Neutral Citation: 2000 ONFSCDRS 168

FSCO A99-001200

BETWEEN:

SISAY BAYNESAGNE KASSA

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Beth Allen

Heard:

August 14 and 15, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David F. Longley for Mr. Kassa

Andrew A. Evangelista for Economical Mutual Insurance Company

The Applicant, Sisay Baynesagne Kassa, was injured in a motor vehicle accident on May 8, 1999. He applied for and received statutory accident benefits from Economical Mutual Insurance Company ("Economical"), payable under the Schedule.¹ Economical refused Mr. Kassa's application for income replacement benefits (IRBs) on the basis that he failed to provide information sufficient to determine his entitlement to an IRB. The Applicant claims entitlement to an IRB under section 4 of the Schedule. The amount of the benefit is also in dispute. The Applicant also claims that Economical is liable to pay a special award for unreasonably withholding benefit payments. The parties were unable to resolve their disputes through mediation, and Mr. Kassa 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 the Applicant disentitled under section 33 of the Schedule to receive an IRB on the basis that he has failed to provide the information reasonably required for the Insurer to determine his entitlement to an IRB?
Is the Applicant entitled to an IRB under section 4 of the Schedule on the basis that he suffers a substantial inability to perform the essential tasks of his employment?
If issue #2 is decided in the affirmative, what is the correct amount of the IRB?
Is Economical liable to pay a special award pursuant to subsection 282(10) of the Act on the basis that it unreasonably withheld benefit payments?
Is the Applicant entitled under subsection 282(11) of the Act to his expenses incurred in respect of the arbitration hearing?
Is Economical entitled under subsection 282(11) of the Act to its expenses incurred in respect of the arbitration hearing?

The Applicant is disentitled to an IRB pursuant to section 33 of the Schedule because he failed to provide the information reasonably required for the Insurer to determine his entitlement to an IRB.
The Applicant is not entitled under section 4 of the Schedule to an IRB on the basis that he failed to establish that he suffers a substantial inability to perform the essential tasks of his employment.
I am not required to determine the quantum of the IRB.
Economical is not liable to pay a special award.
If the parties do not settle the matter, they will make submissions on the expense issue following the release of this decision.

Background to the Claim:

The Applicant, aged 41 at the time, was involved in a motor vehicle accident on May 8, 1999 while driving a taxi. His vehicle was rear-ended as a result of which the Applicant experienced pain in his neck and lower back. Since the accident, the Applicant has complained of headaches and pain in his neck and his right leg and shoulder.

The Applicant was involved in a previous accident on March 10, 1999. He testified that he injured his back and suffered from headaches after this accident. He stated that he subsequently missed two weeks work while his taxi was in for repairs, and that by the time of the May 8, 1999 accident, he had resumed driving a taxi full time.

The Applicant testified that he was unable to return to taxi driving after the May 8, 1999 accident because of his injuries. He stated that he has difficulty sitting for extended periods. He described the essential tasks of his job as driving for 14 to 16 hours per day, lifting luggage, delivering parcels, climbing stairs and, at times, lifting wheel chairs for the disabled. His job also required being able to know customers' destinations.

The Applicant applied for accident benefits as a self-employed taxi driver by an Application for Accident Benefits dated June 8, 1999. The evidence is inconsistent as to the Applicant's status with respect to the taxi business. It appears that he first indicated that he was the sole driver of the taxi and later in July 1999, he advised Economical's accountant that from September 1998 he had a partner in his taxi business named Ferrerea Demeke who drove the taxi on alternate shifts. At times in his testimony he stated that he owned the taxi and at other times he said that he leased it.

On an Employer's Confirmation of Employment (undated but date-stamped as received by Economical on June 14, 1999) which he completed himself, the Applicant indicated that he earned a total of $36,400 in the 52 weeks before the accident, $700 in each of the four weeks preceding the accident. He stated that he paid the expenses related to insurance on the taxi, rent for the taxi licence, propane and car repairs and maintenance. He stated that until five or six months before the May 8 accident, Mr. Demeke split the expenses with him. The Applicant also stated that he subsequently allowed another person who paid him a fee, to drive the taxi during some shifts.

Did the Applicant fail to comply with section 33 of the Schedule?:

The Applicant applied for IRBs under section 4 of the Schedule without claiming a specific IRB rate. Economical submitted that the Applicant has not complied with his obligations under section 33 of the Schedule to provide adequate financial and medical information to permit it to determine his entitlement under section 4 and the rate of his entitlement under section 6 of the Schedule.

