Neutral Citation: 1992 ONICDRG 51

File No. A-001136

ONTARIO INSURANCE COMMISSION

BETWEEN:

KWABENA NYAMEKYE

Applicant

and

LLOYD'S NON MARINE UNDERWRITERS

Insurer

DECISION

Issues:

The Applicant, Kwabena Nyamekye, was injured in a motor vehicle accident on July 25, 1991. He was insured under an automobile insurance policy issued by the Insurer, and received no-fault benefits under the policy. Every motor vehicle policy provides for the no-fault benefits specified in Ontario Regulation 273/90 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act R.S.O. 1990, c. I.8.

The issues in this arbitration are:

1. What is the amount of weekly income benefits to which the Applicant is entitled?

2. Is the Applicant liable to repay any benefits overpaid?

3. Is the Applicant liable to repay benefits of $926.76, paid by the Insurer until March 13, 1992, following the date of a second motor vehicle accident on February 14, 1992?

4. Is the Applicant entitled to reimbursement of taxi fares of $2,099.20, claimed for transportation to and from medical and rehabilitation treatments, between August 1991 and December 1991, and to the cost of a monthly Metropass for the period from January 1992 to March 1992?

A further issue regarding payment of rehabilitation expenses was settled prior to the hearing.

Decision:

The decision is:

1. The amount of weekly benefits to which the Applicant is entitled is $308.92.

2. The Applicant must repay the amount of $889.86 (representing the difference between $308.92 and $457.23, paid from August 1, 1991 for a six week period), together with interest under section 27 of the No-Fault Benefits Schedule.

3. The Applicant must repay benefits of $617.84 that he received for the period from February 20, 1992 to March 4, 1992, together with interest.

4. The Applicant is entitled to recover the cost of a Metropass of $56.50 per month, for the period from August 1991 to March 1992, for a total amount of $452.00, together with interest, under section 24(4) of the No-Fault Benefits Schedule.

5. The Applicant is not entitled to an award for his expenses in this arbitration.

Hearing:

The hearing was held at North York, Ontario, on June 17 and 18, 1992, before me, Susan Naylor, Senior Arbitrator.

Present at the hearing were:

Applicant

Kwabena Nyamekye

Insurer's Counsel:

P. Diane McDowell Barrister & Solicitor

Insurer's Representative:

Ian S. Gurnell, Adjuster Lander-Spiers Insurance Adjusters Ltd.

Mr. Larry Dorkin Lloyd's Non-Marine Underwriters

Witnesses:

The following gave sworn oral testimony at the hearing:

Kwabena Nyamekye

Donald McDougal

Ian S. Gurnell

Lorna Shirlene Lalonde

Documents before the arbitrator:

The following documents were marked as exhibits at the hearing:

Exhibit 1

Goods & Services Tax Return for Registrants in the name of Nyamekye Kwabena A. - date stamped by the Dept. of National Revenue, Toronto Region, September 5, 1991

Goods & Services Tax Return for Registrants in the name of Nyamekye Kwabena A. - date stamped by the Dept. of National Revenue, Toronto Region, September 5, 1991

Exhibit 2

Three envelopes containing taxi-cab receipts

Exhibit 3

Application for Additional Accident Benefits (Form 2), signed by Mr. Nyamekye, undated.

Exhibit 4

Application for Additional Accident Benefits (Form 2), signed by Mr. Nyamekye, dated March 15, 1992.

Exhibit 5

1991 Revenue Canada Tax Return in the name of Kwabena Abubakar Nyamekye, undated.

Exhibit 6

Taxi-cab "Run Sheets" from July 1, 1991 to July 24, 1991 (excluding July 7, 12, 14, 15, and 21)

Exhibit 7

Taxi-cab "Run Sheets" from June 24, 1991 to June 29, 1991

Exhibit 8

Application for Accident Benefits, signed by Mr. Nyamekye, dated October 10, 1991

Exhibit 9

Copy of a letter from Ian S. Gurnell, Lander-Spiers Insurance Adjusters Ltd. to Mr. Nyamekye, dated October 30, 1991

Exhibit 10

Copy of a letter from Mr. Nyamekye to Mr. Ian S. Gurnell, Lander-Spiers Insurance Adjusters Ltd., dated November 25, 1991, with a two-page 1990 Revenue Canada Notice for Assessment attached

Exhibit 11

Copy of a letter from Mr. Jim Krause, Senior Claim Representative, Allstate, to Mr. Nyamekye, dated April 15, 1992

Exhibit 12

One page copies of 12 taxi-cab receipts

Exhibit 13

Goods & Services Tax Return for Registrants in the name of Nyamekye Kwabena A. - for the period 91-07-01 to 91 09 30, undated.

Exhibit 15

Copy of Medical Report from Dr. Michael C. Hall, M.D., Ph.D., F.R.C.S.(C), Indemed Ltd., dated November 6, 1991, and four-page Curriculum Vitae.

