Neutral Citation: 1998 ONFSCDRS 86

FSCO A96–001657

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

DOMENIC ALESSANDRO

Applicant

and

GENERAL ACCIDENT ASSURANCE COMPANY OF CANADA

Insurer

DECISION

Issues:

The Applicant, Domenic Alessandro, was injured in a motor vehicle accident on May 25, 1993. He applied for benefits from General Accident Assurance Company of Canada ("General Accident"), payable under Ontario Regulation 672.¹ The parties were unable to resolve their disputes through mediation, and Mr. Alessandro applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is the Applicant entitled to ongoing weekly income benefits under section 12 of the Schedule? The Insurer paid benefits of $600 per week between May 31, 1993 and April 18, 1994. The Applicant claims benefits between April 19, 1994 and May 25, 1996. The Insurer submits that the Applicant should not have received any weekly benefits.

2. What is the proper amount of the Applicant's weekly benefits? The Insurer submits that any benefits to which the Applicant is entitled should be paid at the minimum rate of $185.60 per week less 80 percent of the Applicant's post-accident net income, pursuant to sections 12 and 15 of the Schedule.

3. Is the Applicant entitled to the medical and rehabilitation benefits claimed under section 6 of the Schedule after April 18, 1994?

4. Is the Insurer entitled to repayment of the weekly benefits paid under section 27(1) of the Schedule?

5. Is the Applicant entitled to be reimbursed for his arbitration expenses under section 282(11) of the Act?

6. Is the Insurer entitled to be reimbursed for its arbitration expenses under section 282(11) of the Act?

7. Is the Insurer entitled to be reimbursed for its arbitration assessment of $2,000 under section 282(11.2) of the Act?

Mr. Alessandro also claims interest on any amounts owing and his expenses incurred in the hearing.

Result:

1. The Applicant is not entitled to weekly income benefits because he was not disabled as a result of the accident.

2. Any benefits to which the Applicant is entitled are payable at the minimum rate of $185.60 per week, which is reduced to zero after deduction of 80 percent of the Applicant's post-accident net income.

3. The Applicant is not entitled to the medical and rehabilitation benefits claimed.

4. The Applicant shall repay weekly benefits of $27,600 plus interest.

5. The Applicant is not entitled to his arbitration expenses.

6. The Applicant shall reimburse the Insurer $2,000 for its assessment.

7. I have no authority to order the Applicant to pay the Insurer's arbitration expenses.

Hearing:

Details of the hearing are set out in the Appendix A to this decision.

Background and Issues:

The Applicant, Domenic Alessandro, is 31 years old. He lives in his parents' home with his common-law spouse and two children. He graduated from Humber College with a three-year civil engineering diploma in 1987. Since then, he has worked in a lumber store and as an estimator and general contractor in residential construction. He claims that he was working as a plumber or pipe layer for Top-All Plumbing & Heating Contractors Ltd. ("Top-All") at the time of the accident.

On May 25, 1993, the Applicant was driving his Jimmy Blazer when he was rear-ended by a truck. The impact pushed his vehicle forward into the rear-end of a vehicle that had stopped ahead of him. The Applicant testified that he "felt a jolt" and felt "nervous" and "shocked" after getting out of the vehicle. He did not sleep well that night, and woke up with a stiff lower back and a light migraine. He soon developed mid-and low-back pain, right shoulder pain and nausea. His headaches resolved after a few weeks, as did some chest bruising which resulted from his chest hitting the steering wheel. He claims that his back and right shoulder continue to cause him problems and prevent him from standing for a prolonged time, twisting, bending, lifting, carrying with his right arm, or working overhead.

The Applicant testified that he had improved "probably 50%" by the time of the hearing, and could probably perform administrative tasks like reading drawings, completing estimates, ordering supplies and inventory. However, he would not be able to dig trenches, lay pipes, carry equipment and supplies, work in awkward spaces, use a welding torch or a hacksaw, or work on his knees in cold and wet conditions, all of which are required activities for a pipe layer. The Applicant testified that he did not work after the accident until the summer of 1996, when he began working as a paralegal for his brother's company, Agents at Law. Accordingly, he does not claim benefits after 156 weeks under paragraph 12(5)(b) of the Schedule.

The Applicant's credibility is the main issue in this case. The Insurer does not accept the Applicant's claim that he worked for Top-All before the accident. The Insurer submits that the Applicant sustained, at most, very minor soft tissue injuries which resolved long ago, and that the Applicant quickly returned to his pre-accident activities. The Insurer alleges that the Applicant was involved in an auto body business at 95 Rivalda Road in Weston before and after the accident. The body shop operated under three names during the benefit period: European Sport Auto Collision ("European Sport"), European Luxury Auto Centre Inc. ("European Luxury"), and Formula One Auto Centre Ltd. ("Formula One"). The Insurer alleges that the Applicant participated in several fraudulent schemes connected with the body shop during the benefit period. The Insurer claims repayment of benefits on the basis that they were obtained by fraud.

The Applicant denies any wrongdoing.

Reasons:

The Insurer's allegations about the Applicant's activities are directly relevant to two issues in this proceeding: (i) whether the Applicant was disabled as a result of the accident, and (ii) the appropriate benefit rate. Indirectly, the Insurer's allegations, if true, destroy the Applicant's credibility, which undermines his case on both the benefit entitlement and benefit rate issues. Arbitrators have often stated that the applicant's credibility is an important issue in soft tissue injury cases, where there is little or no objective evidence of injury. Credibility is also critical where there are gaps in the documentation of the applicant's pre-accident and post-accident income.

For reasons given below, I find the Applicant an entirely unreliable witness, and I accept none of his testimony without corroboration. Nor do I believe his brother, Joe Alessandro, who testified about the Applicant's pre-accident work and their business activities together after the accident. I find that key documents filed in respect of the Applicant's pre-accident job at Top-All were manufactured. I do not believe that the Applicant worked for Top-All before the accident. After the accident, I find that the Applicant was actively employed or self-employed through the auto body shop, Pure-Platinum Enterprises (his sole proprietorship) and Agents at Law. I find that the Applicant misrepresented the nature and duration of his involvement in all these businesses.

I find that the Applicant misled his doctors about his activities before and after the accident. In any event, the medical evidence indicates that the Applicant sustained, at worst, a mild soft tissue injury. I do not accept the Applicant's evidence about his pain and functional limitations because I find that he is not a credible witness. Accordingly, I find that the Applicant was not entitled to weekly benefits because I am not satisfied that he was disabled as a result of the accident. In any event, as I received no reliable evidence about the Applicant's activities or income before or after the accident, I draw adverse inferences. I find that if the Applicant was entitled to any benefits for any period, his pre-accident income entitles him to a benefit at the minimum rate of $185.60 per week, which is reduced to zero because of his post-accident income. I find that the Insurer has satisfied the onus of proving that benefits were overpaid through wilful misrepresentation or fraud.

A number of evidentiary issues were raised in this proceeding with respect to the admissibility of evidence about a prior conviction. My rulings on these issues are set out in Appendix B to the decision.

Pre-accident employment:

The Applicant testified he was employed by Top-All as a plumber or pipe layer for seven and a half days before the accident. Domenic Caroni, owner of Top-All, corroborated his testimony. Joe Alessandro, the Applicant's brother, testified as to his knowledge of the Applicant's work with Top-All. I did not believe any of these witnesses. Supporting documentation included an Employer's Confirmation of Income form, a T4 slip, a cancelled cheque payable to the Applicant and a paystub. I am not satisfied that the documents are authentic. My reasons follow.

