Neutral Citation: 1996 ONICDRG 137

OIC A-007954

ONTARIO INSURANCE COMMISSION

BETWEEN:

DENIS HENRI

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION

The Applicant, Denis Henri, was injured in a motor vehicle accident on October 4, 1993. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 672.¹ The Applicant claimed further benefits, which the Insurer denied. 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:

1. (a) Is the Applicant entitled to ongoing weekly income benefits after July 31, 1995?

(b) What is the rate of weekly benefits to which the Applicant is entitled?

2. Is the Applicant entitled to vocational retraining services?

3. Is the Applicant entitled to a special award?

4. Is the Insurer entitled to repayment of any benefits overpaid, with interest?

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

Result:

1. The Applicant is entitled to weekly benefits of $185.60 per week until September 21, 1995, for a total of $18,745.60. He received weekly benefits of $25,800. Accordingly, he is not entitled to additional weekly benefits.

2. The Applicant is not entitled to vocational retraining services.

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

4. The Insurer is not entitled to a repayment of benefits overpaid.

The Applicant is entitled to be reimbursed for his arbitration expenses incurred, to the limits set out in Regulation 664 R.R.O. 1990 (Schedule F of the Dispute Resolution Practice Code - 1995 Release).

Hearing:

The hearing was held in Ottawa, Ontario, on October 2, 3, 4 and 5, 1995, before me, Nancy Makepeace, Arbitrator. I heard submissions by telephone conference on October 27, 1995.

Present at the Hearing:

Applicant:

Denis Henri

Applicant's Representative:

Catherine L. (Jones) Coplea Barrister and Solicitor

Todd Plant

Student-at-law

Insurer's Representatives:

William A. Garay Barrister and Solicitor

Michael Pantalony

Barrister and Solicitor

Witnesses are listed in an Appendix to the decision.

Background:

The Applicant, Denis Henri, is a 49-year-old general contractor. He and his wife, Monique Henri, live in Hammond, Ontario. In 1963-64, the Applicant left high school in the middle of grade 10 and began working in the construction industry. In 1971-72, he completed grade 10 through an upgrading program at Algonquin College. He also trained as a welder at that time, and he worked as a welder for almost three years in the early seventies. The Applicant began building houses while working as a welder. He would build a house, live in it, then sell it a year or so later. By 1990, he was engaged solely in residential construction work, and he incorporated several companies in the early nineties.

When the motor vehicle accident occurred on October 4, 1993, the Applicant had just finished four houses and was in the process of building two more. He claims that as a result of the accident, he suffers from pain and stiffness in his neck, right shoulder, upper back, and low back. He also complains of pins and needles down his right arm to his hand whenever he works overhead or applies force with his right arm (gripping, lifting, carrying, pushing). He has had sleep problems since the accident. More recently, he has developed a problem in his left shoulder.

The Applicant returned to the job site by the end of October 1993, but he claims that his accident-related injuries continue to prevent him from doing the heavier tasks involved in house construction. He hired Jacques Menard to help him with the heavy work, and claims that his businesses have lost money since the accident because he has had to subcontract more of the physical work. He seeks compensation for his additional labour costs. The Applicant also seeks unspecified retraining.

The Insurer terminated the Applicant's weekly income benefits on August 8, 1994, on the basis of the July 27, 1994 report of Ron Sullivan, a chartered accountant. On August 10, 1994, the Insurer issued an Assessment of Claim form notifying the Applicant that benefits were terminated and requesting repayment of all the benefits paid to him. There was no dispute at that time about whether the Applicant was able to return to his pre-accident work. At the hearing, the Insurer conceded that the Applicant was disabled until July 31, 1995, the date of Dr. El-Sawy's medical-legal report on the Insurer's behalf.

Weekly Income Benefits:

The Applicant is entitled to ongoing weekly income benefits after July 31, 1995 if he establishes, on a balance of probabilities, that he remains substantially unable to perform the essential tasks of his pre-accident occupation as a general contractor as a result of his accident-related injuries.

Essential tasks

The Applicant testified in some detail about his work as a general contractor. He worked long hours on the job site during the summer building season. During the winter, he provided snow removal services for his properties. The Applicant's experience and pride in his skills as a house builder were evident at the hearing. Here was no dispute about his testimony explaining the main steps involved in building a house and I generally accept this testimony.

I also accept the Applicant's testimony that his administrative tasks as a general contractor included purchasing land, contracting with an architect, contracting with, coordinating and supervising subcontractors, obtaining all necessary inspections and permits, ensuring the quality of construction, selling the houses, dealing with lawyers and real estate agents, as well as all the administrative tasks involved in running any business.

The Applicant testified that before the accident, he subcontracted a number of tasks, including excavation, roofing, electrical, plumbing, drywall, installation of the septic tank, pouring the basement floor, painting, rough landscaping, carpet and kitchen floor installation, and cabinet construction. Other tasks were subcontracted, but he worked with the subcontractors to reduce the bill. Although he testified that he billed these subcontractors for his services at $30/hour, the expression he used most often during his testimony was that he "helped" the subcontractors, if he had time.

The Applicant's general comments about his work suggested that he built the houses almost singlehandedly, with a few exceptions. However, his detailed account of his tasks suggested that he subcontracted to the usual trades and rarely or never worked alone. For example, the Applicant testified that he cleared the land himself, but later said, "we cut the trees in 4 foot lengths With regard to pouring sand onto the gravel for the basement sub-floor, he said "I mostly do this myself." He testified that he "or someone else" would nail down the sill ribbon. If he were nailing down the deck, someone else would carry over the plywood, so that he carried the plywood half the time. He testified that about four men would be needed to raise the exterior and interior walls. In explaining how the trusses are erected, he stated, "someone below passes the trusses to the guy on top [of the wall]"; he added, "I help." Again, he said the plywood roofing is installed by four people, "one guy on the ground and three on the roof"; he said he would be on the roof. The Applicant testified that he subcontracts the roofing, but carries the bundles of shingles to the roof, "if I have time." These comments suggest to me that the Applicant supervised the subcontractors and pitched in wherever he could to reduce costs and ensure quality.

This conclusion is supported by certain discrepancies between the Applicant's testimony and other evidence. For example, the Applicant testified that he built the interior staircase and landing himself, but sometimes he had someone to help him install it. In contrast, Jacques Menard, who worked with the Applicant before and after the accident, testified that a landing could not be built and installed without help. I prefer the testimony of Mr. Menard, who has less of a vested interest in the outcome of this proceeding; I also find this evidence inherently more plausible.

The Applicant also testified that he put on the vinyl siding himself, "sometimes a labourer would help me,@ and he sometimes hired his son to help in the summertime. A few minutes later, he stated that he always needed someone to erect the scaffolding and that he installed the siding with one other person. Robert Laforce, the vocational consultant who assessed the Applicant at Accu-Med Vocational Rehabilitation, reported that the Applicant told him that the siding work was done by subcontractors. According to Mr. Laforce, the Applicant told him that he assumes sole responsibility for the installation of hardwood floors, alarm systems, windows and doors." Marie Yee, the Insurer's first adjuster on the file, testified that the Applicant told her in the fall of 1993 that he did the floors, drywall and landscaping himself. I find these more limited lists of physical tasks more realistic than the Applicant's claim that he did most of the work himself.

