Neutral Citation: 1993 ONICDRG 54
File No. A-003551
ONTARIO INSURANCE COMMISSION
BETWEEN:
RAJA ALRAWDAH
Applicant
and
ZURICH INSURANCE COMPANY
Insurer
DECISION
Issues:
The Applicant, Raja Alrawdah, was injured in a motor vehicle accident on August 3, 1991. 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. Alrawdah received weekly disability benefits until December 5, 1992 at a rate of $600 per week. After his benefits were terminated by the Insurer, Mr. Alrawdah applied for mediation. Mediation was unsuccessful and Mr. Alrawdah applied for arbitration.
The issues in this hearing are:
Is the Applicant entitled to weekly income benefits after December 5, 1992?
What is the amount of weekly income benefit to which the Applicant is entitled? Is any repayment owed to the Insurer?
Is the Applicant entitled to a special award under section 282(10) of the Insurance Act?
The Applicant also claims interest on any outstanding amounts owing and his expenses incurred in the hearing.
Result:
The Applicant is not entitled to further weekly benefits after December 5, 1992.
The Applicant is entitled to weekly benefits at the rate of $185.60 from August 10, 1991 to December 5, 1992, totalling $12,806.40. Since the Insurer has paid $41,400 in weekly benefits, it is entitled to a repayment of $28,593.60 under the provisions of section 27(1) of the No-Fault Benefits Schedule; the Insurer is also entitled to interest pursuant to section 27(4).
The Insurer is also entitled to deduct $5,514.82 from any benefit payable under Part IV of the No-Fault Benefits Schedule, according to the provisions of section 15 of the Schedule.
The Applicant is not entitled to a special award.
The Applicant is entitled to his expenses of this proceeding.
Hearing:
The hearing was held at North York on May 31, June 1, 3 and 29, 1993, before me, K. Julaine Palmer, arbitrator. On July 29, 1993, I requested the Director of Arbitrations to refer certain questions to the Medical and Rehabilitation Advisory Panel, under section 282(5) of the Insurance Act. I received a report from Dr. Sergio Bacal, psychologist, on August 30, 1993.
Present at the Hearing:
Applicant:
Raja Alrawdah
Insurer's Representatives:
A. Jarvis Scott
Barrister & Solicitor
Linda Ironside
Senior Claims Examiner
Witnesses:
Raja Alrawdah
Amal Alrawdah
Tanya Alrawdah
Zena Alrawdah
Mintri Dolsingh
Wayne Simpson
Linda Ironside
Linda Baynes
Wendy Scott
Bob MacLeod
Jonathan Wood
James A. Forbes
The parties filed two medical briefs, an income brief and 22 other exhibits. The report of Dr. Sergio Bacal, dated August 20, 1993 was marked as Exhibit 26 to the hearing.
Evidence and Findings:
1. Is the Applicant entitled to weekly income benefits after December 5, 1992?
The Applicant's family operated a small take-out submarine and pizza restaurant in downtown Georgetown from about 1986 until October 27, 1992. The restaurant also sold Middle Eastern food. All the food was made on the premises. Besides the Applicant, now age 43, his wife and two teenage daughters worked in the business. The family lived in an apartment above the restaurant.
The Applicant testified that in the accident of August 3, 1991, his vehicle was hit on the passenger door. He testified that after the accident he suffered from headaches on the left side of his head and from an injury to his left hand. Hospital records show Mr. Alrawdah had fractured two bones in his hand: the fourth metacarpal and the third proximal phalanx. He was treated in a hospital emergency department, by his family doctor and by a general surgeon. He wore a cast on his arm for about five weeks.
The Applicant and his witnesses described the daily routine of the business. They testified that after the accident, the Applicant had great difficulty making pizza dough, shaping balls of dough for individual pizzas and forming dough into pizza shells, especially for the largest size. The Applicant testified that he had no power in his fourth and fifth digits and that he could not lift with his weak left wrist. He stated that kneading dough was very painful.
The Applicant testified that he also had problems opening the heavy door of the pizza oven with his left hand repeatedly during the course of a day. He stated he had trouble lifting anything weighing more than 20 pounds, including carrying boxes of chicken weighing 40 pounds; placing heavy, commercial bags of flour into the storage container; carrying a bowl of raw dough from the mixer to the table; and removing the dough from the bowl.
