Italo Penaglia v. Allstate Insurance Company of Canada, 1999 ONFSCDRS 136

Neutral Citation: 1999 ONFSCDRS 136

FSCO A97-001704

BETWEEN:

ITALO PENAGLIA

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION

Before:

John Wilson

Heard:

April 13, 14, and 15, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David F. Longley for Mr. Penaglia

Colin S. Jackson for Allstate Insurance Company of Canada

The Applicant, Italo Penaglia, was injured in a motor vehicle accident on July 3, 1996. He applied for statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.¹ Allstate refused to pay any benefits. The parties were unable to resolve their disputes through mediation, and Mr. Penaglia applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. The issues in this hearing are:

Was there an accident, pursuant to section 1 of the Schedule?
Is Mr. Penaglia barred from proceeding with this claim on the grounds that his application was not in compliance with the time limits set out in section 59(1) of the Schedule, and he did not have a reasonable excuse pursuant to section 59(4) of the Schedule?
Is Mr. Penaglia entitled to weekly income replacement benefits from July 10, 1996?
What is the correct amount of his weekly income replacement benefits?
Is Mr. Penaglia entitled to supplementary medical expenses, claimed pursuant to paragraph 36(1) of the Schedule?
Is Mr. Penaglia entitled to payments for housekeeping services in the amount of $4,200 pursuant to section 55 of the Schedule?
Is Mr. Penaglia entitled to his expenses incurred in this arbitration proceeding? Mr. Penaglia also claims interest on any amounts owing.

Mr. Penaglia was involved in an accident pursuant to Section 1 of the Schedule.
Mr. Penaglia has a reasonable excuse for non-compliance with section 59(1) of the Schedule and is not barred from proceeding with this matter.
Mr. Penaglia is entitled to weekly income replacement benefits from July 10, 1996 to March 27, 1997.
The correct amount of his benefits is $436.05 per week, less any collateral benefits that he received from the Aetna Insurance Company.
Mr. Penaglia is not entitled to supplementary medical expenses pursuant to section 36(1) of the Schedule.
Mr. Penaglia is not entitled to payment of housekeeping expenses pursuant to section 55 of the Schedule.
The issue of expenses may now be spoken to.

The incident giving rise to this dispute took place at a public self-storage operation located at 2 Greensboro Drive, near Kipling Avenue in Etobicoke. It is not disputed that the Applicant, Mr. Italo Penaglia, arrived at the entrance to the storage facility in a van. At that time, another van, driven by a Mr. Rizzo was stopped in the entrance of the facility, pointed in the direction of the exit, and blocking the entrance. As a result, the van occupied by the Applicant could not enter the facility.

Beyond this point, the parties disagreed on the exact details of the story.

A confrontation ensued over whose van would give way at the entrance to the storage facility. The van owned by Mr. Penaglia's friend, Mr. Clavero, was pushed backwards by Mr. Rizzo's vehicle to enable Mr. Rizzo to exit the facility. The same van subsequently came into contact with Mr. Penaglia, who had exited his vehicle and was, at the time, on foot. It is this second incident that precipitated the injuries in respect of which Mr. Penaglia is claiming benefits.

Issue 1: Was there an "accident" pursuant to section 1 of the Schedule?

The Insurer has claimed that the incident did not constitute an "accident" as defined by Section 1 of the Schedule.

Section 1 of the Schedule states:

"accident" means an incident in which directly or indirectly, the use or operation of an automobile causes an impairment or causes damage.

There has been much argument in courts and arbitration hearings over what constitutes the use or operation of a vehicle in this context, as well as the question of causal linkage to such usage. In the case of Amos v. Insurance Corporation of British Columbia, (1995)1995 CanLII 66 (SCC), 127 D.L.R. (4th) 618, the Supreme Court of Canada dealt with the question of the use or operation of a motor vehicle.

Although Amos involved a different statutory insurance scheme, the test enunciated by the Supreme Court has been adopted in Ontario. Director's Delegate Draper in Hanlon and Guarantee Company of North America² endorsed the two-pronged test in Amos:

Did the accident result from the ordinary and well-known activities to which automobiles are put?
Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant's injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

In this case the parties disagree about the facts giving rise to Mr. Penaglia's claim for benefits. Mr. Penaglia claims that he was injured as a result of being run down by Mr. Rizzo's van. The Insurer claims that if Mr. Penaglia was injured in the incident, it was because he leapt at Mr. Rizzo's stationary vehicle in a fit of anger, kicking and hitting it.

