Neutral Citation: 1992 ONICDRG 11

File No. A-000378

ONTARIO INSURANCE COMMISSION

BETWEEN:

SOLTAN DAVOUDI KAHKESH

Applicant

and

LLOYD'S NON MARINE UNDERWRITERS

Insurer

DECISION

Issue:

The Applicant, Soltan Mohammad Davoudi Kahkesh, was injured in a motor vehicle accident on April 1, 1991. He applied for weekly income benefits, payable under Part IV, Regulation 273/90, under the Ontario Insurance Act, R.S.O. 1990, c. 1.8 (the "No-Fault Benefits Schedule").

The Applicant is a 36 year old taxicab driver. He was paid weekly income benefits of $468.20 for six weeks based on his statement to an adjuster on April 5, 1991. From May 20 until September 12, 1991, the Applicant was paid at the rate of $185.60, the minimum payable under Section 12(7) of the No-Fault Benefits Schedule, because the Insurer had not received proof satisfactory to support the gross weekly income declared initially.

The Applicant applied for mediation on the issue of amount of weekly benefit from May 20, 1991 to September 12, 1991. Mediation failed to resolve the issue and the Applicant subsequently applied for the appointment of an arbitrator under Section 282 of the Insurance Act.

The issue to be determined in this arbitration is:

1. What is the amount of weekly income benefits payable to the Applicant from April 8, 1991 to September 12, 1991?

There remains outstanding an issue between the parties as to the Applicant's entitlement to ongoing benefits from September 13, 1991.

This hearing did not deal with that issue. A subsequent hearing will be held on that issue, if necessary.

Decision:

The decision is:

1. The Applicant is entitled to benefits at the rate of $185.60 per week from April 8, 1991 to September 12, 1991.

2. The Insurer is entitled to a repayment in the sum of $1,695.60, together with interest at the bank rate from this day forward, pursuant to Section 27 of the No-Fault Benefits Schedule.

3. The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code.

Hearing:

An arbitration hearing was held at North York, Ontario, on March 3 and 5, 1992 before K. Julaine Palmer, arbitrator.

Present at the hearing were:

Applicant:

Soltan Mohammad Davoudi Kahkesh

Applicant's Agent:

C. Joseph Tritt, Paralegalities, Inc.

Gerald Tritt (March 3, 1992 only)

Insurer's Counsel:

P. Diane McDowell, Barrister & Solicitor

Insurer's Representatives:

Ian S. Gurnell

Larry Dorkin

Witnesses:

The following gave oral testimony, under oath or affirmation, at the hearing:

Soltan Mohammad Davoudi Kahkesh

Applicant

Noah C. Rotman

Taxicab Manager

Nasser Moradmand

Taxicab Driver

Yekinni B. Agiri

Taxicab Driver

Ebrahim Fadaie-Nia

Sales Manager

Paul Hales

Investigator

Ian S. Gurnell

Adjuster

Lorna Shirlene Lalonde

Risk Manager, Co-Op Taxi

Legislation:

Weekly income benefits are paid under Section 12 of the No-Fault Benefits Schedule (Ontario Regulation 273/90).

Section 12(7) sets out the rules for the calculation of gross weekly income.

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

1. 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.

3. Business expenses which cease as a result of the accident shall be deducted from a person's income from self-employment before calculating his or her gross weekly income. O.Reg. 273/90, s. 12.

Section 15 describes the deductions for income received or available subsequent to the accident:

15. The insurer may deduct from any benefit payable under this Part 80 per cent of any income received or available from any occupation or employment subsequent to the accident. O.Reg. 273/90, s. 15.

Section 27 describes the entitlement by an insurer to repayment.

27. (1) A person must repay to the insurer any benefit received under this Schedule that is paid to the person through error or fraud.

(2) A person must repay to the insurer any benefit received under sections 12 and 13 that is paid to him or her if the person or the person in respect of whom the payment was made with disqualified from payment under section 17.

(3) A person must repay to the insurer any benefit received under sections 12 and 13 to the extent of any payments received by the person that are deductible from benefits under subsection 12(4) or 13(3).

