Neutral Citation: 1991 ONICDRG 9

Arbitration File No. A-000027

ONTARIO INSURANCE COMMISSION

BETWEEN:

Thai Tru Luong

Insured Person

and

Toronto Transit Commission

Insurer

DECISION

Issue:

The Applicant Thai Tru Luong was injured in a motor vehicle accident on August 31, 1990. He applied for personal injury benefits under Regulation 273/90 under the Ontario Insurance Act, R.S.O. 1980, c. 218, as amended, (the "No-Fault Benefits Schedule").

The Applicant had been driving a motor vehicle loaned to him by a friend, which vehicle was not insured under a motor vehicle liability policy.

The Insurer declined to pay weekly income benefits to the Applicant on a number of grounds. The Insurer's position was that the Applicant did not qualify as an insured under its policy of insurance, and moreover was not eligible for benefits because he was operating an uninsured vehicle. Further, the Applicant had failed to attend at a medical examination arranged by the Insurer, as he was required to do pursuant to the No-Fault Benefits Schedule. Finally, the Insurer claimed that the Applicant had failed to substantiate his alleged loss of income.

The Applicant applied for mediation claiming he was entitled to weekly income benefits and interest on overdue payments. Mediation was unsuccessful and the Applicant accordingly applied for the appointment of an arbitrator pursuant to s. 242d of the Insurance Act, as amended.

The issues to be determined at the arbitration hearing were:

(1) Who is the insurer in this case? Did the Applicant properly have recourse against the Respondent Toronto Transit Commission under s. 232 of the Insurance Act, as amended?

(2) Did the Applicant properly verify his economic loss, sufficient to prove that he is entitled to a weekly income benefit under section 12 of the No-Fault Benefits Schedule?

(3) Can the Insurer properly deny benefits on the basis that the Applicant was operating an uninsured motor vehicle pursuant to sec. 17(1) (c) of the No Fault Benefits Schedule?

(4) Can the Insurer properly deny benefits on the basis that the Applicant refused to comply with the Insurer's requirement, pursuant to section 23 (2) of the No-Fault Benefits Schedule, that he be examined by an independent medical practitioner?

Result:

The decision is:

The Insurer is the Respondent Toronto Transit Commission.

The Applicant has not verified his economic loss and therefore is not entitled to a weekly income benefit. In light of this decision, the other issues, raised as grounds for denying benefits to the Applicant, are not required to be addressed.

Hearing:

A hearing was held at Toronto, Ontario on June 20, 1991, and resumed on July 18 and August 7, 1991 before me, Frederika M. Rotter, Senior Arbitrator.

Present at the hearing were:

Applicant:

Thai Luong Tru (present July 18, 1991 only)

Legal Counsel:

Jayson Schwartz, Barrister and Solicitor

Insurer's Rep:

A. J. Saliba, Claims Superintendent (CHECK)

Legal Counsel:

Brian M. Leck, Barrister and Solicitor

Witnesses:

Reuel Talangbayan, M.D., Family Physician

Margaret Fung, Administrator, Asian Garden Dining Room

Abby Ho, owner of vehicle

Allen Ho (Win Bun), brother of owner

Lewis McFaydon, Insurance Broker, SIA Brokers CHECK

Niall McSwiggan, Personal Lines Manager, Halifax Insurance Company

Gerhardt Goethe, Registered Insurance Broker

Clara Smit, Regular Auto Assistant Manager, Royal Insurance Company CHECK

Horace Chiu, part owner, Tat Hing Asia Diner

Chan Woon Hung, waiter, Tat Hing Asia Diner

Documents filed:

From the Applicant:

(1) An Application for Appointment of an Arbitrator, in Form 4, dated January 22, 1991 and received by the Ontario Insurance Commission on January 24, 1991.

(2) A casebook containing photocopies of cases and other authorities relied on by the Applicant.

From the Insurer:

(1) A Response in Form 5 dated April 1, 1991.

(2) A loose-leaf binder containing copies of various documents, including correspondence, pertaining to this matter.

(3) Exhibits to the hearing, as follows:

Exhibit 1:

A copy of medical report dated September 21, 1990 signed by Dr. R. Talangbayan. The report indicates that the Applicant was injured in an accident which occurred on August 31, 1990. He was examined by the doctor on September 18, 1990. The doctor did a complete physical examination of the Applicant. The diagnosis is cervical and lumbo-sacral strain, hip sprain and post-traumatic headache. The report indicates that the Applicant suffers tenderness of the cervical and lumbar spine, depressed range of movement and muscle spasm.

Exhibit 2:

A handwritten document entitled "Luong Tru Thai (Tom)" which shows gross earnings from the period of the July 23 through to September 9, 1991, as well as, CPP unemployment, and tax deductions and net earnings.

Exhibit 3:

A copy of a T4-1990 statement of remuneration paid by the Asian Dining Corner Inc., located at 4810 Sheppard Avenue East to Tom Thai. The document shows that total income from employment was $1,540.00.

Exhibit 4:

"Employer's Confirmation of Income" form, dated Oct. 2, 1990, signed by Horace Chiu, President, Tat Hing Asia Diner, 4810 Sheppard Avenue East. It is indicated that the Applicant, Thai Tru Luong, was employed as a waiter. His duties were cleaning tables, setting up tables, taking orders, serving tables, etc. Gross income was $1,540.00 for the seven weeks worked, plus $200.00 weekly in tips.