I find that the Applicant subcontracted the major trades, as is the norm in the business. I do not accept that the Applicant normally worked alone. Indeed, I do not accept that the Applicant would have been able to complete six houses in a season (much less two houses a month between April and December, as he told Mr. Laforce) without substantial assistance from subcontractors or employees. When asked how this was possible in cross-examination, the Applicant stated that the lots were side-by-side, and the houses were built two at a time. While this arrangement would certainly create efficiencies, I do not believe it would allow the Applicant to build six houses in one season on his own.

I also find that the Applicant exaggerated the weights involved in various tasks. For example, he testified that the gravel or crushed stone poured into and around the house weighed 35-40 pounds per shovel load. Mr. Menard's comment on this testimony was that 'it would need a pretty big shovel." He estimated that a shovel load of crushed stone would weigh about five pounds. In response to the Applicant's evidence that a wheelbarrow full of crushed stone would weigh 200-300 pounds, Mr. Menard said 'I'm not a superman," and testified that he'd never seen anyone pushing such a heavy wheelbarrow. There were similar discrepancies in the evidence of the Applicant and Mr. Menard with regard to the weight of plywood sheets, skylights, and kitchen and bathroom cabinets. I find Mr. Menard's testimony more plausible.

The Accu-Med Job Analysis gave the following lifting and carrying estimates for the Applicant's job, based on his own description of it:

• over 100 pounds: rarely (less than 10% of time per shift)

• 76-100 pounds: rarely

• 61-75 pounds: occasionally (between 11% to one-third of time per shift)

• 26-60 pounds: frequently (between 34% and two-thirds of time per shift)

• 10-25 pounds: frequently

• under 10 pounds: continuously (between 67% of time per shift and the entire shift)

These requirements are much less onerous than those suggested by the Applicant's testimony about his job, and I find them to be more realistic. I do not accept the Ergos Evaluation report, which relied on the Applicant in considering him a "carpenter," a job category which is classified as "heavy" in the Canadian Occupational Dictionary.

I am troubled that the Applicant persistently over-estimated in his testimony the weights involved in various construction tasks. However, I accept that the Applicant's pre-accident occupation involved "rare" heavy construction work and frequent light and moderately heavy work, often involving overhead reaching, twisting and awkward positions. Mr. Menard, as well as Paul Mineault and Raymond Brazeau, two of the Applicant's suppliers, corroborated the Applicant's evidence that before the accident he was a "jack of all trades" who was always on site and always "doing something." They also testified about the Applicant's concern with quality.

I conclude that the Applicant's main role, with regard to the physical construction tasks, was to fill in where needed, to perform some light and moderately heavy tasks himself, and to do regular clean-up, a task he mentioned several times during his testimony. I expect that much of the Applicant's time, even during building season, would be taken up with administrative tasks on site, especially co-ordinating and supervising the subcontractors, ensuring that construction supplies were available, arranging for inspections and permits, and checking that the work was done to specification and on time.

The accident

The Applicant testified that while travelling southbound through an intersection on October 4, 1993, he struck an eastbound car at 70-80 km/hour. He immediately felt pain in his neck and upper back. There was a second collision when the other car swung around. The Applicant testified that he thinks he lost consciousness for a moment. He began to feel pain in his mid-back, right shoulder, and neck, and tingling in his right arm. His car was demolished.

He attended for a few hours at Ottawa General Hospital. X-rays were negative, except for an old mid-thoracic problem.

The pain decreased over the next few weeks, though he continued to feel tight in his upper back, and had pain in his right arm. He returned to the job site almost immediately, but he found that physical work exacerbated his symptoms. For example, a couple weeks after the accident, he complained to Ms. Yee, the Insurer's adjuster, that his upper back pain got worse when he tried to install a floor.

The Applicant saw his family doctor, Dr. Baribeau, on October 13, 1993, nine days after the accident, complaining of left-sided cervical pain and moderate bilateral thoracic and lumbar pain "when he is working especially and this slows him down." On examination, Dr. Baribeau found that movements were normal, but "a bit stiff" in the thoracic and lumbar spine, and there was mild tenderness in the left cervical spine from about C3 to C7 and in the lumbar spine about L3. Dr. Baribeau referred the Applicant to Dr. J.- P. Ouellette, an orthopaedic specialist, and prescribed Naprosyn and hot baths.

The Applicant saw Dr. Ouellette on October 19, 1993 and twice a month in November and December. Dr. Ouellette diagnosed minor intervertebral joint dysfunction and ligamentous laxity of the cervical and thoracic spine. He treated the Applicant with manipulations and ligament tightening (sucrose) injections. He also recommended an exercise program, but did not arrange this himself because the Insurer had already referred the Applicant to the Canadian Back Institute (CBI).

On initial assessment by a CBI physiotherapist, Robert Karas, on October 29, 1993, the Applicant complained of constant right trapezius and mid-scapular pain, pain in his right elbow, numbness in the 3rd and 4th fingers of his right hand, headaches, and sleep problems. His symptoms were worse with sitting or elevation of the right arm. On examination, Mr. Karas found moderate reductions of all cervical movements, and positive signs of right brachial plexus tension. Mr. Karas felt that the Applicant had suffered soft tissue injury to the cervical spine, involving the discs and posterior elements, as well as an injury to the soft tissues around the brachial plexus. He recommended a 6-8 week program (three visits a week) involving posture education, stretching exercises and strengthening exercises. He predicted that the Applicant, who reported that he was currently performing supervisory duties only, would be able to gradually take on more physically demanding duties over the following 2-4 months.

On January 18, 1994, the Applicant began what was scheduled as a two-day Functional Capacity Evaluation at the CBI. However, on the first morning, he experienced a sudden severe exacerbation of right interscapular pain, neck and arm pain, and bilateral leg pain, such that he was unable to sit or stand. An ambulance took him to Ottawa General Hospital, where cervical muscle spasm was diagnosed and Naprosyn and heat were prescribed. The Applicant was discharged from the CBI program in February, on the basis that he had non-organic signs and was non-compliant with the program. Ms. Brenda Dennison, the physiotherapist who prepared the discharge report, predicted that the Applicant would be able to return to normal work activities in 6-8 weeks.

Following this incident, Dr. Baribeau referred the Applicant to Dr. Francois Racine, a physiatrist, who examined the Applicant on February 2, 1994.² He found that the Applicant had full range of motion in the neck, though movement was slow and painful at the extremes. Dr. Racine recommended physiotherapy, stretching exercises and postural education. He suggested that the CBI program might have been too aggressive for the Applicant.

The Insurer referred the Applicant to Accu-Med Vocational Rehabilitation Inc. in early February 1994. After an initial assessment, Robert Laforce, Vocational Consultant, recommended that the Applicant resume his snow-removal work by March 1, 1994 and begin gradually to resume light construction work. He also recommended a physiotherapy assessment to ensure that his home exercise program was appropriate.

Further to Mr. Laforce's recommendation, the Applicant was referred to Embrun Physiotherapy Clinic, where he was assessed by Normand Lahaie, a physiotherapist, on March 24, 1994. Mr. Lahaie felt that along with the Applicant's soft tissue injuries to the cervical and thoracic spines, he could not rule out a disc herniation at C7-T1. He recommended a gradual reactivation program, home exercises and (eventually) physiotherapy; Mr. Lahaie would see the Applicant in follow-up every two weeks.

The Applicant testified that after leaving the CBI program, his symptoms improved through the spring of 1994 but worsened when the building season began and he resumed some physical tasks. In June 1994 Mr. Lahaie told Mr. Laforce that he had noted a marked decrease in physical capacity and cervical range of motion, reportedly following the Applicant's attempt to install prefabricated windows. The Insurer, through Mr. Laforce, rented a lifting device to assist with this task; the lift was purchased for the Applicant later on in the summer when the Applicant reported that he was using it on the job. The Insurer also provided the Applicant with a hydraulic attachment for his snowblower, to relieve the Applicant of the task of manually adjusting the flue, which requires a force of about 35 pounds.