Exhibit 16

Copy of Report from Dr. J.G. Stubbs, M.D., F.R.C.S.(C), Riverfront Medical Services, Ltd., dated February 18, 1992, and one-page Curriculum Vitae

Exhibit 17

Copy of Letter from Dr. Michael C. Hall, dated May 13, 1992

Exhibit 18

Copy of Letter from Dr. J.G. Stubbs, dated May 12, 1992

Documents before the arbitrator, but not marked as exhibits:

Report of Mediator, dated February 18, 1992

Application for Appointment of an Arbitrator, dated March 18, 1992

Response by Insurer, dated April 10, 1992

Reply by Insured Person, dated April 22, 1992

Pre-Hearing Letter from K. Julaine Palmer, Arbitrator, dated May 7, 1992

The proceedings were recorded by Ms. Tracey Smith, Canadian Verbatim Reporting Services.

Evidence:

The Testimony of the Applicant:

a) The amount of benefits:

The accident occurred on July 25, 1991. At the time of the accident, the Applicant drove a taxi-cab. He rented his taxi plate from the Associated Toronto Taxi-Cab Co-operative Limited ("Co-Op Cabs").

The Applicant testified that, after the accident, he was directed to see Mr. Gurnell, an adjuster with Lander-Spiers Insurance Adjusters Ltd. The Applicant said that he had not yet received his income tax form, so Mr. Gurnell asked for goods and services tax returns ("GST return") as proof of his earnings. Mr. Gurnell refused to accept the Applicant's taxi trip sheets as proof of his income.

The Applicant filed an application for accident benefits on October 10, 1991 (marked Exhibit 8). On it, the Applicant indicated that he earned $1,250.00 in each of last four weeks preceding the accident. He testified that he got this income from his trip sheets, marked as Exhibit 6 and 7. He attached his GST returns for the first two quarters of 1991 to his application. The GST returns are marked as Exhibit 1, and indicate that they were submitted to Revenue Canada in person on September 5, 1991.

The GST return for the first quarter of 1991 showed total supplies (revenues) of $14,815.00, and total purchases (expenses) of $7,480.00. The GST return for the second quarter shows supplies of $15,000.00 and total purchases of $7,570.00.

The Applicant was paid weekly income benefits until March 4, 1992, because his injuries prevented him from returning to work. For the first six weeks after the accident, the Applicant received $457.23 per week. This figure was based the net amount that he had reported on his GST return for the second quarter of 1991.

Then he received a letter from Mr. Gurnell, dated October 30, 1991, filed as Exhibit 9. This advised him that, after the first six weeks, his benefits would be reduced to the minimum amount, until he produced his 1990 income tax return to verify his income.

The Applicant sent Mr. Gurnell a copy of his completed Notice of Assessment for 1990, with a note attached, marked as Exhibit 10. The note stated:

this tax return was filed with T4 slips and not taxi income because I was not driving during that period.

The Notice of Assessment showed income of $20,080.00. Based on this figure, the Applicant's benefits were recalculated to $308.92 each week.

The Applicant stated that the income declared in his 1990 tax return was unrepresentative of his earnings as a cab driver because he was not driving a taxi at that time. Instead, he worked in a factory and did not make much money.

He felt that his benefits should be based on the income he earned in the four weeks before the accident, as reflected in his trip sheets and GST return for the period. He submitted that, if his benefits were to be based on the fifty-two weeks before the accident, they should be calculated on the income reported in his tax return for 1991, because that represented his earnings from taxi driving.

An uncertified computer printout of the Applicant's 1991 tax return was filed in evidence at Exhibit 5. It showed gross revenues of $31,295.00, with a net income of $11,835.00.

Automobile expenses for gas and oil of $3,895.00 were claimed. No figures were listed for other allowable automobile expenses, such as repairs and maintenance or car washes. The Applicant stated that he thought that all his expenses of this nature were included under the rubric of "gas and oil". The Applicant also claimed deductible expenses of $460.00 per month, for a total amount of $15,565.00 for the rental charge for his taxi plate.

Exhibit 5 was not signed or dated. The Applicant testified that he got this document from the accountant who prepared his tax return. He did not know the accountant's name. The Applicant testified that he, himself, mailed the completed return to Revenue Canada on April 26, 1992. He did not have a copy of the signed return that was sent. He testified that he did not attach any documentation to the return. He did not provide the accountant who prepared the return with any verifying documentation. He supplied the accountant with all the figures, which he took from his GST returns.

The Applicant testified that an accountant also prepared the GST returns, but a different accountant than the one who prepared his tax form. He did not recall the name of the accountant. The Applicant stated that he supplied the accountant with the figures. The figure for his expenses was based on the amount that he paid for his taxi plate, gas and oil, car washes, repairs and radio costs. He did not give the accountant any original receipts or documentation.

The Applicant explained that his plate expenses had continued for a period after the accident. However, his revenues stopped at that time, because his car was not in use. When he was unable to find someone to drive his car, he removed the plate some time in August, having made two or three more rental payments. On cross-examination, he testified that it would have cost him about $2,000.00 to have turned his plate in immediately, and then to have re-leased if he found another driver to drive his car. He denied that there was any possibility that his plate had been removed by the company.

The Applicant was asked whether he reported tips and gratuities on his income tax return. He testified that he did not declare his tips and gratuities. He stated that he declared only the amounts listed on his GST returns. He testified that he paid GST on tips. On being asked whether he was getting tips, he stated "maybe I didn't get them".