Section 33 of the Schedule imposes a positive obligation on an applicant to provide adequate information within 14 days of a request by the insurer to assist the insurer in determining his entitlement to accident benefits. The relevant portion of this provision states:

(1) A person applying for a benefit under this Regulation shall, within 14 days after receiving a request from the insurer, provide the insurer with the following:
Any information reasonably required to assist the insurer in determining the person's entitlement to a benefit.

(2) The benefit is not payable for any period before the person complies with subsection (1).

The Applicant did not dispute that Economical requested the information at issue. He argued that he provided Economical all the financial information available to him and that this information is sufficient to calculate his IRB rate. Regarding medical productions, he submitted that he need not produce medical reports and records since he is only interested in treatment and a cure for his injuries.

Economical's Production Requests:

Economical provided a chronology of its requests for financial and medical information.

On June 16, 1999, it retained the services of Mr. Jeffrey Smith, a chartered accountant with Hayes Smith & Associates Inc., to calculate the Applicant's IRB. Mr. Smith communicated with the Applicant numerous times by telephone, in three face-to-face meetings and by correspondence regarding the information needed to calculate his IRB. Mr. Smith testified that the Schedule provides for two alternative time periods for the calculation of self-employment income², the 52 weeks before the accident and the last fiscal year completed before the accident for the business. He stated that he requested information to calculate income for both of these periods to arrive at the calculation most favourable to the Applicant.

In Mr. Smith's initial letter to the Applicant dated June 18, 1999, he requested: the Applicant's 1998 income tax return; a Notice of Assessment by Revenue Canada for 1998; taxi trip sheets for January 1, 1998 to present; any notes, receipts or records of operating expenses for January 1, 1998 to the present; and copies of monthly bank statements for bank account(s) where taxi revenues were deposited for January 1, 1998 to the present. I find these are reasonable documentary requests.

By the date of the mediation on December 1, 1999, the Applicant still had not provided the information Economical requested. In a letter to the mediator dated November 17, 1999, Economical requested that the Applicant furnish the documentation Mr. Smith had requested in his June 18, 1999 letter. In a further letter dated March 1, 2000, Economical requested the following additional financial documents, which I also find are reasonable requests: confirmation as to whether the Applicant had received unemployment (or employment) insurance or workers compensation (or safety insurance) benefits; income tax returns from 1997 to the present as well as working papers and supporting documents for his 1997 and 1998 returns; any amendments or addendums to his 1998 tax return; taxi trip sheets for May 8, 1998 to the present; and complete books and records including invoices and expense receipts, banking documents and cancelled cheques for 1998.

In the same letter, Economical also requested the following medical documentation which I also find to be reasonably necessary to determine the Applicant’s medical entitlement: the clinical notes and records of all treating health practitioners including his family doctor, Dr. H. Getu (for two years pre-accident), Dr. Allan Shell of The Spine Clinic, and Ms. Bonnie Lubotta, an occupational therapist.

By the date of the pre-hearing discussion on April 18, 2000, the Applicant had still not produced critical financial and medical documentation. At the pre-hearing, Mr. Kassa undertook to produce the documents requested by Economical in its March 1, 2000 letter as well as the following additional documents which Economical confirmed in a further letter of May 10, 2000: the address and phone number of his partner, Ferrerea Demeke; any available taxi business records; the particulars of the Applicant's March 10, 1999 accident; the particulars of the insurance for the motor vehicle involved in his May 8, 1999 accident; the names and addresses of Mr. Kassa’s supervisors at Don Mills Taxi and Upper Delta Taxi; and Mr. Kassa’s complete daily journal including the pages he removed; and the clinical notes and records of Dr. Albam and Dr. M. Gawel.

The Applicant's Productions:

Regarding the deficiencies in the financial documentation, Mr. Smith testified that by the date of the hearing he had insufficient records of Mr. Kassa's revenues. In testimony, Mr. Smith detailed the documents he received:

Initially, eight trip sheets and eventually by July 23, 1999 an additional 83 trip sheets³, each trip sheet purportedly representing one day's revenue. Only 27 of these trip sheets were referable to days in the 52 weeks before the accident.
On July 23, 1999, four envelopes containing handwritten notations, which the Applicant purported were records of revenue. The notations were largely undated and none of them contained a reference to a year.
On July 23, 1999, copies of pages from the Applicant's journal which the Applicant claims he used to record revenues and expenses. The Applicant removed the pages for the period May 13, 1999 to June 2, 1999. He advised Mr. Smith that the information on these pages was irrelevant. He never provided these pages in spite of Economical's requests.
On July 23, 1999, pages from a Royal Bank passbook for the period from February 20, 1995 to March 1, 1999 and a printout for a Toronto Dominion Bank deposit account history for the period February 1, 1998 to June 8, 1999.
On July 23, 1999, six pages containing four invoices for auto repairs and car inspection, two receipts dated April 1, 1999 and May 4, 1999 for $909.50 from the Applicant to Don Mills Taxi and a handwritten note of items and figures, unsigned and undated.
The Applicant’s 1998 income tax return which he filed on September 13, 1999 and submitted to Mr. Smith’s office on the same day.

