Neutral Citation: 1993 ONICDRG 21

File No. A-002213

ONTARIO INSURANCE COMMISSION

BETWEEN:

EMMANUEL NTIRI

Applicant

and

PRUDENTIAL OF AMERICA GENERAL INSURANCE COMPANY (CANADA)

Insurer

DECISION

Issues:

The Applicant, Emmanuel Ntiri, was injured in a motor vehicle accident on May 11, 1991. He applied for and received accident benefits payable under Regulation 672 (R.R.O. 1990, the "No-Fault Benefits Schedule") enacted under the Ontario Insurance Act, R.S.O. 1990, c. I.8. Every motor vehicle policy provides for these no-fault benefits.

The Applicant received weekly income benefits under section 12 of the No-Fault Benefits Schedule. Mr. Ntiri had two jobs before the accident. One was at Rayette Forest Products. The other was delivering newspapers for The Toronto Star.

The Insurer initially paid the Applicant weekly income benefits based upon the Applicant's claimed earnings from both jobs. The Insurer reduced the Applicant's benefits when he did not produce records that the Insurer deemed sufficient to document his Toronto Star income. The Insurer also claimed that the Applicant had returned to work at The Toronto Star after the accident.

The Applicant disputed the reduction of benefits for his second income and applied for mediation. After unsuccessful mediation, the Applicant applied for the appointment of an arbitrator.

The issue to be determined at the hearing is:

What is the Applicant's quantum of weekly income benefits?

The Applicant also claims his expenses, interest on overdue payments, and a special award under section 282(10) of the Insurance Act.

Result:

The decision is:

1. The Applicant is entitled to $600 per week benefits.

Hearing:

The hearing was held at the Ontario Insurance Commission, North York, Ontario, on February 17, 18, 19, 1993 and March 8, 9, 1993, before Arbitrator, Fred B. Sampliner.

Present at the hearing:

Applicant:

Emmanuel Ntiri

Applicant's Representative

David S. Wilson

Barrister & Solicitor

Insurer:

Lawrence Lythgoe

Senior Claims Consultant

Insurer's Representative

Stephen M. Malach

Barrister & Solicitor

There were ten witnesses: the Applicant, Richard Assan, Dave Waldon, Charles Aboagye, Mauro DiCarlo, Victor Grandison, Veronica Ntiri, Paul Hales, George Kwasi Assifo, and Lawrence Lythgoe.

The parties filed twenty-four exhibits at the hearing.

Findings:

1) The quantum of benefits:

The Insurer agrees that Emmanuel Ntiri was substantially disabled from performing his job duties at Rayette Forest Products after the May 11, 1991 accident. As a result, the Insurer paid him $388 per week from the date of the accident through to the hearing. The Insurer does not dispute any portion of the benefits paid to the Applicant to compensate him for wage losses from his employment at Rayette Forest Products.

This dispute arises from the Applicant's claim to section 12 weekly income benefits based on his second job at The Toronto Star. It was agreed that Mr. Ntiri delivered newspapers for The Toronto Star before the accident. The sole issue is the amount that he earned from this job.

Income:

Under section 12 of the No-Fault Benefits Schedule, Mr. Ntiri may recover from his insurer eighty percent of his pre-accident weekly income from The Toronto Star and Rayette Forest Products, subject to the $600 maximum weekly benefit. Section 12(7) of the No-Fault Benefits Schedule provides:

(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.

The Applicant claims $600 per week, the maximum weekly benefit based on the combined earnings from Rayette Forest Products and The Toronto Star.

The Insurer maintains that the Applicant is owed $388 per week, the benefits level based on the Applicant's work for Rayette Forest Products. The Insurer argues that the Applicant has not adequately proven his entitlement to any benefits based on his Toronto Star income.

