Neutral Citation: 1993 ONICDRG 5

File No. A-001107

ONTARIO INSURANCE COMMISSION

BETWEEN:

ISAIAH ALLEYNE

Applicant

and

ROYAL INSURANCE COMPANY OF CANADA

Insurer

DECISION

Issues:

The Applicant, Isaiah Alleyne, was injured in a motor vehicle accident on June 22, 1990. 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 until November 24, 1991, when the Insurer terminated his benefits, alleging that he no longer qualified for them. The Applicant disputed the termination of his benefits.

The Applicant applied for mediation of his dispute with the Insurer. Mediation was unsuccessful, and the Applicant subsequently applied for the appointment of an arbitrator.

The issues to be determined at the arbitration hearing were:

1. Is the Applicant entitled to weekly income benefits under the provisions of section 12(1) of the No-Fault Benefits Schedule after November 24, 1991?

2. What is the correct amount of the benefit to which the Applicant is entitled?

3. Is any overpayment owing to the Insurer?

The Applicant also claimed interest on any payments found to be owing to him and his expenses of this arbitration.

Result:

The decision is:

1 .The Applicant is not entitled to further weekly income benefits.

2. The correct amount of weekly income benefits is $308.10.

3. The Applicant shall repay to the Insurer the sum of $12,682.82 plus interest, as calculated under section 27(4) of the No-Fault Benefits Schedule.

4. The Applicant is not entitled to his expenses of this proceeding.

Hearing:

A hearing was held at North York, Ontario, on December 14, 15 and 17, 1992, and February 1 and 2, 1993, before me, K. Julaine Palmer, Arbitrator.

Present at the hearing were:

Applicant :

Isaiah Alleyne

Applicant's Representative:

Livingston Wederburn

Student-at-law

Insurer's Representatives:

John Aikins

Barrister & Solicitor

Helen Silveira

Barrister and Solicitor

Witnesses:

The following testified under oath at the hearing:

Wayne Brooks

Isaiah Alleyne

Charles Williams

Howard Seiden

Chris Hacking

Jane McKiee

Vena Prithipaul

Eddie Hickman

Exhibits:

The parties filed an arbitration brief and 20 other exhibits at the hearing.

I will deal with the issues in the following order:

Amount of Weekly Income Benefit; Entitlement to Benefit after November 24, 1991; and Overpayment.

Amount of Weekly Income Benefit:

The Insurer does not dispute the Applicant's evidence, which is that he worked for Steelwood Doors Limited prior to the accident. The Applicant's T-4 for 1990 lists his employment income as $8,365.50. In 1989, the Applicant earned $3,418.74 from the same employment. These figures, when added, total $11,784.24. The Employer's Confirmation of Income form, filed as an exhibit, reports that the Applicant earned $11,785.00 in gross income from this source in 30.6 weeks during 1989-90. This averages to $385.13 per week. The same form lists the Applicant's gross weekly income in the four weeks preceding the accident as totalling $1,385.00, for an average of $348.25. Eighty per cent of the best figure for gross weekly income is $308.10. This is the amount to which I find the Applicant entitled under the provisions of section 12(4) and (7) of the No-Fault Benefits Schedule, following the reasoning of the Director's Delegate in the appeal decision Vincenzo Scavuzzo v. Canadian Home Assurance Company (O.I.C. File No. P-000626, dated June 19, 1992).

During the hearing, I listened to a great deal of testimony about I.C.A. Enterprises, an operation of which the Applicant alleged he was the sole proprietor. The Applicant testified that, in addition to his income from employment, he earned income as an independent contractor who hired others to sell vacuum cleaners through commission sales. It was the calculation of income earned by this business prior to the accident, and any income earned from it subsequent to the accident, that caused substantial disagreement between the Insurer and the Applicant.

The Applicant testified that he provided the funds to start up I.C.A. Enterprises, but that someone else ran the business. The Applicant claimed in the last half of 1989 this business earned $53,243.00; in the first six months of 1990, however, sales were not very good and every cent in revenue went toward paying I.C.A. Enterprises' bills, principally the costs of the van. The Applicant testified that the gross revenue of the business in 1990 was $42,865.00. He was not sure what amount was earned by the business after the date of the accident. He stated his accountant would have this information.

The Applicant produced copies of personal income tax returns from 1989, 1990, and 1991, none of which had been filed with Revenue Canada. The Applicant also provided several unaudited financial statements covering the same period.