Section 12(1) of the No-Fault Benefits Schedule prescribes the test for eligibility for weekly income benefits, as follows:
(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident a weekly income benefit during the period in which the insured person suffers substantial inability to perform the essential tasks of his or her occupation or employment if the insured person meets the qualifications set out in subsection (2) or (3).
It is the responsibility of the Applicant in this case to persuade the Arbitrator by providing the best evidence he can that he suffered a substantial inability to perform the essential tasks of his occupation or employment after December 5, 1992. The Insurer paid weekly income benefits until that date and is not contesting the Applicant's entitlement until then.
The test that the No-Fault Benefits Schedule sets out in section 12(1) is not an easy one. It requires that the applicant suffer more than some inability to perform in his or her job; it requires a considerable or significant inability to perform the necessary or key requirements.
I find that the essential tasks of the Applicant's occupation as a small take-out restaurant owner included the following: driving an automobile; talking on the telephone to receive or place orders; using his hands in fine motor movements such as to make submarine sandwiches, cut ingredients for pizza and sandwich toppings, prepare foods such as sauces, bacon, meatballs, lasagna, roast chicken and operate a cash register; cleaning equipment and premises; receiving shipments of ingredients and storing them.
Other necessary or key requirements of his job included the ability to open an oven door with one hand while holding a pizza in the other; the ability to make batches of pizza dough weighing roughly 25 pounds in a batch, by adding flour and water to a dough mixer; carrying a large bowl of raw dough several steps to a counter; extracting the raw dough from the bowl to shape it and let it rise; cutting dough into different sizes; shaping the cut dough into balls; spreading finished dough into pie crust by pushing, lifting and stretching the dough using two hands.
The Applicant, Mr. Alrawdah, has not succeeded in this case, because he has not provided sufficient evidence to show that he qualifies for benefits under the No-Fault Benefit Schedule's definition of disability. From the evidence before me, it is clear that Mr. Alrawdah was sufficiently injured in the accident so that, for a time, he was eligible for benefits and was substantially disabled from performing the essential tasks of his job. He was paid weekly benefits by the Insurer during that period. However, he seeks benefits after December 5, 1992 on an ongoing basis. Even accepting his own evidence of his disabilities, it is my view that after December 5, 1992 he was not substantially disabled from performing his job.
The weight of the medical and rehabilitation evidence is that Raja Alrawdah could perform his essential tasks. The Applicant received physiotherapy treatment between August 1991 and April 1992. The physiotherapist testified at the hearing and filed her notes. Her view was that by the end of treatment, the Applicant's hand was better and he could use it functionally to return to full-time work. The first rehabilitation worker, Mintri Dolsingh, testified that on February 17, 1992 Mr. Alrawdah told her he was attempting all his duties.
The second rehabilitation consultant, Wayne Simpson, Ph.D., met with Mr. Alrawdah on three occasions between July and October 1992 and once with Dr. Li, Mr. Alrawdah's family doctor. He gave expert testimony at the hearing. His qualifications include a Masters degree in Kinesiology, a doctorate in Health Studies and teaching experience at the University of Alberta. In casual observation, Dr. Simpson remarked that the Applicant picked up his infant daughter with his left arm and cradled her with his left arm; he also observed him pick up a cup of hot coffee with his left hand; he saw no guarded movements. Dr. Simpson demonstrated simple hand and arm exercises to Mr. Alrawdah that he had already been recommended to perform, but seemed not to have followed through upon. Dr. Simpson testified that he recommended that Mr. Alrawdah return to work full-time and perform his hand and arm exercises twice daily. Dr. Simpson concluded that Mr. Alrawdah was minimally disabled in October 1992.
As early as October 28, 1991, Dr. S.H.C. Li, the Applicant's family physician, felt that Mr. Alrawdah could return to light work as of November 1, 1991, including lifting a maximum of 20 pounds, with frequent lifting or carrying of objects weighing up to 10 pounds, in a job where walking or standing was required to a significant degree. His view was that Mr. Alrawdah could, even at that time, occasionally carry 21-50 pounds. Dr. Li also indicated at that date that his patient had no capacity with his left hand for gross grasp, fine manipulation, or pushing-pulling. He commented: "Residual disability appeared to be localized to his left knee, left hand and wrist..."
