Neutral Citation: 1996 ONICDRG 189

OIC A-006636

ONTARIO INSURANCE COMMISSION

BETWEEN:

ROCCO AND LINDA GIOSA

Applicant

and

ALPINA INSURANCE COMPANY, LIMITED

Insurer

DECISION

Issues:

The Applicants, Mr. Rocco Giosa and Mrs. Linda Giosa, were injured in a motor vehicle accident on February 10, 1991. They applied for and received statutory accident benefits from Alpina Insurance Company, Limited ("Alpina"), payable under Ontario Regulation 672.¹ Mrs. Giosa's weekly income benefits were terminated on August 26, 1991. Mr. Giosa's weekly income benefits were terminated on June 20, 1993. The parties were unable to resolve their disputes through mediation and Mr. and Mrs. Giosa applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Mr. Giosa entitled to weekly income benefits after June 20, 1993?

2. What are the amounts of Mr. and Mrs. Giosa's weekly income benefit?

3. Do Mr. and Mrs. Giosa have post-accident income that may be deducted from their weekly income benefits?

4. Did Alpina overpay weekly income benefits to either Mr. or Mrs. Giosa?

5. Is Mr. Giosa entitled to a cognitive rehabilitation program?

6. Is Mr. Giosa entitled to reimbursement for landscaping expenses?

7. Is Mr. Giosa entitled to a special award?

8. Is Alpina entitled to any repayment from either Mr. or Mrs. Giosa?

Mr. and Mrs. Giosa also claim interest on any amounts owing, and their expenses of the arbitration.

Result:

1. Mr. Giosa is entitled to further weekly income benefits from June 20, 1993 through December 14, 1994.

2. Mr. Giosa's weekly income benefit is $1,050. Mrs. Giosa's weekly income benefit is $706.

3. Mr. Giosa and Mrs. Giosa each earned post-accident income that may be deducted from their weekly income benefits.

4. Mr. Giosa has been overpaid, and must repay Alpina. Mrs. Giosa has been underpaid.

5. Mr. Giosa is not entitled to a cognitive rehabilitation program.

6. Mr. Giosa is entitled to landscaping expenses, subject to set-off by the repayment order.

7. Mr. Giosa is entitled to half of his arbitration expenses, subject to set-off by the repayment order. Mrs. Giosa is entitled to her arbitration expenses.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on June 13, 14, 15, 1995; November 7, 8, 9, 1995; January 3, 1996, before me, Fred Sampliner, arbitrator. I received written submissions from the parties on February 26, 1996.

Present at the Hearing:

Applicants: Rocco and Linda Giosa

Applicants' Representative: Mark Fonseca Barrister and Solicitor

Alpina's Representative: Guy M. Farrell Barrister and Solicitor

The proceedings were recorded by Ray MacDonald of Paul Rosenberger, Official Examiner.

Witnesses:

Linda Giosa Applicant

Raf Betro Bookkeeper

John Duguid Contractor/customer

Rocco Giosa Applicant

Dr. John McLachlin Psychologist

Malcolm Allman Chartered Accountant

Dr. John Zasowski Family Doctor

Dr. Ann Taylor Neuropsychologist

Gregory Hocking Chartered Accountant

Exhibits:

The parties filed 31 exhibits.

Evidence and Findings:

The Accident:

The hearing of this case was protracted and contentious. The following facts are not in dispute. Mr. Giosa was 33 years old, married, with two young children at the time of the February 10, 1991 accident. His car was stopped at a traffic light. Mr. Giosa was driving, his wife was a front seat passenger, and their daughter was in the back. Their car was violently struck from the rear at high speed and was completely demolished.

Both Mr. and Mrs. Giosa sustained injuries in the accident. However, Mrs. Giosa was not as severely affected as her husband. She returned to work on August 27, 1991, and the parties agree that she is eligible for weekly disability benefits under section 12 of the Schedule until then. Only the amount of Mrs. Giosa's benefit is in dispute, which is dealt with later in this decision.

Mr. Giosa sustained more serious injuries. He was transported by ambulance to Etobicoke General Hospital. Mr. Giosa was knocked unconscious by the impact, and initially treated in the intensive care unit for pelvic fractures, internal bleeding and a closed head injury. Mr. Giosa recovered in hospital over the next two weeks. The evidence contains conflicting accounts of Mr. Giosa's loss of consciousness and degree of amnesia.

