Neutral Citation: 1999 ONFSCDRS 226

FSCO A98-001119

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MARIA SIR

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Deena Baltman

Heard:

July 26, 27, 28 & 29, 1999, in Owen Sound and September 14, 15, & 16, 1999, in Collingwood, Ontario.

Appearances:

D. Grant Scheifele and Katherine King for Ms. Sir

Cameron C.R. Godden for Wawanesa Mutual Insurance Company

Issues:

The Applicant, Maria Sir, was injured in a car accident on February 29, 1996. She has not returned to her pre-accident employment as a baker, landscaper, or caterer, but has managed to continue operating a greenhouse on a limited basis. Wawanesa Mutual Insurance Company ("Wawanesa") paid her income replacement benefits ("IRBs") of $998.65 weekly until February 25, 1998, under the Schedule.¹

Ms. Sir seeks ongoing IRBs. Wawanesa claims that Ms. Sir is no longer disabled. It also claims a repayment, on the basis that Ms. Sir overstated her pre-accident earnings and failed to account for post-accident income from her greenhouse operation.

The issues in this hearing are:

1. Is Ms. Sir entitled to income replacement benefits from February 25, 1998 onwards?

2. What is the amount of income replacement benefits to which Ms. Sir is entitled?

3. Is Wawanesa entitled to a repayment?

Result:

1. Ms. Sir is entitled to income replacement benefits from February 25, 1998 onwards.

2. The correct amount of the current income replacement benefit is $634.82, leaving a balance of $34,233 owing to Ms. Sir, before interest, as of September 14, 1999. The correct figures for previous IRBs are as set out in Schedule 2 of the report of Hayes & Associates Inc., dated September 8, 1999, attached as Appendix "A."

3. Wawanesa is not entitled to a repayment.

EVIDENCE AND ANALYSIS:

Introduction:

Ms. Sir is a bright, driven and unconventional woman of 55 years. She and her husband emigrated to Canada from Czechoslovakia in 1968. They separated in 1994 and she has continued to live on a 100-acre farm in Holland Centre, approximately a half-hour drive from Owen Sound. Her two children are grown and live elsewhere.

Before Ms. Sir was injured in this accident, she singlehandedly operated a bakery, and a greenhouse, and also performed some landscaping and catering. Of these, her bakery operation was the most demanding and the most lucrative, with the greenhouse providing a second, more modest source of income. By the time of the accident, the landscaping and catering businesses composed a very small portion of her income.

Her work was physically demanding and she was in good health. She worked out regularly in a nearby gym. Several years before the accident she was diagnosed with interstitial cystitis, a chronic bladder condition. She learned to manage the condition through exercise and diet. I find that while her bladder condition was chronic, it was not disabling.

Ms. Sir worked extraordinary hours and achieved considerable success in her various enterprises. She was liked and respected in her community where, despite the many hours she devoted to work, she looked out for needy friends and neighbours. Numerous witnesses testified that before the accident she was highly capable, organized and talented. Several described her as a "workaholic," but happy being so.

Ms. Sir's life changed dramatically on February 29, 1996. She was involved in a head-on collision with another driver who suddenly appeared in her lane. The other driver was killed and Ms. Sir was rendered unconscious. Ms. Sir was taken to the hospital in Orangeville. She was kept overnight and diagnosed with a clavicular fracture, two fractured ribs (on her right side), a cervical strain and a closed head injury. Her car was written off.

When Ms. Sir returned home, she was in considerable pain, confused, and emotionally distressed. She was treated with extensive physiotherapy, psychotherapy and massage treatments. She continued to work out in a gym and walk regularly. However, she was unable physically or mentally to keep up with the demands of the bakery, the farm and the greenhouse. She has given up the baking, landscaping, and catering operations, but has managed to continue her greenhouse business by obtaining hired help and reducing the scope of the operation. As a result of all these changes, her income has plunged considerably.