I heard inconsistent evidence about how the Applicant came to be hired by Top-All. The Applicant testified that a friend, "Angelo," gave him Mr. Caroni's phone number; he did not know Angelo's last name. He testified that he had never met Mr. Caroni before he called him looking for work.

Mr. Caroni gave a different account of his first contact with the Applicant. In direct testimony, he said that he called the Applicant, who had been recommended by an unnamed contact. The basis for the recommendation was not clear, since the Applicant is not a qualified plumber or pipefitter and I heard no specific evidence of any relevant job experience. In cross-examination, Mr. Caroni admitted that he already knew the Applicant's father, Vito Alessandro, and his uncle, Joe Alessandro,² because Top-All subcontracted for North Hill Homes, the Alessandro family's construction business. On further questioning, he admitted, "I probably ran into Domenic [Alessandro] on the job site or talked to his father."

The Applicant's brother, Joe Alessandro, confirmed that Top-All was one of North Hill Homes' subcontractors. When asked "is that when you met Domenic Caroni?", Joe Alessandro rubbed his forehead and muttered "I'm trying to recall his last name." I did not find this testimony persuasive. Mr. Alessandro went on to state that he had seen Mr. Caroni at job sites and in North Hill's office. He believed that his brother, Domenic, also knew Mr. Caroni through North Hill Homes.

I find that the Applicant and Mr. Caroni knew each other or had mutual contacts through North Hill Homes before the date of the Applicant's alleged employment with Top-All. The attempts by the Applicant, his brother and Mr. Caroni to conceal or minimize their business relationship seriously undermines the credibility of all three witnesses.

The Employer's Confirmation of Income form signed by Mr. Caroni indicates that the Applicant earned $22 per hour for a 44-hour work week: $968 in the first week and $198 in the second.³The T4 slip shows a gross income of $1,166.⁴ A single cheque was issued in the amount of $872.14; the cancelled cheque and paystub were filed into evidence.⁵ The Insurer paid benefits at the maximum rate of $600 per week based on these documents.

Mr. Farrell cross-examined Mr. Caroni about his reasons for paying $22 an hour to the Applicant, who has no qualifications or experience as a plumber. Mr. Caroni explained that while he pays apprentices about $11 an hour, and journeymen (with 5 to10 years experience) $26 an hour, he pays as much as $40 an hour for labourers if he needs to get the job done, and commonly pays around $20 to compete with the union rate. This does not make sense, and I do not accept it in the absence of independent corroboration.

The Insurer also questioned the legitimacy of the paystub and T4 slip, which appear to have been prepared by the same person who prepared the T4 slip issued to the Applicant by Agents at Law for the 1996 tax year. When the Applicant testified in January 1998, he refused to acknowledge the similarity of the forms, and testified that he did not know whether the same person had prepared the two T4 slips. When the hearing resumed two months later, Mr. Caroni testified that the Top-All T4 had been prepared by Mr. Jose Louzeiro, Top-All's bookkeeper. Joe Alessandro, the Applicant's brother, then testified that Mr. Louzeiro was also the bookkeeper for Agents at Law.

Mr. Louzeiro confirmed that he worked for both companies and had prepared both T4 slips. He testified that Domenic Alessandro hired him to do the bookkeeping for European Luxury in late 1994, and hired him in the same capacity for Formula One, his new company formed in 1995 after European Luxury went out of business.

I accept that as an employee of Top-All, the Applicant might not have known who prepared his T4 slip, but this innocent explanation is inconsistent with Mr. Louzeiro's testimony that it was because of his work for Top-All that Mr. Alessandro subsequently hired him to do the bookkeeping for European Luxury and Formula One. I think that in January 1998, when the Applicant testified, he knew who did the bookkeeping for his brother's business. I do not accept the Top-All T4 slip as corroborating the Applicant's pre-accident employment or income because of the Applicant's attempt to conceal his ongoing business relationship with Mr. Louzeiro.

There were equally serious problems with the Applicant's evidence about his pre-accident job duties at Top-All.

The Application for Accident Benefits form⁶ and Employer's Confirmation of Income form⁷describe the Applicant's pre-accident job at Top-All as installing drains in residential and commercial sites. The work is described as "heavy physical work." In cross-examination, the Applicant was unable to recall details of any of the jobs he did at Top-All. He first explained that he worked "everywhere," going to different jobs every day. When Mr. Farrell countered that in seven and a half days, he couldn't have worked "everywhere," the Applicant explained that he didn't know where they worked because he wasn't driving, but was driven to the job sites with a group in a van. On arrival, he did not notice the address of the work site because he was there to work. Pressed further, he said that he thought they went to Hamilton once to work on some town homes, but that was four years ago and he couldn't remember the exact location. Asked to describe the work, he was able to say only that he was laying drains. I found the Applicant's testimony implausibly vague, despite the passage of time. The Applicant's evasive responses to Mr. Farrell's questions further undermines his claim to have worked for Top-All.

Joe Alessandro testified that the Applicant was working on a project near Yorkdale in North York at the time of the accident. I do not accept this testimony. Joe Alessandro conceded that Yorkdale is about 15 minutes away from the Alessandro home. I would expect the Applicant to be able to identify a location so close to home, but he made no reference to any specific area other than Hamilton and Mississauga in his testimony.

In contrast to the Applicant's vague testimony, Mr. Caroni gave detailed testimony about the work done by Top-All's employees. Mr. Caroni did not, however, testify about the Applicant's specific duties, except to say, generally, that he observed the Applicant engaged in this work.⁸

Given the serious gaps and discrepancies in the evidence about the Applicant's income and duties at Top-All, I am not satisfied that the Applicant was employed by Top-All at the time of the accident.⁹ As I heard no reliable evidence about the Applicant's employment or self-employment duties or income, I have no basis for finding that he "suffers substantial inability to perform the essential tasks of his . . . occupation or employment." Accordingly, I am not satisfied that the Applicant was entitled to weekly benefits for any period.

Because there is reason to believe that the Applicant was involved in other business activities unrelated to Top-All before the accident, I also considered whether he was disabled from sedentary or light administrative duties as a result of the accident. For reasons that follow, I find he was not.

The accident:

The Applicant testified that the accident happened after he stopped from a speed of 50-60 km/h and signalled his move into the centre lane to avoid hitting a vehicle that had stopped in the right lane. A three-to-five ton truck, carrying a trailer, rear-ended his Jimmy Blazer and pushed it 10-15 feet into the rear of the stopped vehicle. His foot was firmly on the brake at the time.

The Applicant testified that he felt two "jolts"; he was shocked. He testified that the Jimmy's rear bumper was "all bent," the tailgate and spare tire (which is mounted on the passenger side of the tailgate) were pushed in, and the left rear taillight was cracked or broken. There was also minor damage to the front of the vehicle. The proof of loss claim filed with the Insurer included repairs of $5,636.15.

The Insurer alleged that the property damage claim was fraudulently enhanced and that the Jimmy Blazer suffered only minor damage. I received no independent expert evidence as to the extent of the damage. The Insurer relied on photographs which show damage to both front and rear bumpers, the left taillight, the right headlight and the grill. I see no evidence of damage to the spare tire or its soft vinyl covering.¹⁰

I heard oral evidence from the drivers of the other two vehicles involved in the accident. Mr. James Duke, a farmer, drove the vehicle that rear-ended the Applicant's Jimmy. He testified that he drove a 3/4-ton Dodge pick-up truck pulling an empty cattle trailer. This was in marked contrast to the Applicant's testimony that he was struck by a "three to five ton vehicle." The photograph of the vehicle¹¹ supports Mr. Duke's testimony, as did Mr D.R. Eliathamby, the driver of the first vehicle. Confronted with the photograph, the Applicant denied recognizing the truck and said he could not remember whether this was the trailer he observed. I do not believe him.