After his release from the hospital, Mr. Giosa complained of multiple symptoms: vertigo, headaches, neck and back pain and stiffness, reduced strength and endurance, poor concentration and memory, slow thought processing, sleep loss, radiating thigh pain, reduced hearing in both ears and progressive tingling and numbness in both arms.

In late 1993 and early 1994, Mr. Giosa underwent successful surgeries to release the impingement on the ulnar nerves on both his left and right arms. The two surgical procedures significantly reduced the numbness and tingling in Mr. Giosa's arms. However, physiotherapy, acupuncture and chiropractic treatment did not change Mr. Giosa's soft tissue complaints of backache and neck pain. He was referred to various specialists for treatment of headaches, hearing problems and loss of cognitive function resulting from the accident.

At the time of the accident, Mr. Giosa was employed and also ran his own business. His entitlement to weekly income benefits is determined under section 12 of the Schedule. Mr. Giosa must prove, on a balance of probabilities, that he suffered a substantial inability to perform the essential tasks of both his pre-accident jobs outlined above during the first three years after the accident. After the first three years, Mr. Giosa must show that he cannot engage in any suitable occupation or employment.²

Mr. Giosa's pre-accident work:

Before the accident, Mr. Giosa held down a full-time day job as a technical support specialist for Rogers Cantel Incorporated. He also worked nights and weekends on his own, installing security alarms, cable and satellite TV systems and intercoms, and doing other electrical work.

There was no dispute about Mr. Giosa's duties at Rogers Cantel. Most of Mr. Giosa's time at his full-time job was spent doing sedentary office work. Mr. Giosa testified that 70 percent of the time he worked at the computer or on the telephone. Thirty percent of the time he travelled to various sites around the province and Canada, overseeing, managing and sometimes assisting technicians with equipment repairs and installations. In addition, Mr. Giosa periodically conducted technical training sessions for company employees and outside contractors.

Mr. Giosa's duties as a part-time, self-employed security alarm installer occupied centre stage in the evidence. Before the accident Mr. Giosa and his wife were partners (60/40 percent) in Comtech Communications. The business operated from the couple's home. Mr. Giosa performed all of the physical work, while his wife helped with the telephone and record keeping.

Mr. Giosa testified that he had to squat, stand, crawl and otherwise work in awkward positions in order to feed wires through walls and crawlspaces and install the electronic devices. He used both hand and power tools. Mr. Giosa estimated the costs for each job, negotiated prices, planned the work, bought supplies, and used his home computer for record-keeping, creating invoices and other documents.

During the year before the accident, Mr. Giosa had devoted considerable time to developing Comtech's business. He reduced his overtime hours at Cantel, and often worked on alarm installations for Comtech until one or two o'clock in the morning. Comtech's business was growing, and it was Mr. Giosa's ultimate goal to eventually quit Cantel and become fully self-employed in the security alarm and electrical business.

Mr. Giosa maintains that his soft tissue injuries, loss of cognitive function and hearing deficit have made him unable to return to either Cantel, Comtech or any other suitable job.

Medical/Psychological Evidence:

(a) Physical problems

Dr. Galea initially became involved in the treatment of Mr. Giosa's injuries after Alpina requested a medical examination in October 1992. He practices sports medicine and conducts disability evaluations. After his initial examination of Mr. Giosa in 1992, Dr. Galea went on to become one of his treating physicians and directed various testing and therapies.

As a result of Dr. Galea's recommendations, Mr. Giosa entered into physiotherapy, exercise regimes and a work-hardening program to prepare him for return to employment by simulating his normal job duties. Although the pelvic fracture had healed nicely, it left Mr. Giosa with a one to two centimeter difference in leg length. In May 1993, testing to determine Mr. Giosa's trunk strength revealed that he had progressed quite well. According to Dr. Galea, the pelvic shift caused by the difference in leg length, together with his soft tissue back injuries and the normal aging process would continue to periodically cause Mr. Giosa some mechanical back pain.

Dr. Galea's main concern in 1993 was Mr. Giosa's numbness, tingling and restriction in finger, wrist and hand movement. These problems were objectively identified as a physical barrier to Mr. Giosa's return to work.

By the latter half of 1994, Dr. Galea and the surgeon who performed the release of the ulnar nerves in Mr. Giosa's wrists had determined the results of that surgery. Mr. Giosa told the surgeon that he was pleased with the improvement in his right wrist, but that there was some remaining loss of sensation in the little finger. Similarly positive results were achieved by surgery on the left wrist, with some small residual sensory deficit as well. Testing ordered by Dr. Galea confirmed that the surgeries had improved Mr. Giosa's symptoms in his arms, but with reduced bilateral elbow/ wrist strength, endurance and range of movement.

