Neutral Citation: 1991 ONICDRG 3

File No. A-000386

BETWEEN:

Albert Stoll

Applicant

and -

Kingsway General Insurance

Insurer

DECISION

The Applicant Albert Stoll was injured in an automobile accident on May 3, 1991. He applied for and received personal injury benefits payable under Regulation 273/90 under the Ontario Insurance Act, R.S.O 1980, chap. 218, as amended, (the" No-Fault Benefits Schedule").

The Applicant is a self-employed taxi owner and operator.

The Applicant claims weekly income benefits payable at the maximum rate of $600 per week. He provided daily "run sheets" to document his claim for weekly income benefits. The Insurer refused to accept the run sheets as evidence of the Applicant's earnings and instead chose to rely on the Applicant's income tax return as a basis for calculating the benefits payable. The Applicant applied for mediation on the issue of the quantum of weekly benefits. The mediation was unsuccessful, and the Applicant subsequently applied for the appointment of an arbitrator.

The issue to be determined at the arbitration hearing is:

What is the correct amount of the weekly benefit payable to the Applicant?

The decision is:

The Applicant is entitled to weekly benefits of $252.10.

A hearing was held at North York, Ontario on August 29, 1991 before me, Frederika M. Rotter, Senior Arbitrator.

Present at the hearing were:

Applicant:

Albert Stoll

Witness for the Applicant:

Martin Greenberg, taxi driver

Insurer's Representative:

Harry P. Brown, Barrister and Solicitor

Witnesses for the Insurer:

Mordi Gafni, taxi fleet manager

Stephen Touchow, taxi fleet owner

Doreen Tapping, clerk, Metro Licensing Commission

Matthew L. Goetz, claims adjuster,

Kingsway General Insurance Company

The Evidence:

The Applicant, Albert Stoll gave sworn testimony stating that he was previously involved in an accident, in 1989. At that time, he dealt with the same insurer, Kingsway General Insurance Company. The Applicant stated that in 1989 he had provided his run sheets to the Insurer to document his earnings, and the run sheets had been considered acceptable documentation.

He testified that in February or March of 1990 he was involved in another accident which resulted in damage to his car. At that time again the Insurer accepted his run sheets as evidence of his earnings.

The Applicant testified that he was off work for about ten weeks as a result of the accident in 1989. When he returned to work, he was still suffering some pain and discomfort. Therefore, he decided to quit the company he had been working for, Royal Taxi, in order to work on his own at taxi stands. The Applicant stated that this resulted in a drop in his income, but he was not overly concerned at the time because he had other sources of income. He testified that it took him a long time to fully recover from the effects of the accident.

The Applicant testified that by March 1991 he was 95% physically recovered from the accident. He rejoined the Royal Company effective March 1, 1991. He testified that rejoining the company made a tremendous difference in the business available to him. He also had a cellular telephone installed in his vehicle, and had made some connections with a hotel and at York University. This also increased his business.

The Applicant also testified that in 1991, the taxi company had negotiated a contract with the Wheel-Trans system of the TTC which would have guaranteed him a minimum of $160 daily had he been able to work.

The Applicant filed Exhibit 1, a newspaper clipping from the Toronto Star which documents the Wheel-Trans contract with Royal Taxi. He also filed Exhibit 2, a letter from Royal Taxi dated July 25, 1991. The letter indicates that the company is still holding a place available for the Applicant for transporting disabled patrons, pursuant to the Wheel Trans contract, at the rate of $160.00 for eight hours of work.

The Applicant also filed copies of the following documents which were marked exhibits to the hearing:

Exhibit 3: 1990 Income Tax Return documenting the income of a colleague of the Applicant, who is also a taxi driver
Exhibit 4: A newspaper clipping discussing the possible formation of a union of taxicab drivers
Exhibit 5: An unaudited Accountant's statement of Income and Expenses for the period April 1, 1991 to May 3, 1991 which documents the Applicant's earnings as follows:

Taxi fares and gratuities

$3,840

Operating expenses:

Gasoline

$799

Insurance

298

Dispatching fees

187

Care washes

Licenses - Provincial, Metro and radio

1,365

Net income

$2,475

Exhibit 6: GST return for the period April 1, 1991 to June 30, 1991 which shows taxable services in the amount of $3840.
Exhibit 7: Run sheet for May 1, 1991 showing total earnings of $112.60.
Exhibit 8: Run sheet for May 2, 1991 showing total earnings of $91. 20.
Exhibit 9: Run sheet for May 3, 1991 showing total earnings of $147.80.