Mr. Duke said he wasn't going "that fast" when he "bumped or hit" the Jimmy. He agreed that the impact from his vehicle pushed the Jimmy into the stopped car, but he estimated the distance between them as "5 feet or more." He testified that he observed no damage to any of the three vehicles, and saw no glass or other debris on the road. In contrast, the Applicant testified that there was "slight damage to [Mr. Duke's] front bumper and maybe his grill."

In cross-examination, Mr. Duke refused to concede that he was at fault for the accident. I preferred the evidence of Mr. Eliathamby, the driver of the stopped vehicle, a four-wheel-drive Toyota utility vehicle, who appears to have no interest in the outcome of this proceeding.

Mr. Eliathamby testified that he felt a "nudge" at the moment of impact. He denied feeling any pain. He observed moderate damage ("not a lot, some") to the Jimmy's front bumper, and testified that a headlight was broken. Mr. Eliathamby's evidence that the tailgate of the Jimmy was "dented in" supports the Applicant's testimony. Asked whether the Jimmy's damage would have been observable at 10 feet, Mr. Eliathamby answered "certainly, yes." Mr. Eliathamby also testified that his own truck sustained very minor rear-end damage, and that Mr. Duke's Dodge Ram had damage to its front end. He added: "All the vehicles had noticeable damage."

The three drivers agreed, in their testimony, that they exchanged insurance information and discussed calling the police, but decided this was unnecessary. The Applicant admitted that he understood that an accident involving the extensive property damage he claimed should have been reported. He gave several explanations for not doing so, including that no one needed an ambulance, the vehicles were blocking traffic, all three vehicles were drivable, and there was no telephone nearby from which to make a call. Whatever the Applicant's reasons for not wanting to report the accident, I find it significant that Mr. Eliathamby agreed not to report the accident. This suggests that the damage to his vehicle was indeed minor, which in turn suggests that the Jimmy also sustained only minor front-end damage. Based on the photograph of the Jimmy, I find that its rear-end damage was also minor: the vinyl covering of the spare tire appears to be intact, as does the "GMC Jimmy" logo (within an inch or two of the point of impact), and the tailgate appears to be openable and sitting squarely in its frame.

The Applicant's testimony that he felt a "jolt" or "jolts" at the moment of impact is consistent with Mr. Eliathamby's testimony that he felt a "nudge," but is inconsistent with the Applicant's description of a 3-5 ton vehicle pushing the braked Jimmy 10-15 feet into the rear of the stopped car. The Applicant's attempt to embellish the severity of the accident undermines his credibility further. I find that the Jimmy sustained minor damage and was drivable after the accident. I also find that none of the three drivers complained of injuries at the scene and none sought immediate medical attention.

Termination of benefits:

In the spring of 1994, the Insurer conducted surveillance of the Applicant at an auto body shop at 95 Rivalda Road in Weston. On June 7, 1994, a claims examiner wrote to Mr. Joseph Caprara, the Applicant's representative at that time: "Further to our numerous telephone messages left for you, we are trying to obtain information regarding Mr. Alessandro's part-time work." There appears to have been a follow-up letter on July 29, 1994. Mr. Caprara responded by letter dated August 25, 1994 as follows:

• Mr. Allessandro [sic] has not resumed employment.

• Mr. Allessandro is apparently attending the Columbus Center exercise facility and has arranged to recondition himself for employment through their facility.

• Mr. Allessandro admits attending European Auto Collission on a regular basis and has advised us that he had been actively negotiating the purchase of that business.

On October 17, 1994, the Insurer issued an Assessment of Claim form terminating benefits effective April 18, 1994 on the basis that the Applicant had been working.

Post-acccident employment:

At the hearing, the Applicant maintained the explanation set out in Mr. Caprara's letter. In fact, on June 16, 1994, two months before that letter was written, the Applicant became sole shareholder, officer and director of European Luxury.

The body shops at 95 Rivalda Road

European Sport was registered as a new business on April 28, 1993, not quite a month before the accident. The Applicant testified that his first contact with the shop happened when he took his Jimmy there for repair after the accident, although he knew it then as Triple C Auto Collision. While visiting to check on the progress of the repairs, he got to know Joe Silva. European Sport was registered as a sole proprietorship in the name of Lucy Silva, Joe Silva's wife.

European Luxury was incorporated on April 14, 1994 to operate the same business. The Applicant testified that he did not become involved until June 16, 1994, when the company's corporate records indicate that he became sole shareholder, officer and director. The records indicate that Joe Palma held that role for the first two months of the life of the company, and that Bill Campbell took over when the Applicant disposed of his interest on November 11, 1994.¹²The Applicant described Mr. Silva as "the owner" and Mr. Palma "the shareholder" at the time he became interested in the business.

According to the Applicant, he was invited to invest in the business in the spring of 1994, when he was looking for a job. Mr. Silva asked him if he wanted to become a shareholder because Mr. Palma was going back to school. The Applicant says he told Mr. Silva he had no money to invest and would have to pay him later. Though the corporate records indicate the Applicant owned 100 shares, the Applicant testified that he had only been aware of owning 50 shares. The Applicant insisted that he paid no money for his interest in the business.

Nor did he make any money. According to the Applicant, Mr. Silva just kept putting him off, saying that the business wasn't making any money, so the Applicant finally left the business in the fall of 1994. The Applicant also gave a second reason for getting out of the business — that he was uncomfortable with the people "hanging around" the shop.

The Applicant testified that his only function at European Luxury was to write the cheques. He knew nothing about the auto body business, and it was Mr. Silva who dealt with the customers and did the estimates. In cross-examination, in response to Mr. Farrell's question whether he answered the phones or dealt with appraisers and insurers, the Applicant's answer was "I might have. I'm not saying that I didn't." I find this answer evasive. In cross-examination about his reasons for leaving the business, the Applicant remarked, "he [Mr. Silva] was never there. . ." In my view, this remark indicates that the Applicant was at the shop on a regular basis.

The Applicant testified that in March 1995, after European Luxury went bankrupt, he opened a new auto body shop, Formula One, on the same premises. He testified that this came about because he knew the landlord and was able to arrange a new lease. The corporate records indicate that the Applicant incorporated Formula One on March 23, 1995 as sole shareholder, officer and director. Asked how long European Luxury was closed before he started up Formula One, the Applicant testified that it "could have been" a couple of days or a couple of weeks," he didn't know. Formula One employed "one or two" of European Luxury's workers. The Applicant testified that while the premises were vacant, workers and creditors "were coming in" for cheques, and the Applicant told them he was not responsible because it wasn't his business. This answer indicates that the Applicant was there at the shop to respond to the people "coming in." A couple of questions later, he testified that he did not attend on a daily basis as a normal routine but "I won't say I didn't go there." In response to Mr. Farrell's question whether he had brought his family's cars into European Luxury for repair in 1994 and 1995, the Applicant testified that he "probably referred them maybe," "it's possible," and he didn't remember. I found the Applicant's testimony on this point evasive and I draw an adverse inference. I find that the Applicant was active in an auto body shop operating out of 95 Rivalda Road virtually without interruption throughout 1994 and early 1995, despite the apparent change in business organization and ownership.

