Neutral Citation: 2014 ONFSCDRS 81

FSCO A13-001116 and A13-001136

BETWEEN:

MARCO P and MICHAEL P Applicants

and

TD GENERAL INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Jeffrey Rogers

Heard: March 31, April 1, 3 and 4, 2014, at the offices of the Financial Services Commission of Ontario in Toronto

Appearances: Mr. Ian Little, solicitor for Marco P and Michael P Mr. Benjamin Sim-Tzung Lee and Mr. Fergal Murphy, solicitors for TD General Insurance Company

The issues in this hearing are:

Are Marco P and Michael P entitled to payment of a non-earner benefit (NEB)?
Is any party liable to pay the other’s expenses of this arbitration?

Result:

Marco P and Michael P are not entitled to payment of an NEB.
The decision on the issue of expenses is reserved, to be determined in accordance with Rule 79 of the Dispute Resolution Practice Code.

OVERVIEW:

Michael and Marco P’s mother was injured a motor vehicle accident on August 31, 2004. The issues in this hearing are based in those injuries. Michael and Marco claim that their mother’s injuries caused them to suffer psychological or mental injury. In 2010, they applied for an NEB from TD General Insurance Company (“TD General”), the accident benefits insurer under the Schedule.¹ TD General refused to pay. The parties were unable to resolve their disputes through mediation. Marco and Michael then applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.²

Marco and Michael are fraternal twins who were about to turn 12-years old when their mother was injured. To be entitled to payment of an NEB, they must prove that their mother’s injuries caused them to sustain a psychological or mental injury. They must also prove that within 104 weeks of the accident, they suffered a complete inability to carry on a normal life as a result of their psychological or mental injury. Since an NEB is not payable before age 16, they must further prove that their complete inability to carry on a normal life persisted on August 19, 2008, their 16th birthday.

I find that there were some changes in the applicants’ lives after the accident. However, significant aspects of those changes were not caused by any psychological or mental injury they might have suffered. I further find that the applicants have not proven that they sustained a psychological or mental injury within 104 weeks of the accident. I also find that, assuming that they have proven such an injury, the evidence does not support a determination that the applicants suffered a complete inability to carry on a normal life within 104 weeks of the accident, or at any time. They are therefore not entitled to the claimed NEB.

EVIDENCE AND ANALYSIS:

The Applicants are Insured Persons

TD General submits that the applicants are not insured persons as defined because they have not proven that their mother suffered a physical injury in the accident. I reject this submission.

I find that TD General is estopped from taking the position that the applicants are not insured persons because it raised the issue for the first time in closing submissions. TD General did not raise the issue in its Response to the Application for Arbitration. It did not raise the issue at the pre-hearing discussion, one of the purposes of which is to identify issues in dispute. It did not raise the issue in its cross-examination of the applicants’ mother. To raise the issue in closing submissions can only be described as trial by ambush. Contrary to TD General’s submission, its refusal to pay an NEB does not put into play all possible defences under the Schedule. Fairness requires timely disclosure of its position so that the applicants know the case they must present.

Section 2(1)(g) of the Schedule defines “insured person” to include a person who “is not involved in an accident but suffers a psychological or mental injury as a result of an accident…that results in a physical injury to his…parent”.

The applicants’ did not elicit a great deal of evidence regarding their mother’s physical injuries. They believe that it was their mother’s psychological condition that impacted them, so that was the focus of the evidence. Nevertheless, I find that they did prove that their mother sustained physical injuries in the accident. She testified that the car she was in was hit from behind. She was immediately taken to the hospital for treatment and she was unable to function after the accident because of pain. TD General did not test this evidence in cross-examination, perhaps careful not to reveal its planned ambush. There was no contradicting evidence.

I also reject TD General’s further submission that the applicants must show that their psychological or mental injury resulted from their mother’s physical injury and not her psychological condition. That is not a requirement of the definition of “insured person”. The definition requires that the applicants suffer a psychological or mental injury as a result of an accident in which their mother suffered a physical injury. TD General seeks to rewrite the definition to require that the applicants suffer a psychological or mental injury, as a result of physical injuries their mother suffered in an accident.

I also reject TD General’s submission that the definition of “insured person” upon which the applicants rely is intended to apply only to persons who witness the accident. If the Legislature intended that, it would have said so.