Mr. Gabriele Rizzo, the driver of the second van, and Mr. Rui Amaral, his assistant, were both called as witnesses by the Insurer.

Mr. Rizzo testified that his vehicle was in "park" and could not have moved and did not hit Mr. Penaglia. I find that Mr. Rizzo's recollection of the incident was not convincing. Given the potential consequences of a finding that Mr. Rizzo intentionally ran down a pedestrian, he had some interest in absolving himself of responsibility.

His former assistant, Mr. Amaral, who was present in the vehicle with Mr. Rizzo, testified on cross-examination that the van was in "drive" and that it might have been moving, albeit slowly. I prefer Mr. Amaral's testimony on this matter to that of Mr. Rizzo.

The Applicant, Mr. Penaglia, testified that he was standing outside of the parked vehicle belonging to his friend, Mr. Clavero. After he heard a bump and saw his friend's vehicle moving backwards, he went up the driver's side of Mr. Clavero's vehicle towards Mr. Rizzo's vehicle. This would have placed him in the path of Mr. Rizzo's vehicle, which was attempting to leave the parking lot. He further testified that Mr. Rizzo's vehicle then began moving towards him and did not stop. He said he tried to move out of the way but was bumped on the right knee. He then was pushed toward the passenger side of the vehicle and claimed to have fallen to the ground.

He admitted that in the process of coming into contact with the vehicle, his arms were extended towards the hood of Mr. Rizzo's vehicle, apparently in an attempt to fend it off. This may well have created the mistaken impression that he was climbing up on the front of the van.

While Mr. Penaglia was at times inconsistent and self-serving, his version of the events is more consistent with the investigator's reports, filed as part of exhibit 1, than Mr. Rizzo's account .

Based on the evidence before me at the hearing, I find that there was a confrontation between Mr. Clavero and Mr. Penaglia on one hand, and Mr. Rizzo on the other hand. This resulted in Mr. Penaglia being hit by Mr. Rizzo's vehicle while Mr. Rizzo was trying to drive out of the storage facility. There was a continuous chain of causation stretching between the operation of Mr, Rizzo's motor vehicle and the injuries suffered by the Applicant.

I find that, in driving his van out of the storage facility, Mr. Rizzo was making use of his van in an ordinary and well-known manner. Any injuries Mr. Penaglia suffered at that time were directly attributable to the use and operation of a motor vehicle as contemplated in Amos.

Issue 2: Non-compliance with time-limits:

Section 59(1) of the Schedule provides that an applicant for benefits should apply to the insurer within 30 days after the circumstances that gave rise to the entitlement. The Application for Benefits, found at tab 1 of exhibit 1, is dated January 9, 1997. The accident took place on July 3, 1996.

Section 59(4) of the Schedule states:

A failure to comply with a time limit set out in subsection (1) or (3) does not disentitle a person to benefits if the person has a reasonable excuse.

It is incumbent upon Mr. Penaglia to prove, on the balance of probabilities, that, if he failed to comply with section 59 of the Schedule, he had a reasonable excuse.

The facts as they emerged at the hearing were that Mr. Rizzo did not remain at the scene of the accident and did not leave his ownership or insurance particulars with Mr. Penaglia or Mr. Clavero.

Mr. Penaglia attempted to trace the owner, as witnessed by an unsuccessful Vehicle Record Search, which he filed as exhibit 5. There may have been some confusion or mistake in the licence numbers transcribed at the accident scene, delaying the identification of Mr. Rizzo as the other party to the incident.

I find that any delay in reporting the accident to Allstate is directly attributable to the failure of Allstate's insured, Mr. Rizzo, to remain at the scene of the accident, and to provide proper identification and insurance particulars. In addition, the Applicant attempted to apply to the only identifiable insurer at an earlier date, and took active measures to prosecute his claim. I find that the Applicant, Mr. Penaglia, has a reasonable excuse for failing to comply with the time limits set out in section 59(1) of the Schedule.

Issue 3: Entitlement to weekly benefits:

To be entitled to weekly income replacement benefits pursuant to section 7 of the Schedule, the Applicant must demonstrate, on the balance of probabilities, that he suffered an impairment as a result of an accident, and he fell within one of the employment situations outlined in subsections 1 through 5 of section 7 of the Schedule. He then must prove that, as a result of the accident, he suffered a substantial inability to perform the essential tasks of his employment (section 7(2)(iv), of the Schedule).

