Neutral Citation: 1996 ONICDRG 130

OIC A-012020

ONTARIO INSURANCE COMMISSION

BETWEEN:

MURAT JOZEF SARKIS KASAP

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION

Issues:

The Applicant, Murat Jozef Sarkis Kasap, was injured in a motor vehicle accident on November 2, 1992. He applied for and received statutory accident benefits from the Insurer, Allstate Insurance Company of Canada (Allstate), payable under Ontario Regulation 672.¹ Weekly income benefits were terminated by Allstate on June 19, 1994. The parties were unable to resolve

their disputes through mediation and Mr. Kasap applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is the Applicant entitled to weekly benefits under section 12 or section 13 of the Schedule after June 19, 1994?

2. Is the Applicant entitled to weekly benefits after 156 weeks?

3. What is the correct amount of weekly benefits?

4. Is the Insurer entitled to a repayment pursuant to section 27(1) of the Schedule?

5. Is the Applicant entitled to supplementary medical and rehabilitation expenses pursuant to section 6 of the Schedule?

6. Is the Applicant entitled to a special award pursuant to section 282(10) of the Insurance Act?

The Applicant also claims interest on any amounts owing, and his expenses incurred in the hearing.

Result:

1. The Applicant is entitled to weekly income benefits pursuant to section 12 of the Schedule for 156 weeks until November 9, 1995.

2. The amount of weekly income benefits is $185.60.

3. The Applicant is not entitled to weekly benefits after November 9, 1995.

4. The Insurer is entitled to a repayment of $21,446.40.

5. The Applicant is entitled to the following supplementary medical and rehabilitation expenses: transportation - $84; medications - $53.48; physiotherapy - $20, which are to be set off against the overpayment.

6. The Applicant is entitled to one-half his assessable expenses for time and his full assessable expenses for disbursements which amount is not to be set off against the overpayment.

7. The Applicant is not entitled to a special award.

Hearing:

The hearing was held on April 22, 23, 24 and 25 and May 21, 1996. Final written submissions were to be made by June 14, 1996. I considered additional submissions of the parties dated June 14 and July 8, 1996.

Present at the Hearing:

Applicant:

Murat Jozef Sarkis Kasap

Applicant's Representative:

Kenneth Arenson and Rebecca Nelson

Barristers and Solicitors

Insurer's Representative:

Joanna Chadwick

Barrister and Solicitor

Insurer's Officer:

Philip Langford

Before:

William J. Renahan

Arbitrator

Introduction:

The Applicant, Murat Kasap, sometimes referred to as Joe Kasap, was born in Turkey on February 19, 1971. He came to Canada with his father when he was about 14. He finished grade 10 and worked intermittently for his uncle, Bogos Kasap, at his jewellery manufacturing business in Toronto.

At the time of the motor vehicle accident of November 2, 1992, Mr. Kasap was 21 years old. He was in the process of starting up his own jewellery manufacturing business. The parties dispute what stage the business was at when the accident occurred.

The Accident:

The accident occurred during a rain storm on the evening of November 2, 1992. Mr. Kasap was attempting to walk across an intersection on a green traffic light when he was struck by a van making a turn. The van struck Mr. Kasap on the left side. He was thrown in the air and struck the right side of his head on the road when he landed. Mr. Kasap got up to pursue the driver and then fell to the road where he remained until he was taken by ambulance to hospital.

The Injuries:

Prior to the accident Mr. Kasap was in good health. He played a number of sports. He was a body-builder and he held a black belt in a martial art.

The ambulance report indicates that Mr. Kasap was alert and oriented and sustained minimum loss of consciousness following the accident. The emergency department report indicates that Mr. Kasap suffered a fracture of the right clavicle and a contusion of the skull. The fracture was treated with a figure of eight bandage. A skull x-ray appeared normal. Mr. Kasap was discharged after three and a half hours with instructions to follow a head injury routine. A doctor told Mrs. Kasap to wake her husband every two hours and to return him to the hospital if he vomited or became disoriented.

While Mr. Kasap's wife and father tried to dress him, Mr. Kasap fell out of his chair onto the floor. The nurse's notes describe Mr. Kasap as being semi-unconscious as he lay on the floor. The hospital staff treated the fall as fainting. Mr. Kasap's family was concerned that he was being discharged from the hospital too soon.

Overview:

Although Mr. Kasap had earned less than $700 in the year prior to the motor vehicle accident and was receiving social assistance at the time of the accident, Allstate calculated weekly income benefits on the basis of a purchase order Mr. Kasap presented to make 2,000 pairs of earrings and 1,250 charms. Allstate concluded that Mr. Kasap would earn $3,500 to $4,000 per month on this order and that he was entitled to the maximum weekly benefit of $600.

In my view, a misrepresentation by Mr. Kasap and a mistake by Allstate have greatly affected the relationship between the parties and have contributed to the difficulties of this case.

