Car accident does not have to be sole cause for accident benefits.

April 24, 2011, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Director’s Delegate: David Evans

Decision Date: March 2, 2011


Mr. Arunasalam appealed the order of Arbitrator Rogers dated June 25, 2009, limiting his claim for income replacement benefits (IRBs) toMarch 31, 2008 and cancelling a further hearing scheduled to determine post-104 week IRB entitlement. The following is a summary of the decision made by Director’s Delegate David Evans on the issues of the appeal.


Mr. Arunasalam was injured in a motor vehicle accident on August 31, 2006. He received IRBs until they were terminated on July 24, 2007. The issue in arbitration was IRB entitlement from July 25, 2007 to August 25, 2008, 104 weeks after the accident.

Mr. Arunasalam had left one job before the accident and allegedly had started at another. The first question before the hearing arbitrator, then, was which job to use to determine both entitlement to and quantum of IRBs under the SABS. State Farm submitted it was prevented from providing relevant evidence to show that Mr. Arunasalam had not started the other job.
If an insured is working at the time of an accident, entitlement to IRBs is based on that employment. If not, it is based on the employment in which the insured person spent the most time during the 52 weeks before the accident. Mr. Arunasalam had been employed by Frisco's Brasserie. He claimed to have left that job several weeks before the accident for health reasons after allegedly finding a job with a temporary placement agency, A&T Manpower Services Inc. Although not working on the day of the accident, he claimed to have been working as a shipper and receiver on assignment for A&T at a company called Zimmcor. He submitted that IRB entitlement should be based on his work at Zimmcor, and State Farm submitted that it should be on the Brasserie job.

Regarding this issue of Mr. Arunasalam's employment for the purposes of the IRBs, Arbitrator Rogers found that the Insured had an ongoing relationship with A&T prior to the accident and that he had been working as a shipper and receiver on assignment at Zimmcor. He concluded that Mr. Arunasalam's entitlement to IRBs should be based on the A&T job.

The parties also disagreed on the extent of Mr. Arunasalam's accident-related impairments. With respect to Mr. Arunasalam's pre-accident condition, he left the Brasserie because his right leg problems interfered with stair climbing and the job aggravated his asthma. The Arbitrator found that these were problems specific to the Brasserie. He found that pre-accident the Insured was capable of engaging in the essential tasks at Zimmcor, which he found included prolonged standing and repetitive lifting and carrying of weights between twenty and fifty pounds.

With respect to Mr. Arunasalam's post-accident condition, his principal complaints were neck, back and right shoulder pain and stiffness accompanied by frequent debilitating headaches. While Mr. Arunasalam had also been diagnosed with depression, the Arbitrator found there was no suggestion that he was disabled from working solely as a result of psychological illness.

The Arbitrator rejected State Farm's submission that Mr. Arunasalam's reported symptoms were not credible. Instead, he wrote, "I find that the existence of objective evidence to support significant, accident-related injury to Mr. Arunasalam's right shoulder, completely undercuts State Farm's suggestion of fabrication and exaggeration." The Arbitrator noted that a large and almost complete tear in the supraspinatus tendon in his right shoulder was not diagnosed until almost two years after the accident, on April 21, 2008. The Arbitrator found this tear was connected to the accident, as the medical history was "replete with Mr. Arunasalam's immediate and persistent complaints of right shoulder pain to both those who treated Mr. Arunasalam and those who assessed him on State Farm's behalf."

The Arbitrator found that the objective verification of Mr. Arunasalam's complaints regarding his right shoulder bolstered the credibility of his complaints about other symptoms. Accordingly, he accepted Mr. Arunasalam's evidence and found that in addition to right shoulder and arm pain, he continued to suffer significant lumbar and cervical pain and stiffness and frequent debilitating headaches. He found that Mr. Arunasalam continued to be substantially unable to perform the essential tasks of his employment at A&T when State Farm terminated IRBs on July 24, 2007.