In July and August, 1994 the Applicant also began to report severe left shoulder pain, which was variously diagnosed as rotator cuff tendonitis, bursitis, or laxity of the left coracoclavicular ligament. Mr. Lahaie felt that the Applicant had developed this problem "as a result of overuse and probably overcompensation for his injuries in the cervical spine." He recommended "intense physiotherapy" to deal with this problem, but noted that the Applicant did not have time to attend. Dr. Ouellette treated the left shoulder with ligament tightening and cortisone injections. In December 1994, Dr. Ouellette told Mr. Laforce that he could not explain the Applicant's increased pain. He discharged him from his care, and recommended a spinoscope examination as well as a referral to a physiatrist.

Further to Dr. Ouellette's recommendation, the Applicant saw Dr. Racine again on January 17, 1995. Dr. Racine identified a significant change in symptoms. He reported that the Applicant was now complaining about more diffuse pain, and more on the right side, whereas in February 1994, the Applicant had complained of right upper extremity paraesthesia and left neck pain. Dr. Racine felt the Applicant might have fibro myalgia:

Clinically, this patient shows signs of fibromyalgia which has developed and whose clinical portrait dominates on the right side. There are non-restorative nights, morning stiffness, accentuated pain with efforts, accentuated stiffness without efforts or with immobility and lack of comfortable position.

Dr. Racine recommended stretching exercises, massage and continued use of Elavil. He did not feel that further physiotherapy was likely to be of much benefit. Dr. Racine also recommended referral to a chronic pain management program and a rheumatologist.

Dr. Susie Duff, a rheumatologist, examined the Applicant on June 12, 1995. She did not accept Dr. Racine's diagnosis of fibro myalgia because she found that the Applicant's symptoms were limited to the right upper extremity, whereas fibro myalgia is bilateral and involves both the upper and lower body. At the hearing, Dr. Duff explained that fibromyalgia" and chronic pain" are distinct diagnoses, although sometimes the terms are used interchangeably.

According to the Applicant, his neck and back pain had improved by the spring of 1995, but his right upper extremity symptoms have not changed much, and despite treatment, they are still aggravated by any overhead or weight-bearing work with the right arm.

Analysis:

The Insurer does not dispute the Applicant's entitlement to weekly benefits up to July 31, 1995. For the following reasons, I am not persuaded that the Applicant is substantially unable to do his pre-accident work after that date.

The doctors who have examined the Applicant have not been able to agree on a definitive diagnosis. Objective investigations have identified no orthopaedic or neurological injury. X-rays of the Applicant's cervical and thoracic spines have been consistently negative, except for pre-existing problems. X-rays taken in January 1995 revealed minimal osteoarthritic changes in the cervical spine. None of these results is significant with respect to the Applicant's complaints.³Electromyographic studies performed on March 14, 1994 revealed 'no definite evidence of right ulnar neuropathy at the elbow or right C7-C8 radiculopathy." The only evidence of neurological involvement is the Applicant's report of 'dropping things" -for which there was no independent corroboration- and Dr. Duff's finding of limitation of passive cervical motion. However, the Applicant displayed full range of cervical motion on examination by Drs. Baribeau, Racine, and El-Sawy. The CBI's assessors found no sign of mechanical pain or nerve root irritation. The MRI recommended by Dr. Duff was not done. I do not accept that the Applicant has sustained a significant neurological injury.

Nor do I accept that the Applicant has fibromyalgia. Dr. Racine did not make a definitive diagnosis of fibro myalgia. Dr. Ouellette, who accepted this diagnosis, also put forward a number of other possible diagnoses. Dr. Duff, a rheumatologist, has greater experience than Dr. Racine and Dr. Ouellette have with fibro myalgia. I accept her evidence that the Applicant's localized right upper extremity pain -his most troubling ongoing symptom- is not characteristic of fibro myalgia.

In July 1995, Dr. R. El-Sawy, a physiatrist, examined the Applicant at the Insurer's request. He could find no sign of physical or psychological injury resulting from the accident. He concluded, 'I do not see any reason to prevent [the Applicant] from performing his job as he used to immediately before the accident."

The medical reports also include many references to the Applicant's being focussed on pain, disability and benefits. The CBI assessors attributed the Applicant's severe exacerbation of pain on January 18, 1994 to his "high pain awareness and focus on disability." One of the assessors (Joy Steele, a physiotherapist), reported that during a subsequent telephone conversation with the Applicant, "[h]e emphasized that he is unable to perform his job duties and asked if this would be in my report." She told him they had been unable to assess his functional level because of the pain episode.

The Ergos assessors concluded their July 17, 1995 report with the following comments:

During the evaluation Mr. Henri demonstrated several pain behaviours. These included repeated facial grimacing, heavy breathing, rubbing reported areas of discomfort, reports of dizziness and prolonged breaks. Because Mr. Henri performed nearly all of the activities with facial grimaces and moans it appeared that he was forcing himself to complete each one. However, upon examining the detailed analysis of Mr. Henri's performance some inconsistencies have made it difficult to appreciate his level of perceived exertion. For example, he demonstrated weight control difficulties lifting and carrying 20 lbs. when he had previously demonstrated the capability to lift 30 lbs. during the dynamic lifting activity. Secondly, the evaluee reported that during the static lifting he was using his left arm more so than his right. However, the detailed force graphs indicate the evaluee was utilizing relatively equal amounts of force from both arms.

In a questionnaire appended to the report, the Ergos assessors noted that the Applicant supported his right arm, but there was no sign of muscle atrophy on that arm, as would be expected of someone who had not lifted heavy items for two years. The clinical notes of Dr. Baribeau, the Applicant's family doctor, also reflect the Applicant's overriding concern with his dispute with the Insurer. On February 2, 1995, Dr. Baribeau noted "malingering is still # 1 diagnosis here as far as I am concerned."

The Applicant is not precluded from receiving weekly benefits just because the doctors cannot find objective evidence of injury or agree on a diagnosis. And though the Statutory Accident Benefits Schedule does not compensate for pain in the absence of disability, an insured person who is substantially unable to perform the essential tasks of his pre-accident occupation because of pain is entitled to receive weekly benefits. However, in cases of chronic soft tissue pain, the Applicant's credibility becomes an important issue.

The Applicant in this case exaggerated the weights involved in various construction tasks and his own participation before the accident in the physical, as opposed to administrative or supervisory tasks of house construction. His testimony that his post-accident work has been limited to supervising the contractors was contradicted by Mr. Menard, who clearly resented the suggestion that he would need to be supervised 12 hours a day. The Applicant's own evidence suggested that he has been doing a significant amount of physical work since he returned to the job site within days of the accident. I have no doubt that some of these tasks aggravated the Applicant's symptoms, but I am not persuaded that the pain was such that it forced him to stop working or restrict himself solely to administrative and supervisory tasks.

Less than a month after the accident, a CBI assessor stated that he expected that the Applicant would be able to take on more physically demanding duties 2 to 4 months after completing a 6-8 week stretching and strengthening program. Even after the January 1994 incident that ended the Applicant's CBI program, another CBI assessor predicted that the Applicant would be able to return to normal work 6-8 weeks after discharge. The medical reports and testimony indicate that the Applicant had improved substantially by the spring of 1994. Indeed, in March 1994, the Applicant agreed gradually to resume snow clearing, on the recommendation of Dr. Ouellette and Mr. Laforce. They also encouraged the Applicant to resume occasional light construction work.

