M.K. v. Wawanesa Mutual Insurance Company, 2017 ONFSCDRS 214

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2017 ONFSCDRS 214

Appeal P16-00082

Appellant

and

Respondent

BEFORE:

Delegate Jeffrey Rogers

M.K., self-represnted

Mr. Kevin D.H. Mitchell, solicitor for Wawanesa

June 30, 2017

Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, R.R.O. 1990, as amended, it is ordered that:

This appeal is dismissed.
M.K. shall pay Wawanesa its appeal expenses in the amount of $2,800.

August 4, 2017

Jeffrey Rogers Director’s Delegate

Date

I. NATURE OF THE APPEAL

M.K. appeals the Arbitrator’s decision. The submission is that the Arbitrator erred in dismissing the claim for income replacement benefits (IRBs), medical benefits and a special award. The Arbitrator found that the Appellant was self-employed, and not an employee, and that there was no entitlement to IRBs because the evidence did not prove any quantifiable income during the relevant pre-accident period. The Arbitrator accepted expert evidence to the effect that the Appellant would not benefit from the proposed treatment. He therefore dismissed the Appellant’s claim for medical benefits.

For the reasons that follow, I find no error of law by the Arbitrator. The Arbitrator’s decision turned on his analysis of the facts. I find that the Arbitrator’s reasons provide a cogent explanation for his factual conclusions. I find no error in principle in arriving at those conclusions. This appeal is therefore dismissed.

II. BACKGROUND

M.K. was injured in an accident on January 3, 2012 and sought accident benefits from Wawanesa, payable under the Schedule.¹ M.K. filed an application for arbitration, after mediation did not resolve disputes that had arisen regarding entitlement to further claimed accident benefits. The issues before the Arbitrator were entitlement to IRBs at the rate of $400 per week, from one week post-accident, payment for medical treatment in the amount of $1,177.86, and a special award. The Arbitrator dismissed the claims. The Arbitrator’s findings are noted above. I will review them in greater detail later.

English is not M.K.’s first language. This was apparent from the Notice of Appeal and the written submissions. I therefore arranged for an interpreter to assist at that oral hearing. However, the precaution proved unnecessary because M.K. is much more proficient in spoken English than in writing.

Before the hearing, M.K. presented a document for counsel for Wawanesa to sign. The document appeared to be an agreement not to disclose personal information. I informed M.K. that I could not require counsel to sign the agreement but I could craft this decision without identifying the Appellant. Wawanesa did not object. I also informed M.K. that I am unable to withdraw from public scrutiny any information that has already been made public.

III. ANALYSIS

As at the hearing, M.K. is self-represented in the appeal. Under s. 283(1) of the Insurance Act, appeals are limited to “a question of law”. M.K.’s Notice of Appeal consists of 19 typewritten pages and a further 32 pages of attachments. Upon reading it, it is apparent that M.K. disagrees with the Arbitrator’s findings of fact. It is difficult to discern any allegation of an error of law. The same applies to the voluminous written submissions I received from M.K.

I noted this issue in my letter acknowledging the appeal on November 17, 2016. I stated:

Considering the length of [M.K.’s] Notice of Appeal, I remind the parties that appeals are limited to “a question of law”: Insurance Act, s. 283(1). The leading case on the interpretation of s. 283(1) is Lombardi and State Farm Mutual Insurance Company, (FSCO P01-00022, February 26, 2003). As discussed in that case, an error of law is a finding of fact made in the complete absence of supporting evidence, based on conjecture, or arising from a misapprehension of the evidence that is caused by a misdirection on a legal principle. ..

I trust that, once we set a date for the providing of written submissions, these limitations will be kept in mind with respect to those submissions. I suggest that in particular [M.K.] should focus in on the areas where there may be an error of law within the meaning of Lombardi, and not ask me to re-weigh the evidence.

Before hearing oral submissions, I again brought this issue to M.K.’s attention. Nevertheless, most of M.K.’s oral submissions dealt with why the Arbitrator should have made different conclusions on the facts. M.K. gave new evidence and recounted the “evidence” at the hearing. No transcript of the hearing was filed on the appeal. I will review the Arbitrator’s factual findings in detail later, but here are the issues raised in oral submissions which I consider to be allegations of errors of law.