(4) The insurer may charge interest from the day the amount owing to the insurer under this section is determined at the bank rate on that day.

(5) In subsection (4), "bank rate" means the bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule 1 to the Bank Act (Canada).

Evidence:

In this arbitration, the task of the Applicant was to prove his gross weekly income prior to the accident.

The Applicant testified under oath that he had been a cab driver for three years until the date of this accident. Because of the accident, he has been unable to work at any job. The Applicant had driven with Co-Op Cabs for more than six months; previously, he was with Royal Cabs. He testified he owned a 1987 Ford motor vehicle, and rented taxicab plate number 2609.

Contrary to the provisions of the lease, a copy of which was entered as an exhibit, the Applicant's evidence was that he was the true owner, not the lessee, of the motor vehicle described above. He paid $460.00 per week for rental of the taxicab plate, insurance, dispatching fees, and other dues as a participant in the Co-Op Taxi association.

The Applicant no longer owns the 1987 Ford cab. He testified he sold the car three or four weeks after the accident to Nasser Moradmand for $1,000.00. However, the transfer of ownership registration was not done until several months later, in the summer of 1991.

The Applicant testified that he grossed between $150.00 and $180.00 for a 12-hour shift, plus tips. His usual practice was to work 12 to 14 hours, five or six days of the week. In 1990, he declared a gross revenue of $36,000.00 to Revenue Canada. He did not declare any tips which he received. When questioned with respect to this omission on cross-examination, the Applicant responded that "tips is not going on the tax return--maybe you didn't make it".

Four weeks after the accident, the Applicant stopped paying the plate leasing charge, dues and insurance. Photocopies of three receipts dated April 19, 1991 were entered as exhibits relating to weekly rental charges due April 6, 13 and 20, 1991.

Exhibit 1 to the arbitration hearing is a certified copy of the Applicant's 1990 Income Tax T1 General form, dated April 1Z, 1991. In this income tax return, the Applicant reported a gross revenue of $36,000.00 from business and $2,879.98 from interest income. He also reported $38,500.00 in business expenses, leaving a net loss for the business for 1990 of $2,500.00. The income tax return contained a statement of income as at December 31, 1990, prepared by Onkar Bakshi, C.G.A., which stated it was "prepared without audit from the information supplied and for tax purposes only".

Exhibit 2 to the arbitration is a photocopy of a Goods & Services Tax Return for Registrant in the name Soltan Mohammad Davoudi K (sic), for the period January 1, 1991 to March 31, 1991. This photocopied form was incomplete, line by line, and contained figures only in the last six lines of the form. It purported to show total G.S.T. and adjustments for the period in the sum $750.00, together with $770.00 in total Input Tax Credits and adjustments. Net tax in the sum ($20.00) was indicated. A refund in the sum of $1,020.00 appeared to be claimed.

Further copies of quarterly G.S.T. returns until the end of 1991 were also filed as Exhibits 3, 4 and 5. No authenticated or certified copies of any G.S.T. information were filed.

The agent for the Applicant invited the arbitrator to infer from Exhibit 2 that the Applicant's gross income in the first three months of 1991 was $10,500.00. This assumed that the rate of Goods & Services Tax was 77° and that the figure of $750.00 represented 77_a of a gross income of $10,500.00.

The Applicant testified that he sold his taxicab approximately 40 days after the accident for the sum of $1,000.00. He further maintained that after the accident he never drove the cab again and received no income from the cab. He also denied working in the carpet business in Toronto following the accident. He has not yet prepared his income tax return for 1991.

On cross-examination, the Applicant testified that he helped out an Iranian newcomer, Nasser Moradmand, from February 13, 1991 onwards, by putting him on the taxi insurance as a driver. The Applicant denied that Mr. Moradmand ever paid him for using the cab. It was his evidence that the cab required frequent repairs, because he had bought it at an auction, and that Nasser Moradmand would do repairs for him without payment.