According to Dr. Galea, neither the periodic back pain or remaining wrist/elbow problems would interfere with Mr. Giosa's return to work at Cantel. Dr. Galea's reports and the treatment records of Toronto West Rehabilitation Services indicate that Mr. Giosa had made significant progress using the exercises, physiotherapy and work simulations. I rely upon Dr. Galea's reports and the rehabilitation records in finding that by December 1994, Mr. Giosa had plateaued in his recovery of function to the point where he was physically capable of performing his office duties at Cantel.

(b) Neuropsychological problems

However, Mr. Giosa's claim is also based upon psychological impairment. Dr. Galea was concerned by Mr. Giosa's continuing neuropsychological or cognitive symptoms. Mr. Giosa complained of nagging headaches, periodic dizziness and poor concentration and memory while under Dr. Galea's care. In August 1994, Dr. Galea referred Mr. Giosa to a psychologist, Dr. McLachlan, for an evaluation of the head injury.

By all accounts, Mr. Giosa had suffered a concussion in the accident. However, the evidence of the time period during which Mr. Giosa lost consciousness varies considerably.

In December 1993 Mr. Giosa was referred to Dr. Chepesiuk, a neurologist. Based upon Mr. Giosa's reported unconsciousness in hospital for three days after the accident, Dr. Chepesiuk diagnosed a severe head trauma. However, the hospital emergency room records indicate that the attending physician personally interviewed Mr. Giosa after his arrival. During that interview, Mr. Giosa was unable to recall details of the accident, but he was oriented and provided appropriate answers on other matters. At the hearing, Mr. Giosa explained that he did not know what he told Dr. Chepesiuk in 1993, and he still has no recall of the accident itself. Unfortunately the hospital records do not provide reports from the scene, and I was not provided with evidence from the ambulance attendant or the police.

Mr. Giosa gave Dr. McLachlin a different account of his loss of consciousness. Mr. Giosa described regaining consciousness upon arrival at the hospital emergency room. At first he did not recognize family members, but over the following week he slowly regained his faculties. The emergency records together with Dr. McLachlin's evidence persuade me that Mr. Giosa probably lost consciousness on impact, was relatively alert in the emergency room, and over the following week suffered some reduced level of awareness.

Dr. McLachlin conducted testing and examined Mr. Giosa. He characterized Mr. Giosa as having suffered a mild to moderate brain injury. Particularizing the deficits, Dr. McLachlin testified that Mr. Giosa lacks the ability to concentrate or appropriately focus on a task. Although he has no overall memory problems, Dr. McLachlin also found that Mr. Giosa's processing and retrieval of information was slower than expected, given his intelligence and education.

At the hearing, Dr. McLachlin was presented with a description of Mr. Giosa's duties at Cantel. Dr. McLachlin testified that Mr. Giosa might have difficulty with rapid responses or doing multiple tasks at the same time. Likewise, he stated that Mr. Giosa would have reduced ability to absorb new information. However, the doctor opined that less efficiency did not mean that Mr. Giosa was unable to manage these intellectual tasks if he were given adequate time. Dr. McLachlin could cite no reason why Mr. Giosa should not return to work at Cantel, despite his mild depression, memory impairment and slower information processing capability.

Dr. Ann Taylor, a psychiatrist, examined Mr. Giosa in September 1995, conducted testing, and reviewed Dr. McLachlin's records and report on Alpina's behalf. Dr. Taylor was of the opinion that Mr. Giosa did not suffer any cognitive deficit as a result of the accident.

Dr. Taylor testified that Mr. Giosa functioned at grade nine level in math, but only grade three or four on vocabulary and reading. She stated that a head injury sufficient to cause loss of cognitive ability would affect all intellectual functions. According to Dr. Taylor, a massive head trauma causes loss of long-term memory required for reading and vocabulary. Since the evidence does not indicate a massive head trauma, she opined that Mr. Giosa did not sustain these impairments from the accident.

Dr. Taylor felt that Mr. Giosa's selective difference of intellectual skills points to other causative factors. She postulated that Mr. Giosa's upbringing in a dual language household (Italian/English) and possible learning disability could be factors. However, she was not provided with Mr. Giosa's school records nor any pre-accident testing, which might assist in this analysis.