1. M.K. claims that the Arbitrator was biased

I find no basis for the allegation. It is claimed that the Arbitrator has a personal connection with Wawanesa, but there is no evidence to support the claim. It is claimed that M.K. complained about the Arbitrator’s conduct of the hearing and he was disciplined as a result. There is no evidence of this. M.K. alleges that someone at ADR Chambers confirmed that the Arbitrator had been disciplined but refused to say how and did not provide written confirmation. That seems highly unlikely and I do not accept that it happened. M.K. claims that the Arbitrator’s bias is exposed by the personal tone of his decision. I found no such tone in the decision.

2. M.K. claims that the Arbitrator erred in denying a motion to add further issues

M.K. sought to add two further claims for medical benefits to the arbitration. The Arbitrator denied the request because the issues had not been mediated and the dispute arose after April 1, 2016 when jurisdiction to resolve the dispute was transferred to the License Appeals Tribunal as a result of amendments to the Insurance Act.

Section 281(2) of the Insurance Act as it stood before April 1, 2016, required mediation to have been sought and to have failed, before a dispute could be brought to arbitration. M.K. claims that the additional items in dispute were in fact mediated. However, M.K. did not produce a mediator’s report or any other evidence to support that claim. I find no error by the Arbitrator.

3. M.K. claims that the Arbitrator’s reasons on credibility were deficient

The Arbitrator did not find M.K. to be a credible witness, principally because of inconsistencies in the oral testimony. He stated:

Throughout the Hearing, I found the Applicant’s testimony to lack a ring of truth and consequently, I found [M.K.] to lack credibility as witness. [M.K.] contradicted … self numerous times, and therefore I give little weight to … testimony. I placed significantly greater weight on the medical reports and the testimony of the expert witnesses at the Hearing. The injuries that the Applicant testified to at the Hearing were different than the documented evidence in … doctor’s medical notes. These discrepancies also included the number of times that … claimed to have visited … family doctor, which were different than the evidence in the doctor’s notes.²

M.K. submits that the reasons are deficient because the Arbitrator did not give any examples of untruthfulness in the testimony and the examples he gave of discrepancy between the documents and testimony are insignificant.

I find no error by the Arbitrator. In its decision in Kanareitsev v. TTC Insurance Company Limited,³ the Divisional Court summarized the jurisprudence regarding the adequacy of reasons as follows:

Determining adequacy of reasons is a contextual exercise. The essential question is whether reasons provide the basis for meaningful judicial review.
The reasoning process must set out and reflect consideration of the main relevant factors.
It is insufficient to summarize parties’ positions and baldly state conclusions.
Factors to be considered include the decision maker setting out essential findings of fact and the evidence upon which they are based. The reasons must address the major points in issue.
Particularly when results turn on credibility and involve fact-driven analysis, appellate review must take proper account of the distinct advantage of the decision maker’s assessments. Appeal officers must not try the case de novo or substitute his or her view.

The Arbitrator did not give many examples to support his findings on credibility. Nevertheless, as noted in Kanareitsev, caution should be exercised in reviewing his decision in this regard because of his “distinct advantage” in assessing M.K.’s credibility. The question of the sufficiency of his reasons requires a contextual analysis. His view of M.K.’s credibility played a minor role, if any, in the outcome. His decision on entitlement to IRBs turned on the documents and on expert evidence. It did not turn on M.K.’s explanation. The Arbitrator’s decision on entitlement to the disputed medical treatment turned on his acceptance of uncontradicted expert testimony. In this context, the Arbitrator was not required to support his credibility findings with a more detailed analysis. I now turn to the details of the Arbitrator’s findings regarding the benefits in dispute.

IRBs

As I noted earlier, the main thrust of this appeal is to challenge the Arbitrator’s findings of fact. Again, as noted earlier, a finding of fact can be an error of law if made in the complete absence of supporting evidence, if based on conjecture, or when it arises from a misapprehension of the evidence that is caused by a misdirection on a legal principle. I find no such error by the Arbitrator. The Arbitrator’s decision clearly sets out and reflects consideration of the main relevant factors, sets out essential findings of fact and sets out the evidence upon which they are based.

M.K. submits that the Arbitrator erred in not accepting that the accident caused disability from employment. But, although the Arbitrator referred to the evidence in this regard, he made no such finding. Indeed, Wawanesa conceded that M.K. initially met the disability test for entitlement to IRBs. The problem is that M.K. could not prove any qualifying income.

M.K.’s source of income is two business entities. The first is a wholly owned corporation which showed no income. The second is an unincorporated entity from which M.K. took 40% of the income and M.K.’s spouse took the remaining 60%. For tax purposes, this entity operates as a partnership. M.K. reported some income from this partnership, but the net was zero, after deductions. These are the essential facts, as the Arbitrator found, supported by the documents M.K. provided to Wawanesa.