The Applicant testified that, following the accident, Shirlene Lalonde, the risk manager of Co-Op Taxi, called him at home and asked to put another driver on his cab. This man was known to the Applicant only as "Ali". Neither Ali nor Nasser Moradmand ever paid anything to the Applicant for driving the cab. When the Applicant was asked why he would let them drive his car for free, he stated that he got $1,000.00 for the sale of the car and he was afraid that if he transferred ownership of the car right away he would get no money from the insurance company. Accordingly, the ownership transfer was not completed until the summer of 1991. The Applicant indicated that exhibit 6, the receipt or purported bill of sale, was prepared "four or five months [before the hearing]", that is, in October or November of 1991, although he also believed it was done at the time he transferred the ownership of the car (late summer 1991). The Applicant testified he might have typed the document himself, perhaps even at Mr. Tritt's office.

On cross-examination, the Applicant was thoroughly questioned about his purported income and his reporting of Goods & Services Tax collected. He was questioned with respect to the location of his "paper" relating to his income from January to April 1991. He responded that "nobody" has the paper for 1991. He brought no receipts for his expenses in 1991 to the hearing nor any other documents.

The Applicant testified that in 1990 his wife worked and supported him and he also got money from his friends. He denied he made any money from Mr. Moradmand and "Ali" in the spring of 1991 and reiterated that "they are not my drivers". He also denied he ever worked for the Persian Carpet Centre.

Noah C. Rotman, Yekinni B. Agiri, and Nasser Moradmand gave evidence. Mr. Rotman is the manager of a taxi fleet of 10 to 15 cabs involved with the Co-Op association. Mr. Agiri has been a cab driver since 1975 and also drives a Co-Op taxi; he leases his plate but owns his own car. Nasser Moradmand is a friend of the Applicant, who bought his car following the accident.

Mr. Rotman gave evidence that an average taxicab driver in the City of Toronto in 1991 might earn $150.00 for a 12-hour shift. With tips, the earnings would be a little higher. Mr. Agiri gave evidence that he grossed approximately $300.00 a day in 1991 for a 14-hour day, five days a week. In addition, he earned tips of between $100.00 and $150.00 per week.

Mr. Nasser Moradmand testified that he worked part-time for the Applicant even before February 13, 1991. His evidence was that he would take fares but would never give the Applicant any money. After the taxicab had been repaired in the third or fourth week in April, Mr. Moradmand bought the car for $1,000.00. Thereafter, he was responsible for the repairs as well as for the payment of the weekly fee for the plate rental and management services. Three or four months later, the car ownership was transferred to his name. There was "no reason" for the delay in the transfer. Mr. Moradmand has the same relationship with the owners of plate number 2609 as the Applicant had previously. Mr. Moradmand arranged for his friend, Alireza Mohammad Zadehbabr, to be added to the car insurance on April 25, 1991.

Ebrahim Fadaie-Nia, a cousin of the Applicant, gave evidence at the behest of the Insurer. He is the sales manager with Persian Carpet Centre, 348 Davenport Road, Toronto. Mr. Fadaie-Nia testified that he received a telephone call on February 7, 1992 from a man asking about his cousin, Soltan Mohammad Davoudi Kahkesh. He understood that he was giving a reference to someone calling from the Credit Bureau. Mr. Fadaie-Nia testified that he gave a good reference because "I owe Soltan. I stayed his house four to six months. Everything good for him I say". He told the caller that Mr. Davoudi Kahkesh worked as a commission salesman for Persian Carpet Centre. This was a lie; the Applicant never worked for Persian Carpet Centre.

Paul Eldon Hales gave evidence for the Insurer. He is a licensed private investigator with five years' experience in insurance investigations. He spoke with Ebrahim Fadaie-Nia at a time when the insurance company was trying to locate the Applicant. The Applicant was not living at the address which the company had for him. Mr. Hales testified that he had two conversations with the man he called "Ebrahim". On the second occasion, Ebrahim seemed to be upset that Mr. Hales was asking questions, although during that call the investigator was attempting only to determine the length of employment of the Applicant with the Persian Carpet Centre.