Applicants do not meet the NEB test

The Test

The applicants are entitled to an NEB if their accident-related impairments caused a complete inability to carry on a normal life within 104 weeks after the accident. The definition of “complete inability to carry on a normal life”, combined with the definition of “insured person”³ require the applicants to prove that psychological or mental injury caused by the accident continuously prevented them from engaging in substantially all of the activities in which they ordinarily engaged before the accident. If they satisfy the requirements of the definition, they would be entitled to payment of an NEB from their 16th birthday and for as long as they continue to suffer a complete inability to carry on a normal life.

The Court of Appeal set out the approach to applying the definition of “complete inability to carry on a normal life” in its decision in Heath v. Economical Mutual Insurance Co.⁴ The following analysis is required:

The analysis starts by comparing pre-accident and post-accident activities and life circumstances;
Assessing pre-accident activities requires more than a snap-shot of the claimant’s life immediately preceding the accident. It involves an assessment of activities and circumstances over a reasonable period;
All pre-accident activities should be considered. However, in deciding whether the necessary threshold has been satisfied, greater weight may be assigned to those activities identified as being important to pre-accident life;
The claimant must not only show changes. Rather, the claimant must show that those changes amounted to being continuously prevented from engaging in substantially all pre-accident activities.

Because the applicants were children at the time of the accident, their life was not static. Therefore, the above analysis must be conducted by assessing the effect of accident-related impairments on their demonstrated potential.

Analysis re Michael P

At the time of the accident the applicants lived with their parents in the area known as Weston, in Toronto. They are their parents’ only children. Born on August 19, 1992, they had just turned 12 years old when the accident happened on August 31, 2004. They had recently completed Grade 6.

The applicants had lived on the same street their whole lives. The family lived with their maternal grandmother on the same street before moving to their parents’ home. Their grandmother still lived a few doors down. They had a circle of friends in the neighbourhood. All members of the family described their life at home as normal and happy before the accident. Dad worked long hours. Mom took care of the home and the children. Friends visited regularly. The boys were active in sports: soccer in the summer, hockey in the winter.

Michael described himself as a good student who enjoyed going to school before the accident. He did not think that there were any pre-accident problems with attendance. He said that he was identified as gifted in English but he had chosen not to pursue that course. He enjoyed his social life in the neighbourhood. He had a good relationship with his parents and his brother. He liked playing soccer and hockey. These were the things that were important to him before the accident. According to Michael, the accident had an adverse effect on all of these things.

Before going further in the analysis, I reiterate that the applicants must prove that, within 104 weeks of the accident, psychological or mental injury caused by the accident continuously prevented them from engaging in substantially all of the activities in which they ordinarily engaged before the accident.

There is a consensus in the evidence that the accident had an immediate impact on the applicants’ household because of their mother’s accident-related impairments. She stopped taking care of the home and did little for the applicants. She became easily irritated. She developed an inordinate concern for her sons’ safety and became over-protective. Friends became reluctant to visit because of her volatility. The applicants stopped participating in organized sports. There were frequent altercations between the parents, leading to their separation in 2009.

Although Michael attributed his loss of friends to the accident, there is no evidence that this was because of any psychological or mental injury he sustained. The only evidence was that his friends did not want to be around his ill-tempered mother. There is also no evidence that Michael was unable to make or maintain friendships. It appears that he did maintain friendships in his neighbourhood. His father testified that the boys retained strong friendships in the neighbourhood after the accident. He bought the family home when he separated from their mother partly because he wanted his sons to have the opportunity to continue those friendships.

Similarly, the only evidence was that Michael withdrew from organized sports because his father’s added household responsibilities left no time for taking him to these activities. There was no evidence that Michael was unable to engage in sports because of any psychological or mental injury he sustained. The only evidence was that the deterioration of Michael’s relationship with his mother was because of her mental state, not his. The only evidence was that the deterioration of his relationship with his brother was because they took opposite sides in their parents’ fight, not because of any psychological or mental injury he sustained.

The only opinion that Michael qualifies for an NEB was given by Dr. Carolyn Donsky. Dr. Donsky has been Michael’s family doctor since before the accident. She is also his mother’s family doctor. She completed two Disability Certificates with regard to his claim for an NEB. The first was dated June 15, 2010⁵, almost 6 years after the accident. Michael first reported symptoms consistent with depression in October 2008. He made similar complaints in April and May 2010.

The Disability Certificate of June 15, 2010 recites Michael’s belief that his mother’s injuries from the accident had affected his psychological health. Dr. Donsky diagnosed depression. She gave October 29, 2008 as the date symptoms first appeared. She checked “N/A” in the box regarding NEBs.

