Neutral Citation: 1995 ONICDRG 165
ONTARIO INSURANCE COMMISSION
BETWEEN:
MICHAEL MIHAS
Applicant
and
PAFCO INSURANCE COMPANY LIMITED
Insurer
DECISION
Issues:
The Applicant, Michael Mihas, was injured in a motor vehicle accident on August 19, 1993. He applied for benefits from the Insurer, payable under Ontario Regulation 6721. The Insurer did not pay any 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 in this hearing are:
Is Mr. Mihas entitled to weekly income benefits from August 26, 1993 to April 1, 1994 and, if so, to what amount of benefit?
Is Mr. Mihas entitled to be reimbursed for transportation expenses to chiropractic treatment, under the provisions of section 6(1)(d) of the Schedule?
Is the Insurer entitled to rely upon the exclusion in section 17(3)(a) of the Schedule (material change in the risk) to avoid payment of weekly income benefits to Mr. Mihas?
The Applicant also claims interest on any amounts owing, and his expenses incurred in the hearing.
Result:
The Applicant is entitled to weekly income benefits in the sum of $185.60 per week for nine weeks, from August 26 to October 28, 1993, plus interest as set out in section 24 of the Schedule.
The Applicant is entitled to transportation expenses for chiropractic treatment for 24 visits, at 24 kilometres return per visit, at the usual rate paid by the Insurer in 1993 for such expense, plus interest, under the provisions of sections 6(1)(d) and 24 of the Schedule.
The Applicant is entitled to a Special Award of 40% of the amount owing under paragraph two, above, plus interest as set out under the provisions of section 282(10) of the Insurance Act.
The Insurer is not entitled to rely upon the exclusion in section 17(3)(a) of the Schedule (material change in the risk) to avoid payment of weekly income benefits to Mr. Mihas.
The Applicant is entitled to his expenses of the arbitration.
Hearing:
The hearing was held in North York on August 21, 1995, before me, K. Julaine Palmer, Arbitrator. By prior agreement, on August 25, September 1 and 12, 1995, the parties submitted written material to me relating to the underwriting of the policy.
Present at the Hearing:
Applicant: Michael Mihas
Applicant's Representative: Steven J. Vano Barrister and Solicitor
Insurer's Representative: Leonard C. Wilgus Barrister and Solicitor
Insurer's Officer: George Kalopsis Vice-President, Claims
Witnesses: John Hasapis, Dimitra Michas [sic], Michael Mihas, Athina Michas [sic], Nino Calabrese
The parties filed 17 exhibits at the hearing. Seven documents were included with Mr. Wilgus' letter of August 25, 1995 and 17 with his letter of September 12, 1995.
Evidence and Findings:
Michael Mihas has operated a successful business, known as Cronos Cleaning, since 1981. At the time of the accident, it had five or six regular, nightly commercial customers. Mr. Mihas testified that he performed a large amount of the heavy cleaning and garbage removal himself. He claimed he was unable to work after the accident of August 19, 1993, because of injuries to his back and neck. He claimed weekly income benefits from the Insurer. The Insurer did not believe Mr. Mihas was disabled from performing his essential tasks at work. On September 28, 1993 an investigator engaged by the Insurer observed both Mr. Mihas and his wife, who was also involved in the accident, cleaning at one of their customers' premises.
Issue No. 1:
Entitlement to weekly income benefits from August 26, 1993 to April 1, 1994
(a) Entitlement
In order to recover weekly income benefits, Mr. Mihas must meet the requirements of section 12(1) of the Schedule. Firstly, he must have sustained a physical, psychological or mental injury as a result of an accident. Secondly, this injury must have caused him to suffer a "substantial inability to perform the essential tasks of his...occupation or employment." Arbitrators have frequently pointed out that a "substantial inability" to perform one's essential job tasks is more than some inability. It must be a sizeable inability to perform the key parts of the job. In addition, it has been observed that the Schedule does not afford compensation for pain experienced after an accident. Only if the pain is so disabling that job performance is substantially compromised are weekly income benefits payable.
