Neutral Citation: 1995 ONICDRG 128
File No. A-007416
ONTARIO INSURANCE COMMISSION
BETWEEN:
PINA COLES
Applicant
and
DOMINION OF CANADA GENERAL INSURANCE COMPANY
Insurer
SUPPLEMENTARY DECISION
Background:
This decision supplements the decision released February 13, 1995 relating to the Applicant, Pina Coles, who was injured in a motor vehicle accident on October 30, 1990. Ms. Coles applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721.
Weekly income benefits were terminated by the Insurer in October 1993. Ms. Coles claimed to be entitled to further weekly income benefits. The parties were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issues considered at the hearing were Ms. Coles' entitlement to weekly income benefits after October 1993 and her entitlement to a special award under section 282(10) of the Insurance Act I found Ms. Coles was entitled to weekly income benefits, under section 12(1) of the Schedule until the date of my decision. I found she was not entitled to a special award. However, in the first decision, I did not calculate the exact amount to which Ms. Coles was entitled, although I did receive financial information in evidence. I left it to the parties to determine the precise sum owing to Ms. Coles, taking into consideration the various provisions of the Schedule with respect to interest, overpayments made by the Insurer in 1990 and 1991 and the lack of payments since November 1993. As well, the amounts which Ms. Coles admitted she earned after the accident had to be deducted, since the Insurer wished to rely upon the provisions of section 15 of the Schedule.
Unfortunately, the parties were unable to settle the amount owing. I had stipulated in the first decision that, in that event, either party might apply to bring this matter back before me for determination.
I received notice that the parties were unable to resolve the amount owing by letter from Mr. Altor Shields, the Applicant's lawyer, dated May 21, 1995. On May 23, 1995, I responded to both the Applicant's solicitor and the new lawyer for the Insurer, Mr. Lee Samis, inviting written submissions on the appropriate calculation and the amounts owing. Submissions were received from the Applicant on June 9, 1995 and from the Insurer on July 10, 1995. Responding submissions from the Applicant followed on July 21, 1995.
The initial submissions from the Applicant largely followed the oral argument made at the hearing on October 7, 1994. In the last half of his written submissions, the Applicant’s counsel outlined the calculations over which I assumed there was some dispute – that is, the amounts paid by the collateral insurers. Dominion of Canada itself, and the small amounts earned by Ms. Coles after the accident.
The Insurer's counsel, at the hearing on October 7, 1994 made no submissions with respect to the calculation of Ms. Coles average gross weekly income from her occupation. However, when the new Insurer's counsel provided written argument, dated June 29, 1995, he calculated Ms. Coles average gross weekly income in a manner which differed from the Applicant’s submissions. The Insurer’s written submissions concluded by showing that Ms. Coles was entitled to receive a benefit from Dominion of Canada during the 157 weeks after the accident.
In his reply submissions of July 18, 1995, the Applicant's counsel responded by pointing out the flaws in the Insurer’s presentation, particularly with respect to the omission of expenses for November and December 1989.
Analysis:
It appears from comparing the written submissions of both counsel that they agree on the total amount of benefits paid by the Insurer to Ms. Coles for weekly income benefits. They also agree on the amounts received under the collateral disability policies. The Insurer does not appear to take issue with a deduction of $2,120.00 representing 80% of the net amounts which Ms. Coles admits she has earned from December 1, 1992 through February 13, 1995 (pursuant to section 15 of the Schedule).
Consequently, it would seem that the parties have no disagreement on the base figures which should be used to settle the amount owing, based on my decision of February 13, 1995.
Nevertheless, I appreciate that the parties now wish me to set out the calculation on which I based my original finding that:
...it is clear on the evidence before me that the payments under the Citadel policy, for the time it was in effect, exceeded 80% of Ms. Coles' gross weekly income from employment. Accordingly, by the formula of section 12(4)(b) of the Schedule, for the entire period during which those benefits were paid (which I understand to be 24 months, beginning 31 days post-accident), Dominion of Canada was not obliged to make any weekly income payments to Ms. Coles.
I will set out the calculation in this supplementary decision.
Calculation:
The following figures are taken from the Statement of Earnings for the year ended December 31, 1990 (Exhibit 2, tab 40) and from the letter of Neal Temple, Chartered Accountant, dated March 15, 1991 (Exhibit 2, tab 36) which dealt with ongoing business expenses.
I accept the evidence of Ms. Coles that she earned nothing from the business after the date of the accident, October 30, 1990. Therefore, I attribute the gross sales for the year ($74,473) to the 10 month period January 1 - October 30, 1990. However, the expenses shown on the financial statement reflect 12 months of expenses in the calendar year 1990. I accept Mr. Temple’s statement of the ongoing business expenses of $2,448.00 per month. Thus, to achieve a picture of 10 months of revenue and expenses for 1990, $4,896 ($2,448 x 2) would be added back, for a net business income of $39,890.
In 1989, the corresponding gross sales figure was $99,008 from which expenses of $50,294 are deducted leaving a net income of $48,714. Two months of such net income totals $8,119. When this two-month figure is added to the 10-month figure for 1990, a net business income of $48,009 for the 52 weeks preceding the accident results.
Ms. Coles gross weekly income computes to $923.25 and she is entitled to the lesser of 80% of that figure ($738.60) or the maximum of $600 in weekly income benefits according to section 12(4) of the Schedule.
The expense figures deducted, above, do not include deductions taken in the income statement for depreciation. Mr. Shields submitted, at the hearing, that depreciation deducted in the income statements, which were filed for income tax purposes, was not appropriately deducted here as an operating expense. I presume that the reason for this was that Ms. Coles capital assets (mainly industrial sewing machines), as used in her couturier operation, have a longer useful life as capital assets than the amortization period allowed under the Income Tax Act (Canada), R.S.C. 1985, c.I.
I find that the following amounts are owing to Ms. Coles:
For November 7-30, 1990:
$ 1,923.57
For December 1, 1990 - November 30, 1992:
nil
For December 1, 1992 - February 13, 1995:
$69,000.00
TOTAL:
$70,923.57
Less amounts paid by the Insurer:
$41,342.79
Less 80% amounts earned by Ms. Coles after the accident to Feb.13/95 ($2,650.00):
$ 2,120.00
TOTAL DEDUCTIONS:
$43.462.79
BALANCE:
$27.460.72
The total amount owing for weekly income benefits through February 13, 1995 is, therefore, $27,460.78. Interest is payable on that sum at the rate of 2% per month from the due dates of the payments, as set out in section 24 of the Schedule.
Order:
- Ms. Coles is entitled to $27,460.78 in weekly income benefits, plus interest, under the provisions of section 24(4) of the Schedule, to February 13, 1995.
September 13, 1995
K. Julaine Palmer Arbitrator
Date