Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 238

Appeal P15-00054

OFFICE OF THE DIRECTOR OF ARBITRATIONS

WAWANESA MUTUAL INSURANCE COMPANY Appellant

and

ILIR KRAJA Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Kevin D.H. Mitchell for the Appellant, Wawanesa Mutual Insurance Company Mr. K. Gus Triantafillopoulos and Mr. Fabio Longo for the Respondent, Mr. Ilir Kraja

HEARING DATE: By written submissions received by October 26, 2015

APPEAL ORDER

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

1. Pursuant to Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition – Updated January 2014), this appeal from Arbitrator Stramwasser’s August 19, 2015 decision is presently rejected. This is without prejudice to the Appellant renewing this appeal upon all of the issues in dispute in the current arbitration being finally decided, subject to any further or other order of an appellate officer.

2. Arbitrator Stramwasser’s August 19, 2015 Order is not stayed.

3. If the parties cannot agree on the legal expenses of this appeal either party may request an appeal expense hearing within thirty days of the date of this decision, as set out within.

November 10, 2015

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

The Respondent, Mr. Ilir Kraja, was injured in an August 1, 2012 motor vehicle accident. As a result, he applied to his first-party automobile insurer, the Appellant, Wawanesa Mutual Insurance Company, for statutory accident benefits under the 2010 Schedule.¹

The Respondent seeks enhanced accident benefits on the basis that he sustained a catastrophic injury, as defined by subparagraph 3(2)(d)(i) of the 2010 Schedule. That provision reads:

(2) For the purposes of this Regulation, a catastrophic impairment caused by an accident is,

(d) subject to subsection (4), brain impairment that results in,

(i) a score of 9 or less on the Glasgow Coma Scale, as published in Jennett, B. and Teasdale, G., Management of Head Injuries, Contemporary Neurology Series, Volume 20, F.A. Davis Company, Philadelphia, 1981, according to a test administered within a reasonable period of time after the accident by a person trained for that purpose …

The Appellant denies the Respondent sustained a catastrophic impairment. The parties came before Arbitrator Stramwasser (the “Arbitrator”) for determination of that issue.

The Arbitrator’s August 19, 2015 decision stated at page three that the Appellant conceded the Respondent had three scores of nine on the Glasgow Coma Scale (“GCS”) and that all three tests were administered within a reasonable period of time after the accident by a person trained for that purpose. However, the Appellant argued the evidence did not establish:

(1) The GCS readings were caused by a brain impairment; and,

(2) The Respondent had sustained a brain impairment as a result of the accident.

The Arbitrator found:

1. The Respondent had sustained a concussion. The emergency room physician’s diagnosis of concussion was consistent with the findings of the ambulance responders that the Respondent had three GCS readings of nine and a decreased level of consciousness. The medical professionals who treated the Respondent in the hours after the accident were in the best position to assess him. Their diagnosis was consistent with the medical definition of concussion given by the two experts who testified at the arbitration hearing.

Dr. R. Yufe (a neurologist the Appellant retained to do a paper review) testified at the end of his cross‑examination that the diagnosis of concussion was valid. Following Security National v. Hodges, 2014 ONSC 3627 (leave to appeal denied: Ontario Court of Appeal, file #M44078, November 14, 2014), that the severity of the brain impairment is not relevant, the Arbitrator disregarded Dr. Yufe’s opinion that the Applicant could not be said to have sustained a significant or serious head injury or brain impairment.

2. The Respondent had sustained a brain impairment. The Arbitrator noted that subsection 3(1) of the 2010 Schedule defines impairment as “a loss or abnormality of a psychological, physiological or anatomical structure or function.” Dr. H. Becker defined a concussion as an impairment in brain function. Dr. Yufe defined a concussion as a “transient disturbance in brain function or impairment of consciousness.” Dr. Yufe agreed with the American Association of Neurological Surgeons’ definition of concussion as “an injury to the brain that results in temporary loss of normal brain function.”

3. The Respondent had established causation. Based on the proximity in time between the car accident, the GCS readings and the diagnosis of concussion, it was reasonable to conclude that the readings and diagnosis were more likely than not caused by the August 1, 2012 motor vehicle accident. In any event, the evidence suggested no other cause.

While Dr. Yufe testified that GCS readings of nine or less could have numerous causes (such as drug or alcohol intoxication, epileptic seizure, shock, voice problems, stroke, hearing disability, inability to understand English and/or a stubborn refusal to cooperate) the Appellant did not introduce evidence to support the suggestion that any collateral factors actually existed in this case. In the absence of such evidence, the Appellant’s argument was speculative.

