returned to arbitration for redetermination. The Arbitrator’s decision is otherwise confirmed.

I now address the Appellant’s arguments, in turn, in greater detail.

II. ONGOING IRB ENTITLEMENT BASED ON THE RESPONDENT’S NON-COMPLIANCE WITH CLAUSE 37(2)(a)

The Appellant’s non-compliance argument is based on clause 37(2)(a) of the Schedule. That provision provides:

(2) An insurer shall not discontinue paying a specified benefit to an insured person unless,

(a) the insured person fails or refuses to submit a completed disability certificate as required under clause (1)(a) …

Subsection 37(1), referenced in clause 37(2)(a), states:

37. (1) If an insurer wishes to determine if an insured person is still entitled to a specified benefit, the insurer,

(a) shall request that the insured person submit within 15 business days a new disability certificate completed as of a date on or after the date of the request; and

(b) may notify the insured person that the insurer requires the insured person to be examined under section 42.

The Appellant argues that the Respondent’s March 8, 2010 IRB termination did not comply with clause 37(2)(a) as the Respondent did not request a disability certificate of the Appellant.

The Appellant submits that to remedy its error the Respondent was obliged, first, to bring IRB payments up-to-date, regardless of whether he met the post-104 week IRB entitlement requirements under paragraph 5(2)(b) of the Schedule. Otherwise, the Appellant would unfairly be required to reprove his IRB entitlement that had already been established procedurally. The Respondent, it is argued, was then required to request a disability certificate. Only upon consideration of the certificate and the evidence as a whole could the Respondent move to terminate IRBs either after an insurer’s medical examination (“IME”) or on some other proper basis.

The Appellant argues that the Respondent’s request for a disability certificate and its receipt of same dated May 17, 2010 from his family doctor, Dr. K. Gray, two months post-termination, neither remedied the Respondent’s prior error nor disentitled him, based on the Respondent’s procedural error, from ongoing IRB entitlement four years later. The Appellant submits that the Arbitrator erred in failing to address section 37’s binding requirements and whether there had been a proper termination of the Appellant’s IRBs.

The Respondent submits that little argument or case law concerning clause 37(2)(a) was presented at arbitration. This is certainly consistent with clause 37(2)(a) not being cited, either in the Appellant’s 24 pages of the transcript in his opening statement or 48 pages of final submissions (other than obliquely at page 162), as entitling the Appellant to ongoing IRBs regardless of whether he met the paragraph 5(2)(b) disability based entitlement test.

Specifically, the Appellant did not mention Stranges v. Allstate Insurance in his submissions. This is the leading case on whether an insured person is entitled to a benefit simply based on an insurer not complying with a compulsory obligation. In Stranges, the statutory provision in question was subsection 64(13) of the Statutory Accident Benefits Schedule — Accidents After December 31, 1993 and Before November 1, 1996, O. Reg. 776/93. Subsection 64(13) stated:

. . . , and, if it is finally determined that the benefits should not have been stopped, the insurer shall,

(a) resume payment of the benefits; and (b) pay the benefits that were not paid.

The trial judge, citing this provision, held that as the insurer had improperly terminated weekly benefits, the plaintiff was entitled to payment of ongoing weekly benefits. The Court of Appeal disagreed. It stated:

The inadequacy of the refusal notice did not entitle the respondent to payment of benefits in perpetuity until proper notice was given or a proper DAC assessment was carried out. The respondent was still required to prove that she was entitled to the continued payment of IRBs because of her continued substantial inability to perform the essential tasks of her employment.

In State Farm Mutual Automobile Insurance Company and Yogesvaran, (FSCO P09-00042, October 28, 2010), also on an issue of procedurally based entitlement, I held:

… following the Court of Appeal in Stranges, I find that the Respondent is still required to prove her entitlement to the benefits in dispute according to the legislated criteria of eligibility and respectfully, that the Arbitrator, without the benefit of that decision, erred in this regard.

Succinctly, the Appellant submits that the Court of Appeal got it wrong in Stranges.

The Appellant cites the headnote in R. v. McInnis, 1973 CarswellOnt 37 (Ont. C.A.), that the “Court of Appeal is not bound to follow its own decisions where the prior decision was given without consideration of an applicable authority or statutory provision.” The Appellant submits that in Stranges the Court of Appeal failed to consider its prior decision in Black v. Dominion of Canada General Insurance Co., 2007 CarswellOnt 6710. The Appellant cites Fraser v. Ontario (Attorney General), 2011 CarswellOnt 2695 (SCC):

If a precedent has overruled prior cases, two sets of precedents exist, an original precedent and a new precedent, although one has been overruled. In such cases it will be more important to carefully scrutinize the new precedent to determine if it has strayed from sound prior decisions and whether it would be preferable to return to the original, and more sound, decisions.