Accordingly, then, an Arbitrator should have detailed evidence of the job duties that the insured person performed prior to the accident. The Arbitrator should also hear testimony about how the injuries specifically impacted on the injured person's ability to do his work.
In this case, Dimitra and Michael Mihas testified about Michael Mihas' job duties. I find that prior to the accident, he mopped, swept, took out garbage, used a cleaning machine for cleaning and waxing floors, cleaned stairs, and performed dusting and "high dusting" at approximately five different commercial sites. I heard evidence from Dimitra and Michael Mihas and John Hasapis, a former employee, about what Michael Mihas was able to do after the accident. Mr. Mihas testified that he still went to work after the accident because he had to be there to allow access to the buildings, which were secured with alarm systems. Mr. Mihas also testified he had to make sure the job was done. He drove workers to the job sites, opened the doors, supervised, and lifted boxes and other objects weighing five to ten pounds.
Mr. Mihas stated he suffered from headaches and neck and low back pain after the accident. Mrs. Michas testified that her husband slept very poorly. She stated he could not move his neck and took pain medication. She stated she did not believe he did much lifting at work after the accident, since he did nothing at home. Mr. Hasapis testified that Mr. Mihas acted as a supervisor after the accident.
He stated he never saw him clean at all and that he was always leaning and complaining. Mr. Hasapis worked for Mr. Mihas from August 20, 1993 (the day after the accident) until the end of October 1993.
Mr. Mihas filed a single medical report from Dr. C.H. Li. Dr. Li reported that Mr. Mihas saw him on August 21 and 26, September 2 and 16, October 2 and 21 and one date in December 1993. At his first visit Dr. Li noted "pain and limited bending of the neck and right shoulder." He advised rest at home and referred his patient to Dr. Salituro, a chiropractor. Mr. Mihas was examined by Dr. Salituro a week later, on August 28, 1993. Dr. Salituro found a decreased range of motion in Mr. Mihas' cervical and lumbar spines. He diagnosed a "mild to moderate cervical and lumbar strain/sprain." He treated Mr. Mihas on 24 occasions from August 28 to November 6, 1993. At that time, he believed Mr. Mihas showed "moderate improvement with the neck condition and headaches and a mild improvement with the lower back condition." Mr. Mihas discontinued treatments after November 6, 1993. In their reports, neither Dr. Li nor Dr. Salituro address the issue of whether, in their opinion, Mr. Mihas could perform his essential tasks at work, as a result of the injuries he sustained in the accident.
Mrs. Michas testified that Cronos Cleaning lost all its contracts after the accident, because the cleaning was not done well. Mr. Hasapis testified that he stopped work at the end of October 1993 because Mr. Mihas told him he had lost all his contracts. Mr. Mihas testified that his employees could not do the jobs and his business failed little by little from August 1993 until April 1994.
The Insurer filed a videotape and investigator's report. On September 22 and September 28, 1993 an investigator observed Mr. Mihas and his wife working. On September 28, 1993 the investigator filmed some of their activities with a video camera. The videotape shows Mr. Mihas moving cardboard boxes and bags of garbage at one of the cleaning sites. The observations were made over a period of more than two hours. Mr. Mihas drove his wife home, then went to socialize with some of his friends, at two different restaurants, for at least 22 hours after that.
The impression one receives from the testimony of Mr. Mihas and his wife is that Mr. Mihas did very little in the business after the accident. However, the investigator's report and videotape provide a different view. The videotape does not show Mr. Mihas pushing a heavy cleaning machine or sweeping or mopping, but it does show him actively gathering garbage and depositing it in a dumpster. The videotape shows that Mr. Mihas was able to be socially active after working for more than two hours one evening, less than six weeks after the accident. It shows him acting as more than a supervisor.