Wawanesa paid Ms. Sir IRBs until February 25, 1998, just days before the 104-week mark when Ms. Sir would have been entitled to an offer respecting her loss of earning capacity. Wawanesa relied on medical reports stating she was no longer disabled from baking, farming or running a greenhouse. In order to qualify for ongoing IRBs, Ms. Sir must establish that she remains substantially disabled from the essential tasks of her pre-accident employment, in accordance with section 7 of the Schedule.

Wawanesa also claims a repayment, on the basis that Ms. Sir overstated her pre-accident income and failed to account for post-accident earnings. At the hearing, Ms. Sir conceded that her IRB should be lower than the weekly sum of $998.65 she received, but nonetheless arrived at a calculation substantially higher than Wawanesa's estimate of $300 weekly.

I find that Ms. Sir remains disabled from most of her pre-accident employment. I also find that her current IRB should be in the sum of $634.82. In arriving at this conclusion, I was strongly impressed by two distinctive features of this case. The first was Ms. Sir's persistent and committed attempt to continue working despite her ongoing injuries. The second was a most impressive array of lay witnesses who testified compellingly about the dramatic change in Ms. Sir since this accident. They included² neighbours, friends, employees, customers, suppliers and competitors. They were uniformly credible in describing how Ms. Sir had gone from being strong, fast and capable to weak, slow and confused. Virtually none of their testimony was materially weakened in cross-examination.

Issue #1: Entitlement to IRBs beyond February 25, 1998

The bulk of the evidence at the hearing related to Ms. Sir's work as a baker and greenhouse operator. Although she also performed some landscaping and catering work, I received little evidence about her essential tasks in those fields. In any case, it is undisputed that most of her income came from her bakery operation, with the greenhouse placing a distant second. The loss of her bakery income alone is sufficient to justify the IRB she is claiming. Consequently, I have concentrated my assessment on her employment as a baker, with briefer comments about the greenhouse operation.

Essential Tasks of Employment:

1. The Bakery

Ms. Sir testified that the majority of her baking was done for the farmer's market in Owen Sound, which took place every Saturday. She also sold bread to ski resorts and restaurants.

Although numerous witnesses confirmed that baking is heavy, labour-intensive work, most of the details were provided by Ms. Sir and Birgit Madsen, another baker who also sold bread at the farmer's market. Their evidence on this point was compelling.

In order to deliver fresh bread to the market each Saturday, Ms. Sir would begin baking 36 hours beforehand. As she usually produced several hundred loaves each week, she needed to work straight through from Thursday night until Saturday morning. Her job did not end there. Once the bread was ready for sale, she bagged it, loaded it up into her van and drove to the market, where she operated a stall until 1:00 p.m., when the market closed.

Although she occasionally had help, she performed the bulk of the duties herself. Having purchased numerous supplies earlier in the week, she would begin by measuring and then mixing the ingredients for the dough in large bowls. She kneaded the dough and set it aside to rise. It was then "knocked out," a further kneading process that removes any gasses that have formed. Kneading dough is physically demanding: one witnessed compared it to "laying a good beating on someone. "³

After kneading, the dough was left to rise a second time. Then it was shaped into loaves which were loaded onto a pan and placed in the oven. While she waited for one batch of dough to rise or bake, Ms. Sir would be mixing, kneading, or shaping another batch. At any given moment she may have four or five batches on the go. It was essentially an assembly line, with her staffing each post. Maureen Lisle, who occasionally helped Ms. Sir bake bread, described it as such an exhausting marathon that on occasion "I was just about stripped down to my underwear and lying on the stairs."

The operation needed to be timed precisely. Yeast is not forgiving. If a batch of dough was not kneaded or shaped in time, it would "over-rise" and be ruined. Once a batch was ready for the oven it had to go in promptly or it would spoil. Therefore, Ms. Sir rarely took a break. She also needed to remember and concentrate, in order to keep track of what needed to be done with each batch.

Ms. Sir had to work in a standing position for most of this process. She used her upper body extensively in mixing, kneading, and "knocking out." She frequently lifted mixing bowls and containers weighing 15 to 20 pounds. She squatted to load and unload the oven and then later bent over while loading and unloading her van.