Employment:

It was accepted by counsel for both parties that Mr. Penaglia had been employed by Consumers Glass as a machine operator prior to the accident.

Essential Tasks:

Mr. Penaglia worked at a machine which moulded various sizes of bottles and jars. He testified that this was a tiring job, as he was required to stand for long periods in the heat created by working with molten glass, and also had to do the occasional heavy lifting to retrieve damaged bottles and to maintain the machine. He also testified that he frequently worked double shifts, which could result in a 16-hour day.

The Employer's Confirmation of Income form (at tab 8, exhibit 1) summarizes Mr. Penaglia's job description as: "maintains and operates glass-forming machine." It identifies his essential tasks as maintaining and operating a glass-forming machine, and lifting from 50 to 75 pounds.

Mr. Penaglia's testimony about his job tasks is supplemented by a limited job description from the employer, and a Medical/Rehabilitation Assessment (DAC) report dated April 8, 1997 (tab 16, exhibit 1). Dr. Rocco Guerriero, chiropractor, outlines the Applicant's work history at page 4 of his report:

He has been a machine operator at Consumers Glass since 1989. He reports that the machine he used to work on makes bottles and jars. He states that originally the job required standing, although he admitted that he could sit occasionally. He states that the machine he worked at made approximately 164 bottles per minute. Some of his work duties involved quality control. He states that he examined the bottles after they were made. Occasionally he would have to change the equipment on the machines. He reports that the maximum lifting involved was up to 40 pounds.

This coincides with Mr. Penaglia's testimony that it was difficult work, although he stated at the hearing that he was not allowed to sit while the machine was in operation, and that on occasion, he had to lift as much as 75 pounds.

I find that Mr. Penaglia's essential tasks are as outlined in the DAC report above, with the exception of the lifting requirement, which I accept was in the range of 70 pounds. I accept that the job involved difficult, heavy work.

Injuries arising from the accident:

At page 3 of his DAC report, (tab 16, exhibit 1), Dr. C. Weisleder, an orthopaedic surgeon, summarizes a Health Practitioner's Certificate dated July 1996 from Dr. M. Hack, and mentions the diagnosis of "...contusion and soft tissue trauma right knee, right leg." He also mentions an August 1996 certificate from the same doctor and notes: "contusion, strain right forearm, right shoulder pain." A Certificate of Disability, presumably authored by Dr. Hack is noted as concluding: "cervical and lumbar myofascial strain."

The report of a Dr. P. Kirwin dated October 24, 1996, and filed as exhibit 4, is the first direct evidence filed with regard to Mr. Penaglia's injuries. Since the report mentions a referral by Dr. Hack to Dr. Kirwin, I presume that Mr. Penaglia first sought treatment before October from Dr. Hack. There were no reports from Dr. Hack filed, nor was he called to testify by either side.

Dr. Kirwin's report of October 24 states that immediately after the accident, the Applicant experienced low back, neck, right shoulder, and right leg pain. He also developed left leg pain within two-and a-half-months of the accident .

Dr. Kirwin's diagnosis is complicated by the fact that the Applicant had been treated for pre-existing back problems, and was also involved in an incident on a bus, shortly after the accident in question. He sustained some injury to his hand or arm in the bus incident.

Dr. Kirwin concludes that Mr. Penaglia appears to be suffering from cervical, thoracic and lumbar myofascial strains, a left collateral ligament strain of the knee, a light patellofemoral syndrome, right supraspinatus tendinitus and contusion of the right radius and possible left posterior rib fracture.

The report of Dr. Weisleder dated March 27, 1997, (tab 16 of exhibit 1), which forms part of the Med/Rehab DAC report, at page 4, summarizes Mr. Penaglia's injuries from the accident:

Based on my history, physical examination and review of the available medical reports, I feel that Italo Penaglio sustained:

Cervical strain
Lumbar strain
Bilateral knee strain

injuries as a direct result of the injury sustained on July 3, 1996.

On January 2, 1997, Mr. Penaglia was seen by Dr. Kirwin. At this time he concluded:

In assessment, Mr. Penaglia continues to suffer from an exacerbation of his degenerative disc disease of the lumbar spine, as well as a non-specific right knee arthralgia, right anterior shoulder impingement syndrome, and whiplash associated disorder of the cervical spine.