Dr. Li's report of January 18, 1993 was filed at the hearing. That lengthy report summarizes the injuries sustained and treatment received by Mr. Alrawdah as a result of the accident. The initial treatment and symptoms described in the report are useful as background information, however, the most important parts of the report for the purposes of this hearing are Dr. Li's comments with respect to the fall of 1992, which is the point in time of concern here.
In this portion of the report, Dr. Li's assessment of the Applicant's ability to work contradicts the evidence the Applicant provided at the hearing. For example, Dr. Li states..."Since the accident, he had to give up most of the manual duties he was capable of doing." This statement is not supported by the weight of the evidence at the hearing.
Dr. Li also suggests that Mr. Alrawdah had to close his restaurant in October because "his wife gave birth to a child in April 1992 and had to stay home for maternity leave. One of the elder daughters was also not able to work for him because she sustained injuries from a separate motor vehicle accident early in the fall. His brother-in-law also left in September 1992." These statements by Dr. Li were also not supported by the evidence at the hearing.
At no time at the hearing was it suggested that the birth of Rochelle Alrawdah, on April 13, 1992, contributed to the closing of the restaurant at the end of October 1992. Mrs. Alrawdah testified that she arranged for a babysitter so that she could work full-time in the business. Hassan Bouajram, Mrs. Alrawdah's brother, had left months before, either around the end of December 1991, according to Mrs. Alrawdah, or just after the birth of Rochelle. Both teenage daughters testified that after they returned to school in the fall of 1992, they worked in the restaurant.
The Applicant's testimony at the hearing focused on the disabling nature of the injuries to his left hand. However, none of the medical evidence presented at the hearing suggests that Mr. Alrawdah's left hand is dysfunctional to a degree that would be incapacitating after December 5, 1992. Both his physiotherapist and the rehabilitation consultant testified that kneading pizza dough and working with the dough to spread it would be excellent rehabilitation exercise for the hand.
Dr. William J. McCracken, a Hamilton orthopaedic specialist who examined the Applicant for the Insurer on August 26, 1992, noted that there was "no radiological evidence up to the date of the last films [February 10, 1992] of a post-traumatic osteoarthritis having developed in the joint spaces between the 3 MC's and the distal row of carpal bones (bones in the mid wrist region)." Dr. McCracken comments that he found muscle wasting of the left forearm which he believed to be secondary to the immobilization in the cast "plus the continuing protective partial disuse effect."
Dr. McCracken noted:
Elbow and finger function is normal bilateral and pronation of the forearm (turning the hand towards the floor) is normal and equal to the opposite wrist. Extension of the wrist is normal and equal to the opposite, but there is a complaint of aching being produced at the limits of this test. Flexion of the wrist is 75% of normal with a complaint of pain being produced along the dorsum (top) of the wrist on carrying out this test. The patient is able to flex his fingers in a normal and full manner and this test is pain-free. Hand grip on the left side is slightly weak compared to the opposite, but there is no complaint of pain being produced. Tinel's sign (a test used to determine nerve root irritability or damage) is positive on compressing the ulnar nerve in the ulnar tunnel behind the elbow. This is associated with a transient sensory change sensation along the ulnar side of the forearm.
On examination of the left hand, there is a residual bony type of deformity along the back of the hand at the bases of the metacarpals (MC's, bones passing from the wrist to the fingers) involving in particular the base of #2, and to lesser degrees the base of #3 and #4, and there also is deformity of the head of MC #4 with recession of the head, and I would be of the opinion this is due to shortening which has occurred in #4 MC as a result of a fracture which has healed in this position. There is no muscle fasciculation noted. There is no evidence of a reflex neurovascular dystrophy. Reflexes are normal and equal. On sensory testing, there is no sensory deficit noted despite the positive Tinel's sign. On measurement there is no wasting of the muscles of the shoulder girdles or the arms, however, there is 1/2" diminution in size of the left upper forearm and 3/4" diminution in size at the level of the left wrist compared to the opposite. This in all probability would represent a disuse type of muscle atrophy. It is also noted there is some wasting of the hypothenar muscles (small muscles along the medial side of the hand) and this would suggest a partial neuropraxia (nerve compression effect, either at the level of the nerve root in the cervical spine or distal to this at the level of the elbow).
Dr. McCracken recommended Mr. Alrawdah begin daily, repetitive low-magnitude exercises for his neck, shoulders, arms and hands. He also recommended his medication be changed to a straight anti-inflammatory drug.
