Neutral Citation: 1999 ONFSCDRS 51 FSCO A98-001161

Between: Azad Mustafa (Applicant) and Royal Insurance Company of Canada (Insurer)

Reasons for Decision

Before: Judith Killoran Heard: March 8, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Mr. Mustafa did not appear and no one appeared on his behalf Noella M. R. Thompson for Royal Insurance Company of Canada

Issues:

The Applicant, Azad Mustafa, was injured in a motor vehicle accident on June 14, 1997. He applied for statutory accident benefits from Royal Insurance Company of Canada ("Royal"), payable under the Schedule.¹ Royal refused to pay any benefits. The parties were unable to resolve their disputes through mediation, and Mr. Mustafa applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act").

The issues in this hearing are:

Is Mr. Mustafa entitled to weekly income replacement benefits from July 1, 1997?
If Mr. Mustafa is entitled to weekly income replacement benefits, what is the amount of benefit that Mr. Mustafa is entitled to receive?
Is Mr. Mustafa entitled to receive medical benefits for treatment and transportation?
Is Mr. Mustafa entitled to payment for housekeeping and home maintenance services?
Is Mr. Mustafa entitled to interest on any amounts owing?
Is Mr. Mustafa entitled to his expenses incurred in this arbitration proceeding?
Is Mr. Mustafa liable to pay Royal's expenses in respect of the arbitration?

Result:

Mr. Mustafa is not entitled to weekly income replacement benefits.
Mr. Mustafa is not entitled to receive medical benefits for treatment and transportation.
Mr. Mustafa is not entitled to payment for housekeeping and home maintenance services.
Mr. Mustafa is not entitled to his expenses incurred in this arbitration proceeding.
Mr. Mustafa is ordered to pay Royal's expenses in the amount of $3000.

EVIDENCE AND ANALYSIS:

1. History of Proceedings:

Mr. Mustafa was involved in a motor vehicle accident on June 14, 1997. He was the driver of a 1987 Ford Tempo which was travelling east along the 401 when a car struck the left side. Mr. Mustafa's vehicle was knocked to the curb and spun around facing the opposite direction. Mr. Mustafa was taken by ambulance to North York General Hospital where he was provided with medication and discharged.

Mr. Mustafa claimed that he was injured in the accident and applied for statutory accident benefits. Royal refused to pay benefits. Mr. Mustafa was a part-time student prior to his motor vehicle accident. He reported that he had an offer of employment to start work as a courier at Canada Commerce Centre. Royal disputed that a legitimate job offer was in effect at the time of the accident. Royal also disputed that Mr. Mustafa suffered a substantial inability to perform the essential tasks of his employment.

Mr. Mustafa applied for mediation of his dispute with Royal. According to the Report of Mediator dated April 14, 1998, the following issues remained in dispute: entitlement to weekly income replacement benefits of $400.00 per week from July 1, 1997 and ongoing; entitlement to payment of $4000.00 for medical reports, taxis and housekeeping expenses; and interest on all outstanding payments. Mr. Mustafa then applied for arbitration of the dispute.

On December 14, 1998, a pre-hearing discussion was held by telephone conference call arranged by the Financial Services Commission of Ontario. Mr. Mustafa was notified of the pre-hearing discussion but did not attend; however, he was represented by Mr. Michael J. Henry. Ms. Barb Kozalka participated on behalf of Royal, represented by Mrs. Noella Thompson. The pre-hearing letter dated December 30, 1998, a copy of which was sent to Mr. Mustafa, confirmed the issues in dispute, production requirements and the dates of the arbitration hearing.

On January 8, 1999, the Commission received a letter from Mr. Henry advising that his law firm no longer acted for Mr. Mustafa and did not know his whereabouts or his intentions. On February 18, 1999, the Commission received a letter from Mr. Henry providing further details about the withdrawal of his services. Mr. Henry advised that Mr. Mustafa had called his office on December 11, 1998 and informed staff that he would be unable to attend the pre-hearing on December 14, 1998. Mr. Mustafa indicated that he was now living in the United States and refused to provide a current address or telephone number but said that mail was being forwarded to him. A number of letters were sent to Mr. Mustafa advising him of the withdrawal of the law firm's services. However, the law firm received no reply from Mr. Mustafa.

On December 15, 1998, a Notice of Hearing was forwarded to Mr. Mustafa informing him that an arbitration hearing would take place on March 8, 9, 10 and 11, 1999. The Notice of Hearing includes the following paragraph which reflects the provisions of subsection 7(1) of the Statutory Powers Procedure Act ("'SPPA")² and section 34.5 of the Dispute Resolution Practice Code ("Practice Code").

You may attend this hearing in person and/or be represented. If you or your representative do not attend at the hearing, the arbitrator may dispose of the case in your absence and you will not be entitled to any further notice of the arbitration proceedings.

