Neutral Citation: 1998 ONFSCDRS 96

FSCO A96-000256

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LASZLO KASSA

Applicant

and

BELAIR INSURANCE COMPANY INC.

Insurer

DECISION

Issues:

The Applicant, Laszlo Kassa, was involved in a motor vehicle accident on March 19, 1993. He applied for and received statutory accident benefits from Belair Insurance Company Inc. ("Belair"), payable under the Schedule.¹ Belair terminated weekly income benefits on April 6, 1995. Mr. Kassa disputed the termination of weekly income benefits and the amount of weekly income benefits paid to him. He also disputed Belair's refusal to pay for the services of a rehabilitation case manager. The parties were unable to resolve their disputes through mediation, and Mr. Kassa applied for arbitration at the Financial Services Commission of Ontario² under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

1. Is Mr. Kassa entitled to weekly income benefits?

2. If Mr. Kassa is entitled to weekly income benefits, what is the quantum of the benefits to which he is entitled?

3. Is Belair entitled to a repayment of weekly income benefits?

4. Is Mr. Kassa entitled to be paid for the services of Wayne Cook Rehabilitation Consultants?

5. Is Mr. Kassa entitled to a special award?

6. Is Mr. Kassa entitled to his expenses in respect of the arbitration?

7. Is Belair entitled to its expenses in respect of the arbitration?

Mr. Kassa also claims interest on any amounts owing.

Result:

1. Mr. Kassa is not entitled to weekly income benefits.

2. Belair is entitled to a repayment of weekly income benefits in the amount of $252 per week from March 26, 1993 to May 26, 1994 and in the amount of $185 per week from May 27, 1994 to April 6, 1995.

3. Mr. Kassa is not entitled to paid for the services of Wayne Cook Rehabilitation Consultants.

4. Mr. Kassa is not entitled to a special award.

5. Mr. Kassa is not entitled to his expenses of the arbitration.

6. Belair is not entitled to its expenses of the arbitration.

Those present and the exhibits filed at the hearing are set out in the Appendix to this decision.

Reasons for Decision:

1. Background and History of the claim

Mr. Kassa is 48 years old. He apprenticed as a photo-engraver in Hungary. Mr. Kassa came to Canada in 1969, he started working as a photo-engraver in 1970, and worked at this type of work as well as other endeavours until 1990.

Mr. Kassa last worked as a photo-engraver in February 1990, when he injured his right knee at work. Mr. Kassa suffered from a cyst on the knee which was initially aspirated and subsequently removed in June 1990. The Workers' Compensation Board ("WCB") determined that Mr. Kassa was partially impaired with restrictions for his right knee. Although these restrictions did not prevent him from returning to the work force, they prevented him from returning to his pre-accident employment.³

Mr. Kassa initially received temporary total disability benefits and subsequently, as of December 1991, a future economic loss award (FEL) and benefits to supplement this award (as Mr. Kassa was involved in a Board-approved vocational rehabilitation program) from the WCB. The benefits from the WCB equalled 90 percent of Mr. Kassa's pre-injury net average earnings.

On March 19, 1993, Mr. Kassa was involved in a motor vehicle accident. Mr. Kassa testified that he was on Lawrence Avenue East at Victoria Park Avenue, and was in the centre lane in a line of traffic going westbound through the intersection. An eastbound vehicle, which was making a left hand turn to go into a mall on the north side of Lawrence Avenue struck his vehicle with sufficient force to cause his vehicle to be forced into the sidewalk and to bend the two right wheels. The car was a "write off and Mr. Kassa received $3,008 for the total loss of his vehicle.

Subsequent to the accident, Mr. Kassa made a claim for accident benefits from Belair. He received weekly income benefits at the rate of $504 per week from March 26, 1993 to May 26, 1994, and then at the rate of $185 per week from May 27, 1994 to October 3, 1994,⁴ when benefits were terminated. Weekly income benefits were reduced to $185 per week because Belair did not receive the documents it requested from Mr. Kassa to verify his pre-accident income.⁵

Mr. Kassa applied for mediation which was conducted on March 24, 1995. Belair agreed, inter alia, to reinstate Mr. Kassa's weekly income benefits at the rate of $185 per week from October 4, 1994 pending satisfaction of Belair's request for documentation of Mr. Kassa's pre-accident income.⁶ The issue of the quantum of weekly income benefits to which Mr. Kassa was entitled remained in dispute.

Belair paid weekly income benefits to April 6, 1995.

Mr. Kassa disputes the termination of weekly income benefits and claims that he is entitled to weekly income benefits at the rate of $252 per week from May 27, 1994 onwards.

Belair takes the position that all weekly income benefits paid to Mr. Kassa (amounting to $39,089) were in fact an overpayment, on the basis that Mr. Kassa was not employed prior to the car accident, that he was not disabled as a result of the accident, and that his claim is fraudulent.

Also in issue, are overpayments which may have been created by Belair originally calculating Mr. Kassa's weekly income benefits based on the formula approved by the Director's Delegate in Scavuzzo and Canadian Home Assurance Company.⁷ Since the hearing in this matter, the Director of Arbitrations has issued her decision in Vo and Maplex General Insurance Company.⁸

Further, also in issue, are overpayments which may have been created because Mr. Kassa was in receipt of workers' compensation benefits during the period he was receiving weekly income benefits. Mr. Kassa also earned some post-accident income from photography.