The Applicant presented Wayne Brooks as his accountant. Counsel sought to qualify the witness as an expert in the field of accounting. The witness was not a chartered accountant, but stated he had 15 years' experience in accounting work. He testified that he was not presently a member in good standing with the Certified General Accountants' Association. The witness claimed to have an M.B.A. degree from Stanford University, but he could not recall the year the degree was granted.

I was unable to accept Wayne Brooks as being qualified to give opinion evidence as an expert in the field of accounting. However, I was fully prepared to hear his evidence as the person who had prepared various financial reports for the Applicant. Unfortunately, Mr. Brooks was reluctant to continue his testimony and did not return to the hearing room following the lunch hour. He was not in attendance under a summons.

The Insurer presented Charles W. Williams, C.A., as a witness and sought to have him qualified as an expert in the field of accounting. The Applicant's counsel did not object. This witness obtained his chartered accountant designation in 1960. Since 1967, he has specialized in investigative accounting for insurers, police forces and other entities. I accepted this witness as qualified to give opinions as an expert in the field of accounting. Although I heard copious evidence from Mr. Williams about the accounts of I.C.A. Enterprises and reviewed the reports he prepared, it is not necessary for me to make findings with respect to the income of that business for the reasons which follow.

I find that the business, known as I.C.A. Enterprises, was neither owned nor operated by the Applicant, but by a man known to the Applicant as Pete Small. I find that the Applicant has attempted to defraud the Insurer by claiming to be the beneficial owner of this business.

For reasons unknown to me, Pete Small has operated I.C.A. Enterprises under the name "Isaiah Alleyne". Christopher David Hacking, 30, an employee of Canadian Bonded Credits, Hamilton, testified that he was formerly the president of an Ontario corporation which carried on business in Etobicoke as an area distributor of vacuum cleaners. He testified that he met the man he knows as Isaiah Alleyne (not the Applicant) in mid-1988. He hired that man as an independent dealer to sell vacuum cleaners. He testified he had never seen the Applicant before the hearing.

Chris Hacking testified that the Isaiah Alleyne he knew worked for Hacking's company before he set up I.C.A. Enterprises. Mr. Hacking stated that this Isaiah Alleyne was an "inside area dealer" who worked as a crew manager with a team of door-to-door sellers. He recognized an exhibit which was a cancelled cheque of I.C.A. Enterprises. That cheque bore his signature as one of two payors. The other signature was "Isaiah Alleyne". Chris Hacking testified that the I.C.A. Enterprises chequebook was kept in his office as a control on the business, so funds would not be inappropriately spent. The Isaiah Alleyne Mr. Hacking knew often signed the cheques in his presence; the chequebook was never taken away. This man also attended sales meetings every morning at Chris Hacking's place of business.

The Applicant admitted that a photograph, captioned "Isaiah Alleyne", in some promotional material was really a photograph of Pete Small. Chris Hacking testified he had never heard the name Pete Small before. Neither had he heard that Pete Small was a front for someone else who owned I.C.A. Enterprises. In fact, he testified that the Isaiah Alleyne he knew was the sole owner of I.C.A. Enterprises, having between two and six sales representatives working for him. Mr. Hacking conceded, however, that it was possible, although he did not know how it would be, that someone else could operate I.C.A. Enterprises without ever meeting him.

Chris Hacking testified that, in the summer of 1990, the man he knew as Isaiah Alleyne left his office and became associated with another distributor of vacuum cleaners, Eddie Hickman.

Eddie Hickman, 29, partner in Hickman and Hickman Inc., testified. He stated that he had operated a business as a distributor of vacuum cleaners for 11 years. He testified that Isaiah Alleyne operated I.C.A. Enterprises as an independent contractor working under him from approximately May 1990 to October 1990, although he had known him casually for two years prior to that date. Eddie Hickman testified that he did not know the Applicant, either. He stated that his relationship with the Isaiah Alleyne he knew continued on a weekly or biweekly basis until early December 1992, because that person operated a cleaning company, Canadian General Cleaning Service, which purchased shampoos and other sundries from him.

Mr. Hickman did not know anyone named Pete Small. He testified that his acquaintance, Isaiah Alleyne, knew that this arbitration was taking place, because he mentioned it to Mr. Hickman. Mr. Hickman testified that he was never told that Isaiah Alleyne was "fronting" the business for someone else. Mr. Hickman was "totally shocked and wouldn't believe" that the Applicant was the actual owner of I.C.A. Enterprises.

