Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2018 ONFSCDRS 125

Appeal P17-00020

PARALOGANATHAN NADESU Applicant

and

ZURICH INSURANCE COMPANY LTD. (COMMERCIAL BUSINESS) Respondent

BEFORE: Edward Lee

REPRESENTATIVES: David S. Wilson for Mr. Nadesu William M. Sproull for Zurich

HEARING DATE: May 8, 2018

DECISION ON A PRELIMINARY ISSUE

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:

Zurich’s motion is dismissed.
The request for a stay of this proceeding until Mr. Nadesu attends a continued examination by an occupational therapy assessor is denied.

Edward Lee Director’s Delegate

July 10, 2018

REASONS FOR DECISION

I. NATURE OF THE PROCEEDING

This matter involves the SABS–1996.¹

This is a preliminary motion brought by Zurich Insurance Company Ltd. (“Zurich”) within a larger variation/revocation proceeding brought by Mr. Nadesu.

In its motion, Zurich seeks a stay of the variation/revocation proceeding until Mr. Nadesu rectifies breaches he has committed by not submitting to Insurer’s medical examinations and not providing disclosure of medical and other documentation.

II. BACKGROUND

In a decision issued in May 2015, Arbitrator Rogers determined that Mr. Nadesu was catastrophically impaired and entitled to attendant care benefits. Mr. Nadesu then filed an appeal of the May 2015 decision, seeking to overturn that part of the decision which dismissed his claim for Botox injections, and the duration and monthly amount of attendant care awarded to him.

Before that appeal was heard, Mr. Nadesu submitted a new Form 1 to Zurich in January 2016, seeking an increase in the amount of attendant care paid monthly.

In response, Zurich requested that Mr. Nadesu attend an Insurer’s in-home occupational therapy functional assessment. In May 2016, Mr. Nadesu attended this assessment at his home. Following this assessment, the occupational therapist, Angela Fleming, issued a report of the insurer’s examination she conducted.² This report and how the examination proceeded are the primary subjects of this preliminary motion.

On October 7, 2016, Delegate Feldman issued his appeal order of Arbitrator Roger’s May 2015 decision. Delegate Feldman rejected Mr. Nadesu’s appeal of Arbitrator Rogers’ dismissal of the Botox claim, but allowed the appeal in regard to the amount of attendant care awarded. Specifically, Delegate Feldman increased the monthly amount of attendant care by $500.00 in each of the time periods considered.

In February 2017, Mr. Nadesu filed an Application for a Variation/Revocation of the order of Arbitrator Rogers (as modified by Delegate Feldman in his appeal decision of October 7, 2016), seeking an increase of the amount of attendant care to $5,897.41/month, commencing January 11, 2016, based upon the Form 1 Mr. Nadesu had provided Zurich in January 2016.

In its Response to the Variation/Revocation, Zurich raised this preliminary motion, seeking, inter alia, to stay the variation/revocation proceeding because Mr. Nadesu had not submitted to the examination that took place at his home in May 2016.

Specifically, Zurich seeks the following relief:

(1) An order rejecting this application as being deficient pursuant to Rule 61.4(b) [of the Dispute Resolution Practice Code] in that the application is incomplete or lacks sufficient details to allow the other to respond

(2) An order staying this proceeding until the Applicant rectifies his continuing breach of section 33(1) of the SABs by providing the documents listed in Zurich’s motion materials, “including by way of section 44 medical and occupational therapy assessments”

(3) An order staying this proceeding until the applicant rectifies his continuing breach of section 44(9)(2)(ii) and 44(9)(2)(iii) of the SABs, by attending a continued examination by the occupational therapy assessor and submitting to all reasonable physical and functional examination requested by her

(4) An order staying this proceeding until the Applicant submits to all physical, psychological, and mental examinations by medical experts to assess the applicant’s current medical condition pursuant to section 44(1) of the SABs

(5) Other such orders the Tribunal might permit.

This matter was originally assigned to Delegate Pressman, who required Mr. Nadesu to provide his written submissions to the motion first, and to have Zurich file their written submissions after.³ Following her departure from the Commission, I assumed carriage of this file.

In his submissions, Mr. Nadesu has contended that because this motion was brought by Zurich, Zurich bears the burden of proof. I agree with Mr. Nadesu’s position on this point.

I turn now to the arguments set out in Zurich’s Response to the Notice of Variation/Revocation.

III. ANALYSIS

(i) Is the application for a Variation/Revocation incomplete or lacks sufficient details to allow the other to respond?