Exhibit 5:

Certificate, that papers annexed are true copies of documents filed in the Ministry of Transportation, dated April 2, 1991.

Exhibit 6:

Temporary insurance certificate, dated March 30, 1990, valid for thirty days, issued by Halifax Insurance Company to Lo Kai Ming, in respect of a 1990 Plymouth Voyager Van.

Exhibit 7A:

Front side of envelope of a registered letter from Halifax Insurance, addressed to Kai Ming Lo, 45 Grenoble Drive. The address has been crossed out and the envelope is marked Changed Address.

Exhibit 7B:

Reverse side of envelope.

Exhibit 8:

Notice of Cancellation of Insurance, from Halifax Insurance Company to Lo Kai Ming, for non-payment of outstanding premium.

Exhibit 9:

Letter from the TTC to the Applicant's solicitor, dated October 23, 1990, indicating that the TTC cannot consider weekly disability benefits as OMPP regulations make no allowance for uninsured persons.

Exhibit 10:

Letter from the TTC to the Applicant's solicitor, dated December 13, 1990, indicating that an arrangement has been made for an independent medical examination of the Applicant.

Exhibit 11:

Letter from the TTC to the Applicant's solicitor, dated December 17, 1990, indicating that the appointment with the medical doctor has been cancelled in view of the Applicant's refusal to attend.

Exhibit 12:

Computer-generated printout showing payments made to all employees of Tat Hing Asia Diner from July to December 1990.

The Evidence:

Because the Applicant failed to attend on the first hearing day, it was agreed between the parties that the Insurer's witnesses would proceed to give their evidence first, thus reversing the normal order of procedure as a matter of convenience only. It was understood by the parties that the Applicant still bore the ultimate burden of proving his case, despite the change in the order of procedure.

The Insurer's first witness was Dr. Reuel Talangbayan, a family physician who saw the Applicant for treatment of his injuries on September 18, 1990. The physician testified that the Applicant complained of pain as a result of a motor vehicle accident on August 30, 1990.

The physician testified that the Applicant had first seen another family doctor after the accident, before consulting him. That other doctor had done X-rays. The physician testified that the Applicant stated that he worked in a restaurant, but had quit work on August 31, 1990 because of the pain and headaches from his injuries.

The physician testified that he physically examined the Applicant and on the basis of that examination and the Applicant's reported pain, he made the diagnosis of cervical and lumbo-sacral strain, hip sprain and post-traumatic headache, reported in Exhibit 1. The physician testified that on physically examining the Applicant, he noted a decrease in his range of motion. He also noted a flatness in the Applicant's lumbar spine, which, he testified, is an objective sign of spasms. In summary, he confirmed that the Applicant was suffering from mild whiplash injury, and had not suffered a serious or major injury. The physician testified that he prescribed some analgesics for the Applicant's pain, and ordered massage therapy. He did not order any further tests or treatments, and did not refer the Applicant to any neurological, orthopaedic or other specialist. It was the physician's view that the Applicant would recover in a matter of weeks or months.

The physician testified that he thinks that he made an appointment for the Applicant to be seen again following one week, but the Applicant did not keep this appointment. The physician next saw the Applicant on November 30, 1990. At that time, the physician testified, the Applicant was still "totally disabled" from gainful employment because he was still complaining of neck and back pain and bilateral hip pain. His sleep was also disturbed. The physician conceded, however, that the Applicant's ability to work did depend on the type of work done, and that he himself had no information about what the Applicant's actual duties at his restaurant job had been. He agreed that the extent and duration of the disability depended on the nature of the duties performed.

The physician testified that following the visit on November 30, 1990, he prescribed medications for the Applicant, for pain and sleep. He advised the Applicant to exercise. He never saw the Applicant again. The physician testified that from his experience, he thought the Applicant would recover from his injuries in four to six months.

The physician testified that he had a large family practice, 90% of which is personal injury related, and that he has had this practice since 1985. To the best of his knowledge, in the case at hand, the Applicant's injuries appear to be genuine.

Ms. Margaret Fung gave evidence under oath. She testified that she is currently employed as the administrator of the Tat Hing Asian Garden Dining Room, and goes into the restaurant sometimes. She testified that she knew Mr.Thai, but did not talk to him. He was a waiter who had worked at the restaurant. The witness testified that she did not know that Mr. Thai had sustained any injuries. She testified that Mr. Thai had never called in to advise of an accident or complain of any injuries.

The witness testified that Horace Chiu is the owner of the restaurant, not the manager. She testified that Mr.Chiu owned a number of restaurants and each had different store managers.

The witness testified that when Mr. Thai's employment was terminated it was not because of injuries, but because of shortage of work. Mr. Thai had accepted that reason, and had left the restaurant on that basis. Mr. Thai's duties were to clean and set up tables. He would take orders and would sometimes serve tables. Sometimes he would bring food from the kitchen to a customer, but he did not have to do much heavy lifting.