I heard no reliable evidence as to whether, when and why the Applicant left Formula One. The Applicant testified that he invested about $20,000-$25,000 in starting up the company and never got back more than $8,000-$10,000 of his investment. He put the business up for sale in July or August 1995; when there was no interest, he closed it. In fact, the corporate records indicate that he transferred his interest to his brother, Joe, on October 25, 1995. In cross-examination, Joe Alessandro admitted that he had prepared the corporate records for European Luxury and that Mr. Louzeiro had prepared Formula One's records. As the Alessandro brothers and Mr. Louzeiro have other business arrangements, and I found neither Domenic nor Joe Alessandro reliable, I find that I cannot rely on the corporate records.

The Applicant attempted to minimize his role in the day-to-day work of the business, indicating that "the workers that would work, they would work in the office too, writing estimates or meeting up with the insurance adjusters or representatives." Pressed on who was responsible for filing estimates, the Applicant admitted "it was either me or somebody else that would be appointed." The Applicant explained that "most of the shops" sell their invoices to a finance company in order to ensure cash flow pending payment by the insurance company, and that "we never sent invoices directly to the insurance company." He also admitted that he was responsible for paying staff. I find that the Applicant ran the shop on a day to day basis.

I do not believe the Applicant's account of limited involvement in the operation of the auto body business. I find that the Applicant was a principal of European Luxury and Formula One during the benefit period.

The fraud conviction

The Insurer alleges that the Applicant signed a number of false Employer's Confirmation of Income forms as President of Pure-Platinum between December 8, 1993 and August 1, 1995, and directed the vehicles allegedly damaged in these accidents to the auto body shop at 95 Rivalda Road.¹³

On February 3, 1997, the Applicant pleaded guilty to nine counts of fraud over $5,000 in connection with these events. Sentencing was put over to March 6, 1997. On that day, the Applicant's counsel, Steven Skurka, was permitted to withdraw from the record, and the Applicant moved to have his guilty plea struck. The motion was heard in September and October 1997. On November 25, 1997, Judge Vaillancourt dismissed the motion. The Applicant has appealed Judge Vaillancourt's decision.

The Applicant testified before me that he pleaded guilty under coercion from his former counsel, and that Mr. Silva, who was co-accused on these charges, gave evidence exonerating him at the hearing of his motion to strike the guilty plea. Judge Vaillancourt rejected both of these submissions. He found that Mr. Alessandro made a fully informed and voluntary decision to plead guilty and admitted the facts on the record.

The Insurer filed eight of the Employer's Confirmation of Income forms which formed the basis of these charges.¹⁴ Each form lists Pure-Platinum, the Applicant's business, as the employer, and indicates that the named person was employed by the company as a labourer for no more than six weeks before the accident. Beside the signature is printed "Dominic Alessandro, President." The forms were purportedly signed by Mr. Alessandro on October 6, 1993;¹⁵ March 22, 1994;¹⁶March 29, 1994;¹⁷ April 6, 1994;¹⁸ April 28, 1994;¹⁹ and April 29, 1994.²⁰ The Applicant denied signing the Employer's Confirmation of Income forms and stated he had never seen them before the arbitration hearing.

A Tilden accident report, dated October 2, 1993, indicates that the vehicle being driven by Tony Ferraro at the time of the accident was rented out to the Applicant. The rental agreement, dated the previous day, lists Pure-Platinum as the customer and the Applicant as the driver. The credit card receipt, apparently signed by the Applicant, is attached. On cross-examination at the hearing, the Applicant was unable to remember renting a car for Mr. Ferraro or reporting an accident to Tilden. He did not recognize the signature as his own. I find that the signature is the Applicant's, on comparing it with other signatures he admits are his own.²¹

Fabio Ferraro, another person for whom a Pure-Platinum Employer's Confirmation form was prepared, had his damaged vehicle, another rental car, appraised at European Sport on March 14, 1994.

The appraisal form with respect to the Bui Quang Yen vehicle, also a rental vehicle, indicates that the appraisal was prepared at European Auto on May 10, 1994, a date when the Applicant was sole shareholder, officer and director of European Luxury,²² the company that succeeded European Auto.

The treatment of previous criminal convictions in civil proceedings is set out in The Law of Evidence in Canada as follows:

In Demeter v. Pacific Life Insurance Company,²³ it was held by both the trial judge and the Ontario Court of Appeal that the rule in Hollington v. Hewthorn²⁴was never part of the law of Ontario. Demeter decided that a criminal conviction is admissible as prima facie proof that the party against whom the conviction was rendered committed the offence. That party can rebut this finding, but only so long as it would not be an abuse of process for it to do so. The conviction is not, however, admissible as prima facie proof of every factual finding made in the criminal proceeding, only those necessary for the court's determination of the charge.²⁵

In cross-examination at the hearing, the Applicant gave the same explanation for his guilty plea that Judge Vaillancourt had rejected. Mr. Silva and Mr. Skurka did not testify before me and no evidence was led to support the Applicant's explanation.

I find, on a balance of probabilities, that the Applicant was involved in manufacturing false Employer's Confirmation of Income forms through his business, Pure-Platinum, between October 6, 1993 and May 29, 1994. His involvement in an attempt to defraud insurers is obviously fatal to his credibility in this proceeding.

Agents at Law

The Applicant claims that he began working for his brother's paralegal company, Agents at Law, in July 1996, after the end of the period for which benefits are claimed. In examination-in-chief, he testified that he began "hanging around" his brother's office in the fall of 1994, when European Luxury went out of business, and again in the fall of 1995, after Formula One closed.

He testified that he spent his time searching the classified ads for a job and learning the paralegal business.

On July 19, 1996, an adjuster interviewed the Applicant by telephone with regard to another claim.The transcript of the taped interview was led into evidence.²⁶ Asked whether he was employed at that time, the Applicant said he was employed at Agents at Law. When asked how long he had been there, he responded "two years." In cross-examination at the hearing, the Applicant was asked whether he had made this statement. He replied: "I was working with my brother. I've always worked with my brother. He's my brother, you know?" Mr. Farrell then asked: "And he established his company, his Agents at Law company, in '94, and you always worked with him?" to which the Applicant responded: "I have always worked with him. I have always tried to help him out, sure. If I can't help out my brother.You know, I've always helped him since he opened up his business in '94."

The Applicant's testimony on cross-examination indicated that he was involved in the business in some capacity from its inception. He said that he still works for his brother, and described his job duties as "paperwork," motions, answering phones, interviewing clients, "a little bit of running around." He testified that he initially worked 2-4 hours a day, depending on how he felt, and remains unable to work full time because of his accident-related injuries. The Applicant wore a pager throughout the hearing, and admitted that he wears a pager in his current business so that his brother can reach him.

Joe Alessandro testified that his brother worked for him part time between July and December 1996: "That's when I could afford to pay him. But there were times he helped me, I did him some favours, he did me some favours." When Mr. Farrell told Joe Alessandro that his brother had said he'd worked at Agents at Law since 1994, the response was: "He came in periodically. He was not getting paid all the time."

I found both witnesses careful, vague and evasive. I find that the Applicant began working with his brother in 1994.

Medical evidence

From a medical point of view, this is a fairly typical soft tissue injury case. The Applicant complains of chronic disabling pain, but objective tests (x-ray and MRI) show no abnormality. There is no consistent finding of muscle spasm or reduced joint mobility. In such cases, the applicant's credibility is critical, since his reports of pain and dysfunction are virtually the only evidence in support of his claim. In this case, I have found the Applicant to be an entirely unreliable witness.