I reject this argument. The Notice of Variation/Revocation is neither incomplete nor lacks sufficient detail to allow the other to respond. The Applicant sets out a series of facts in Schedule A of its Notice of Variation/Revocation that sufficiently detail the claim to allow Zurich to respond.

(ii) Should the proceeding be stayed until the Applicant rectifies his breach of Section 33(1) of the SABs, by providing the list of documents as set out in Zurich’s Response to the Application for Variation/Revocation, and “including by way of section 44 medical and occupational therapy assessments?”

This argument encompasses two distinct questions, one arising from section 33(1), and the other from section 44. The section 44 issue is also covered in a later argument, and will be addressed in that part of my analysis.

Section 33(1) relates to the general duty of an applicant to provide information to an Insurer, following a request from an Insurer. In the present case, Mr. Nadesu agrees that there are many medical documents that are relevant to the variation/revocation, and has in fact already disclosed some of those documents to Zurich.

At the appeal hearing before me, this issue proceeded as a simple motion for productions. Zurich’s counsel sought the documents listed in his List of Documents at Schedule A of the Response to the Notice of Variation/Revocation. Mr. Wilson declared he was prepared to produce those documents and had already indeed produced most, if not all, of them to Zurich. Zurich agreed that some of the documents had been exchanged, but was unsure as to whether all had been produced.

It was agreed that Zurich would review its file for the productions and send a letter to Mr. Wilson indicating which were still outstanding. Zurich also agreed to assume reasonable expenses for the production of these documents.

Given the parties were able to agree on this issue, I find no reason to stay the variation/revocation proceeding based on this ground.

(ii) Should this proceeding be stayed until the Applicant rectifies his continuing breach of section 44(9)(2)(ii) and 44(9)(2)(iii) of the SABs, by attending a continued examination by the occupational therapy assessor and submitting to all reasonable physical and functional examination requested by her?

(a) Section 44(9)(2)(ii)

Section 44(9)(2)(ii) refers to a requirement on both parties to “ … provide to the person conducting the examination such information or documents as are relevant or necessary to the review of the insured person’s medical condition …”

This ground is also no longer an issue. The parties have come to an agreement on productions.

There is no reason for me to stay the variation/revocation proceeding based on these findings.

(b) Section 44(9)(2)(iii)

This is the main issue of this preliminary motion. Section 44(9)(2)(iii) requires the insured person to attend an examination and to “ … submit to all reasonable physical, psychological, mental and functional examinations requested by the person or persons conducting the examination.”

According to Zurich, Mr. Nadesu breached section 44(9)(2)(iii) by not submitting to all the examinations requested by Angela Fleming, despite attending the examination at his home.

The May 26, 2016 report of the occupational therapist contains these comments:

This assessment took place on May 26, 2016 at Mr. Nadesu’s home with Mr. Nadesu, his spouse, Jeyasutha Nadesu and a Tamil interpreter present. This assessment was conducted between 10:30 a.m. and 1:45 p.m. The assessment was terminated at that time by Mr. Nadesu who advised he was unable to participate in further testing, even following a 30 minute break. Mr. Nadesu was asked if he would be able to participate further should the writer return for a second day, however, he declined, stating he did not anticipate his ability to participate would be any different on another day.⁴ [Italics mine]

Zurich argues the assessment process was “thwarted by the Applicant’s non-cooperation, leading her [the occupational therapist] to be unable to render an overall opinion, including the completion of the Form 1.”⁵

In written submissions, Zurich specified its concerns about the examination undertaken by the occupational therapist as follows:

(1) at page 22, she [the occupational therapist] outlines that the applicant was “negligibly co-operative with the assessment. He was short-tempered with the interpreter, advising there had been inaccuracies in translating what he said. He repeatedly inquired as to when the assessment would be completed after less than 90 minutes into the assessment ...”

(2) also at page 22, she indicates that “Regular breaks were taken, approximately every 30 minutes for 10 minutes at a time. Along with a 30 minute break intended to attempt to complete the assessment”.

(3) also at page 22, she states that “After a 30 minute break to eat and rest in his bed upstairs, the writer attempted a modified range of motion assessment in a supine position… Supine to sit transfers were observed to be independent ... Mr. Nadesu stated he was unable to sit at the side of the bed unsupported … At that point Mr. Nadesu declined to continue the assessment.”

(4) Excepting the home entrance, the dining room area, the stairs from the lower to upper floor, and the Applicant’s bedroom, Ms. Fleming and the interpreter were refused access to the remainder of the residence (see pp. 14-15).