I find this was a labour intensive job requiring frequent reaching, pulling, lifting, squatting and bending. I also find that it required sound memory and organizational skills, along with the physical and mental stamina to work 36 hours with little respite.

2. The Greenhouse

Before the accident, Ms. Sir operated three greenhouses on her farm. It is seasonal work. I did not receive a detailed breakdown of the essential tasks. She orders her plants and soil during the winter. In February and March she prepares the germinating tables and sandboxes. By springtime she receives, unloads and transplants the plants. She mists, fertilizes and weeds them, as needed. Plants are stored at various heights within the greenhouse, requiring her to frequently bend, lift, squat and reach. She delivers plants to private customers and to garden stores, and also directly to the public from her greenhouses.

The job requires some mental concentration, in order to supply the right nourishment and care to the plants and to keep track of orders and deliveries. It is intermittent work, with variable hours.

Before the accident, she managed all greenhouses mostly on her own. Since the accident, she has eliminated one greenhouse and hired help in order to continue operating the remaining two.

I find this job of moderate demand physically and mentally. It allows for rest breaks, and its heavier demands can be relieved by hired help, provided that is financially viable.

Ability to Work:

1. Overview

Ms. Sir's injuries have left her with numerous symptoms. She reports frequent headaches as well as constant neck pain, intermittent pain in her chest, left upper arm and in her left scapular area: dizziness, problems with memory, concentration, multi-tasking, word-finding and in following conversations. She also reports continuing nightmares, depression, anxiety and irritability, as well as disturbed sleep, weight loss and an absence of sexual libido. She states that it takes all of her resources to manage her greenhouses, and even then she is often in severe pain by the end of the day. She is torn over whether to sell the farm/greenhouse: the greenhouse is physically draining, but she feels it is important for her psychological well-being.

While there is little disagreement over the orthopaedic injuries she sustained, opinions are divided as to why her symptoms have continued until now. Similarly, though most of the medical experts agree Ms. Sir suffered a closed head injury, they differ on whether her ongoing impairments are significant and whether they are attributable to this accident.

Many of the assessors refer to Ms. Sir's unusual personality. The adjectives ascribed to her range from brilliant, energetic, motivated, determined and colourful to erratic, eccentric, grandiose, bizarre and histrionic. She is certainly unconventional, but beyond that I found that many of the descriptions unhelpful in assessing disability. More often than not, they merely reflected whether the assessor was comfortable with a non-conformist and shed little light on her ability to work.

2. Evidence regarding Disability

Numerous practitioners opined that Ms. Sir cannot perform jobs that are physically or mentally demanding. Dr. L.O. Mesensky, her family physician, has known her for 30 years. He noticed a significant change in her personality and behaviour following the accident. He detected signs of cognitive impairment, including poor concentration and inability to plan tasks. He also noted that although the fracture to her left clavicle had healed, she was left with restrictions in the use of her left arm.

Dr. John McCall is her treating orthopedic specialist. He concluded that Ms. Sir suffered a severe whiplash injury to her neck and head, and found her complaints of neck pain, left arm pain and dizziness compatible with the mechanism of the accident. He detected signs of a cognitive disorder and recommended a neuropsychological consultation in order to assess the effects of her head injury. Dr. McCall believed that her injuries would permanently prevent her from resuming her pre-accident work as a baker and farmer.

Dr. Avrum Green, a psychologist, treated Ms. Sir on a weekly basis following the accident. He noted that she met all the criteria of post-traumatic stress disorder, and displayed problems with concentration, memory, and stress management. He recommended that a full neuro-psychological assessment be done in order to assess her cognitive functioning.

Dr. N.C.S. Doxey is a psychologist who conducted a psycho-vocational assessment at the request of Ms. Sir's counsel. After extensive testing and assessment, he concluded that as a result of the accident, Ms. Sir was left with memory and concentration difficulties and significant depression, anxiety and anger. He noted that despite her problems, she was highly motivated and "refused to give up on her struggle to continue working." He accepted that her injuries prevented her from farming and baking and also reduced her greenhouse operation.