2. Entitlement to weekly income benefits

Mr. Kassa is entitled to weekly income benefits pursuant to subsection 12(1) of the Schedule if he establishes, on a balance of probabilities, that he was employed or self employed at the time of the accident,⁹ that he sustained a physical, psychological or mental injury as a result of the accident and that he suffered a substantial inability to perform the essential tasks of his employment as a result of this injury.

a) Was Mr. Kassa employed at the time of the accident?

Mr. Kassa testified that he was employed at the time of the accident as an undercover security officer with a social club known as "Jackhammers."The club consisted of a pool hall, country and western bar and a banquet hall. Mr. Kassa testified that his job was to keep an eye on customers and staff (bartenders and waitresses) to prevent theft from the bar and kitchen. He had to act like a person who has come to the club to have a good time — a lot of socializing and talking. There was very light physical work involved. When a band was setting up, he would assist in setting up the stage. He needed to do a lot of walking, standing and sitting. He needed to be alert and have a good memory. He needed to be able to keep track, without keeping obvious notes, of how much customers were drinking and eating and confirm that their bills at the cashier reflected this. Mr. Kassa testified that no one in the club knew he was an employee except for the owner, Mr. Walter Hermann, and the manager, Ms. Judy Legault.

In a statement that Mr. Kassa gave to Belair's adjuster on March 26, 1993, he stated that he worked 42 hours per week, 6 hours per day for 7 days. At the hearing, Mr. Kassa testified that his working hours varied, but were based on a 42-hour week at the rate of $15 per hour ($630 per week). He was paid by cheque, which was cashed for him at the bar by Mr. Hermann. Mr. Kassa testified that he started the job on March 4, 1993, and did not return to this job after the accident.

Mr. Kassa's evidence is confirmed by that of Mr. Walter Hermann, the former owner of Jackhammers. On March 25, 1993, Mr. Hermann signed an Employer's Confirmation of Income form indicating that Mr. Kassa had been engaged in full-time employment with Jackhammers from March 4, 1993 to March 19, 1993 as "undercover thief security." He stated that Mr. Kassa's working hours were "random" but that he worked 42 hours a week and was paid $15 per hour.

At the hearing, Mr. Hermann testified that he had known Mr. Kassa as a patron at Jackhammers. He stated that in the fall of 1992, the club became very busy. It became difficult for him to keep an eye on everything at all times. He stated that Mr. Kassa, as well as others, brought it to his attention that when he was not there, customers were being served without being charged and their tabs at the bar were being dumped. Mr. Hermann testified that he approached Mr. Kassa and asked him to work for him "unofficially." He did not want his employees to know that Mr. Kassa was working for him. He wanted Mr. Kassa to identify times when he was being "ripped off." Mr. Kassa was hired on a "verbal contract basis." He would attend at the club when Mr. Hermann was not there and during the times when the club was busy. He was to continue to act like a patron, but to be sharp and keep his eyes open and let him (Mr. Hermann) know what was going on and where he was losing money.

Mr. Hermann stated that Mr. Kassa was paid like "everyone else" — by cheque, which could be cashed at the bar or at the billiard counter.

Notwithstanding Mr. Kassa's and Mr. Hermann's evidence, Belair contends that the alleged "employment" at Jackhammers did not exist for a number of reasons, one of them being that Mr. Kassa's and Mr. Hermann's evidence in respect of Mr. Kassa's duties as an "undercover" security officer does not make sense. Belair submits that according to Mr. Kassa and Mr. Hermann, Mr. Kassa was paid to work 42 hours a week as an "undercover" officer to keep his eyes on employees. He was to act just like a patron. He was to be there 1 days a week for 42 hours. He was to be paid by cheques which were cashed at the bar. Belair submits that surely after 42 hours a week (seven days a week) virtually all of the employees at Jackhammers were going to know that something was "strange" about this customer. He was going to blow his cover, particularly when he cashes his cheques at the bar.

I agree with Belair that Mr. Kassa's and Mr. Hermann's evidence in respect of Mr. Kassa's duties as an "undercover" security officer do not make sense and this raises some question in respect of their credibility on this issue. It is difficult to accept that Mr. Kassa's cover as a patron (vis a vis other employees of Jackhammers and regular patrons of the establishment) could be maintained for very long, if part of his duties involved assisting in setting up the stage (moving musical equipment for the groups) and when his pay cheques were cashed at the bar or billiard counter. Mr. Kassa points out that Mr. Hermann's and Mr. Kassa's evidence is corroborated by the job analysis conducted by Crawford and Company, on behalf of Belair, in January 1994. However, I note that the "essential tasks analysis" conducted by Crawford was based exclusively on information provided by the manager, Ms. Judy Legault, who said nothing about Mr. Kassa's hours or pay. Further, like Mr. Kassa's and Mr. Hermann's, her description of Mr. Kassa's duties does not make sense. She stated that Mr. Kassa was an "undercover security enforcer" and was responsible for ensuring that "laws (were) being upheld by the patrons" and for monitoring staff theft. She also stated that Mr. Kassa would have also acted as a bouncer and would have had to restrain and escort patrons in altercations off premises. Mr. Kassa's cover as a patron for Jackhammers could not be maintained for very long (vis a vis other employees and regular patrons of the establishment) if his duties involved acting as a bouncer and restraining and escorting patrons in altercations off premises.

I also note that between March 4 and March 19, 1993, when Mr. Kassa alleges he was employed with Jackhammers, Mr. Kassa was participating in a WCB vocational rehabilitation program which required him to actively search for modified employment as a condition for his continued receipt of benefits. In a WCB Worker's Progress Report dated March 20, 1993, Mr. Kassa certified that he had not worked for any employer and had not been self-employed. Further, he did not report his alleged employment with Jackhammers to the WCB at any subsequent time.