Dr. Taylor recommended assessment of Mr. Giosa's depression, and agreed with Dr. McLachlin that he could return to work at Cantel. In the result, both Dr. McLachlin and Dr. Taylor agree that Mr. Giosa was not psychologically restricted from returning to his work at Cantel.

On the one hand, I accept Dr. McLachlin's opinion that in all probability the accident caused some slowdown of Mr. Giosa's information retrieval. The experts agree that he can function at a relatively high level of problem solving, albeit with reduced speed. On the other hand, I also accept Dr. Taylor's conclusion that Mr. Giosa's poor reading skills and vocabulary probably stem from sources other than the accident. Thus, I find that the accident resulted in a modest permanent decrease in Mr. Giosa's intellectual capability, not disabling on its own.

Mr. Giosa also alleges that the trauma to his head resulted in hearing loss and speech difficulties. However, the evidence did not connect these problems to the accident. Mr. Giosa's family physician, Dr. Zasowski, referred him to an audiologist shortly after the accident. Testing revealed a marked high frequency hearing impairment, consistent with noise-induced hearing loss. The audiologist concluded that since Mr. Giosa had not been exposed to loud noises, the loss was accident-related. Mr. Giosa and Dr. Taylor cited the hearing loss as a cause of his speech problem.

At the hearing, Mr. Giosa listened to and answered questions during his testimony. His speech was not impaired. He did not use an aid during the hearing. In fact, Mr. Giosa admitted that he has not used a hearing aid at all since the accident. So although I find that Mr. Giosa suffers from a permanent high frequency hearing loss as a result of the accident, it does not seem to impair his ability to function in daily life.

In summary, Mr. Giosa operated at a high level of activity before the accident. But based upon Dr. Galea's evidence, by December 1994 the wrist surgery had healed and physiotherapy, exercises and the normal healing process had left him with relatively mild soft tissue aches and pains. The hearing loss resulting from the head trauma did not significantly affect Mr. Giosa's functioning. And while Mr. Giosa is slow to retrieve information and suffers from poor concentration and headaches at times, it is clear to me from the evidence of Dr. McLachlin, Dr. Taylor and Dr. Galea, that Mr. Giosa could have returned to his duties in the alarm/electrical business in December 1994.

The Surveillance Evidence:

Although Mr. Giosa never returned to his job at Cantel after the accident, he continued the electronic and alarm installation business. Mr. Giosa testified that after the accident, he sub-contracted the physical work to other individuals. He denied doing installations, except on an occasional basis, without pay. Mr. Giosa claims that he was only able to work at the computer, talk with customers, and do the paperwork and bookkeeping.

The surveillance evidence shows Mr. Giosa attending at various job sites and performing electrical work. A November 21, 1991 videotape shows Mr. Giosa at a residential worksite loading tools and equipment in and out of his car. He is carrying a file and what appear to be architectural plans.

A year later, on November 19, 1992, an investigator videotaped Mr. Giosa unloading equipment from his car and entering a large home around 10 o'clock in the morning. He departs from the home around 2 p.m.

On both of the above dates, Mr. Giosa is not shown physically working, but later surveillance shows him performing electrical work for a considerable time. During the morning of December 14, 1994, Mr. Giosa is depicted on the videotape selecting electrical parts from bins and racks, at a supplier. At noon that same day, he arrives at a large home, unloads his tools and carries a roll of electrical wire into the house. Mr. Giosa comes out of the house and drills a hole through the brick wall of the home, using both hands and full body pressure (about seven minutes). He hammers out the diameter of the hole, places the electrical conduit through it and screws an electrical box onto the brick wall. Then Mr. Giosa feeds the wire through the wall from inside the house. He strips the wires and connects them to the receptacle. Finally, he affixes the receptacle to the box, caulks the box weather tight, and leaves the house at about 2 p.m.

Mr. Giosa did not deny that he installed the electrical box or that he was able to bend, stand, squat, or use power and hand tools during the two hours required for that work. In my view, an installation like this requires the same training, experience, dexterity, strength, endurance and ability to plan work that Mr. Giosa would have used before the accident. This videotape evidence is a strong indicator that by December 1994, Mr. Giosa could perform the tasks of his self-employment.

This is not the only instance where Mr. Giosa appears to conduct work after the accident. A subsequent videotape taken December 15 and 19, 1994 shows Mr. Giosa working with tools on a five or six foot step-ladder just inside the front plate glass door of a shop. The time marks on the tape indicate that Mr. Giosa was present at the store for over three hours. Though the tape itself is not three hours long, I received no evidence that Mr. Giosa was away from the site for any of that period. I find that he worked for three hours.