In a letter to the Commission dated March 4, 1999, Mrs. Thompson outlined the various attempts made to contact Mr. Mustafa. Correspondence was couriered to him on February 8, February 22, and February 24, 1999. The courier advised that although Mr. Mustafa was not available to claim the packages, the landlord confirmed that Mr. Mustafa lived there and he was collecting his mail. A private investigator was hired to trace Mr. Mustafa but was unsuccessful in his efforts. Mrs. Thompson contacted an interpreter from Able translations, Mr. Rasgar Hassan, who had worked with Mr. Mustafa both on this case and an immigration matter. He assured her that Mr. Mustafa was no longer in the country.

The arbitration hearing began, as scheduled, on March 8, 1999 at 10:00 a.m. The hearing was delayed for one half-hour to wait for Mr. Mustafa to appear. Mr. Mustafa did not appear and no one appeared on his behalf. Mrs. Thompson appeared on behalf of Royal and sought an order dismissing the arbitration.

As indicated by Arbitrator Manji in Hersi and American Home Assurance Company,³ I am not persuaded that I have the authority to make an arbitration order against Mr. Mustafa because he did not attend the hearing. For that reason, I will not dismiss Mr. Mustafa's application based only on his failure to appear. However, I am satisfied that every effort has been made to give proper notice of the hearing to Mr. Mustafa in accordance with the SPPA and the Practice Code. Additionally, Mr. Mustafa was sent both the pre-hearing letter and couriered a number of documents from Royal. No correspondence or documents were returned.

Mr. Mustafa did not contact his lawyer, Royal, nor the Commission. He did not appear at the hearing and there was no evidence that he had not received the Notice of Hearing or the pre-hearing letter. In accordance with subsection 7(1) of the SPPA and section 34.5 of the Practice Code, I proceeded with the hearing.

2. Mr. Mustafa's entitlement to benefits claimed:

The onus is on Mr. Mustafa to prove his claim for statutory accident benefits. Since he did not appear at the hearing, no evidence was led to support his position that he is entitled to benefits. My findings about entitlement to benefits are restricted to the evidence led by Royal.

Job Offer Letter:

Mr. Mustafa's application for benefits was received by Royal on July 22, 1997. He claimed entitlement to income replacement benefits under section 4 of the Schedule at the rate of $400 per week from July 1, 1997. Mr. Mustafa sought to qualify under paragraph 3.i. of section 4 which requires that the insured person "was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and that is evidenced in writing."

The job offer letter dated June 4, 1997 from Canada Commerce Centre is signed by M. Darabi, recruiting officer. The letter offers Mr. Mustafa a position as a driver starting on July 1, 1997 at $500 per week plus a gas allowance of $.25 a kilometre. The authenticity of the letter is challenged by Royal. On that basis, Royal denied income replacement benefits to Mr. Mustafa citing inconsistencies with the amount of income offered in the letter and as stated in a signed statement from the potential employer.

On October 31, 1997, a statement was taken from Mr. Mustafa in the presence of a Kurdish interpreter. On November 27, 1997, a statement was taken from Kamiar Tarighi, the potential employer. There are great discrepancies between the statements taken from Mr. Mustafa and Mr. Tarighi and both statements are riddled with internal inconsistencies.

For example, Mr. Mustafa claimed that he was to be paid $500 per week plus car and gas expenses starting on the first of July. This was consistent with the offer of employment letter dated June 4, 1997 but was inconsistent with the statement taken from Mr. Tarighi. Mr. Tarighi claimed that Mr. Mustafa's starting salary was $7 per hour, with a gross of $200-$250 per week.

Mr. Mustafa claimed to attend classes five days a week from 9-2:30 p.m. with the expectation of completing the school year at the end of June. However, Mr. Tarighi stated that Mr. Mustafa volunteered for him from 9-5 p.m. every day in May and June. Also, Mr. Mustafa's statement was vague about the details of his employment. For example, he claimed that he volunteered at Canada Commerce Centre but he could not remember the location. Although he stated that he worked with his next door neighbour, who was Mr. Tarighi, he claimed not to know his last name.

In his statement, Mr. Tarighi explained that he had worked by himself for two years before Mr. Mustafa worked with him as a volunteer. Mr. Tarighi had not advertised the position and had not had a driver working for him since Mr. Mustafa left. He had been using the services of a friend about once per week for which he paid approximately $80 per week. Based on a review of Mr. Tarighi's statement, it is improbable that Canada Commerce Centre would have required or been prepared to pay $500 per week to Mr. Mustafa for his services as a driver.

According to the notes filed from Barry Stedman, an ADR consultant with Royal, Mr. Stedman spoke with Rasgar Hassan, an interpreter with Able Translation, who came to him and Frances McCall, claims handler, to report that Mr. Mustafa paid $400 for the job offer letter which is fictitious.

