Ontario Insurance Commission

Commission des assurances de l’Ontario

Neutral Citation: 1996 ONICDRG 76

Appeal P-002264

Appellant

and

Respondent

Before:

David R. Draper, Director's Delegate

Representatives:

Andreas Kosmopoulos (in person)

Gregory P. Heckel (for Victoria Insurance)

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration decision, dated November 10, 1993, is confirmed.
No expenses are payable with respect to this appeal.

May 14, 1996

David R. Draper

Director's Delegate

Date

Andreas Kosmopoulos was injured in an automobile accident on April 10, 1991. At the time of his accident, he was a self-employed leather cutter working exclusively for Avon Sportswear. He applied to Victoria Insurance Company of Canada (Victoria Insurance) for accident benefits under Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (the Schedule), claiming he was unable to return to work.

Mr. Kosmopoulos received weekly income benefits of $763.16 for nearly a year, a total of $40,294.83. Victoria Insurance cancelled his benefits, effective April 4, 1992, on the basis that he could perform the essential tasks of his pre-accident work. He disagreed with this decision, claiming that he was entitled to ongoing benefits.

At the arbitration hearing, Victoria Insurance presented surveillance evidence in support of its position that Mr. Kosmopoulos had returned to work. Further, it submitted that he failed to disclose a substantial amount of post-accident income that he received from Avon Sportswear. Mr. Kosmopoulos maintained that he was still unable to return to work, and that the post-accident income was for work done by his wife and son, not him.

In a decision dated November 10, 1993, the arbitrator concluded that by January 22, 1992, Mr. Kosmopoulos not only was able to perform the essential tasks of his occupation, but had returned to work. He ordered Mr. Kosmopoulos to repay all the benefits he received for the period January 22, 1992 to April 4, 1992 ($7,631.60), plus 80% of his post-accident income up to January 22, 1992 ($18,493.76), a total repayment of $26,125.36, plus interest.

Mr. Kosmopoulos appealed this order.

Mr. Kosmopoulos' appeal raised the following preliminary issues that I addressed following my appointment as Director's Delegate. My rulings, with reasons, were provided to the parties in a letter dated October 5, 1995.

A. Issues on Appeal

Mr. Kosmopoulos raised many issues in his appeal. I concluded that some of them could not be considered because they had not been raised in the mediation or pursued at the arbitration hearing, and involved claims for benefits not included in the Schedule. He was allowed to proceed on the following issues:

Did the arbitrator err in concluding that Mr. Kosmopoulos is not entitled to weekly income benefits for any period after January 22, 1992?
Did the arbitrator err in concluding that Mr. Kosmopoulos was overpaid by $26,125.36?
Did the arbitrator err in concluding that Mr. Kosmopoulos has to repay the full overpayment to Victoria Insurance, with interest?
Did the arbitrator err in concluding that Victoria Insurance should not be required to pay a special award?
Did the arbitrator err in concluding that Mr. Kosmopoulos is not entitled to interest or his expenses related to the arbitration?

B. New Evidence

Mr. Kosmopoulos provided a large number of documents in support of his appeal. Victoria Insurance objected to this new evidence. The decision whether to admit new evidence on appeal is discretionary. As indicated in my letter, I accept the following criteria identified in previous decisions as a useful guide:

The evidence should generally not be admitted if by due diligence it could have been available for the arbitration hearing;
The evidence must be reasonably capable of belief;
The evidence must be relevant to a potentially decisive issue; and
The evidence must be such that, if believed, it could reasonably be expected to have affected the result.¹

After reviewing Mr. Kosmopoulos' documents in light of these criteria, I concluded that the only one that should be considered in the appeal was his letter to the Commission, dated March 21, 1994, which is more like written submissions than new evidence.

C. Appeal Procedure

I also had to decide how the appeal would proceed. Section 283(4) of the Insurance Act gives the Director a broad discretion to decide the appeal on the record, or by rehearing of some or all of the issues. Mr. Kosmopoulos asked for an oral re-hearing, while Victoria Insurance submitted that the appeal should be decided solely on the record. I concluded that the appeal should be decided based on the evidence in the record, plus the one additional document described above, but with an opportunity for the parties to make oral submissions.