In summary, Mr. Penaglia suffered some injuries as a result of his contact with Mr. Rizzo's vehicle. These injuries included cervical strain, lumbar strain, and bilateral knee strain. These may have been complicated by an exacerbation of a pre-existing degenerative disc disease of the lumbar spine.

With regard to the pre-existing condition, the letter of Dr. Kirwin dated October 24, 1996 (exhibit 4) states: "Prior to the first accident of July 3, 1996, he was totally asymptomatic. In fact, the last time he even had low back pain was about December of 1995."

Dr. Kirwin's conclusions are supported by the fact that, prior to the accident, Mr. Penaglia was able to perform a physically challenging job that included standing in a hot and noisy environment for extended periods of time, and was able to lift heavy objects and efficiently operate a bottle and jar-making machine. He was even able to undertake double-shifts of up to 16 hours from time to time.

The summaries of the reports of his physician, Dr. Hack, the evidence of Mr. Penaglia, as well as the reports of Drs. Kirwin and Weisleder, lead to the conclusion that Mr. Penaglia suffered injuries as a result of the accident. It is not disputed that Mr. Penaglia stopped going to work after the accident.

I agree with Dr. Weisleder's assessment of the Applicant's injuries, previously cited, and I find that they occurred as a result of the collision between Mr. Rizzo's van and Mr. Penaglia.

Inability to carry out the essential tasks of his employment:

Mr. Penaglia was absent from work following the accident. He claimed disability benefits from Aetna I nsurance due to his inability to work following the accident. He testified that Dr. Hack advised him to remain away from work due to his injuries. Mr. Penaglia also provided a Certificate of Disability as well as a Health Practitioner's Certificate from Dr. Hack to the Insurer. The original application for benefits filed by the Applicant, (tab 1 of exhibit 1) states that the Applicant was receiving medical care from Dr. Hack and that he was unable to return to normal activities after the accident. It does not mention any specific activities that Mr. Penaglia could not do.

The Applicant testified that he saw a chiropractor and Dr. Kirwin, as well as Dr. Hack, to obtain treatment for his injuries. He testified that he could not perform his job after the accident and remained off work for about a year.

The Insurer sent the Applicant to Mt. Sinai Hospital in February of 1997, to be examined by Dr. Rajka Soric, a physiatrist. The report of Dr. Soric dated February 19, 1997 concludes at page 4:

"This patient, in my professional opinion does not have any impairments which disable him from performing the essential tasks of his employment."

Dr. Soric's only other mention of employment tasks is at page 3 of her report, where she states:

"This man last worked on July 3, 1996. He is a machine operator for Consumer Glass. He is not working now, but assures me that he still has a job to return to."

The list of documentation reviewed by Dr. Soric at pages 1 and 2 of her report, does not include any description of Mr. Penaglia's work as a machine operator.

Mr. Penaglia testified that when he wanted to return to work that following spring, the company was reluctant to consider it without full clearance from the company's physician, which was not obtained until June of 1997. This indicates that the company would have been reluctant to permit an injured or disabled worker to operate a glass machine.

I find therefore, that after the accident, Mr. Penaglia was unable to perform the essential tasks of his employment. I find that a person who sustained cervical strain, lumbar strain, and bilateral knee strain, could not be reasonably expected to operate the glass-making machine at Consumer's Glass for any length of time. I accept that Mr. Penaglia could neither stand for an eight-hour shift or longer, because of knee and back pain, nor could he safely operate his machine over an extended period of time. The pain complained of would have had the potential of interfering with his concentration, an essential matter when dealing with a machine processing molten glass at a high speed.

Duration of Disability:

As with most questions in this arbitration, there was a substantial difference of opinion between Mr. Penaglia and his Insurer concerning the duration of his disability. Mr. Penaglia's evidence was that he in fact returned to work in July 1997, and might have returned earlier, had Consumers Glass not insisted on prior clearance from its own physician.

The Insurer stated that an earlier return to work should have been considered, and relied upon the report of Dr. Soric as evidence that Mr. Penaglia was not disabled and could have returned to work at an earlier date.