The Applicant also filed a GST return for the third quarter of 1991, marked as Exhibit 13. The Applicant stated that he mailed this return to Revenue Canada. It showed revenues of $1,480.00, with total purchases of $4,411.00. The Applicant confirmed that these figures were also included in his 1991 return. The back of the return lists certain expenses. The Applicant confirmed that this was his handwriting, and that these expenses included the plate payments he made after the accident.

The Applicant was asked to explain why the revenues reported on Exhibit 13 for the month of July differed from the amount that he had declared in his application for accident benefits, marked as Exhibit 8. He testified that he had to change his transmission in July, 1991. Therefore, his car was not in operation for that week. He testified that he might not have understood the information required in the application. He explained that he might have understood it to mean the amount that he would have earned, had he been at work for that week. He agreed that the figures he supplied in Exhibit 8 were incorrect.

At the hearing, the Applicant did not provide receipts or other original documentation of his expenses. He said that Ms. Lalonde, the Risk Manager of Co-Op Cabs, and a witness for the Insurer, would support his figures.

On cross-examination, the Applicant expanded on his employment history. In 1990, he was employed part-time in a donut factory for a period of five months. Between July and October of that year, he was employed on a full-time basis at a motor speciality shop, but was laid-off from his job there. He then returned to the donut factory, on a full-time basis.

The Applicant testified that he started to drive a cab on a part-time basis in January 1990, while he was at the donut factory. He bought a car and leased the plate from the company that is now known as Co-Op Cabs. He testified that the cab was in his name, but he had invested in it with a partner, Peter Atuahene, who shared the driving and the expenses. They each worked for 12 hours a day. The Applicant estimated that he drove for about 60 hours a week.

The Applicant said he did not drive more hours because he was looking for work. He testified that, when he got full-time work, his friend took over the driving and expenses.

The Applicant testified that he did not declare his income from his taxi business on his 1990 income tax return. He confirmed that he had signed the statement on the return, stating that his income was correctly reported. He testified that this was correct to him, because he was basically driving to pay off his taxi expenses.

The Applicant testified that, in January 1991, he started to drive the cab on a full-time basis, because he could not earn enough income from his factory job.

He stated that he recorded his fares on his trip sheets. He introduced in evidence his trip sheets for the periods from June 24, 1991 to June 29, 1991, and from July 1, 1991 to July 24, 1991. These were filed as Exhibits 7 and 6, respectively. The trip sheets showed total earnings of $1,303.20 for the last week in June and $4,078.80 for three and a half weeks in July.

The Applicant testified that he completed the run sheets at home at the end of each day. He did not include his tips. He stated that he had left his run sheets for the period before June 24, 1991 at home. He stated that he did not bring his trip sheet for July 25, 1991, the morning of the accident, because they involved only a couple of fares.

The Applicant testified that he started work around 5:30 or 6:00 a.m. He worked a minimum 14-hour day, and usually longer on Fridays. He worked the Saturday night shift, and did not work on Sundays. He would try to make $200.00 a day, less his expenses.

(b) Transportation expenses:

The Applicant claimed the cost of taxi fares that he incurred in attending physiotherapy and doctors' appointments between August and December 1991.

The Applicant attended physiotherapy treatment two or three times a week until the end of the year. The clinic is at the same location as his family practitioner's office. In November 1991, he was examined by Dr. Hall, an orthopaedic surgeon, at the Insurer's request. In January, he transferred to a F.I.T. centre for further rehabilitation.

The Applicant said that he took cabs because he was unable to walk long distances, or wait for the bus or sit for any length of time. Two bus connections were required to travel from his home to the clinic. The journey was quicker and he could lie down in the cab. He stated that he thought travelling by taxi was his only choice.

In January, he started taking public transit to his appointments, after he was told at F.I.T. that this activity would help his rehabilitation. He testified that, had he known this before, he would have travelled by public transport earlier.

The Applicant's claim for these expenses is filed at Exhibits 3 and 4. The Applicant filed three envelopes containing taxi cab receipts for these trips. These are marked as Exhibit 2.

The Applicant confirmed that he had incurred these expenses. He stated that he would sometimes book the cab in advance. He testified that he had friends who were cab drivers, who would drive him to the appointments. However, the meter would be turned on, even though the driver was his friend. The ride was not free.

The Applicant confirmed that on November 6, 1991 he had taken a cab to his appointment with Dr. Hall at 180 Bloor Street West. He could not remember who drove him. He was shown two cab slips for November 6, 1991, signed by "Mahmud". He stated that he recalled that the driver was Mahmud. He testified that he arranged for the cab to pick him up after the appointment and drive him home. He confirmed that this occurred. He denied that he had taken public transit on that date or on any other occasion claimed in 1991.

The Applicant testified that he was preparing to return to work at the end of February. However, on February 13, 1992, he was involved in a second accident, which prevented him from going back to work. He is receiving accident benefits from Allstate Insurance in respect to the injuries he sustained in the second accident.

The Testimony of Mr. Donald McDougal:

Mr. Donald J. McDougal testified on behalf of the Insurer. He testified that he has owned and operated a private investigation agency, Investigation Unlimited Inc., for nine years. Before that, he was a ten-year veteran with the Metropolitan Police Force. In between times, he has been involved in the limousine/taxi cab industry in a management capacity.