In the later videotape, Mr. Giosa works near the top end of the step-ladder, using tools at a level even with and above his head. He climbs the ladder, stands on it and descends without any observable restriction. At the hearing, Mr. Giosa explained that he installed a door alarm at this shop.

Mr. Giosa's adept use of tools on firm ground and overhead on a step-ladder during December 1994 supports the view that he is capable of and could regularly perform electrical work. In fact, when Dr. Bowen, the surgeon who performed the ulnar surgery, examined Mr. Giosa in June 1993, he found Mr. Giosa had ingrained dirt and thick callouses on his hands. This suggests that Mr. Giosa was performing regular physical labour at an even earlier date than the 1994 video. Mr. Giosa's hands still showed callouses at the hearing.

Mr. Giosa's complaints of dizziness are discredited by the video showing him working overhead from the top of a stepladder. Mr. Giosa's soiled, calloused hands and the surveillance of him working for lengthy periods seriously conflict with his claim that he cannot do electrical installations. Altogether, Mr. Giosa's presentation in the surveillance is certainly not that of a seriously disabled person who cannot work at all. Weighing this evidence, I find that Mr. Giosa has failed to prove, on balance, that after December 15, 1994 his accident injuries prevent his return to his part-time electrical work.

Applying the eligibility test of section 12(5) of the Schedule, if Mr. Giosa could return to one of his pre-accident jobs after February 17, 1994, he is no longer eligible for weekly income benefits. Since I have found that Mr. Giosa could have returned to either of his pre-accident jobs by December 15, 1994, he is no longer eligible for weekly income benefits after that date. Thus, I find that Mr. Giosa is entitled to further weekly income benefits from the June 20, 1993 termination date through December 14, 1994.

Amount of Mr. and Mrs. Giosa's Weekly Income Benefit:

The amount of Mr. and Mrs. Giosa's weekly income benefits are in dispute. Under section 12 of the Schedule, the insured person may base the weekly income benefit upon his or her average weekly earnings from either the four week or 52 week period before the accident. In this case, both Mr. and Mrs. Giosa chose the four week period before the accident. They each have employment and self-employment income during that period.

Mr. and Mrs. Giosa's income from their employment during the four weeks prior to the accident is easily determined. Mrs. Giosa was employed by L’& M Truck Parts. She earned $585 per week. Mr. Giosa was employed by Rogers Cantel Incorporated, and earned a $903.03 weekly salary.

Mr. and Mrs. Giosa's self-employment income from the Comtech partnership is much more complicated. Mr. and Mrs. Giosa claim that Comtech earned money from three jobs during the four week period before the accident. The income is based upon three invoices Mr. Giosa prepared. On total billings of $13,591, the labour listed on the invoices (dated January 17, 1991, January 21, 1991 and February 10, 1991) is $6,718.

Mr. Giosa testified about the work represented by these invoices. Two relate to work for Mr. John Duguid. Mr. Giosa stated that he performed all of the $5,000 worth of labour, billed on the January 21, 1991 invoice, between Saturday January 12, 1991 and Monday January 21, 1991. The invoice indicates that Comtech installed an alarm system, intercom wiring, and outside and indoor lighting at the residence of Mr. Duguid in Aurora, Ontario. The second invoice to Mr. Duguid lists installation of wiring for an audio system, an intercom system, electrical and outdoor plugs. Labour costs were $1,200 and material was $2,202. The third invoice represents $517.68 labour for the installation of a garage door opener and intercom wiring in King City, Ontario.

Other than Mr. Giosa's testimony, little independent evidence exists to verify that the work was performed within the four week period before the accident. At the hearing, Mr. Duguid testified that he hired Comtech to do work sometime shortly after he took title to his new home at the end of October 1990. He did not personally observe Mr. Giosa working, and he had no specific recall whether the work was performed within the four week period before the accident. Mr. Giosa testified that he negotiated the work for the Duguid residence before Christmas 1990, and began the job in mid-January 1991. He cited overtime work at Cantel during the holiday season and family conflicts as the reason for the delayed start. However, Mr. Giosa admitted that his Cantel paycheck showed no overtime, and there was evidence that supplies were purchased for this job in December 1990.