In response to Mr. Smith’s requests for further documentation, the Applicant asserted that he had produced all that he could. He indicated that he had lost many documents.

Despite Economical's many requests, not until the first day of the hearing did the Applicant produce income tax information forms for the years 1993 to 1997. The Applicant admitted that he had previously told Mr. Smith that he had not filed for income tax in the years before the accident. The cover letter enclosing the income tax information forms, addressed to the Applicant's counsel, is dated January 31, 2000 and date-stamped as received on February 1, 2000, over eight months before the hearing.

By the time of the hearing, the Applicant had similarly defaulted in satisfying his obligations to produce medical documentation. Other than Dr. Gawel’s clinical notes and records, which were not filed as evidence, the Applicant produced no other clinical notes and records of his treating medical practitioners. He refused to produce the clinical notes and records of his family doctors, Dr. Getu and Dr. Alemayehu, those of Dr. Shell and The Spine Clinic and the occupational therapist, Ms. Lubotta, all of whom treated him. I also note that the Applicant has not produced medical documentation from such doctors as Dr. Ford, Dr. Evans, Dr. Albam and Dr. Hiraki who, it appears from the oral evidence, have also seen the Applicant.

The medical documentation the Applicant ultimately produced for the hearing were a Disability Certificate dated June 8, 1999, prepared by Dr. Getu, a medical-legal report dated January 27, 2000 by Dr. Michael E. Kliman, an orthopaedic surgeon, and a medical-legal report by Dr. Alemayehu dated July 31, 2000. Regarding the latter report, Economical submitted that the Applicant produced it in the days immediately preceding the hearing and that it had no notice of this doctor until it received this report. The Applicant responded that despite requests for this report by letters dated December 8, 1999 and July 25, 2000, he received the report only on August 10, 2000 and produced it to Economical immediately.

The Applicant testified as to why he did not produce the medical documentation Economical requested. He stated emphatically that he would not authorize the disclosure of his doctors' clinical notes and records to the insurance company because, from his point of view, he needed "treatment" and a "cure" and not to ask his doctors for documents. He testified that for the same reason he did not want any medical reports to be prepared. The Applicant further explained that he changed from Dr. Getu, his family doctor of nine years, to Dr. Alemayehu because he thought she was sympathetic to the insurance company and he did not trust her.

Conclusion on Section 33 Issue:

Arbitrator Joachim held in the Tesfay⁴ case, and I agree, that "[t]he purpose of section 33 is to ensure that insured persons facilitate the insurer’s ability to obtain sufficient information to assess a claim for benefits." I find for the following reasons that the Applicant did not satisfy the requirements of this provision.

I accept Mr. Smith's opinion over the evidence of the Applicant, that the totality of the documentary evidence, together with the Applicant’s verbal representations, were insufficient to calculate his income for either the 52 weeks before the accident or for the business' pre-accident fiscal year. I therefore find that the information contained in the Employer’s Confirmation of Income, the trip sheets, the envelope notations, the journal notations, the two bank account records, the miscellaneous invoices and the Applicant’s 1998 income tax information, together with the Applicant’s verbal information did not provide a sufficient basis for Economical to calculate the Applicant’s income and therefore his IRB.

Mr. Smith opined, and I agree, that the trip sheets do not cover a sufficient part of the relevant time period, the envelope notations are sketchy and non-specific as to date, etc.; the journal notations are also sketchy and incomplete; the bank account records are incomplete in terms of the relevant time periods, non-specific as to the account holders and the nature of the deposits and withdrawals; the invoices are few in number and lack detail; and the 1998 tax return lacks supporting financial documentation. Further, the Applicant claimed gross income of $46,593 on his 1998 return and $36,400 gross income for the 52 weeks before the accident on his Employer’s Confirmation of Income and I find that he did not adequately explain how he arrived at either of these figures.

I reject the Applicant’s assertion that Mr. Smith’s opinion was based on an assessment of the Applicant's credibility rather on an objective evaluation of the information provided. I find, on the contrary, that Mr. Smith principally based his opinion on the fact that the Applicant failed to produce the information necessary to calculate his IRB. In my view, Mr. Smith went to reasonable lengths to communicate with the Applicant by telephone, personal meetings and correspondence to identify the documents he required.