The Disability Questionnaire (Exhibit 1.29) submitted by the Insurer contains references to the work of the Applicant as a field manager of C. Hacking Enterprises. In that document, which the Applicant signed on July 26, 1990, he claimed to work 7 to 9 hours per day in that business, demonstrating and selling vacuum cleaners and supervising a staff of five people. He claimed to walk two to five miles per day in this job and to lift and carry vacuum boxes weighing 16 to 30 pounds, 10 to 15 times per day. The Applicant claimed he earned a minimum of $2,000.00 per month in this activity.

No one testified in support of this allegation of the Applicant. I find this activity is wholly unsupported by the evidence. In fact, the Applicant, himself, testified at the hearing that his only activity on behalf of I.C.A. Enterprises was approximately two hours per day of sedentary administration. He thereby admitted that the information he gave Jane McKiee in late July 1990 was false. He attempted to explain this discrepancy by saying that he was under heavy medication at the time.

Jane McKiee testified. I found her testimony credible. She testified that in her view the Applicant was lucid and able to give her the information about his occupation at the time of their initial meeting in July 1990.

The Applicant seemed unfamiliar with the books and records of I.C.A. Enterprises throughout his testimony. He first testified he kept the books, then later admitted it was not his handwriting. He could not remember the name of a single sales representative for the business, and suggested this was because they stayed so short a time and changed so often. He did not know the number of what he alleged was his own car telephone, even when presented with the account showing the number. He testified he had never heard of Canadian General Cleaning Services, then admitted later that he had heard of it when shown cheques made out to a printing company on its behalf from I.C.A. Enterprises' bank account, after the accident.

The Applicant testified he was the sole person who wrote the business cheques and could not initially identify the second signature on Exhibit 7, one of I.C.A. Enterprises' cheques bearing two signatures. He later testified he had the cheques sent over to Hacking's office; Chris Hacking testified that the chequebook never left his office.

The Applicant bears the onus of proving that he is, indeed, the owner of I.C.A. Enterprises if any income earned by this business is to be taken into account in determining his gross weekly income prior to the accident. The Applicant's allegation was completely undermined by the testimony of two independent witnesses, Chris Hacking and Eddie Hickman, whose evidence I accept. No credible evidence was offered to rebut this independent testimony; in particular, no witness named "Pete Small" testified.

I do not accept the Applicant's allegations that he was the beneficial owner of I.C.A. Enterprises. The Applicant has presented a fantastic story. I am not charged with unravelling the mysteries of I.C.A. Enterprises and its ownership in this arbitration; however, I find that the Applicant has not discharged his onus of proof with respect to this alleged source of self-employment income in the 52 weeks preceding the accident. Therefore, I find that only the Applicant's income from employment with Steelwood Doors should be included to calculate his gross weekly income benefit.

Entitlement after November 24, 1991:

Evidence: The Accident and Early Aftermath

The Applicant testified that he was injured in a motor vehicle accident on June 22, 1990, while exiting from a shopping mall. He stated his Hyundai Excel was hit head-on by a blue Buick, resulting in some $4,000.00 damage to his vehicle.

The Applicant testified that in the impact his head hit the steering wheel, because he was leaning forward to see if he could exit safely from the mall. The Applicant testified that he lost consciousness briefly after the accident. After regaining consciousness, he felt a little pain in his neck.

The Applicant went in the tow truck to the dealership, where his car was taken. There he rented a car and drove home. Later that evening, he went first to one busy hospital Emergency department, where he waited 12 hours without being seen, then to another hospital where he was examined. The doctor gave him some analgesic medication and advised him to see his family doctor.

The Applicant testified that at the time of the accident he had no family doctor. He went to see his brother's doctor, Dr. S. Dyment, on July 28, 1990, five weeks after the accident. In the meantime, however, on July 13, 1990, the Applicant underwent some elective oral surgery, which he understood to be a relatively simple procedure. Unfortunately, when complications arose following this surgery, the Applicant required at least three additional surgeries and was hospitalized with swelling and infections in his jaw and sinuses as well as significant bleeding from the nose. The last corrective surgery was performed in the fall of 1990.