The Applicant's strongest medical evidence comes from Dr. Lorne Sokol, his family doctor. Dr. Sokol's first form report, dated June 1, 1993, notes tenderness, spasm and reduced mobility in the Applicant's cervical, dorsal and lumbar spine, with secondary symptoms of headaches and sleeplessness. X-rays of the Applicant's cervical and lumbar spine were negative. Dr. Sokol prescribed analgesics, anti-inflammatories and muscle relaxants, and referred the Applicant to Dufferin Central Physiotherapy and Rehabilitation Centre. The Applicant saw Dr. Sokol 11 more times in 1993, but reported little improvement in his symptoms. In fact, in his August 4, 1993 form report, Dr. Sokol reported right shoulder strain and reactive depression along with the other symptoms. The Applicant received physiotherapy treatments at Dufferin between June 4 and December 1, 1993, but little improvement was noted on discharge. Dr. Sokol's clinical notes reflect the Applicant's persistent complaints over numerous visits through 1997, but his notes, his brief report of December 1997 and his two form reports do not set out any objective cause for these complaints.

The Applicant testified that he called Dr. Sokol after the accident, rather than Dr. Masi, his regular family doctor, because Dr. Masi was too busy that day. Confronted with the absence of any mention of the accident in Dr. Masi's clinical notes about nine subsequent visits, the Applicant explained that he "didn't feel [he] had to get two doctors involved when one doctor was already looking after [his] file." While there is nothing inherently improper in changing doctors, the Applicant's decision to do so on May 27, 1993, within 48 hours of the accident, is troubling, as his failure to tell Dr. Masi about the accident.

Dr. Sokol referred the Applicant for a physiotherapy and occupational therapy assessment at F.I.T. for Work Centres ("F.I.T.") in August 1993. The assessors reported that the Applicant's low back symptoms were his worst problem, though he had less serious mobility restrictions in his neck and right shoulder. The Applicant was also found to be depressed, anxious and fearful of reinjury. The assessors concluded that the Applicant's problems would create "significant interference with his ability to function both at work and home. It is anticipated that his injuries would pose a considerable difficulty for him in his work as a drain layer, work that requires sustained awkward positions and heavy lifting and carrying." They recommended a full functional restoration program, including a work hardening programme.

The Applicant saw Dr. Martin W. Roscoe, an orthopaedic surgeon, on referral from Dr. Sokol in November 1993. Dr. Roscoe felt that the Applicant had strained his right shoulder and low back and should concentrate on stretching and strengthening exercises. He reported that the Applicant needed further time to recover before returning to his "heavy manual ... job" as a pipe layer. When Dr. Roscoe saw the Applicant again in January 1995, he expressed surprise that "a man of his age and fitness level has continued to have so much discomfort." He suggested trying one more intensive course of 6-8 weeks of exercise. When Dr. Roscoe saw the Applicant in June 1995, he could offer nothing other than stretching and strengthening routines; the Applicant reported that his ongoing physiotherapy routine since he was last seen had not helped.

Dr. Joel E. Maser, an internist, saw the Applicant for Dr. Sokol in May 1995. Dr. Maser reported that the Applicant "appeared to be fit," and had sustained a whiplash injury, a low back strain and a strained and bruised right shoulder. When he saw the Applicant again in January 1997, Dr. Maser found him "fairly muscular" and stated "it was obvious that he had been doing body building." Though the Applicant "appeared to be depressed," Dr. Maser thought he could return to work as a plumber, despite his residual pain, though initially on a limited part-time basis.

The Insurer had the Applicant assessed by Dr. Victor G. Lawson, an ENT specialist, on July 14, 1993, and Dr. G. D'Angelo, an orthopedic surgeon, on September 18, 1993. Dr. Lawson reported that the Applicant sustained "extremely mild" injuries to his low back and right shoulder and could return to work as "a drain servicing person." Dr. D'Angelo diagnosed soft tissue injuries of the neck and low back. He felt that the Applicant's cervical strain was "essentially resolved" but recommended exercise for the Applicant's low back on the basis of the Applicant's subjective complaints. He did recommend an MRI of the right shoulder, which turned out to be negative. He felt that it would be reasonable for the Applicant to have a work hardening programme or "aggressive active rehabilitation program" before returning to his heavy job as a pipe layer.

In summary, the medical evidence establishes that the Applicant sustained sof tissue injuries, at worst, and that a period of rehabilitation would be required before he returned to his heavy pre-accident work. Dr. Sokol's opinion was based on his understanding that the Applicant worked as a general contractor before the accident, and had physical as well as supervisory duties. Dr. Roscoe, Dr. D'Angelo and the F.I.T. centre thought he was a pipe layer or drain layer and Dr. Maser thought he was a plumber. As I do not accept that the Applicant was employed as a pipe fitter, pipe layer or plumber before the accident, and I heard no evidence that he worked as a general contractor in the period immediately before the accident, I give little weight to the expert reports favourable to the Applicant. Moreover, none of the medical or rehabilitation experts knew about the Applicant's post-accident activities with Pure-Platinum, the auto body shops or Agents at Law. And all the experts relied on his subjective complaints of pain and restricted mobility, which I do not accept because I find the Applicant not to be credible.

The Insurer also alleges that the Applicant has failed to take reasonable steps to rehabilitate himself. In June 1993, the Insurer retained Rehabilitation Network Canada Inc. ("Rehabilitation Network") to assess the Applicant. Carmille Bulley, Director of Rehabilitation Network, wrote to Mr. Caprara on June 24, 1993, left several follow-up telephone messages, and sent a follow-up letter on June 29. The file was closed on August 10. The Rehabilitation Network file indicates that the Insurer asked that the file be reopened after a telephone conversation with Mr. Caprara in which he agreed to the involvement of Rehabilitation Network. Mr. Caprara's letter of August 18 stated "we cannot, at this time, consider your involvement. However, please be advised that in the near future, should we require a rehabilitation case worker, we will advise you accordingly."

The Rehabilitation Network file indicates that Mr. Caprara did change his position in October. Over the next two and a half months, Rehabilitation Network made numerous attempts to contact him to arrange an intial interview with him and the Applicant. This finally occurred on January 13, 1994, and Ms. Bulley met separately with Dr. Sokol and the Applicant's physiotherapist on January 26, 1994. Dr. Sokol placed many restrictions on the Applicant but agreed that he should attend a work hardening programme.

Accordingly, Dr. Sokol referred the Applicant to the Accident Rehabilitation Centre ("ARC") for a multidisciplinary assessment. It was originally scheduled for February 8, 1994, but was postponed to March 8. The Applicant was unable to explain the reason for the delay except to say "unfortunately there was a confusion here of some sort with the office or myself. I don't know what it was, but that's something we can't fix today." Ultimately, the assessors recommended a functional restoration programme consisting of aerobic conditioning, strengthening exercises for the right shoulder and low back, work conditioning activities, pain counselling and education, and hydrotherapy. On June 8, 1994, ARC advised the Insurer that it had closed its file because it had not heard from the Applicant. Dr. Sokol's notes indicate that the Applicant didn't go to ARC because benefits had been terminated, and he was working out on his own at the Columbus Centre and "The Work Out," a private fitness facility. The Applicant testified that he also worked out at the Twin Dragon Kickboxing Club, though he was not able to do as much work as before the accident. Martin McNamara, co-owner of the club, corroborated this testimony.

Again, when Dr. Sokol sent the Applicant back to F.I.T. in February 1995, the Applicant attended only five times and made no substantial progress. At the hearing, he testified that he continued to work on his own at this time.