I therefore conclude pursuant to section 33 of the Schedule, that the Applicant provided insufficient information for Economical to calculate the amount of his IRB and accordingly he is disentitled to a benefit for this reason. I arrive at this conclusion recognizing as other arbitrators have, that small businesses ought not be held to the same standard as might apply to more sophisticated businesses. Even taking this into account, I find that the Applicant fell substantially short of providing sufficient information. The misleading and inconsistent nature of some of the Applicant’s representations contributed to the shortcomings in the information about the taxi business.

In the event that I have erred in finding the Applicant disentitled to an IRB for providing insufficient financial information, I also find that the Applicant failed to provide Economical sufficient information to determine his disability. On June 8, 1999 he signed the authorization on Part 1 of the OCF-3/59 Disability Certificate authorizing his treating health practitioner to give the insurance company any pre- and post-accident information relating to his health and treatment. However, I conclude that the Applicant flouted his production obligations under the Schedule. His admissions that he subsequently verbally instructed his family doctor not to provide clinical notes and records to the Insurer and that he refused to authorize other doctors to release pertinent medical information, is evidence of this. I find it is reasonable to infer from this conduct that the Applicant has attempted to conceal information that might be adverse to his claims. I do not find his explanations of why he refused to provide this information to be reasonable.

The Disability Certificate, rather than assisting the Applicant, actually raises questions about the cause of the Applicant's disability which I find makes the Insurer's requests for further medical information reasonable. On Part 2 of the Disability Certificate, next to "Date applicant was unable to work or carry out normal daily activities", Dr. Getu wrote "1999/03/10". I find, contrary to the Applicant's claim, that this suggests that at the time of the May 8, 1999 accident, the Applicant was disabled from the March 10, 1999 accident.

Dr. Kliman did not have the benefit of the Applicant’s background medical information in preparing his report of January 27, 2000. For this reason, his report was also of limited value in assisting Economical to assess the Applicant’s disability.

In the end, the Applicant furnished Economical scant medical information to substantiate his disability claim. Accordingly, I find he is also disentitled to an IRB for this reason.

Disability and Quantum Claims:

I have decided that before the hearing the Applicant did not provide Economical with sufficient information to assess his quantum and disability claims. I also find that he failed at the hearing to call sufficient additional evidence to prove his entitlement under section 4⁵ of the Schedule and the quantum of his benefit under section 6⁶ of the Schedule. I conclude that the additional information the Applicant produced at the hearing - the income tax information for 1993 to 1997, Dr. Alemayehu’s report and his own testimony - is not sufficient with the other evidence to prove his claims.

I find that the 1993 to 1997 tax documents do not provide information that assists with calculating the Applicant’s income in the year before the accident.

I also find Dr. Alemayehu's report to be of limited value. Dr. Alemayehu seemed to be unfamiliar with the Applicant’s pre-accident medical history since he saw the Applicant for the first time on November 30, 1999, about seven months after the accident. The report does not refer to any background medical documentation and appears to be based solely on the Applicant’s self-report. There is no reference to the March 10, 1999 accident nor any mention of the Applicant’s medical history. Hence, I am not persuaded by this report that the disabilities Dr. Alemayehu discusses are related to the May 8, 1999 accident.

Apart from his own evidence, the Applicant called no other witnesses to support his claims. He might have called his partner, Mr. Demeke, other fellow taxi drivers, personnel from the taxi companies, an accountant, family members, friends or medical practitioners to support his evidence. I draw the adverse inference that these witnesses, if called, would not have assisted his case. I find the Applicant’s testimony on both the quantum and disability issues unpersuasive without the support of corroborating witnesses and documentary evidence.

The Applicant has the burden to prove his quantum and disability claims on a balance of probabilities. I conclude that he has failed to satisfy this burden and accordingly is not entitled to an IRB.

SPECIAL AWARD:

The Applicant claims, pursuant to subsection 282(10) of the Act, that Economical is liable to pay a special award for unreasonably withholding benefit payments. He specifically argues that in denying benefits, Economical improperly relied on its accountant's assessment of the Applicant's credibility in relation to the financial documents produced. According to the Applicant, the accountant usurped the role of the arbitrator by doing so. Under subsection 282(10), the determination of a special award is predicated on a finding of benefit entitlement. Since I have found the Applicant is not entitled to benefits, I need not decide the special award issue.

EXPENSES:

The parties agreed to await the outcome of this decision to make submissions as to expenses. I encourage the parties to settle this issue but, failing this, they can bring the matter to the Commission for a determination.

September 11, 2000

Beth Allen Arbitrator

Date