The witness identified Exhibit 2 as a document which showed Mr. Thai's income from his employment at the restaurant. She verified that his total gross income was $1,540.00. She testified that the restaurant had no knowledge of any income earned, other than the income from employment. Waiters generally received some gratuities from customers, but the restaurant did not know what the income from gratuities was. The employees never advised the restaurant management of their tips.

The witness identified Exhibit 3 as a copy of the T-4 slip completed by the employer. She testified that Exhibit 4 (the "Employer's Confirmation of Income" form) confirms the gross income of $1,540.00 and shows that Mr. Thai was out of work as of September 1, 1990. However, she indicated that she did know why that date was shown, since according to the payroll records, Mr. Thai was working at the restaurant until September 9, 1990. She testified that although Mr. Chiu signed the document, he probably did not fill it out. Mr. Chiu would not have known about the tips and commissions earned by an employee. She stated that probably Tom Thai filled out the form, and Mr. Chiu simply signed it without bothering to verify the dates. The witness testified that she did not exactly remember whether Mr. Thai worked until September 9th or not, but it was clear that he was paid for working until September 9, 1990 according to the payroll records. He started work on July 23, 1990.

Ms. Abby Ho gave evidence which she solemnly affirmed was true, with the assistance of a Cantonese interpreter. She testified that on August 31, 1990 she owned a grey Plymouth van, Ontario license number 280 KLP. She bought the car in March 1990. When she bought the vehicle she did not have a driver's license. She was aware that she required insurance coverage for the vehicle. The witness testified that she allowed other people to drive the vehicle. She cannot drive, but her brother, Allen Ho, does. Her brother took care of insuring the vehicle. She did not look after insurance for the vehicle herself because she did not know what to do. In fact, her brother asked his friend to take of insuring the vehicle for him. That person was Lo Kai Ming. She testified that as far as she knew, it was actually Mr. Lo who made the arrangements for the insurance. Her brother paid for the insurance. She never drove the car herself.

The witness testified that her brother had allowed Mr. Thai to drive the car and had given him the car keys. Mr. Thai was her friend. She did not know why Mr. Thai was using the car. Mr. Thai asked her brother whether the car was insured.

The witness testified that she only realized that there was no insurance on the car after the accident happened. Her brother advised her about one week after the accident that the car was not insured.

Allen Ho (Win Bun) gave viva voce evidence which he solemnly affirmed was true. He testified that he had made the arrangements for insuring his sister's vehicle. He testified that he did not make these arrangements himself, but instead, asked one of his employees, Mr. Lo Kai-Ming, to do it because he was too busy to do it himself. It was easier for Mr. Lo to make the arrangements for insurance because Mr. Lo had a car of his own and an insurance company that he did business with.

The witness testified that he gave Mr. Lo a cheque for $700.00 payable to the insurance company. He did not remember to which company the cheque was payable. When he received the insurance documents, he gave them to the vendor of the car, because he could not take ownership of the car without showing the insurance documents. The vehicle was initially insured for 6 months.

The witness testified that when he bought the vehicle, he assumed that the vendor would fill out the insurance forms correctly. He relied on the vehicle vendor to fill out the forms, because his English is not good. When he took possession of the car, he received a pink form from the insurance company indicating that the car was insured. He verified that the pink form (Exhibit 6) showed that Halifax Insurance Company was the Insurer and Lo Kai-Ming was the owner of the car.

The witness testified that he was never advised by Mr. Lo that the insurance policy had been cancelled prior to September 1990. He never received any letter from the company advising him of the cancellation of the policy. He testified that he was not concerned that the insurance form showed the owner of the vehicle as Mr. Lo rather than his sister. He testified that he understood that it was possible to buy insurance this way.

The witness testified that he did not know why Mr. Thai required the use of the car, that he believed he needed the car to move something, but he did not ask Mr. Thai his purposes.

The witness testified that he would not have loaned the car to Mr. Thai unless he believed it was insured. When Mr. Thai asked him for the use of the car, he showed Mr. Thai both the ownership documents and the insurance documents.

In cross-examination, the witness testified that his original cheque for $700.00 for insurance had "bounced" for insufficient funds, and therefore, he subsequently gave $700.00 in cash to Mr. Lo to pay for the insurance. The witness testified that the address of 45 Grenoble Drive shown on Exhibit 6 is the address of Lo Kai-Ming.

Lewis McFaydon, Insurance Broker, gave viva voce evidence under oath. He testified that he is employed with SIA Brokerage Company, which acts as agents for the Halifax Insurance Company. He testified that he had dealings with Mr. Lo in March 1990, and that Mr. Lo had an ongoing policy of insurance for some other vehicle. He testified that under the Compulsory Insurance Act, a person must represent that they are the registered and actual owner of a vehicle before they can obtain insurance for the vehicle. A broker ordinarily must make sure that a person is the registered and actual owner before he can issue auto insurance to that person. When new clients come to an insurance broker, they usually have a bill of sale for a vehicle but not a registration. They must sign a representation that they are the owner of the vehicle.

When Mr. Lo requested insurance on the van, he was asked for the serial number of the vehicle, the purchase of vehicle documents, the value, make and model of the vehicle and what the vehicle was used for. In this case, it was indicated that the vehicle was a second vehicle on the policy, and the brokers inquired whether there were other drivers to be named on the policy for that vehicle. The witness testified that Mr. Lo was supposed to be the only driver of both of the vehicles insured under the policy. His notes in this file indicate that on March 30, 1990 he was instructed to add a Plymouth 1990 of the appropriate description and serial number to the policy, and that its use was strictly for pleasure. The price of the vehicle was reported as $22,750.00 and coverage for liability, accident benefits, loss of use and family protection was extended. Coverage for this vehicle was to be added under the existing policy of insurance.