Mr. Kassa testified on cross-examination that he did not report his employment with Jackhammers to the WCB because he was not required to do so until the end of the month because the benefits cheque would be issued at the time, and that he was told by a WCB clerk to make sure the job was full time before he reported it otherwise the WCB would cut off his benefits. He also testified that he was not working at the time that he completed the Worker's Progress Report.

I do not accept Mr. Kassa's testimony because both he and Mr. Hermann indicated in their evidence that Mr. Kassa's employment with Jackhammers was full time.¹⁰ Further, the Worker's Progress Report specifically asked him if he had worked for any employer or had been self-employed between his first day off work (Mr. Kassa had been off work as a result of his right knee injury at work since February 1990) and March 20, 1993 (the day he signed the form), Mr. Kassa said, "no."¹¹ Mr. Kassa also provided the WCB with a copy of his job contact list indicating that he was actively searching for employment between March 4 and March 19, 1993 and not working during this time.

Mr. Kassa's, Mr. Hermann's and Ms. Legault's description of Mr. Kassa's "employment" with Jackhammers may not in itself have caused me to find that Mr. Kassa was not employed as an undercover security officer with Jackhammers at the time of the accident. However, in conjunction with the fact that Mr. Kassa advised the WCB that he had not been employed at any time since his injury at work, his continued active job search during the period that he claims he was employed with Jackhammers, his failure to produce any documents, such as cheque stubs or an income tax return filed with Revenue Canada, confirming his employment with Jackhammers,¹² and the short duration of his alleged employment, I am not satisfied that Mr. Kassa was employed as an undercover security officer at the time of the accident. Mr. Kassa has not established, on a balance of probabilities, that he was employed as an undercover security officer between March 4 and March 19, 1993, as he claims.

Mr. Kassa submits that Belair is estopped from denying the pre-accident employment at Jackhammers for the following reasons: 1. Belair received authorization to communicate with the employer, and acted on it; 2. Within a day of the receipt of the Application for Accident Benefits, Belair received oral confirmation of the employment, duties and income; 3. Belair failed to request further information for more than a year, and by that time the employer was no longer in business, and Mr. Kassa did not have access to the employer's records; and, 4. Approximately nine months after the accident, Belair's case manager conducted a job-site analysis at Jackhammers and had full access to the staff there to clarify his job duties.

I am not satisfied that the doctrine of estoppel applies in this case. The doctrine of estoppel by representation comprises of two elements: a representation by word or deed made to another and a reliance by that other on that representation to his or her detriment.¹³ I do not find that through its conduct, Belair represented to Mr. Kassa that it was unequivocally accepting his claim that he was employed at the time of the accident and would not be seeking verification from him of his employment. In any event, I received no evidence that Mr. Kassa relied on Belair's conduct.

Mr. Kassa submits that in the event I find that he was not employed at Jackhammers, then the evidence demands that I consider whether he was self-employed as a photographer prior to the accident.

In determining whether Mr. Kassa was self-employed as a photographer prior to the accident, I have considered the Commissioner's Guideline for Identifying Self-employed Individuals.¹⁴This Guideline states that for the purpose of the Schedule, an individual is considered to be self-employed if the business he or she derives his or her remuneration from is not incorporated under any law. The Guideline defines "(b)usiness" as "(a)n activity that is carried on for profit or with a reasonable expectation of profit, including a profession, a calling, a trade, a manufacture or undertaking of any kind, an adventure or concern in the nature of trade, or a service."

Mr. Kassa registered a business in 1989 — "Kassa Photography."¹⁵ I heard evidence that Mr. Kassa photographed five to six weddings prior to the accident (from 1989 to 1993),¹⁶ but I heard no evidence of his net income from photography prior to the accident. Mr. Kassa took the position throughout the hearing that the "photography business" was little more than a glorified hobby, with little in the way of an expectation of profit. He testified that he was a hobby photographer who tried to make his hobby into a profession, primarily doing wedding photography. Although it was his hope that he would be able to convert the hobby into a profitable business, this never came to pass.

I find, therefore, that Mr. Kassa was not self-employed as a photographer prior to the accident.

Since I have determined that Mr. Kassa was not employed or self-employed at the time of the accident, for the purposes of determining Mr. Kassa's entitlement to weekly income benefits, I need not deal with the issues of whether he sustained a physical, psychological or mental injury as a result of the accident, and if so, whether he suffered a substantial inability to perform the tasks of his occupation or employment. I also need not deal with the question of the amount of weekly income benefit to which he was entitled. However, for the purposes of completeness, I will set out my findings and reasons for my findings on these issues.¹⁷

b) Did Mr. Kassa sustain a physical, psychological or mental injury as a result of the accident?

It is not disputed that Mr. Kassa was involved in a motor vehicle accident on March 19, 1993. However, the nature and extent of the injuries he suffered, if any, in this accident is in issue. I find that Mr. Kassa sustained a mild head injury and a soft-tissue injury to his neck in the accident. My finding is based on Mr. Kassa's largely consistent reporting of these injuries following the accident, Dr. Ernest White's opinion that the degree of Mr. Kassa's complaints on May 21, 1993 were consistent with these injuries,¹⁸ Dr. Marek Gawel's conclusion on January 12, 1994 that Mr. Kassa's headaches after the accident fit the pattern of headaches which come on after a mild head injury¹⁹ and Belair's adjuster's opinion that on March 26, 1993, when he met with Mr. Kassa, his complaints appeared legitimate.²⁰

Mr. Kassa testified that he also re-injured his right knee in the accident and that on the day following the accident, his right knee was hurting terribly. Mr. Kassa testified that his knee was "cleared" by Dr. Allan Gross in late 1992 and he had no knee pain at the time of the accident. However, after the accident his right knee was always aching and swelling and his pain intensified in 1995.