First, I find that Mr. Kasap deliberately misrepresented to Allstate and his doctors that he was a successful manufacturer of jewellery, and that he had secured a large order to manufacture jewellery in the weeks prior to the accident, in order to induce Allstate to pay him the maximum weekly income benefit. I find that Mr. Kasap was still in the process of setting up his business at the time of the accident, that he had not developed a plan to attract business and that he had no work. His misrepresentations to his doctors and Allstate that he was a successful jeweller lead to inappropriate rehabilitation based on his inability to perform the essential physical tasks of manufacturing jewellery. Misdirected rehabilitation lead to frustration on the part of the rehabilitation workers and Mr. Kasap.

Second, I find that Allstate erred in calculating Mr. Kasap's weekly income benefits. Although Mr. Kasap never earned anything as a self-employed jeweller, Allstate mistakenly assumed that he was entitled to the maximum weekly income benefit of $600 because he presented an order to manufacture a large amount of jewellery. Even if the order was genuine, I am of the view that the order was irrelevant to the calculation of any weekly benefit because Mr. Kasap never received any income from the order. Except in the case of a person who claims weekly income benefits on the basis that he is entitled to start work within one year under a legitimate offer of employment, the Schedule does not provide weekly income benefits on the basis of anticipated income. There was no suggestion that the purchase order constituted an offer of employment. As a consequence of Mr. Kasap's misrepresentation and Allstate's mistake, Mr. Kasap received weekly income benefits of $600 per week for 84 weeks. That amount far exceeded any income Mr. Kasap had ever earned.

The Order to Manufacture Jewellry:

Although I find that the alleged purchase order for jewellery was irrelevant to the calculation of weekly income benefits because no income was earned as a result of the order, I reviewed the evidence concerning the existence of this order in some detail. Mr. Kasap lead the doctors, the rehabilitation workers and Allstate to believe that he was a successful jeweller before the accident, and this purchase order was supposed to prove that. In my view, that misrepresentation led to errors in diagnosis and misdirected rehabilitation.

Doug Graham, Allstate's field representative met Mr. Kasap the day after the accident and explained the available accident benefits. Mr. Graham recorded in his notes and testified that Mr. Kasap told him that he was not working and that he was in the process of setting up his own jewellery manufacturing business. As a result of that conversation, Mr. Graham recorded that Mr. Kasap would qualify for the minimum benefit of $185.60 per week. However, when Mr. Graham next met Mr. Kasap two weeks later on November 24, Mr. Kasap told Mr. Graham that he received an order to manufacture jewellery before the accident and that he had not started work on it. Mr. Graham wrote in his notes: 'just got first order before MVA and yet to start." Mr. Kasap said that he would produce a copy of the order from the buyer, Luis Imports.

Mr. Kasap produced a letter from a friend, Luis Dibuja, who sold jewellery wholesale. The letter indicated that the parties had agreed that Mr. Kasap would manufacture 2,000 pairs of earrings and 1,250 charms for Mr. Dibuja's company. Mr. Graham told Mr. Kasap that the document had to be dated before the accident in order to support a claim for more than the minimum weekly income benefit. Mr. Kasap obtained a new letter which pre-dated the accident and in January 1993 started to receive weekly income benefits of $600 per week, retroactive to November 7, 1992.

I heard numerous contradictions regarding the existence of the purchase order from Luis Dibuja's company. Mr. Kasap said that he discussed the order with Mr. Dibuja frequently, but that the order was not finalized until one or two weeks before the accident during a telephone conversation. Mrs. Kasap confirmed that the order was received about one month before the accident. Mr. Dibuja, the other party to this agreement, contradicted Mr. Kasap's evidence. He said that he placed the final order six to eight months before the accident and that he kept waiting for Mr. Kasap to complete it. In re-examination Mr. Dibuja was absolutely sure that he placed the order six months before the accident and not in the week before the accident.

The reasons Mr. Kasap was able to obtain a large order were contradictory and not plausible. Mr. Kasap said that he was able to obtain the order from Mr. Dibuja because he gave him a good discount and because he had new models for charms which he had made in the previous year. Mrs. Kasap confirmed that her husband got the order because he had new models. Luis Dibuja said he was impressed by some of Mr. Kasap's new models. He said that because the models were exclusive, he thought he could make a lot of money over six or seven months before someone else started copying them. He said that he cancelled the order right after the accident. He had no explanation why someone else did not complete the work if the value of the jewellery was in the exclusivity of the models. Pam Urzua is a friend of the Kasaps. She testified that her father is in the jewellery business and that she knows of many companies in the Toronto area that do parts of the jewellery manufacturing process. Uncle Bogos Kasap said that his nephew did not have any new models, he only had his old models. He said that his nephew got the order because he offered a discount. In re-examination, in answer to leading questions by the Applicant's counsel, Bogos Kasap changed his testimony and said that his nephew had new models. Mr. Kasap said that he could not be bothered to sell or give his new models to his uncle. However, he said that he would have made $10,000 profit for four or five weeks work if he had completed the order. I find that if Mr. Kasap had new exclusive models, he probably would have had someone else, like his uncle or another manufacturer, complete the order and share the profit.