In Black, the lower court held that the “appropriate remedy for an insurer’s non-compliance with Section 64 of the Schedule [termination of benefits] is an award of interim benefits,” citing Arbitrator Rotter in Sweete and Jevco Insurance Company, (OIC A96-000614, October 24, 1996). In Yogesvaran, citing Sweete, based on an insurer’s procedural irregularity, I varied a final benefits order to an interim award, the interim award being subject to a determination of the insured person’s disability entitlement.

The Court of Appeal in Black held that the motion judge had made no error in his analysis or in his conclusion. As the only issue raised was the insurer’s compliance with subsection 64(14) of the Schedule, it did not lie with the appellant to raise the issue about the status of the respondent’s disability for the first time on appeal.

The Appellant argues that the Court of Appeal decision in Black is consistent with the Supreme Court’s concern for consumer protection legislation enunciated in Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R 129; Richard v. Time Inc., 2012 CarswellQue 1218 (SCC), (addressing the Consumer Protection Act, R.S.Q., c. P-40.1); and Association des courtiers et agents immobiliers du Québec v. Proprio Direct inc., 2008 SCC 32, (regarding the Real Estate Brokerage Act, R.S.Q., c. C‑73.1).

The Appellant argues that Black is also consistent with Bapoo v. Co-Operators General Insurance Company, 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616 (Ont. C.A), pertaining to statutory interpretation.

However, in Black, only payment of interim benefits was ordered. The Appellant was unable to show me where in that decision “interim” meant final ongoing entitlement until the insurer corrected its termination procedure, or that correcting the procedure meant restarting the entire termination process.

I find, contrary to the Appellant’s submissions, that Black is consistent with Stranges. Stranges is especially applicable in the present case where four years of ongoing benefits are claimed notwithstanding a disability certificate having been requested and having been received by the Respondent years ago. The Appellant seeks a final, not an interim, IRB payment order covering the four years to date, and ongoing, based on the Respondent’s procedural non-compliance with subsection 37(1). Such a result is contrary to Black. It is contrary to the binding authority of Stranges.

There is another, perhaps more fundamental problem with the Appellant’s argument. The argued requisite continued payment of IRBs is based on the mandatory wording in clause 37(2)(a) that an insurer “shall not discontinue” paying a benefit unless the insured failed or refused to submit a completed disability certificate. As the Respondent did not request a certificate before terminating IRBs, it is argued that it could not rely on clause 37(2)(a) for termination.

However, subsection 37(2), using the disjunctive “or” rather than the conjunctive “and,” lists six alternative grounds upon which an insurer may discontinue benefits. Termination under subsection 37(2) is not limited to the one ground argued by the Appellant, nor must every alternative ground be met.

The Respondent’s March 3, 2008 Explanation of Benefits (OCF-9) did not rely on clause 37(2)(a) for IRB termination, the insured person’s failure to submit a completed disability certificate. Rather, it cited the Appellant’s failure to attend a March 1, 2010 IME. The Respondent’s March 8, 2010 denial letter relied on the IME as well as the Appellant having resumed employment.

Clause 37(2)(d) allows an insurer to terminate benefits if the insured person has resumed his or her “pre-accident employment duties.” Clause 37(2)(c) authorizes an insurer to discontinue benefits if the insured fails or refuses to comply with a subsection 42(10) IME. Simply put, the Appellant was arguing the wrong clause.

For both the aforementioned reasons, this ground of appeal is rejected.

II. ONGOING IRB ENTITLEMENT BASED ON CLAUSE 5(2)(b)

As noted, the Appellant was injured on July 19, 2007. As found by the Arbitrator, a car suddenly turned in front of the Appellant’s motorcycle. As the Appellant struck the vehicle ahead, a van following him crashed into his motorcycle from behind. The Appellant underwent surgery regarding his L1 compression fracture, metal rods being affixed along each side of the spine.

Two of the original screws having broken, the Appellant underwent a second surgery in September 2008 replacing all of the original screws, adding two more and installing new fixation rods. The Arbitrator awarded the Appellant an additional two and a half years of IRBs from March 8, 2010 to September 21, 2012. The Appellant appeals the Arbitrator’s decision not to award IRBs ongoing after September 21, 2012.