Evidence re Disability after November 24, 1991:

Because the Insurer has accepted that the Applicant was disabled by the motor vehicle accident until November 24, 1991, I am concerned only with the Applicant's condition in the period around and after that date to determine whether the Applicant continued to qualify for weekly income benefits thereafter. In order to be eligible for weekly income benefits after November 24, 1991, the Applicant must establish that he has suffered "a substantial inability to perform the essential tasks of his occupation or employment" after that date, as a result of the accident.

The Applicant called no doctor to testify at the hearing, but filed several form reports. I also had the benefit of the clinical notes of his doctor and his physiotherapist and a form report from his chiropractor.

The Applicant testified that he has problems with his back every day; he has difficulty sleeping on his water bed. The Applicant described his physical condition now compared to before the accident: previously, he had no physical problems and was a strong person who was never sick or in the hospital. Since the accident, he has had back problems and pain. At home, sometimes, when he bends to pick up something, including his infant daughter, he has pain. He testified that prolonged sitting at the hearing was annoying. The Applicant testified that if he had no problems he would be working. He stated that he was taking no regular medication.

The evidence of the Applicant of his disability is in sharp contrast to that of the Insurer. Dr. Howard S. Seiden, a specialist in family practice, who has in the last five years devoted much of his practice to occupational health issues, examined the Applicant at the request of the Insurer on July 10, 1991. Dr. Seiden testified at the hearing and explained his holistic approach to medical assessments and treatment recommendations, including the importance of taking a full history from the patient. Dr. Seiden's report of 82 single-spaced, typewritten pages was also filed as an exhibit.

Dr. Seiden concluded that the Applicant had basically a normal examination. He remarked that the Applicant sat in his office in a low, wing-back chair for approximately 12 hours without complaint or apparent discomfort; he found a full range of neck movement and no muscle spasm in his back; he could forward flex to touch his fingertips to his feet and could extend his back within the normal range.

Dr. Seiden concluded from his interview and examination of the Applicant that the bulk of the Applicant's disability related to the dental problems he suffered following his oral surgery in July 1990. Dr. Seiden was prepared to concede that the Applicant may have some continuing low back discomfort, which he relates to the motor vehicle accident, but he could find no serious underlying pathology and he did not believe working would harm him. In Dr. Seiden's opinion, no treatment was necessary for the Applicant in July 1992, but he saw no harm in the Applicant participating in a supervised, exercise program.

Findings re Entitlement to Benefit after November 24, 1991:

I accept the Applicant's evidence that he laboured at Steelwood Doors Limited, Woodbridge, from October 24, 1989 to June 1, 1990 as a painter in its residential entrance door factory.

The Applicant also testified that he was the sole proprietor of a business known as I.C.A. Enterprises, which sold vacuum cleaners door-to-door. I reject the Applicant's evidence with respect to this business, for the reasons set out above.

At the hearing the Applicant testified that his job at Steelwood Doors required him to stand for eight hours and to move large drums of paint, weighing 200 to 300 pounds, to place them on a skid. The Applicant testified that he would pick up these drums of paint and roll them on their sides in order to accomplish this task.

When the Applicant was interviewed by adjuster Jane McKiee, on July 26, 1990, he told her that he could not do his job at Steelwood Doors because it was "impossible to lift 60 pound doors, or move 35 gallon paint drums".

The Employer's Confirmation of Income form completed by the office manager of Steelwood Doors Limited describes the Applicant's job as: "loaded paints from (off/on) skids: Mixed Paint: Operated Painting Machine: Painted Wood and Metal Frames".

Dr. Seiden reported that the Applicant told him that his job was to examine and paint doors, that he "supervised a machine", that there was lots of lifting, but that his body was conditioned to it.

This is all the evidence I received with respect to the essential tasks of the Applicant's employment.

I find that the Applicant's employment at the time of the accident was as a painter for a residential entrance door manufacturer. I find that his essential tasks included loading paint drums on and off skids, but I do not accept that his duties included liftingdrums that weighed 200 to 300 pounds. I find that he operated a painting machine, mixed paint, and was required to lift residential entrance doors.

In my view, the Applicant has failed to prove substantial inability to perform his essential tasks after November 24, 1991. The Applicant supervised the machine-painting of residential entrance doors. Lifting these doors and moving large drums of paint was part of his job. The Applicant complains of pain in his low back. However, the Applicant is not eligible for weekly income benefits unless the pain of which he complains substantially disables him from performing the essential tasks of his job. There is no credible evidence that the Applicant is disabled to this degree.