Dr. Sherrie Bieman-Copland is a neuropsychologist who assessed Ms. Sir at her counsel's request. She noted that Ms. Sir fell into the 10 to 20 percent of individuals whose post-concussive symptoms persist well beyond the predicted time frame for recovery. She found that the accident permanently altered Ms. Sir's neural function and resulted in marked impairment, and suggested that she was not able to return to "full productive work, despite valiant and almost over-focused efforts to do so."

Wawanesa relied on numerous assessors who suggested that Ms. Sir was not disabled from her previous employment. Dr. E. J. Rumble, an orthopaedic surgeon, saw her in April 1996, only two months after the accident. He noted that she is ambidextrous. He diagnosed a delayed union of the left clavicle and a frozen left shoulder, but predicted that she would recover normal range after "many months." I find such predictions unhelpful where, as here, the patient does not recover within the norm for a particular injury and the physician does not reassess her. All this tells me is that her recovery was atypical.

A similar difficulty emerges from the medical evaluation performed by Dr. B. Alpert, another orthopedic surgeon who was retained by Wawanesa. He examined Ms. Sir in August 1996 and noted that she was gradually improving. He predicted that if she received an active physiotherapy program and was able to "overcome her pain focused behaviour," her prognosis was good. Again, Dr. Alpert never reassessed Ms. Sir, and therefore cannot shed any light on whether she remains disabled or, if so, why.

Wawanesa did little else to assess Ms. Sir until nearly two years after the accident, when she would have qualified for an LEC offer. Wawanesa then commissioned a flurry of reports from Focus Assessments, a Kitchener-based company which assesses personal injury claimants. The first one was co-authored by Dr. Chris Arciszewski, an orthopedic specialist, and Ms. Jennifer Husvar, a kinesiologist. They concluded that Ms. Sir was not disabled from her pre-accident activities. Dr. Arciszewski also testified at the hearing. I give little weight to his report and testimony, for the following reasons:

1. I found Dr. Arciszewski defensive and disingenuous. He acknowledged that he performs approximately 200 medical-legal assessments a year, primarily for insurers, but then insisted that he often does not know on whose behalf the report is obtained, or whether his conclusion in this case supported Wawanesa's position. While Dr. Arciszewski may believe that his opinion is "independent" and "objective," I find it incredible that he is unaware of what impact it might have on an applicant's case. Ironically, this assertion seriously undermines his objectivity.

2. Dr. Arciszewski spent less than an hour with Ms. Sir. Most of his conclusions are based on his review of other reports and the testing performed by Ms. Husvar. Yet Ms. Husvar's testing reveals that Ms. Sir was restricted in many of the movements required in both baking and greenhouse work (stooping, kneeling, crouching and lifting). Ms. Husvar dismissed any limitations as "self-imposed" or a result of "pain-focussed behaviour." However, her report shows little understanding of the actual demands of Ms. Sir's baking operation. It is also inconsistent with numerous lay witnesses who testified that Ms. Sir was highly motivated and worked valiantly post-accident despite obvious pain.

3. Dr. Arciszewski misunderstood the issue in this case. During cross-examination he emphasized repeatedly that Ms. Sir was not totally disabled because she was capable of performing numerous household and garden activities. He did not focus adequately on the relevant test, namely whether Ms. Sir was disabled from the essential tasks of her employment, especially her bakery. Indeed, he showed little knowledge of or interest in what her daily tasks were, at one point insisting that this case was "not about baking bread." But to a great extent that is precisely what this case is about.

4. Dr. Arciszewski suggested that Ms. Sir could cope with her working demands by pacing herself, or taking breaks. Again, this shows a complete failure to understand the unique nature of Ms. Sir's bakery, which required her to work for extremely long periods without a break.