The Arbitrator also noted that M.K. claimed variously to be an employee and then to be self-employed. He found that M.K. is self-employed. That finding is supported by the evidence, but it hardly matters. The only evidence M.K. produced to show income as an employee was uncashed cheques and cheque stubs showing year-to-date earnings. The Arbitrator correctly discounted this evidence because there were no bank records to support it and no T4s.

Section 4.3(3) of the Schedule requires weekly income from self-employment to be calculated in accordance with the Income Tax Act. Section 4.3(5) requires that only income reported under the Income Tax Act shall be taken into account in calculating IRBs. This rule applies regardless of whether the insured person is employed or self-employed. There is not a single income tax return showing net income of more than zero to support entitlement to IRBs, whether from employment or from self-employment. Therefore, even if the Arbitrator had not rejected the flimsy evidence M.K. provided to prove income as an employee, there still would be no entitlement to an IRB.

Section 15 of the Schedule requires Wawanesa to pay for reasonable and necessary expenses incurred for M.K.’s medical treatment. The $1,177.86 in dispute at the arbitration was for treatment described in a treatment plan of August 10, 2012. The plan was prepared by Dr. Mathieu Turgeon, a chiropractor. Dr. Turgeon diagnosed various muscle strains and sprains and proposed to manipulate multiple regions over the course of 9 visits.⁴

Wawanesa denied payment based upon the opinion of Dr. Anthony Marchie, an orthopaedic surgeon. He opined that M.K.’s treatment regimen had plateaued in terms of its efficacy. Dr. Marchie testified at the hearing and he confirmed his opinion. M.K. presented no expert evidence. Except for the assumption that Dr. Turgeon believed the treatment to be reasonable and necessary, there was no evidence before the Arbitrator to support that conclusion.

The thrust of M.K.’s position before the Arbitrator was that the accident caused more severe injuries than the soft tissue injuries that all medical practitioners diagnosed, including M.K.’s family doctor. On appeal, the submission was that the accident caused chronic pain. But there is no evidence that the proposed treatment would address that issue.

The Arbitrator noted that M.K. only visited the family doctor three times after the accident. He rejected M.K.’s evidence about more visits because it conflicted with the doctor’s notes and the OHIP summary. He accepted Dr. Marchie’s opinion that M.K. sustained uncomplicated soft tissue injuries as a result of the accident and that the proposed treatment would be of no benefit. I find no error by the Arbitrator. As with his decision on IRBs, the Arbitrator’s decision clearly sets out and reflects consideration of the main relevant factors, sets out essential findings of fact and sets out the evidence upon which they are based. M.K. submitted that the Arbitrator erred because Wawanesa concedes that the injuries are not minor, thereby conceding entitlement to $45,000 in treatment. M.K. also submitted that the Arbitrator is not a doctor and therefore cannot make findings regarding impairments, and that the Arbitrator erred in finding that the accident did not cause psychological impairments. None of these submissions is relevant to the Arbitrator’s decision. Although the accident-related injuries were not minor, M.K. still had to prove that the proposed treatment was reasonable and necessary. The Arbitrator is not a doctor but he did not make a diagnosis or form an independent opinion regarding treatment. He relied upon expert opinion, as he was entitled to do. The proposed treatment was not for a psychological condition, so it could not be justified by M.K.’s alleged psychological impairments.

Special Award

M.K. submits that the Arbitrator erred in not allowing a claim for a special award to be pursued and in not granting a special award. Section 282(10) of the Insurance Act allows an arbitrator to make a special award only when it is determined that an insurer has unreasonably withheld or delayed payments. The Arbitrator could not have erred, since he correctly found that no payments were owed.

IV. EXPENSES

Wawanesa sought its expenses of the appeal. The only relevant criterion is Wawanesa’s complete success. I find that Wawanesa is entitled to its expenses. I fix the amount at $2,800. In assessing the reasonableness of the appeal expenses, I am guided by Delegate Blackman’s review in Bains and RBC General Insurance Company.⁵ He found that the average expense award to successful insurers was $2,812.91. I have fixed the amount recoverable a bit below the average because, although an in-person hearing was required, this was a straightforward appeal from Wawanesa’s perspective.

August 4, 2017

Jeffrey Rogers Director’s Delegate

Date

Footnotes

The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
At page 5
2008 CanLII 26262 (ON SCDC), [2008] O.J. No. 2132
Exhibit 3, Tab 148
(FSCO P09-00005, September 8, 2010)