The broker testified that no specific inquiry was made whether Mr. Lo was the registered owner of the vehicle, because in the situation of an existing policy of insurance, it was assumed that the owner was the registered owner. The broker testified that a pink card (Exhibit 6) was sent out, showing the coverage for the vehicle. In order for the vehicle to be registered in the owner's name, he would require that pink insurance coverage card.

The broker testified that to cancel insurance coverage, a company must send a notification by registered mail. An insurance policy remains in place until it is cancelled in compliance with the requirements.

The broker testified that after the temporary document was issued, an invoice was sent from the company to Mr. Lo, and a request for coverage was sent to the insurance company. There was no further contact with anyone pertaining to that vehicle. The broker testified that if he had known that Mr. Lo was not the owner of the vehicle, he would not have been able to insure the car. He cannot insure a vehicle unless he has contact with a registered owner. He stated that the insurance industry is an industry which involves trust.

Niall McSwiggan, Personal Lines Manager of Halifax Insurance Company, gave viva voce evidence under oath. He testified that he was familiar with the coverage on the van of Lo Kai Ming. He testified that the insurance was placed by the broker and a pink card was sent out. He stated that it was his understanding that notwithstanding the pink card, a registered letter had to be sent out to the insured person before the contract of insurance could expire. The witness testified that Halifax Insurance Company had problems with this insured person because of non-sufficient funds. On this account there had been three NSF cheques.

The Halifax Insurance Company took the position that the insurance policy was cancelled on June 21st, 1990, the date that the registered letter was sent. The expiry date of the policy was 15 days after June 21, 1990. The letter was mailed on June 22, 1990. The witness testified that the normal practice was for the company to give notice of cancellation of the insurance, effective from the date shown. The expiry actually becomes effective 15 days from the date of the receipt of the letter. The witness testified that the letter was addressed to 15 Grenoble Road, the address that the company had in its records. The letter was returned unopened, showing the change of address, on August 16th, 1991. This was the first time the company became aware of a new address.

The witness testified that the company took no steps to reach Mr. Lo at the new address. At that time the company had no information showing that Mr. Lo was not the registered owner of the vehicle. The witness testified that no notice was sent out prior to the cancellation of the policy, because the company normally notifies the insured the first time it receives an NSF cheque, but not a second time. Also, no notice of outstanding account was sent to the insured before cancelling the policy, as this is usually done through the broker.

The witness testified that in his file he had a comment from the underwriter, indicating that he had contacted the broker to inquire if the broker had a correct address for the insured. The insurance company was not advised of any new address and therefore, could not contact the insured. It therefore sent a registered letter to the last known address in the file. The witness testified that after receiving the returned letter on August 16th, the company contacted the broker to find out whether the address indicated was actually the correct address.

The witness also testified that the broker had made inquires about the whether the insured was the operator, but had not made any inquires as to the ownership of the vehicle. There was no information regarding the ownership of the vehicle in the file. The witness testified that normally the broker would ask questions about the operator of a vehicle, but it would be taken for granted that the individual concerned is the registered owner. The witness testified that in fact the insured had no insurable interest in the vehicle. If the company had known that, it might have taken steps to contact the real owner of the vehicle. Otherwise, the company would have declined to insure the vehicle.

Mr. Gerhardt Goethe, a Registered Insurance Broker, gave viva voce evidence under oath. He testified that he has worked as an Insurance Broker for twenty-five years and currently has three employees. His business is to place auto insurance coverage for individuals.

He testified that it is the owner's responsibility to insure a vehicle. The owner must normally state that he or she is the registered and actual owner of the vehicle. The witness testified that normally, if someone had an auto insurance policy, he would still make inquires as to the actual ownership of a new vehicle. He would consider it unwise not to question a policyholder about the ownership of a vehicle.

He cannot place a policy of insurance without the signature of the registered owner of the vehicle.

Clara Smit, the Auto Assistant Manager for Royal Assurance in Etobicoke gave viva voce evidence under oath. She testified that she is familiar with the cancellation practices of auto insurance companies. She testified that where a registered letter was sent out and came back with a new address, her practice would be to make an effort to re-register the original letter. However, this is done as a matter of courtesy and not as a matter of obligation, as it is her understanding that there is no legal requirement that this be done. It is her understanding that an insurance company's obligation is fulfilled if a registered letter is sent out to the insured's last known address, advising of the cancellation of the policy.

The hearing was adjourned and resumed on July 18, 1991. On the resumption date, Thai Tru Luong, the Applicant, gave viva voce evidence under oath. He testified that he was involved in a motor vehicle accident on August 31, 1990, and that he was the operator of the motor vehicle in question. He borrowed the car from a friend, who owned it in his sister's name. He had asked the friend if the vehicle was insured, and was told of an insurance paper in the glove compartment of the car.