5. Dr. Arciszewski stated that the video surveillance demonstrated that Ms. Sir "could be termed normal with regards to ...any work-related activities that she pursues." But the video surveillance reveals nothing about Ms. Sir's ability to bake bread, and has only little relevance to her greenhouse operation. It shows her driving, walking, and shopping. She squats in the library while choosing magazines and later carries two plants to her car. She reaches her arms up to hug a friend. These activities (which she did not deny) shed little light on her ability to perform the essential tasks of her pre-accident employment.

Wawanesa also relied on a report prepared by Dr. S.M. Liao, a physiatrist, for the defendant in the tort action. Dr. Liao noted that as of September 1998, as part of her daily routine, Ms. Sir walked two and a quarter miles, fed her farm animals and then picked fruits and vegetables from her garden. In the springtime, she tended to her greenhouse operation during the day. She worked out regularly at the local gym and enjoyed painting watercolours at night. On physical examination, she found her to be "a very active individual with the presence of hard calluses over the plantar aspect of both feet." Dr. Liao concluded that Ms. Sir was capable of resuming all her pre-accident employment activities.

I give little weight to Dr. Liao's opinion. Her report shows little understanding of the demands of Ms. Sir's bakery and greenhouse operation; she gives no details about the greenhouse operation and deals with the bakery simply by saying "she used to do a lot of baking." Ms. Sir's ability to exercise and tend to farm tasks, at her own pace, does not mean that she is capable of resuming her bakery operation. I also find it troubling that Dr. Liao relies on the presence of calluses on her feet to conclude that she is physically very active. Even Dr. Arciszewski acknowledged that that may simply indicate that she walks around barefoot a lot - a tendency of Ms. Sir's that is referred to in other reports.

Shortly after Dr. Arciszewski completed his assessment, Focus Assessments arranged for a psychological assessment by Dr. A. Nashef. Dr. Nashef reported that Ms. Sir displayed a "host" of post-traumatic stress disorder features, mild depressive moods and some emotional lability. He noted she had great difficulty managing her pain. However, he concluded that she was not psychologically disabled from her pre-accident employment. He also suggested it was unlikely the accident was responsible for her present pain and psychological condition. He believed that the accident merely "aggravated a pre-existing pain and emotional strain."

Although I found Dr. Nashef well-intended, his conclusions are not well-founded. Most significantly, there is no evidence that Ms. Sir suffered from any significant physical or emotional problems pre-accident. Her bladder condition was well under control. Numerous witnesses, including her longstanding family physician, confirmed that she was stable and healthy. Dr. Nashef’s testing indicated that Ms. Sir was likely to respond to illness in an average or unexceptional way. There is no basis for Dr. Nashef’s belief that she was already in distress pre-accident.

Dr. Nashef also found that Ms. Sir was "not optimizing her gains" from psychological counselling she received earlier "due to a marked level of eccentricity." At the same time, he profiled her as self-assured, a person who placed heavy demands on herself to fulfill work and family obligations, and a person who perceives past and present events in a balanced fashion. These latter descriptions are highly consistent with how many lay witnesses described Ms. Sir's pre-accident personality.

Finally, although Dr. Nashef concluded Ms. Sir was not substantially disabled, he noted the presence of multiple psychological disorders, stated that her prognosis for recovery was guarded, and advised that she would benefit from attending an in-patient pain management program.

For these reasons, I give little weight to Dr. Nashef’s opinion that Ms. Sir is not disabled.