The Medical and Rehabilitation DAC report of April 8, 1997, at tab 16 of exhibit 1, considered whether Mr. Penaglia was unable to perform the essential tasks of his employment. The report concluded at page 9:

Mr. Penaglia should be reassured that he has not sustained any permanent, severe, physical injury as a result of these motor vehicle accidents. He reports an excellent level of recovery. Unfortunately, he has not attempted a return to work trial. There may be an issue with the employer. Nevertheless, I would not recommend any further chiropractic treatments, massage therapy, physiotherapy or any other forms of physical rehabilitation at this point in time. Mr. Penaglia has had the necessary rehabilitation to address the physical impairments sustained in the motor vehicle accident.

The functional abilities evaluation portion of the DAC assessment concluded:

...no functional limitations were noted which would prevent him from performing all his pre-accident job duties, despite some residual discomfort which may be present.

Although the report at one point identifies Mr. Penaglia as a "press machine operator" and in another place refers to him as "maintenance supervisor," the detailed job description considered by the occupational therapist in her report (at tab 16, exhibit 1) makes clear that his duties involve the operation of a glass-making machine at Consumers Glass.

I conclude that at least by April of 1997 Mr. Penaglia should have been able to resume his duties at Consumers Glass. The Insurer however argues for an earlier date, based on the report of Dr. Soric, dated February 19, 1997.

Dr. Soric examined the patient, and examined a variety of documents supplied by the Insurer. She does not list, however, any job description of the Applicant's position at Consumer's Glass, among the documents examined. Nor does she state that she obtained a job description from her interview with Mr. Penaglia. She does, however, at page 4 of her letter conclude that: "This patient in my professional opinion does not have any impairments which disable him from performing the essential tasks of his employment."

Dr. Soric did not find any evidence of "neuromusculoskeletal abnormalities" and did not feel the need for further investigations.

She notes, however, at page 2 that "Mr. Penaglia presents with pain in both legs." In the same paragraph she details other complaints of pain presented by the Applicant. In her conclusion on page 4 she does not deal at all with the effect of this pain on his work activities.

Most of the post-accident medical reports mention a history of ongoing, potentially disabling pain. Consistent throughout Dr. Kirwin's reports are references to pain. Likewise Dr. Weisleder's DAC report of March 27, 1997 mentions that: "On review today, Mr. Penaglia is complaining of persistent neck pain, lower back pain, bilateral knee pain and bilateral calf pain." Mr. Penaglia considered that pain was an important factor in his disability. This was not dealt with at all in the conclusions of Dr. Soric's report, nor was the question of the essential tasks of the Applicant"s employment considered.

These omissions may have been oversight on the part of Dr. Soric, but on the basis of the analysis contained in her report of February 19, 1997, I do not find her conclusion determinative of the issue of Mr. Penaglia's inability to perform the essential tasks of his employment.

The DAC report contained at tab 16 of exhibit 1, previously cited, does deal with the issue of the Applicant's "residual discomfort." It finds, however, that a return to work is possible.

I find therefore that Mr. Penaglia was able to perform the essential tasks of his employment as of March 27, 1997, the date of his examination by Dr. Weisleder, as part of the DAC process, and not earlier, as claimed by the Insurer.

Issue 4: What is the correct amount of the weekly income replacement benefits?

Mr. Penaglia elected to designate the four weeks before the accident, pursuant to section 7(2)(1) of the Schedule as the period from which to calculate benefits.

Section 9(1)(1) of the Schedule provides that:

For the purpose of determining the amount of a person's weekly income replacement benefit under paragraph 1 or 2 of subsection 7(1), the person's gross annual income from employment shall be deemed to be the following amount:

In the case of a person who designated the four weeks before the accident under paragraph 1 of subsection 7(2), the person's gross income from employment for the four weeks before the accident, multiplied by thirteen.

Several documents were submitted as evidence to assist in the determination of Mr. Penaglia's income for the purposes of the Schedule. These included two Employer's Confirmation of Income forms, and letters dated February 13, 1998, and July 31, 1996 from the Human Resources department at Consumers Glass. These are contained in tab 9 of exhibit 1. Unfortunately there are some discrepancies between the figures given on the forms, the amounts claimed by Mr. Penaglia, and the amount calculated by the Insurer.

Mr. Gold, testifying on behalf of the Insurer, provided his version of what Mr. Penaglia's benefits should be. His evidence varied substantially from the figures presented by Mr. Penaglia. An important factor in the difference was the level of deductions allowed for the Applicant in the income tax calculation. Mr. Gold was unable to give any insight into the assumptions about deductibility contained in the computer programme he used to calculate benefits, and could only testify that his numbers were what the computer produced.