The Applicant testified that he was hurt as a result of the accident and went to see his family doctor, whose office is near Spadina and Dundas. He then went to see another doctor, on the recommendation of a friend. This was Dr. Talangbayan, who he referred to as "Dr. Sonny". Dr. Sonny was recommended as an expert in car accident cases.

The Applicant testified that he explained what had happened to the doctor and the doctor gave him some medicine. He testified that as a result of the accident, his back and neck hurt, and he could not sleep very well because of the pain. He felt the pain intermittently, as though he were being squeezed.

The Applicant testified that immediately after the accident he felt the pain for a number of hours. Subsequently, the pain grew less, and by the end of December 1990 the pain was not so bad. However he testified that he still suffers from occasional pain.

The Applicant testified that prior to the accident, he had worked in a restaurant. He started working there at some time in July 1990. Before that, he had been receiving unemployment insurance since 1989. His previous job was in a restaurant, but he was not able to remember what he had done and whether he had been laid off or had quit that previous employment.

The Applicant testified that he started working at Tat Hing Asia Diner on July 16, 1990 and that he was hired by a Mr. Chiu. He testified that he spoke to Mr. Chiu and met with him when he was hired, but afterwards, Mr. Chiu was not often at the restaurant. The Applicant testified that he was a waiter at the restaurant, that he took orders, cleaned tables and carried food back and forth.

The Applicant testified that after the accident, he took the completed accident claim form to Mr. Chiu and Mr. Chiu signed it. He referred to Exhibit 4 and indicated that he himself had filled in the form, and that the handwriting in it is his. He indicated that he made approximately $200.00 in salary and $200.00 in tips weekly. He testified that he did not declare the tips in his income tax return, although he did declare the income from earnings.

The Applicant testified that when he went in to have Exhibit 4 signed he advised Mr. Chiu that he had had an accident and could not continue to work. Then he and Mr. Chiu got into an argument, because Mr. Chiu said he needed somebody to work. The Applicant testified that Mr. Chiu filled out the form because he had to, but he was not very happy about it.

The Applicant testified that after the accident he could not wait on tables and could not lift. He could not return to work unless a doctor advised him that he could do so.

The Applicant testified that he could not remember how many times he had seen the doctor. He stated that he thought he saw him a few times, perhaps 6 or 7 times, he does not really remember. He last saw him some time in December 1990. He also saw his family doctor after seeing Dr. Talangbayan.

The Applicant indicated that perhaps Mr. Chiu did not recognize him. He testified that Mr. Chiu did not like him very much, that he was annoyed with him because he needed someone to work in the restaurant. The Applicant testified that he made about the same amount in tips as did the other waiters. He testified that he worked 6 days a week from 4:00 p.m. to 1:00 a.m. and he made approximately $30-40 a day in tips.

In response to cross-examination by counsel for the insurer, the Applicant reiterated that Mr. Chiu had hired him and that Mr. Chiu knew that he was working at the restaurant, although he did not see him very often. He testified that after the accident, he stopped working right away. He went to see Mr. Chiu the day after he saw the doctor, and that was his last day of work. He told Mr. Chiu on the day of the accident that he could not continue to work. The Applicant denied that he was laid off work by Mr. Chiu because there was not enough work.

The Applicant testified that he did not remember that Dr. Talangbayan had told him to come back in a week. After seeing Dr. Talangbayan, he went back to see his original family doctor. He could not explain why he waited two and a half months to see Dr. Talangbayan again, but stated that it was perhaps because he saw his family doctor in between. The Applicant testified that he could not work until after December 1990, because his back still hurt him. In fact, he did not start to look for work again until April 1991.

The Applicant testified that he had no written records of his tips. He confirmed that after the accident, he was not physically able to work as a waiter. He did not even try to work, because it hurt if he stood for even a little bit. He felt that it would hurt even more if he was serving tables. At the time in question, the Applicant was living at home with his parents. His parents have been supporting him since the accident, and he has also been receiving social assistance. He did not apply for unemployment insurance after the accident, because he knew that he did not have enough weeks of employment.

Horace Chiu, part-owner and manager of the Tat Hing Hot Pot restaurant, and part-owner of the Tat Hing Asia Diner, gave viva voce evidence under oath. He explained that he is a part-owner of the restaurant and also supervises employees. He testified that he has worked at the Asia Diner since June 1990, when the restaurant opened. He testified that he hired someone who identified himself as Thai Tru Luong on July 16, 1990, but he stated that the Applicant was not the person who he hired and who worked for him. He testified that he had absolutely never seen the Applicant before. He had hired an individual called Tom Thai who worked at the restaurant. The individual who he hired was a relatively tall person for an oriental, about 5'10" tall, and quite good looking. He spoke good English and Chinese.

The employer stated categorically, that the person who called himself Tom Thai was not the Applicant. He pointed out that the Applicant is a slim-built individual who wears glasses.

The employer reiterated that he is certain 100% that the Applicant is not the person who worked for him at the restaurant, and that he never spoken or communicated with the Applicant before. The employer stated that his former employee must have been using someone else's social insurance number. He confirmed that he used to see "Tom Thai" almost every day at the restaurant. When the restaurant opened, it was a small operation with very few employees, and he knew every one.

The employer confirmed that he was 100% sure that he knew all of the employees in the restaurant by name, and that he used to talk to almost everyone daily. Tom Thai was the only Vietnamese-Chinese individual who worked for him.