Dr. Roscoe's last report, dated March 31, 1997, indicated that the Applicant had failed to keep five appointments and therefore no further appointments would be booked. On cross-examination, the Applicant explained that Dr. Roscoe takes appointments two months in advance: "Now, I can't keep a promise of a scheduled appointment two months ahead of time, because I don't know what my schedule is going to be." Pressed further, he offered three further explanations: he'd just had a baby in late 1996; he hadn't missed five appointments, only two; and he might have missed five over the four-year term, "but not consecutively."

I find that the Applicant had marginal interest in treatment or rehabilitation because he had very minor injuries and had already returned to work.

Weekly benefits: conclusion

I find that the Applicant was involved with the auto body shops operating out of 95 Rivalda Road by early 1994, and until at least October 25, 1995, when he transferred Formula One to his brother. He also carried on business through Pure-Platinum, his sole proprietorship, during the benefit period. By the early summer of 1994, he was also involved with his brother's business, Agents at Law. I received no reliable evidence about his activities or income before or after the accident. find that the Applicant has no credibility because of serious discrepancies and evasions in his evidence and in the testimony of the witnesses called on his behalf.

I find that the Applicant was not disabled as a result of the accident and therefore he was never entitled to weekly benefits. Further, in case I am wrong in my first finding, I find that any benefits to which he was entitled would have been reduced to zero because of the Applicant's income from employment or self-employment after the accident.

Medical and Rehabilitation Benefits:

The Applicant also claims medical and rehabilitation benefits under section 6 of the Schedule for prescription drugs, physiotherapy treatments, social/vocational rehabilitation services, and travel expenses.

The Applicant claims $508.10 for treatment by Dr. Sokol between June 1, 1993 and March 18, 1997, and related travel expenses of $42. I heard no reason why Dr. Sokol's treatments would not be covered by OHIP; his fees for medical-legal reports are arbitration expenses. The related travel expenses are disallowed because I am not satisfied the Applicant sustained injuries in the accident which necessitated his attendances with Dr. Sokol.

I dismiss the claim for physiotherapy treatment between November 8, 1996 and May 21, 1997 because I am not satisfied that the Applicant's minor injuries necessitated physiotherapy treatment four and a half years later. Nor am I persuaded that the Applicant required social/vocational rehabilitation services as a result of the accident. Three parking receipts from the spring of 1995 were unidentified.

Certain of the medications purchased (Acyclovir, Chlorhexidine) were clearly unrelated to the accident. I also reject the claims with respect to prescription drug expenses for anti-inflammatories, analgesics, and anti-depressants because of the Applicant's serious misrepresentations about the severity of his injuries. I do not accept that he needed medication as a result of the accident.

Repayment of Overpaid Benefits:

I have found that the Applicant was not entitled to any weekly benefits because he was not disabled as a result of the accident. I have found further that if he had been entitled to weekly benefits, he would only have been entitled to the minimum rate of $185.60 per week, and that this amount would have been reduced to zero after the Insurer deducted 80 percent of the Applicant's net post-accident income under section 15 of the Schedule. The Insurer seeks repayment of the weekly benefits it paid the Applicant on the basis that benefits were overpaid as a result of the Applicant's fraudulent misrepresentations.

I received a great deal of evidence in support of the Insurer's allegation that the Applicant's claim forms part of a wider insurance fraud scheme. The Applicant submitted that a finding of fraud requires a higher standard of proof than the civil standard of balance of probabilities. I was referred to no authority for this proposition.²⁷

Subsection 27(1) of the Schedule says that "a person must repay any benefits received . . . through error or fraud. It is settled law that the insurer's administrative error or an innocent error on the part of the insured in providing information to the insurer will not result in repayment of overpaid benefits pursuant to this subsection, and that the insurer bears the onus of proving that the overpayment was "attributable in some material way to the actions of the insured."²⁸

I have no hesitation in finding that the Applicant obtained weekly benefits through fraud or wilful misrepresentation about his activities and income before and after the accident. The Applicant received benefits totalling $27,600.²⁹ The benefits must be repaid with interest as set out in subsection 27(4) of the Schedule.

Expenses:

Both parties seek their arbitration expenses. As the Application for Appointment of an Arbitrator was filed before November 1, 1996, the legislative amendments that took effect that day do not apply.³⁰ Accordingly, I have discretion whether or not to order the Insurer to pay the Applicant's arbitration expenses, but I have no power to order the Applicant to pay the Insurer's expenses.

In Allison and Markel Insurance Company of Canada,³¹ Director's Delegate Naylor reviewed the principles guiding an Arbitrator's discretion in awarding an applicant's expenses. She reaffirmed that it is appropriate to deny the expenses of applicants who "deliberately make false or misleading statements or are dishonest, especially if the dishonesty continues in the hearing.” I agree with Arbitrator Naylor's approach and apply it here.

I find that the Applicant lied about working for Top-All before the accident, intentionally misrepresented the severity of the accident and his injuries, and failed to tell the Insurer or his doctors about his business activities after the accident. Most seriously, I find that he lied under oath about these matters. Though Mr. Cozzi conducted his client's case with efficiency, courtesy and professionalism, I find this an appropriate case for denying the Applicant his expenses.

Assessment against Applicant:

For the same reasons, I have no hesitation in ordering the Applicant to pay the Insurer's assessment of $2,000 pursuant to subsection 282(11.2) of the Act, which provides for such orders where the Arbitrator finds that the insured "commenced an arbitration that was frivolous, vexatious or an abuse of process." I find that the application for arbitration in this case was frivolous and an abuse of process.

Order:

1. The Applicant's claims for weekly benefits between April 19, 1994 and May 25, 1996, medical and rehabilitation benefits after April 18, 1994, and his arbitration expenses are dismissed.

2. The Applicant shall repay to the Insurer weekly benefits in the amount of $27,600 with interest as set out in subsection 27(7) of the Schedule.

3. The Applicant shall pay the Insurer $2,000, being the amount of the Insurer's assessment under section 14 of the Act, under subsection 282(11.2) of the Act.

November 24, 1998

Nancy Makepeace

Arbitrator

Date

APPENDIX A - THE HEARING

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on January 12, 13 and 14, and March 9, 10 and 11, 1998, before me, Nancy Makepeace, Arbitrator.

Present at the Hearing:

Applicant:

Mr. Domenic Alessandro

Mr. Alessandro's Representative:

Peter B. Cozzi

Barrister and Solicitor

General Accident's Representative:

Guy Farrell

Barrister and Solicitor

Walter Scodeller

Barrister and Solicitor

General Accident's Officer:

Donald Igbokwe

The proceedings were transcribed by Catherine Boyle of Rosenberger & Weir, and a transcript of the first three days of the hearing was made available to me before the hearing resumed in March

Witnesses:

Mr. Domenic Alessandro, the Applicant

Mr. Domenic Caroni, owner of Top-All Plumbing

Mr. Joe Alessandro, the Applicant's brother

Mr. Dilantha R. Eliathamby, driver of the vehicle struck by the Applicant's vehicle

Mr. Martin McNamara, Twin Dragons Kickboxing Club

Mr. Warren Russell, Investigator, Special Investigations Unit,

Zurich Insurance Company

Officer Brian Humber, Ontario Provincial Police

Mr. Jose Louzeiro, bookkeeper

Mr. James W. Duke, driver of the vehicle that struck the Applicant's vehicle

Exhibits:

Exhibit 1

Applicant's Arbitration Brief

Exhibit 2

Applicant's Corporate Records Brief

Exhibit 3

Applicant's Clinical Notes Brief

Exhibit 4

Application for Accident Benefits

Exhibit 5

Applicant's Formula One Financial Records Brief

Exhibit 6

Excluded Driver Endorsement

Exhibit 7

Photograph of the front of the Applicant's vehicle after the accident

Exhibit 8

Photograph of the rear of the Applicant's vehicle after the accident

Exhibit 9

Photograph of the Duke vehicle

Exhibit 10

Letter dated June 7, 1994, from Ms. Rita Rand, Claims Examiner, to Mr. Joe Caprara, Legal Assistant

Exhibit 11

Letter dated June 8, 1994, from Dianne Hopkins-Gaunt, Case Manager (ARC) to Mr. Donald Igbokwe

Exhibit 12

Letter dated August 25, 1994 from Mr. Caprara to Ms. Rand

Exhibit 13

Reasons of Judge Charles H.Vaillancourt, on Application to Strike Guilty Plea, dated November 5, 1997

Exhibit 14

Related Losses Brief

Exhibit 15

Fit for Work Records

Exhibit 16

Letter from Dr. Sokol dated December 1, 1997

Exhibit 17

Documents from Mr. Caroni's file

Exhibit 18

Employer's Confirmation of Income form (stamped by Insurer in upper left-hand corner of first page)

Exhibit 19

Employer's Confirmation of Income form (not stamped by Insurer)

Exhibit 20

Top-All cheque obtained by Insurer's investigator

Exhibit 21

Supplementary Financial Records Brief

Exhibit 22

Excerpt from the Applicant's statement to Veena Tiwari

Exhibit 23

Excerpt from Officer Humber's file (15 pages)

APPENDIX B - EVIDENTIARY RULINGS

1. Evidence of Applicant's prior conviction

In cross-examination on the first day of the hearing, Mr. Farrell, representing the Insurer, put to the Applicant that he was charged and prosecuted for preparing false Employer's Confirmation forms through his sole proprietorship, Pure-Platinum. Mr. Cozzi objected that the question was improper because the Applicant had applied to have his guilty plea struck, and though Judge Vaillancourt had dismissed his application, the Applicant still had time to appeal the judge's ruling and intended to do so. Mr. Cozzi also submitted that the criminal proceeding was irrelevant to this proceeding in that it dealt only with property damage claims, not accident benefit claims.

Section 22(1) of the Ontario Evidence Act states:

A witness may be asked whether he has been convicted of any crime, and upon being so asked, if he either denies the fact or refuses to answer, the conviction may be proved.

The authors of The Law of Evidence in Canada state that the rule allows for evidence to be led about any Criminal Code conviction, whether or not it is relevant to any issue in dispute in the proceeding. They make the following comment:³²

The principle that a person with a criminal record is deserving of a standard of belief less than one with no criminal record cannot be accepted as a general principle. Cross-examination on previous convictions should not, however, be prohibited in cases in which the previous conviction is relevant, either to an issue or to credibility.

In this case, Mr. Farrell's question, which relates to a Criminal Code conviction, clearly falls within the rule set out in the Ontario Evidence Act. In any event, I find that the conviction is relevant to the Applicant's credibility in this proceeding, which also involves an allegation of insurance fraud. Moreover, the conviction relates to the Applicant's business activities during the period at issue in this proceeding. With regard to the Applicant's stated intention of appealing Judge Vaillancourt's decision, I ruled that a conviction stands as a matter of record unless and until it is set aside. I ruled that Mr. Farrell's question was proper.

When the hearing resumed in March 1998, Mr. Cozzi advised that the matter was now under appeal. I have not been advised of the outcome.

2. Particulars of the conviction

Mr. Cozzi submitted that if the Applicant admits the conviction, Mr. Farrell is not permitted to lead evidence of the particulars because it would be oppressive to the Applicant, given that he intends to appeal Judge Vaillancourt's decision. He also submitted that allowing these questions may breach solicitor-client privilege.

I ruled that Mr. Farrell is entitled to lead evidence about the particulars of the conviction and to file the Judge's written reasons. Pursuant to subsection 15(1) of the Statutory Powers Procedure Act, an Arbitrator may admit a relevant document as evidence, whether or not it would be admissible in a court of law, subject to the law of privilege. I am not persuaded that this evidence involves any breach of solicitor-client privilege, since Mr. Caprara testified as co-accused in the criminal proceedings. I find that the Applicant waived solicitor-client privilege in respect of his discussions with Mr. Skurka, his then counsel, about the guilty plea, by moving to strike the plea on grounds of coercion by his counsel. In any event the judge's reasons are a matter of public record.

In addition, I was persuaded on a prima facie basis that the evidence relating to the particulars of the Applicant's prior conviction is admissible as similar fact evidence.

The authors of The Law of Evidence in Canada describe the "similar facts rule" as follows:³³

The so-called "similar facts rule is an exception to the general exclusionary rule barring evidence of the bad character of a party....Similar fact evidence is admissible if it is relevant to an issue in the case other than a relevance that derives simply from showing the party is a bad person and its probative value outweighs the prejudice to the party that may arise from the admission of such evidence.

As stated earlier, the dangers associated with the admission of similar fact evidence are not present to the same degree in civil cases as in criminal proceedings. However, the same rules apply, and the evidence sought to be introduced must possess a sufficient nexus with or display the requisite relevance or materiality to the issues in the case.

Similarity in the modus operandi and recurrent instances of the same conduct may be sufficient to render the evidence admissible. In such cases, if the past similar acts constitute a "system", the criterion of materiality will be considered to be fulfilled.

In this case, the proffered evidence is not relevant just because it would tend to show that the Applicant is a person of bad character. Rather, it is led to show that the Applicant is familiar with insurance matters, is disposed to falsify documents in order to enhance insurance claims, and was active during the period for which he claims benefits through his business, Pure-Platinum, as well as European Luxury and Formula One, the body shops at 95 Rivalda Road. This evidence, if tendered, may be highly probative.

While I am mindful of the seriousness of the Insurer's allegations in this case, I am not persuaded that allowing the Insurer to lead this evidence will be oppressive to the Applicant. I find that any prejudice to the Applicant can be remedied by allowing him to give full answer to the Insurer's allegations. In the event, the Applicant chose not to call Mr. Silva or anyone else to support his explanation of the events around the guilty plea.

The issue in dispute in this hearing is the Applicant's entitlement to certain statutory accident benefits. The issue is not his good character or any other civil or criminal proceedings in which he has been or will be involved. I cautioned the parties that I would be mindful of the need to conduct an expeditious, focused hearing. I excluded the transcript of the proceedings other than the judge's reasons to avoid relitigating the criminal proceeding.

Judge Vaillancourt's written decision was entered as Exhibit 13.

3. The Transcript brief

Mr. Farrell sought to introduce a brief consisting of documents entered into evidence in the criminal proceedings and the transcript of the proceedings. In addition to the party's oral submissions on this issue, I considered their written submissions filed on February 27, 1998 and March 10, 1998.

Section 15.1 of the Statutory Powers Procedure Act is as follows:

(1) The tribunal may treat previously admitted evidence as if it had been admitted in a proceeding before the tribunal, if the parties to the proceeding consent.

(2) In subsection (1), "previously admitted evidence means evidence that was admitted, before the hearing of the proceeding referred to in that subsection,

(a) in another proceeding to which this Act applies;

(b) in a proceeding to which this Act does not apply that is before an Ontario court or a court or other tribunal outside Ontario.