No accountants, or representatives of the employer, were called by either side to provide information concerning the amounts earned by the Applicant, or to give their opinions on the appropriate deductions to be made from his gross income for the purposes of calculation of these benefits. The details of Mr. Penaglia's income tax returns for 1994, 1995, and 1996 were provided as tab 7 of exhibit 1.

Counsel for Mr. Penaglia suggested that it would be appropriate to consider the Net Weekly Income Table published by the Ontario Insurance Commission, as it then was, pursuant to section 82(1)(a) of the Schedule, as the basis for calculating Mr. Penaglia's weekly benefits. Counsel for the Insurer had no objections.

The Net Weekly Income Table sets out a procedure for the calculation of net weekly income from employment.

I find that the calculations should be based on the amounts contained in the Employer's Confirmation of Income forms and the confirming letters written by the various managers of human resources. Where there is any conflict in amounts given between the various documents, I will accept the versions contained in the managers' letters as correct.

The accident did not conveniently happen on a payday, leaving some adjustment to the pay figure necessary to calculate the pay actually relevant to the four-week period prior to the accident. In addition, Mr. Penaglia was on sick leave for a week of this period, and received temporary disability benefits from Aetna Insurance instead of his salary. These factors may also account for the different amounts provided in evidence.

Deductions:

Information supplied by Mr. Penaglia as part of the original application for benefits further confused the issue of deductions that may be claimed for income tax purposes. In the original application at tab 1 of exhibit 1, Mr. Penaglia represented that he was "single" and was not paying support to a spouse or former spouse.

The Applicant's income tax return for 1996 at tab 7 of exhibit 1 indicates that he was divorced, and deducted $6,000 for alimony payments. It also shows that he claimed an "equivalent to spouse" deduction of $5,380.

Mr. Penaglia referred to his divorced status in his testimony. He also stated that he was living alone in his apartment at the time of the accident. These facts would be consistent with a claim for the deduction of alimony, but not necessarily for the claim of the "equivalent to spouse" deduction, since section 118(1)(b) of the Income Tax Act (R.S.C. 1985 c.1) would require a dependent claimed to be actually resident with him.

Even the Applicant's counsel could advance no argument in support of this latter deduction, except to suggest that his deductions appeared to have been accepted by Revenue Canada for the past taxation years. Director's Delegate Draper in Laforme and Economical Mutual, (FSCO P98-00027, February 3, 1999) refers with approval to the rejection of a similar argument by a hearing arbitrator.

"He makes the reasonable comment that without evidence that Revenue Canada has made a specific ruling, the absence of a challenge cannot be taken as determinative."

While an arbitrator is not generally in a position to second-guess income tax returns, an applicant is under an obligation pursuant to section 85(2) of the Schedule to provide reasonable information to determine the tax payable. In addition, since the Applicant in this case is claiming a specific deduction which has a substantial effect on the level of benefit to which he is entitled, the onus is on him to supply information supporting this as a valid deduction.

I accept that the claim for alimony payments of $6,000 per year as shown in his income tax returns, should be used in the calculation of his income for benefit purposes, but find that there is no evidence that the "equivalent to spouse" deduction is applicable. For the purposes of the tax calculation code contained in the Net Weekly Income Table - other than self employment, referred to in section 82 of the Schedule, Mr. Penaglia would be a "code 1."

Calculation of pay:

The accident took place on Wednesday, July 3, 1996. Four weeks prior to the accident would be Wednesday, June 5, 1996.

A letter, dated July 31, 1996, from Mina Fior, the Manager of Human Resources for Consumers Glass, found at tab 9 of exhibit 1, lists five pay dates relative to this period: June 8, June 15, June 22, June 29, and July 6.

Assuming that Mr. Penaglia was working a normal five-day week, the pay week ending June 8 would have included three days relevant to the four-week time period. The week ending June 15 comprised his sick week, when he was paid by Aetna Insurance. The June 22 and June 29 amounts would be fully included. The pay date July 6, would be fully included since the Applicant last worked on July 5, 1996, and was not paid for subsequent days.

Including the gross amount of the sick pay ($416), shown in the letter from Human Resources, for the period off work, and the adjustment for the days in the first pay period, falling outside of the four-week period, I find that Mr. Penaglia's gross earnings for the four-week period prior to the accident were $2,412.67. This would create a gross annual income, for the purposes of the benefit calculation, of $31,364.71.