Mr. Kasap gave conflicting evidence about whether he was making jewellery at the time of the accident. The day after the accident he told Mr. Graham that he was not working at the time of the accident. Two weeks later Mr. Graham recorded in his notes that Mr. Kasap had an order but that he had not started working on it. At the hearing, Mr. Kasap said that at the time of the accident he had done one casting which represented about 25 per cent of the order. He said he did not know if his uncle completed the order. He also said that he told his uncle to take the used gold and recast it.

I find that Mr. Kasap fabricated the existence of the order from Luis Imports to induce Allstate to pay him the maximum weekly income benefit allowed under the Schedule.

As well, I accept the accuracy of Mr. Graham's notes, and that Mr. Kasap told him that he had not started work on the order at the time of the accident. I do not accept Mr. Kasap's testimony that he had done one casting and then told his uncle to melt down the gold.

Mr. and Mrs. Kasap, Luis Dibuja and Bogos Kasap gave conflicting testimony on when Luis Dibuja made the order to manufacture jewellry, why the order was made and what work was done on the order. As well, if the value of the jewellery was in the exclusivity of the models, I should have heard some explanation why Bogos Kasap or some other jeweller did not complete the order.

Was the Applicant employed or unemployed at the time of the accident?

It is necessary to determine whether Mr. Kasap was employed at the time of the accident in order to determine if he is entitled to receive weekly benefits under section 12 or section 13 of the Schedule.

Allstate argued that Mr. Kasap was unemployed at the time of the accident and that his entitlement should be determined by applying the test set out in section 13 of the Schedule. Mr. Kasap argued that he was self-employed as a manufacturer of gold and silver jewellery and that his entitlement should be determined by applying the test set out in section 12 of the Schedule.

At the time of the accident of November 2, 1992, Mr. Kasap was receiving social assistance. He was 21 years old and did not have a history of steady employment. He and his future wife, Cecilia Tan, started living together in July 1991 and married June 25, 1994. Their daughter Taline was born December 16, 1994.

Mr. Kasap said that before they began living together he worked on and off as a bouncer as he chose, went to a lot of parties, and sold some jewellery on the side. His uncle, Bogos Kasap, owned and operated Accent Jewellery Limited and Mr. Kasap was able to work there when it suited him. As a result of that work he learned how to make gold and silver jewellery from start to finish.

Mr. Kasap said that over a six or seven-year period he worked periodically for his uncle, sometimes full-time and sometimes part-time. The employment records of Accent Jewellery Ltd. and Mr. Kasap's income tax returns indicate that Mr. Kasap earned the following amounts working for Accent Jewellery Ltd.: 1989 - $3,640; 1990 - $3,057;1991 - $800; and 1992 - $660. Although there was some suggestion that Mr. Kasap worked more than the income tax records and the accounting records of Accent Jewellery Ltd. indicated, I am not persuaded that these records are inaccurate.

After Cecilia and he began living together in 1991, Mr. Kasap started thinking about a career and running his own jewellery manufacturing business. On June 30, 1992 he incorporated Golden Champagne Enterprises Co. for the purpose of manufacturing jewellery. In that month he bought a jeweller's bench and press for $833. Receipts indicate that he spent another $500 on equipment and supplies. He had some models from his uncle. Although he may have made some models, I am not satisfied that those models had any more value than the models he received from his uncle. He said he looked through the telephone book to identify potential customers. I do not accept that he had an order to manufacture jewellery for Luis Imports Ltd. at the time of the accident.

At what stage a person's status becomes one of self-employed is a question of fact. Planning a business, by itself, may not amount to self-employment. On balance I am satisfied that Mr. Kasap was self-employed at the time of the accident. Although I have found that he did not have any orders and that he was still in the planning and development stages of his business at the time of the accident, I find that he had taken a number of steps towards his goal of operating his business and that he intended to continue towards that goal. Accordingly, his entitlement to weekly income benefits should be determined by applying section 12 of the Schedule.

Essential Tasks:

I agree with Arbitrator Draper's characterization of "essential tasks" in Donohue and State Farm Mutual Automobile Insurance Company (August 31, 1994), OIC A-006756. He said:

However, the person's essential tasks cannot be based solely on a "snapshot" of what he or she happened to be doing on the date of the accident. For example, it would make little sense to treat a vacationer's essential tasks as limited to his or her duties while on vacation. In my view, the phrase, "in which he or she would normally engage" [emphasis in original], means that although the person's essential tasks must be determined at the time of the accident, they must be considered over some reasonable time period.