The employer confirmed that he signed the employment form (Exhibit 4) dated October 2, 1990, but he stated that he did not fill in any of the information on the page. He did not write in the information, and he did not check the starting date and the termination date indicated on the form. He looked only at the salary reported and noted that Mr. Thai had put in the tips himself. The employer testified that he thinks that he did not meet with Mr. Thai on the day that he signed the form. He believes that Tom Thai had the form delivered, and did not bring it in personally. The restaurant did not keep records of the tips earned by employees. Mr. Thai could have put in any amount for tips.

The employer testified that he did not know that a car accident had occurred until he signed the form. He did not notice any lowering of the level of work performed by Tom Thai, and he was not aware that Mr. Thai had incurred any injury until he signed the form. Tom Thai had said nothing about a car accident and the employer had heard nothing about an accident. The employer testified that Mr. Thai was terminated on September 9th because the restaurant did not have enough hours of work for him.

The employer was questioned about the Applicant's testimony, that the Applicant had met with him and told him about the car accident. The employer responded that the Applicant was lying. The employer described the duties which had been performed by Tom Thai, and stated that when he was asked to sign the form, he cooperated. He testified that he has no motives with respect to his former employee Tom Thai and no interest in the outcome of this hearing. He was at the hearing to give evidence, in compliance with the summons to witness which had been issued, and all the evidence that he has given is true to the best of his knowledge.

The employer testified that after Tom Thai left, another waiter was hired in late October or early November. He stressed that he personally knew almost all the staff who worked in his restaurant, including kitchen staff, waiters and waitresses, and management staff. He used to go into the restaurant at opening hours to chat with customers, chat with the waiters, see how things were going. The employer was questioned about the list that he had provided naming all of his former employees. He was cross-examined about the occupation of each employee on the list and easily identified almost every one.

The hearing was then adjourned and resumed on August 7, 1991. Neither the Applicant nor his legal counsel appeared the resumed hearing. The Applicant's legal counsel had advised me that he was no longer acting for the Applicant, since he was not able to contact him and had received no further instructions from him.

Tan Wing Hung, an employee of the Tat Hing Asia Diner, gave viva voce evidence under oath, on behalf of the Insurer. He testified that he had started working at the restaurant as a waiter on July 20, 1990. He knew a waiter called Tom, who had worked at the restaurant for a few months during the summer last year. He did not know Tom's last name. The person that he knew as Tom was a heavy fellow, around 6' tall, who must have weighed approximately 160 pounds. The witness testified that he did not know why the waiter named Tom left the job. They used to work together, and when he was working, the witness saw Tom every day.

The witness also testified that Mr. Horace Chiu used to come to the restaurant almost every day, to supervise its operation. Mr. Chiu would see both Tom and himself there every day. There was no other waiter called Tom working at the restaurant at that time .

Following the evidence, counsel for the Insurer made oral submissions. He reviewed the Applicant's testimony, which was that he had started work in July 1990 and worked until August 31, 1990, the date of the motor vehicle accident. The Applicant stated that he had not worked since the accident and was currently receiving social assistance.

The Insurer submits that the Claimant had never been employed at the restaurant all, and that the basis of his claim for compensation is fraudulent. Clear and cogent evidence from Mr. Chiu, the manager of the restaurant, shows that the Applicant had never worked for him at the restaurant.

Counsel pointed out that the Applicant had failed to appear on the first hearing day and also failed to attend for the resumption of the hearing, and submitted that I, as Arbitrator, was entitled to make reasonable inferences from that fact. He submitted that the most reasonable inference was that the Applicant had assumed that his identity would not be in question if all the employer's evidence was given on the first hearing day. This was why he did not attend the hearing the first day. His plan backfired when the employer, Mr. Chiu, appeared on the second hearing day. Mr. Chiu saw him, fortuitously, that day and accordingly was able to state categorically that the Applicant had never worked for him. After Mr. Chiu and Applicant saw each other, the Applicant disappeared from the hearing and was not seen again.

Counsel submitted that the employer, Mr. Chiu, has no interest in the outcome of these proceedings, and was reluctant to attend personally. He initially delegated the administrator of the restaurant, Margaret Fung, to appear at the hearing on his behalf. However, when he did attend, he was forthright in giving his evidence and was visibly affronted and upset when his veracity was challenged.

Counsel submitted that the Applicant did acknowledge that Mr. Chiu was his immediate supervisor at the restaurant. The Applicant stated that he had met Mr. Chiu when he was hired, saw Mr. Chiu from time to time at the restaurant, and advised him that he had to stop working because of his injury. However, Mr. Chiu denied ever knowing the Applicant. He knew another individual who identified himself as Tom Thai and had worked in the restaurant, but the other person was a much bigger, heavier person than the Applicant. Mr. Chiu stated that he was sure the Applicant was not Tom Thai who was employed at the restaurant.

Counsel submitted that the evidence of Mr. Chan confirms that there was a waiter at the restaurant, called Tom, who was about 6' tall and fairly heavy. The claimant cannot be so described. The restaurant records show that Tom Thai was employed at the time that the Applicant says he was employed. However, the witness, Mr. Chiu denied any conversation about injuries from a motor vehicle accident. Tom Thai was dismissed from employment because of a shortage of work, and not for reasons of disability. The employment records show that Tom Thai actually worked until September 9, 1990 although the Applicant's evidence was that he could not work after August 31, 1990.