Based on all of the evidence submitted to me and in the absence of contradictory evidence from Mr. Mustafa, I do not find that Mr. Mustafa was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and is evidenced in writing, as required by section 4 of the Schedule.

Medical Evidence and Findings:

The Multidisciplinary Assessment from Work Able Centres Inc. dated January 6, 1998 summarized the findings and recommendations of the assessment team. The orthopaedic assessor identified that Mr. Mustafa could return to his pre-accident activities and his employment on a full-time basis with no medical restrictions. No therapy other than self-directed home therapy was recommended. During the Functional Abilities Evaluation, Mr. Mustafa demonstrated the ability to complete all his tasks as a student of business studies and as a courier. No permanent or temporary impairments to bodily function were identified that would prevent Mr. Mustafa from returning to his pre-accident level of function.

There were no documents filed at the hearing to refute Royal's position or support Mr. Mustafa's position. Surveillance photos and investigation reports from August, November and December 1997 were couriered to Mr. Mustafa and filed at the hearing. The photos showed Mr. Mustafa cycling, shopping, and walking to the beach.

The evidence submitted by Royal indicates that Mr. Mustafa could not have sustained the injuries he alleged that he sustained in the accident. In the absence of evidence from Mr. Mustafa to refute Royal's evidence, I find that Mr. Mustafa is not entitled to income replacement benefits.

Non-earner Benefits:

Royal made submissions about the issue of non-earner benefits and asked for a finding that Mr. Mustafa would not meet the test for entitlement under section 12 of the Schedule. Royal submitted that Mr. Mustafa did not suffer from "a complete inability to carry on a normal life as a result of and within 104 weeks after the accident." I decline to make such a finding since this was not an issue which was mediated and Mr. Mustafa has never received notice that this issue would be part of the arbitration hearing.

Medical Benefits for Treatment and Transportation:

Section 14 of the Schedule specifies the conditions to be met by Mr. Mustafa for payment of medical benefits for treatment and transportation. However, I have not been provided with any particulars with respect to this claim. No details or receipts have been filed. In the absence of any evidence to support the claim, I must deny it.

Payments for Housekeeping and Home Maintenance Services:

Section 22 of the Schedule sets out the circumstances which would entitle Mr. Mustafa to payments for housekeeping and home maintenance services. However, I have not been provided with any details or receipts with respect to this claim. No evidence has been presented to establish that Mr. Mustafa sustained an impairment that resulted in a substantial inability to perform the housekeeping and home maintenance services that he normally performed before the accident. Therefore, in the absence of any evidence to support the claim, I must deny it.

EXPENSES:

In his Application for Arbitration, Mr. Mustafa seeks an award of the expenses in respect of this hearing. As with Arbitrator Seife in Polus and Royal Insurance Company⁴ and Arbitrator Manji in Hersi and American Home Assurance Company,⁵ I find that the Applicant's failure to pursue his claims has caused the insurer to expend needless time and resources on this arbitration process. Therefore, I decline to exercise my discretion to award Mr. Mustafa his expenses of the proceeding.

Royal asked for payment of its expenses in the amount of $5000. According to Royal, this amount represents the cost of preparing for the arbitration and hiring a private investigator to find Mr. Mustafa. Royal pointed to the barriers throughout the process which were created by Mr. Mustafa and the substantial time and effort expended over the past few weeks liaising with an investigator and preparing for an arbitration.

Subsection 282(11) of the Act was amended effective November 1, 1996 to allow an arbitrator to award expenses to either the insured person or the insurer. Regulation 664, as amended,⁶ applies in this case as it came into effect prior to the filing of Mr. Mustafa's Application for Arbitration. As Arbitrator Miller pointed out in Athanasiadis and Zurich Insurance Company,⁷ although this amendment has broadened the scope of an arbitrator's discretion, that discretion must be exercised in accordance with the criteria set out in the Regulation. These criteria have been incorporated into section 73 of the Dispute Resolution Practice Code. In particular, one important factor that I have considered when awarding expenses in this case is the conduct of the insured person "that tended to prolong, obstruct or hinder the proceeding ..."

Royal did not present an itemization of its expenses and I am reluctant to award $5000 for expenses which were not quantified precisely. Rather, I order Mr. Mustafa to pay Royal its expenses of the arbitration in the amount of $3000.

March 30, 1999

Judith Killoran Arbitrator

ARBITRATION ORDER

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

Mr. Mustafa's claim for weekly income replacement benefits is dismissed.
Mr. Mustafa's claim to receive medical benefits for treatment and transportation is dismissed.
Mr. Mustafa's claim for payment of housekeeping and home maintenance services is dismissed.
Mr. Mustafa is not entitled to his expenses incurred in this arbitration proceeding.
Mr. Mustafa shall pay Royal its expenses in respect of the arbitration in the amount of $3000.