Neutral Citation: 1993 ONICDRG 30

File No. A-002533

ONTARIO INSURANCE COMMISSION

BETWEEN:

RANKO RAICKOVIC

Applicant

and

GORE MUTUAL INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Ranko Raickovic, was injured in a motor vehicle accident on June 7, 1992. He applied for and received accident benefits from the Insurer payable under Ontario Regulation 672 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8.

Mr. Raickovic receives $185.00 each week in income benefits from the Insurer. However, he believes he should be receiving a greater amount, based on his earnings in 1989.

The issues in this hearing are:

1. Is the Applicant entitled to weekly income benefits under section 12 (Income Benefit) or section 13 (Benefit if no Income) of the No-Fault Benefits Schedule?

2. What is the correct amount of weekly income benefit which the Applicant should receive?

3. Should any part of the workers' compensation payments which the Applicant receives be deducted from his weekly income benefits?

The Applicant also claims interest on any outstanding amounts owing and his expenses incurred in the hearing.

Result:

1. The Applicant is entitled to benefits under section 13 of the No-Fault Benefits Schedule.

2. The benefit is $185.00 per week.

3. In the absence of agreement by the parties, I have no jurisdiction to consider the issue of deductions of workers' compensation benefits, which was not mediated.

Hearing:

The hearing was held at North York on May 17, 1993, before me, K. Julaine Palmer, arbitrator.

Present at the Hearing:

Applicant:

Ranko Raickovic

Applicant's Representative:

Bruce Scott

Barrister and Solicitor

Insurer's Representative:

Lawrence Foy

Barrister & Solicitor

Joe Ferritto

Witness:

Ranko Raickovic

A portion of the proceedings was interpreted in Serbian by Ray Oluski.

The parties filed an Agreed Statement of Facts and four other exhibits.

Evidence and Findings:

Background:

The Applicant, Ranko Raickovic, worked as a self-employed carpenter and building renovator until August 11, 1989 when he suffered a serious injury to his back. He is still receiving workers' compensation payments as a result of this injury.

Unfortunately, on June 7, 1992, Mr. Raickovic was involved in a motor vehicle accident in which he received further injuries to his neck and shoulders. As a result of that accident, he receives benefits of $185.00 per week from his Insurer under the provisions of section 13 of the No-Fault Benefits Schedule. The Insurer accepts that Mr. Raickovic's injuries from the motor vehicle accident continue to cause him "substantial inability to perform the essential tasks in which he [...] would normally engage".

1. Is the Applicant entitled to weekly income benefits under section 12 (Income Benefit) or section 13 (Benefit if no Income) of the No-Fault Benefits Schedule?

The Applicant contends that he should receive benefits under section 12 of the No-Fault Benefits Schedule. In order to be eligible for benefits under section 12, an applicant must meet the following qualifications:

Section 12.

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

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

i. employed or self-employed,

ii. on a temporary lay-off, or

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

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

(emphasis added)

In this case, the meaning of "at the time of the accident" and "employed or self-employed" is important.

The word "accident" in the No-Fault Benefits Schedule is defined in section 2. In Mr. Raickovic's situation, I find that "accident" refers to the motor vehicle collision of June 7, 1992. It does not mean the work-related accident of August 11, 1989. Section 2 states:

"accident" means an incident in which the use or operation of an automobile causes, directly or indirectly, physical, psychological or mental injury or causes damage to any prosthesis, denture, prescription eyewear, hearing aid or other medical or dental device;

Was Ranko Raickovic "employed or self-employed" on June 7, 1992? I heard no evidence that the Applicant worked after August 11, 1989; in fact, he received workers' compensation payments for a serious back injury.

The words "employed or self-employed" are not defined in the No-Fault Benefits Schedule. The grammatical and ordinary meaning of the word "employed" signifies a relationship of "service to another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed". (Black's Law Dictionary, 6th Edition). The Applicant gave no evidence of being employed in any respect in the year prior to June 7, 1992.