Ian S. Gurnell, licensed independent insurance adjuster for Lander-Spiers Insurance Adjusters Ltd., gave evidence. He has been a licensed adjuster since 1981 and is the control adjuster acting on behalf of Lloyd's Non Marine Underwriters. Mr. Gurnell adjusts 70 - 100 accident benefit files at one point in time, and 80 - 907 of these files relate to self-employed taxicab drivers.

Mr. Gurnell testified that he became aware of the Applicant's accident when he received a fax from the risk manager of Co-Op Taxi on April 2, 1991. He telephoned the Applicant the next day and went to see him on April 5, 1991 at his home.

At that interview, Mr. Gurnell provided the Applicant with blank benefit forms and outlined the accident benefits available to him. He also took a statement from him, which was entered as Exhibit 10. The statement gave details of the Applicant's income and expenses. While at the Applicant's apartment, the adjuster became aware of the involvement of Mr. C. J. Tritt of Paralegalities Inc. and had a brief telephone conversation with Mr. Tritt before leaving the Applicant's home.

During that conversation, Mr. Gurnell outlined the documents which the company would accept as proof of the Applicant's income. He indicated that income tax returns or G.S.T. forms would be acceptable. Mr. Gurnell stated he would be prepared to recommend six weeks' payment of benefits on the verbal declaration of the Applicant, but thereafter would require acceptable documentary proof. He told Mr. Tritt that "run sheets" kept by taxi drivers would not be acceptable as proof of income.

Exhibit 11 is the Ontario Automobile Application for Accident Benefits of Soltan Davoudi-Kahkesh, dated April 9, 1991. In this application, the gross income of the Applicant for the 48 weeks preceding the accident is stated to be $38,400.00, plus $7,200.00 in tips, for a total of $45,600.00. This document was signed by both Soltan Davoudi and C.J. Tritt.

Within 10 days of the accident, the Insurer had received two widely different statements as to the income of the Applicant. Exhibit 13 is a letter from Mr. Tritt dated April 10, 1991 to the insurance broker in which the following statement is made:

"His gross income for the three months preceding the accident was approximately $12,000.00, plus (sic) the claim is for the maximum benefits of $600.00 per week commencing April 9, 1991."

Mr. Gurnell wrote to Mr. Tritt on April 17, 1991. In his letter, he stated:

"The G.S.T. information you provided proves nothing toward what your client's gross weekly income is. We suggested copies of your client's Tax Returns. You advised he was under no obligation to submit them and quoted an unnamed source at the Ontario Insurance Commission as authority. Please advise the arbitration or mediator officer's name so we can confirm this. Rather than delay payment of benefits due to lack of documentation, we are prepared to calculate benefits based on your client's own verbal declaration to us of earnings and expenses which net at $585.25 per week. 80% of this is $468.20 and the attached cheque represents payment from April 9 - April 22, 1991 inclusive or $936.40."

Further accident benefits were forwarded on April 24, 1991. In a letter to Mr. Tritt dated April 25, 1991 (Exhibit 16), Mr. Gurnell discussed outstanding issues in the settlement of the Applicant's claim, including downtime for the loss of use of his vehicle while it was off the road for repairs. The last two paragraphs of the letter related to his claim for no-fault wage benefits: "Thus far payments are based on Mr. Davoudi's declaration to the writer. Trip-sheets are of no value in confirming income. Please provide appropriate documentation."

In a letter to Mr. Tritt dated May Z1, 1991 (Exhibit 17), a further request was made for documentation to support the claim for loss of wages.

"Attached is a cheque for $936.40 regarding wage benefits to May 20, 1991 inclusive.

The insurer now insists that documentation to support the declared income be provided in the form of G.S.T. remissions or Tax Assessment forms for the tax year 1990.

Thus far the insurer has acted in good faith taking your client's verbal declaration, however, they are entitled to proof of income. Failure to provide same will prejudice your client's claim."

In September 1991, C.J. Tritt sent to the adjuster a certified printout from Revenue Canada which showed a loss of $2,500.00 on the Applicant's business in the year 1990. A photocopy of this printout was filed as Exhibit 12.