Focus Assessments also arranged for a neurological examination by Dr. K. A. Giles. Dr. Giles agreed that Ms. Sir suffered a closed head injury in the accident, but believed it was minor and not disabling. He suspected that "her problems are psychiatric in nature" and unrelated to the accident. He conceded, however, that he was not qualified to make any kind of psychiatric or psychological assessment. He made no attempt to explain the cognitive impairments noted by Dr. Sherrie Bieman-Copland. Like many doctors who assessed Ms. Sir, he attributed her problems to "eccentric behaviour" and "idiosyncratic tendencies." But these are classic descriptions of behaviours associated with frontal lobe syndrome⁴. Moreover, numerous witnesses confirmed that while Ms. Sir was always unconventional, before the accident she was competent and organized, whereas after she became confused and unreliable. They noted that she often loses things, forgets names of people whom she has known for years, gets lost in familiar places, forgets to turn the stove on or off, repeats things she said several times, stutters when tired, loses track of conversations, is physically clumsy and becomes impatient and irritable over small matters. One witness commented that whereas before the accident her home could have been featured in "Better Homes and Gardens,' now it looks "like a small bomb has gone off." I find the evidence of those who knew and worked with Ms. Sir for several years much more persuasive than Dr. Giles, who saw her on behalf of Wawanesa on one occasion after the accident.

Wawanesa suggested that the lay evidence in this case was of minimal value, given the large conflict among the medical experts. But that is precisely why I find their evidence so compelling; many of the physicians did not assess Ms. Sir until after the accident, and did so purely in a medical-legal context. The lay witnesses, by contrast, interacted with Ms. Sir regularly for years before and after the accident. Although some were loyal friends, and therefore might be expected to testify in her favour, I found them to be astute, honest individuals who did not overstate their evidence. Rarely does one see lay evidence of the quality and consistency presented in this case.

Wawanesa also argued that the head injury could not have been significant, given Ms. Sir's behaviour in the hospital on the day of the accident. Within hours of her admission, she described to the dietician the type of diet that she needed, and listed foods that she was required to avoid. I do not find this remarkable; Ms. Sir had always been scrupulously attentive to her diet in order to prevent flareups of her bladder condition. It makes sense that when asked about dietary concerns, she could recite them, notwithstanding any other cognitive difficulties she was encountering.

While in hospital Ms. Sir also expressed great alarm over how she would support herself financially in the wake of this accident. I do not agree with Wawanesa that this shows a money-obsessed, plotting individual. On the contrary, it is entirely plausible that soon after waking up in hospital with numerous injuries, Ms. Sir began to worry about her survival; she lived alone, was solely responsible for a bakery, greenhouse and farm operation, and had neither husband nor children nearby to support her through this crisis. Nor is it surprising, given the traumatic nature of the accident, that Ms. Sir later remembered very little of what occurred or what she said that day.

3. Conclusion

Regardless of the precise basis for her difficulties, I am persuaded that Ms. Sir is disabled from her work as a baker as a result of this accident. I accept that through a combination of physical, psychological and emotional factors she is not able to keep up with the intense demands of that occupation. Although her landscaping and catering work were not discussed in detail at the hearing, I heard sufficient evidence to be persuaded that she is also disabled from those tasks.

The situation is less clear with the greenhouse operation. Several witnesses, including Ms. Sir, confirmed that she continues to run a credible greenhouse. It is physically less demanding than the bakery operation and allows for breaks. Although Ms. Sir's ability to manage her greenhouses has been impaired because of the accident, I find she is able to perform the essential tasks of that operation by hiring extra help and reducing the scope of the business. At the same time, I recognize that because of these changes the greenhouse operation is less lucrative than before. I need not determine whether these changes make the operation unprofitable because, as I noted above, the loss of the bakery income is sufficient to support the IRB being claimed.

Issue #2: Amount of Income Replacement Benefit

1. The Issue

Under the Schedule, a self-employed individual is entitled to an IRB based on 90 percent of her average weekly "net" income in the 52- or 156-week period preceding her accident, whichever is greater. The Schedule also provides that her IRB is augmented by 90 percent of any post-accident self-employment losses incurred as a result of the accident. As noted above, Ms. Sir continues to run the greenhouse, but at a loss.

The calculation in this case was complicated by many factors commonly seen with self-employed persons. For example, Ms. Sir did not file income tax returns regularly before the accident. The returns for 1993, 1994 and 1995 were not filed until 1997. They show a substantial net income, whereas the returns filed in the years preceding the accident record a loss. Wawanesa argues that returns filed after the accident are not reliable because they were "skewed" in order to support Ms. Sir's claim for IRBs.