Clause 5(2)(b) of the Schedule provides that the insurer is not required to pay IRBs “for any period longer than 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training or experience.” The Appellant argues that the Arbitrator erred regarding the clause 5(2)(b) post-104 week IRB entitlement test in:

1. Misstating the Appellant’s position;
2. Applying a higher standard than a balance of probabilities;
3. Considering irrelevant factors and failing to consider important factors;
4. Misstating the evidence of Drs. Weisleder, Dunlop and Drew, Ms. M. Ross, O.T., Ms. S. Hanks, independent insurance adjuster, and the Appellant, himself;
5. Failing to consider there was no medical or other evidence upon which to deny ongoing IRBs; and,
6. Failing to properly interpret and apply clause 5(2)(b) of the Schedule.

Since 1996, as noted, subsection 283(1) of the Insurance Act has restricted appeals from the order of an arbitrator to a question of law. The Appellant relies on Delegate Makepeace’s statement in Truong and Lumbermens Mutual Casualty Company / Kemper Group, (FSCO P03-00007, March 31, 2005):

… the test for error of law “is whether the decision was based on a material

finding of fact that was not supported by the evidence such that a reasonable

tribunal acting judicially and properly directed in law could not have made the

finding in question.” As the Arbitrator's conclusions were supportable on the evidence, I am not persuaded he erred in law.

Delegate Makepeace, however, stated in her subsequent decision in Pembridge Insurance Company and Lesniak, (FSCO P06-00021, December 20, 2007), that “I am not the finder of fact, and as there was evidence to support the arbitrator’s finding, and his reasons reflect his awareness of the issue, I am not satisfied the insurer’s concern rises to an error of law.”

This is consistent with Delegate Naylor’s statement in Kasap and Allstate Insurance Company of Canada, (OIC P96-00071, March 13, 1998):

It is well established that my role on appeal is not to second guess the arbitrator’s evaluation of the evidence or substitute my own view of the weight to be attributed to it. The arbitrator has the advantage of hearing and observing the witnesses in person. This gives an arbitrator the opportunity to assess the credibility of their testimony and to evaluate the documentary evidence in light of the evidence as a whole.

It is also consistent with the statement of the Divisional Court of Ontario in Kanareitsev v. TTC Insurance Co., 2008 CanLII 26262 (ON SCDC), [2008] O.J. No. 2132:

Particularly when results turn on the first instance decision maker’s view of the credibility of witnesses and involves a fact-driven analysis, appellate review must take “proper account of the distinct advantage” of the first-instance decision maker’s assessments. The appeal judge must not try the case de novo or simply substitute his or her views for those of the trial judge.

Thus, as I stated in Motor Vehicle Accident Claims Fund and Avdeeva, (FSCO P11-00004, November 10, 2011), Truong “is not a back-door key to having an appellate officer rehear the arbitration or second guess an arbitrator’s assessment of the evidence.”

Prior to oral submissions, I referenced for the assistance of the parties my decision in Bains and RBC General Insurance Company, (FSCO P09-00005, June 3, 2010), where I cited Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, that “an appeal is not a retrial of a case.” The Supreme Court quoted with approval Underwood v. Ocean City Realty Ltd. (1987), 1987 CanLII 2733 (BC CA), 12 B.C.L.R. (2d) 199 (C.A.):

The appellate court must not retry a case and must not substitute its view for the

views of the trial judge according to what the appellate court thinks the evidence establishes on its view of the balance of probabilities.

Housen noted the principles behind deferring to the findings of fact of the trial judge:

(1) Limiting the number, length and cost of appeals. Judicial resources are scarce and there is utility in avoiding needless duplication of judicial proceedings with little, if any improvement in the result, while concurrently not prejudicing litigants with fewer resources and frustrating the goal of providing an efficient and effective remedy.

(2) Promoting the autonomy and integrity of trial proceedings. Frequent and unlimited appeals would weaken public confidence in the trial process and undermine the presumption that a trial judge is competent to decide the case before him or her and that a just and fair outcome will result from the trial process. An appeal is the exception rather than the rule.

(3) Recognizing the trial judge’s expertise and advantageous position to make factual findings owing to his or her extensive exposure to the evidence, the advantage of hearing testimony viva voce and the judge’s familiarity with the case as a whole. As the trial judge’s primary role is to weigh and assess voluminous quantities of evidence, the trial judge’s expertise and insight in this area should be respected.

These considerations are consistent with subsection 283(1) of the Insurance Act now restricting appeals from the decision of an arbitrator to questions of law.

The Appellant states at paragraph 71 of his reply appeal submissions, after a 55 page review in his initial appeal submissions of the evidence at arbitration, that “he has proven all aspects of his case” and that he seeks “a determination that he remains disabled on a balance of probabilities with the meaning of the post-104 [week disability] test.” In other words, he asks that an appellate officer, to use the words cited in Housen, retry the case and substitute his or her view for the arbitrator’s according to what the appellate officer thinks the evidence establishes.