I find that after the accident, Mr. Mihas hired at least one new employee, John Hasapis, who worked until the end of October 1993. Mr Hasapis says that he was paid $1,000 per month for full-time work after the accident. Mr. Hasapis testified he worked with two women, who were part-time workers. Mr. Hasapis also referred to a man with whom he worked in his testimony. Mr. Mihas testified that before the accident he worked alone with two, full-time female employees.
Mr. Mihas testified that he was better between April 1994 and June or July 1994, when he again experienced low back pain. He was asked about previous injuries in motor vehicle accidents and admitted he could have been involved in as many as five accidents in the five years preceding the August 1993 accident. He admitted he had previously collected benefits from other insurers and that he had told Dr. Li about only one previous accident (in 1987), although he had known Dr. Li for 10 to 15 years before the 1993 accident. Mr. Mihas admitted he was off work for 15 weeks after an accident in April 1991. He also admitted that he had collected benefits from a private disability insurance policy for five to six months, after the accident in July 1987.
I find that Mr. Mihas suffered a substantial inability to perform the essential tasks of his occupation as a commercial cleaner after the accident for a period of time. I find that although he could drive a vehicle, unlock the premises, and remove some light garbage, he had difficulty bending and could not mop, vacuum, sweep, or remove heavy garbage for several weeks. Those duties formed the majority of his essential tasks as a commercial cleaner. I find that the videotape evidence shows that his condition was improving in late September 1993.
In this case, the medical and chiropractic evidence is of little assistance to me. Dr. Li's report of October 26, 1994 is silent with respect to objective findings after the initial visit of August 21, 1993. It would appear Mr. Mihas was not seen in November 1993 and did not see Dr. Li again after a single visit in December.
Dr. Li records that on October 21, 1993 "he still had a lot of pain and wasn't able to work yet," however, the evidence is that Mr. Mihas had been working continuously at some portion of his job since the accident. Dr. Salituro reported moderate improvement in Mr. Mihas' neck condition and headaches and mild improvement in his lower back by November 6, 1993, but the chiropractor found that he had discontinued treatments prematurely, so he could expect "intermittent residual symptomatology."
On balance, I find that Mr. Mihas is entitled to weekly income benefits until October 28, 1993, a period of 10 weeks following the accident (less one week waiting period as set out in section 12(5)(a) of the Schedule).
(b) Rate of Weekly Income Benefit
Mr. Mihas filed several documents in support of his claim for benefits, but he did not testify about them, nor did his counsel made any submissions on the amount to which he claims to be entitled. A handwritten document, filed as Exhibit 1, appears to be a list of amounts paid to employees after the accident to September 30, 1993 and totals $5,948.00. Income tax returns of Michael Mihas for the years 1991 through 1994 were also filed. An undated, typewritten statement, headed "Monthly Income of Cronos Cleaning Co.," was filed. It shows a gross monthly income of $6,141 for the business and $1,520 in expenses, including $960 in wages for Christine Zindros. A bank statement for the business account at the Ukrainian Credit Union from August 1, to September 20, 1993 was filed. Finally, a photocopy of a letter from H.W. & Associates Janitorial Services dated September 1, 1993 was filed. The letter stated that Cronos Cleaners was paid twice monthly on the 15th and last day of the month, totalling $3,263.50 per month.
No witness testified about any of the financial information. No payroll records were presented. No original documents or original books of entry were submitted. No other bank records were supplied. None of the documents before me supported any other document—all were mutually inconsistent. For example, the statement entitled "Monthly Income of Cronos Cleaning Co." does not appear to be supported by the income tax figures or Mr. Mihas' claims that he had two full-time employees prior to the accident. The testimony of John Hasapis, who stated he earned $1,000 per month is contradicted by Exhibit 1 which shows he was paid $760.00 from August 20 to September 30 (1993). Only the deposit on September 1, 1993 of $1,631.75, appears to be consistent with half the amount reported to be paid by H.W.& Associates in its letter.