Finally, by letter dated September 10, 1991, Mr. Gurnell wrote as follows:

"Thank you for your letter and enclosure delivered to our office September 6, 1991.

Unfortunately, the certified copy from Revenue Canada does not break down your client's income in sufficient detail so that we might calculate his proper entitlement. Therefore, we would request that you obtain a full copy from Revenue Canada. We understand that it will take approximately six weeks to be delivered."

In his cross-examination of the adjuster, Mr. Tritt, the Applicant's agent, intimated that the job of Ian Gurnell was "not to pay". Mr. Tritt asked if Ian Gurnell was familiar with what cab drivers earn, since he purported to be handling between 70 and 80 such claims for wage benefits under the no-fault scheme at a time. Mr. Gurnell responded that there is a wide variation in what cab drivers earn, from $25.00 after expenses to $300.00 after expenses, per week. He could not make a general statement about earnings of cab drivers because of the wide variation.

When he was questioned about his continual demand for a tax return to support the income of the Applicant, Mr. Gurnell recalled that Mr. Tritt's answer had always been that Gurnell was "not entitled". Mr. Gurnell stated that he recalled Mr. Tritt himself saying that he had not filed a return. Mr. Tritt asked "can you get an income tax information by court order?" Mr. Gurnell's answer was that he had no idea.

With respect to the G.S.T. return submitted, Mr. Gurnell commented in cross-examination that it was not stamped, certified nor even completed properly. Mr. Gurnell testified he did not know any other insurer that allows a grace period of six weeks to permit an insured person to prove his income to the satisfaction of the insurer. It was his own personal suggestion to the company that G.S.T. forms that pre-date the accident be viewed as sufficient proof.

At a further point in the cross-examination, Mr. Tritt asked Mr. Gurnell why, when the complete tax return had been received and forwarded to the insurance representative at a pre-arbitration hearing four to six weeks prior to the hearing, are we still sitting here? Mr. Gurnell's reply was that the net income shown on the 1990 return was a negative $2,500.00.

The last witness to give evidence was Shirlene Lalonde, the risk manager for Co-Op Taxi. Ms. Lalonde has more than ten years' experience in the taxi industry. As part of Ms. Lalonde's testimony, a letter dated September 3, 1991 was filed as Exhibit 24. That letter sets out the dates the Applicant contacted Ms. Lalonde's office. Ms. Lalonde's evidence was that on February 13, 1991, the Applicant came into her office with Nasser Moradmand and indicated that he wished that Mr. Moradmand, whom he characterized as his cousin, be placed on the insurance as another driver. Ms. Lalonde understood that Nasser Moradmand would be a full-time driver. Her evidence was that she would not have approved him unless she thought he was to be full-time. On April 25, 1991, the Applicant put another driver on the vehicle, Mr. Alireza Mohammad Zadehbabr. Ms. Lalonde told the Applicant at that time that when he was ready to return to work he would have to release one of these drivers as only two drivers were permitted per car.

She next heard from the Applicant on August 21, 1991 that Nasser Moradmand would be taking over the lease of plate number 2609.

Ms. Lalonde gave evidence that the normal practice in the Co-Op Taxi Association was that a second driver in 1991 would pay between $360.00 and $425.00 per week to the lessee. This arrangement, however, was strictly between the lessee and the driver. The second driver helped pay the lease expenses of the lessee. Ms. Lalonde testified that radio and meter charges were approximately $55.00 per month. In addition, there would be oil changes, repairs, and Department of Transport costs. Her evidence was that the drivers usually paid for the gasoline for their shift and often car washes as well.

Regularly, twice per year, Ms. Lalonde obtains a motor vehicle abstract of each driver. Exhibit 24 is two driver search abstracts of the Applicant, dated April 8, 1991 and October 22, 1991. By October 22, 1991, the Applicant was no longer associated with Co-Op Taxi, but Ms. Lalonde noted that the new abstract showed that the points against his driving record were now over the insurable limit of what the insurance available through Co-Op would allow. At that point in time, had the Applicant still been driving, he would have had to place his own insurance on the vehicle, which Ms. Lalonde estimated would be at a cost of approximately $8,000.00, or alternatively, turn in his plate.