The Arbitrator concluded that the Respondent had sustained a catastrophic impairment within the meaning of subparagraph 3(2)(d)(i) of the 2010 Schedule. She noted that the Respondent was not automatically entitled to benefits; rather, he was still required to prove entitlement. The Arbitrator found the Respondent entitled to his legal expenses of the preliminary issue hearing, in an amount to be agreed or assessed.

Rule 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the “Code”) provides that an appeal may be rejected if “it is from a preliminary or interim order that does not finally decide the issues in dispute.” In Security National Insurance Co./ Monnex Insurance Mgmt. Inc. and Hodges, (FSCO P12-00029, August 13, 2012), I held:

As set out in Allstate Insurance Company of Canada and Tesfay, (FSCO P99-00023, June 21, 1999), Allstate Insurance Company of Canada and Al-Obaidi, (FSCO P99-00009, May 2, 2000) and Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), the decision whether to hear an appeal from a preliminary or interim order is discretionary. The relevant criteria include:

(a) the apparent strength of the appeal;

(b) the importance or novelty of the issue(s) raised;

(c) whether rejecting or hearing the appeal will prejudice either party;

(d) the preference of the parties;

(e) whether the arbitration decision represents a departure from prior cases; and,

(f) whether rejecting or hearing the appeal would provide the quickest, most just and least expensive way of disposing of the issues between the parties.

Delegate Makepeace, in Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), held that the purpose of the present Rules 50.2 and 51.2(c) of the Code is to:

…facilitate the most cost-effective resolution of disputes by minimizing the time

and money spent on procedural or collateral matters. The decision whether to hear an appeal of a preliminary order is discretionary … the over-arching principle guiding the exercise of the discretion is that the rule “should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute”…

The Appellant seeks leave to appeal the Arbitrator’s preliminary decision on the basis:

1. The appeal will finally determine the important issue of catastrophic impairment (“CAT”).

However, I note that Rules 50.2 and 51.2(c) of the Code do not automatically allow appeals from arbitration decisions that finally determine a single issue. Rather, leave is required unless the arbitration decision determines “all” of the “issues [plural] in dispute.”

2. The Appellant states at paragraph 2 of its reply submissions that the “true issue in dispute in this matter is whether an Emergency Room diagnosis of concussion, as identified by Arbitrator Stramwasser as a finding of fact, and in the absence of any corroborating evidence of head trauma, brain injury or sequelae, did result in brain impairment equal to catastrophic impairment.” The Appellant submits that the Arbitrator confused brain injury with brain impairment. A concussion is not brain impairment.

However, as I noted above, the Arbitrator made a finding of brain impairment following the definition of impairment in the 2010 Schedule and based, in part, on the evidence of Drs. Baker and Yufe. It is presently difficult to see that a concussion, defined by the American Association of Neurological Surgeons’ as “an injury to the brain that results in temporary loss of normal brain function,” is not “a loss or abnormality of a psychological, physiological or anatomical structure of function.”

Further, as the Divisional Court held in Hodges:

It is sufficient that the person claiming catastrophic impairment had any brain injury causing any impairment to make that person’s GCS score relevant for the purposes of the definition in the SABS.

[Emphasis in the Divisional Court decision]

We agree with the Director’s Delegate that an inquiry into the patient’s prognosis or the seriousness of the actual brain injury is irrelevant for the purposes of the SABS. The GCS score is a proxy for that determination and it is conclusive with respect to the definition of catastrophic impairment. [Emphasis added]

The Divisional Court further stated:

The regulation focuses on measuring brain impairment, not brain injury, and it uses a GCS score as the determinative measure. [Emphasis in the original]

The Appellant, at page three of its initial submissions, agreed with the Divisional Court that there must be “some” brain impairment. The severity of the brain impairment is statutorily set as that which results in a score of 9 or less on the GCS according to a test administered within a reasonable period of time after an accident by a person trained for that purpose; period.

The Appellant claims the Respondent comes within the Minor Injury Guideline (“MIG”). Subsection 3(1) of the 2010 Schedule defines a minor injury as “one or more of a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and includes any clinically associated sequelae to such an injury.” Subsection 18(1) specifically limits the medical and rehabilitation benefits payable in respect of an insured person who sustains an impairment that is predominantly a minor injury to $3,500.

In this present case there is no allegation (1) an adjudicator has found the Respondent to come within the MIG, or (2) the parties agree the Respondent comes within the MIG. Nor does the July 16, 2014 pre-hearing letter set out a MIG determination as an issue for arbitration. Nothing has been brought to my attention that a MIG determination has been added in the last sixteen months as an issue in the arbitration. The Respondent’s May 25, 2013 Response to Appeal, in a grab bag of defences including that the arbitration be dismissed as vexatious and an abuse of process, does not mention the MIG.