About 2 years later, Dr. Donsky completed a second Disability Certificate, dated November 2, 2012.⁶ She added diagnoses of substance abuse and social anxiety. She now stated that Michael suffered a “complete inability to lead a normal life” as of the date of the accident. She confirmed the date symptoms first appeared to be October 29, 2008. She added the qualifier that it was the “date I was first made aware by him of symptoms.” She offered no opinion on whether Michael sustained a psychological or mental injury within 104 weeks of the accident.

Dr. Donsky explained that she chose the date of the accident as the date of the onset of a “complete inability” because she saw the accident as the source of ongoing impairment. She noted that she assumed there were no pre-accident issues other than the usual coughs and colds and therefore “I am using the date of the accident as the date in which Michael ceased to live what was then considered his normal life.”⁷

The absence of any opinion that Michael sustained a psychological or mental injury within 104 weeks of the accident precludes a finding that he meets the NEB test. He cannot prove that psychological or mental injury caused by the accident resulted in a complete inability to carry on a normal life within 104 weeks of the accident, without proving that he sustained a psychological or mental injury within 104 weeks of the accident.

If that conclusion is wrong, I give no weight to Dr. Donsky’s opinion that Michael meets the test. She appears to assert simply that his life changed as a result of the accident. Dr. Donsky did not compare Michael’s pre-accident level of function to his function in the 104 weeks after the accident. She did not do a detailed comparison of his level of function at any time, to his pre-accident level of function. She did not assess whether changes she noted were caused by any psychological or mental injury. She did not consider whether the changes meant that he was continuously prevented from engaging in substantially all of his pre-accident activities.

School is the most important aspect of his pre-accident activities that Michael claims was affected by his accident-related impairments. He claims that he lost interest in attending school and this led to his failure to complete high school on time. However, the first significant departure from his pre-accident level of performance in school did not occur until Grade 11. Consequently, there is no evidence of a complete inability to engage in school within 104 weeks of the accident.

Even if I assume that:

problems in Grade 11 were caused by accident-related psychological or mental injury, and
they reflect Michael’s function within 104 weeks of the accident,

Michael’s overall performance after the accident is not so inconsistent with his demonstrated potential that it can be determined that he was continuously prevented from engaging in school.

A review of Michael’s pre-accident report cards shows that he was not an exemplary student before the accident. For example, in Grade 4 he was absent 21.5 days and late 13 times.⁸ In Grade 5 he was absent 24.5 days and late 3 times.⁹ In Grade 6 he was absent 38.5 days and late 10 times.¹⁰ His marks were dominated by Cs and Ds.

Neither of his parents could recall being concerned about Michael’s pre-accident performance in school. His mother said that she really did not get involved because she does not have much of an education herself. She left it to her husband. His father said that his long hours of work meant that he left the details of schooling up to his mother. Neither parent could recall attendance issues. Neither could recall a Grade 2 recommendation for a psychological assessment or intervention.¹¹ Neither could recall a Grade 3 recommendation for a social work intervention “to address tendency to school phobia and reluctance to complete assignments.”¹²

Michael’s own opinion that he was a good student before the accident confirms that his pre-accident performance was an acceptable benchmark in his household. With the bar set at mediocrity, unblemished scholastic achievement was not guaranteed.

Michael successfully completed Grades 7, 8, 9 and 10 after the accident. His attendance improved in Grade 7. He was absent 4 days and never late.¹³ He testified that the improvement was because his father became involved and forced him to go to school. His marks were similar to previous years. His attendance dipped in Grade 8. He missed a total of 71.5 days and was late 9 times. Nevertheless, his marks were again similar to previous years, perhaps better. For the first time his learning skills were rated either “good” or “excellent”. ¹⁴ In previous years, he had always received some ratings of “satisfactory” and “needs improvement”.

Later records were not put into evidence. Michael testified that he failed Grade 11. He changed schools that year because his parents separated. Then he stopped attending. But he returned to school and completed high school a year behind schedule. He then enrolled in College and is currently on schedule to complete a two-year program in the study of natural medicine. He complained of no current deficits in his ability to engage in school.

As I noted above, assuming the accident to be the cause, Michael’s performance in school, viewed as a whole, does not support a finding that he was continuously prevented from engaging in his pursuit of education.