Dr. Kenneth J. Bradley, a general surgeon in Milton, followed Mr. Alrawdah's case from August 8, 1991 forward. His consultation notes to Dr. Li formed part of the medical exhibits in the hearing. By his visit of November 11, 1991, Dr. Bradley had seen Mr. Alrawdah five times. He wrote:
I saw Raja today in long term followup in regards to his hand with the two fractures an[d] as well both his knee problems.
All areas are quite satisfactory and certainly he is not disabled from it, but he seems to be using the left hand problem to keep himself from carrying a full load of duty at the pizza shop here that his brother-in-law owns.
I have advised him that the best thing he can do is to start kneading dough as it is the best form of physiotherapy and without it he may takes years to recover.
In December 1991, Dr. Bradley reported a left-arm nerve conduction study had been reported as normal. Dr. Bradley also wrote: "He can toss more chickens around now without too much trouble although the left hand is still somewhat weak." In January 1992, Dr. Bradley noted that Mr. Alrawdah's hand pain was recurring "now that he is off the Toridal but not so severe that he can't carry on with work, and I think we will try to avoid the medication for the time being." Dr. Bradley was to see Mr. Alrawdah again in three weeks, but it appears he did not until August 6, 1992. At that time, he ordered x-rays of Mr. Alrawdah's left hand and left knee, but on reviewing them with Mr. Alrawdah, concluded that "X-ray [sic] show no sign of any injuries and we discussed his problem and we felt the best treatment was to do nothing unless he should become incapacitated from the symptoms. He seems happy with this approach."
When Mr. Alrawdah returned to Dr. Bradley in January 1993, he ordered further x-rays of his left wrist and shoulder and chest and put him on a course of medication. He was to see him again in three weeks, but the next visit was April 5, 1993. At that time, Mr. Alrawdah brought Dr. McCracken's September 1992 report and Dr. Bradley booked him for another nerve conduction study. By May 10, 1993, the results of the nerve conduction study were available and reported to be negative. Dr. Bradley wrote to Dr. Li:
We had a long discussion with respect to his left arm problem and his left knee problem. I think the only route to go now is conservative management and he will have to learn to live with his discomfort and disability. We spent sometime stressing this and whether or not it has got through to him or not is a point that will take sometime to assess.
Dr. R. Graham Vanderlinden, neurosurgeon, saw Mr. Alrawdah in November 1992 at the request of Dr. Israelian, the neurologist who performed the November 1991 nerve conduction study, and found it normal. Dr. Vanderlinden noted Mr. Alrawdah reported to him that "although the hand improved and it is better now than it was six months ago, it still aches and feels weak." Mr. Alrawdah confirmed this reported improvement at the hearing. Dr. Vanderlinden diagnosed a neuroma of the left supra-orbital nerve at the site of a scar from a cut suffered in the accident. He recommended surgery to remove the nerve and felt there was a 70 per cent chance that this would alleviate Mr. Alrawdah's headaches. At the date of the hearing, Mr. Alrawdah had not had this surgery performed.
Mr. Alrawdah was also seen by Dr. Robert A. McKnight, a specialist in physical medicine and rehabilitation and Assistant Clinical Professor, Faculty of Medicine, McMaster University. This examination took place on May 3, 1993 at the request of the Insurer.
In his examination of Mr. Alrawdah's arms and hands, Dr. McKnight noted he had normal movement of his elbows, wrists and forearms except for a 20 per cent decrease in left wrist flexion. He found a mild residual bony deformity at the base of Mr. Alrawdah's left metacarpals and that his left wrist and forearm were smaller in circumference than his right by 1.75 and 1.25 cm, respectively. Dr. McKnight found evidence of inconsistent maximal exertional effort when he tested Mr. Alrawdah's grip strength of his left hand. After examining Mr. Alrawdah's head, neck, shoulders and knees, he made no significant findings.