The Applicant, Mr. Emmanuel Ntiri, testified that he began delivering papers for The Toronto Star in March 1989 and continued doing so without interruption until the accident on May 11, 1991. Mr. Ntiri claims that he earned about $420 every week. He worked six apartment buildings, seven days a week, between 2:30 a.m. and 6:00 a.m. Mr. Ntiri testified that the number of daily papers varied between an average of 250 and 300.

The Applicant failed to report any of his Toronto Star income to Revenue Canada. He admits he has not declared his Toronto Star income on his 1989, 1990 and 1991 returns (Exhibits 4, 5, and 6). Only the Rayette Forest Products earnings are shown. His failure to pay taxes on these earnings does not bar him from recovery, as held by Arbitrator Palmer in Soltan Davoudi Kahkesh v. Lloyd's Non Marine Underwriters, (O.I.C. File No. A-000378, dated March 31, 1992), but I agree that the Applicant must establish his income by some other reliable, independent evidence - Manuel Lopes v. Federation Insurance Company of Canada, (O.I.C. File No. A-000602, dated November 9, 1992).

The Applicant and his wife's bank records do not assist me in establishing an income level. At the outset, I note that the deposit book and passbook savings account record which the Applicant produced (Exhibits 13 and 14) were for periods either well before the accident or far after the Applicant had ceased delivering the Star. The deposit book represented a period from June 2, 1989 until August 31, 1990. The passbook record showed deposits and withdrawals from Mr. and Mrs. Ntiri's joint account for September 30, 1991 to February 12, 1993.

The Applicant's wife, Mrs. Veronica Ntiri, was the only person who testified from the bank records. She could not identify which deposits were her income and which were her husband's. Her testimony was not helpful in establishing the Applicant's income.

The Insurer obtained more complete records of the Applicant's joint bank account. Records from January 1990 to February 1993 (Exhibit 21) were filed. However, there was absolutely no testimony from any witness to explain what the deposits represented. I place no reliance on the bank records to establish the Applicant's income.

I was able to establish the Applicant's income from the testimony of Toronto Star personnel and Star business records. The Applicant called Dave Waldon, the district sales manager. Mr. Waldon was a reliable and credible witness, whose testimony from the Toronto Star records independently confirmed Mr. Ntiri's income. Mr. Waldon stated that the Applicant was a route delivery person from the time Mr. Waldon became district manager in March 1990 until the accident. Mr. Waldon explained many details of the Applicant's route deliveries, payment for newspapers and credits through the four Toronto Star invoices that were filed as Exhibit 2.

The Toronto Star newspaper purchase invoices confirmed the Applicant's testimony about his average number of deliveries. Every two weeks, Mr. Ntiri was given a bill charging him for the number of papers the Star provided each day during the previous two-week period. The four invoices dated between March 10 and April 21, 1991 (Exhibit 2) support an average of approximately 240 daily papers, rather than the 250 the Applicant claimed.

Corroborative evidence substantiates the Applicant's testimony of his income. Exhibit 3 is the Toronto Star commission schedule used to calculate the Applicant's gross earnings from sales. His commission per delivery would vary according to the number of days the customer was taking the paper. From the schedule, I have calculated his commission, which ranged between 16 and 48 cents per daily delivery. The minimum commission of 16 cents per delivery represents weekday-only customers, and the maximum commission of 48 cents per delivery is for weekend-only customers. Seven-days-a-week customers yielded the Applicant a 25 cent per day commission.

Mr. Ntiri stated that most of his customers took the paper seven days a week. The Applicant's daily delivery records, on the four Toronto Star invoices, show a fairly regular and even number of papers for both weekdays and weekends. Taking the 25 cent per paper daily delivery commission multiplied by the 240 average number of papers for seven days a week yields $420. I find that this is a reasonable estimate of the Applicant's average earnings from delivering the Toronto Star.

I base my findings on the testimony of the district manager, Dave Waldon, together with the Toronto Star invoices. They provide an independent, credible and reliable basis to corroborate the Applicant's testimony. I would not have sufficient evidence to support the Applicant's income without the Star's business records and Mr. Waldon's testimony.