While I accept that Mr. Kassa suffered from right knee pain following the motor vehicle accident of March 1993 and that this pain intensified in 1995, I do not accept Mr. Kassa's testimony that it was caused by the accident.

The evidence indicates that Mr. Kassa first started to relate his right knee problems to the motor vehicle accident after he received a decision from the WCB that his ongoing difficulties with his right knee in 1995, including the meniscal tear that was discovered, were not related to his injury of February 1990.²¹ There was no mention of any injury or aggravation of his right knee as a result of the motor vehicle accident to anyone prior to November 1995.²²

Mr. Kassa testified that he told his family doctor, Dr. Karpati, of the increase in right knee pain following the accident, but that Dr. Karpati just brushed it off. I note that Dr. Karpati, in his report dated April 15, 1996, states that after the motor vehicle accident Mr. Kassa's right knee pain intensified and it is possible that this is related to the accident. However, at the hearing, on cross-examination, Dr. Karpati testified that he could not say if Mr. Kassa's right knee pain after the accident was related to the accident.

The WCB records indicate that Mr. Kassa's recovery from the knee surgery on June 13, 1990 was slow and he continued to complain of severe right knee pain up to the date of the motor vehicle accident.²³ This was the reason why Dr. Karpati made an appointment for him to see Dr. Allan Gross, an orthopaedic surgeon. Mr. Kassa saw Dr. Gross in December 1992. Dr. Gross did not "clear" Mr. Kassa's knee, as Mr. Kassa claims. On the contrary, Dr. Gross concluded that Mr. Kassa "... must have significant degenerative changes in his medial and patellofemoral compartments." Dr. Gross found that Mr. Kassa had a significant fluid collection in the joint, probably as a result of these degenerative changes.

Dr. Carol Hutchison, the orthopaedic surgeon who performed arthroscopic surgery on Mr. Kassa's right knee in November 1995, advised the WCB that the meniscal tear identified in August 1995 could have easily been caused by the injury he sustained at work.²⁴

I am not satisfied that Mr. Kassa aggravated his previous right-knee injury in the accident and that his right knee problems after the motor vehicle accident, including his knee surgery in 1995, are related to the accident.

(c) Did Mr. Kassa suffer a substantial inability to perform the essential tasks of his employment or occupation?

If I had found that Mr. Kassa was employed as an undercover security officer with Jackhammers at the time of the accident, I would have found that Mr. Kassa suffered a substantial inability to perform the essential tasks of this job until June 18, 1993, and therefore he would be entitled to weekly income benefits only up to this date.

I rely on Dr. White's opinion of May 21, 1993 that Mr. Kassa suffered a substantial inability to perform the essential tasks of the job of undercover security officer as a result of the injuries he sustained in the accident until June 18, 1993. I also rely on Dr. White's opinion that after this date, Mr. Kassa did not suffer from significant musculoskeletal disabilities that would prevent him from returning to his pre-accident employment.²⁵

Mr. Kassa testified that he could not return to his job as an undercover security officer after June 18, 1993 because of severe headaches, loss of memory and poor concentration as a result of the head injury that he sustained in the accident. However, there are no objective neurological findings to support Mr. Kassa's testimony. An EEG and CT Scan of Mr. Kassa's head were normal.²⁶ Dr. Oscar Kofman, a neurologist, who assessed Mr. Kassa on two occasions, July and October 1993, in connection with the head injury sustained in the motor vehicle accident, concluded that Mr. Kassa's headaches were not related to a neurological deficit. He opined that the pain could be the result of muscle contraction. Normally, headaches of this variety would improve over a period of weeks or months.

Dr. Marek Gawel, who saw Mr. Kassa in January 1994, concluded that he was incapable of working at the time because he could not concentrate on what he was doing when he had a headache. However, Dr. Gawel's opinion was not based on any objective findings. It was based on what Mr. Kassa told him. Mr. Kassa complained that he was suffering from a headache five days out of seven, and that while he had the headache he could not concentrate on anything.

Dr. Gordon, another neurologist, who saw Mr. Kassa on May 31, 1994, found some cognitive impairment. However, he did not identify the extent of the impairment and stated that the cause of the impairment was not clear.

Dr. L.B. Raschka, a psychiatrist, whom Mr. Kassa has been seeing since December 1995, was of the opinion as of April 6, 1996 that Mr. Kassa was suffering from a major depressive episode caused by the motor vehicle accident of March 19, 1993 and Mr. Kassa was entirely disabled and thus unable to perform the essential tasks of his pre-accident employment as an undercover security officer. However, Dr. Raschka makes it clear that at the time he arrived at this opinion, he had no knowledge of any disability arising from a source other than the injuries sustained in the motor vehicle accident. He was under the impression, based on the information that was provided to him by Mr. Kassa, that Mr. Kassa's right knee problems, including the surgery in 1995, were a result of the motor vehicle accident.²⁷