Mr. McDougal testified that he received an assignment to conduct surveillance of the Applicant in respect to his attendance at a medical examination arranged by the Insurer on November 6, 1991.

He testified that at 1:15 p.m. on that date he observed the Applicant walking on the north side of Bloor Street from Avenue Road. The Applicant entered the main door at 180 Bloor Street West. Mr. McDougal took a photograph of him entering the building.

At 2.30 p.m., Mr. McDougal observed the Applicant leaving the building, and took a second photo of him. The two photographs were introduced as Exhibit 14. The Applicant acknowledged that these photographs were of him.

Mr. McDougal testified that he observed the Applicant walking east along Bloor Street as far as Bay Street. The Applicant then turned up Bay Street, walked north for 75 to 100 feet, and entered the T.T.C. subway station. Mr. McDougal observed that the Applicant was walking with a normal gait with fluid movements. Mr. McDougal testified that he waited for approximately 10 minutes outside the subway station, however, the Applicant did not reappear.

Mr. McDougal testified that he proceeded by van to Richlow and Willowridge Road. He telephoned the residence of the Applicant, but did not get a reply. At 4:00 p.m., he observed a southbound bus arriving at the Willowridge stop. Mr. McDougal stated that he caught a side and back view of a male wearing the same clothes as the Applicant was wearing. He then telephoned the residence again and a male answered the phone.

On cross-examination, Mr. McDougal conceded that his purpose in taking the pictures was for identification only. It was not to establish the validity of the Applicant's transportation expenses. He agreed that he did not see how the Applicant had arrived at 180 Bloor Street West, or how he departed. Mr. McDougal stated that he simply saw a person with grey clothing walking and identified him as the Applicant.

The Applicant stated that he has had an answering machine for several years. The Applicant asked whether Mr. McDougal had noticed the machine, when Mr. McDougal had telephoned his house. He asked why Mr. McDougal did not take his picture coming off the bus. Mr. McDougal stated that he was unable to do so from his observation post. The Applicant asked Mr. McDougal what he said on the telephone. Mr. McDougal replied that he said some casual words to determine whether there was someone in.

The Testimony of Shirlene Lalonde:

Lorna Shirlene Lalonde testified on behalf of the Insurer. She been working in the taxi-cab industry since 1964. For the last five years, she has been employed as the Risk Manager for Co-Op Cabs. Her position involves interviewing all prospective cab drivers. She records the employment history of the new applicants and explains the lease packages to them.

Ms. Lalonde testified that she interviewed the Applicant on December 5, 1989, when he first applied to drive for the company. Ms. Lalonde recorded that the Applicant had several years' experience driving cabs with other companies. She testified that he was originally looking for work as a day-shift driver. These drivers rent a car for a fixed daily fee from the company for the period of the shift. The driver has no responsibility for repairs or other expenses.

Ms. Lalonde testified that the Applicant was approved on six-months' probation. This is standard procedure.

On January 4, 1990, the Applicant purchased a vehicle licensing plate from Co-Op Cabs and became the total lessee on car No. 1154. Under the arrangement, the Applicant was responsible for paying the weekly rental charge of $425.00 for his plate and monthly dues of $55.00 for his meter and his radio. The Applicant was required to pay for repairs and maintenance of the vehicle and all other expenses, such as oil, gas and car washes. The company supplied the insurance and certain other services.

Ms. Lalonde's records indicated that the Applicant was a full-time cab driver. She stated that the company would not have given him a full-time lease if he had other employment.

Ms. Lalonde testified that, under the arrangement, the Applicant was required to be the only driver of the car. If he wanted to have another driver, he had to obtain the company's approval. Ms. Lalonde was emphatic that the company did not allow anyone else to drive the car. Under the company's rules, generally only two drivers per vehicle could be approved, one of whom must be the plate holder. Ms. Lalonde testified that the penalty for allowing an unapproved person to drive was immediate removal of the offender's plate. Thereafter, the individual would not be allowed to lease a plate from the company again, unless he or she was covered by private insurance.

Ms. Lalonde confirmed that the Applicant was told these rules when he assumed the lease.

Ms. Lalonde testified that she had not approved Mr. Atuahene as a second driver of the Applicant's car and was unaware of the arrangement between Mr. Atuahene and the Applicant. She said that the Applicant would have lost his plate had she learned of the arrangement. She stated that the rules of the Metro-Toronto Licensing Commission prohibited partnerships.

Ms. Lalonde testified that company rules require that accidents be reported promptly, generally within 24 hours. She testified that, on August 15, 1991, she learned that the Applicant's car had been involved in an accident several months earlier on May 14, 1991. Another driver, Mr. Assume, was apparently driving the car at the time of that accident. Mr. Assume had not been approved by the company. The car was damaged in the accident.

Ms. Lalonde ordered the Applicant and the driver to attend at her office. She told the Applicant that his plate was being removed because he had allowed an unauthorized driver to drive his car and had not reported the accident. Her records indicated that the Applicant's plate was removed on August 12, 1991.

The Applicant denied this. He stated that he never came to Ms. Lalonde's office for a meeting, and that he turned the plate in himself. Ms. Lalonde responded that it was normal procedure after a meeting like this to allow the individual to go home and remove the plate. Ms. Lalonde stated that the procedure for turning in a plate was straight forward, and that no expense was attached to it.