Although he was referring to section 13 of the Schedule, I believe the same rationale applies to "essential tasks" under section 12. As well, section 12 contemplates situations, such as temporary lay off, entitlement to start work under a contract of employment and having worked 180 days in the previous 12 months, where the claimant is not actually performing employment tasks at the time of the accident.

Although Mr. Kasap was still in the planning stages of his business when the accident occurred, in my view, his essential tasks include those physical duties in the manufacturing process in which he would have engaged had his business progressed. Information concerning making jewellery was obtained from Mr. Kasap and from notes prepared by Mrs. Kasap.

The first step in making jewellery requires a model of the piece to be reproduced. Luis Dibuja said that the value of jewellery is in the model. He said that he can make a lot of money on an exclusive model by selling 2,000 pieces before someone copies the model. Bogos Kasap said that he bought his models from suppliers in Toronto and Los Angeles. He said that he had about 600 models for charms and about 50 for earrings.

The model is made in jeweller's wax or metal using saws, files and a rotisserie motor.

A vulcanizer machine is used to make a rubber mold from the model. The mold is a negative copy of the model. The rubber mold is precisely cut apart using a surgical knife and the mold is used for the creation of all subsequent pieces.

The rubber mold and a wax injection machine are used to reproduce wax positive copies of the model. After the application of heat and pressure, the mold is removed from the machine and taken apart to yield the wax copy. The process is repeated for each piece of jewellery to be made.

The wax copies are joined together by wax spurs to form what is known as a 'Christmas tree." The Christmas tree is coated with a solution known as an investment.

After the investment hardens, the molten gold or silver is poured into the investment, displacing the wax Christmas tree. After the casting has cooled, the gold or silver charms or earrings are cut from the Christmas tree. The individual pieces are polished, cleaned and finished. Posts are soldered onto earrings.

The work is meticulous and requires patience, concentration, fine motor skills, good vision, good hand-eye coordination and the ability to work for long periods in a sitting position bent over small pieces of jewellery. Model making also requires imagination and the artistic ability to transfer the image into a concrete form.

As well, Mr. Kasap's essential tasks would include entrepreneurial skills necessary to set up a business. Although I heard no direct evidence on this point, I heard a great deal of evidence that Mr. Kasap's energy, concentration, confidence and determination have diminished because of the accident and that he cannot pursue his business goals because of these losses.

Ability to Perform Essential Tasks:

Several arbitrators have stated that the applicant does not have to show that the motor vehicle accident was the only cause of disability. The test is whether the accident "significantly" or "materially" contributed to the insured person's disability.²

I heard and read a great deal of evidence concerning Mr. Kasap's inability to manufacture jewellery because of virtual total body pain, fatigue, inability to concentrate, headaches, dizziness, cognitive and personality changes, depression, inability to sleep and poor memory.

I question the accuracy of some of the medical opinions about Mr. Kasap's inability to return to work, because Mr. Kasap misrepresented to the doctors that he was a successful manufacturer of jewellery. These doctors did not know that Mr. Kasap had no work to return to and that he was still in the development stage of his business. For example, Dr. Kachooie, Mr. Kasap's physiatrist, recommended in July 1993 that Mr. Kasap return to work in his own business part-time, on an administrative level. Later he recommended that Mr. Kasap return to work in a managerial capacity. In November 1993, Dr. Louise Koepfler, a psychologist, reported that Mr. Kasap said that he was very successful in his jewellery business. In December 1993, Dr. Bacal, a psychologist, examined Mr. Kasap for Allstate. He questioned the viability of a thriving jewellery business prior to the accident. His concerns were overlooked and treatment and rehabilitation continued on the basis that Mr. Kasap had a successful business to return to.

Dr. Kachooie thought that because of a mild to moderate degree of myofascial pain syndrome, Mr. Kasap could not return to work as a jeweller. However, on July 22, 1993, February 24, 1994 and May 25, 1994 Dr. Kachooie urged that Mr. Kasap return to light duty modified work. By March 1995 Dr. Kachooie found that Mr. Kasap had become 'tangled in a major depressive anxiety disorder" and recommended vocational rehabilitation and alternate work. Mrs. Kasap testified that her husband's problems all come down to lack of self-esteem. Before the accident he was happy-go-lucky and full of confidence. Now it is humiliating for him that he cannot work, that he needs help from her parents to buy groceries and that she is the provider.

Pam Urzua is a friend of the Kasaps. She described Mr. Kasap before the accident as an active macho athletic teenager. In the second summer following the accident, she and her boyfriend shared a cottage with the Kasaps. She found that Mr. Kasap was not as vital as he used to be and took no responsibility for work around the cottage because he was limited in what he could do. She said that he didn't sleep. Mrs. Kasap was pregnant at the time and Ms. Urzua and her boyfriend did all the work. She said that Mr. Kasap used to pamper his wife and now the roles are reversed, she pampers him. She observed that Mr. Kasap has been getting more depressed since the accident, especially when dealing with his daughter.