The Applicant testified that his reported earnings for GST were based on Exhibit 5, the Accountant's statement. He confirmed that he had provided the Insurer with his run sheets for the month of April 1991. He testified that the total shown on the Accountant's statement was about $400 less than the total on all the run sheets (including those for May 1, 2, and 3) and that the discrepancy could be accounted for by the failure to document on run sheets two out-of-town fares to Niagara Falls, Ontario. The Applicant testified that he charged a flat rate of $200 for the Niagara Falls trip, and that he made two such trips on weekends during the month of April. In cross examination, the Applicant testified that he was not aware that he had to keep trip sheets for out-of-town, flat rate fares.

In cross-examination, the Applicant testified that he uses his car phone mostly for personal matters, and not primarily for business. Therefore, he did not list the telephone charges, which come to about $40 per month, as part of his operating expenses. The Applicant confirmed that he had returned his taxi license and cancelled his insurance on or about May 15, 1991.

The Applicant confirmed that both his income and his expenses were lower in 1990 because he was still partially disabled and was not able to work as many hours. He testified that in March 1991 he was just getting used to working with the company again. April 1991 was his first more fully productive month.

The Applicant was cross-examined about his declared expenses for the year 1990 (which was part of the documentation which he had made available to the Insurer). He was questioned about expenses for items such as radio dispatch charges, tires, repairs and maintenance, accounting charges and expenses for depreciation. The Applicant stated that the information with respect to his expenses for the year 1990 was not relevant to 1991.

The Applicant called one witness, a self-employed taxi driver who testified about his own earnings and income for the year 1990. The Insurer led evidence from two taxi fleet owners and operators, who testified about the general decline in the taxi industry during 1991.

The Insurer called Doreen Tapping, a clerk at the Metro Licensing Commission who gave sworn evidence about the number of taxi licenses which had been returned during 1991. She also introduced Exhibit 10, a copy of the regulation which requires taxi drivers to keep daily records of all trips.

Matthew Goetz, claims adjuster for the Insurer, gave evidence under oath, indicating that he had worked on the Applicant's file and had prepared a document summarizing the file.

The adjuster introduced Exhibit 10, a package of material including:

run sheets submitted by the Applicant for April 1 to 30, 1991. The total earnings on the run sheets submitted amount to $3,090.
the summary of the file which he had prepared
the Applicant's Statement of Income and Expenses for the year 1990
a letter to the Applicant dated August 6, 1991 explaining that his weekly benefits have been recalculated based on his trip sheets for the month of April 1990. Expenses were deducted based on the Applicant's statement of income and expenses for the year 1990. The Applicant's weekday benefits were recalculated at $191.68 and a cheque was forwarded to the Applicant for the amount owing.

The adjuster testified that he had originally calculated the weekly benefits of $185 payable to the Applicant based on the Applicant's tax return for the year 1990. He stated that the Insurer generally preferred to rely on the tax return as evidence of a cab driver's earnings, since the Insurer is aware of some instances where run sheets have been "fabricated". He confirmed that he had totalled up the twenty-one run sheets submitted by the Applicant and had recalculated the weekly benefit based on the run sheets.

The Applicant made a final submission, indicating that he felt that he should be entitled to maximum benefits under the No-Fault Benefits Schedule.

Counsel for the Insurer made final submissions, stating that the Applicant's weekly benefit should be calculated on the basis of the "best evidence" available.

He submitted that the Applicant's income for the 4 weeks prior to the accident should be calculated by totalling the 33 trip sheets provided for the period April 1 to May 3, 1991, dividing by 33 to obtain a daily average rate, and multiplying by 28 to obtain the amount applicable for four weeks. He submitted that the result of this calculation gives a daily rate of $104.29 and a total for the four weeks of $2920.14.

Counsel submitted that the Applicant's oral evidence about the two out-of-town trips should not be accepted for the purpose of calculating his income, since no documentation or record of these trips exists.

Counsel submitted that the Applicant's expenses should be calculated by referring to his statement of income and expenses for the year 1990 and making appropriate adjustments. He submitted that the depreciation expenses should be reduced by 50%, to account for the fact that the vehicle was not being used as much. He also submitted that the cellular telephone charges should be included as an expense.

After the hearing had been concluded, the Applicant sought to introduce further evidence about his earnings, by way of a letter from his accountant. I met with the Applicant and with counsel for the Insurer, and indicated that I could not accept this document as evidence, since it appeared to be hearsay information and the Insurer had been afforded no opportunity for cross examination. Further, the Applicant gave no reasonable explanation for failing to introduce this information at the hearing.

Findings:

The No-Fault Benefits Schedule provides for weekly income benefits to be paid to persons injured in automobile accidents. In the present case, benefits are payable under section 12 of the No-Fault Benefits Schedule, which section sets out the method for computing the benefits payable to employed and self-employed individuals. The relevant portions of section 12 are reproduced as follows:

Section 12.

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3).

(2) The following qualifications apply to an insured person who claims a weekly benefit under subsection (1):

He or she must have been at the time of the accident,

i. employed or self-employed,

ii. on a temporary lay-off, or

iii. entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.