The Appellant argues that the Arbitrator’s error in his decision is not simply factual but whether the facts satisfied the legal test under clause 5(2)(b) of the Schedule, which would be a question of mixed fact and law: Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 758). As stated in Murphy v. Murphy, 2013 ONSC 7015, also provided to the parties, “Matters of mixed fact and law lie along a spectrum.”

If the Arbitrator’s argued error properly fits within the subsection 283(1) of the Insurance Act as an error of law, it could be argued that it would be “a proportionate, more expeditious and less expensive means to achieve a just result,” to use the words of the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7, concerning summary judgments, to have an appellate officer simply do a paper review of the evidence rather than remit the matter back for a new hearing.

The Supreme Court, however, stated:

… a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.

Besides it being contrary to my role as an appellate officer to find the necessary facts, it bears stating that, having never seen the Appellant or any other witness in person or having heard first hand any evidence, I would have no confidence, specifically in this case, where the credibility, reliability and weighing of evidence is crucial, of finding the necessary facts and applying the relevant legal principles to those facts.

Accordingly, if there were an error of law, I would decline to take on the role of a first-level adjudicator to retry this matter. If there is an error of law, the matter should be remitted to a new arbitration hearing.

In Young and Liberty Mutual Insurance Company, (FSCO P03-00043, June 20, 2005), application for judicial review dismissed, 2006 CanLII 7286 (ON S.C.D.C.), Delegate Evans cited Delegate McMahon in Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO P01-00022, February 26, 2003):

… errors of law include findings of fact made in the complete absence of supporting evidence, made on the basis of conjecture, or made on the basis of a misapprehension of the evidence caused by a misdirection on a legal principle. The vital distinction is between a conclusion that there was “no evidence” to support a finding and a mere “insufficiency of evidence.”

Perell J. stated in Murphy, cited above:

37It is an error in law for a judge or tribunal member to fail to provide an explanation of his or her decision that is sufficiently intelligible to permit appellate review: R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, [2002] S.C.J. No. 30; Law Society of Upper Canada v. Neinstein (2010), 99 O.R. (3d) 1, [2010] O.J. No. 1046, 2010 ONCA 193, at para. 61.

38The adequacy of reasons for decision is determined having regard to their functions, which are to inform the parties of the decision; provide public accountability; and permit meaningful appeal or judicial review: R. v. M. (R.E.), 2008 SCC 51, [2008] 3 S.C.R. 3, [2008] S.C.J. No. 52, at para. 25. In R. v. M. (R.E.), at para. 17, the Supreme Court explained that the judge should tell the parties what he or she decided and they explain why but not necessarily how that decision was reached. The question about the adequacy of reasons is whether the reasons, viewed in light of the record and counsel’s submissions on the live issues presented by the case, explain why the decision was reached, by establishing a logical connection between the evidence and the law on the one hand, and the decision on the other: R. v. M. (R.E.), at para. 41. The reasons for decision must be sufficient to enable the parties and the reviewing court to determine whether there are grounds of appeal …

39Reasons are adequate if they are responsive to the case’s live issues and the parties’ key arguments. Their sufficiency is measured not in the abstract, but as they respond to the substance of what was in issue: R. v. M. (R.E.), supra, at para. 34; R. v. Walker, 2008 SCC 34, [2008] 2 S.C.R. 245, [2008] S.C.J. No. 34, at para. 20. Adequate reasons will communicate the findings of fact upon which the court or tribunal based its decision, the court’s or tribunal’s conclusion, and the reasoning process that led to the conclusion. A reviewing court, however, does not have the power [page760] to intervene simply because it thinks the trial court did a poor job of expressing itself: R. v. Sheppard, supra, at para. 26.

The Appellant submits, at paragraph 58 of his initial written appeal submissions, that the Arbitrator did not set out the post-104 week disability test under clause 5(2)(b) of the Schedule. However, at page three of his decision, the Arbitrator specifically cited clause 5(2)(b), noting that the Appellant argued that “he continues to suffer a complete inability to engage in any employment suitable to his education, training and experience.”