The evidence of the psychologists is consistent with the evidence of the lay witnesses with respect to the change in Mr. Kasap's personality, his depression and loss of confidence. It seems to provide a rational explanation for Mr. Kasap's inability to perform the essential tasks of his employment as well as explain why Mr. Kasap mislead the doctors and the rehabilitation people to believe that he was a successful self-employed jewellery manufacturer.

Dr. Day, a psychologist, treated Mr. Kasap on 34 occasions from April 1993 to June 1994. He concluded that:

Mr. Kasap impressed as an insecure person, only tentatively establishing himself at the time of injury. His confidence was destroyed with the accident. In combination with low normal intellectual quotient, what transpired was a very difficult recovery. There was no question that some of the more diffuse complaints like "fatigue" would be more accurately labelled as depression. Some more specific issues such as the head injury do deserve further investigation. Prognosis is guarded, based mainly on the poor recovery to date.

Mr. Kasap underwent a neuropsychological assessment at the request of his lawyer. Following a one-hour interview and a seven-hour test session, Dr. Ladowsky-Brooks reported in March 1996:

This client's presentation most likely represents the interplay of several factors relating to psychological makeup and pre-morbid ability. The client's background seems to be one of emotional neglect, and the development of physical symptoms may be a manifestation of emotional difficulties which cannot verbally be expressed. The client is clearly being supported by his wife's family in this campaign to have his condition recognized, and this may be serving to perpetuate his symptoms. The occurrence of the accident may have re-awakened feelings of extreme vulnerability which had been suppressed for many years through his strong involvement in physical conditioning. . . while the cognitive impairment is excessive, there were not marked inconsistencies in the client's neuropsychological profile.

With respect to the closed head injury . . . any sequelae of such an injury would be expected to have recovered by this point in time. . . . With limited psychotherapeutic intervention, it may be possible to return this client to work.

In March 1995, Mr. Kasap's physiatrist, Dr. Kachooie, said that Mr. Kasap had become "tangled in a major depressive anxiety disorder." He recommended vocational rehabilitation and alternate work.

Dr. Bushuk, an orthopaedic surgeon, examined Mr. Kasap for Allstate in October 1995 and viewed a videotape which showed Mr. Kasap assisting movers with the loading of his furniture into a truck. He observed no signs of discomfort and opined that Mr. Kasap's complaints were out of keeping with the physical evidence. Although I agree that the videotape showed no signs of discomfort, I cannot say that the videotape demonstrates the confidence needed to set up a business and the mental and motor skills necessary to do meticulous work.

The tasks of setting up a business and manufacturing jewellery require high degrees of concentration, energy and self-confidence. I accept the testimony of Mrs. Kasap, Pam Urzua and Mrs. Tan's father, Ernesto Tan, that Mr. Kasap underwent a personality change after the accident. Although the responsibility of supporting a family and establishing a career may have been other stressors in Mr. Kasap's life, I find that the accident significantly contributed to Mr. Kasap's depressive state. As a consequence, he did not have the confidence and energy necessary to develop his business and manufacture jewellery during the 156-week period after the accident.

Entitlement to weekly income benefits after 156 weeks:

The only medical evidence that Mr. Kasap is 'continuously prevented from engaging in any occupation or employment for which he is reasonably suited by education, training or experience" within the meaning of section 12(5)(b) of the Schedule is the evidence of Dr. Mamelak, a psychiatrist, who had grave doubts whether Mr. Kasap would ever work again.

Mrs. Kasap arranged for her husband to see Dr. Mamelak because she was concerned that he continued to have problems with depression, lack of concentration and poor memory. Dr. Mamelak arranged for a SPECT scan which indicated decreased passing of fluids through parts of the brain. He recommended neuropsychological testing be done by Dr. Ladowsky-Brooks in order to better delineate the extent and nature of this brain injury. Dr. Ladowsky-Brooks wrote that any brain injury would best be classified as mild in severity and that she would have expected Mr. Kasap to have recovered from the after-effect of such an injury by the time she saw him, four years after the accident.

I heard no evidence of the significance of an abnormal SPECT scan other than that of Dr. Berry, a psychiatrist, who examined Mr. Kasap for Allstate. In his report of February 22, 1996 he wrote:

The SPECT scan has been reported to be abnormal but I would point out that the SPECT scan is in the early stages of its assessment in patients who have suffered mild to moderate brain damage, that it is subject to interpretive and technical

limitations and that within the practice of the neurologist and neurosurgeon, it is not regarded to be of value in the assessment of patients such as Mr. Kasap. The test is also influenced by emotional factors and in my experience, false positive test results have often served to confuse the diagnosis and assessment of such patients.