The Applicant may have earned more money, but I am unwilling to speculate. He testified that he made at least $10 per week from customer tips. The Applicant had no record of his tips and I am unwilling to accept his statements without corroborating evidence.

Evidence of the Applicant's sales bonuses is also unclear. The Applicant and the district manager, Dave Waldon, told me that the Star held sales promotions in the spring and fall of each year, from which the Applicant earned bonuses. They also indicated there was wide variation in the number of customers the Applicant signed up and the commissions earned for each type of delivery. The Toronto Star invoices (Exhibit 2), while listing significant amounts of "special offer credits" paid to the Applicant, were incomplete for either the four or fifty-two week period before the accident, as set forth in section 12(7) of the No-Fault Benefits Schedule. Neither witness specifically stated the Applicant's bonus amounts for either the four or fifty-two week period prior to the accident. There did not appear to be a bonus average or range. Thus, I cannot make specific findings on the amount of the Applicant's bonuses.

Expenses:

The Applicant's business expenses which cease should be deducted from his gross income. Section 12(7)3. of the No-Fault Benefits Schedule states:

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.

The Applicant testified that his only ceasing expenses were for his automobile used for newspaper pickup, delivery and collection of accounts. Mr. Ntiri had no records of these car expenses and I have no other evidence to guide me.

In the absence of more complete evidence on ceasing expenses, I must make an expense calculation from the facts before me. Mr. Ntiri stated that he drove 39 kilometres a day, 7 days a week, plus 24 kilometres per week for trips to collect monies from his customers. Altogether, he drove 15,444 kilometres per year. In 1991, Revenue Canada allowed an automobile expense deduction of 31 cents per kilometre for the first 5,000 kilometres, and 25 cents thereafter. This figure takes all auto expenses into consideration, not just gas. From this, I arrive at a figure of $80 per week for auto expense.

The Insurer submitted that a portion of the Applicant's home telephone cost was another ceasing expense to deduct. The Applicant testified that he received and made calls to customers from his home phone. I find that the Applicant required the use of his home phone, regardless of his paper route. The expense did not cease after the accident, and it is not a deduction.

After deducting ceasing expenses, I find that the Applicant earned $340 per week delivering newspapers for The Toronto Star. Eighty percent of $340 is $272, which represents the Applicant's weekly entitlement under section 12 of the No-Fault Benefits Schedule.

As a result, the Applicant is entitled to $600 per week from the accident date forward. The Applicant's benefit entitlement from Rayette Forest Products is $388 per week. His weekly benefit for his Toronto Star job is $272 per week. The $658 total is subject to a maximum of $600, in accordance with Section 12(4) of the No-Fault Benefits Schedule.

The Applicant's weekly income benefits are reduced by the Insurer's previous payments. Until February 4, 1992, the Insurer paid the Applicant the $600 per week maximum benefit. Between February 5, 1992 and March 31, 1992, the Insurer paid the Applicant $400 per week. From April 1, 1992 until the hearing, Mr. Ntiri was paid $388 weekly income benefits. The Insurer shall pay the Applicant the difference between the $600 per week award, less benefits previously paid, together with interest on all outstanding amounts.

2. Deduction of available benefits:

The parties agree that Emmanuel Ntiri may be entitled to disability insurance benefits from The Toronto Star. Exhibit 11 is The Toronto Star policy issued by Seaboard Life Insurance covering Star employees. No witnesses testified or other evidence was introduced about coverage or benefits. Section 12(4) (b) (i) of the No-Fault Benefits Schedule provides that benefits available from any income continuation plan may be deducted from the insurer's obligation. In this case, I have insufficient evidence to make any determination of what benefits are available to the Applicant from The Toronto Star insurance policy.