(5) The Applicant refused performance validity testing, stating he was unable to learn or recognize the test stimuli (p. 22).

(6) The Applicant declined to participate in cognitive or psychosocial testing (p. 23).

(7) Ms. Fleming indicates she was generally unable to perform range of motion testing (p. 24).

(8) The Applicant declined to participate in manual muscle testing, and he also declined to demonstrate transfers, stopping, squatting, kneeling or mobility testing (p. 24).

(9) As detailed at pages 25-30, Ms. Fleming indicates at page 23 that the Applicant “was unwilling to participate in almost all requested aspects of the assessment, including functional testing.” This included Dressing/Undressing (p. 25), Grooming (p. 26), Shaving (p. 27), Hair care (p. 28), Nail care (p. 28), and Feeding (p. 29) under level 1; Hygiene (p. 31), Clothing Care (p. 32), and other functional testing under Basic Supervisory Care under level II; and Genitourinary Tracts (p. 35), Bathing (p. 38), and Oral Hygiene (p. 39) under level III.⁶

To support its position that Mr. Nadesu’s actions amounted to a breach of his obligation to submit to insurer’s examinations, Zurich cited the arbitral decision of Griva and AIG Insurance Company of Canada.⁷

In Griva, the Arbitrator stayed an arbitration pending the completion of an in-home occupational therapy assessment, and a psychological assessment that had not yet taken place at the time of the Insurer’s motion for a stay. The occupational therapy assessment had been commenced previously and conducted for over eight hours during the course of two days and had still not been completed.

The Arbitrator was unable to determine which party had been at fault for the length of the testing, and found that there was evidence on both sides “pointing to the other…”⁸ He noted that the assessor had testified that the delay was attributable to the attendance of the insured’s own treating occupational therapist at the assessment, the unsolicited interjections of the insured’s wife, and the need for questions to be repeated to obtain clear and accurate answers from the Insured.

In his ruling, the Arbitrator held that there was no evidence that completing the test would cause “negative health consequences” to the Insured, and that the Insured’s own medical evidence proved that the Insured could complete the remaining testing with a different assessor. The Arbitrator stayed the applicant’s application for arbitration pending the attendance and/or completion of the Insurer’s in-home attendant care and psychological examination by the applicant.

A similar question was canvassed in Gogna and State Farm Mutual Insurance Company (FSCO A05-001887). In that case, the Arbitrator considered section 42(5) of the SABs, a similar provision which also required an Insured to “…submit to any physical, psychological, mental and functional examinations requested by the person or persons who conduct the examination …”

In that case, an Insured attended a psychological assessment at a clinic, but left after approximately one hour of testing. The Arbitrator held that the pre-conceived notions of the assessor as to how the Insured would respond, and how he would react made the examination uncomfortable. The assessor created an insensitive, critical, impatient, and tense atmosphere that led the Insured to leave, and the Arbitrator refused to preclude the Insured from arbitration for failing to attend or submit to the Insurer’s examination.

I am bound by neither of these decisions, and in regard to Griva, I note that nothing in the SABs or any other legislative or jurisprudential authority requires an Insured to demonstrate “negative health consequences” to justify the non-completion or discontinuance of an Insurer’s medical examination.

In the case before me, Mr. Nadesu attended the occupational therapy assessment and permitted examiners to enter his home to conduct it. It is also clear that he submitted to the examination for approximately three-and-a-quarter hours, when he “… advised he was unable to participate in further testing, even following a thirty minute break.”⁹

Zurich’s motion seems to raise the following question: at what point can it be said that an Insured has submitted to an Insurer’s examination so as to have satisfied the requirements of section 44(9)(2)(iii)?

In this regard, I note the following criteria which have been widely accepted in arbitral jurisprudence when considering Insurer’s examinations:

With respect to possible prejudice to the parties:

a. It is recognized by the Commission that insurer examinations are “inherently intrusive”,

b. The Commission strongly disapproves of an insurer using excessive insurer examinations as a means to harass or intimidate an applicant or in callous disregard of information that such assessments may adversely affect the health of the applicant;”¹⁰ [Emphasis mine]

Given these accepted principles, I find what constitutes “submission” to “all reasonable physical, psychological, mental and functional examinations” requires a more nuanced analysis than that applied by the Arbitrator in Griva. In fact, the Arbitrator in that case seemed to have been unaware of the arbitral jurisprudence cited above.