The Appellant further submits that nowhere in his decision did the Arbitrator indicate he had considered, applied or interpreted the clause 5(2)(b) disability test. However, at page four of his decision, the Arbitrator discussed the Appellant’s pre-accident employment at Jenson Tire. The Arbitrator found that there “is no dispute [the Appellant’s] sales job at Jensen was primarily light sedentary work.” At pages six to seven the Arbitrator discussed, under the heading “suitable work,” appropriate alternative employment, specifically the factors of pre-accident experience and pay scale. The Arbitrator concluded:

Based on Mr. Hill’s interest in computers and aptitude for technical work, I find that a computer service technician is reasonably within the range of suitable positions that are commensurate with Mr. Hill’s pre-accident computer experience, personal interest and tested technical aptitude. I find that computer repair services, telemarketing/call center agents, collectors, retail sales, file and general office clerk positions are reasonably suited to Mr. Hill’s pre-accident education, training, experience and rate of compensation.

The Appellant argues, at paragraphs 26 and 46 of his reply submissions, that the Arbitrator made no adverse findings of credibility against him. A key issue at arbitration was the Appellant’s sitting endurance for the sedentary employment the Arbitrator found to be suitable. At page ten of his decision, the Arbitrator stated that although the Appellant was “quite candid about the traumatic and painful events in his life, his current assertion of his sitting tolerance is not accurate.” The Arbitrator stated:

Mr. Hill testified he was driving an hour each way to drop his daughter off in Milton at the beginning of the school week and picked her up before the weekend start. In addition to his twice weekly trips to Milton, Mr. Hill drove to Hamilton and back to attend hour-long GED preparation classes at the Academy starting in October 2011. During the summer of 2012, Mr. Hill testified he once drove two hours each way to have dinner at Pigeon Lake.

The Arbitrator further stated in his decision:

I rely on Mr. Hill’s evidence of his regular commuting to Milton and sedentary classes at the Academy during the period from October 2011 to June 2012. This evidence is sufficient, on balance, to undermine his testimony that he cannot regularly remain seated to perform sedentary work more than 30 minutes. His 2012 one-day summer drive to Pigeon Lake is evidence that Mr. Hill’s sitting tolerance continues to improve.

The Appellant’s argument in this regard, set out at paragraphs 69 to 77 of his initial submissions, is not an absence of evidence, but largely the sufficiency of that evidence. The Appellant, at paragraph 72 of his appeal submissions, submits that he was not able to drive his daughter to her Milton classes on the same days that he attended school himself. In this regard, the Appellant refers to page 284 of the transcript. However, at page 284 of the transcript, the actual cross-examination of the Appellant is as follows:

Q. Alright. So but you testified yesterday that you would drive her to Milton even now to go to school, she is going to high school?

A. I drive her Mondays and I go to school Tuesdays. I don’t drive her on the days I go to school. I did a couple of times but it changed so I don’t have to do all of that driving in one day.

Q. If you didn’t drive your daughter to school in Milton, do you think you could go more often to school?

A. That’s not why I don’t go.

Q. I didn’t ask you that. I asked you whether if you didn’t have to drive her there, do you think you could drive or go to school more often?

A. That’s not relevant. It doesn’t have anything to do …

The Arbitrator instructed the Appellant to answer the question. The Appellant’s answer was that driving his daughter “doesn’t affect how often I go to school.” The Respondent then queried whether the at least two hours required to drive his daughter to Milton could be better used to attend school. The Appellant answered that it depended on how he felt that day, that his daughter had to go to school, she can’t fail and he was the only one capable of driving his daughter. The Respondent queried why the Appellant would not make the effort to ensure that he went to school.

The Arbitrator also noted regarding the Appellant’s credibility and the reliability of his evidence:

Ms. Hanks [the independent insurance adjuster] testified that she accepted the plausibility of Mr. Hill’s explanation for being at his father-in-law’s business, but she pointed out this showed he had not previously been candid with WorkAble’s assessors about his activities.

However, it is true that on other matters, such as the Appellant’s lack of pay for his post-accident work for his father-in-law and his receipt of unspecified lump sums of money as being favours from relatives, the Arbitrator did find the Appellant credible.

A further significant consideration in the Arbitrator’s IRB decision was the Appellant’s completion of high school in the fall of 2012. The Appellant argues, at paragraph 21 of his reply submissions, that the test is not whether he has a high school diploma but whether he could engage in any employment for which he is suited by way of education, training or experience in the real world of employment.

However, the post-104 work disability test specifically encompasses an insured person’s education. That education is not frozen at the time of the accident. In his opening statement, the Appellant’s representative stated that he “finally received funding to work on some retraining in the fall of 2011 which he has been doing since that time. He has recently just written his exams related to his GED, which is his high school equivalency. We don’t have the results of those.”

The Appellant’s counsel further submitted that the Appellant was “retraining to be able to do computer repairs and things like that, likely just on a part-time basis.” In closing submissions, the Appellant’s representative stated, at page 156 of the transcript, that “in December of 2012, two months ago, Andrew, in fact, completes his GED.” However, at page 41 of his initial submissions, the Appellant submitted that “Counsel at no point submitted that Andrew completed his high school requirements.”