In fact, the medical reports and testimony indicate that the Applicant had substantially resumed his pre-accident activities well before he saw Dr. El-Sawy in July 1995. He returned to the job site within days of the accident. A couple of weeks later, he told Ms. Yee that his symptoms had flared up when he installed a floor. By June 1994, he was installing pre-fabricated windows and performing other physical construction work, although this resulted in an exacerbation of his symptoms. By December 1994, Dr. Ouellette discharged the Applicant from his care, stating that he was unable to explain the Applicant's ongoing complaints. Dr. Ouellette advised Mr. Laforce that he would not recommend any assistance devices or sign any documents certifying his physical limitations.

Mr. Lahaie, the Applicant's physiotherapist at Embrun, noted the Applicant's "slow but steady improvement" in the spring of 1994. In his June 1 progress note, he stated that the Applicant "is doing more physical tasks at the job site. He continues to have difficulty with heavier tasks such as cutting wood with a chain saw." Although the Applicant began to report severe left shoulder pain in July and August of 1994, Mr. Lahaie stated that "Mr. Henri's symptoms in the cervical spine, thoracic area and right hand have decreased markedly."

Throughout his treatment of the Applicant in the summer and fall of 1994, Mr. Lahaie noted that the Applicant was too busy to attend regularly, even while he was reporting severe left shoulder pain. In his August 31, 1994 progress report, he stated that the Applicant had not attended since August 5 and had not yet responded to Mr. Lahaie's calls to book an appointment. In his next progress report, October 31, 1994, he stated that the Applicant was "in status quo" "despite work schedule and non-attendance to physio," although an injection to his left shoulder after his August appointment had helped. On discharge in January 1995, Mr. Lahaie stated:

Mr. Henri did not benefit significantly from his physiotherapy treatments due to the inconsistent attendance. The fact that he is involved in heavy physical work as a construction contractor also tended to exacerbate his symptoms.

The Applicant's determination to resume his former activities and keep his business going is laudable. Arbitrators have stated in a number of decisions that an insured person is not precluded from receiving further income benefits just because he or she has returned to work on a trial, gradual, modified or part-time basis. However, I find the Applicant's non-compliance with the home exercise and physiotherapy program to be inconsistent with the severity of symptoms he has reported.

In considering whether the Applicant is substantially unable to perform his essential tasks as a result of the accident, I recognize that a self-employed person has some flexibility in organizing his work. In Eric Simpson, I stated that 'it is appropriate to recognize this flexibility by considering whether the insured person's pre-accident essential tasks could be accomplished with reasonable and practical modifications."⁴

This principle was approved by Director's Delegate David Draper in the Appeal decision in Bertsouklis: 'if [a self-employed painter] can do his job tasks with minimal assistance, or can accomplish them in a different way, he may not be eligible. This analysis, however, must be realistic and reasonable." The Director's Delegate went on to say that an insured person is not disentitled because he can get the job done by hiring others to do it. In this case, I find that the Applicant regularly worked with subcontractors before the accident as well as afterwards.

I heard no evidence that the accident ever prevented the Applicant from performing his supervisory and administrative tasks. The Applicant admitted that he can perform a number of his pre-accident physical tasks. He also admitted that he can stand, kneel, twist, carry light weights, bend, crouch, sit, and climb a ladder. His walking is limited only by a pre-existing foot condition.

I accept that the Applicant's accident-related problems necessitate some changes in the way he does his job. However, I find that by July 31, 1995, the Applicant was able to perform his pre-accident work with only minimally more assistance than he needed before the accident.

The expert reports also indicate that the Applicant's complaints after the accident are similar to his pre-accident complaints. The Applicant has complained of right neck pain and right arm pain and weakness since 1978, when he was injured in a motorcycle accident. In July 1990, Dr. G. Cournoyer, the Applicant's former family doctor, referred him to Dr. M.T. Richard, a neurosurgeon. The Applicant complained to Dr. Richard about "chronic, low posterior neck pain which occasionally radiates down the lateral aspect of the right arm into the fingers of the right hand. This is also associated sometimes with tingling in the same area." The Applicant told Dr. Richard that his symptoms were aggravated with heavy use of the right arm, and that lately he had not been doing heavy work with the right arm. The Applicant continued to report right-sided neck pain and weakness, pain and tingling in the right arm.

On May 30, 1990, the Applicant fell directly onto his left shoulder. The shoulder was tender, painful and unstable. Dr. Baribeau diagnosed acromioclavicular joint strain, and recommended that the Applicant wear a sling for a week. He also referred the Applicant to Dr. R. Chauhan, an orthopaedic surgeon, who recommended physiotherapy.

On May 1, 1991, when the Applicant complained again about right neck pain, Dr. Baribeau referred him to Dr. Ouellette for a procaine injection. In his Form 4 report dated October 20, 1993, Dr. Ouellette indicated that he had treated the Applicant for similar symptoms from October 23, 1990 until February 2, 1993, although the Applicant was able to work during this time.

As arbitrators have stated in many decisions, in order to show that his disability "results from" the accident, the Applicant is not required to show that the accident was the only cause of his symptoms; he must show that it made a "significant" or "material" contribution to his ongoing symptoms. I am satisfied that the Applicant was able to work as a general contractor before the accident, and was not disabled from that occupation by his pre-existing neck, back, or right upper extremity problems or any other unrelated problem. However, I am not persuaded that the accident significantly contributed to the Applicant's symptoms after July 1995.

Nine days after the accident, Dr. Baribeau diagnosed "exacerbation of past cervical left pain and dorsal lumbar pain especially at work" [emphasis in original]. Dr. Ouellette testified that except for the eight months just before the accident, he had treated the Applicant about every 6 weeks for right neck, shoulder and interscapular pain; this is about as often as he saw the Applicant after the accident. Dr. Ouellette testified that rotator cuff tendonitis was the only new complaint after the accident. Dr. Ouellette, Dr. Richard and physiotherapist Normand Lahaie agreed that this condition probably resulted from repetitive overhead work. Considering all the evidence on balance, I find it more likely that the Applicant's ongoing symptoms are work-related aggravations of his pre-accident problems.

Notice of termination:

Section 24(8) is as follows:

If the insurer refuses to pay an amount claimed in an application for statutory accident benefits, the insurer shall forthwith give written notice to the insured person giving the reason for the refusal.

The Insurer terminated the Applicant's weekly benefits effective August 8, 1994, based on the July 27, 1994 report of Ron Sullivan, a chartered accountant. The Insurer did not dispute the Applicant's ongoing disability until the summer of 1995. On July 31, 1995, the Applicant was examined by Dr. Reda El-Sawy, a physiatrist, at the Insurer's request. In his report dated August 2, 1995, Dr. El-Sawy opined that the Applicant had no accident-related problems which would prevent him from returning to his pre-accident job. The Insurer gave the Applicant written notice of termination, with reasons, by letter of September 21, 1995, which enclosed an Assessment of Claim form and a copy of Dr. El-Sawy's report.

The Applicant is entitled to weekly income benefits until September 21, 1995.