Ms. Sir explained that the delay in filing was due to her marital difficulties and her accountant's illness. Until 1994, she and her husband jointly owned a restaurant, and lived together on the farm. They filed joint tax returns. By 1993 it became apparent that the marriage was dissolving. There were financial disputes over the division of property, during which time she did not file income tax returns. I accept her evidence that by early 1996 she had put her financial records in order and had them ready to give to her accountant, Ian Drummond, but the accident intervened.

After the accident, Wawanesa demanded documentation to support her claim for IRBs. Ms. Sir contacted Mr. Drummond in March 1996 and shortly thereafter delivered to him the documents she had prepared before the accident. I accept her evidence that she did not alter her records between the time of the accident and their delivery to Mr. Drummond. I also accept Mr. Drummond's testimony that by August 1996 he had prepared everything he needed in order to file her outstanding tax returns for the years 1993-1995. However, he became ill, and was therefore not able to attend to the filing until midway through 1997.

Ms. Sir's income tax returns for 1993, 1994 and 1995 state that she earned revenues of approximately $30,000, $50,000 and $52,000 respectively, solely from her bakery. The returns, however, are only as reliable as the records on which they are based. In this case, the "record" is an account book, made up of ledger sheets, in which Ms. Sir recorded her income and expenses for each year. Although the majority of her expenses were supported by receipts, her income is not itemized on a regular basis. The ledger sheets only record the total revenues by source for the year and do not provide any daily or monthly detail.⁵ Nor did Ms. Sir make regular bank deposits. Mr. Drummond testified that Ms. Sir's "bookkeeping" is typical of many farmers and self-employed persons who run a cash business.

Wawanesa retained an accountancy firm, Hayes Smith & Associates (Hayes Smith), to assess Ms. Sir's IRB. Mr. Gregory Hocking, the author of the reports produced by Hayes Smith, testified at the hearing. He presented three possible scenarios of how to arrive at an IRB in this case.⁶ In the first scenario, Mr. Hocking accepted Ms. Sir's and Mr. Drummond's documents at face value. On that basis, he estimated a current IRB of $634.82, leaving a balance of $34,233 owing to Ms. Sir as of September 14, 1999 (the day he testified), before interest.⁷

The second scenario assumes an IRB of $500 resulting in an overpayment of $13,358 as of September 14, 1999. The third scenario assumes an IRB of $300, resulting in an overpayment of $50,038 as of September 14, 1999. Wawanesa argues in favour of the third scenario, with the second as their "fall-back" position. Wawanesa has no scientific basis for arriving at these figures, but believes they are more reasonable alternatives than those advanced by Ms. Sir.

2. Findings

Ms. Sir's claim is based on her income tax returns, which state that she earned over $50,000 (gross) from her bakery in each of the two years preceding this accident. She argues that this is a very conservative estimate. The bread she sold ranged in price from $3 to $5.75 per loaf. Even at the minimum price, this works out to only 300 loaves per week, much less, she claims, then what she actually sold each week.

I received persuasive evidence from several witnesses who supported her position, including:

• Brenda Pellerin, the manager of the Owen Sound market, testified that Ms. Sir was their "prime" bread baker. She sold more bread than any other vendor and its quality was excellent. After her accident, she had to search for another vendor to replace her. She testified that each week Ms. Sir sold "hundreds and hundreds" of loaves. Even on a quiet winter day, she estimated that 300 people might attend the market, and that most of them would buy between one and two loaves of bread. During the warmer seasons, when the tourist trade came through, over 1,000 loaves of bread would be sold each week.

• Birgit Madsen was Ms. Sir's biggest competitor at the market. She testified that she sold 200 to 300 loaves per week, significantly less than Ms. Sir's usual sales of 300 to 500 per week. Ms. Madsen stated that in 1997 she earned $67,000 (gross) from baking, and even then did not sell as much bread as Ms. Sir did before the accident.