The Applicant testified that he was a self-employed person in 1989. He stated that he did carpentry and renovation work and worked for various companies. He used the name Montenegro Building Renovations. He had his own tools, a cube van, and sometimes hired a helper. The Applicant produced four cheques, each for $800, dated July 20, 1989 to August 11, 1989, from Rocco's Carpentry. He stated that he earned $20.00 per hour on this job working as a carpenter. No deductions were taken from his cheque. On this job he paid for no materials.

The Applicant produced computer summaries of his 1988 and 1989 income and deductions as reported to Revenue Canada Taxation. The summary shows a gross business income of $27,150 in 1988 and a net business income of $6,691. In 1989, it shows net commission income of $6,150. The Applicant could not explain the reason for the change in terminology to commission income in 1989.

The Applicant gave no evidence of working as a self-employed carpenter or building renovator, nor that he engaged in any other self-employed occupation, in the twelve-month period before the motor vehicle accident of June 7, 1992. The year prior to the accident is important because section 12(3) of the No-Fault Benefits Schedule gives a person who was unemployed or not self-employed at the time of the accident the right to qualify for income benefits if he was employed or self-employed for any 180 days in the 12 months before the accident.

Two letters from the Workers' Compensation Board were filed at the hearing. They relate that during the period August 11, 1989 to June 7, 1992 Ranko Raickovic received workers' compensation payments. He received full temporary total benefits from August 14, 1989 to June 17, 1991. From June 17, 1991 to August 1, 1992, he received both a monthly pension based on a 20% permanent impairment award and a full temporary supplement under section 147(2) of the Workers' Compensation Act. After August 1, 1992, Mr. Raickovic no longer received the temporary supplement since he was not able to participate in a vocational rehabilitation program, due to attending physiotherapy for his injuries from the June 7, 1992 motor vehicle accident.

The Applicant's counsel submitted that I should find the Applicant to be self-employed at the time he was receiving workers' compensation payments. He cited no authority for this proposition. The Applicant's counsel submitted that where a person is unable to work due to incidents beyond his control, like a strike, lockout, Act of God, or injury, a self-employed person should retain his status as self-employed under the No-Fault Benefits Schedule. Counsel for the Insurer referred to a number of cases, which are set out in the Appendix to this decision. Although some of the cases cited dealt with insured persons who were receiving workers' compensation benefits at the time when they were involved in a motor vehicle accident, not a single case involved a self-employed person.

The term "self-employed" has been defined as "earning income directly from one's own business, trade, or profession rather than as a specified salary or wages from an employer". (W ebster's Third International Dictionary). The Dictionary of Canadian Law emphasizes the fact one is engaged in an occupation on one's own behalf. In this case, in my view, the Applicant was no longer "self-employed" at the time of the accident on June 7, 1992. For more than two years and nine months prior to the accident, he had been doing no work on his own behalf at any business, trade, profession or occupation. He brought no evidence that his business continued in any manner whatsoever.

The Applicant produced no indicia that his status as a self-employed carpenter-renovator continued during 1990 to 1992, other than his receipt of workers' compensation benefits. He showed no business registration continuing, produced no business financial records or bank records, no telephone directory listing, nothing which would indicate the business of Montenegro Building Renovations continued.

Since I have found that the Applicant was neither employed nor self-employed in the twelve-month period before the motor vehicle accident of June 7, 1992, he is ineligible for weekly income benefits under section 12 of the No-Fault Benefits Schedule.

2. What is the correct amount of weekly income benefit which the Applicant should receive?

The Insurer accepts that the Applicant meets the criteria to qualify for benefit under section 13(1) of the No-Fault Benefits Schedule. The amount of the benefit is thus $185.00.

3. Should any part of the workers' compensation payments which the Applicant receives be deducted from his weekly income benefits?

The Insurer has paid the Applicant weekly income benefits under section 13 of the No-Fault Benefits Schedule (Benefit If No Income). Section 13(3) fixes the benefit at $185.00 per week, less any payments for loss of income, except Unemployment Insurance benefits,

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

(b) received under any sick leave plan.