Submissions:

Ms. McDowell submitted on behalf of the Insurer that, based on the Applicant's initial statement to Ian Gurnell (Exhibit 10), his annual income would have been $24,000.00 in the 1990/91 period. Subsequently, the Application for Accident Benefits, dated April 9, 1991 (Exhibit 11), was filed, which showed income in the 48 weeks preceding the accident of $38,400.00, plus $7,200.00 in tips. This, she submitted, indicated a total income of $49,400.00 annualized. Within five days, the Insurer had two different statements of the Applicant's income, one double the other. By September 6, 1991, the only additional information provided to the Insurer was a computer printout from Revenue Canada which showed a net loss in 1990 of $2,500.00. Only at the pre-hearing stage was the full income tax return produced. On the basis of that return, the Applicant is only entitled to $185.60.

Ms. McDowell submitted that the Applicant as a witness had virtually no recollection of his affairs, and, on cross-examination, was evasive and not credible. There is no evidence of the Applicant's income in the first three months of 1991 at all; the G.S.T. evidence is not credible and neither is the witness' evidence. With respect to other expenses; gas, repairs and maintenance ceased at the time of the accident. Plate charges, insurance, and dues stopped three weeks after the accident. If these are subtracted from the 1990 revenue, one still arrives at a negative income.

Ms. McDowell asked that the Insurer be paid a refund of the overpayment with interest, pursuant to Section 27(4) of the Regulation. The difference in the six week period, at $282.60 overpayment per week, amounts to $1,695.60.

In his submissions, Mr. Tritt asked that the arbitrator find that before the accident the Applicant was earning $180.00 per day, five or six days per week. He submitted that his client's earnings were $36,000.00 in 1990. He submitted that the G.S.T. return shows earnings of $10,500.00 in the first quarter of 1991. Mr. Tritt submitted that Mr. Gurnell never did ask for a certified copy or receipt of the G.S.T. return, he simply discarded it out of hand. Mr. Tritt's submission was that "the tax return is the business of the taxpayer" and that it is an "invasion of privacy to look at the tax return".

He submitted that the only expense that ceases after the accident is gas ($6,000.00) and the rest of the expenses are ongoing. If $6,000.00 is subtracted from the gross annual income of $36,000.00, and 10% is added for tips, then the Applicant's annual income would be $33,600.00 or $646.15 per week. 80 percent of that figure would be the appropriate weekly benefit and that is $516.92. If the G.S.T. return is projected forward, over four quarters in 1991, then this would show an annual income of $42,000.00 plus $4,200.00 in tips, for a total annual income of $46,200.00. Eighty percent of this would yield a weekly benefit of $710.77, which is greater than the maximum benefit of $600.00.

Mr. Tritt submitted that the Applicant would be entitled to $185.60 even if he was unemployed. However, the Applicant was a hard-working cab driver in the City of Toronto who paid his insurance and, accordingly, is entitled to between $516.92 and $600.00 per week. He asked for the sum of $8,500.00, plus interest, plus a 50% penalty on the Insurer, plus costs and expenses.

Findings:

The issue to be decided on this arbitration is the amount of weekly benefits to which the Applicant is entitled.

In order to establish entitlement to weekly income benefits, the Applicant must show that he qualifies under the provisions of Section 12(1) and (2) of the Regulation. There is no issue that the Applicant was self-employed at the time of the accident.

The Applicant must also establish his "gross weekly income from his or her occupation or employment", pursuant to Section 12(4) of the Regulation. In this case, the weekly benefit is the lesser of $600.00 and 80% of the Applicant's gross weekly income from his occupation or employment.

Subsection 12(7) of the Regulation defines the rules for the calculation of gross weekly income.

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

1. 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.

2. [...]

3. Business expenses which cease as a result of the accident shall be deducted from a person's income from self-employment before calculating his or her gross weekly income. O.Reg. 213/90, s. 12.

The Applicant has not established that his average gross weekly income for either the four or fifty-two weeks preceding the accident is greater than $232.00.