He or she as a result of and within two years of the accident must have suffered a substantial inability to perform the essential tasks of his or her occupation or employment.

(4) Subject to subsection (5), the weekly benefit under subsection (1) will be the lesser of,

(a) $600 plus, if Optional Benefit 2 has been purchased, the amount of the benefit chosen; and

(b) 80 per cent of the insured person's gross weekly income from his or her occupation or employment, less any payments for loss of income, except Unemployment Insurance benefits,

(i) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan, or

(ii) received under any sick leave plan.

(7) The following rules apply to the calculation of gross weekly income:

A person's gross weekly income shall be deemed to be the greatest of,

i. his or her average gross weekly income from his or her occupation or employment for the four weeks preceding the accident,

ii. his or her average gross weekly income from his or her occupation or employment for the fifty-two weeks preceding the accident,

iii. $232.

In the present case, the weekly benefit payable to the Applicant, according to section 12(4), is the lesser of $600 or 80% of the Applicant's gross weekly income as calculated under subsection 12(7).

Subsection 12(7)1 explains the basis for calculating the gross weekly income. In the present case, the Applicant has chosen to base his gross weekly income on his earnings for the four weeks preceding the accident.

The Applicant submitted run sheets which documented his earnings for the thirty-three days prior to the accident. He also gave oral evidence to the effect that he had additional earnings which are undocumented in the run sheets.

I accept the run sheets as prima facie evidence of the Applicant's earnings. I cannot accept the Applicant's oral evidence about his additional earnings since this evidence has not been verified or documented in any reliable fashion. The Applicant bears the onus, in this case, of proving his earnings. That onus has not been met here, since he has provided no documentary corroboration of his out-of-town trips.

I have calculated the Applicant's earnings for the four weeks prior to the accident by totalling the run sheets for the twenty-eight day period in question, namely April 6 to May 3, 1991.

The Applicant's total earnings from his run sheets amount to $2918.40, or $729.60 per week.

The Applicant's gross weekly income must be determined by subtracting his expenses from his earnings. However, the Applicant gave very little direct evidence about his expenses. Exhibit 5 constitutes the Applicant's best evidence with respect to his expenses for the period April 1 to May 3, 1991. However, it is clear that this document does not include all of the Applicant's costs of operating his business, since certain expenses, listed in his Statement of Income and Expenses for 1990, are not dealt with in Exhibit 5.

Moreover, Exhibit 5 lists the Applicant's expenses for a thirty-three day period. I have performed the calculations necessary to express this figure as a weekly amount, as follows:

$1365 x 28/33 + 4 = $289.52

The Insurer relies on the 1990 Statement of Income and expenses for a more accurate and comprehensive listing of the Applicant's expenses. That document lists the Applicant's total annual expenses as $24,261. The corresponding weekly amount is therefore $473.48. This includes amounts for repairs, maintenance and tire replacement, accounting fees, and capital cost allowance: all items not dealt with in Exhibit 5. I am convinced that these items represent genuine expenditures which must be accounted for in determining the Applicant's actual income. The Applicant, in cross examination, admitted to expenses under these headings. Therefore, I find that the 1990 statement is a more reliable guide to the Applicant's expenses than is Exhibit 5, and I accordingly base my determination of the Applicant's actual expenses on this document.

However, the amount listed for capital costs, or depreciation comes to $6656 for the year. The Insurer has conceded that this figure should be halved in light of the fact that the Applicant's car was not depreciating in value as rapidly during the period when it was being used less. Therefore, I am deducting $64 from the total weekly expenses, which represents half of the weekly capital cost expense. The resulting figure for weekly expenses is $409.48.

Finally, I have adjusted this figure by adding $5 weekly, which represents charges for the Applicant's car phone. Although the Applicant testified that the car phone was used primarily for personal matters rather than business, he also stated at the beginning of his evidence in chief that his business improved considerably after he had the car phone installed. Since he testified that the charges for the car phone were approximately $40 per month, or $10 weekly, I have determined that half of that amount or $5 weekly should be attributed to the business. Therefore the final total for weekly expenses is $414.28.

Accordingly, I find that the Applicant's net weekly income is $729.60 - $414.48 = $315.12. The Applicant's weekly benefit is 80% of that amount, or $252.10.

Order:

The Applicant is entitled to weekly benefits of $252.10. The Applicant is also entitled to interest on all outstanding amounts owed, as well as his reasonable expenses for the arbitration hearing.

Oct. 18, 1991

Frederika M. Rotter

Senior Arbitrator

Date

Albert Stoll v. Kingsway General Insurance, 1991 ONICDRG 3

Case Summary

Present at the hearing were:

The Evidence:

Findings:

Order: