Neutral Citation: 1996 ONICDRG 108

File No.: A-013607

ONTARIO INSURANCE COMMISSION

BETWEEN:

RABIA MOTALA

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Rabia Motala, was involved in motor vehicle accidents on February 6, 1991 and September 25, 1992. She applied for and received weekly income benefits from Dominion of Canada General Insurance Company ("Dominion"), payable under Ontario Regulation 672.¹ Ms. Motala was paid $328 per week until July 13, 1994. Ms. Motala claims that she continued to be entitled to $328 per week until September 25, 1995. Dominion disagrees with Ms. Motala's claim for additional weekly income benefits, and alleges that Ms. Motala's post-accident earnings result in an overpayment. The disputes were not resolved through mediation and Ms. Motala applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Ms. Motala entitled to weekly income benefits after July 13, 1994?

2. What is the amount of Ms. Motala's weekly income benefit?

3. Did Dominion overpay weekly income benefits to Ms. Motala?

4. Is Dominion entitled to a repayment?

Ms. Motala also claims interest on any amounts owing, and her expenses of the arbitration.

Result:

1. Ms. Motala is not entitled to weekly income benefits after July 13, 1994.

2. Ms. Motala's weekly income benefit is $600 from February 13, 1991 until September 24, 1992. Ms. Motala's weekly income benefit is $185.60 from October 1, 1992 until July 13, 1994.

3. Dominion overpaid weekly income benefits to Ms. Motala in the sum of $14, 664.

4. Dominion is not entitled to a repayment of weekly income benefits.

5. Ms. Motala is not entitled to her expenses of the arbitration

Hearing:

The hearing was held in North York, Ontario, on October 18, 19 and November 27, 1995, before me, Fred Sampliner, arbitrator.

Present at the Hearing:

Applicant:

Rabia Motala

Applicant's Representative:

Vusumzi Msi

Barrister and Solicitor

Insurer's Representative:

William McClelland

Barrister and Solicitor

The hearing was recorded by Voula Kirkos and Arminda Vteira of Professional Court Reporters.

Witnesses:

Dr. Gil Faclier - anaesthesiologist

Tatiana Brezden - business associate/co-worker

Dr. Marvin Shedletzky - chiropractor

Rabia Motala - Applicant

Barbara Smith - claims representative

Exhibits:

Thirteen exhibits were filed.

Evidence and Findings:

Background:

Ms. Motala's vehicle was rear-ended while stopped at a red light on February 6, 1991. Physical damage to her vehicle was slight. Ms. Motala sustained soft tissue injuries, primarily to her upper back and neck, which resulted in neck pain, fatigue and headaches.

The second accident, which occurred on September 25, 1992, was quite similar to the first one. Again Ms. Motala was stopped at a light, rear-ended by another vehicle, causing slight damage to her rear bumper. Ms. Motala maintains that the second collision greatly exacerbated her previous injuries, and prolonged her disability until September 25, 1995, three years after the second accident.

Ms. Motala's eligibility for weekly income benefits is determined under the test contained in section 12 of the Schedule. Paraphrasing the test, where insureds sustain accident injuries resulting in a substantial inability to perform the essential tasks of their job, they are entitled to a weekly income benefit.

Ms. Motala's Employment

The primary element of Ms. Motala's disability claim is her inability to lift, move or carry heavy and bulky items on the job. At the time of the first accident, Ms. Motala was employed as a salesperson for Franco Belgian Limited ("Franco Belgian"), a carpet wholesaler. Ms. Motala claims that her accident injuries prevented her from lifting and carrying the books of carpet samples and large display folders she was required to take on visits to customer locations.

Ms. Motala testified that she spent three and a half days of the week visiting customer locations before the accident. Her duties included transporting and showing carpet samples, negotiating sales, measuring and inspecting sites, checking installations, and discussing problems with customers and installers. Ms. Motala described the lightest sample books as weighing between three and five pounds. She also carried demonstration boards of three by four feet, weighing 20 to 30 pounds. I am satisfied that Ms. Motala's ability to lift, move and carry these samples and display boards to and from her customer locations was an important function of her position. I also accept that if Ms. Motala was not able to perform these functions on outside sales calls, she would qualify for weekly income benefits.

On the other hand, Ms. Motala admits she was able to conduct showroom sales after the accident. Ms. Motala returned to her pre-accident position at Franco Belgian ten days after the first accident, and worked there until the company went into receivership in early September 1991. Ms. Motala testified that during this time, she was assisting customers in the showroom and doing phone work, albeit with pain, headaches and fatigue. Ms. Motala testified that some days she was unable to attend work due to her pain and fatigue. The president of Franco Belgian wrote Dominion that Ms. Motala was not able to carry the sample books or even move material around in the showroom.

When Franco Belgian went out of business in early September 1991, Ms. Motala went to work as a showroom salesperson for a nearby carpet wholesaler, Perfection Rug Company ("Perfection"). According to Ms. Motala, she was hired strictly for inside sales. For the next two months she and a fellow salesperson, Tatiana Brezden, worked at Perfection and formulated the idea of starting their own carpet business.

Ms. Motala's decision to go into business is curious. She abandoned her steady income and employment at Perfection to embark upon a risky small business venture at a time when she alleges she was having physical difficulty conducting sales.

In any event, using their own resources and a loan from Ms. Motala's family, Ms. Brezden and Ms. Motala incorporated the Moden Group, and opened a showroom in October 1991. Ms. Motala and Ms. Brezden were 50/50 principals in the company. By all accounts this enterprise was not successful, and in June 1994 the business closed.

During the period of Moden's operations, Ms. Motala continued to claim that her injuries prevented her from performing outside sales. However, Ms. Motala was less than candid with Dominion about her relationship with Moden. In October 1992, Ms. Motala's business partner, Tatiana Brezden, prepared an Employer's Confirmation of Income form for Dominion, setting out Ms. Motala's duties as an outside salesperson. Dominion's agents thereafter requested a more detailed "Job Analysis" in June 1993. Under the heading "purpose and nature of the job," Ms. Brezden wrote "outside sales." Further, she wrote that Ms. Motala was conducting these outside sales 90% of the time before the accident, and attended the office only one day a week. Ms. Brezden also stated that Ms. Motala was generally required to lift and carry four to six sample books, weighing up to 10 pounds each. While Ms. Brezden's job description generally confirms Ms. Motala's testimony, Ms. Brezden's failure to disclose that Ms. Motala was half-owner of the company makes it appear that Ms. Motala was an employee who had no control over her job.

At the hearing, Ms. Motala denied that she had anything to do with Ms. Brezden's representations. However, I find it implausible that two partners in a small business would not know and consult with each other on this matter.

Moreover, I heard other testimony from Ms. Motala that convinces me she knew of, or participated in, this important misrepresentation. At the hearing, Ms. Motala admitted that she probably told a rehabilitation consultant in March 1994 that she feared lay-off from Moden because her employer would no longer tolerate her absences due to illness. The statement was clearly calculated to estrange Ms. Motala from the management and operation of Moden. I find that Ms. Motala and Ms. Brezden consulted with each other to prepare the documents for Dominion, and tailored the information in order to advance the veracity of the claim.

Nor did Ms. Motala report the true nature of her post-accident income source to Dominion. On June 24, 1993 Ms. Motala signed a statement that she had earned no commissions and made no sales since the accident. The statement presents Ms. Motala as an employee who could earn nothing but her salary due to the injuries.

At the hearing, Ms. Motala stated she worked off and on at Moden, performing managerial, clerical and sales duties until the company folded. Ms. Motala's résumé indicates that she was the president of Moden. Ms. Motala also stated that from May or June of 1992 until the second accident in September 1992, she was more or less working full-time at Moden, and had begun visiting clients and carrying light sample books.

The evidence demonstrates very clearly that Ms. Motala was not an employee, as she characterized herself in the written statement. I find that Ms. Motala hid her control over the company and her income source from Dominion, misrepresentations which underscore her unreliability as a witness.

Ms. Motala testified at the hearing that after the second accident, she stopped work. She said that after a while she resumed full-time work at Moden with assistance. However, shortly thereafter during her evidence, Ms. Motala said she was unsure what she did both on the job before and after the second accident.

Ms. Motala's change in recall of her job duties, misrepresentation of her relationship with Moden, and recharacterization of facts to suit her own purposes, cause me to find that her evidence of the disability and her work is unreliable.

Medical Evidence:

This leads me to consider the evidence from the health practitioners who cared for Ms. Motala in the years following the accidents. Ms. Motala participated in active rehabilitation, physiotherapy and regular chiropractic treatment. She received nerve block injections, massage therapy, TENS treatment and Codetron electronic muscle stimulation to treat her symptoms. Ms. Motala states that she swam, exercised and took analgesics and muscle relaxers to relieve her headaches and pain.

During the first nine months after the February 1991 accident, Ms. Motala's treatment consisted entirely of chiropractic treatment and massage. Her family physician, Dr. Earl Schwartz, also saw Ms. Motala periodically, an average of once a month, after the accidents. In addition, Ms. Motala was referred to Dr. Gil Faclier, an anaesthesiologist specializing in chronic pain.

Dr. Faclier testified that Ms. Motala was 75% recovered from her upper back/neck injuries when he first saw her on December 13, 1991. Dr. Faclier testified that his later examination of Ms. Motala in March 1993 confirmed that the second accident in September 1992 had re-injured her neck and upper back areas. At that time, Dr. Faclier found that although Ms. Motala had a reasonably good range of neck motion, there was some left-sided muscle tightness. She was tender and had trigger point reactions in her muscles over the entire upper back and shoulder region. Dr. Faclier opined that the accidents had produced a post-traumatic myofascial syndrome with some psychological overlay. Dr. Faclier did not see Ms. Motala after March 1993.

I accept Dr. Faclier's opinion as confirmation that Ms. Motala continued to suffer from her soft tissue injuries through March 1993. But Dr. Faclier did not provide any opinion about her level of disability. Moreover, Dr. Faclier stated at the hearing that he examined Ms. Motala three times, the last examination being in March 1993. Dr. Faclier candidly stated during testimony that he could not speculate about Ms. Motala's condition after this last examination. Thus, Dr. Faclier's evidence is of little value in determining Ms. Motala's disability after that date.

Dr. Mark Erwin, a chiropractor, treated Ms. Motala from the February 1991 accident until December 1992. According to Dr. Erwin's treatment records, he saw Ms. Motala quite often during this period. His notes confirm many of Ms. Motala's complaints. On February 12, 1991, Dr. Erwin examined Ms. Motala and found full flexion and extension, but some pulling and pain at the outer ranges of her neck movements. Although Dr. Erwin's notes between the accident and June 1991 state that Ms. Motala improved, one entry seems to confirm that the cervical pain was continuing to interfere with Ms. Motala's sleep and work. Dr. Erwin continued to perform chiropractic adjustments. His September 1991 notes indicate medication was prescribed for inflammation of the upper back and neck muscles.

Dr. Erwin's notes indicate that Ms. Motala's aches and pains settled down and periodically flared up again that fall. The October 24, 1991 notation states that Ms. Motala was quite frustrated with the continued inflammation and was considering nerve block injections. Spring of 1992 found Dr. Erwin concerned that she had not improved, despite active physiotherapy and massage.

Dr. Erwin's findings after the 1992 accident indicate that Ms. Motala's upper back muscles were enlarged and sensitive. His notes from the exam following the September 1992 accident indicate she was wearing a neck collar and had seen Dr. Faclier. He found Ms. Motala's neck rotation and flexion greatly reduced, with diffuse tenderness throughout the paracervical muscles that was distinctly more severe than her symptoms after the first accident. Dr. Erwin's notes confirm that the second accident significantly aggravated her neck injury.

The chiropractor's and family doctor's notes mention corresponding emotional elements. Dr. Earl Schwartz' and Dr. Erwin's records note that Ms. Motala was under a great deal of stress from a break-up with her fiance beginning in the spring of 1992. Again, in June 1994, Dr. Schwartz indicates that Ms. Motala was planning to get married and move to Florida, an event that never took place. At this same time, Ms. Motala was under pressure in her business. Sales were poor and the partnership with Ms. Brezden had broken up. Dr. Schwartz' notes indicate that Ms. Motala was depressed, lethargic, and bothered by the neck pain throughout the fall of 1994.

Rehabilitation reports also confirm that Ms. Motala's neck pain and depression continued throughout 1993 and 1994. In tests, Ms. Motala was unable to lift or carry ten pound weights. She complained of her driving difficulty, although she admits commuting daily from her Toronto apartment to Moden's Mississauga office. Ms. Motala also told rehabilitation consultants and her physiotherapist that she had difficulty with many household chores, and requested payment of housekeeping expenses. According to Ms. Motala, chiropractic treatment and physiotherapy in 1993 and 1994 failed to improve her condition.

Dr. Schwartz' notes from this time period indicate continuing neck and upper back complaints. His notations of Ms. Motala's physical complaints are intertwined with emotional and business problems. When Moden closed in June 1994 and Dominion ceased paying benefits shortly thereafter, Ms. Motala was financially pressed. Dr. Schwartz' notes indicate she was considering applying for welfare assistance and filing for bankruptcy. Dr. Schwartz' notes state that Ms. Motala was determined to stay afloat, despite these financial and emotional setbacks. Ms. Motala testified that she borrowed money from her family again and attempted to arrange contract sales of carpeting, without success. In order to gain experience in the retail apparel trade, Ms. Motala testified that she worked part-time, as an unpaid employee, at a friend's clothing store on St. Clair Avenue in Toronto during October and November 1994. I do not find it plausible that Ms. Motala simply volunteered to work when she was in such dire financial straights. However, I was presented with no proof of employment earnings for this job.

Dr. Schwartz did not testify. While his notes substantiate Ms. Motala's continuing complaints, they do not provide a detailed explanation or an opinion of Ms. Motala's disability level.

I also have evidence from Dr. Shedletzky, a chiropractor who began treating Ms. Motala in January 1995. However, the value of Dr. Shedletzky's evidence is limited by the short scope of his treatment.

Dr. Shedletzky testified, and his report also indicates, that in January 1995, when he first saw Ms. Motala, he found muscle spasms in her neck, pain with movement of the left shoulder, and a decreased range of cervical motion. Again, this evidence appears to confirm Ms. Motala's neck and upper back complaints. But Dr. Shedletzky did not express any definite opinion about Ms. Motala's lifting and carrying ability. He admitted that since his treatment had not commenced until 1995, he could not speculate on the cause of the symptoms.

I have reviewed the surveillance evidence taken in October 1995. The videotape shows Ms. Motala working without physical restrictions at a downtown Toronto women's apparel shop. In testimony, Ms. Motala stated that she has been continuously working full-time at the store since August 11, 1995. This is verified by her pay slips. The video shows her reaching into overhead clothes racks and pulling out garments, bending over about 90 degrees at the waist and removing items from the lower racks, walking throughout the showroom, busily chatting with customers and turning her head and neck. While the video does not depict Ms. Motala lifting and carrying heavier objects, I do not see any restriction in neck movement. Viewed realistically, Ms. Motala's showroom presentation is unrestricted in every sense, and is not consistent with her claimed cervical restriction or inability to lift and carry. Though the surveillance was conducted shortly after Ms. Motala ceased claiming benefits, the videotape suggests that Ms. Motala exaggerated her condition.

Conclusion on Entitlement

In sum, Ms. Motala's evidence is unreliable. The evidence from Ms. Motala's health care practitioners does not support her claim that she suffered such intense fatigue, headaches, cervical restrictions, neck and back pain after July 13, 1994, as would cause her to be substantially unable to perform her job. While I acknowledge that Ms. Motala may indeed have suffered accident-related neck and back pain and occasional headaches, the health practitioners have provided no concrete evidence relating the symptoms to an incapacity to carry and lift. In light of the intervening emotional factors unrelated to these accidents, and Ms. Motala's tendency to exaggerate and tailor information to suit her purposes, the evidence of her disability is not strong.

Consequently, I find that Ms. Motala has failed to establish on a balance of probabilities that she suffered a substantial inability to perform the essential tasks of her employment after July 13, 1994. I find that Ms. Motala is not entitled to weekly income benefits after that date.

Overpayment on Entitlement:

Dominion contends that it overpaid Ms. Motala because she ceased to be entitled to weekly benefits at an earlier point than the July 13, 1994 cut-off date. The company bases the claim for an overpayment upon the medical evidence, Ms. Motala's testimony that she performed outside sales for some months before the second accident, and her attempts to mislead Dominion about the nature of her ownership and position with Moden.

Certainly, this evidence suggests that Ms. Motala may have actually been performing some outside sales for periods during which she was paid weekly income benefits. However, the evidence is not sufficient, in my view, to support a factual finding that Ms. Motala conducted or was able to conduct outside sales during any distinct time period before the termination date. To draw a firm conclusion from the evidence would be speculative, and I therefore decline to find any overpayment based upon entitlement.

The Benefit Amount:

Dominion paid Ms. Motala a weekly income benefit of $328. This amount was calculated incorrectly.

Section 12(7) of the Schedule provides that insured persons may use their gross income for either the four or 52 week period before the accident as the basis for calculating the benefit. The benefit is 80% of the average gross income for the chosen period.

Ms. Motala used the four week period before the first accident as a basis to calculate her benefit. She submitted claim forms showing that her income from Franco Belgian during the four weeks prior to each accident was $960. Her employer certified that the weekly sum represented $550 salary, $270 commissions and $140 in other compensation.

Dominion based the benefit on 80% of Ms. Motala's commissions and other income ($270 + $140 x 80% = $328). Dominion calculated the benefit as if Ms. Motala was being compensated for the portion of her income that she lost due to the accident.

Dominion should have used Ms. Motala's average gross income. Her average gross weekly income for the four week period prior to the first accident totalled $960. The benefit, according to section 12(4), is the lesser of 80% of her average gross income ($768) or $600. Accordingly, I find that Ms. Motala's weekly income benefit is $600 up to the second accident.

Ms. Motala was not an employee at the time of the second accident on September 25, 1992. All of the evidence demonstrated that Ms. Motala equally controlled the finances and operations of Moden along with her partner. Her significant ownership interest and managing control of the company's operations leads me to find that Ms. Motala was self-employed at the time of the September 25, 1992 accident.

The weekly income benefit is calculated differently for self-employed persons under section 12. The weekly income benefit for self-employed persons is based upon the average gross income for either the four or 52 week period before the accident, less business expenses which cease as a result of the accident. It is critical, in my view, for the self-employed person to provide reasonably reliable and accurate business records of their income and expenses, where the amount of the benefit and entitlement are in issue.

Ms. Motala admits that the records simply do not exist. While the evidence does contain a summary of Moden's cheques to Ms. Motala for the four weeks prior to the September 25, 1992 accident, all details about the company's income and expenses have apparently been destroyed or are otherwise unavailable. Both Ms. Brezden and Ms. Motala say that they do not have any of Moden's business records. Ms. Motala accused her partner of confiscating the computer and business records during their breakup in 1994. Ms. Motala leaves me with no accurate basis upon which to determine her weekly income benefit after the second accident.

In the absence of reliable and accurate income and expense information, arbitrators have assigned the minimum $185.60 benefit to the claim.² I find that Ms. Motala has failed to establish income which would entitle her to a benefit above the minimum. I find that Ms. Motala's weekly income benefit is $185.60 per week after the second accident.

Deduction of Post-Accident Income:

The parties do not dispute that Ms. Motala worked after the accident and earned income. Dominion knew Ms. Motala returned to Franco Belgian after the accident, and accepted that she was entitled to the weekly income benefit. In fact, the company knew that Ms. Motala was working and earning income during most of the post-accident period, and did not deduct post-accident income from her benefits.

Section 15 of the Schedule provides for the deduction of post-accident income.

15. The insurer may deduct from any benefit payable under this Part 80 per cent of any income received or available from any occupation or employment subsequent to the accident.

Ms. Motala argues that instead of deducting post-accident earnings from the benefit ($600), 80% of the income she earned after the accident should be applied against her average gross weekly income ($768), thus giving her a higher entitlement. However, Ms. Motala's calculation method does not agree with the Schedule. In my view, it is not within my authority to manipulate the legislation to create a closer resemblance to an insured's actual loss.

Ms. Motala testified that she went back to work at Franco Belgian 10 days after the February 1991 accident, where she earned her regular $550 per week salary until the company went into receivership in September 1991. The company president confirmed her post-accident employment by a letter, but no evidence was introduced to show when her salary ceased. Since there are 29 weeks between Ms. Motala's return to work ten days after the accident and the end of July 1991, when she says she left the company, the $550 per week salary translates into $15,950 total gross earnings.

For approximately two months Ms. Motala worked at Perfection where her earnings were relatively small. The T-4 slip from Perfection indicates that Ms. Motala earned $1,836. I find the T-4 slip is adequate proof that Ms. Motala earned $1,836 from Perfection after the accident.

In October 1991, Ms. Motala and Ms. Brezden incorporated Moden, and both stated that they drew salaries. At the hearing Ms. Motala was somewhat unsure of the time periods and amounts she received from Moden. The T-4 slip for 1992 shows Ms. Motala received $6,000 income, less deductions of $47.60. The T-4 slip for 1993 indicates that Ms. Motala received $20,000, less $417.50 deductions. Although Ms. Motala disputes the accuracy of the T-4 slips, she provided no alternative data nor did she specify exactly why the amounts shown are inaccurate. It appears from the T-4 slips for 1992 and 1993 that Ms. Motala earned a minimum of $25,535 income from Moden Group.

However, an itemized summary of company cheques written to Ms. Motala reveals far greater earnings than the total T-4 slips for the same period. According to the summary, in 1992 Moden wrote cheques to Ms. Motala totalling $37,750, and $12,436.66 in 1993. Again, Ms. Motala did not offer any plausible explanation for the discrepancy between the cheque summary and her T-4 slips. The list shows cheque numbers, dates and amounts. Nearly all of the cheques are in multiples of $500. Most were issued weekly. Out of the 60 cheques issued by Moden to Ms. Motala between May 4, 1992 and April 29, 1993, only one was for an odd amount ($266.66). This leads me to believe that all of the other payments to Ms. Motala from Moden during this period constituted salary earnings. Therefore, I find the cheque summary is reliable evidence that Ms. Motala had $49,920 available post-accident earnings from May 1992 through the end of 1993.

Ms. Motala's testimony that she drew a salary from the company leads me to inquire into her undocumented earnings from Moden in 1991. At the hearing, Ms. Motala admitted that she did not declare to Revenue Canada all of her earnings from Moden. No company records document Ms. Motala's earnings from the time Moden opened in the fall of 1991 until May 1992, though Ms. Motala testified that she received a salary from the company until the business began to fail.

Revenue Canada shows that Ms. Motala earned $26,300 in 1991. If Ms. Motala's earnings from Franco Belgian ($3,840 pre-accident + $15,950 post-accident) and Perfection ($1,836) are subtracted, $4,674 of income is not attributable to any reported T-4 source in 1991. This sum appears roughly equivalent to the $500 per week salary Ms. Motala seems to have received, according to the cheque summary. Thus, Ms. Motala's testimony about her salary and the 1992/1993 cheque summary leads me to conclude that she received earnings from Moden when the company began in late 1991. On balance, I find that Ms. Motala received $4,674 from Moden in 1991.

Records do not exist with which to similarly analyze Ms. Motala's income from Moden from January 1992 to May 1992. While Ms. Motala worked at Moden between these dates, and may have been paid, I am not prepared to speculate.

Overpayment on the Amount of Benefits:

In conclusion, I find that Ms. Motala earned and had available $72,378 in post-accident income during the period she was receiving weekly income benefits. Section 15 and the facts of this case mandate that I find $57,902 (80% of the post-accident income) may be deducted from Ms. Motala's weekly income benefits.

Ms. Motala's entitlement from February 6, 1991 until July 13, 1994 provides her with 84 weeks of benefits at $600 per week, and 124 weeks of benefits at $185.60 per week, totalling $73,414. After the deduction of post-accident income, Ms. Motala should have received $15,512. Ms. Motala received more than this amount.

Dominion's claims representative, Barbara Smith, testified that the company paid Ms. Motala $30,176 in weekly income benefits, which is confirmed through Dominion's schedule of payments. Deducting the total weekly income benefits paid from the $15,512 amount that Ms. Motala should have received, I find that she has been overpaid $14,664.

Section 27(1) of the Schedule states that an insured person must repay benefits received due to error or fraud. Arbitrators have generally followed the lead of former Senior Arbitrator Naylor's conclusions in Levenson.³ In that case, the arbitrator found that in order to give the word "error" its proper meaning within section 27, the actions of the insured person must have materially contributed to the overpayment. I agree with her reasons and conclusion.

Initially, Dominion decided to reimburse Ms. Motala for lost commissions and other income. The company ignored the correct method of calculation under section 12. Dominion knew that Ms. Motala worked throughout the period that the company was paying weekly income benefits and yet did not inquire into or seek to deduct post-accident income. These facts indicate that Ms. Motala was only a part of the reason that Dominion overpaid her weekly income benefits.

The word "may" in section 15 provides discretion for the insurer to choose whether or not to deduct post-accident income from a benefit. In this case, Dominion only decided to deduct post-accident earnings after it discovered that Ms. Motala was an owner of Moden and had cut off the weekly income benefits. The repayment request challenges the company's own basis for adjusting the claim.

While Ms. Motala attempted to hide her ownership and job duties at Moden from Dominion, I find that it was Dominion's initial errors in establishing the basis for adjusting the claim that caused the overpayment on quantum. They incorrectly calculated the weekly income benefit and did not choose to deduct Ms. Motala's post-accident earnings for years, although they knew she was working. The overpayment based upon the quantum had more to do with Dominion's adjusting than Ms. Motala's actions, and I am unwilling to order a repayment under these circumstances.

Expenses:

Since the McCormick⁴ decision, most arbitrators have granted applicants their arbitration expenses where the claim has merit and is not frivolous or vexatious, subject to the limits of the regulations and the Dispute Resolution Practice Code. While reaffirming the basic tenet of McCormick, arbitrators have also restricted or not granted an applicant's expenses based upon the particular case facts.

I cannot say that Ms. Motala's claim for additional weekly income benefits was completely without merit. Though Ms. Motala may not be reliable, the medical evidence indicates that her symptoms continued to cause neck pain, at least periodically, after Dominion ceased paying weekly income benefits.

However, Ms. Motala's misrepresentation of herself as an employee led Dominion to assume that Moden's reporting was independent verification of the disability and job duties. Quite simply, the deception significantly departs from Ms. Motala's obligation to make full disclosure to her insurer. In my view, her action seriously affected Dominion's ability to judge the veracity of her claim overall. Apart from the repayment issue, this must have a consequence. I am not prepared to grant Ms. Motala her expenses of the arbitration process.

Order:

1. No monies are to be paid by either party with respect to the issues herein.

June 25, 1996

Fred Sampliner

Arbitrator

Date

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule —Accidents Before January 1, 1994. In this decision, the term '"Schedule' will be used to refer to Regulation 672.
2. 2Mary Parisien and Royal Insurance Company of Canada (May 26, 1993), OIC A-001978
3. 3Levenson and General Accident Assurance Company of Canada (February 18, 1992), OIC A-000260, appeal decision (September 29, 1992), OIC P-000260.
4. 4McCormick and Economical Mutual Insurance Company (October 2, 1991), OIC A-000139.