The implicit Appellant’s question of whether a person coming within subparagraph 3(2)(d)(i) of the 2010 Schedule is taken out of that CAT determination by a MIG determination, in this case is presently hypothetical.

3. The Appellant argues that there is a strong case the Arbitrator erred in law a number of times in her decision:

(a) The Appellant submits that there was no brain impairment, that the Arbitrator merely concluded that a concussion was a brain impairment. The Arbitrator erred in not determining whether the concussion, which was a brain injury, indeed caused a brain impairment.

The Arbitrator also erred, it is argued, in concluding that a mild brain injury, such as a concussion, was sufficient to be considered a brain impairment to meet the CAT definition in the 2010 Schedule.

However, as I noted above, the latter argument was rejected in Hodges. Further, as also stated above, the Arbitrator made her finding of brain impairment applying the definition of impairment in the 2010 Schedule and based on the evidence of Dr. Becker, Dr. Yufe and the American Association of Neurological Surgeons.

(b) The Appellant further submits that in determining whether there was a brain impairment, the Arbitrator erred in not considering such evidence as the normal CT scan, the documented clenching and the voluntary closure of the Respondent’s eyes.

However, the Appellant itself, at page two of its initial submissions, cites Delegate Evans in Kingsway General Insurance Company and Pereira, (FSCO P05-00031, August 4, 2006):

Appeals are restricted to questions of law … As set out 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. [Emphasis added]

As the Respondent states, subsection 283(1) of the Insurance Act, R.S.O. 1990, c.I.8, restricts appeals from the order of an arbitrator to questions of law. Rule 50.1 of the Code reiterates that a party may appeal an arbitrator’s order “only on a question of law.” However, in any event, the Divisional Court held in Hodges:

The Delegate correctly held that any notion of catastrophic impairment other than the specific meaning ascribed to that term by SABS must be discarded when considering whether a claimant meets the statutory test. The Delegate correctly rejected reading in qualifying language such as “valid and reliable”, “ongoing”, “durable”, or “significant.”

(c) The Arbitrator misconstrued, the Appellant argues, Dr. Yufe’s evidence. The Appellant submits that, in part, Dr. Yufe testified that “even if there were a concussion, it did not result in brain impairment that resulted in a loss of consciousness, given the totality of the evidence.”

However, the Respondent notes Dr. Yufe’s evidence at page 224 of the transcript that he never challenged the diagnosis of concussion. The Respondent further notes Dr. Yufe’s testimony at page 172 of the transcript that “a concussion has a degree of severity to it that implies impaired brain function due to a head injury.”

As I noted, subparagraph 3(2)(d)(i) of the 2010 Schedule requires a brain

impairment that results in a score of 9 or less on the GCS. The Appellant concedes the Respondent had three scores of 9 on the GCS.

(d) The Arbitrator erred in relying on Hodges and not the higher court decision in Liu v. 1226071 Ontario Inc. (Canadian Zhorong Trading Ltd.), 2009 ONCA 571.

However, the Court of Appeal in Liu held:

Any notion of catastrophic injury, other than the specific meaning ascribed to that term by the legislation, must be discarded when considering whether a claimant meets the statutory test. The statutory scheme creates a bright line rule which is relatively easy to apply. This enhances the ability of those looking to the definition to know what injuries will and will not be considered catastrophic … [Emphasis added]

The Court of Appeal denied leave to appeal from the Divisional Court decision in Hodges. The Appellant does not explain how the Divisional Court erred in Hodges in allegedly not following Liu or, if it did, why the Court of Appeal nonetheless refused to grant leave to appeal in Hodges.

(e) The Appellant submits it never conceded the three GCS scores of 9 were a valid measure of brain impairment. Rather, it states it argued that the brain impairment did not cause the GCS scores. The Appellant submits that the Arbitrator disregarded the relevant evidence of Dr. Yufe that a concussion would “normally” cause a GCS of 13 to 15.

The Appellant further argued that the Arbitrator erred in failing to consider collateral or confounding factors “that could have affected” the Respondent’s GCS in the circumstances of this case. Dr. Yufe testified that the GCS is a measure of level of consciousness and not brain impairment.

However, I noted that in Liberty Mutual Insurance Company and Young, (FSCO P03-00043, June 20, 2005), application for judicial review dismissed, 2006 CanLII 7286 (ON S.C.D.C.), Delegate Evans also cited Lombardi that the “vital distinction is between a conclusion that there was no evidence to support a finding and a mere insufficiency of evidence.