The Insurer agrees that no part of the Applicant's "permanent impairment award" is to be deducted from the weekly income benefit paid to the Applicant under section 13. It accepts that such an award is not a payment "for loss of income". However, the Insurer submits that the temporary benefits are fully deductible. It requests that I deduct any temporary workers' compensation benefits received by the Applicant between June 7, 1992 and August 1, 1992 when those benefits ceased.

In Ralph McCormick v. Economical Mutual Insurance, (1991 Ontario Insurance Commission file no. A-000139), Lily Steele v. Zurich Insurance (1992 Ontario Insurance Commission file no. A-001024), and Michael Morin v. Personal Insurance Company (1993 Director of Arbitrations, Ontario Insurance Commission, file no. P-000468), the issue of deductibility from benefits was fully explored, both in relation to Canada Pension Plan and Workers' Compensation benefits.

I concur in the interpretation of sections 12 and 13 as set out in those decisions.

Temporary workers' compensation benefits might well be deductible in the normal case, however, in the case of Ranko Raickovic, a jurisdictional hurdle intervenes to bar my consideration of the issue. This question did not form part of the issues mediated at the Commission, so I am without jurisdiction to deal with it in the absence of agreement by the parties (see section 281(2), section 282(3) of the Insurance Act).

Expenses:

The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(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 664 (R.R.O. 1990).

In the McCormick case (O.I.C. File No. A-000139, dated October 2, 1991), arbitrator Susan Naylor made the following comments about expenses, with which I agree:

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.

The Director of Arbitrations approved this statement of the principles guiding an award of expenses in the appeal decision in Vito Luigi Calogero v. The Co-Operators General Insurance Company (O.I.C. File No. P-000251, issued February 13, 1992).

This is an appropriate case in which to award the Applicant his expenses of this arbitration. In the event that the parties are unable to agree on the amount of expenses, I remain seized of this matter and either party may apply for assessment of the expenses before me.

Order:

1. The Applicant is entitled to benefits under section 13 of the No-Fault Benefits Schedule.

2. The benefit is $185.00 per week.

3. In the absence of agreement by the parties, I have no jurisdiction to consider the issue of deduction of workers' compensation benefits, which was not mediated.

4. The Applicant is entitled to his expenses incurred in respect to the arbitration.

May 26, 1993

K. Julaine Palmer

Arbitrator

Date

APPENDIX

Bradley v. I.C.B.C., (1989 1989 CanLII 10440 (BC CA), 41 C.C.L.I. 152 (B.C.C.A.)

Bress and Bress v. State Farm Insurance, (1992) Ontario Insurance Commission, Files A-000191 and A-000192)

Ciolfi v. Continental Insurance Co., (1985) 1985 CanLII 2094 (ON HCJ), 12 C.C.L.I. 275 (Ont. H.C.J.)

Houseworth v. Federation Insurance, [1980] I.L.R. 1-1264 (Ont. Small Claims) Affirmed [1980] I.L.R. 1-1263 (Ont. Div. Ct)

Lamb v. State Farm Mutual Insurance, [1982] I.L.R. 1-1534 (Ont. H.C.J.)

Levata v. Simcoe and Erie Insurance, (1992 unreported decision of Justice Cusinato, File 91-GD-18119 (Ont. Gen. Div.)

Martin v. I.C.B.C., (1991) 1991 CanLII 2298 (BC SC), 7 C.C.L.I. (2d) 124 (B.C.S.C.)

McCormick v. Economical Mutual Insurance, (1991) Ontario Insurance Commission, File A-000139

Morin v. Personal Insurance Company, (1993) Director of Arbitrations File P-000468

Pineda v. The Co-operators Group, (1985) 1985 CanLII 2094 (ON HCJ), 12 C.C.L.I. 275 (Ont. H.C.J.)

Ratych v. Bloomer, (1990) 1990 CanLII 97 (SCC), 69 D.L.R. (4th) 25 (S.C.C.)

Scavuzzo v. Canadian Home, (1992) Ontario Insurance Commission, File A-000626, upheld (1992) Director of Arbitrations, File P-000626

Todd v. Pitts Insurance, (1980) 1980 CanLII 1791 (ON HCJ), 120 D.L.R. (3d) 503 (Ont. H.C.J.)