The income tax returns are illegible in part, where numbers have been overwritten. No explanation was offered as to Mr. Mihas' $28,000 salary in 1993 and zero salary in 1992 and 1991. No explanation was provided with respect to motor vehicle expenses claimed by Michael Mihas personally, the business' vehicle expenses and capital cost allowance, including claiming capital cost allowance for the 1993 van registered to Athina Michas. No explanation was offered as to the manner in which expenses for the Mihas family home were claimed as if their home was a money-losing rental property, in addition to expenses being claimed for the business use of the home. All the income tax returns, however, (except for one schedule in 1994) and Exhibit 1 appeared to be completed in the handwriting of Mr. Mihas, who was certainly available to testify about the business income and expenses. Many of the figures in the Statement of Income and Expenses are totally round figures, such as 1993 Purchases (under the heading Cost of Goods Sold) - $10,000.00. In addition, I received no submissions about the proper calculation of Mr. Mihas' gross weekly income, including information about business expenses which ceased as a result of the accident.
In the total absence of any evidence with respect to the Applicant's gross weekly income before the accident and any income received or available after the accident which is worthy of belief, I find the Applicant is entitled to weekly income benefits in the minimum amount of $185.60 per week.
Issue No. 2:
Is Mr. Mihas entitled to be reimbursed for transportation expenses for chiropractic treatment, under the provisions of section 6(1)(d) of the Schedule?
Mrs. Michas testified that she did not know the number of chiropractic treatments her husband had received. She testified the chiropractor's office was a 12 to 15 minute drive from their home, although she did not know the actual distance. Mr. Mihas did not testify about the chiropractic transportation issue at all. Dr. Salituro's report noted Mr. Mihas had attended for 24 treatments to November 6, 1993. I am prepared to allow 24 kilometres (return) for each visit, as claimed in Exhibit 8, for those 24 treatments. I allow nothing for the 15 visits claimed in 1994, since I have no evidence of those visits apart from Exhibit 8, entitled "Schedule of Chiropractic Visits."
Special Award
Section 282(10) of the Insurance Act provides for a mandatory, additional payment to an insured person, where an arbitrator finds that an insurer has unreasonably withheld or delayed payments. The subsection reads as follows:
282— (10) 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 Statutory Accident 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.
The Insurer in this case refused to pay transportation expenses to Mr. Mihas for his attendance at chiropractic treatment. However, it did not cross-examine Mr. Mihas about this issue at the hearing nor file any evidence, nor make any submissions which would lead me to conclude that it considered the transportation expense unreasonable. The amount in dispute is very small.
All Insurers have obligations to insured persons under the Schedule for supplementary medical and rehabilitation benefits. Section 6(7) of the Schedule is clear about the obligations of an Insurer where it disputes the expense:
6.--(7) In case of a dispute concerning an expense described in clause (1)(a), (b) or (d), the insurer will pay the expense pending resolution of the dispute. [emphasis added]
Clause 6(1)(d) concerns the transportation of the person to and from treatment. I find this Insurer has acted unreasonably in failing to pay the transportation expenses claimed, in the light of the express wording of section 6(7) of the Schedule. I find the Applicant entitled to a special award of 40% of the amount owing, plus interest, as set out in section 282(10).
Issue No. 3:
Is the Insurer entitled to rely upon the exclusion in section 17(3)(a) of the Schedule (material change in the risk) to avoid payment of weekly income benefits to Mr. Mihas?
The Law
Insurance contracts have been characterized as contracts where the parties must deal with each other in utmost good faith: uberrimae fides. In normal circumstances, a misrepresentation by the insured person, a contravention of a term of the contract, commission of a fraud, or the wilful making of a false statement in respect of an insurance claim invalidates the claim and forfeits the right of the insured to recover under the contract. However, statutory accident benefits are protected from such rigorous attention to the truth by the exempting provisions of section 233(2), 234(2)2. and 235(1) of the Insurance Act and section 5 of the Schedule.