I place little weight on Dr. Mamelak's opinion in this case. I am not satisfied that the abnormal SPECT scan is significant. Dr. Mamelak's opinion that Mr. Kasap may never work again is not supported by Dr. Ladowsky-Brooks, the neuropsychologist to whom he referred Mr. Kasap for further testing to measure the extent of any brain injury. As well, Dr. Mamelak, like many doctors who saw Mr. Kasap, came to conclusions based on inaccurate information provided by Mr. Kasap. Dr. Mamelak thought that Mr. Kasap was hard working and that he "had the energy and initiative to start his own jewellery manufacturing business and he had also managed to procure work contracts - a sign that his customers had confidence in him." I find Mr. Kasap's work history to be the contrary. I found no reliable evidence that he was a hard worker. He left school after grade 10 and did little work after that. In each of the years 1989, 1990 and 1992 his income from social assistance and unemployment insurance exceeded his income from employment. In 1991 his employment income was only $800. I heard no evidence that he was unable to find work. His uncle and only employer, Bogos Kasap, testified that he worked hard when he wanted to. Mr. Kasap testified that he worked as a bouncer at a lot of parties "on and off as I chose." At the time of the accident Mr. Kasap was 21 years old and had not developed a significant work history.

I prefer the other medical opinions, including those of Mr. Kasap's physiatrist, Dr. Kachooie, that Mr. Kasap should look to prepare himself for alternate employment. I do not accept Mr. Kasap's evidence that he is too weak and in too much pain to do any kind of work. Mr. Kasap's physiatrist thought Mr. Kasap could do some kind of work. On July 22, 1993, February 24, 1994, May 25, 1994 and March 6, 1995 Dr. Kachooie urged his patient to return to light duty modified work. As well, the videotape shows that Mr. Kasap does not have the total body pain he claims to have. The videotape shows him helping movers load his furniture into a truck. He makes about 20 trips moving light chairs and bags. In my opinion the video shows him moving purposefully without apparent pain or restriction. At one point he turns to speak to someone behind him by jumping and turning at the same time. Mr. Kasap performed unskilled work when he worked as a bouncer and his income on an annual basis has not exceeded the minimum wage. I am satisfied that Mr. Kasap can perform light duty work and that a broad range of work would be suitable having regard to his education, training and experience. Mr. Kasap has therefore not satisfied me that he meets the test for entitlement to weekly income benefits after 156 weeks.

Amount of benefit:

The rules for determining the amount of a weekly income benefit are set out in section 12 of the Schedule. The premise in calculating benefits is that, except in the case of a person who is entitled to start work within one year under a legitimate offer of employment, the income must have been earned. In Gaudreault and Pilot Insurance Company (November 2, 1995), P-007144, Director's Delegate Draper said that the critical time in determining income for the purpose of the section 12 calculations is when the income is earned, rather than the date of payment.

The formula for determining the amount of benefit is based on the claimant's income in the four weeks or 52 weeks preceding the accident. 'Income" is defined in The Concise Oxford Dictionary as money or other assets received from one's business, investments, work etc. Mr. Kasap did not earn anything under the alleged contract. How much he might have earned is irrelevant to the calculation of the amount of the weekly income benefit under section 12 of the Schedule. Mr. Kasap earned about $800 in 1991 and about $660 in 1992. Even if he had other income from working as a bouncer or from selling jewellery, there is no reliable evidence that he is entitled to more than the minimum benefit of $185.60 per week.

Repayment:

Allstate paid Mr. Kasap $600 per week from November 9, 1992 to June 19, 1994 for a total of $50,400. I have determined that Mr. Kasap is entitled to $185.60 per week for 156 weeks for a total of $28,953.60. Allstate has overpaid Mr. Kasap the difference in the amount of $21,446.40. Allstate claims a repayment pursuant to section 27(1) of the Schedule.

Since Levenson and General Accident Assurance Company of Canada (February 18, 1992), OIC A-000260, appeal decision (September 29, 1992), OIC P-000260, arbitrators have held that in order to recover a repayment under section 27(1), the overpayment must be attributable to some error or fraud on the part of the Applicant. In my opinion, the overpayment was attributable to error on the part of Allstate and fraud on the part of Mr. Kasap. Mr. Kasap induced Allstate to assess his weekly income benefit at the maximum of $600 by misrepresenting that he would have earned $3,500 to $4,000 per month. Even if Mr. Kasap had an order to manufacture jewellery, Allstate erred, in my view, by calculating benefits on the basis of loss of future earnings or earnings potential. In my view, how much an insured might have earned had it not been for the accident is only relevant where the insured is entitled to start work within one year under a legitimate offer of employment within the meaning of section 12(2)(1)(iii) of the Schedule.