In this case, the Arbitrator looked at the proximity in time between the accident, the diagnosis of concussion and the GCS readings. Where the Arbitrator found that there was an absence of evidence was the Respondent’s speculation as to other possible causes for the GCS readings.

Further, the Divisional Court in Hodges held that the CAT definition is a legal test, not a medical test. The “purpose of this threshold test in the SABS is simply to allow a person to make a claim for enhanced benefits.”

Or, as stated by the Court of Appeal in Liu:

Provided there is a brain impairment, all that is required is one GCS score of nine or less within a reasonable time following the accident. It is a legal definition to be met by a claimant and not a medical test.

[Emphasis added]

The Court of Appeal held that in the case before it the trial judge “fell into error in equating the statutory test to a medical one. It is not.” It is difficult to see how the Arbitrator erred in law in failing to equate the statutory test to a medical test or in following both the Divisional Court and the Court of Appeal.

4. The Appellant submits that this appeal raises novel and important issues. It argues that the precedential cases have all dealt with situations “where there is a serious acknowledged brain injury, supported by objective evidence of brain bleeding observed on CT scans and MRIs, significant head trauma and lengthy periods of impaired consciousness. In this case there was a finding of catastrophic impairment based only on the Emergency Record diagnosis of concussion and a recorded GCS score of 9.”

The case law in this area, the Appellant submits, has not previously dealt with the circumstances that arise in this matter that deals with accident-related injuries that allegedly fall within the MIG (even though not an issue in the present arbitration).

However, I note that the Divisional Court held in Hodges that any notion of catastrophic impairment other than the specific meaning ascribed to that term must be discarded when considering whether a claimant meets the statutory test. Accordingly, reading in qualifying language such as “ongoing” or “significant” must be rejected. At this juncture, while this, as with any case, has its own facts, it is difficult to see that this appeal raises novel issues.

5. This decision ignores, the Appellant argues, the Court’s distinction between a “brain impairment” and a “brain injury.” One must first determine whether there is a brain injury and then determine if it caused “some” brain impairment.

However, I note that the words “brain injury” are not to be found in subparagraph 3(2)(d)(i) of the Schedule.

6. The Appellant argues that the Respondent will not be prejudiced if the appeal is allowed to proceed. The main hearing is not scheduled to proceed until February 2016. There are no outstanding treatments in dispute. However, I note that the Appellant itself states at page nine of its initial written submissions that the Respondent has exhausted his available benefits within the $3,500 MIG limit.

The Appellant argues the Respondent would suffer hardship in repaying benefits to which he is not entitled under the MIG such as attendant care or those over the MIG monetary limit. It argues that, in any event, the Respondent has not submitted any treatment for approval since November 2012, nor has he submitted any treatment for approval outside of the MIG or any documentation suggesting he has incurred any attendant care expense.

The Appellant submits that by agreeing to a preliminary hearing on the CAT question both parties agreed this “is the overarching issue that needs to be determined prior to the main arbitration hearing.” It argues that the Respondent does not deny that at the pre-hearing both parties felt that dealing with the CAT issue prior to the main hearing would result in the quickest, most just and least expensive resolution of the dispute. The parties’ preference, it argues, should be given some deference in determining whether to permit the appeal to proceed.

Resolution of this matter is not possible, the Appellant argues, until the CAT issue is finally disposed. If this appeal is heard only after the main hearing and the Respondent is found not to be catastrophically impaired, the main arbitration hearing of this matter will have to be reheard by a new arbitrator.

The Respondent notes it is within my discretion to reject this appeal without prejudice to the Appellant resubmitting its appeal once the main arbitration decision is issued. He cites Wawanesa Mutual Insurance Company and Henderson, (FSCO P15-00048, September 30, 2015), where I found the most important consideration in whether to accept that appeal was that the main arbitration hearing was scheduled for six weeks hence and that avoiding a possible multiplicity of appeals was the more efficient and cost effective means of resolving the dispute.

Following the criteria confirmed in Hodges, I am not persuaded to accept at this time this appeal from a preliminary or interim arbitration decision because:

(a) For the reasons set out above, I am not persuaded as to the apparent strength of the appeal.

(b) I am not persuaded that the Arbitrator’s decision represents a departure from prior cases, specifically a departure from the binding decisions in Liu and Hodges.

(c) The issues in actual present dispute are novel to the extent that they are largely a variation on prior arguments rejected in the binding decisions in Liu and Hodges.

(d) Prejudice to the Appellant is avoided by presently rejecting this appeal without prejudice to the Appellant renewing this appeal upon all of the issues in dispute in the current arbitration being finally decided.