III. THE APPEAL

The critical issue in the arbitration was Mr. Kosmopoulos' credibility. It was central to both his claim for additional weekly income benefits and his assertion that the income he received after the accident was for work done by his wife and son. The arbitrator made strong findings that

Mr. Kosmopoulos was not a credible witness based on his "inconsistent, contradictory statements, recanted testimony, his evasiveness and general demeanor during questioning." On appeal, Mr. Kosmopoulos submits that the arbitrator erred in rejecting his evidence.

My role is not to rehear the case, or to second-guess the arbitrator's assessment of the evidence.²The arbitrator had the advantage of hearing and observing the witnesses in person. This gave him an opportunity to assess their credibility, and to consider the exhibits in light of the testimony. Because the arbitrator was in the best position to evaluate all the evidence, his decision should not be disturbed on appeal unless his findings are unsupported by the evidence, or he misapplied the Schedule to the facts.

In this case, I have the advantage of a transcript of the testimony of Mr. Kosmopoulos, his wife and his son. I reviewed the arbitration exhibits and the transcript, paying particular attention to the pages noted in Mr. Kosmopoulos' letter of March 21, 1994 and in his oral submissions. I have no hesitation in concluding that there was ample evidence to support the arbitrator's conclusions, and find no reason to interfere with the decision.

There are many inconsistencies in the testimony of Mr. Kosmopoulos and his witnesses, only some of which are noted in the arbitration decision. These inconsistencies, however, are not the only problem with his claim. Much of Mr. Kosmopoulos' material reflects a misunderstanding of the scope of accident benefits. He seems to believe that weekly income benefits should have been paid until he fully recovered. In his letter of March 21, 1994, he argued that the arbitrator "did not have any proof that I was fit on January 22, 1992 to perform my duties at my occupation at 100%." Full recovery, however, is not the test. Weekly income benefits are only payable for the period that the person is substantially unable to perform the essential tasks of his or her pre-accident occupation or employment. I find no error in the arbitrator's conclusion that by January 22, 1992, Mr. Kosmopoulos no longer met this test.

Mr. Kosmopoulos also seems to believe that there are few, if any, limits on his ability to structure and re-structure his financial affairs to maximize his family income. He testified that before the accident, he did all the work for Avon Sportswear, but split his income with his wife for tax purposes. In 1990, Mr. and Mrs. Kosmopoulos each listed gross business income of $21,077.75 on their income tax returns. For purposes of accident benefits, however, Mr. Kosmopoulos claimed that he earned all the income from January 1, 1991 to the date of the accident. Victoria Insurance calculated his weekly income benefits on that basis. When it was discovered that he had received a substantial amount of post-accident income from Avon Sportswear, Mr. Kosmopoulos claimed that this income was not his because the work was done by his wife and son, not him. In my view, the arbitrator was quite justified in treating the business as Mr. Kosmopoulos' and including all the post-accident income as income "available" to him.

In his appeal submissions, Mr. Kosmopoulos focussed on the role played by his lawyer. He stated that he planned to represent himself until the pre-hearing arbitrator encouraged him to retain a lawyer. He contends that if he had presented his own case, it would have been "one hundred per cent different."

I am quite prepared to accept that the pre-hearing arbitrator suggested that Mr. Kosmopoulos might be better off with a lawyer, particularly considering the insurer's claim that he should be required to repay all the benefits that he had received. The decision, however, remained with Mr. Kosmopoulos. Following the first pre-hearing, the pre-hearing arbitrator sent the parties a letter, stating in part:

The rules governing arbitrations do not require that the parties have lawyers to represent them at an arbitration hearing. However, in more complicated cases, it is helpful to have a lawyer.

In his letter, dated March 21, 1994, Mr. Kosmopoulos states that the pre-hearing arbitrator "recommended that it was better to have a lawyer for the hearing." It is clear, therefore, that he was not forced to use a lawyer.

I am also not persuaded that Mr. Kosmopoulos' case was compromised by his lawyer, resulting in any injustice. His case failed because of his own inability to present a coherent, credible basis for his claim. It is not enough for him to second-guess litigation decisions in the wake of an unsuccessful result.

Mr. Kosmopoulos submitted that the record reveals some specific errors. These are considered below.

Mr. Kosmopoulos contends that the arbitrator made mistakes because he was unable to keep up with the testimony. He points to page 31 of the transcript as an example. At the outset of the hearing, the arbitrator told the parties he would be taking notes and asked them to pace themselves accordingly. He said he would have to interrupt if they went too quickly. This is precisely what he did. At page 31, the arbitrator asked Mr. Kosmopoulos and his counsel to go back 13 lines in the transcript. I note that the arbitrator correctly repeated the evidence that he was concerned about, while Mr. Kosmopoulos "corrected" him. There are several similar examples in the transcript of the arbitrator asking that a question or answer be repeated. In my view, this does not suggest a problem. On the contrary, it indicates that the arbitrator was ensuring that he did not miss any of the testimony.