In this case, Allstate mistakenly paid the maximum weekly benefit as a result of both deliberate misrepresentation by Mr. Kasap and error on its part. Pursuant to section 27(1) of the Schedule, Mr. Kasap must repay to Allstate the overpayment of $21,446.40.

Rehabilitation:

Mr. Kasap is entitled to rehabilitation benefits under section 6 of the Schedule during the ten-year period following the accident as long as the expense is a reasonable expense resulting from the accident and as long as it is required because of the accident. It is not clear to me what rehabilitation expenses are sought. In his report of March 6, 1995, Dr. Kachooie recommended vocational rehabilitation as soon as possible and a self-directed treatment plan including a daily hydrotherapy swimming exercise program, cardiovascular fitness and rehabilitation process at the YMCA. Dr. Ladowsky-Brooks thought it might be possible to return Mr. Kasap to work with limited psychotherapeutic intervention.

In my view, one measure of whether a rehabilitation expense is reasonable is whether there is a reasonable possibility that the treatment plan submitted will alleviate a condition caused by the case. In this case I find that the accident significantly contributed to a depressive anxiety reaction and an inability by Mr. Kasap to carry on with his business plans. I heard little evidence on the kind and amount of treatment, goals of treatment, likelihood of success and probable cost. The evidence on the treatment plans to alleviate the conditions caused by the accident was vague and not persuasive.

Transportation, Prescription drugs and Physiotherapy:

Mr. Kasap identified five receipts for taxi fares to doctor's offices. I award the total claim of $84. I also accepted into evidence a list of doctors' appointments. As I heard no evidence of the distances or the amount claimed, no amount is allowed for this transportation.

Mr. Kasap presented a computer printout from a pharmacy for prescriptions he had purchased since the accident. Some were paid by Allstate, although it was not clear which ones. Mr. Kasap also identified four receipts for medications. I allow the total of these four receipts in the amount of $53.48.

Mr. Kasap identified a receipt for physiotherapy. The amount of $20 is allowed.

I heard no evidence that these claims were submitted to Allstate for payment before the hearing.

Mr. Kasap is entitled to interest on these amounts in accordance with section 24 of the Schedule, however, since there is no evidence on when the claims were submitted, I cannot determine when the payments became overdue.

Set-off:

In a number of decisions³ Arbitrator Draper considered overpayment and the necessity of allowing the insurer to set off different amounts owing under the Insurance Act and the Schedule in order to issue a sensible order. In my view, it is sensible that Allstate be allowed to set off the amounts awarded in this decision against the overpayment of $21,446.40.

I decline to deal with whether future claims should be set off against the overpayment because the matter is speculative.

Special Award:

Mr. Kasap advanced a number of grounds for a special award pursuant to section 282(10) of the Insurance Act. This section allows an arbitrator to make a special award where the insurer has unreasonably withheld or delayed payment. Many of Mr. Kasap's complaints were irrelevant to the issue of whether Allstate unreasonably withheld or delayed payment.

Moreover, I find that Allstate did not unreasonably withhold or delay payment. The opposite is the case. I find that Allstate overpaid Mr. Kasap $21,446.40.

However, I will address Mr. Kasap's claims.

In November 1993, Dr. Parker, a physiatrist, examined Mr. Kasap at the request of Allstate. Dr. Parker reported:

Impression:

1. Mild head injury.

2. Post-traumatic stress disorder.

Recommendations:

1. Mr. Kasap should undergo neuropsychological testing specific to a closed head injury.

2. Mr. Kasap should continue with psychological counselling which should be directed towards the management of his post-traumatic stress disorder.

3. Mr. Kasap does not require any further physical interventions and should be encouraged to gradually resume normal activities.

Prognosis

The prognosis remains guarded. However, it is expected that Mr. Kasap will slowly improve and will eventually resume his pre-morbid activity level. The process will be very slow and could easily require an additional year to achieve this state.

Mr. Kasap claims that he should have been told of the diagnosis of mild head injury and that Allstate should have arranged neuropsychological testing.

Although Mr. Kasap knew that he injured his head when he was released from the hospital with head injury routine instructions, I agree that Mr. Kasap should have been informed of this report. Mr. Kasap's counsel arranged for neuropsychological testing by Dr. Ladowsky-Brooks. Dr. Ladowsky-Brooks reported that "With respect to the closed head injury . . . any sequelae of such an injury would be expected to have recovered by this point in time." Although Dr. Parker may have recommended neuropsychological testing, I heard no evidence to explain why neuropsychological testing was reasonable and necessary. I am not satisfied that Allstate unreasonably withheld payment for neuropsychological testing.

I heard evidence that Allstate failed to fund rehabilitation.