The Arbitrator held that, in his view, the Appellant’s “completion of high school during the fall of 2012 makes him more competitive in the employment marketplace.” I am not persuaded that this was an irrelevant consideration regarding the applicable statutory post-104 week IRB disability test.

The Appellant submits, at paragraph 38 of his initial appeal submissions, that he continues to be disabled within the meaning of the post-104 week IRB test “not just on a balance of probabilities, but as a virtual certainty.” At paragraph 113, he states that the only medical evidence available to the Arbitrator upon which to determine the question of the post-104 week entitlement clearly supports his ongoing disability. However, in his final arbitration submissions, at page 178 of the transcript, the Appellant’s submissions were different:

With the exception of Dr. Weisleder’s inconclusive half-page addendum the disability opinions are consistent.

Dr. Weisleder is an orthopaedic surgeon who prepared an August 13, 2009 post-104 week IME report. In that report, Dr. Weisleder concluded that the Appellant:

…remains unable to engage in any employment for which he is suited by education, training or experience, primarily due to a limited sitting tolerance. He remains on two narcotics which would impair his ability to work. Should his spine fusion go on to heal, I would anticipate him being able to resume sedentary work.

Following a review of surveillance conducted June 12, 2009, Dr. Weisleder added a December 30, 2009 addendum:

Observations of [the Appellant] cleaning his pick-up truck call into question the validity of his current status as outlined in my report obtained August 20, 2009. He demonstrated more ability than what was indicated in his description of his current status. He indicated a limited sitting tolerance precluding performing the essential tasks of his current status. He indicated a limited sitting tolerance precluding performing the essential tasks of his pre-accident employment. Observations from the surveillance and the surveillance report indicate otherwise. Based on the surveillance report and my observations of the CD, I would also call into question my previous statement that he remains substantially unable to engage in any employment for which he is reasonably suited by education, training or experience.

On cross-examination by the Appellant, at page 113 of the transcript, Dr. Weisleder testified that the surveillance did not change his opinion, only the validity of that opinion. At page 139, Dr. Weisleder stated that the video surveillance demonstrated that the Appellant’s abilities “may be more than what he actually told me. May.”

At page 121, in re-examination, Dr. Weisleder did not agree with the Respondent that the Appellant could probably find a competitive job, if the Appellant could not sit for more than an hour. Dr. Weisleder agreed that in that regard, all he had to go on was what the Appellant told him. At page 123, Dr. Weisleder testified that based on his interview with the Appellant, the x-rays and the reports of Dr. Drew, he did not think that the Appellant could do sedentary work with a limited sitting tolerance of one hour even if that meant he could get up and stand and stretch.

At page 126, Dr. Weisleder distinguished between a patient being allowed to work and being able to work. At page 11 of his decision, the Arbitrator notes that Dr. Weisleder testified that the scar tissue forming from a burst fracture at the T12/L1 junction such as the Appellant’s “can cause significant pain that varies his day-to-day abilities based on his personal tolerance.” This echoes Arbitrator Makepeace, in Quattrocchi and State Farm Mutual Automobile Insurance Company, (OIC A-006854, September 29, 1997), that “[w]hether work might be therapeutic is a distinct question from whether the Applicant” meets the applicable statutory entitlement test.

As further stated in Quattrocchi, IRB entitlement is a question of function: “It is not necessary for an Arbitrator to accept any particular diagnosis of the Applicant’s complaints.” Further, “Pain on its own is not compensable in the statutory accident benefit scheme. Nor does a diagnosis of ‘chronic pain syndrome’ guarantee entitlement.”

The Arbitrator noted that Dr. Drew, the Appellant’s treating orthopaedic surgeon, had no opinion as to whether the Appellant could sit for an hour and resume suitable employment after March 8, 2010. In his decision, the Arbitrator stated:

The expert opinions are helpful to understand the nature of Mr. Hill’s condition, but not necessarily determinative of his disability outcome. In that respect, I am mindful of comments in Pisani and Simcoe & Erie General Insurance Company and Canadian General Insurance Company made by [Delegate Draper]: “[t]he determination of disability cannot be done with absolute precision, particularly in cases involving limitations based on pain. Although entitlement to weekly income benefits must be based on the test established in the Schedule, there is scope for the arbitrator to consider all of the evidence and reach a result that is fair in the particular circumstances of the case.”

The Arbitrator did review medical expert evidence and stated that lack of knowledge about the Appellant’s pre-accident job duties, his post-accident non-paid work with his father-in-law, his classroom attendance and driving distances undermined that evidence.