After addressing eight areas in which he proposed measures which could benefit Mr. Alrawdah, Dr. McKnight concluded as follows:
Mr. Alrawdah has had extensive experience in food preparation and the pizza and submarine business. He has rudimentary formal education, somewhat limited facility with written English, and few transferable skills. It is thus clearly desirable that he return to the line of work in which he has been engaged for the past 15 years, 8 of which have been in relation to his own business. The principal barrier to his doing so is, in my view, his perception of significant injury and resultant dysfunction. He harbours the view, in my judgement, that he has somehow been rendered "fragile" and that he will harm himself by carrying through with activities integral to this business. He exudes a certain defeatism and has clearly been non-compliant with the suggested exercise program. He requires the above assurances and reenforcement of the benefits to be derived from maximizing his physical condition, and would benefit significantly from the suggested assistive devices. He must accept, as stated, that a variable degree of discomfort may continue to be experienced, but that it will not be harmful to him. Adherence to the above-stated management principles on an on-going basis will serve to maximize and maintain his functional capacity, and in my considered judgement there is no medical contra-indication or other practically or theoretically justifiable barrier to his resumption and performance, in substantial measure, of all of his pre-mishap activities.
In summary, the overwhelming weight of expert medical evidence is that after the fall of 1992 the Applicant was not physically disabled from performing his work as a result of the accident. Therefore, I considered whether Raja Alrawdah might have sustained a mental or psychological injury as a result of the accident.
I received a report from Sergio Bacal, Ph.D., C.Psych. dated August 20, 1993, in response to my request to the Director of Arbitrations to refer certain questions to the Medical and Rehabilitation Advisory Committee under section 282(5) of the Insurance Act. Dr. Bacal examined Mr. Alrawdah, reviewed the medical evidence obtained at the hearing, and administered two objective psychological tests: the Millon Clinical Multiaxial Inventory (MCMI) and the Beck Depression Inventory (BDI). At the conclusion of his report, Dr. Bacal summarized his opinion as follows:
I do not believe that the insured, Mr. R. Alrawdah, is presently suffering from any mental, psychiatric or psychological condition which could be considered clinically significant or occupationally disabling (totally or partially, or in terms of his regular job-duties or modified work). There is no substantial evidence - clinical, documentary or subjective - that following the August 3, 1991 accident he developed full-blown psychological disorders, although subsequently he gradually developed mild symptoms of depression and post-traumatic stress features.
I accept the expert opinions provided by physiotherapist Wendy Scott, Wayne Simpson, Ph.D., Dr. William McCracken, Dr. Robert McKnight, and Sergio Bacal, Ph.D., C.Psych. in reaching my conclusion that Raja Alrawdah has been capable of performing the essential tasks of his occupation as the owner of a small pizza, submarine, and Middle Eastern food take-out restaurant from December 6, 1992 forward.
Although Raja Alrawdah is no longer eligible for weekly income benefits arising out of the automobile accident, he may remain eligible for Supplementary Medical and Rehabilitation Benefits under Part II of the No-Fault Benefits Schedule for up to ten years from the day of the accident. I recommend the parties consider the "management stratagems" proposed by Dr. McKnight and by Dr. Bacal.
Mr. Alrawdah's recovery from the motor vehicle may not remain static over time. Indeed, Dr. McCracken mentions the possibility of osteoarthritis developing in Mr. Alrawdah's left hand. It remains open to Mr. Alrawdah to apply for a variation of this order if a material change in his circumstances takes place.
2. What is the amount of weekly income benefits to which the Applicant is entitled? Is any repayment owed to the Insurer?
On August 12, 1991, Raja Alrawdah completed an application for accident benefits. On that form he checked the box that declared he was self-employed, but provided no information as to his income from employment. He did, however, submit an Employer's Confirmation of Income form, also dated August 12, 1991, completed by Amal Alrawdah, "bookkeeper". The form set out the following information:
3. Details of Employment
Type of employment: full-time, self-employed
Occupation: general manager and cook
Brief Job Description (Essential Tasks): Food preparation, including preparation from raw ingredients and cooking. Serving customers at counter.
4. Claimant's Income
Income from employment. How is Claimant paid?: weekly
Salary: (gross weekly income last 4 weeks preceding accident)
Week 1
$2,496.19
Week 2
$3,035.57
Week 3
$3,356.37
Week 4
$2,989.28
Gross income for 52 weeks preceding accident:
No. of Weeks Worked: 52. Gross income: $13,412.75
5. Employer Remarks
Mr. Alrawdah is a self-employed businessman operating Downtown Pizza & Submarine in Georgetown, Ontario. On average, the cost of food provided to his customers is approximately 50% of the selling price.