Aside from the pre-existing disability from the right knee work-related injury, the evidence indicates that Mr. Kassa may have suffered from other problems prior to the accident. Dr. Karpati testified, on cross-examination, that Mr. Kassa had a drinking problem which in Dr. Karpati's mind raised concerns about the health of Mr. Kassa's liver and stomach. Dr. Karpati also testified that Mr. Kassa always had emotional problems and received supportive treatment for depression prior to the motor vehicle accident of March 1993. Further, Dr. Karpati testified that Mr. Kassa suffered a severe head injury in a motor vehicle accident in 1984. As a result, he was seen by a couple of neurologists, including Dr. Kofman,²⁸ and was treated by a Dr. Franks from 1984 to 1988 for memory loss as a result of that accident. Dr. Karpati testified that Dr. Kofman referred Mr. Kassa to a psychiatrist because of an emotional reaction to the injuries he sustained in the 1984 accident. Dr. Karpati was not able to separate how much of Mr. Kassa's disability was due to the motor vehicle accident of March 1993 and how much was due to these other pre-existing problems. It was Dr. Karpati's opinion that the brain damage that Mr. Kassa suffered in the 1984 accident may still have been affecting him in March 1996.

In the absence of objective medical evidence to support Mr. Kassa's claim that he continued to be disabled from returning to his (alleged) pre-accident employment as a result of the March 1993 motor vehicle accident, I am unable to find that Mr. Kassa is entitled to weekly income benefits after June 18, 1993. I am not prepared to make this finding based on Mr. Kassa's testimony alone or on evidence that relies principally on information provided by Mr. Kassa because I did not find him to be a credible witness, for a number of reasons.

He failed to advise Belair²⁹ and the specialists he was seeing in connection with his 1993 motor vehicle accident of his right knee work injury and that he had not returned to work since 1990 as a result of it.³⁰ He also failed to mention other pre-existing problems which, according to his family physician, Dr. Karpati, were significant, including a serious head injury that he sustained in a motor vehicle accident in 1984.

At the same time, Mr. Kassa failed to advise the WCB that he was involved in a motor vehicle accident in March 1993 and suffered injuries as a result of the accident. He indicated to the WCB that there were no other medical conditions which impacted on the extent of his work-related impairment other than the injury to his right knee.³¹

Throughout 1993 and until April 1, 1994, Mr. Kassa was involved in a WCB vocational rehabilitation program which required him to actively search for modified employment as a condition of his continued receipt of WCB benefits. At all times, Mr. Kassa represented to the WCB that he was actively searching for modified employment, and the only thing that was preventing from finding a job was the job market. Mr. Kassa admitted, in cross-examination, that he misled the WCB in his job search efforts. For example, he fabricated the times and dates of his "job contacts." If Mr. Kassa is capable of misleading the WCB in order to qualify for WCB benefits, he is equally capable of misleading Belair and an arbitrator in order to qualify for accident benefits.

Mr. Kassa submits that Belair is estopped from denying his disability before April 25, 1995 because it entered into an agreement with him at mediation on March 24, 1995 to reinstate his weekly income benefits. It is not clear from the Report of Mediator, dated March 24, 1995, that when Belair agreed to reinstate weekly income benefits from October 3, 1994 onwards, it waived its right to dispute Mr. Kassa's entitlement to the benefits. The agreement was made in conjunction with an undertaking from Mr. Kassa to provide Belair with information pertaining to his WCB benefits and his payments from Jackhammers. Further, the existence of such an agreement was not alleged by Mr. Kassa when he applied for mediation again in October 1995.³²At that time, Mr. Kassa claimed entitlement to weekly income benefits from March 26, 1993 onwards. In any event, Mr. Kassa raised this issue for the first time in his submissions at the conclusion of the hearing. Accordingly, Belair did not have an opportunity to present evidence on this issue. In these circumstances, I am unable to consider this submission.

3. What is the correct amount of the weekly income benefit to which Mr. Kassa was entitled?

I have determined that Mr. Kassa would only have been entitled to weekly income benefits from March 26 to June 18, 1993. Belair paid weekly income benefits at the rate of $504 per week during this period based on information provided by Mr. Kassa and Mr. Hermann. At the hearing, Mr. Kassa relied on his own evidence and that of Mr. Hermann in support of his claim that he was paid $630 per week while working at Jackhammers.

I did not find the evidence of Mr. Kassa and Mr. Hermann credible on the issue of Mr. Kassa's employment with Jackhammers, including the hours he worked and the amount he was paid. In the absence of reliable evidence of Mr. Kassa's pre-accident income, I find that Mr. Kassa would have only been entitled to the minimum weekly income benefit of $185.60 per week from March 26 to June 18, 1993.

Mr. Kassa submits that Belair is estopped from denying Mr. Kassa's income at Jackhammers for the same reasons that it is estopped from denying his employment at Jackhammers. Again, I am not satisfied that the doctrine of estoppel applies.

Mr. Kassa received benefits from the WCB during the period March 26 to June 18, 1993. He received Future Economic Loss benefits (FEL) in the amount of $438.11 per month and a Vocational Rehabilitation Supplement in the amount of $1,603.34 per month.³³ Mr. Kassa concedes that the amount of his Vocational Rehabilitation Supplement should have been deducted from his weekly income benefits. However, he submits that a FEL benefit is not a payment for loss of income of any kind and therefore is not deductible from his weekly income benefits.