(e) The Appellant advises that main arbitration hearing is scheduled for February 2016 (the July 16, 2014 pre-hearing letter had set it for June 2015). If accepted, this appeal would not be determined by next February. Any decision from this office is subject to judicial review.

There is no allegation that the parties agreed to put the main hearing on hold pending every available level of appeal being exhausted. If that was so, I am at a loss as to why a hearing date would be set for three months hence.

In any event, as I stated in Zurich Insurance Company Ltd. (Commercial Business) and Nadesu, (FSCO P11-00031, January 23, 2012) and elsewhere, neither appeals, nor arbitration, is a “parking lot” where cases are put in indefinite storage. Again, as stated by Delegate Makepeace in Torok, the over-arching principle guiding the exercise of the discretion is that the rule “should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute.”

I am not persuaded by the Appellant’s implicit argument that it refuses to discuss resolution of this case until it has exhausted all avenues of appeal. It is unclear why the Appellant could not seek at the upcoming hearing a repayment order of benefits available only under the CAT threshold should the Arbitrator’s order be subsequently overturned. It is unclear why a further main arbitration hearing would be necessary if the Arbitrator’s CAT finding is ultimately overturned.

I note, however, that the Appellant argues, to the contrary, that one reason this appeal should be accepted is that the Respondent is not seeking any benefits that are subject to a CAT

determination.

As in Henderson, I find that the quickest, most just and least expensive means of resolving this dispute and avoiding a multiplicity of possible appeals is to reject this appeal at this time without prejudice to the Appellant renewing this appeal upon all of the issues in dispute in the current arbitration being finally decided, subject to any further or other order of an appellate officer.

In respect to determining whether to grant leave for this present Notice of Appeal, I note Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53:

A court considering whether leave should be granted is not adjudicating the merits of the case … A leave court decides only whether the matter warrants granting leave, not whether the appeal will be successful … This is true even where the determination of whether to grant leave involves, as in this case, a preliminary consideration of the question of law at issue. A grant of leave cannot bind or limit the powers of the court hearing the actual appeal …

Turning to the Appellant’s requested stay of the Arbitrator’s decision, subsection 283(6) of the Insurance Act states that an appeal does not stay the arbitrator’s order unless decided otherwise. Therefore, a stay of the order of an arbitrator is the exception, not the rule. Consistent with the Insurance Act, Rule 50.3 of the Code provides that an “appeal does not stop an arbitration order from taking effect, unless the Director orders otherwise.”

In Guardian Insurance Company of Canada and Armstrong, (FSCO P00-00037, July 20, 2000), Delegate McMahon, following Canadian Home Assurance Company and Scavuzzo, (OIC P‑000626, May 18, 1992) adopted the following criteria as to whether a stay should be granted:

1. The bona fides of the appeal.

2. The substance of the grounds for appeal.

3. The hardship to the respective parties if the stay is granted or refused.

The Appellant argues the Arbitrator’s CAT decision be stayed pending the resolution of the appeal because:

1. The appeal is bona fides as both parties wished to obtain, prior to the main hearing, a final determination of the important issue of whether a claim considered to be within the Minor Injury Guideline can be considered to be a catastrophic impairment.

2. The Arbitrator erred in failing to address the proper legal test.

3. If the appeal is not presently allowed, there will be a repayment request that will be a hardship to both parties.

4. Allowing the stay will not result in any hardship to the Respondent. Rather, allowing the catastrophic impairment issue to be finally resolved will “provide certainty moving forward to the main hearing.”

As set out above, I am not persuaded as to the substance of the grounds for appeal. Regarding the alleged prejudice to the Appellant, in Digiammatteo v. Leblanc, (1989), 1989 CanLII 4076 (ON CA), 71 O.R. (2d) 130 (C.A.)

the Court held under the Rules of Civil Procedure where a stay was automatic, not the exception:

In any event, there is always a risk of non-recovery in any litigation, even when successful, and I can see no reason why all of that risk should fall on the respondent in this case.

I am persuaded by the Respondent’s submission that a stay of the Arbitrator’s order presents a hardship that will disentitle him from further benefits, the MIG monetary limits having been exhausted for over two years and the first application for mediation having been submitted in February 2013.

Accordingly, I am not persuaded to stay the Appellant’s August 19, 2015 Order.

III. EXPENSES

If the parties cannot agree on the legal expenses of this appeal, pursuant to Rule 79.1 of the Code, either party may request an appeal expense hearing within thirty days of the date of this decision.

The request is to be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, and submissions on such entitlement and/or quantum expense issues as are in dispute.

November 10, 2015

Lawrence Blackman Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.