Benefit rate:

I heard a great deal of evidence about the appropriate method of calculating the Applicant's benefits, and about the disputes which arose concerning the Insurer's requests for documents in support of the Applicant's claim for benefits of $600 per week. Dennis Houle, a Certified General Accountant, has been the Applicant's accountant for about 15 years. Ron J. Sullivan, a Chartered Accountant, Chartered Business Valuator and Certified Fraud Examiner, prepared three reports at the Insurer's request, a July 20, 1994 report prepared while he was with Arthur Andersen & Co. (Exhibit 1, Tab 6), a July 13, 1995 draft report prepared after he had formed his own company, Sullivan & Company (Exhibit 1, Tab 7) and a revised final report dated September 25, 1995 (Exhibit 8, Tab 1). Mr. Houle prepared a document entitled 'Calculation of Weekly Income Benefit" in the summer of 1995, after receiving Mr. Sullivan's July 1995 report. After receiving Mr. Sullivan's final report in September 1995, Mr. Houle prepared a Reconciliation (Exhibit 9). I heard oral testimony about the accounting issues from Mr. Houle, Mr. Sullivan, and Richard Cousineau, the Applicant's bookkeeper. The parties agreed that the Applicant should be treated as self-employed through his sole proprietorship and his four companies,⁵ that his benefits should be based on his gross average weekly income in the 52 weeks prior to the accident, and that revenue and expenses should be recognized on the completion (or sale) date. The parties also agreed on most of the figures involved in the calculation of benefits. Their main dispute concerned the treatment of business expenses before and after the accident. The Applicant’s counsel submitted that no "ceasing expenses" are to be deducted from the Applicant’s gross revenue in the 52 weeks before the accident, because the business continued to operate after the accident and no expenses ceased. Alternatively, the Applicant’s counsel submitted that in any event the Insurer had agreed to adopt this approach to benefit calculation, and should not be permitted to amend its approach. The Applicant’s accountant, Mr. Houle, took a "modified net income" approach, deducting direct costs, but not operating expenses from gross revenue before and after the accident. The Insurer submitted that all expenses -both direct and operating expenses- should be deducted from gross revenue both before and after the accident.

Treatment of business expenses

The Schedule contains three provisions dealing with recognition of business income. Sections 12(4), 12(7)1 and 12(7)2 provide that an insured person's weekly benefit shall be 80% of "gross weekly income" (subject to a minimum deemed gross weekly income of $232 and a maximum benefit level of $600). Section 12(7)3 contains the Schedule's only reference to business expenses:

Business expenses which cease as a result of the accident shall be deducted from a person’s income from self-employment before calculating his or her gross weekly income.

Post-accident income is dealt with in section 15, which says that the Insurer may deduct from the benefit received "80% of any income received or available from any occupation or employment subsequent to the accident."

I find these provisions ambiguous. First, while the term "gross weekly income" in section 12(4) and the first two paragraphs of 12(7) may seem clear at first blush, section 12(7)3 requires that ceasing expenses be deducted from a person’s income before calculating gross weekly income. In my view, this suggests that the drafters intended the result of the calculation to be modified net income - gross income less ceasing expenses. Any other interpretation of section 12(7)3 would mean that the amount from which ceasing expenses are deducted, as well as the amount which remains, is gross weekly income, an absurd result.

Secondly, as has often been pointed out, the word income" in section 15 is not modified by either "gross" or "net." The Applicant submits that "income" in section 15 must be distinguished from gross income" in section 12, and that the only way to draw a meaningful distinction is to say that 'income" in section 15 means 'net income." However, the same argument would have income" in section 12(7)3 mean net income," with the result that ceasing expenses would be deducted from net income to reach gross weekly income; this, again, makes no sense. On the other hand, an interpretation of income" in section 15 to mean gross income would make the presence of the word 'gross" in section 12(4) and (7) of the Schedule redundant, which contravenes a principle of statutory interpretation.

Thirdly, section 12(7)3 applies most clearly where the business discontinues operations - permanently or temporarily, as a result of the accident. It does not appear to contemplate the situation of the business which continues to operate, but with increased operating expenses and decreased profit as a result of the accident. This problem was clearly described by Arbitrator Janice Mackintosh in the arbitration decision, Thomas George Piper:⁶

... there is no specific recognition in the Schedule that where a business continues to operate, its associated expenses including the salaries of regular and replacement employees might increase in the aftermath of an accident involving one of the principals of a company. Nor is there any recognition that while expenses may increase, the efficiency and overall profitability of a business may decrease as the result of the disability of one of the principals. Furthermore, section 15 of the Schedule makes no express provision for the deduction of continuing expenses from the calculation of income earned post-accident, to balance the deduction of "ceasing expenses" from pre-accident income. This could result in a higher post-accident income being deducted from a lower pre-accident income, thereby reducing the amount of weekly income benefit payable by the Insurer.

Other arbitrators have commented on the difficulty of applying these provisions where an applicant’s business continues to operate after the accident. The arbitration decisions have been fact-driven and have taken varying approaches. In Francois Philippe, Senior Arbitrator Susan Naylor said:

In my view, section 12(7)3. cannot be interpreted to provide a clear formulation which applies in all cases. Ultimately, the issue of whether an expense is a ceasing expense is a question of fact, based on an individualized inquiry into the specific circumstances of each case.

With regard to post-accident income, the Arbitrator made the following comments:

Where, as here, statutory language is ambiguous, the interpretation that best meets the objectives of the legislation should be adopted.

I agree with these comments.

The Applicant’s counsel in the instant case submitted that the Applicant’s gross weekly income before the accident should be calculated without deducting any expenses because the business did not cease after the accident, but continued operating and continued to incur expenses. I do not accept this approach. First, nothing in section 12(7)3 restricts its application to situations where the business ceases operation. In my view, the plain words of the section - "business expenses which cease as a result of the accident" - contemplate that some expenses may cease as a result of the accident, while others do not. Moreover, I agree with the approach taken by Senior Arbitrator Susan Naylor in Philippe. She concluded:

If a significant proportion of the expense stops as a result of the accident, that proportion may be regarded as an expense that has ceased under section 12(7)3.

For the same reasons, I do not accept any approach which deducts fewer types of expenses from post-accident revenue than are deducted from pre-accident revenue - for example, recognizing pre-accident gross revenue less direct expenses (expenses which cease) but without deducting operating (ongoing) expenses, and recognizing post-accident income net of all expenses. This method of calculation would result in a windfall for the Applicant and would not reflect his actual financial loss resulting from the accident. In my view, generally accepted accounting principles require that the same method be used to calculate pre-accident and post-accident income.

In some circumstances the modified net income" approach adopted by the Applicant's accountant may be appropriate. In this case, I am not satisfied that this approach fairly, accurately and reasonably reflects the Applicant's financial situation before and after the accident.

The Applicant's personal income tax return for 1993 reports a business loss of $2,146 and interest and investment income of $7,221.75, for a net loss of $5,075.75. Mr. Houle testified that the Applicant received a Notice of Reassessment for 1993 relating to a bonus of $12,700 which the Applicant forgot to report. I received no documentary support for this evidence, which in any event falls far short of establishing a net or modified net income of $42,762 for that year. The Applicant's corporate income tax returns and income statements for the year before the accident also indicate net losses or nominal taxable incomes.

Arbitrators have stated in a number of decisions that while an insured person's income tax returns are not determinative of income issues, they provide strong evidence which must be rebutted by convincing evidence corroborating the claim for a higher income. In this case, the Applicant testified that he preferred to build houses for his own personal use and subsequent sale; Mr. Houle testified that proceeding in this way minimized taxes. The Applicant also admitted that he operated his business through four corporations for tax purposes. There were several non-arm’s length transactions, including intercompany sales, and construction of a house (the N.L. house) without intention of profit. On April 1, 1995, the Applicant transferred one of his companies, Modenham Construction, to his son, Kris Henri; the company was transferred back to the Applicant on July 1, 1995. (The Applicant explained that he had hoped his son would enter into business with him, but it didn't work out.) Modenham was working on a project for the Workers Compensation Board at this time. There was also a dispute between Mr. Sullivan and Mr. Houle about whether certain expenses should be included in direct costs or operating expenses.