The Arbitrator found that Mr. Arunasalam was not entitled to IRBs after March 31, 2008. However, as will soon be discussed in detail, this was not based on any improvement in the Insured's condition. The Arbitrator found that Mr. Arunasalam was disabled from working due to that tear in the right shoulder tendon that was only diagnosed on April 21, 2008, three weeks after the termination date set by the Arbitrator. The Director’s Delegate could only take this to mean that the Arbitrator found the Insured was still disabled due to the accident even after the termination date he set. In fact, the Arbitrator made no finding that Mr. Arunasalam's accident-related condition ­– which included the tear – had improved prior to the two-year mark. Accordingly, the Director’s Delegate concluded that the Arbitrator found that the Insured was disabled through to that point.

However, the Arbitrator stated that since the accident, "Mr. Arunasalam has been diagnosed to be diabetic and suffering from high blood pressure and an unspecified heart condition." This was reported by Mr. Arunasalam to Dr. JG, psychologist, who assessed him at his counsel's request. The Arbitrator found it "reasonable to limit his entitlement to further IRBs to March 31, 2008, which is shortly before he reported his limitations to Dr. Garber." The Arbitrator thus cancelled the hearing originally scheduled for September 14, 2009 to determine Mr. Arunasalam's entitlement to post-104 week IRBs. Accordingly, he did not deal with Mr. Arunasalam's claim for those post-104 week claims.

Analysis of the Appeal

Mr. Arunasalam appealed the Arbitrator's order that he was not entitled to further benefits after March 31, 2008 and so was not entitled to a hearing to determine his entitlement to post-104 week IRBs.

Mr. Arunasalam submitted that the Arbitrator erred in applying rules of natural justice, in applying the law, and in making findings essentially in the absence of evidence and based on expressed opinion. He submitted that because the alleged heart condition only played a minor role in the arbitration, the Arbitrator should have noted his concerns in that regard and allowed submissions on it, especially since the Arbitrator focused on "Mr. Arunasalam's perceived limitations" and not the actual effect of these limitations.He submitted that the issue of causation for unrelated intervening events deserved more than a one-sentence analysis. He also submitted that, at best, the Arbitrator's finding was an expressed opinion, as no evidence could reasonably support it.
The Director’s Delegate found merit to these submissions, considering the limited evidence about the alleged conditions and their diagnoses. While the Arbitrator stated "The parties filed10 briefs containing several hundred documents," he nonetheless "did not receive evidence as to exactly when these diagnoses were made." The only evidence about the alleged heart and blood pressure conditions – which were the ones referred to as causing Mr. Arunasalam to limit his activities – came from Mr. Arunasalam himself. Dr. JG in his report attached a number of caveats when reciting what Mr. Arunasalam told him about his limitations, noting that "it actually remains unclear as to whether Mr. Arunasalam may have in fact be misunderstanding certain comments being offered by other health care providers."

The clinical notes and records of Mr. Arunasalam's family physician contained no reference to a heart condition. There was no reference to anything pointing to a heart condition, no referral to a specialist for a heart condition, and no evidence of heart attack, angina, or other such symptoms. Furthermore, the Arbitrator set a termination date even though he did not know when the diagnoses were made – assuming they were even made, despite the lack of any such medical evidence.

Mr. Arunasalam had real and not just perceived accident-related limitations, as the Arbitrator had already found. Indeed, the Arbitrator relied on the objective determination of the shoulder tendon tear that was made after the termination date imposed by him.

Accordingly, nothing changed one day to the next, between March 31 and April 1, 2008, in Mr. Arunasalam's real accident-related limitations. Since the Arbitrator found that Mr. Arunasalam continued to suffer a substantial inability to perform the essential tasks of his job due to the accident, in that he relied on the diagnosis of that tear that was diagnosed in April 2008, it followed that according to the terms of s. 4(1)1 the Insured was still entitled to receive his IRBs after March 31, 2008.

State Farm submitted that there was no need to apply the material contribution test, as there was no dispute that the Arbitrator found the tear in the tendon in Mr. Arunasalam's shoulder was caused by the accident. It submitted that the only relevant test is the "but for" test that should be applied in all circumstances unless there is a specific reason the test is unworkable.