I do not find Mr. Giosa's explanation of how he arrived at the labour charges for the initial Duguid job satisfactory. Mr. Giosa stated said that he used his labour rate and an estimate of time in order to quote each job. Mr. Giosa was not sure of his hourly labour rate. Yet, he was able to recall technical details of the Duguid jobs. Mr. Giosa also said that he did not earn a lot of money from alarm installations. But ironically, the largest labour amount of the three pre-accident invoices is attributable to the bill for Mr. Duguid's alarm system.

Mr. Giosa's explanation of the labour charges does not satisfy me. The contract negotiations and parts purchases in December 1990 coupled with Mr. Duguid's inability to substantiate Mr. Giosa's version of the start date suggest to me that the Duguid work was begun during the week between Christmas and the new year, outside the four weeks preceding the accident.

To calculate the amount of labour from the first invoice that falls within the four week period, I consider that Mr. Giosa negotiated the job around Christmas 1990. Since the work was obviously completed by the time the January 21, 1991 invoice was prepared, logically three quarters of the labour represents earnings before January 14, 1991, the beginning of the four week period. I find that $1,250, or one quarter of the $5,000 labour charges from the invoice dated January 21, 1991, falls within the four weeks. Adding the $1,250 to Comtech's labour charges from the other two invoices in the four weeks yields $2,968.

Mr. Giosa also testified that Comtech earned profit on the supplies provided for the Duguid jobs. One invoice is for labour only. The two other jobs were for Mr. Duguid, and the invoices recite materials charges of $3,781.65 and $2,202.27. No backup data was presented to substantiate the materials charges or markup. However, I heard evidence from Mr. Duguid, Mr. Giosa and the parties' accountants.

Mr. Duguid is a contractor/builder. He testified that materials in the construction trade are customarily marked up 23 to 25 percent. Mr. Giosa said that Comtech earned a 25 percent profit on the Duguid materials. I might have been willing to give this oral evidence more weight if at least some proof of materials purchases could have been specifically tied to the projects to demonstrate the profit margin. But absent corroborative proof, I am unwilling to accept the claim that profits were earned from the sale of the materials on the invoices. Moreover, evidence from the accountants and Mr. Giosa's bookkeeper indicate that the materials purchased during this period equal exactly the invoiced amounts from the Duguid jobs. I therefore conclude that Comtech did not earn profit from materials used on the pre-accident jobs.

The Schedule provides that "ceasing expenses" should be deducted from partnership earnings from the four weeks preceding the accident. The no-fault disability scheme has centred on the return of the insured person to his or her essential tasks. It appears to me that in providing for the deduction of ceasing expenses only as relates to self-employed people, the drafters intended to protect the continuing operating expenses of a business so that self-employed individuals could return to their pre-accident work. I interpret the term "ceasing expenses" to literally mean those expenses from an insured person's self-employment that have stopped after an accident. This approach assumes that continuing operating expenses of a business are not deducted from income, and provides some income to enable the insured person to pay the ongoing operating expenses of continuing the business.

In this case, Mr. and Mrs. Giosa used the Comtech partnership name to operate the alarm and electrical business for three months after the accident. There are four Comtech invoices, dated between March 29, 1991 and May 15, 1991. Comtech prepared books for the 1991 year-end, which indicate that most of the work was conducted during the first four months of that year.

Although Comtech ceased to exist after 1991, the Giosa's continued their alarm installation and electrical business. They incorporated LNR Alarms Inc. after the accident, and the company's financial statements indicate business was commenced in the 1992 calendar year. This evidence persuades me that the Giosa's electrical business continued after the accident, and that there were no ceasing expenses.

The calculation of Mr. and Mrs. Giosa's weekly income benefits follows these findings. The $2,968 self-employment income divided into the Giosa's 60/40 partnership shares provides Mrs. Giosa with $1,187 and Mr. Giosa with $1,781 of income during the four weeks before the accident. Thus, Mrs. Giosa had average weekly earnings from self-employment during the four week period of $297, and Mr. Giosa earned $447 per week from Comtech. The combined average of Mrs. Giosa's employment and self-employment weekly earnings equals $882. I find that her weekly income benefit under section 12 is 80% of that amount, or $706. Mr. Giosa's average employment and self-employment weekly earnings is $1,350, and his weekly income benefit reaches the maximum $1,050 per week.