Since the hearing in this matter, the Director of Arbitrations has issued her decision in Alpina Insurance Company Limited and Mouawad.³⁴ In that decision, she upheld the analysis and conclusion of Arbitrator MacIntosh that a FEL benefit, which is paid to reimburse an injured worker for anticipated loss of income, is a payment for loss of income and therefore is deductible under subsection 12(4)(b) of the Schedule. She also upheld the analysis and conclusion of Arbitrator MacIntosh that a Vocational Rehabilitation Supplement is not a payment for loss of income but a payment for cooperation in a rehabilitation program and therefore is not deductible under subsection 12(4)(b) of the Schedule.

I agree with the Director of Arbitrations' decision in Mouawad. Accordingly, I find that the FEL benefits that Mr. Kassa received from March 26 to June 18, 1993 are deductible under subsection 12(4) of the Schedule from the weekly income benefits payable by Belair³⁵ but that the Vocational Rehabilitation Supplement benefits that Mr. Kassa received are not.

4. Is Belair entitled to a repayment of weekly income benefits?

As noted earlier, Belair paid weekly benefits at the rate of $504 per week from March 26, 1993 to May 26, 1994 and then at the rate of $185 per week from May 27, 1994 to April 6, 1995. I have determined that Mr. Kassa was not entitled to any weekly income benefits. Belair seeks repayment of all weekly benefits paid. Belair has paid weekly income benefits in the amount of $39,089.

A part of the overpayment was caused because payments for loss of income, i.e., WCB FEL benefits, received by Mr. Kassa were not deducted by Belair.³⁶ Mr. Kassa received FEL benefits during the entire period that he received weekly income benefits. In my view, Belair can obtain repayment of any overpayment that arises by its failure to deduct the FEL benefits under subsection 27(3) of the Schedule which states as follows:

(3) A person must repay to the insurer any benefit received under sections 12 and 13 to the extent of any payments received by the person that are deductible from benefits under subsection 12(4) or 13(3).

The balance of the overpayment may only be recovered, under subsection 27(1) of the Schedule, if the benefits were paid to Mr. Kassa through error or fraud. I agree with Senior Arbitrator Susan Naylor in Levenson and General Accident Assurance Company of Canada³⁷ and numerous subsequent arbitration decisions that the word "error" in subsection 27(1) of the Schedule requires that responsibility for the payment be attributable in some material way to the actions of the applicant.

Mr. Kassa was originally paid at the rate of $504 per week because Belair used the formula approved by the Director's Delegate in Scavuzzo and Canadian Home Assurance Company.³⁸Belair took the gross amount that Mr. Kassa claimed he earned and averaged it over the number of weeks he actually worked (two weeks). Since the hearing in this matter, the Director of Arbitrations has issued her decision in Vo and Maplex General Insurance.³⁹ in which she upheld the formula for calculating weekly income benefits of Arbitrator Draper at the arbitral level. Under the circumstances, the correct formula for calculating weekly benefits is to take the amount Mr. Kassa earned in the two weeks he allegedly worked for Jackhammers and divide it by four weeks. This will result in a weekly benefit calculation of $252 per week, instead of $504 per week.

Mr. Kassa submits that any overpayment caused by Belair's failure to calculate the benefits in accordance with the formula in Vo was not caused by him and hence he should not be held responsible to repay such benefits. I agree with Mr. Kassa. Belair did not suggest that any conduct on the part of Mr. Kassa contributed to its decision to calculate benefits on the basis of the formula set out in Scavuzzo.

Belair submits that it is entitled to repayment of weekly benefits on the basis that Mr. Kassa received these benefits as a result of "...his fraud or misrepresentation or induced error." I am not satisfied that Belair was induced to make payment of weekly income benefits as a result of the fraud of Mr. Kassa. However, I find that Belair was induced to make payment of weekly income benefits as a result of the culpable error of Mr. Kassa. Mr. Kassa failed to advise Belair and the specialists he saw in connection with his 1993 motor vehicle accident of his work-related right knee injury and disability as a result of this injury. He also failed to mention other pre-existing problems which, according to his family physician, were significant, including a serious head injury that he sustained in a motor vehicle accident in 1984. He also said he had a full-time job when he didn't.

In conclusion, I find that Belair is entitled to recover benefits in the amount of $252 per week from March 26, 1993 to May 26, 1994 and in the amount of $185 per week from May 27, 1994 to April 6, 1995.

5. Is Mr. Kassa entitled to be paid for the services of Wayne Cook Rehabilitation Consultants?

Mr. Kassa disputes Belair's refusal to pay for the services of Wayne Cook Rehabilitation Consultants. He seeks payment for the services under subsections 6(1)(c) and (f) of the Schedule.

In order to obtain payment of supplementary medical and rehabilitation benefits under section 6(1) of the Schedule, Mr. Kassa must establish that the expense claimed is a reasonable expense required because of the motor vehicle accident of March 19, 1993.

I am not satisfied that the services of Wayne Cook Rehabilitation Consultants were required because of the motor vehicle accident of March 19, 1993.

Mr. Kassa relies on the evidence of Dr. Karpati in support of his claim that these services were reasonable and necessary. The Referral form to Wayne Cook Rehabilitation Consultants from Dr. Karpati is dated December 1, 1995. Dr. Karpati indicates on the form that the services of Wayne Cook Rehabilitation Consultants are being requested because of the problems that Mr. Kassa is experiencing with his right knee.⁴⁰ I have found that the right knee problems that Mr. Kassa experienced and continues to experience after the motor vehicle accident of March 19, 1993 are not related to that accident.

At the hearing, Dr. Karpati testified that he was not sure whether the need for the services arose from the motor vehicle accident of March 1993. He testified that it was difficult to separate the problems Mr. Kassa experienced as a result of 1993 motor vehicle accident from other pre-existing problems. He could not say how much the motor vehicle accident contributed to Mr. Kassa's overall disability.