To Zurich Insurance, the information provided for the four weeks preceding the accident was, at face value, inconsistent with the figures provided for the 52 weeks prior to the accident. Linda Ironside, Senior Claims Examiner, testified that she believed the $13,412.75 figure was inserted in error, since it did not correspond with what she believed was a total of $11,877.41 in gross sales over four weeks. By taking 50% of the $11,877.41 figure as "ceasing expenses" (according to section 12(7)3. of the No-Fault Benefits Schedule), Ms. Ironside arrived at a gross income figure of more than $1,000 per week. Based on this calculation, the Insurer paid the Applicant $600 per week in income benefits.
While Linda Ironside was away on vacation, Madeleine Grady, also of Zurich's Hamilton office, spoke with Raja Alrawdah and made notations on the submitted form of an annual income of $33,000.
In September 1991, the Insurer received from the Alrawdahs an income statement for the year ending August 31, 1990; a balance sheet for year ending August 31, 1990; and a class 8 depreciation schedule dated August 31, 1989. Zurich learned that the business's 1991 year's documents were at an accountant's for preparation of 1991 statements.
It was not until December 1992, after Raja Alrawdah's benefits had been terminated, that the Insurer learned that Raja Alrawdah was not the sole proprietor of the Downtown Pizza & Submarine business. The Insurer paid $41,400 in weekly income benefits to Raja Alrawdah from August 10, 1991 to December 5, 1992.
At the hearing, the Applicant presented financial information with respect to the family business. Tanya Alrawdah and Zena Alrawdah testified that they were paid for their work in the restaurant and that their mother kept track of these payments. Tanya Alrawdah testified that in the summer of 1991 she worked 6 hours per day, 5 days per week in the business. She testified that her sister, Zena, worked 4 or 5 hours per day, 5 days each week that summer. Tanya Alrawdah testified that the income tax return she filed for 1991 showing $6,072.81 as her income from the business was accurate and true.
Raja Alrawdah testified that in 1991 the $31,173.05 in net income earned from the business to August 31, 1991 was divided among the family members. In 1992, following a change in bookkeepers, the net income of $9,543.78 was divided in a different manner:
1991
1992
Raja Alrawdah
21%
40%
Amal Alrawdah
34%
40%
Tanya Alrawdah
18%
10%
Zena Alrawdah
20%
10%
Nasha Alrawdah
7%
0%
Accordingly, for the twelve months ending August 31, 1991, Raja Alrawdah reported he earned $6,546.34. By the provisions of section 12(7) 1 .iii of the No-Fault Benefits Schedule, his average gross weekly income from his occupation or employment would be deemed to be $232. He would thus be entitled to a benefit of $185.60 per week.
From the Applicant's evidence of his work in the restaurant prior to the accident, it is difficult to understand why he would be allocated only 21% of the restaurant income for 1991. No one explained the basis for the allocation among the family members, yet no witness sought to impute a greater proportion of the family income to Raja Alrawdah. The evidence is that Raja Alrawdah worked full-time in the business in 1991; his wife worked something slightly less than full-time and their daughters worked casual hours after school, on Saturday, and more often in the summer.
The Insurer hired Coopers & Lybrand, Chartered Accountants, to provide expert accounting evidence at the hearing. James A. Forbes, C.A., testified that in order to verify the income figures for the four weeks preceding the accident, the daily "Z" tapes from the restaurant cash register were added and found to total $5,435.88. This total could not be reconciled with the figure of $11,877.41 reported on the original Employer's Confirmation of Income form.
Mr. Forbes answered my questions about the assumptions on which his report was based. He indicated that his report assumed that the 21 per cent participation figure reported by Raja Alrawdah represented an appropriate figure, approximating the work done by him. He testified that the business continued to operate at approximately the same level after the accident. Even if the figures for participation by Raja Alrawdah were raised to 60 per cent of the income from the business, he calculated the average weekly income benefit payable to Mr. Alrawdah would not rise above the deemed minimum.
Mr. Forbes also testified about the deductions from Mr. Alrawdah's benefit for income received or available to him after the accident. According to the provisions of section 15 of the No-Fault Benefits Schedule, the Insurer may deduct 80 per cent of any such income from any weekly benefit payable.
Raja Alrawdah's 21 per cent share of the revenues from the restaurant business from August 4, 1991 to October 28, 1992 amounted to some $17,726.79, according to Mr. Forbes. Ceasing expenses were found to be 60.5% of actual revenues or $10,724.71. Eighty per cent of the resultant net income amounted to $5,514.82. This figure could be deducted from any weekly benefit payable.