Accordingly, I conclude that the Applicant’s accounting evidence must be scrutinized rigorously. In my view, the Insurer's "net/net" approach is more likely than the "modified net" approach to reflect accurately, fairly and realistically the Applicant’s financial losses resulting from the accident more accurately. In any event, the Insurer's "gross/gross" figures (Scenario I and IV as set out in the September 1995 report) are even less favourable to the Applicant, since they result in no benefit payable, rather than the minimum benefit of $185.60 payable under the "net/net" approach (Scenarios II and V).

I was impressed by Mr. Sullivan's qualifications. He is a chartered accountant, certified fraud examiner and chartered business valuator, and he has substantial experience with the benefit calculation provisions of the Schedule. Mr. Houle, a certified general accountant, has no such specialized experience. Mr. Houle’s Calculation of Weekly Income Benefit summary and his Reconciliation were prepared on the basis of Mr. Sullivan's more complete reports, and the Reconciliation included a number of adjustments based on Mr. Sullivan's draft report. The Reconciliation was in turn incorporated into Mr. Sullivan's final report. Given the relative complexity of the Applicant's financial arrangements, I rely on Mr. Sullivan's greater expertise.

Comparing the accounting evidence presented by the Applicant and the Insurer, I find that the Insurer's approach more fairly, accurately and realistically reflects the financial loss suffered by the Applicant as a result of the accident than does the Applicant's modified net approach. Accordingly, the Applicant is entitled to the minimum rate of $185.60 per week.

Did the Insurer agree to adopt the Applicants approach?

The Insurer retained Mr. Sullivan in early 1994 further to an agreement with Applicant's counsel; the Applicant agreed to produce information and documents at Mr. Sullivan’s request, and the Insurer agreed to pay benefits at the maximum rate pending receipt of Mr. Sullivan's report. In his three reports, Mr. Sullivan took no explicit position as to the proper method of calculation, but set out two scenarios: a 'gross/gross" scenario (both pre- and post-accident income are calculated on the basis of gross revenue) and a 'net/net" scenario (both pre- and post-accident income are calculated on the basis of gross revenue less all expenses).⁷ Mr. Sullivan testified that he and Applicant's counsel disagreed about the method of calculation from the outset, and that he had advised the Applicant’s counsel in their earliest conversations that he adopted the 'net/net" approach, which was his firm's standard method of calculating benefits for self-employed insureds.

The Applicant's counsel did not, of course, testify at the hearing. The only document supporting her submission that the Insurer had initially accepted the Applicant’s position on the treatment of business expenses is Mr. Mariani's letter to her of January 26, 1994, confirming the parties' agreement reached at mediation.⁸ Although the letter refers to "gross weekly income" and "ceasing expenses," with regard to pre-accident income, and "net income," with regard to post-accident income, it does not address the treatment of "ceasing expenses" in the context of an ongoing business. My impression is that Mr. Mariani’s letter recites the key words of the Regulation without analysis. In any event, the Applicant's counsel's letter of February 1, 1994 to Mr. Sullivan⁹ indicates that the treatment of business expenses was by that time clearly an issue between the parties.

At no time did Mr. Sullivan prepare a "scenario" in which benefits were calculated on the basis of the approach taken by the Applicant or his counsel. Nor has the Insurer or its counsel ever accepted either approach. Whatever conversations Mr. Sullivan may have had with the Applicant’s counsel, I am not persuaded that the Insurer ever bound itself to accept any particular approach to the calculation of benefits.

I have some sympathy for the Applicant’s submission that the Insurer did not commit itself to any particular approach to benefit calculation until the hearing. In the ideal world, both parties should know, well in advance of the hearing, the theory of the case they have to meet. In this case, I note that the Applicant’s position was also unclear, with the Applicant’s counsel and his accountant proposing different methods of calculation throughout the hearing. I am not persuaded that the Applicant was prejudiced by any lack of clarity as to the Insurer’s position.

Payments to Jacques Menard

The Applicant testified that his accident-related symptoms left him unable to do much of the heavy construction work he did himself before the accident, and he was forced to subcontract this work to Jacques Menard. The Applicant filed invoices and cheques totalling $42,000 for work performed by Mr. Menard between the date of the accident and the fall of 1995. The Applicant submitted that he should be reimbursed for Mr. Menard’s fees as rehabilitation expenses required as a result of the accident. Section 6(1) of the Schedule provides for payment of 'all reasonable expenses resulting from the accident" relating to a number of specified goods and services, and - in clause (f) - for 'other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident."

In a previous decision, Kevin Zehr, I discussed whether replacement labour expenses could be reimbursed under section 6.¹⁰ In that case, the applicant was a farmer who hired farm workers after the accident to perform the heavy work he could no longer complete. I concluded that these expenses lacked the 'treatment or rehabilitation nexus" required under section 6, but were rather business expenses.¹¹ I considered the following factors:

I heard no evidence that the work of the hired farm workers will facilitate Mr. Zehr's rehabilitation, except by allowing Mr. Zehr to avoid the restricted activities. This goal could be achieved without Mr. Zehr hiring others to replace his labour. Mr. Zehr’s testimony was that he hired farm workers in order to keep the farm going during the period of his disability. Though this is an admirable goal, it does not relate to Mr. Zehr’s rehabilitation, however broadly defined, under section 6. The decision to keep the farm going was a business decision. The hired farm workers are not helping Mr. Zehr to perform the heavy farm work, supplementing his work, retraining him, or helping in his physical or vocational rehabilitation. They are replacing Mr. Zehr’s labour.

These comments apply to the instant case. The services Mr. Menard provided were not medical or rehabilitation services intended to aid the Applicant his recovery, but construction services aimed at completing houses under construction by the Applicant’s business. Accordingly, I find that payments to Mr. Menard are business expenses which should be deducted from the Applicant’s post-accident gross revenue in calculating his net post-accident income.

The Applicant submitted, in the alternative, that Ms. Yee had agreed at the outset to pay the Applicant’s additional subcontracting costs. The Applicant offered no documentary evidence of this agreement, and Ms. Yee denied that she had made such a representation. I am not satisfied that the Insurer promised the Applicant it would pay his subcontracting fees.

Mr. Sullivan prepared two "net/net" scenarios, one of which "added back" $23,000 for payments to Mr. Menard, and the other of which did not. According to Mr. Sullivan’s calculations, this made no difference to the final result, which in either case is a benefit of $185.60 for the Applicant.¹² Mr. Sullivan based the $23,000 figure on the companies' general ledgers; he testified that he was not provided with the cheques and invoices filed at the hearing. According to my calculations, adding back $42,000 rather than $23,000 makes no difference to the Applicant’s benefit level.

I find that the Applicant is entitled to weekly income benefits at the minimum level of $185.60 per week.

Repayment:

The Applicant is entitled to benefits of $185.60 per week between October 11, 1993 and September 21, 1995 (101 weeks) for a total of $18,745.60. He received a total of $25,800 in benefits ($600 per week for 43 weeks). Accordingly, the Insurer has overpaid the Applicant’s benefits by $7,054.40.