Ms. Lalonde testified that, in her opinion, 90 per cent of taxi-cab drivers do not make out run sheets. She stated that the only drivers who are required to keep run sheets are those drivers who own their own plate and must show the records to the Department of Transportation. She testified that, in her experience, cab drivers do not keep very good records.

Ms. Lalonde testified that the rules of the company do not require plate lessees to keep trip sheets, and that the company would make no effort to correlate the run sheets with the driver's meter. Ms. Lalonde stated that the Applicant was not employed by Co-Op Cabs and whatever he makes is strictly up to him.

On further questioning by me, Ms. Lalonde confirmed that Metro-Toronto Licensing Commission requires drivers to complete run sheets. A fine may be assessed for non-compliance. At my request, counsel for the Insurer subsequently provided me with a copy of the by-laws of the Metro-Toronto Licensing Commission governing trip sheets.

The Testimony of Ian Gurnell:

Ian Sandy Gurnell testified on behalf of the Insurer. He is employed as an adjuster at the company, Lander-Spiers Insurance Adjusters Ltd., and has been employed by this company for more than eleven years. He was responsible for handling the Applicant's claim.

Mr. Gurnell stated that the Insurer is prepared to accept as proof of income a certified GST return filed with Revenue Canada before the accident, but only for an interim period of six weeks. The interim period gives applicants the opportunity to obtain a certified copy of their tax return for the year before the accident. Mr. Gurnell stated that the Insurer gives applicants the benefit of the doubt for this period of time.

Mr. Gurnell was asked how a taxi driver could take the benefit of the alternative provisions for computing income in section 12(7) of the No-Fault Benefits Schedule, if the Insurer accepted only the prior year's tax return.

Mr. Gurnell stated that proof of income was problematic in the case of self-employed individuals. The Insurer assessed applicants' income from the best information possible, that was capable of objective confirmation, such as a tax return. In contrast, trip sheets are not susceptible to objective verification. The Insurer tries to strike a balance by allowing a grace period of six weeks before the tax return is required to prove income.

The Insurer also introduced in evidence medical reports by Dr. Hall and Dr. Stubbs. These are Exhibits 15, 16, 17 and 18, respectively.

Submissions:

The Applicant submitted that the Insurer is not able to comply with the provisions of section 12(7) of the No-Fault Benefits Schedule, regarding the calculation of an Applicant's average gross weekly income, because it will not accept contemporary records such as trip sheets. Furthermore, the prior year's income tax return is not necessarily representative of earnings in the 52 weeks before the accident, and in this case was outdated.

The Applicant submitted that the evidence of the investigator, Mr. McDougal, was unreliable.

In regard to the taxi cab receipts, the Applicant stated the doctors he saw did not tell him that it would assist his rehabilitation if he took the T.T.C. rather than taxi-cabs to appointments.

The Insurer:

Counsel for the Insurer submitted that the Applicant had the onus of proving his income. She submitted that both GST returns and taxi runs sheets depend on the honesty of the individual who completed them. Moreover, GST returns are subject to further adjustment on completion of the year's tax return. Notwithstanding this, the Insurer allows a grace period of six weeks before requiring objectively verifiable proof of income.

Counsel for the Insurer questioned the credibility of the Applicant, and pointed out discrepancies and difficulties in the documentation which he provided. Counsel also questioned the reliability of the transportation receipts.

Issue regarding Adjournment:

In the course of his submissions, the Applicant complained that he had not been informed that Ms. Lalonde would be giving evidence. He stated that, had he known in advance, he could have arranged to call other witnesses to support his version of events.

After hearing the submissions of counsel for the Insurer, I was satisfied that the Insurer did not fail to disclose its intention to call Ms. Lalonde to testify for tactical reasons. However, I ruled that the Applicant was entitled to an adjournment, to provide him with full opportunity to call such witnesses as he thought necessary. The Applicant was asked if he wished for an adjournment. However, the Applicant stated that he wished to continue with the hearing at that time and did not want to adjourn. Therefore, the hearing proceeded.

Findings:

1. The amount of weekly income benefits:

The Applicant, a self-employed taxi driver, suffered injuries in a motor vehicle accident on July 25, 1991. These injuries entitled him to receive disability benefits under section 12 of No-Fault Benefits Schedule for as long as he was unable to return to his work.

In this case, the Applicant was entitled to a weekly benefit representing 80 per cent of his gross weekly income from his employment before the accident.

Section 12(7) sets out how the Applicant's gross weekly income is to be calculated. The relevant subsections provide as follows:

(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.

These provisions entitle an applicant to benefit from the highest of his or her earnings in the four or the fifty-two weeks before the accident, or a deemed minimum amount of $232, whichever is better.

It is the position of the Applicant that he has been denied the right to have his benefits based on his income for the four weeks before the accident. This is because, except for the first six weeks after the accident, the Insurer calculates benefits based on the applicant's income tax return for the previous tax year. This practice was confirmed by the testimony of Mr. Ian Gurnell, an insurance adjuster called on behalf of the Insurer. He stated that the Insurer adopted this practice because it was difficult to assess the income of self-employed persons, other than through sources of documentation that were capable of objective verification.