However, both before and after March 31, 2008, the Arbitrator's findings meant that "but for" the accident Mr. Arunasalam was disabled from working. The only change was that the Arbitrator arbitrarily selected that date as the one as of which Mr. Arunasalam was also disabled due to his perceived heart problems. It was on that basis that he terminated benefits. That was an error in law, since Resurfice has not changed the law that there can be more than one cause to a disability. Perhaps part of the problem was that there is some confusion in the use of the term "material contribution." It has a specific meaning in tort cases, as set out in Resurfice, but in cases at the Commission it means that a cause of the disability – injuries arising from a motor vehicle accident – is materially contributing to the disability despite other causes, whether they arose before or after the accident.
The most similar case to that of Mr. Arunasalam, in that it dealt with a disability arising post-accident, is Worku and Co-operators General Insurance Company. Ghenet Worku was injured in a motor vehicle accident on July 28, 1990, and received statutory accident benefits from her insurer. Approximately two weeks after her car accident Ms. Worku was assaulted and robbed at her workplace. She received Worker's Compensation benefits in respect of injuries sustained in the assault and robbery. The arbitrator noted that, unlike judges within the tort system, arbitrators do not have the flexibility to divide and distribute damages between two or more contributing causes, or to adjust the amount of benefits to reflect the extent to which a car accident may have contributed to injury – a situation that has not changed. The arbitrator concluded that both the car accident and the assault made significant contributions to Ms. Worku's condition. The arbitrator found that the applicant was entitled to statutory benefits until her accident-related disabilities had abated to the extent that she no longer met the disability test, noting that "the Insurer is not responsible for continuing difficulties that I have found to be more probably connected to the robbery than to the motor vehicle accident."

The basic tort principle of returning a plaintiff to an "original position" does not apply in SABS cases. Either a person receives IRBS or does not, unless the SABS itself sets out an apportionment based on post-accident income, for instance, or a "ramp-down" on the basis of age over 65.
There was nothing impossible about proving that the motor vehicle accident caused Mr. Arunasalam's disability. The "material contribution" test in the technical Resurfice sense was not even at issue here. What was at issue was whether an insurer could be excused from paying further benefits when another cause contributes to an insured's disability, even when the injuries from the motor vehicle accident are still a material cause of the disability. The analogy in the no-fault benefit system is between causes arising from the motor vehicle accident and other causes. As set out in Worku, arbitrators do not have the power to divide and distribute damages (apportionment) between these causes. Apportionment would also be contrary to the principles of the SABS, because then the insurer would escape full liability even though the motor vehicle accident materially contributed to the applicant's injuries.
The Ontario Court of Appeal in Monks v. ING Insurance Company of Canada (2008) noted that there has been “a long line of arbitral decisions in which this [material contribution] test has been utilized to resolve causation issues in accident benefits disputes, including in cases where the benefits claimant suffered from a pre-existing condition prior to the accident in question.”

The Court of Appeal has reaffirmed that the sense of "material contribution" used in the case law at the Commission – namely, that the motor vehicle accident need only be a cause of the disability and not the sole cause ­– continues to be good law.

Mr. Arunasalam suffered an accident-related disability, and but for the accident that disability would not have occurred. The Arbitrator found that he continued to suffer from those same disabilities after March 31, 2008, so regardless of whatever perception the Insured may have had about any alleged heart problem, the accident continued to be a material cause of his ongoing disability. Only if his disability had lessened to the level that he no longer met the disability test, as in Worku, would the accident cease to be a material cause of his disability. Accordingly, the Director’s Delegate found that the Arbitrator erred in law in misapplying the principles of causation in finding that the IRBs should be terminated as of March 31, 2008. The Director’s Delegate also concluded that Mr. Arunasalam was entitled to IRBs to August 25, 2008, the 104-week mark after the accident, which was the issue at arbitration. Furthermore, on that basis, Mr. Arunasalam was not precluded from proceeding with his claim for post-104 week benefits.
Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Disability Insurance, Pain and Suffering

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