Working with the formula contained in the Net Weekly Income Table, Mr. Penaglia would have a gross annual income for benefit purposes of $25,364.71 or a weekly gross of $487.78. The table converts this as $370.07 net. The income worksheet forming part of the Table indicates that the weekly alimony payments of $115.38 should be added back in, for a total net weekly income of $485.45.

Calculation of Benefits:

Section 10(1) of the Schedule provides:

The amount of a weekly income replacement benefit shall be 90 per cent of the insured person's net weekly income from employment determined in accordance with section 81 or 82.

Ninety percent of his net weekly income would be $436.05. This would be Mr. Penaglia's basic entitlement for income replacement benefits.

The letter from Doug Matthews, Manager, Human Resources for Consumers Glass, dated February 13, 1998, at tab 9 of exhibit 1, states that Mr. Penaglia received payments from Aetna Canada for 26 weeks at $413.00, gross or $333.64 net. An explanation of benefits dated January 6, 1997, apparently from Aetna Insurance, found at the last page of tab 9, states "This payment is a final settlement. Maximum benefits have been reached." It also lists the maximum benefit period as 26 weeks.

The temporary disability benefit paid by Aetna qualifies as a collateral benefit pursuant to section 75 of the Schedule. Pursuant to section 75(1)(1), of the Schedule, the net amount of such temporary disability payments would be deductible from any weekly income replacement benefits payable to an insured.

I find, therefore, for the period from July 10, 1996 to January 6, 1997 that the Insurer, Allstate Insurance Company, is obliged to pay to the Applicant, Italo Penaglia, an income replacement benefit in the amount of $102.41 per week.

From January 6, 1997, the date of the last collateral payment, to March 27, 1997, the Insurer shall pay a weekly income replacement benefit in the amount of $436.05 per week .

Issue 5: Supplementary Medical Expenses:

The Applicant presented no evidence on this issue. In the absence of any evidence, I make no determination.

Issue 6: Housekeeping Services:

The Applicant submitted a receipt for housekeeping expenses following the accident to the Insurer pursuant to section 55 of the Schedule. Copies of the receipts, dated from August 10, 1996 to February 28, 1997 are included at tab 10 of exhibit 1. Each receipt is signed by the written signature of "Viganza Colucci" with an SIN number beneath.

Section 55 of the Schedule provides payments for additional expenses reasonably incurred as a result of the accident for housekeeping and home maintenance services.

Mr. Penaglia testified that the receipts were for about 20 hours a week of cleaning a one-bedroom apartment, as well as some shopping and laundry.

When asked about the receipts in cross-examination, Mr. Penaglia admitted that the signature was in his wife's writing, and that he had asked her to fill in the receipts. He maintained, however, that Ms. Colucci had done the work, and that the "receipts" were only a record of payment so that they could claim on the insurance.

The Insurer called Ms. Vincenza Colucci to testify about the claim for housekeeping services. Ms. Colucci testified that she had provided some housekeeping services for Mr. Penaglia's wife prior to the accident, but not at the times claimed by Mr. Penaglia. She had ceased to provide the services when Mrs. Penaglia was unable to pay an outstanding account for some $500.

After examining the copies of the receipts, she denied that they were her handwriting and stated that it was not her signature at the bottom of the forms. She remarked as well, that her name was misspelled.

Ms. Colucci also testified that, well after the accident, Mr. Penaglia contacted her and mentioned that an insurance representative would be in touch with her about the "receipts." She alleged that Mr. Penaglia offered to pay the outstanding account of $500 if she supported his claim for housekeeping expenses. On the advice of her mother, she declined his offer. Ms. Colucci was slightly confused about the exact chronology of events on cross-examination, but she remained credible in her assertion that she had not done the work as claimed, and had not signed the receipts.

I find that the Applicant, Mr. Penaglia, created or caused to be created, the "receipts" for house-keeping expenses for the purpose of supporting a spurious claim. I find that the Applicant has produced no credible evidence in support of his claim, and I dismiss it.

Interest:

Mr. Penaglia is entitled to interest on any amounts owing by the Insurer.

Issue 7: Expenses:

The question of expenses was deferred until all other issues in dispute were decided. Therefore, the issue of Mr. Penaglia's expenses of this arbitration proceeding may now be addressed.

July 14, 1999

John Wilson Arbitrator

Date