Post-Accident Income:

Section 15 of the Schedule provides that 80% of any income earned by an insured person after the accident should be deducted from the benefit. No accounting methodology is set out in the legislation. In my opinion, the insured's income both before and after an accident must be treated equally. On the one hand, I have not deducted the fixed expenses of the Giosa's business to arrive at pre-accident income, pursuant to my understanding of ceasing expenses in the Schedule. On the other hand, the corollary is to leave out the fixed expenses of a continuing business in the post-accident calculation, too. Where a business continues without changes, this means that the weekly income benefit reflects cost of sales, and fixed office expenses are ignored. In the result, while the insured's disability benefit is raised to recognize that he or she continues to pay fixed expenses, the benefit is reduced by the post-accident profit on sales, without consideration of the fixed costs.

Four Comtech invoices dated between March 29, 1991 and May 15, 1991 represent the partnership's post-accident income for that year. A subcontractor performed the work, and the invoiced labour amounts agree with the notations on the Comtech ledger.

The first invoice dated March 29, 1991, totals $3,945. Of that amount, $3,676 was paid out for GST, a subcontractor and for materials, leaving $269 of income. I can find no data to determine the costs of sales on the second invoice for $101. Comtech was left with $220 earnings on the third invoice, after paying GST and reimbursing the subcontractor for parts and labour. And the last invoice, dated May 15, 1991, represents sales of materials only. Since there is no documentation of the cost for these items, I do not feel Mr. and Mrs. Giosa have met the burden of proof to show profit for the materials listed on the invoices.

Based upon these figures, I find that the total Comtech 1991 post-accident earnings are $489, which must be attributed 60/40 to Mr. and Mrs. Giosa ($293 and $196).

As abruptly as Comtech ceased operations in May 1991, LNR Alarms Inc. ("LNR") seems to have started in 1992. This leaves me with the impression that business might not have actually ceased during this seven month interval when the business changed format. However, evidence of income during this period was not presented.

In 1992 LNR earned gross revenues of $48,059. Labour, services, tools and material costs were $37,453, resulting in a $10,606 gross marginal profit on sales. Similiarly, the company's income statements for 1993 and 1994 show that LNR earned $72,168 and $92,089 gross revenue. After materials and labour costs were deducted, the company earned $15,032 and $34,093 gross marginal profit on sales during those respective years. Accordingly, I find that $59,731 represents LNR's post-accident earnings from 1992 through 1994.

Eighty percent of LNR's earnings from 1992 through 1994 are deductible from Mr. Giosa's weekly income benefits under section 15 of the Schedule. Although I received no documentation to support LNR's ownership, it appears that Mr. Giosa owned all of the shares in that corporation. Thus, in respect of LNR, $47,784 (80% of $59,731) is deductible from Mr. Giosa's weekly income benefits between January 1, 1992 through December 15, 1994, the period of LNR's operation and Mr. Giosa's entitlement. Together with his partnership income from Comtech, I find that Mr. Giosa's total deduction attributable to post-accident income is $48,077.

The parties submitted that Mr. Giosa received long-term disability benefits from Canada Life Insurance Company of $632 per week since the accident. These payments for loss of income are deductible from the weekly income benefit under section 12(4) b of the Schedule, dollar for dollar.

I have calculated that there are 199 weeks in the entitlement period from one week after the accident through December 14, 1994. Mr. Giosa's total entitlement to weekly income benefits during that period is $208,950, excluding interest under the Schedule. Deduct the $125,768 Canada Life disability benefits and the $48,077 deduction for post-accident income, and it appears that Mr. Giosa was due $35,105 during the period of his entitlement. The evidence presented indicates that Alpina paid Mr. Giosa a total of $129,510 in weekly benefits. Consequently, I find that Mr. Giosa was overpaid $94,405.

Mrs. Giosa was entitled to weekly income benefits for 27 weeks. At $706 per week, she is entitled to a total of $19,062 in weekly income benefits, exclusive of interest under the Schedule. This is reduced by her modest post-accident partnership income from Comtech ($157 deduction).

I received conflicting submissions on the quantum of the weekly income benefits paid to Mrs. Giosa. At the outset of the hearing, the parties seemed to agree that Alpina paid Mrs. Giosa $468 per week during the entitlement period, or a total of $12,636. However, the final written submissions from Mrs. Giosa's counsel seem to allege Alpina paid her nothing. I have used the $468 per week figure in finding that Alpina has underpaid Mrs. Giosa by $6,269 in weekly income benefits, plus interest according to the Schedule. The parties should make the appropriate change should my understanding be incorrect.

Cognitive Retraining Expenses:

Dr. McLachlin recommended a program of cognitive training for Mr. Giosa, which has support from Dr. Galea, Dr. Chepesiuk and Dr. Zasowski. I accept Dr. McLachlin's opinion that Mr. Giosa might have difficulty with rapid responses in performing multiple tasks or new duties, although Dr. Taylor gave evidence that Mr. Giosa's cognitive difficulties may not entirely stem from the accident.