Since I have found that the services of Wayne Cook Rehabilitation Consultants are not required because of the accident, I need not determine whether they are a reasonable expense.

6. Is Mr. Kassa entitled to a special award?

Mr. Kassa seeks a special award under section 282(10) of the Insurance Act. Even if I were to find that Belair acted unreasonably, a special award is based on the amount to which the Applicant is entitled at the time of the award. I have concluded in this case that Mr. Kassa is not entitled to any benefits. Therefore, I cannot make a special award.

Expenses:

Mr. Kassa seeks an award of the expenses he has incurred in respect of this arbitration. An arbitrator's authority to make an award for expenses in favour of an applicant is found under section 282(11) of the Insurance Act. Arbitrators have generally exercised their discretion to award applicants their expenses, regardless of outcome. However, expenses have been denied to an applicant where it has been found that the applicant lacked credibility or provided false or misleading evidence or that the applicant's conduct unreasonably prolonged the proceedings.

I agree with Belair. I do not believe that this is an appropriate case in which to award Mr. Kassa his expenses. Accordingly, I am exercising my discretion and declining to award Mr. Kassa his expenses in respect of this arbitration.

Belair claimed its expenses of the arbitration. This arbitration was commenced prior to November 1, 1996, the date on which the Insurance Act was amended to permit insurers to be awarded their expenses in arbitration proceedings. Therefore, even if I were inclined to award Belair its expenses, I find I do not have jurisdiction to do so.

Order:

1. Mr. Kassa is not entitled to any weekly income benefits.

2. Mr. Kassa is not entitled to paid for the services of Wayne Cook Rehabilitation Consultants.

3. Belair is entitled to a repayment of weekly income benefits in the amount of $252 per week from March 26, 1993 to May 26, 1994 and in the amount of $185 per week from May 27, 1994 to April 6, 1995.

4. Mr. Kassa is not entitled to his expenses of the arbitration.

5. Mr. Kassa is not entitled to a special award.

6. Belair is not entitled to its expenses of the arbitration.

December 17, 1998

Shemin Manji Arbitrator

Date

APPENDIX

Hearing:

The hearing was held at the offices of the Financial Services Commission of Ontario in North York, Ontario, on August 18, 19, 20, and 21, 1997, November 3, 4, 5 and 28, 1997 and December 3, 1997, before me, Shemin Manji, Arbitrator. I received written submissions from Mr. Kassa on December 16, 1997 and January 5, 1998 and from Belair on December 29, 1997.

Present at the Hearing:

Applicant: Laszlo Kassa

Mr. Kassa's Representative: Michael J. Gillen Barrister and Solicitor

Belair's Representative: William P. Dermody Barrister and Solicitor

Belair's Officer: Robert Philpott

Witnesses: Dr. Leslie Karpati Laszlo Kassa Walter E. Hermann Wayne Cook Etelka Toth David Ka Ko Chan Vinny Khanna Dr. Ernest J. White David J. Hoffman Joseph Cabral David K. Desilva Nick Anastasakos

Exhibits: Twenty-three exhibits were filed at the hearing.

Exhibit A Material filed by Mr. Kassa re: motion on admissibility of surveillance evidence

Exhibit 1A Applicant's Document Brief

Exhibit 1B Applicant's First Supplementary Document Brief

Exhibit 2A Document Brief for Lazlo Kassa

Exhibit 2B Supplemental Document Brief of Belair Insurance

Exhibit 3 WCB File - 3 volumes

Exhibit 4 Applicant's Reconciliation of WCB payments

Exhibit 5 Referral Form signed by Dr. Karpati to Wayne Cook Rehabilitation Consultants dated December 1, 1995

Exhibit 6 Royal Bank Book - Chequing Account of Mr. Kassa

Exhibit 7 Letter dated January 25, 1996 to Dr. Karpati from Mr. Wayne Cook

Exhibit 8 Report of Crawford and Company dated March 30, 1993

Exhibit 9 Fax Transmittal dated August 21, 1997 to Belair from Crawford

Exhibit 10 Curriculum Vitae of Dr. White

Exhibit 11 Notes of Dr. White

Exhibit 12 Photographs - October 23, 1993

Exhibit 13 Photographs - May 27, 1994

Exhibit 14 Video 93-10-7666 (October 1993)

Exhibit 15 Video 73736-94-04-8020A (April 1994)

Exhibit 16 Video 94-07-8332B (May 1994)

Exhibit 17 Video 73736-CG/679/95 (March 31, April 1 and April 8, 1995)

Exhibit 18 Video 73736-CG/679/95 (July 8, 1995)

Exhibit 19 Video 73736-CG/679/95 (August 16, 17, 19 and 21, 1995)

Exhibit 20 Video 0073736-CG/679/95 (February 19, 20, 21, 22, and 23, 1996)

Exhibit 21 Video 0073736-CG/679/95 (March 6 and 12, 1996)