Section 27(1) of the Schedule is as follows:

A person must repay to the insurer any benefit received under this Schedule that is paid to the person through error or fraud.

In Dana B. Levenson, Senior Arbitrator Susan Naylor made the following comments about this provision:

Subsection 27(2) and (3) provide for repayment of benefits in circumstances where there is no 'error" but where the recipient is disqualified from payment or where deductible payments have been received, in which case repayment is required to the extent of the deduction.

These provisions suggest that the requirement of 'error" in section 27(1) requires more than an error of judgement or 'being wrong" on the part of the insurer in paying benefits. Otherwise, the broader wording of Section 27(2) and (3) would be redundant. It is not sufficient therefore to establish merely that an applicant has received benefits to which he or she is subsequently adjudged not to be entitled. To give meaning to the terminology of the section, the stipulation that benefits be paid 'through error" in order to be recoverable must require that responsibility for the payment be attributable in some material way to the actions of the applicant.

I agree with these comments, which have been adopted consistently by arbitrators in subsequent decisions.

In this case, despite the parties disputes about certain figures, I am not satisfied that this is a case of fraud or that the Insurer's overpayment of benefits was attributable to the Applicant's actions. Mr. Sullivan testified that he was able to vouch for almost all the items he spot-checked, and ultimately there were few disputes between the parties about the raw data. The main dispute between the parties was as to the proper method of calculating business income under the Schedule. This is a legitimate dispute arising out of the ambiguous wording of the Schedule. I do not find this an appropriate case for a repayment order.

Vocational retraining:

The Applicant submitted that Rehabilitation Management Inc. should be retained to provide vocational rehabilitation. For the reasons given above, I am not satisfied that the Applicant is substantially unable to return to his pre-accident occupation as a self-employed builder. Therefore, I am not persuaded that he requires vocational retraining as a result of the accident.

Special award:

The Applicant claimed a special award under section 282(10) of the Act, which is as follows:

(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 No-Fault Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

The Applicant submitted that the Insurer terminated benefits unreasonably in August 1994 because it did not, at that time, dispute the Applicant’s ongoing disability, but only disputed the amount of benefit payable. The Applicant submitted further that the Insurer only began disputing disability in the spring of 1995, in response to the Applicant's request for vocational retraining.

I am not satisfied that the Insurer acted unreasonably. The Insurer paid benefits at the maximum level in accordance with the initial information received from the Applicant, until it received Mr. Sullivan’s first report. This was consistent with the legislative intent that statutory accident benefits be paid promptly and without the Insurer adopting an unduly adversarial approach with respect to its insured. Moreover, the Insurer's adjusters asked for additional income documentation in support of the maximum benefit rate from the outset of the claim. By early 1994, the parties disagreed about the method of calculation.

I am somewhat troubled that, without questioning disability, the Insurer terminated the Applicant’s benefits altogether, rather than continuing to pay him at the minimum level until it recovered its substantial overpayment of benefits. However, in the circumstances, I am not satisfied that this was unreasonable.

As to the Applicant’s claim that the Insurer only began disputing disability when he sought vocational retraining in early 1995, even if this is so, I find it difficult to criticize the Insurer for doing late what it had an ongoing right to do from the outset - investigate the Applicant’s claim of disability.

Expenses:

Arbitrators have generally ordered insurers to reimburse applicants for their expenses incurred in the arbitration proceeding, unless the application was fraudulent, frivolous or vexatious, or an abuse of process, or the conduct of the applicant unduly prolonged the proceeding. In this case, I find that the overpayment of benefits resulted principally from the parties' legitimate dispute about the method of calculating benefits. Although, I am not satisfied that the Applicant remains disabled from his pre-accident occupation after September 21, 1995, I accept that he may have ongoing symptoms attributable to the accident.

The Insurer’s counsel accepted that the Applicant is generally entitled to be reimbursed for his arbitration expenses, but submitted that an amount should be deducted from the expenses award in consideration of the hearing time spent on the special award claim, which the Insurer regarded as entirely without merit.

I heard a great deal of evidence about the parties' disputes concerning production of accounting documents and about the Applicant’s claim that the Insurer had bound itself to the method of calculation proposed by the Applicant. This evidence included the oral evidence of the three adjusters, Marie Yee, Joseph Mariani, and Hisham Fahmy, and a voluminous brief of correspondence between the parties. I also heard a great deal of oral testimony from Mr. Cousineau and Mr. Sullivan relating to Mr. Cousineau’s bill for his services in providing information to Mr. Sullivan. These matters diverted attention from the main issue in the hearing - the Applicant’s entitlement to benefits. However, these difficulties are not uncommon in cases concerning calculation of business income. I am not satisfied that the Applicant abused the process or unduly prolonged the proceeding, so as to justify reducing his arbitration expenses.

I find this an appropriate case in which to exercise my discretion to award the Applicant his arbitration expenses, subject to the criteria and maximums set out in the regulation.

At the hearing, the parties led evidence and made submissions about the appropriate fees for the services of Mr. Houle and Mr. Cousineau, but they did not deal with any other particular item of expenses. Following the hearing, the Applicant’s counsel submitted a detailed breakdown of the Applicant's expenses in the proceeding.¹³ I received no response from the Insurer's counsel. With the exception of the fees for Mr. Houle and Mr. Cousineau, I will not fix the Applicant's expenses at this time. If the parties are unable to agree on an amount, they may bring the matter before the Commission for assessment.

Fees for the Applicant’s accountant and bookkeeper

The Applicant claimed $3,711.71 (including GST) for the services of Denis Houle. Of this amount, $1.645.12 ($1,537.50 plus GST of $107.62) was billed for preparation of the 'Reconciliation" report (Exhibit 9). Section 282(11) of the Act gives an arbitrator power to award to the Applicant such expenses incurred in an arbitration proceeding 'as may be prescribed in the regulations to the maximum set out in the regulations." The prescribed expenses are set out in Regulation 664, (Schedule F to the Dispute Resolution Practice Code). Section 5(4) of the Expenses Schedule states that 'the maximum amount that may be awarded for a report prepared by an expert is $800." I have no hesitation in awarding Mr. Houle that amount for preparation of the report. The Act and the Regulation leave me no discretion to award a larger amount. Accordingly, the Insurer will reimburse the Applicant $800 for Mr. Houle's September 1995 report (Exhibit 9).

Two other invoices - $267.50 (December 31, 1993) and $1,799.09 (March 8, 1995) - relate to correspondence, meetings, and preparing for the hearing. I agree with the statement of Arbitrator David Draper in Frank Donohue that the Expenses Schedule includes no additional fee for preparation time for an expert witness. I do not allow an additional fee for these items.

Following the hearing, the Applicant’s counsel submitted an additional invoice for $1,070 for Mr. Houle’s attendance at the hearing. As stated above, I make no ruling as to this expense at present. The Expenses Schedule allows an expert witness to collect an attendance fee of $200 per hour, subject to a daily maximum of $1,600. If the parties are unable to agree on an amount, they may bring the matter before the Commission for assessment.

The Applicant also claimed $4,883.31 for the services of Richard Cousineau, his bookkeeper, for about 350 hours between the date of the accident and July 1995.¹⁴ Mr. Cousineau testified that he normally worked for the Applicant about one day a week.