Section 17 of the Schedule sets out the exclusions on which an insurer can rely to avoid the payment of weekly income benefits to an injured person. Section 17(3)(a) is the subsection on which the Insurer in this case seeks to rely:
17(3) The insurer is not required to pay benefits under subsection 12(1) or 13(1),
(a) in respect of any person who has made, or who knows of, a material misrepresentation which induced the insurer to enter into the contract of automobile insurance or who intentionally failed to notify the insurer of a change in the risk material to the contract;
The term "material misrepresentation" is not defined in the Schedule or the Act. The term "change in the risk material to the contract" is partially defined in the Statutory Conditions set out in section 234(2) of the Act.
Statutory Conditions ....
1.-- (1) The insured named in this contract shall promptly notify the insurer or its local agent in writing of any change in the risk material to the contract and within the insured's knowledge.
(2) Without restricting the generality of the foregoing, the words "change in the risk material to the contract include:
(a) any change in the insurable interest of the insured named in this contract in the automobile by sale, assignment or otherwise, except through change of title by succession, death or proceedings under the Bankruptcy Act (Canada); ....
- Despite a failure to comply with statutory condition 1(1), a person is entitled to such no-fault benefits as are set out in the Statutory Accident Benefits Schedule.
I read Statutory Condition 2 with section 235 of the Act and section 5 of the Schedule to mean that section 17 of the Schedule is the controlling provision regarding exclusions. Thus, a person who is proven to have made a material misrepresentation which induced the insurer to enter into the contract will not be eligible for benefits under subsection 12(1) or 13(1) of the Schedule, but will be eligible for other benefits, like supplementary medical and rehabilitation benefits under sections 6 and 7 of the Schedule.
If it wishes to deny Mr. Mihas weekly income benefits pursuant to section 17(3)(a), the Insurer must prove that Mr. Mihas made, or knew of, a material misrepresentation which induced the Insurer to enter into the contract. Or, it may prove that Mr. Mihas intentionally failed to notify it of a change in the risk material to the contract.
The Facts
In this case, the Applicant and his daughter, Athina Michas, testified that a 1993 Dodge Caravan was purchased for her use to attend university and go to work. The Applicant first testified that the purchase date was January 22, 1993 and that the van was bought by his daughter. Later, he testified that the purchase was made April 30, 1993. Athina Michas testified that the van was bought in April 1993. The Applicant filed a Conditional Sale Contract dated April 22, 1993. In that document the buyer's name is listed as "Michel M. Mihas." The co-buyer's name is listed as "Athina Micha." Athina Michas testified that her father's business, Cronos Cleaning, paid both for the van and its insurance.
The Applicant and his daughter both testified about the insurance on the new vehicle. They stated that an insurance agent or broker, George Karpoulis, to whom they were introduced by Mr. Mihas' brother-in-law, came to their home to arrange the insurance. Both father and daughter were present at the meeting. Mr. Mihas testified that he suggested that Athina be the "principal driver" on the policy and that he be an "occasional driver." Athina Michas testified that she told Mr. Karpoulis she would use the van to go to school and to work. She testified that there were no discussions about her father using the van and she never advised Mr. Karpoulis that her father would be driving the van.
The Applicant filed a photocopy of a completed Ontario Application for Automobile Insurance dated April 21, 1993. The Applicant is shown as "Micha Athina." The described automobile is a "93 Dodge Caravan Van." The vehicle is shown to be purchased "new" in April 1993 for $21,000 and to be used for "pleasure" and to "commute 10 km one way," as distinct from the categories of use entitled "business," "farm," and "commercial." Under the section for Driver Information, only one driver is listed: "Applicant." The percentage use of the automobile by the driver is shown as "100."
To the question, "Are there any other persons in the household or business who are licenced to drive?" the answer given is "No." In the Claims and Conviction History section of the application, the word "None" is written twice. The total estimated policy premium is described as "$2,267." The payments are shown as $395.01 paid with the application and 10 monthly payments of $194.00. The Application is not signed by any applicant, although the date April 21, 1993 is completed. The broker or agent signed the Application and indicated that he has bound the risk and issued a temporary motor vehicle liability insurance card. It is noted that the business is new to the broker or agent's office.
Athina Michas testified, in chief, at the hearing that her father used the van only "once or twice" prior to the accident. She said that she or her uncle would often drive her father to work during the summer. Athina Michas also testified that she assumed her father was covered by the van's insurance and that there was no reason not to let him use it. On cross-examination, she admitted she had told the adjuster, after the accident, that her father used the van once or twice a week since it was purchased. She admitted that the statement was true.
Ms. Michas stated that the total premium charged for the policy was $3,416.00. She testified that the price of the policy changed after two or three months had passed. She made no inquiry about the reason for the increase. Ms. Michas testified that her father started using the van more regularly in July or August 1993. Previously, he had been using a Nissan Sentra for his business. That vehicle, they both testified, was owned by Mr. Mihas' brother-in-law. Mr. Mihas testified that the Nissan broke down in the summer of 1993 and it was left at a repair shop for months, until a new motor could be found. Ms. Michas gave rather vague testimony about contacting the agent or broker during the summer about "putting my dad on it because his car was down and he wanted to use the truck." She could not recall when this telephone conversation took place, nor whether the conversation was anything more than an inquiry that they "were thinking of putting father on" the policy.
Mr. Mihas admitted, on cross-examination, that he might have been involved in as many as five motor vehicle accidents in the five years preceding the accident of August 19, 1993. He admitted he collected disability benefits after a July 1987 accident and also after one in April 1991. He admitted he told his doctor only about an accident in November 1987. Mr. Mihas questioned the relevance of these prior accidents to the claim in issue.
Mr. Mihas filed his personal income tax returns, which he had prepared, for the years 1991 to 1994. Each return includes an annual Statement of Income and Expenses for Cronos Cleaning. Mr. Mihas filed statements from his credit union business account for August and September 1993 (to September 20, 1993 only). He stated that the deduction of $431.64 in August 1993 was for the monthly payments on the van. Mr. Mihas also testified that the van purchase and insurance was "put through the company books." He believed that the Insurer would have received some cheques on the Cronos Cleaners account. He deducted capital cost allowance for the van as a business asset in 1993.
Analysis
The Insurer has the onus of proof in order to rely upon the exclusions of section 17(3)(a) of the Schedule. The parties to an insurance contract are bound to mutual obligations of disclosure. However, the enforcement of these obligations with respect to statutory accident benefits has been altered by the provisions of section 233(2), 234(2)2. and 235(1) of the Insurance Act and section 5 of the Schedule.
According to section 17(3)(a) of the Schedule, the Insurer here is not required to pay weekly income benefits to Mr. Mihas if it can prove either of two circumstances: (1) that he has made, or knows of, a material misrepresentation which induced the insurer to enter into the contract, or (2) that he intentionally failed to notify the insurer of a change in the risk material to the contract. In addition, section 27(1) of the Schedule states as follows:
27.--(1) A person must repay to the insurer any benefit received under this Schedule that is paid to the person through error or fraud.
In this case, it is impossible to be precise about what is a "material misrepresentation" or a "change in the risk material to the contract" because the Insurer called no underwriting evidence. The Insurer brought no underwriter or expert in automobile insurance underwriting to testify about the insurability of Mr. Mihas or Cronos Cleaners for the purchase and use of the 1993 van.
Mr. Mihas testified that he suggested to Mr. Karpoulis that he be listed as an "occasional driver" on the policy. I do not believe his evidence on that point. His daughter testified that there were no discussions about her father using the van. I prefer her evidence. Ms. Michas' evidence is supported by the manner in which the application was completed — as if she would be the sole driver of the vehicle and was the only driver in the household. I find that Mr. Mihas wished to conceal from the Insurer any potential operation by him of the van, because of his poor accident record and several claims.