This is a new provision introduced in the 1994 amendments to the SPPA. The parties presented no interpretative authorities.

The Applicant submitted that the evidence was not "previously admitted because he did not admit the testimony of Mr. Skurka, his former counsel, or Mr. Rudner, Mr. Skurka's student. I agree with the Insurer that "[i]t is only facts which can be admitted by parties in a proceeding and not evidence.

In any event, the Applicant does not consent to the transcript being admitted into evidence. I find that subsection 15.1 leaves no room for admitting the transcript in the absence of consent.

The Insurer submitted that if subsection 15.1 is inapplicable, the transcript is admissible in any event under the provisions of subsection 15(1), which gives arbitrators a broad discretion to admit relevant evidence:

15. (1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.

The discretion is subject to the overriding provisions of subsections (2) and (3):

15.(2) Nothing is admissible in evidence at a hearing,

(a) that would be inadmissible in a court by reason of any privilege under the law of evidence; or

(b) that is inadmissible by the statute under which the proceeding arises or any other statute.

(3) Nothing in subsection (1) overrides the provisions of any Act expressly limiting the extent to or purposes for which any oral testimony, documents or things may be admitted or used in evidence in any proceeding.

Section 15.1 does not expressly state that previously admitted evidence is inadmissible without consent, and the SPPA sets out no express rule as to the interaction of sections 15 and 15.1. In my view, the most natural reading is that previously admitted evidence is exhaustively dealt with in section 15.1.

However, it is not necessary for me to decide this issue because I find that the probative value of the transcript is likely to be outweighed by its prejudicial effect. Though the witnesses were cross-examined in the criminal proceeding, I find this an insufficient guarantor of reliability in a case where credibility is the main issue. The Insurer offered no reason why these witnesses could not be called in the hearing before me, so that I could observe their demeanour. I find no prejudice to the Insurer in excluding this evidence, since the Applicant was subjected to two days of cross-examination before me, and Judge Vaillancourt's reasons were admitted. I find that the transcript brief is likely to have little additional probative value, in light of the Applicant's guilty plea. Finally, I find that admitting the transcript brief is likely to focus this hearing on collateral issues.

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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2To be distinguished from the Joe Alessandro who is the Applicant's brother, and who testified at the hearing.
3. 3Exhibit 1, Tab 6A
4. 4Exhibit 17
5. 5Exhibits 17, 18, 19 and 20
6. 6Exhibit 4
7. 7Exhibit 1, Tab 6A
8. 8In examination-in-chief, Mr. Cozzi's questions focussed on the general duties of Top-All's employees rather than the Applicant specifically. Mr. Cozzi sought to reopen the question of the Applicant's specific duties in re-examination. I sustained Mr. Farrell's objection that the matter should have been raised in chief. Despite the relatively informal non-technical approach arbitrators have taken to evidentiary and procedural issues, a fair hearing requires that the opposing party have an opportunity to cross-examine witnesses on critical points of evidence, especially in a credibility case.
9. 9The Applicant testified that before working at Top-All, he had worked at Academy Lumber between April and August 1992. Since this job would have ended more than six months before the May 25, 1993 accident, it would not qualify him as an employed person under paragraph 12(3) of the Schedule.
10. 10Exhibits 7 and 8
11. 11Exhibit 9
12. 12Exhibit 2, Tab 1
13. 13The Insurer also alleges that the Applicant was involved in referring vehicles being repaired at the autobody shop to an adjacent auto glass shop, where fraudulent glass claims were filed. These charges were withdrawn as part of the plea bargain. I place no weight on the evidence relating to the glass claims because the charges were withdrawn, the Insurer called no witnesses other than Warren Russell, an investigator with Zurich, and only two of the vehicle owners' statements indicate that they met the Applicant at the auto body shop. I find that the potential prejudice to the Applicant in accepting this evidence outweighs its probative value.
14. 14An additional form, dated April 29, 1994, was filed with respect to another employer, Borden Roofing. I make no finding with respect to that matter.
15. 15Rory Blundell and Tony Ferraro, dates of accident are illegible but only two weeks of income are listed.
16. 16Fabio Ferraro, date of accident - March 9, 1994.
17. 17Van Nam Nguyen, date of accident - March 26, 1994.
18. 18Bui Quang Yen, date of accident - April 2, 1994.
19. 19Thi Nga Dinh, date of accident - April 7, 1994.
20. 20Duc Do Truong and Van Thanh Truong, both in an accident or accidents on April 26, 1994.
21. 21Including: Pure-Platinum's registration; Top-All's cancelled cheque (which the Applicant endorsed); the car rental agreement and credit card receipt for a replacement car after the accident; the Formula One corporate records; the Applicant's direction to the Insurer to pay F.I.T.'s treatment costs and his authorization to F.I.T. to release records; his Application for Accident Benefits; his income tax returns; his assignment, authorization and direction on retaining counsel; and European Luxury's banking documents.
22. 22Mr. Farrell read the date of the appraisal as October 5, 1994, but Ms. Yen's accident allegedly occurred in April 1994, a date recorded on the appraisal form as "04/02/94." I think it likely that the date of the appraisal --"05/10/94" -- was actually May 10, 1994 rather than October 5, 1994.
23. 23(1983), 1983 CanLII 1838 (ON HCJ), 43 O.R. (2d) 33; aff'd 1984 CanLII 1996 (ON CA), 48 O.R. (2d) 266 [footnote added]
24. 24The rule was "that proof of a previous conviction was not admissible in a civil case as evidence of the underlying facts upon which the judgment was based." [1943] 2 All E.R. (C.A.) [footnote added].
25. 25Infra, pp. 1042-3.
26. 26Exhibit 22. The Applicant objected that the statement should be excluded as hearsay because it was unsigned and the adjuster who interviewed the Applicant is no longer with the Insurer. I ruled that the statement was admissible because the Applicant had been cross-examined about it and because the audiotape was available as a partial guarantor of reliability. I also note that the statement indicates that the Applicant was asked whether he would permit the conversation to be taped and reluctantly agreed.
27. 27Recent authorities state that the civil standard of proof applies to fraud allegations made in civil proceedings, although the seriousness of a finding of fraud is to be considered by the adjudicator in weighing the evidence. Hanes v. Wawanesa Mutual Insurance Company (1963), 1963 CanLII 1 (SCC), 36 D.L.R. (2d) 718 (S.C.C.); London Life Inurance. Company v. Chase, 1963 CanLII 50 (SCC), [1963] S.C.R. 207, [1963] I.L.R. 1-094; Continental Insurance Company v. Dalton Cartage Cmpany Ltd. (1982), 1982 CanLII 13 (SCC), 131 D.L.R. (3d) 559 (S.C.C.), recently reviewed in Vijeyekumar v. State Farm Mutual Insurance Company, unreported decision of Molloy J. (Ont. Gen. Div.), February 9, 1998, Court File No. 96-CU-97590-CM. See also pp. 144-146, The Law of Evidence in Canada, John Sopinka, Sidney N. Lederman, Alan W. Bryant (Butterworths, 1992).
28. 28Levenson and the General Accident Assurance Company of Canada, (OIC A-000260, February 18, 1992), confirmed on appeal, (OIC P-000260, September 29, 1992).
29. 29He received $600 per week between May 31, 1993 and April 18, 1994, a period of 46 weeks.
30. 30Pinto and General Accident Assurance Company of Canada, (OIC P97-00031, November 26, 1997).
31. 31(OIC P-001231, August 21, 1996).
32. 32Ibid, p. 875
33. 33Ibid., pp. 477, 512-3, 515