I find that the legislation does not authorize the establishment of a rigid rule regarding proof of income, that has the effect of denying an applicant the benefit of section 12(7). The regulations do not differentiate between self-employed and employed persons in this regard. One must assume that the Legislature, in enacting these provisions, was aware of the difficulty that may be experienced in assessing income from self-employment, but found it unnecessary to make special provision to deal with the matter. I must conclude that a rigid rule that restricts proof of income to the prior year's tax return, without consideration of the reliability of other sources of proof in individual cases, is contrary to the legislative scheme. I consider that, in determining an applicant's weekly income for the statutory periods, an insurer must evaluate the totality of evidence available to it.

In this case, the Insurer refused to consider the Applicant's trip sheets as part of the evidence regarding the Applicant's earnings. The Insurer will not consider trip sheets as proof of income because they are self-generated documents, and not susceptible to objective verification.

Ms. Lalonde testified that "90 per cent" of taxi-drivers do not complete trip sheets. However, Ms. Lalonde was forced to concede that the daily completion of these sheets is a requirement of the rules governing the taxi-cab business imposed by the Metro-Toronto Licensing Commission, and that non-compliance is sanctionable under those rules.

In Albert Stoll and Kingsway General Insurance (Commission File No. A-000386, F. Rotter, Senior Arbitrator, dated October 18, 1991), the arbitrator considered whether trip sheets were admissible as proof of income. She ruled that trip sheets were admissible as prima facie evidence of income, but that the weight to be attached to them was a matter for evaluation in the individual case. I accept her view of the admissibility and weight of this kind of evidence.

It must be clear, however, that it remains the responsibility of the applicant to establish the amount of his or her income for the requisite period. An applicant must bring forward reliable evidence of his or her earnings, and satisfactorily explain any inconsistencies in the evidence.

The Applicant tendered documentation which he maintains provides the basis for calculating his income for the four weeks before the accident. This comprises his trip sheets for the preceding month and his GST returns for the first two quarters of the year. He also provided a tax return for 1991 which, he submits, provides a better basis than his 1990 tax return for calculating his annualized income as a cab driver. The Applicant gave oral testimony at the hearing.

The two GST returns are filed as Exhibit 1. The first return for the period January 1, 1991 to March 31, 1991 indicates as follows:

Total Taxable Supplies (Sales & Other Revenue)

Total Purchases

GST Collectible

Net Tax

14,815

7,480

969.20

179.04

This gives rise to a net income figure of $7,335, or an average weekly figure of $564.23.

The second return is for the period, April 1, 1991 to June 30, 1991. This states as follows:

Total Taxable Supplies (Sales & Other Revenue)

Total Purchases

GST Collectible

Net Tax

15,000

7,570

981.30

490.26

This gives rise to a net income figure of $7,430 for the period, or an average weekly amount of $571.53.

These GST returns provide prima facie evidence of the Applicant's income for the four weeks preceding the accident. However, the figures provided in these forms were generated by the Applicant and were created after the accident. The figures reflected in the returns are reliable and credible only to the extent that the Applicant is a reliable and credible witness.

I find that the documentation tendered by the Applicant and his testimony at this hearing raise serious doubts as to his credibility.

The documentation filed on behalf of the Applicant was contradictory, internally inconsistent, and reflected different income computations.

The Applicant filed his trip sheets for the four weeks preceding the accident at Exhibit 6 and 7. The Applicant stated that the amounts listed included cash and charge items, but not tips. Production of these sheets was selective. The Applicant did not produce his trip sheets for any period before the statutory four week period, nor his trip sheet for the day of the accident.

The trip sheets produced show a total income of $5,382.00, or an average weekly gross income of $1,345.50. This amount includes $4,078.80 (excluding tips) claimed to have been earned in July 1991. This figure, however, was inconsistent with figures provided by the Applicant in a further GST return filed for the period from July 1 to September 30, 1991, as Exhibit 13. This showed:

Total Taxable Supplies (Sales & Other Revenue)

Total Purchases

GST Collectible

Net Tax

1,480

4411

96.82

-285.11

The Applicant testified that the taxable supplies reported on this form represented the fares that he earned from driving until the date of the accident. He testified that, in contrast, some of his expenses continued after the accident, because he did not turn in his taxi plate until mid-August. The figure of $1,480.00 earned between July 1 and July 24 is manifestly at odds with the figure of $4,078.80 recorded for the month on the Applicant's trip sheets.

In his application for accident benefits filed at Exhibit 8, the Applicant provided yet another number for the income he earned in each of the four weeks before the accident, that of $1,250.00.

When challenged about the discrepancy between these amounts, the Applicant stated that he had to change his transmission in July, and that therefore his car was not in operation for a week in that month. However, the trip sheets do not indicate any such interruption of business.

The Applicant also filed an uncertified copy of his 1991 tax return (Exhibit 5). It provides as follows:

Gross Revenue

Taxi Rental

Expenses (Gas & Oil)

Net Income

31,295.00

15,565.00

3,895.00

11,835.00

The revenues were stated to be for the period from January 1, 1991 to July 25, 1991. The income tax return that was filed was a computer printout that was unsigned, undated, and uncertified. The Applicant could not identify the accountant who prepared his tax return, and the accountant was not called to testify. The Applicant testified that he did not provide the accountant with any substantiating documentation. He stated that the return was based on the amounts claimed in the GST returns. The tax return is, therefore, no more reliable than the GST returns upon which it is based.