Neither party presented any case law from the Commission or the courts on the issue of material misrepresentation, although the Applicant's counsel made vague reference to the case law. He submitted that, based on the "case law" relating to this issue (1) the change in the risk must be material, (2) there must have been non-disclosure, (3) the risk must be different, and (4) the Insurer must not know of the change in the risk. The Applicant's counsel submitted that to occasionally loan a vehicle does not equate to a material change in the risk.
The Insurer in this case has focussed its defence of the claim on the issue of material misrepresentation. However, as I have stated, the Insurer has presented no evidence of what its reaction to the truth of ownership and operation would have been. I cannot assume that the premium for the van, operated by a commercial concern for business use and with a principal or occasional operator with a strong claims history would have been significantly higher, although I suspect that to be true. I cannot even assume that the underwriting considerations would be different in assessing the risk for a van used, at least part of the time, in a cleaning business. In addition, no evidence or submissions were made about any modification of the doctrine of material misrepresentation in a market environment where, due to the creation of the Facility Association, the rule may be to "take all comers." In fact, the Insurer did submit that this Insurer was a "high risk insurer."
In my view, the evidence is inadequate for me to find that a misrepresentation induced the Insurer to enter into the contract.
However, a person who "intentionally failed to notify the insurer of a change in the risk material to the contract" is also disqualified from receiving weekly income benefits. The definition of "change in the risk material to the contract" from section 234(2) 1.(2) says that such changes include changes in the insurable interest of the insured named in the contract. At the outset of the vehicle purchase, in April 1993, it is conceivable that Athina Michas believed her father (through his business, Cronos Cleaning) was purchasing a vehicle for her use in going to university and her summer and part-time work. However, at some point in the summer of 1993, the Nissan Sentra, ostensibly owned by Mr. Mihas' brother-in-law, but continually referred to as his own, broke down. After that time, the only vehicle available in the Mihas household was the van.
I find that the van was used on many occasions in the summer of 1993, prior to this accident, to transport workers and equipment of Cronos Cleaning. I find that the insurable interest of Athina Michas in the vehicle changed sometime in 1993, as the vehicle was claimed as a capital asset of the business of Cronos Cleaning and payments for the vehicle were deducted from the business bank account of Cronos Cleaning. However, I have insufficient evidence to establish when in 1993 this change in insurable interest occurred. I cannot find that it took place prior to the accident, even on a standard of proof of a balance of probabilities.
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 F of the Dispute Resolution Practice Code-1995 Release and in Ontario Regulation 664, R.R.O. 1990, Dispute Resolution Expenses.
In the Ralph McCormick v. Economical Mutual Insurance Company case, October 2, 1991, OIC File No. A-000139, Sr. 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, February 13, 1992, OIC File No. P-000251.
The Applicant is entitled to his expenses as set out in Schedule F of the Dispute Resolution Practice Code-1995 Release. In the event that the parties cannot agree as to the total amount of expenses, a party may apply for assessment of the expenses through the Office of the Registrar.
Order:
The Applicant is entitled to weekly income benefits in the sum of $185.60 per week for nine weeks, from August 26 to October 28, 1993, plus interest as set out in section 24 of the Schedule.
The Applicant is entitled to transportation expenses for chiropractic treatment for 24 visits, at 24 kilometres return per visit, at the usual rate paid by the Insurer in 1993 for such expense, plus interest, under the provisions of sections 6(1)(d) and 24 of the Schedule.
The Applicant is entitled to a Special Award of 40% of the amount owing under paragraph two, above, plus interest as set out under the provisions of section 282(10) of the Insurance Act.
The Insurer is not entitled to rely upon the exclusion in section 17(3)(a) of the Schedule (material change in the risk) to avoid payment of weekly income benefits to Mr. Mihas.
The Applicant is entitled to his expenses of the arbitration.
November 15, 1995
K. Julaine Palmer Arbitrator