Counsel referred to Mr. Chiu's comments that in the immigrant community, it is not unusual for identification, documents and social insurance numbers to be exchanged. This would allow illegal immigrants to work. Counsel submitted that this clearly happened in this case. Someone else used the Applicant's identification documents while the Applicant himself was not employed at the restaurant.

Counsel requested permission to make a submission with respect to fees in this case, and he asked that I address the issue of fees in my reasons. He pointed out that the Insurance Act, as amended, makes no provision for any fees or costs award to be made against an applicant. This is a problem in the case of a fraudulent claim. Counsel submitted that the legislation, which disallows an award of fees against the applicant creates a fundamental injustice to the insurer. He pointed out that the legislation provides for costs to be awarded to insured persons, and severe penalties to be awarded against insurers who act unreasonably. He submitted that Section 242e(10) provides for heavy interest penalties and an increased award against an insurer who acts unreasonably. This provision ensures that insurers act reasonably and in good faith in defending their cases.

The insurer must pay a fee of $1,000 up front for an arbitration hearing, where the insured only pays $50.00. Insurers also bear further out-of-pocket expenses with respect to witness fees, reporter fees, and the like. Counsel submitted that this creates an uneven playing field for insurers involved in arbitration hearings.

He pointed out that in this particular case, the insurer was involved in the expense of attending at a 3-day hearing, and at the end of the day the Applicant's case appears to be fraudulent. When the fraud was finally uncovered, the Applicant himself emerged unscathed; he was simply out of pocket $50.00. Counsel submitted that this result was ludicrously unfair to the insurer. It creates a climate where insurers are encouraged to pay claims regardless of their merits, because of the prohibitive cost consequences of defending even the most successful case.

Counsel submitted that the present cost provisions encourage applicants to come forward with grossly exaggerated and fraudulent claims, as fraudulent claimants have nothing to lose by arbitrating their cases. He argued that the current regime creates a "social welfare assistance system" for dishonest and unscrupulous individuals, and this surely could not have been intended by the government in enacting the legislation.

Counsel also submitted that the entire dispute resolution system was financed by insurers, and insurers pay according to the degree in which they are named as respondents in disputes. In a fraudulent case, therefore, insurers are doubly penalized.

Counsel submitted that the current provisions respecting costs are repugnant and offend the sense of fundamental justice. Although he understood the need to make the dispute resolution system accessible to innocent victims of accidents, counsel stated that there was also a need to realize that some people will abuse the system. This must be recognized and should be dealt with in the legislation.

Findings

Section 232(2) of the Ontario Insurance Act, as revised, sets out the rules for determining who is liable to pay no-fault benefits as follows:

1. In respect of an occupant of an automobile,

i. the occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the occupant has recourse against the insurer of the automobile in which he or she was an occupant,

iii. if recovery is unavailable under subparagraph i or ii, the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to no-fault benefits arose,

The legislation provides that the occupant of an automobile first has recourse against his own insurer. If the occupant has no insurer, he or she has recourse against the insurer of the automobile in which he or she was an occupant. If recovery is unavailable against the insurer of the automobile in which the accident victim was an occupant, then the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to no-fault benefits arose.

No evidence was brought to show that the Applicant had an insurer himself or had a policy of insurance of his own with respect to any automobile. Therefore, pursuant to subparagraph ii, the Applicant first has recourse against the insurer of the automobile which he was driving. The evidence before me shows that although the owners of the automobile had made some attempt to insure their vehicle, in fact, they never actually had a valid policy of insurance as is required by law. An insurance policy on their vehicle was purportedly issued to a person who was not the owner of that vehicle, and had no insurable interest in the vehicle. Therefore, the vehicle was not insured, and accordingly there is no insurer against whom the Applicant can have recourse pursuant to section 232(1)ii of the legislation.

Furthermore, the evidence is that the insurer with which the automobile was purportedly insured had in any case cancelled the contract of insurance for reasons of non-payment. I find that the cancellation was a valid cancellation, in compliance with the rules and practices governing the cancellation of auto insurance policies in this province. Therefore, I am satisfied that at the time of automobile accident there was no valid policy of insurance on the vehicle.

Since recovery is not available against an insurer of the automobile, the Applicant accordingly has recourse against the TTC, the owner of the other automobile which was involved in the incident from which the claim to no-fault benefits arose.

I note that Section 1 of the Insurance Act, the interpretation section, defines automobile at subsection 8, as follows:

"automobile" includes a trolley bus and a self-propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway rolling stock that runs on rails, watercraft or aircraft; ("automobile").

It was not argued or alleged that the TTC vehicle which was involved in the collision is not an automobile within the meaning of the legislation. Therefore, I conclude that pursuant to Section 232(2)(1)(iii), the TTC is properly the insurer for purposes of the Applicant's claim to no-fault benefits.

Verification of Economic Loss

The second issue before me was whether the Applicant properly verified his economic loss so as to prove his entitlement to a weekly income benefit under Section 12 of the No-Fault Benefits Schedule. I have determined that the Applicant did not verify that he suffered any economic loss. In fact, I conclude that the Applicant is not entitled to a weekly income benefit as a result of the accident, and that his claim for such a benefit is fraudulent.