Mr. Kosmopoulos also objected to the arbitrator's refusal to believe that he made his own knives. The exchange that offends Mr. Kosmopoulos is the following (Transcript, p.238):

MR. ARBITRATOR: How do you make the knives?

THE DEPONENT: The knives . . .

MR. ARBITRATOR: That's part of your trade?

THE DEPONENT: Yes. It's not easy. Not everybody can make those knives, because that blade is wide about one inch.

MR. ARBITRATOR: Mm-hmm.

The arbitrator goes on to ask a number of questions about how the knives were made. I am at a loss to find anything objectionable in this interchange. Further, the decision does not include any findings about the knives, or suggest that this was matter of any consequence.

At page 7 of the decision, the arbitrator states that Mr. Kosmopoulos testified that he did "almost all" of the leather cutting at the factory prior to the accident. Mr. Kosmopoulos submitted that this was an error, pointing to page 107 of the transcript, which states:

Q. And did you take some work home from Avon on occasion before the accident?

A. Never.

I accept Mr. Kosmopoulos' submission that the arbitrator was mistaken about the testimony, but I do not agree that it is a matter of significance. The more important question was what Mr. Kosmopoulos did after the accident. I also note that his testimony is somewhat at odds with his wife's. Mr. Kosmopoulos insisted that he did all the cutting prior to the accident and that none of it was done at home. When Mrs. Kosmopoulos was asked why she and her husband split their income prior to the accident, she testified that she was doing some of the cutting at home. (Transcript, p.293).

Mr. Kosmopoulos objected to being questioned about his workers' compensation file without having a reasonable chance to review it. Approximately six weeks before the hearing, the parties agreed that the workers compensation file would be requested, although they realized that there might be some difficulty getting it in time for the hearing. At the beginning of the hearing, counsel told the arbitrator that they were still waiting for the workers' compensation file, and that they agreed Mr. Kosmopoulos might have to be cross-examined on that material at a later date.

Counsel for Victoria Insurance received the workers' compensation file on the evening before the second day of the hearing and provided it to Mr. Kosmopoulos' lawyer the next morning. It was acknowledged that Mr. Kosmopoulos and his lawyer needed a chance to review it. After a discussion, some of which is recorded in the transcript, Mr. Kosmopoulos' lawyer agreed that they would review it over a break and deal with it that day, rather than schedule another day to complete the hearing (Transcript, pp. 188 and 216). After the break, the arbitrator specifically asked Mr. Kosmopoulos if he had been able to look at the workers' compensation file. He said "yes", without any qualification (Transcript, p.217).

I am not persuaded that it was unfair to proceed with Mr. Kosmopoulos' cross-examination on the workers' compensation material, particularly given the apparent agreement of Mr. Kosmopoulos and the explicit agreement of his lawyer. The file is not extensive and Mr. Kosmopoulos had known for some time that his previous workers' compensation claim would be an issue at the hearing.

Finally, Mr. Kosmopoulos expressed concern that the arbitrator relied on the income figures in Tab 3 of Exhibit 1 rather than Tab 2, which was the "true document." I find, however, that the arbitrator relied on Tab 2, not Tab 3. Mr. Kosmopoulos also submitted that there is an error in Tab 2 of Exhibit 1 with respect to the income for December 1992. It shows income of $7,927.20, which is far greater than every other payment. Victoria Insurance concedes that this is probably a typographical error. I find, however, that this error did not affect the arbitration decision in any way. Because the arbitrator decided that Mr. Kosmopoulos was only entitled to weekly income benefits until January 22, 1992, he did not include the December 1992 in his calculation of post-accident income.

For these reasons, I conclude that the arbitrator made findings that are supported by the evidence and properly applied the Schedule to the facts as he found them. As a result, there is no reason to interfere with the decision.

IV. EXPENSES

This appeal was brought on the basis that the arbitrator should have evaluated the evidence differently and reached a different conclusion. Appeal decisions have consistently held this is not a sufficient basis to challenge the decision. I conclude, therefore, that Victoria Insurance should not be required to pay Mr. Kosmopoulos' appeal expenses.

May 14, 1995