Two weeks after the accident, Allstate's representative, Mr. Graham, did not feel that a caseworker was needed because Mr. Kasap appeared motivated to return to work. However, Mr. Kasap did not return to work and in May 1993, six months after the accident, Allstate retained a caseworker to propose rehabilitation options and monitor progress.

Mr. Kasap completed a rehabilitation program at the YMCA and in July 1993 agreed to participate in a gradual return to work program. The agreement came about through the input of the Kasaps, the caseworker and Dr. Kachooie. Mr. Kasap lead the caseworker to believe that he had a "very lucrative" jewellery business. Although I find that Mr. Kasap was still in the planning stages of his business and had no orders to fill, Dr. Kachooie thought Mr. Kasap could return to managerial work on an "administrative level in his own business." The agreement to participate in a return-to-work program lead to misunderstanding and frustration. I find that Mr. Kasap was asked to prepare himself for work which did not exist.

Mr. Kasap was still in the building stage of his business. Before the accident he had spent about $1,400 on equipment and supplies. Two weeks after the accident he continued buying equipment and supplies. In the following three months he spent an additional $14,000 on new jewellery-making equipment. Mr. Kasap bought so much equipment he could not store it all in his apartment and had to store some of it in his father's residence.

Mr. Kasap's father-in-law, Ernest Tan, often argued with Mr. Kasap about the equipment purchases. Mr. Tan had business experience as a sport sock manufacturer and questioned his son-in-law on why he would buy new equipment when he was not getting better. Mr. Kasap explained at the hearing that he hoped to get back to manufacturing jewellery.

At about the same time, Mr. Kasap's uncle and mentor, Bogos Kasap, was trying to sell his jewellery manufacturing business. Bogos Kasap found working difficult because of asthma and was hopeful that his nephew would buy the business. The payroll summaries of Accent Jewellery Ltd. show that Bogos Kasap paid himself a salary of about $2,000 per month as well as a salary to Mr. Kasap's father. Mr. Kasap eventually sold the business to Luis Dibuja for $30,000.

I heard no explanation why Mr. Kasap spent $14,000 on new equipment with the expectation that he would have had to compete with his uncle or Luis Dibuja when he could have bought the established business from his uncle. In my opinion, Mr. Kasap's business plan of spending $14,000 on new depreciable equipment had little merit when he did not have the work and did not know whether he could physically perform the work of manufacturing jewellery. I also question Mr. Kasap's business plan in view of Mr. Dibuja's evidence that the jewellery business has been in recession for the last ten years.

In summary, Mr. Kasap's misrepresentation that he was a successful jeweller resulted in misdirected rehabilitation. It seems to me that Mr. Kasap's first employment need was a reasonable business plan and that rehabilitation directed at returning Mr. Kasap to operate a successful business which did not exist and might never exist, was doomed to failure. In my view, responsibility for the failure of rehabilitation rests solely with Mr. Kasap, because he misrepresented the status of his business.

Mr. Kasap also submitted that Allstate unfairly terminated weekly income benefits and treatment. Mr. Kasap received more weekly income benefits than he should have. Much of the rehabilitation treatment was misdirected because Mr. Kasap misrepresented that he was a successful self-employed jeweller. As dealt with under the claim for rehabilitation benefits, I heard no persuasive evidence that other treatment, including psychological treatment, was reasonable and necessary. I am not persuaded that Allstate terminated benefits or treatment unfairly.

Expenses:

On the one hand Mr. Kasap misrepresented to Allstate, the doctors and this tribunal that he was a successful self-employed jeweller. On the other hand, Mr. Kasap suffered an injury which significantly contributed to his inability to pursue a career as a manufacturer of jewellery. He is entitled to one-half his assessable expenses for time and all his assessable disbursements. Considering all the circumstances, including my finding that Allstate erred in calculating Mr. Kasap's weekly benefit at $600, expenses are not to be set off against the overpayment.

Order:

1. Mr. Kasap is entitled to the following supplementary medical and rehabilitation expenses from Allstate: transportation - $84; medications - $53.48; physiotherapy - $20.

2. Mr. Kasap is entitled to one-half his assessable expenses for time and full assessable expenses for disbursements.

3. Allstate is entitled to a repayment of $21,446.40.

4. Allstate is entitled to set off the accident benefits ordered against the overpayment of $21,446.40. Allstate is not entitled to set off the expenses ordered against the overpayment.

(Sgd)

August 2, 1996

William J. Renahan 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. 2See for example Grout and Pilot Insurance Company ( May 4, 1995), OIC A-004805 and Furtado and York Fire & Casualty Insurance Company ( June 22, 1995), OIC A-008927 (Appeal pending)
3. 3Boodhai and Allstate Insurance Company of Canada (June 14, 1995, OIC A-004002 and Tha Huu Dinh and Pafco Insurance Company Limited (October 5, 1994), OIC A-007053; and Upper and Canadian General Insurance Company (June 3, 1994), OIC A-007053