The Appellant argues that the Arbitrator:

1. Ignored “commercial reality” and “what will realistically be tolerated in the marketplace when considering the test of disability,” that had guided the Arbitrator himself in his prior decision in Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO A99-000957, April 11, 2001);
2. Failed to address whether the Appellant was disabled based on a cognitive and/or psychological basis;
3. Failed to address the Appellant being disabled based on medication use; and,
4. Chose an illogical point for terminating IRBs.

The Arbitrator’s analysis and conclusion regarding IRB entitlement is set out on pages 12 and 13 of his decision. The onus is on the insured person to establish entitlement. However, there is not a word in this analysis as to why the Arbitrator was persuaded that the Appellant was entitled to weekly IRBs up to September 21, 2012. The Respondent has not appealed the Arbitrator’s decision. Obviously, the Appellant does not seek reconsideration of the Arbitrator’s decision awarding benefits up to September 21, 2012.

In making his decision, however, the Arbitrator was aware of the “commercial reality.” He noted the Appellant being “more competitive in the employment marketplace.” The Arbitrator stated, at page 10 of his decision, that he agreed that the Appellant continued to suffer from back pain that required him to take prescription medication that affected his concentration. He also noted the Appellant’s last visit with Dr. Drew in the fall of 2009, that his back pain had diminished but that he still required pain medication.

Regarding psychological disability, the Arbitrator did not mention, but had before him, the September 2, 2009 IME report of Dr. K. Lawson, psychologist. Dr. Lawson stated, at page 21 of his report, that although the Appellant was “experiencing a relatively elevated degree of psychological distress, this does not constitute an impairment that renders him substantially unable to perform the essential tasks of his pre-accident employment.” This is contrary to the Appellant’s argument there was no evidence upon which the Arbitrator could have made his finding that the Appellant was not entitled to ongoing IRBs.

The Arbitrator, during final submissions, inquired of the Appellant’s representative, at pages 164 and 165 of the transcript, as to what the Appellant was doing in the summer of 2011 in school and how that related to his continued benefit entitlement. At pages 170 to 171 of the transcript, also during the Appellant’s closing argument, the Arbitrator was interested in the Appellant’s sitting times at the Academy of Learning where the Appellant was attending.

The Appellant argued, at pages 178-179 of the transcript: “With the exception of Dr. Weisleder’s inconclusive half-page addendum, the disability opinions are consistent. Andrew has skills, he has abilities, he has no formal medical restrictions since October 2009, he has limited education.” The Appellant submitted that if he could work at all, it would likely be part-time in a significantly accommodated or completely sheltered sedentary role. The Arbitrator noted, at page 9 of his decision, that “there is evidence from Ms. Maria Ross, his occupational therapist, who he told in early 2011 that he worked for his father-in-law weekdays from 8:30 a.m. to 5:00 p.m. without pay, but was given time off to pick up his children at school and rest when needed.”

At page 247, in the course of the Appellant’s reply submissions, the Arbitrator asked if there was anyone who refuted Ms. Ross’ release to light-duty. The Appellant responded no, but that Ms. Ross’ comment was in the context of limited capacity, not on the basis of being able to sustain that level of effort in employment.

I am not persuaded that there was no evidential basis upon which the Arbitrator determined IRB entitlement. As stated above, a reviewing appellate body does not have the power to intervene simply because it thinks the adjudicator at first instance did a poor job of expressing himself: R. v. Sheppard, supra, at para. 26. I am not persuaded that the Arbitrator’s poorly expressing himself is a basis for returning the question of IRB entitlement to a new arbitration hearing.

II. ENTITLEMENT TO A SPECIAL AWARD

Subsection 282(10) of the Insurance Act sets out the legislative basis for a special award:

If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

Regarding special awards, in Graper and Liberty Mutual Fire Insurance Company, (FSCO A00-000133, July 20, 2001), Arbitrator Makepeace stated:

An insurer has a continuing duty to consider all available information with respect to an insured person’s benefit claim, and to reconsider a decision to terminate benefits based on new information. Insurer intransigence has resulted in a special award in a number of FSCO decisions.²

The Respondent brought a motion at arbitration that the Appellant’s special award claim be dismissed. The Appellant had commenced a Superior Court action that included claims for exemplary, punitive and aggravated damages. The Arbitrator rejected the Respondent’s motion on the basis that the court action made no mention of a special award. The Respondent did not appeal that decision.

In addressing the Appellant’s claim for a special award, the Arbitrator stated he was not prepared to analyze “the mountain of paper” filed in order to ascertain the facts in addressing the alleged late payments of IRBs. The Appellant, however, submits in this appeal that he was not seeking a special award on the basis of late payments.