• Maureen Lisle, another vendor at the market, occasionally helped Ms. Sir bake bread. She stated that Ms. Sir typically baked 24 loaves an hour,⁸ so that in an 18-hour period she would produce well over 400 loaves. She noted that its quality was "superior" and that she had a large and faithful clientele. There were few other bread vendors at the market, and they sold very little by comparison.

• Part of the reason her bread sold well is because it was of consistently good quality. Peter Wayne, a former restauranteur who purchased bread from her regularly before the accident, testified that after the accident he was never able to duplicate the quality of her product. He commented that bread making "seems to be more of an art than a science."

• William Coke, a neighbour, recalled seeing Ms. Sir loading up her truck with bread one Saturday morning before market, in the winter before the accident. She told him that she had approximately 600 loaves ready for sale. At the hearing, he remarked that bread making requires a type of knowledge and ability that you cannot assign to hired help.

Numerous arbitration decisions have stated that self-employed individuals need not prove their income with precision, provided they adduce credible evidence in support of their claim. In this case, I am satisfied that the evidence is sufficiently reliable to support Ms. Sir's claim about her earnings pre-accident. I also accept her and Mr. Drummond's evidence that the greenhouse business has operated at a loss since the accident. I found no reliable evidence to support Wawanesa's contention that the greenhouse is more lucrative than Ms. Sir claims.

Wawanesa asked me to draw an adverse inference from the failure of Mr. Sir to testify. Although both Mr. and Mrs. Sir were jointly involved in a restaurant operation until 1994, I am satisfied he played an insignificant role in the bread making and greenhouse operations. As Karl Hucklenbroch commented, she was "both the muscle and the brain in the family." His absence is all the more understandable given that the couple is now separated and not on friendly terms.

3. Conclusion

I accept Ms. Sir's submission that the correct amount of the current IRB is $634.82, leaving a balance of $34,233 owing before interest as of September 14, 1999. The correct figures for previous IRBs are as set out in Schedule 2 of the report of Hayes & Associates. Inc., dated September 8, 1999 (see Appendix A).

EXPENSES:

I encourage the parties to resolve this issue on their own. If necessary, I may be revisited.

November 23, 1999

Deena Baltman Arbitrator

Date

Neutral Citation: 1999 ONFSCDRS 226

FSCO A98-001119

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

MARIA SIR

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as amended, it is ordered that:

1. Wawanesa shall pay Ms. Sir $34,233, plus interest in accordance with the Schedule.

2. Wawanesa shall also pay Ms. Sir ongoing IRBs from September 14, 1999, at the rate of $634.82, plus interest in accordance with the Schedule, subject to its right to substitute a loss of earning capacity benefit in accordance with subsections 23(5) and 23(5.1) of the Schedule.

November 23, 1999

Deena Baltman Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98.
2. 2They consist of Birgit Madsen, Debra Fleming, Peter Wayne, Brenda Pellerin, Wendy Linn, Maureen Lisle, Margarete Hucklenbrock, Karl Hucklenbroch, William Coke and Mary Alice Coke.
3. 3Debra Fleming, who occasionally helped bag bread, witnessed Ms. Sir kneading dough.
4. 4Report of Dr. Sherrie Bieman-Copland, January 20, 1999, p. 14
5. 5Ms. Sir testified that she maintained a daily diary of cash receipts for several years pre-accident but it was lost or destroyed following a fire in the restaurant.
6. 6All three scenarios reflect any overpayment arising from the original IRB, which was calculated at $998.65 weekly. They also include IRB figures for previous years, which vary because of fluctuations in Ms. Sir's greenhouse income post-accident.
7. 7These figures were based on Schedule 2 of Mr. Hocking's report of September 8, 1999. During his testimony, he adjusted these figures upward as a result of Mr. Drummond's evidence regarding additional greenhouse losses in 1999.
8. 8Ms. Lisle explained that Ms. Sir had three ovens going full-time, each capable of holding eight loaves, with each loaf taking at most an hour in the oven.