Overall, he appears on track to achieve an outcome that is not inconsistent with his demonstrated potential. After Dr. Donsky’s diagnosis in 2010 he elected not to take the anti-depressants she prescribed. She referred him to psychiatrist, but he only went for one visit. He found relief from counselling by Dr. Donsky, from hypnosis, meditation and natural medicine. He developed an interest in natural medicine that led him to pursue its study in College. He works part-time at the Home Depot. He said that Dr. Donsky is still his doctor but he has not seen her in a “long time”. He said that he stopped getting sick after he started taking the right vitamins.

Nothing in the evidence suggests that there was a gross decline in Michael’s ability to function within 104 weeks of the accident, or at any time. I am not satisfied that the facts support a finding that Michael was at any time continuously prevented from engaging in substantially all of the activities in which he engaged before the accident. He is not entitled to an NEB.

Analysis re Marco P

As one would expect, Dr. Donsky is also Marco’s family doctor. As with Michael, hers is the only opinion that Marco meets the NEB test. She provided two Disability Certificates, similar to the ones she prepared for Michael and she gave similar evidence. For the reasons I gave earlier, I give her opinion no weight. I find that Marco has not proven that he sustained a psychological or mental injury within 104 weeks of the accident. There is therefore no evidentiary basis for finding that psychological or mental injury caused by the accident resulted in a complete inability to carry on a normal life within 104 weeks of the accident.

Marco’s evidence about disruption in his pre-accident activities was also similar to Michael’s. He identified himself as an average student, with no major pre-accident issues. He went to school unless he was sick. He had friends in the neighbourhood. He played soccer in the summer and hockey in the winter.

He said he lost interest in organized sports after the accident, but there was no evidence that any psychological or mental injury played a part. He did not stop playing sports and he continues to do so at present. He said that some friendships were ruined. But there was no evidence that he became unable to sustain friendships as a result of psychological or mental injury. Like Michael, his friends who stayed away did so because of his mother’s condition, not his. Like Michael, he likely retained many of his friendships in the neighbourhood.

He too successfully completed Grades 7, 8, 9 and 10 after the accident. He too had significant attendance issues both before and after the accident. He too had post-accident marks that were not far removed from his pre-accident performance. He too failed Grade 11 and completed high school a year behind schedule. While in high school, he decided to pursue a career as an electrician. He did a 4-month co-op placement in high school. He then completed an electrical pre-apprenticeship course at Electrical College of Canada. He is now looking for a job.

Marco testified that he chose to be an electrician only after his high school career was ruined by failing Grade 11. He said that he had planned to do something in the sciences, like chemistry. However, nothing in his school records points to a particular aptitude in the sciences. Further, assuming that he did plan that course of study, there is no evidence that any psychological or mental injury continuously prevented him from pursuing that option.

Like Michael, Marco did not take the anti-depressants Dr. Donsky prescribed. He said that he thought she was just trying to push pills on him. There is no evidence that he sought other treatment. He has not seen Dr. Donsky recently. He complained of no current deficits in his ability to function.

As with Michael, I find that Marco’s outcome, both in school and overall, to be consistent with his demonstrated pre-accident potential. He is not entitled to an NEB.

PROCEDURAL RULINGS:

While cross-examining Michael, TD General for the first time raised the issue of preclusion of entitlement to NEBs for failure to attend insurer examinations. TD General did not raise the issue in its Response and this was not identified as an issue at the pre-hearing. TD General relented, when I pointed out that it might be unfair to now raise the issue of preclusion. Then, in its submissions, it argued that I should draw an adverse inference because of the applicants’ failure to attend insurer examinations. The issue was not explored in the evidence. Not surprisingly, the applicants did not explore whether notice was properly given, and if so, why they did not attend. I find that it would be unfair in the circumstances to give any weight to TD General’s submissions in this regard.

In similar fashion, TD General argued that I should find that the applicants are not entitled to the claimed NEBs because they did not inform TD General of their intention to apply for the benefit within 30 days after the circumstances arose that gave rise to the entitlement to the benefit, as required by section 32 of the Schedule. This was another issue raised for the first time in submissions. The issue was not explored in the evidence. I find that it would be unfair to allow TD General to pursue the issue in the circumstances.

Further, section 32 does not penalize by disentitlement to benefits as TD General argued. Section 32(6) provides that delay by the insured person simply allows the insurer additional time to determine entitlement to the benefit.¹⁵

In any event, if preclusion is an available remedy for breach of s.32, I doubt that it could be applied to insured persons before they reached the age of majority.

EXPENSES:

The parties made no submissions on expenses. If they are unable to resolve this issue, either party may make an appointment for me to determine the matter in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

May 16, 2014

Jeffrey Rogers Arbitrator

Date

Financial Services Commission of Ontario