Further, his suggestion that evidence of “negative health consequences” is required to permit stoppage or discontinuance of an Insurer’s examination raises more questions than answers. For instance, would an Insured have to provide a medical report to support his contention that he had suffered “negative health consequences?” Would an Insurer then be permitted to seek an Insurer’s medical examination to rebut that evidence? What if the Insured did not complete or participate in that Insurer’s examination? And ad infinitum.

Nor am I convinced that a microscopic examination of each of the myriad of tests and tasks required during an occupational therapy assessment is the fairest or best means to determine if the Insured has “submitted” to an examination. Many Insurer’s examinations and the In-home occupational therapy assessment, in particular, are more complex and nuanced than the giving a blood sample or a pulse or blood pressure measurement.

As amply demonstrated in the present case, the In-home occupational therapy assessment often requires an examinee to undergo a series of functional or cognitive tests which may require active movement, concentration, and cooperation on the part of the examinee. In many instances, (including the present one), even after an Insured has submitted to, or completed a test, the assessor may determine that the readings obtained were not an accurate reflection of the Insured’s actual capabilities. An assessor might even draw a conclusion directly contradictory to the result which was obtained through the very test administered and completed.

Further, many of the tests are dynamic. Presumably, the use and application of different musculoskeletal systems might lead to fatigue, or in some cases, pain in the person being tested.

There may be written tests. In the present case, the report states the Insured appeared to fall asleep at some point during the assessment and asked for numerous breaks.¹¹ Further, he was “short tempered” and “critical” of the interpretation by the interpreter.¹² When asked to participate in performance validity testing, he stated “he was unable to learn or recognize the test stimuli and refused to complete the test.”¹³

None of these observations are surprising given the Insured was already determined to be catastrophically impaired (having a marked impairment due to a mental or psychological disorder), a non-native English speaker, and participating in the examination through the intermediary of an interpreter. Nor do I find that a person who simply states he is “unable to learn or recognize the test stimuli” has necessarily refused a test, or has not ‘submitted” to a test.

Further, it is also clear that assessors often conduct observations of the Insured outside the formalized process of the examination. This is again amply demonstrated by the following comments in the report itself:

he [Mr. Nadesu] was observed to stand tall with a normal stance, ambulate with light support of the walker. He was observed to independently apply his brakes. (p. 22)

Mr. Nadesu was observed to negotiate the stairs … (p. 22)

Supine to sit transfers were observed to be independent. (p. 22)

Mr. Nadesu intermittently appeared to have fallen asleep while seated, however, he remained very much aware of the surrounding conversation and added his input when he wished. (p. 22)

Although he expressed sufficient distress as to terminate the assessment, he appeared to maintain a calm demeanor, with the exception of becoming agitated with the interpreter. (p. 22)

Mr. Nadesu produced scores that were so low as to barely register on the dynamometer. These readings were clearly inconsistent with observed functional abilities, including pulling himself up the bannister while negotiating the stairs and grasping the handles of the walker. (p. 23)

Results of this performance validity testing would suggest that Mr. Nadesu provided suboptimal effort during this assessment. Therefore these observations made should be considered his minimal level of performance. (p. 23)

Mr. Nadesu’s grip strength values, if taken at face value, would suggest very limited hand function. Functionally however, Mr. Nadesu demonstrated significant strength. As such it would appear the results on formal testing are invalid and will not be relied upon to inform clinical reasoning. (p. 23)

With respect to range of motion testing: Passive range of motion testing did not correlate with functional observations. (p. 24)

Mr. Nadesu declined to demonstrate any functional task including a grooming task. He was observed to lift a cup of tea to his lips using both hands during interview. (p. 26)

Based upon demonstrated abilities during informal observations, the writer does not support a need for assistance to wash his face and hands. (p. 27)

he was observed to reach to his face and both hands during interview. He was observed to pull himself up the stairs using both hands. (p. 27)

Indirectly he was observed to demonstrate adequate grip strength to pull himself up the stairs using the bannister, to hold a cup of tea using both hands, to maintain a functional grasp on his Rollater walker as he ambulated. (p. 28)

he was observed to drink a cup of tea independently. (p. 29)

Fully weight bearing, ambulated on the main floor of the home with an upright stance and light support of his Rollater walker

Assistance received from his spouse for transfers to and from chair;

Independent bed mobility demonstrated

Independent sit to stand transfer demonstrated

Sat at side of bed grasping at sides of mattress with both hands

Observed to ambulate with the Rollater walker on the main floor. (p. 30)

The level of cognitive and physical deficit suggested by Mr. Nadesu is not supported by any of the available medical brief. (p. 32)