I do not accept that the Applicant incurred this expense in furtherance of the arbitration proceeding. In cross-examination, Mr. Cousineau admitted that the 10.5 hours invoiced for October 6, 1993 (two days after the accident) "may not include" services provided for the Insurer, given that Marie Yee, the first adjuster on the file, had not yet requested further income documents. Mr. Cousineau invoiced 51.5 hours for the month of October and 23 hours for November. Ms. Yee testified that the Applicant provided no income documents until October 26, when he brought in his Application for Accident Benefits form and his 1992 income tax return, which showed a loss. In a signed statement made that day, he stated that he had built six houses over the previous year, for an average profit of about $13,000 per house. Ms. Yee asked the Applicant for proof of entitlement to more than $185.60 per week, and issued an Assessment of Claim form, indicating that it would pay the minimum $185.60 per week pending receipt of further income documentation.

Mr. Cousineau admitted that the information sought by the Insurer was already on the computer; entering such information was part of his normal duties. He also testified that, using the computer, he need only press a button to produce an interim financial statement. He admitted that the monthly financial statements he provided to the Insurer were the same statements he produced for the Applicant in the normal course of business.

Mr. Cousineau also stated that in November 1993, he prepared some figures to establish future losses. As has been often stated in arbitration decisions, the Statutory Accident Benefits Schedule does not compensate for future economic loss, but only compensates for lost income.

I find that Mr. Cousineau did not explain what he had been doing in furtherance of the arbitration proceeding for 51.5 hours in October and November 1993. I am prepared to accept that the Applicant may have requested minimal assistance from him in this period, in connection with the letters Mr. Cousineau sent the Insurer on November 1 and November 10, 1993. However, the inflated invoices put forward for Mr. Cousineau’s services in October and November 1993 substantially undermine his credibility. For this reason, where Mr. Cousineau’s account of the services he provided is silent or disagrees with the account given by the Insurer's adjusters and Mr. Sullivan, I prefer the evidence of the latter.

The Applicant applied for mediation with respect to the quantum issue on December 1, 1993 and mediation took place on January 24, 1994. The parties reached the procedural agreement referred to earlier - the Insurer would retain a mutually agreeable accountant, the Applicant would provide documents as necessary, and the Insurer would pay benefits at the maximum rate pending receipt of the accountant's report. Mr. Sullivan was retained shortly thereafter. On February 1, 1994, the Applicant's counsel forwarded to Mr. Sullivan a number of documents. All the documents had been prepared by third parties or by the Applicant for official purposes, and all the documents would have been readily available to Mr. Sullivan. Mr. Cousineau's work, if any, would have been minimal. I allow 2 hours for Mr. Cousineau’s work to this date.

Mr. Sullivan testified that he first met with the Applicant and Mr. Cousineau in the Applicant's home office on April 22, 1994, and he prepared his first report based on documents he obtained at this meeting and perhaps a subsequent phone call. The report indicates that it was based on interviews with the Applicant and Mr. Cousineau, and a review of the Applicant's income tax returns and the financial statements and interim financial statements of the companies. Again, all these documents were prepared by third parties or required for official purposes. I heard no evidence as to the length of the April 22, 1994 meeting. I am prepared to accept that it may have lasted half a day, in order to allow Mr. Sullivan to review the Applicant's records. I allow 4 hours for this meeting.

Mr. Sullivan testified that he then had no contact with the Applicant or Mr. Cousineau until June 1995. After a couple of short telephone conversations, Mr. Sullivan met with Mr. Cousineau for one full day and two mornings. The Insurer paid the Applicant for 16.5 hours of his time at $17 per hour, for meetings on June 26, June 30 and July 6. I allow an additional 2 hours for telephone conversations and file review. There was an exchange of telephone calls and letters on July 10 and 11 and again in late July, August and September, with regard to the treatment of capital gains, Modenham’s change in ownership, the Workers Compensation Board contract, and the sale of Ascot 6. I allow a further 4 hours for Mr. Cousineau’s time during this period.

Mr. Sullivan released his draft report on July 13, 1995 and his final report on September 20, 1995. I allow 4 hours for review of each of these reports.

Although Mr. Cousineau's invoices indicate that he charged the Applicant $8.50 an hour for his services, the Insurer agreed to pay him $17 an hour. I do not find this to be an exorbitant rate. In addition to the 16.5 hours already paid by the Insurer, I allow a further 20 hours, for a total of $340, plus GST of 7%, for a total of $363.80.

The parties may bring any other dispute about the amount of expenses payable before me.

Order:

1. The Applicant’s claims for further weekly income benefits, rehabilitation benefits and a special award are dismissed.

2. The Insurer’s claim for repayment of weekly income benefits overpaid is dismissed.

3. The Applicant is entitled to his expenses incurred in respect to the arbitration. His expense for payment of Mr. Houle's Reconciliation report is fixed at $800 plus GST. His expense for Mr. Cousineau's services is fixed at $363.80, inclusive of GST. Any disputes about any other expenses may be brought before me.

August 16, 1996

Nancy Makepeace Arbitrator

Date

Appendix - Witnesses

Denis Henry, the Applicant

Richard Cousineau, the Applicant's bookkeeper

Raymond Brazeau, the Applicant's supplier

Denis Houle, the Applicant’s accountant

Jacques Menard, the Applicant's subcontractor

Paul Mineault, the Applicant's supplier

Monique Henri, the Applicant’s wife

Normand Lahaie, physiotherapist, Embrun Physiotherapy Clinic

Marie Yee, the Insurer's adjuster

Ron Sullivan, chartered accountant

Hisham Fahmy, the Insurer’s adjuster

Dr. Susie Duff, rheumatologist

Dr. Francois Racine, physiatrist

Dr. Jean-Paul Ouellette, orthopaedic specialist

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. 2His original report, written in the French language, and dated February 9, 1994, is at Exhibit 4, Tab 4. An English language translation prepared by Applicant's counsel's firm was filed with the consent of the parties: Exhibit 13. Similarly, Dr. Racine's original report of January 19, 1995, is found at Exhibit 4, Tab 2; the English translation is Exhibit 14.
3. 3X-rays, October 4, 1993, January 18, 1994 and January 12, 1995.
4. 4Simpson and Royal Insurance Company of Canada (April 6, 1994), OIC A-003863, Puopolo and Wellington Insurance Company (December 20, 1994), OIC A-006445, E.Z. and Royal Insurance Company of Canada (November 14, 1995), OIC A-005237, Kotak and CAA Insurance Company (Ontario) (December 20, 1995), OIC A-0011445 and Bertsouklis and Liberty Mutual Life Insurance Company (May 28, 1996), OIC P-006499.
5. 5Modenham Construction Ltd, Hensim Construction Ltd., 996968 Ontario Inc., and 1004315 Ontario Inc.
6. 6Piper and Zurich Insurance Company, (December 6, 1993), OIC A-002585.
7. 7Several variations on these basic scenarios were also provided.
8. 8Exhibit 1, Tab 16. Mr. Mariani's letter of January 28, 1994 (Exhibit 3, Tab 3) states: "As we discussed, we will be asking Mr. Sullivan to look into points #1 and #2 of Mr. Henri's income as documented in my January 26th letter."
9. 9Exhibit 12, Tab 2.
10. 10Zehr and The Guarantee Company of North America Insurance Company (July 30, 1993), OIC A-001963.
11. 11Saini and Wellington Insurance Company (March 18, 1994), OIC A-001515 and Oliveira and Zurich Insurance Company and The Personal Insurance Company (April 21, 1995), OIC A-002691.
12. 12It also made no difference to the "gross/gross" calculation, which in either case resulted in nil benefits payable.
13. 13Letter, dated December 4, 1995, Catherine Coplea to Nancy Makepeace, copied to William Garay.
14. 14Exhibit 3, Tab 2.