At the hearing, the Applicant provided no additional substantiating documentation of his revenues and expenses. In Soltan Davoudi Kahkesh and Lloyd's Non Marine Underwriters (Commission File No. A-000378, K.J. Palmer, arbitrator, dated March 31, 1992), the arbitrator referred to other evidence of income that an applicant might present. She stated:

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.

In addition to the obvious discrepancies in self-generated documentation, I did not find the Applicant to be a credible witness in testifying at the hearing. The Applicant represented himself. I am satisfied, however, that the Applicant was able to participate fully and effectively in these proceedings.

The Applicant's testimony was contradictory and, at times, evasive. In the letter that he attached to his 1990 tax return (Exhibit 10), he stated that he did not include income driving a cab in his return "because I was not driving during that period". In his direct testimony, he reaffirmed this, testifying that he worked in a factory in 1990. On cross-examination, he stated that he drove a cab part-time during the period. He testified that he was driving 12 hours a day, for a 60-hour week. He did not declare this income on his tax return. However, Ms. Lalonde testified that the Insurer believed the Applicant was driving on a full-time basis when he obtained his plate in January 1990, and would not have given him the plate otherwise.

Furthermore, the evidence was that the Applicant had at least two unauthorized persons driving his cab in 1990 and 1991. In the circumstances, one cannot be sure whether the Applicant shared his cab with more than these two drivers or the terms upon which he shared the cab. I cannot be sure whether the Applicant, in fact, drove his cab for the hours he claimed, or earned the fares that he claimed.

The Applicant stated that he did not include tips on his tax return, but paid GST on tips. In response to a question whether he received tips, he stated that he did not declare his tips on his 1990 tax return because "maybe I didn't get them". On being asked about the weekly income stipulated on his application for accident benefits, he said he might have thought the form meant the amount that he would have earned had he been working. When asked why he had signed the declaration on his 1990 income tax return, when he had not declared his taxi income, he said that the amount was correct to him because he was driving to pay off his taxi expenses.

The Applicant's evidence contradicted that of other witnesses. The Applicant testified that he continued to pay rental on his plate until he was satisfied that he was unable to find another driver. Ms. Lalonde testified that his plate had been removed because he had an unauthorized driver on his car. The Applicant disagreed with Ms. Lalonde's version of events, but provided no further credible explanation of events. The Applicant denied that his plate had been removed, but this appeared to be because he had been allowed to remove his plate himself. He was given the opportunity of an adjournment to call witnesses to support his version of events. However, the Applicant declined the adjournment.

The Applicant produced no witnesses to corroborate his version of events.

The Applicant testified that different accountants had prepared his tax filings, the GST returns for the first two quarters of 1990, and the GST return for the third quarter of 1991. However, he was unable to recall the names of his accountants. Nothing was filed in evidence from them. The Applicant testified that he provided them with no supporting documentation in respect to his revenues or his expenses.

The totality of the written and oral evidence regarding the Applicant's income is unreliable and contradictory. The Applicant's explanations in respect to the discrepancies in the documentation are not credible.

I am left therefore with the income as declared in the Applicant's income tax return for 1990. This is objective evidence of the Applicant's earnings, created before the accident, and susceptible of verification. I accept that the Applicant earned at least this amount in employment in 1990. It may be that this is not representative of the Applicant's income for the period covered by the tax return. I have no way of knowing whether it is or not, since the evidence of additional income that he earned from driving a cab cannot be relied upon. Moreover, there was no specific evidence of deductible expenses over the period. The only evidence in this regard is the Applicant's testimony that he regarded the declaration on his tax return as truthful, because he was basically driving to offset his expenses. This suggests that, in any event, he is not entitled to credit for the additional monies made from taxi driving in 1990.

I am not satisfied with the Applicant's evidence of the income he earned as a cab driver for the four or fifty-two weeks preceding the accident. In my view, the 1990 tax return remains the only reliable evidence of the Applicant's pre-accident income.

Based on the tax return, I find that the Applicant's gross average weekly income for the fifty two weeks before the accident is $386.15, giving rise to a weekly benefit of $308.92. I further find that the Insurer is entitled to repayment of the balance between this amount and $457.23 that it paid to the Applicant for the six weeks after the accident.

2. The effect of the second motor vehicle:

The Applicant was injured in a second automobile accident on February 13, 1992. He is receiving disability benefits from Allstate Insurance in respect to this second accident. In accordance with section 12(5)(a), these benefits were not paid for the first week following the accident.

The Applicant was paid benefits by the Insurer in respect of the first accident until March 4, 1992. The Insurer seeks repayment of benefits paid following the occurrence of the second accident on February 13, a total amount of $926.76.

In his report of November 6, 1992, filed at Exhibit 15, Dr. Hall anticipated that the Applicant would be able to return to work as a taxi-cab driver on a limited part-time basis in six weeks, after completing a structured exercise program. Dr. Hall thought it would take a further three months before the Applicant would be able to resume his normal full-time driving activities. Dr. Stubbs saw the Applicant on February 18, 1992. His report is Exhibit 16. He stated that the Applicant's soft tissue injuries from the first accident were resolving satisfactorily, and the Applicant reported that he planned to go back to work at the end of February. However, the Applicant sustained further soft tissue injuries in the second accident, which aggravated the pre-existing problems of the first accident. Dr. Stubbs stated that, as a result, the Applicant's return to full-time work had been delayed for a further three months by the complications of the second accident.