The Applicant placed in evidence only a 1990 Income Tax Return which showed a loss from his occupation in the sum of $2,500.00. No evidence was presented to explain any extraordinary items of expense in 1990, nor any potential difference in calculation of income for tax purposes and calculation of income under the Regulation.

No documentary evidence of 1991 income was provided whatsoever, except for four, single photocopied pages, which purported to be photocopies of the Applicant's G.S.T. Information Returns. The two returns for the first and second quarters of 1991 appear to indicate a loss for those periods of $285.71 and $1,714.29, respectively.

The Applicant's agent produced witnesses who testified as to the income of other taxicab drivers in Metropolitan Toronto in 1990-91. The Applicant's agent failed to establish a gross weekly income of the Applicant in excess of $232.00 per week for either March 1991 or the 52 weeks preceding the accident.

Throughout the course of the hearing, the Applicant's agent showed a poor understanding of the paramount issues in dispute, particularly the burden upon the Applicant to prove his gross weekly income. The concept of "ceasing expenses" set out in Section 12(7)3. of the Regulation was barely referred to in passing. On reviewing the submissions made by the Applicant's agent, there appears to be substantial confusion between the concepts of "gross revenue" and "gross income".

The Applicant's agent submitted that the Applicant was a hard-working cab driver in the City of Toronto, who paid his insurance. I accept that submission. This is not in dispute. There are many means by which it might have been proved that the gross weekly income of the Applicant exceeded $232.00. For example, for the four-week period preceding the accident, the Applicant might have offered as evidence of his revenues documents such as trip sheets, charge vouchers and his bank deposit book. To prove his expenses, the Applicant might have presented gasoline receipts, receipts for payment of the weekly Co-Op fee, receipts for payment of meter and radio expense, and evidence of other expenses incurred, such as maintenance. The choice of methods of proof is for the Applicant and his agent to determine. It is insufficient, however, for the Applicant to give vague, imprecise oral testimony that he earned $150.00 to $180.00 plus unspecified amounts of tips in gross revenue each shift and that he worked either five or six days per week. The evidence of the expenses of the Applicant was presented in only the most sketchy and rudimentary fashion; there was absolutely no testimony or documentation to support any expenses claimed by the Applicant for gasoline, repairs and maintenance, radio and meter expense, etc., apart from the 1990 income tax return.

With respect to the issue of any post-accident income earned at the Persian Carpet Centre, I accept the explanation of Mr. Fadaie-Nia that he lied to the investigator during the two telephone conversations. I accept the evidence of the Applicant that he has never worked selling carpets.

With respect to the issue of income received from Nasser Moradmand and Alireza Mohammad Zadehbabr, I accept the evidence of the Applicant and Nasser Moradmand that the Applicant received no income from the operation of the taxicab following the accident. I accept the explanation that as of April 25, 1991 the car and its revenues had become, to all intents and purposes, the property of Nasser Moradmand.

The calculation of gross weekly income from self-employment is a task that is imposed upon applicants seeking weekly income benefits following motor vehicle accidents. In this case, the Insurer advanced weekly income benefits, based on the verbal declaration of the Applicant for six weeks following the accident. Thereafter, it demanded documentary corroboration as proof of gross income. The Applicant never provided satisfactory proof and the amount of benefit paid was reduced to the minimum prescribed by the regulation.

In the result, the initial accommodation by the Insurer has resulted in an overpayment to the Applicant. I order that the sum of $l,695.00 be repaid by the Applicant to the Insurer, together with interest from today's date, determined at the bank rate on this day.

The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under s. 222(11) of the Insurance Act, which provides as follows:

The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 275/90 "Schedule".

In the McCormick vs. Economical Mutual Insurance Company case (O.I.C. Arb. No. A-000139), Senior Arbitrator Susan Naylor stated the following:

The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act, as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.

Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.

I agree with these comments.

The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code. In the event that the parties cannot agree as to the total amount of expenses, I remain seized of this matter and a party may apply for assessment of the expenses before me.

March 31, 1992

K. Julaine Palmer

Date

Arbitrator