I find that the Applicant, very early after this accident, underwent elective oral surgery which turned out badly and caused him great discomfort over a period of many months. The surgery occurred, in fact, before he saw his family doctor about his injuries from the motor vehicle accident. I find that the Applicant has given so little evidence of seeking treatment for the alleged back injury as to cause me to doubt that it constitutes a significant impediment to his life.

From the records I have reviewed, I note that the Applicant attended at his doctor's office on only nine occasions in the twelve months between November 25, 1991 and November 25, 1992. The dates were: November 27, 1991; December 20, 1991; January 13 and 17, 1992; April 3 and 15, 1992; September 16 and 21, 1992; and November 10, 1992. On four of those visits, he was seeking completion of forms by the doctor. On January 17, 1992, he appeared only to be seeking photocopies of his chart. The record of his visit on April 3, 1992 relates only to nasal congestion. The visit of November 27, 1991 related to a migraine headache.

It would appear that during the five months from April 15, 1992 to September 16, 1992, the Applicant had no medical contact.

The Applicant's physiotherapy records indicate he attended on ten days between October 9, 1991 and November 14, 1991. At the hearing, the Applicant testified that he discontinued physiotherapy because the clinic was located 25 kilometres from his home and he could not afford the taxi fare. The Applicant did not explain why he needed to attend a clinic located so far away, nor why he could not drive there. The Applicant admitted he had never informed the Insurer about any difficulty attending physiotherapy.

I find that the Applicant has been less than forthright in dealing with the various doctors by whom he has been examined; he has not described his job duties in a consistent manner whatsoever. Dr. Williams recorded that he was a "salesman for heavy machinery"; Dr. Stubbs wrote that he appeared to be a door-to-door salesman.

Very little in the medical reports completed by the Applicant's doctors is based upon their objective findings on examination. In the main, these reports repeat what the Applicant told them about his pain, and about his ability to walk, stand, sit, and lift. I find that I can give these comments in the reports little weight in my assessment of the Applicant's condition since November 24, 1991. Where the evidence of Dr. Seiden on his examination of the Applicant conflicts with the reports completed by the Applicant's doctors, I prefer the evidence of Dr. Seiden.

My view of the Applicant's evidence with respect to his ability to perform his job is further influenced by my findings with respect to the credibility of his testimony about I.C.A. Enterprises, discussed above.

Accordingly, I find that the Applicant is entitled to no further weekly income benefits after November 24, 1991 as a result of this accident.

Overpayment:

The Insurer presented evidence that the Applicant received $35,174.12 in weekly income benefits, from one week after the accident to November 24, 1991, a period of 73 weeks. I have found that the Applicant is entitled to be paid at the rate of $308.10 per week over that period and that he is not entitled to any weekly income benefits after that date. Accordingly, the Applicant should have received $308.10 x 73 weeks = $22,491.30 in weekly income benefits.

In the result then, the Insurer has overpaid the Applicant by $12,682.82. I order that the Applicant repay that amount to the Insurer, together with interest, if demanded, as set out in section 27(4) of the No-Fault Benefits Schedule.

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) "Schedule".

In the Ralph McCormick v. Economical Mutual Insurance Company 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).

In the McCormick case, Arbitrator Naylor did not specifically address the question of fraud by an applicant. It is certainly, however, within the spirit of the McCormick decision and the No-Fault Benefits Schedule itself to deny an applicant his expenses in such a case.

I have done so previously in the Marcel Richardson v. Royal Insurance Company case (O.I.C. File No. A-001141, dated November 3, 1992), where the Applicant attempted to perpetrate a significant fraud. There, the Applicant not only worked while collecting weekly income benefits from the Insurer, but when he was caught, he denied that the evidence presented by the insurance company was factual.

This also is a case where expenses should not be awarded to an applicant. I deny the Applicant any claim for expenses of this proceeding based on his fraudulent activity in attempting to claim income from a business known as I.C.A. Enterprises.

If I were empowered to grant costs to the Insurer against the Applicant, I would have done so in this case.

Order:

1. The Applicant is not entitled to further weekly income benefits.

2. The correct amount of weekly income benefits is $308.10.

3. The Applicant shall repay to the Insurer the sum of $12,682.82 plus interest as calculated under section 27(4) the No-Fault Benefits Schedule.

4. The Applicant is not entitled to his expenses of this proceeding.

February 18, 1993

K. Julaine Palmer Arbitrator

Date