In her submissions, counsel for the Insurer conceded that the Applicant's benefits from the second accident would not have commenced until the following week, February 20, 1992.

Based on the evidence before me, I find that the second accident of February 13, 1992 constitutes an "intervening cause". The Insurer is entitled to repayment of benefits paid by the Insurer from the date benefits in respect of injuries suffered in the second accident commenced. Since these benefits were not paid for the first week, the Applicant is liable to repay benefits, from February 20 onwards, in the amount of $617.84.

3. Transportation expenses

Entitlement to medical and rehabilitation benefits is governed by the provisions of section 6. Section 6(1)(d) states:

Section 6.

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

The Applicant claimed the cost of taxi fares that he incurred in attending physiotherapy and doctors' appointments for the period from August and December, 1991. He claimed a total amount of $2,099.20 for reimbursement for taxi fares. He also claimed the cost of a Metropass for the months of January, February and March, 1992, at $56.50 per month. The Applicant confirmed that he had incurred these expenses. He filed three envelopes containing taxi cab receipts for the return trips. These are marked as Exhibit 2. Details of the claims are set out in two applications for additional benefits, marked as Exhibits 3 and 4, and dated March 15, 1992 and undated, respectively. I understand that the latter application was filed some time after mediation proceedings in this matter.

The Applicant testified that friends who were cab drivers drove him to the appointments. Although they were friends, he was charged for the trips.

The Applicant's claim included the fare for a return taxi ride to Dr. Hall's office at 180 Bloor Street West on November 6, 1991. Receipts for fares from the Applicant's home to this location ($29.60), and from this location to the Applicant's home ($30.40) were introduced in evidence. In his testimony, the Applicant confirmed that he had taken the cab on this day. On being shown the receipt, he recalled that the cab was driven by Mahmud.

Mr. McDougal, a private investigator for the Insurer, testified that he conducted surveillance of the Applicant when the Applicant attended a medical appointment at Dr. Hall's office. He took two photographs, filed at Exhibit 14. The Applicant did not deny that these photographs were of him. Mr. McDougal testified that the Applicant arrived at the office on foot, and left on foot. He observed that the Applicant went down the steps of the Bay Street T.T.C. station, and did not reappear. He testified that he observed someone dressed like the Applicant subsequently get off the bus at the stop near the Applicant's home.

Mr. McDougal gave his evidence in a straightforward and credible manner. There was no reason evident to me as to why he would falsify his evidence. The Applicant questioned parts of Mr. McDougal's testimony, in particular, why he did not take more pictures of the Applicant. However, although he had prior notice of the investigator's general testimony, he provided no alternative plausible explanation for the events that Mr. McDougal observed. Furthermore, he did not call the cab driver to testify at the hearing, to corroborate his version of events.

I have carefully reviewed the receipts provided by the Applicant. They reflect that the Applicant used a number of drivers over the period, many of them on a number of occasions. For example, apart from the trip of November 6, they include one way receipts from the Applicant's home, signed by Mahmud, driving cab nos. 1990 and 1999, for Diamond Cabs, on August 16 and August 19, September 4 and 27, and November 19 and 26. I assume that it would have been a simple matter to have called one of these drivers to give evidence. That was not done.

In all the circumstances, I am not satisfied that the Applicant incurred the taxi expenses that he claimed. Therefore he is not entitled to recover these expenses. I find that the Applicant is entitled to recover the cost of a monthly Metropass for the months of August 1991 to March 1992, at $56.50 per month, for transportation to and from rehabilitation treatment.

Expenses:

In the arbitration decision, Ralph McCormick vs. Economical Mutual Insurance Company (Commission File No. A-000139), dated October 2, 1991, I made the following comments in regards to an arbitrator's discretion to award an applicant his or her expenses:

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.

The awarding of expenses incurred in an arbitration proceeding is a matter of discretion under section 282(11) of the Insurance Act. The whole tenor of the evidence in this case was unreliable and internally inconsistent. I am not satisfied that the Applicant incurred the expenses claimed, for which receipts were submitted. I can only conclude that this application for arbitration was unmeritorious. Having regard to the individual circumstances of this case, I decline to award the Applicant his expenses.

Order:

1. The amount of weekly benefits to which the Applicant is entitled is $308.92.

2. The Applicant must repay the amount of $889.86 (representing the difference between $308.92 and $457.23, paid from August 1, 1991 for a six week period), together with interest under section 27 of the No-Fault Benefits Schedule.

3. The Applicant must repay benefits of $617.84 that he received for the period from February 20, 1992 to March 4, 1992, together with interest.

4. The Applicant is entitled to recover the cost of a Metropass of $56.50 per month, for the period from August 1991 to March 1992, for a total amount of $452.00, together with interest, under section 24(4) of the No-Fault Benefits Schedule.

5. The Applicant is not entitled to an award for his expenses in this arbitration.

December 17, 1992

Susan Naylor Senior Arbitrator

Date