On page 15 of his decision, the Arbitrator found that the Respondent terminated IRBs on March 8, 2010 based on the Appellant’s refusal to re-attend at an IME with Dr. Weisleder. The Arbitrator found that the Respondent’s request for Dr. Weisleder to re-examine the Appellant was not reasonable. He found that the Respondent had strategically withheld its August 2009 IME surveillance evidence it had obtained earlier, in June 2009. The Arbitrator found that the Respondent withheld the surveillance evidence so that it could justify a second IME.

However, on page 16 of his decision, the Arbitrator found that the Respondent had relied primarily on its June 2009 surveillance to terminate the Appellant’s IRBs. That surveillance, the Arbitrator stated, showed the Appellant fairly active outdoors and using a truck. The Arbitrator found that it was reasonable for the Respondent to principally rely on its surveillance evidence to terminate IRBs, in the absence of a clinical opinion.

At page 181 of the arbitration transcript, the Appellant submitted that the Respondent’s “conduct is a textbook example of unreasonable withholding of Andrew’s income replacement benefit,” whether based on error, a “simple failure to take a big-picture approach to all of the evidence available,” or “too many cooks in the kitchen.”

The Arbitrator notes in his decision the Appellant’s examination under oath in June 2010, where the Appellant provided details about his activities at his father-in-law’s place of business that were the subject of the surveillance conducted. The Arbitrator also notes that the independent adjuster “accepted the plausibility of Mr. Hill’s explanation for being at his father-in-law’s business, but she pointed out that he had not previously been candid with WorkAble’s assessors about his activities.”

At page 155 of the transcript, the Appellant argued that the Respondent’s adjuster had indicated, based on the evaluation of the available evidence, that the Respondent ought to reinstate the Appellant’s IRBs. The Appellant further submitted that the Respondent did not respond to two further inquiries from its adjuster as to whether she should reinstate IRB payments.

The Appellant had further submitted that in December 2010 he asked the Respondent to consider all of the evidence regarding its decision to withhold benefits. The Appellant submitted that no response was received. He argued that the Respondent had been provided in December 2010 with a further treatment plan of Dr. Gray regarding the need for significant prescription narcotic, depression and sleep medications. In February and March 2011, the Respondent was provided with updated clinical notes and records of the family physician and pain specialists. Between March and July 2011, the Respondent was provided with reports from Dr. Dunlop, Dr. Drew, Maria Ross and the psychologists, Drs. Storey and Hutcheson.

The Respondent argues that the Appellant failed to produce proper evidence regarding the alleged reasonable refusal to pay IRBs, that the Arbitrator’s decision cannot be revisited and that there is no error of law.

The Arbitrator granted the Appellant a further two and a half years of IRBs. The Arbitrator, however, failed to address whether the Respondent’s continued refusal to pay IRBs during this period was reasonable in light of the further information the Appellant submits that he provided to the Respondent with respect to his IRB claim, including updated clinical notes and records and opinions from a range of treating and expert medical practitioners, as well as the Respondent’s own independent adjuster’s alleged advice that payment of IRBs be resumed.

“Reasons are sufficient if they are responsive to the case’s live issues and the parties’ key arguments:” R. v. Walker, 2008 SCC 34, [2008] 2 S.C.R. 245. This is not a case of the Arbitrator simply failing to properly express himself. The Arbitrator failed to address a live issue and key argument regarding the Appellant’s claim for a special award and, thereby, erred in law.

Accordingly, paragraph 2 of the Arbitrator’s April 30, 2013 decision dismissing the Appellant’s claim for a special award is rescinded. The issue of entitlement to and, depending on that determination, the quantum of a special award is returned to arbitration for redetermination. The Arbitrator’s decision is otherwise confirmed.

III. EXPENSES

If the parties cannot agree on the legal expenses of this appeal, amending Rule 79.1 of the Code, as allowed under Rule 81, the time for either party to request an appeal expense hearing is extended to sixty days from the date of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as submissions on such entitlement and/or quantum expense issues as are in dispute.

October 1, 2014

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Arbitrator Makepeace noted Erickson and Guarantee Company of North America, (OIC A-000560, June 2, 1992); Maas and State Farm Mutual Automobile Insurance Co., (OIC A-015935, October 16, 1996), upheld on appeal (OIC P96-00080, December 8, 1997); Murray and Wawanesa Mutual Insurance Company, (OIC A-003224, August 23, 1996); and McConachie and GAN Canada, (FSCO P97-00069, October 28, 1998).