Exhibit 22 Video 73736- Wedding-August 6, 1994

Exhibit 23 Invoice Breakdown - Wayne Cook Rehabilitation Consultants

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2Effective July 1, 1998, the Ontario Insurance Commission was changed to the Financial Services Commission of Ontario, pursuant to the Financial Services Commission of Ontario Act, S.O. 1997, c.28.
3. 3During the course of the hearing, a question was raised in respect of whether Mr. Kassa in fact injured his knee at work. Mr. Kassa's family doctor, Dr. Karpati, in his clinical notes of August 16, 1991, indicated that the cyst was not related to Mr. Kassa's work. I accept the Workers' Compensation Board's finding that Mr. Kassa suffered a work-related injury. See WCB letter dated February 12, 1991 to the Accident Employer - Exhibit 3, Tab 2.
4. 4List of payments made, Exhibit 2A, Tab 41.
5. 5Letter from Belair to Mr. Kassa dated June 17, 1994.
6. 6Specifically, information pertaining to Mr. Kassa's WCB benefits and copies of cheques cashed from his employer - Report of Mediator dated March 24, 1995.
7. 7(OIC P-000626, June 19, 1992)
8. 8(OIC P-002111, December 12, 1991)
9. 9Mr. Kassa is not alleging that he was on a temporary layoff or entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
10. 10Mr. Hermann testified that there was no time limit to the contract. He also indicated in his Employer's Confirmation of Income form that the employment was full time.
11. 11Mr. Kassa signed this form which contains the following paragraph before the signature: "All statements in the foregoing report are true to the best of my knowledge and belief and no information required has been concealed or omitted and I claim compensation and/or health care benefits."
12. 12Mr. Kassa produced his bank book and testified that deposits shown in the bank book of $500 each on March 11 and 19, 1993 were the income he received from Jackhammers.¹² The amount of each deposit is less than what he claims he earned (he and Mr. Hermann testified that Jackhammers did not make any deductions at source). Moreover, there is no independent verification that these monies were received from Jackhammers. Further, Mr. Kassa was not able to explain why there was a bank code "TRC" against the deposit of March 11, 1993, indicating that the monies on that day were transferred from another bank account.
13. 13Blanchard v Ontario (Superintendent of Insurance), (May 9, 1997) 32 O.R. (3d) Part 4, 252, at p. 263.
14. 14Issued pursuant to section 268.3 of the Insurance Act. Commissioner's Guideline No. 1/95, Ontario Insurance Commission, April 25, 1995.
15. 15Kassa Photography was not incorporated.
16. 16Testimony of David Chan.
17. 17At the arbitration, Mr. Kassa did not make a claim for section 13 weekly benefits (Benefits - No Income).
18. 18Dr. White is an orthopaedic surgeon, who assessed Mr. Kassa on May 21, 1993, at the request of Belair. His opinion is contained in his report dated May 21, 1993.
19. 19Dr. Gawel is a neurologist who was consulted by Crawford (adjusters acting for Belair). His opinion is contained in his report dated January 12, 1994.
20. 20Report of Crawford and Company dated March 30, 1993.
21. 21The WCB decision is dated July 27, 1995.
22. 22Mr. Kassa first related the right knee problems to the accident when he met with Mr. Jai Goolsarran and Mr. Wayne Cook of Wayne Cook Rehabilitation Consultants in November 1995. There is no mention of a right knee injury in his Application for Accident Benefits and in the Statement he gave to Belair's adjuster on March 25, 1993. Mr. Kassa was seen by quite a few specialists in connection with the injuries he suffered in the motor vehicle accident - Drs. White, Kofman, Gawel and Graham. Their reports indicate that he made no mention of a right knee injury.
23. 23WCB Memo #57 dated January 26, 1993. In a Worker's Progress Report and Physician's Progress Report dated March 20, 1993, Mr. Kassa and Dr. Karpati indicated that Mr. Kassa's knee was very painful because he had developed arthritis as a result of the work injury.
24. 24Report dated August 21, 1995.
25. 25This is confirmed by Dr. John Graham, another orthopaedic surgeon, in his report of February 8, 1994. He noted that on that date Mr. Kassa had little in the way of orthopaedic complaints. There were no distal neurological features. X-rays of Mr. Kassa's cervical spine did not show any significant radiological abnormalities that would be related to an accident such as he sustained.
26. 26See Dr. Oscar Kofman's report dated October 26, 1993.
27. 27Report of Dr. Raschka dated April 6, 1996.
28. 28Dr. Karpati testified the other neurologist was Dr. Model, whom Mr. Kassa saw in July 1984, because he was stuttering after the accident.
29. 29Mr. Kassa gave a statement to Belair on March 26, 1993. In that statement he described what he was doing at the time of the accident. He omitted to mention that at the time of the accident he was involved in a vocational rehabilitation program with the WCB.
30. 30Mr. Kassa advised Dr. White in May 1993 that his regular occupation was a photo-engraver but that he had been unable to find employment in this field for over six years. He advised him that over the past six years he had worked at various jobs such as security. He advised Dr. Gawel in January 1994 that he had been completely well until March 1993.
31. 31See for example, Non-Economic Loss Summary Report of Dr. Stein dated June 23, 1993.
32. 32See Report of Mediator dated November 29, 1995.
33. 33Exhibit 4 (Applicant's reconcilation of WCB payments) and a letter from WCB to Mr. Kassa dated December 2, 1993.
34. 34(OIC P-003226, April 7, 1998)
35. 35Mr. Kassa received a FEL benefit of $438.11 per month. This should be deducted from his income replacement benefits of $803.65 per month ($185.60 x 4.33).
36. 36Earlier I found that WCB FEL benefits are deductible under subsection 12(4) of the Schedule from the weekly income benefits paid by Belair.
37. 37(OIC A-000260, February 18, 1992)
38. 38Supra, footnote #6
39. 39Supra, footnote #7
40. 40Under the heading "Clinical Information & Diagnosis," Dr. Karpati writes: (r)uptured (m)eniscus of the right knee.