2. Return to work:

Throughout the hearing, I heard a great deal of evidence suggesting that the Applicant had returned to delivery work at The Toronto Star after the May 11, 1991 accident. The Insurer presented two videotapes, two investigation reports, and two witnesses who testified that the Applicant made early morning newspaper deliveries after May 11, 1991.

Section 15 of the No-Fault Benefits Schedule provides:

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.

Careful analysis of the evidence on this issue requires an understanding of the route history after the accident. When Mr. Ntiri was initially injured, his wife and cousin, Charles Aboagye, took over the route. Mrs. Ntiri and Mr. Aboagye testified that they delivered the papers until June 1992. Toronto Star documents and testimony indicated that the route was split after Mr. Ntiri was injured; one part remained in Emmanuel Ntiri's name and the other was transferred to his wife. The exact reason for Mr. Ntiri's name remaining on the records is unclear.

The videotape surveillance from the Insurer purported to show the Applicant making early morning pickup of newspapers at the Toronto Star depot and deliveries to the apartment buildings. These videos were taken during the early morning darkness. They were very unclear and I cannot identify the Applicant.

The Insurer's investigator, Mr. Paul Hales of McNulty & Associates Investigations Ltd., could not identify the Applicant as the person he saw making deliveries. Mr. Hales testified that the man he observed on August 26, 27, and 28, 1992 and on February 20 and 22, 1992 did not have a beard or mustache. The parties agree that Mr. Ntiri continuously maintained a beard and mustache from the accident date to the hearing. This fact was corroborated by photographs of the Applicant, dated April 16, 1986, April 1988, April 1990, and August 31, 1992 (Exhibit 16), all of which showed the Applicant with a full beard and mustache, as he appeared at the hearing.

I conclude that the man whom Mr. Hales followed from Mr. Nuns apartment to the newspaper pick-up depot and delivery sites was Charles Aboagye, the Applicant's cousin. Mr. Aboagye does not have a beard or mustache and is approximately the same height and build as the Applicant. Charles Aboagye testified that from May 1991 until June 1992 he and the Applicant's wife, Veronica Ntiri, delivered the newspapers on the Applicant's route.

Mr. Victor Grandison testified. He was a security guard at one of the apartments on the Applicant's route between August 1991 and October 1992. Mr. Grandison testified that a man who identified himself as the Applicant delivered papers and picked up collection envelopes while he was on duty. Significantly, he also stated that the Applicant did not have any facial hair. Since Mr. Aboagye and Mrs. Ntiri had taken over the route at the time of this observation, Mr. Grandison's testimony is entirely consistent with his description of the individual.

I find that the Applicant did not return to work for The Toronto Star after the accident. No witness could identify the Applicant making pickup or delivery of newspapers. Although two Toronto Start employees, Mr. Waldon and Mr. DiCarlo, saw the Applicant at the newspaper pick-up depot, they did not state they had seen him loading papers. His presence at the depot does not lead me to conclude that Mr. Ntiri returned to work. Mr. Grandison and Mr. Hales could not identify the Applicant at the delivery sites. The Applicant, his wife, Mr. Aboagye and Mr. Assan all testified and denied that Mr. Ntiri worked.

3. Special award and expenses:

Section 282(10) of the Insurance Act provides that the arbitrator must find that the insurer has unreasonably withheld or delayed payment before making a special award. This Applicant did not keep business records. He did not declare his Toronto Star income to Revenue Canada. While I recognize that newspaper delivery people usually do not keep elaborate records, it was reasonable for the Insurer, in this instance, to question the Applicant's proof. Consequently, the Applicant is not entitled to a special award.

The Applicant seeks an award of his expenses in this arbitration under section 282(11) of the Insurance Act. In accordance with the previous arbitration decisions, the Applicant is awarded his expenses.

Order:

1. The Insurer shall pay the Applicant $600 per week from the accident date forward, together with interest on all overdue payments.

2. The Insurer shall pay the Applicant his arbitration expenses.

April 19, 1993

Fred B. Sampliner

Arbitrator

Date