He reported being unable to recall basic personal information, such as age, his children’s ages, or where they were during the current assessment. Despite this, he was able to add pertinent and detailed information to the conversation in an inconsistent manner. (p. 33)

Unfortunately, Mr. Nadesu declined to participate in virtually all aspects of formal and functional assessment. Those objective findings obtained were clearly inconsistent with casual observations and as such were more likely than not invalid. Mr. Nadesu reported cognitive deficits were not in keeping with known patterns of deficit (i.e. being unable to remember his age but being able to recall specific details regarding some, but not all treatments). (p. 40) [Emphasis mine]

Clearly, even without Mr. Nadesu’s completion of certain parts of the testing, the assessor was able to make observations and draw conclusions concerning functionality. In fact, the assessor’s remarks suggest that she believed much of the objective findings was likely inconsistent, invalid or the result of suboptimal effort.

Even the assessor’s comments about Mr. Nadesu being “negligibly co-operative” are unclear. She noted he did not allow access to all parts of his home, but nowhere in the report was this clearly set out as a requirement of the testing process.

Therefore, I find that rather than attempting to parse out the minutiae of the testing process and Mr. Nadesu’s participation in regard to individual segments of the assessment, it is more appropriate to turn to the principles set out in the decision of Certas Direct Insurance Company and Gonsalves.¹⁴ There the Divisional Court applied the following considerations based on natural justice to determine whether an arbitration should be stayed to allow Insurers’ examinations:

[8] Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.

[9] In the circumstances of this case, if this arbitration is allowed to proceed in the absence of a further orthopedic examination by a doctor of the insurer’s choosing, the insurer will have no practical ability to respond to the opinions with which it was provided thirty-one days before the commencement of the arbitration.

[10] In our view, the insurer would be denied the right to make a full response and would not be heard as the dictates of procedural fairness require. … This is trial by ambush. …

[11] In understanding our concern, it is helpful to consider what is likely to happen in the absence of the adjournment. The arbitration will proceed. The most recent orthopedic reports will be presented. The insurer will have nothing current with which to respond.

[Emphasis mine]

First, I note that many of the concerns addressed in Gonsalves are inapplicable to the present situation. In Gonsalves, the applicant delivered a new report raising new issues 31 days before the scheduled hearing. The Insurer’s positon was that there was simply insufficient time for insurer’s examinations to take place before the arbitration hearing. In the present case, the Insured’s occupational therapy report was provided to Zurich in January 2016. The application for a variation/revocation was made in February 2017. No hearing date for the variation/revocation has yet been scheduled, and an Insurer’s occupational therapy examination actually took place in May 2016.

Second, Mr. Nadesu attended the In-home examination, and participated for approximately three-and-a-quarter hours. Zurich was provided an opportunity to gather evidence to respond to the positon taken against it. As mentioned, even without the completion of every aspect of the assessment, the assessor was able to draw the conclusions she noted in her report.

Third, the assessor was never given the decisions of Arbitrator Rogers and Delegate Feldman before she conducted her examination, and as a result, appeared to expend much of her energy and analysis attempting to determine the causation of Mr. Nadesu’s symptomology, a question that was not only answered affirmatively in the Rogers decision, but was also clearly outside her field of expertise.¹⁵ She also made numerous references to the psychological and psychiatric documents in the file, another matter outside her jurisdiction and capabilities.¹⁶ I am not convinced any Insured should be made to repeat an examination merely because the examiner failed to understand the role she had been assigned.

Fourth, the most important consideration is in the report itself. At page 40, the assessor lists a number of medical documents she would like to have to complete the report. She then states the following: “Following receipt of the above information, the writer will proceed to provide an opinion regarding Mr. Nadesu’s need for Attendant care.”¹⁷[Italics mine]

This statement and the previous determinations convince me that the problems of procedural and administrative justice that needed to be addressed in Gonsalves do not exist in the present case. The assessor herself states that once she has these documents (and the parties have agreed on their production), she will be able to provide the opinion sought. Presumably, she would also utilize the many conclusions and findings she made during both the formal and informal testing process that already took place.

I therefore reject Zurich’s request for a stay of the proceedings until Mr. Nadesu attends a continued examination by an occupational therapy assessor.

I also reject Zurich’s request for a generalized stay of the proceedings based on Mr. Nadesu attending “… all physical, psychological, and mental examinations … pursuant to section 44(1) of the SABs.” At the present time, no date for the variation/revocation hearing has been set. No other requests for assessments have been made and it is unnecessary for me to rule on them.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.