However, the cognitive program itself has not been costed or defined in scope or length. In the absence of this information, I am not prepared to make an order. The parties may wish to seek an independent evaluation of the type of program and expense.

Landscaping Expenses:

Lastly, Mr. Giosa seeks reimbursement for the cost of yardwork performed in May, June and July 1993 by Cold Creek Landscape and Maintenance. The three handwritten invoices presented by Mr. Giosa total $2,161.40, only two of which are marked as paid. No other proof of payment was provided.

At the time these expenses occurred in 1993, the ulnar nerve surgeries on Mr. Giosa's wrists had not been completed. His trunk strength had improved and the soft tissue injuries had subsided for the most part, but Mr. Giosa's wrists were still problematic at that stage in his recovery. No doubt the heavier outdoor work constantly using his arms, shoulders and wrists would have greatly exacerbated Mr. Giosa's impingement of the ulnar nerves in his wrists. I find that the $2,161.40 landscaping expenses are reasonable and necessary under section 6(1)(f) of the Schedule, but are subject to set-off by the repayment order below.

Special Award:

Section 282(10) of the Insurance Act provides an arbitrator with discretion to make a special award in addition to the benefits ordered. Mr. Giosa's claim for a special award is predicated upon Alpina's alleged refusal to continue paying Mr. Giosa's weekly income benefits until February 10, 1994, and non-payment of the cognitive rehabilitation program.

I do not accept that Alpina conducted itself inappropriately in terminating Mr. Giosa's weekly income benefits. In this case, Mr. Giosa is ordered to repay a huge sum as a result of his material contribution to the overpayment. Clearly, these circumstances do not give rise to a special award.

Mr. Giosa's Repayment:

Alpina requested a repayment of almost $97,000 from Mr. Giosa around the time that his weekly income benefits were terminated in June 1993. The correspondence between the parties demonstrates that Alpina was not aware of LNR's operation and Mr. Giosa's post-accident income until 1993, when Alpina's suspicions were also aroused concerning the veracity and accuracy of Mr. Giosa's information used to originally calculate his weekly income benefit. Neither Mr. or Mrs. Giosa denied that they failed to inform Alpina of the post-accident operations or income from Comtech and LNR.

The evidence in this case poignantly illustrates that Mr. Giosa has been neither candid nor honest in presenting his claim to Alpina. He worked after the accident and did not report his income to the Insurer. I also find that Mr. Giosa was evasive and not candid in his evidence.

The repayment provision, section 27 of the Schedule, has been consistently interpreted by arbitrators to mandate repayment where the insured person has committed fraud, error or materially contributed to the insurer's overpayment. Considering that Mr. Giosa failed to disclose his post-accident earnings to Alpina and was not candid in presenting his pre-accident earnings for the four weeks, I find that he materially contributed to the overpayment he received. Accordingly, Mr. Giosa must repay the $94,347, less the $2,161 landscaping expenses, or $92,244. This amount shall bear interest from the date of this order, in accordance with section 27 of the Schedule.

Arbitration Expenses:

Although Mr. Giosa's failure to disclose his post-accident earnings caused the large overpayment, the evidence demonstrated that he is entitled to additional weekly income benefits. Under these circumstances, I find it appropriate that he recover half of his arbitration expenses. However, these expenses are subject to set-off by the repayment order.

Mrs. Giosa successfully proved her claim for additional weekly income benefits, based upon the quantum of payments. Her claim could not have been adjudicated without the accounting evidence. Thus, I find that Mrs. Giosa is entitled to her expenses of the arbitration process, which includes all of the accounting evidence. Though the claims were heard together, her expenses are not subject to the set-off.

Particular expenses may be assessed if the parties have difficulty.

Order:

1. Mr. Giosa shall pay Alpina $92,244, plus interest from this date, in accordance with section 27 of the Schedule.

2. Alpina shall pay Mrs. Giosa $6,269, plus interest according to the Schedule.

3. Alpina shall pay half of Mr. Giosa's expenses of the arbitration process, subject to set-off by the repayment order.

4. Alpina shall pay Mrs. Giosa's expenses of the arbitration process, in accordance with the Dispute Resolution Practice Code.

November 5, 1996

Fred Sampliner Arbitrator

Date

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule — Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Section 12(5)b of the Schedule.