ACCIDENT BENEFITS NEWSLETTER - OCTOBER 2004

Catherine Zingg

Greenhalgh v. ING Halifax Insurance Co. (2004) O.J. No.: 3485, Ont.C.A., Labrosse, Charron and Goudge J.A. - On January 14, 2002, the insured became lost while driving on a winter’s night. Her car became stuck and her cell phone was dead. The insured and her passenger left the vehicle and walked through the night for 9 or 10 hours. As a result of exposure to extreme cold, including falling into a frozen river and losing her boots, the insured suffered severe frostbite which resulted in amputation of her fingers and her legs below the knees. Judge Kiteley had found that the insured was involved in an accident pursuant to s.2. The Court of Appeal allowed the insurer’s appeal and ordered the insured to pay $10,000 in costs.

Based on the Court of Appeal’s earlier decision in Chisholm v. Liberty Mutual Group (2002) 60 O.R. 3d 776, O.C.A., the parties proceeded on the basis that the insured must meet the purpose test as set out in Amas v. Insurance Corporation of British Columbia (1995) 3 S.C.R. 405 and the causation test as set out in Chisholm (supra). The plaintiff in Chisholm was the victim of a drive by shooting while seated in his motor vehicle at an intersection. The court held that he was not involved in an “accident” within the meaning of s.2 of the Schedule. In considering the causation test in Chisholm, Laskin J. A. had commented that, “when one thinks of direct causation one thinks of something knocking over the first in a row of blocks, after which the rest falls down without the assistance of any other act”. (Greenhalgh p.9)

In considering the Chisholm decision, the Court noted that Laskin J.A. had “found three inquiries helpful in answering the “direct cause” question; the “but for” inquiry; the “intervening act” inquiry; and the “dominant feature” inquiry” (p.10). When put in context with the present case, the Chisholm test was set out in the form of two questions:

1. Was the use or operation of the vehicle a cause of the injuries?
   
   
2. If the use or operation of a vehicle was a cause of the injuries, was there an intervening act or intervening acts that resulted in the injuries that cannot be said to be part of the “ordinary course of things”? In that sense, can it be said that the use or operation of the vehicle was a “direct cause” of the injuries? (p.10).

The court examined the numerous occurrences between the time the insured’s car became stuck and the time that she suffered her injuries. They found a number of intervening acts that could not be considered “a normal incident of the risk created by the use or operation of a car”.

Kozdra and Canadian General Insurance Group, A01-000390, September 13, 2004 - In this case, the first six days of the hearing occurred in October 2003, followed by additional dates in May and September of 2004. Canadian General’s counsel completed her cross-examination of the applicant on May 10, 2004, and indicated that she would not be cross examining the applicant on surveillance videotapes commissioned by Canadian General (p.2). However, she wished to enter three videotapes into evidence. The applicant’s counsel indicated that he would consent to allowing them into evidence without reexamining the applicant on them (p.2).

Counsel for Canadian General, however, submitted four videotapes, three dated September 2002 and one dated November 19, 2003, which had been taken after the arbitration had commenced in October 2003. A recess was granted to allow the applicant’s counsel a chance to review the November 19, 2003 tape. The applicant’s counsel then asked for an interlocutory order that the insurer not be allowed to enter any surveillance material into evidence. Arbitrator Allen granted the request, commenting:

I find Canadian General’s position that it should be permitted to produce only the three September 2002 videotapes and not the fourth November 19, 2003 videotape is not supportable. Rule 40 clearly requires an insurer to produce all surveillance material generated in relation to the issues in dispute if the insurer intends to rely on any portion of it. I agree with the arbitrator in the Campeau and Liberty Mutual Insurance Company, A00-000522, March 12, 2001, case that it would be unfair for Canadian General to be allowed to pick and choose among its surveillance and investigative evidence (p.9).

The arbitrator went on to comment that she would not have allowed the videotapes into evidence even if the fourth tape had been produced as it was not produced within the required thirty days before the commencement of the hearing, irrespective of whether the hearing, for the purposes of this issue, was seen to have commenced on October 20, 2003, or May 10, 2004. The fourth tape was only brought to the applicant’s attention for the first time on May 10, 2004, the first day of the second sitting of the matter (p.9). Accordingly, it would not have been fair to the applicant to allow the November 19, 2003 videotape into evidence under circumstances where it was unavailable to the applicant’s counsel when he prepared his case (p.9). The arbitrator remarked that this would add insult to the injury already caused by the fact that Canadian General, unbeknownst to the applicant had the advantage of the November 19, 2003 videotape when it cross examined the applicant (p.9).

Smith v. Wawanesa Mutual Insurance Company, August 20, 2004, A03-001475 - Arbitrator Renahan found that the insurer unreasonably withheld and delayed the payment of the applicant’s IRB. The IRB payment became outstanding from June 28, 2002 in the amount of $28,904.31. The insurer failed to pay the proper benefit when it had ample evidence that the quantum was inadequate, and it failed to retain an accountant to go to Spanish, Ontario, the small town where the applicant lived, in order to calculate the correct IRB. It was also found that the insurer failed to promptly follow the recent arbitration decision in Welsh and Economical Mutual Insurance Company, October 7, 2003, P02-00024, and pay an IRB which exceeded $400.00 to allow for reasonable business expenses. The arbitrator was of the opinion that the insurer should have been aware of the decision one month after its release. The arbitrator set out a chart reflecting the principle plus interest pursuant to both s. 46 of the S.A.B.S and s. 282(10) of the Insurance Act. The amount owing to the applicant was calculated at $74,634.45 plus a further $4,312.10 to account for the non payment of IRB’s exceeding more than $400.00 per week, despite the reasonable business losses that increased the applicant’s IRB to more than $400. The insurer was ordered to pay a special award in the amount of $39,900 and the applicant’s expenses in the amount of $16,118.80.

Mrs. S and Non Marine Underwriters, Mbrs of Lloyd’s, A02-001635, August 3, 2004 - Arbitrator Allen made a special award of $10,000.00 to the applicant. It was found that Lloyd’s terminated income replacement and housekeeping benefits in the face of substantial medical evidence of the applicant’s physical and psychological/psychiatric disability (p.41). Dr. Grant, who had assessed the applicant on behalf of Lloyd’s had recommended an orthopaedic assessment after he reviewed an MRI that revealed a right rotator cuff tear. Dr. Grant went on in his January 25, 2002 “orthopaedic addendum” to render the opinion that, with Cortisone injections, the applicant should be able to return to her job and housekeeping chores, but should guard against prolonged over the shoulder activity (p.41). The arbitrator found that Dr. Grant was not qualified to give an orthopaedic opinion and in the circumstances Lloyd’s was unreasonable to rely on this opinion. It was further found that Lloyd’s was reckless with the applicant’s health in relying on the opinion and ignoring the many assessments of the applicant’s disability and her consistent complaints of persistent, disabling right shoulder pain (p.42). In addition, it was found that Lloyd’s was non compliant with the disability DAC guideline when it “unilaterally and surreptitiously” retained Dr. English (the disability DAC orthopaedic assessor) to prepare “a supplementary orthopaedic report”. This action was found to show that Lloyd’s was “bent on justifying benefit denial at any cost, even if it meant breaking with proper DAC assessment protocol to accomplish this” (p.42). Finally, it was found to be unreasonable for Lloyd’s to refuse to fund Dr. Olgilvie-Harris’s assessment, particularly because of the applicant’s doctor’s concerns about the applicant’s right shoulder condition, and the fact that Dr. Grant actually recommended an orthopaedic assessment (p.45).