The Applicant presented little evidence with respect to the income earned after the accident, other than his 1992 income tax return, which included a Statement of Business Income and Expenses for the restaurant to August 31, 1992.
Based on the evidence I received at the hearing, I conclude that Raja Alrawdah is entitled to the minimum weekly income benefit of $185.60 for the period August 4, 1991 to December 5, 1992. Zurich Insurance is also entitled to deduct from that gross amount $5,514.82, which represents 80 per cent of the income received or available from Mr. Alrawdah's occupation or employment after the accident.
In this case, the Applicant may have ordered his financial affairs in a way that minimized the income he personally received from the business. The Applicant clearly has the right to structure his financial affairs, within the law, in whatever manner he chooses. However, he has not presented any proof to substantiate a level of income greater than the deemed minimum during either the four weeks or 52 weeks prior to August 3, 1991. If he had provided sufficient, compelling evidence of greater income, I would have found in his favour, regardless of the income tax returns. As I stated in my decision in Lopes v. Federation Insurance Company of Canada (O.I.C. File No. A-000602, November 9, 1992, under appeal):
It might be said that as a matter of public policy, however, that an applicant who has never formally acknowledged and reported income in his tax return should not be allowed to use a proceeding before an administrative tribunal to recover income lost as a result of an accident. The New Brunswick Court of Appeal in a case heard in 1988, Frenette v. Audet, 1988 CanLII 128 (NB CA), 89 N.B.R. (2D) 306, held this to be the law. The principle of law which the court cited is the maxim ex turpi causa non oritur actio (out of an immoral consideration, an action cannot arise). However, in my view, the view of the British Columbia Court of Appeal in Iannone v. Hoogenraad (1992) 66 B.C.L.R. (2d) 107 is to be preferred. In that case, the court reiterated its definition of the scope of the principle in its decision in Hall v. Hebert, 1991 CanLII 5709 (BC CA), 53 B.C.L.R. (2d) 201. Justice Gibbs, in the Iannone case, concluded that the contention that the plaintiff's recovery should be barred on public policy grounds confuses the concepts of a right to recover on a cause of action and the burden of proof upon a plaintiff whose right of recovery is not barred by a principle like ex turpi causa.
This plaintiff, like others in similar circumstances, had the burden of leading evidence of post-accident wages losses. That will be a difficult burden to discharge where there is no corroborating evidence such as income tax returns, but it is not an impossible burden to discharge.
In order for the ex turpi principle to apply, the cause of action must arise out of the commission of that act. Here, the cause of action arises out of a contract of insurance and a motor vehicle accident, not the false reporting of income.
I find that Raja Alrawdah has failed to prove that his gross income was greater than $232 per week or $12,064 annually. He is accordingly entitled to weekly benefits of $185.60 between August 10, 1991 and December 5, 1992. In addition, it has been established to my satisfaction that Raja Alrawdah was entitled to $5,514.82 in income from his occupation or employment after the accident, and this amount may be deducted by the Insurer from any benefit payable under Part IV of the No-Fault Benefits Schedule.
3. Is the Applicant entitled to a special award under section 282(10) of the Insurance Act?
Section 282(10) of the Insurance Act gives the power to an arbitrator to award a lump sum to a person in certain circumstances:
If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the No-Fault Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.
There was no evidence in this proceeding which would indicate that the insurer unreasonably withheld or delayed payments.
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, Dispute Resolution Expenses.
In the McCormick v. Economical Mutual Insurance Company case (O.I.C. File No. A-000139), Arbitrator 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).
The Applicant is entitled to his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code.
Order:
The Applicant is not entitled to further weekly benefits after December 5, 1992.
The Applicant is entitled to weekly benefits at the rate of $185.60 from August 10, 1991 to December 5, 1992, totalling $12,806.40. Since the Insurer has paid $41,400 in weekly benefits, it is entitled to a repayment of $28,593.60 under the provisions of section 27(1) of the No-Fault Benefits Schedule; the Insurer is also entitled to interest pursuant to section 27(4).
The Insurer is also entitled to deduct $5,514.82 from any benefit payable under Part IV of the No-Fault Benefits Schedule, according to the provisions of section 15 of the Schedule.
The Applicant is not entitled to a special award.
The Applicant is entitled to his expenses of this proceeding.
September 24, 1993
K. Julaine Palmer Arbitrator
Date