There is no dispute that the Applicant was involved in an automobile accident and as a result, suffered some injuries. However, in order to receive weekly income benefits under Section 12 of the No-Fault Benefits Schedule, the Applicant must prove that he meets the qualifications for weekly benefits set out in that section. The section provides as follows:

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 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):

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.

In this case, the Applicant claimed that he was employed as a waiter at the Tat Hing Asia Diner. He produced records, including a "Record of Employer", showing that he was employed at this establishment, and he advised the insurer and his doctor that he was so employed.

The Applicant testified that he worked as a waiter from July 1990 until the day of the accident, August 31, 1990. He claimed to know the owner of the restaurant, Mr. Horace Chiu, and testified that he had had various conversations with him. The records of the employer, including Exhibit --, the income tax --, show that a person using the Applicant's surname was employed in the restaurant up to and including September 9, 1990.

However, the owner of the restaurant disputes that the Applicant was ever employed at the restaurant. He testified unequivocally that the Applicant never worked at the restaurant and that someone else, using the same or a similar name, was actually employed. The owner stated that he knew all of his employees and former employees. He was positive that he did not know the Applicant, and that the Applicant had never worked in his restaurant. The owner was able to provide a physical description of his former employee, "Tom Thai" which does not correspond to the appearance of the Applicant. The owner's evidence was corroborated by a waiter at the restaurant who provided a similar description of his former co-worker.

In this case, the Applicant bears the onus of proving his case on the balance of probabilities. He has not discharged this onus, since I have found that he was not employed, as he claims. I make this finding after carefully considering the evidence and credibility of the Applicant, as well as the credibility and weight of the evidence contradicting his testimony.

I based my assessment of the Applicant's credibility on the following factors:

1. The Applicant's testimony, in general, was vague and often contradictory. His testimony about his employment was lacked convincing detail. His other evidence was also unreliable - for example, he could not remember how often he had visited the doctor. He testified that he thought he saw the doctor six or seven times, whereas the doctor's evidence is that he saw the Applicant twice. I accept the doctor's evidence on this point as reliable.

2. The Applicant's evidence that he had worked only until August 31, 1991 (the date of the accident) was contradicted by reliable documentary evidence from the employer, including income tax records, showing that an individual using the Applicant's name was employed until September 9, 1990.

3. The Applicant's evidence of was contradicted by the sworn testimony of the employer, Mr. Chiu. Mr. Chiu was a reluctant witness who was not attending the hearing voluntarily, but because he had been summoned by the Insurer. However, once at the hearing, he gave his evidence in a candid, straightforward and unambiguous fashion. The employer had no interest in the outcome of the hearing. Further, his evidence was supported both by the restaurant records, and by the testimony of the employee who described the former waiter known as "Tom Thai" in terms similar to the employer's description.

4. The Applicant's demeanour was such that I doubt his credibility. His testimony was delivered in a flat and unconvincing manner. He gave vague answers to precise and specific questions, and failed to remember significant details of his employment history and medical history --the matters at issue in this case.

5. Finally, I note the Applicant's behaviour during the course of the arbitration. The Applicant failed to attend at the pre-hearing meeting in this matter. He then failed to attend on the first hearing day, although he had been advised both by the Commission and by his Counsel, of the time and date of the hearing. He did attend on the second day of the hearing, but left immediately after giving his testimony. He did not remain at the hearing while his evidence was being contradicted by his alleged employer. He did not present any evidence to rebut the testimony of the employer. He failed to attend for the resumption of hearing. I therefore infer from his behaviour that he had no adequate response to the evidence against him.

I therefore find that the Applicant has failed to prove that he was, at the time of the accident, employed or self-employed, pursuant to Section 12, subsection 2 of the No-Fault Benefits Schedule. I further conclude that the Applicant's claim to benefits in this case is wholly fraudulent, since it is apparently bases on the employment of another individual. Therefore, I find that the Applicant is not entitled to weekly income benefits under section 12 of the No-Fault Benefits Schedule.

Finally, the Insurer has requested that I address the issue of costs. It is clear that under the present legislation I cannot order costs against the Applicant. The current legislation, at section 242e (10) permits punitive costs awards to be made against Insurers who act unreasonably. That section provides as follows:

However, nothing in the legislation gives me the jurisdiction to make a costs award against the Applicant.

If I did have such jurisdiction in this case, I would have no hesitation in awarding such costs against the Applicant. The Applicant, in my view, has put forward a wholly fraudulent claim to no-fault benefits at great expense to the insurance company. I concur with the Insurer's observation that the current system may induce some applicants to litigate claims that clearly have no merit, since they risk no penalty by doing so. The system also tends to encourage insurers to settle such claims, as often, settlement is less costly than defending even the strongest case.

I agree that this result was probably not intended by the legislators who enacted these provisions. However, since I lack the jurisdiction to fashion an appropriate remedy in the circumstances, I merely indicate that in this case, I would have awarded costs against the Applicant, if it were open to me to do so.

Order

The Applicant is not entitled to benefits under the No-Fault Benefits Schedule.

F. Rotter

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