Neutral Citation: 2000 ONFSCDRS 3 Appeal P98-00049 OFFICE OF THE DIRECTOR OF ARBITRATIONS

DAVID McANGUS Appellant

and

GUARDIAN INSURANCE COMPANY OF CANADA Respondent

Before: Nancy Makepeace, Director's Delegate

Counsel: R. Gary McLister (for Mr. McAngus) Christopher J. Schnarr (for Guardian)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration order, dated August 31, 1998, is confirmed.
Each party shall bear its own appeal expenses.

January 10, 2000

Nancy Makepeace Director's Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. McAngus appeals from the arbitration order dated August 31, 1998. The arbitrator dismissed his claim for weekly income replacement benefits ("IRBs") between March 12, 1996, when benefits were terminated, and February 13, 1998, when the arbitration hearing ended. The parties also disagreed about the rate of IRBs to which Mr. McAngus is entitled. Guardian paid benefits of $185 per week to November 28, 1995, and $105.91 thereafter until benefits were terminated. Mr. McAngus claimed $832.91 per week. The arbitrator found that the correct weekly rate is $446.93. A further lump sum amount of $752.32 was awarded for post-accident losses, though Mr. McAngus had claimed losses of $14,731.65. The arbitrator dismissed Mr. McAngus' claim for a gym membership. He ordered a special award of $500, inclusive of interest, based on Guardian's delay in paying benefits at the minimum rate. Mr. McAngus submits that a larger award should have been made.

Guardian does not cross-appeal.

II. PRELIMINARY MATTERS

A. Transcript

Mr. McAngus requests an order that Guardian pay for production of a transcript of the hearing. He submits that a review of the transcript is necessary for a full appeal hearing, and that he is unable to pay the cost — about $4,000 for six days of hearing.

Rule 72.2 of the Dispute Resolution Practice Code (3d ed.) states that a party wishing to rely on a transcript must pay for its production. However, pursuant to subsections 282(11.1) and 282(7) of the Insurance Act, I have power to order Guardian to pay for the transcript (or any other appeal expense) on an interim basis, the order being subject to a possible repayment order at the end of the day if the appellant is unsuccessful on appeal. Director's Delegate Draper discussed the pertinent criteria in Malabanan and Canadian General Insurance Company:¹

The filing of a transcript has never been a formal requirement in the appeal process. While it may be useful in some appeals, the decision whether to obtain and file a transcript has been left to the parties.

I agree with Canadian General's submission that interim expenses are not to be ordered on a routine basis. That follows from the decisions on appeal expenses. Unlike the practice at the arbitration level, appeal expenses are often denied to unsuccessful applicants where the appeal focuses on the arbitrator's assessment of the evidence, or raises no significant or novel issue. In this case, the transcript is most relevant to the parts of the appeal dealing with the arbitrator's factual findings. However, those are precisely the kind of appeals that are often unsuccessful and where expenses are not awarded. I am not persuaded by the material before me that the appeal is sufficiently strong that interim expenses should be ordered.

I have sympathy for an appellant who cannot afford to pay for a transcript he feels he needs to present his case properly on appeal. This may raise access to justice issues, especially where the appellant argues that the arbitrator made unsupportable credibility or factual findings. However, Mr. McAngus makes no specific allegation that the arbitrator ignored or misunderstood the oral testimony, or that the oral evidence rebutted adverse documentary evidence. Rather, he submits that the arbitrator applied the wrong tests for entitlement and came to the wrong conclusions in his assessment of the evidence. I find that the documentary evidence amply supports the arbitrator's conclusions. While Mr. McAngus would clearly prefer a reconsideration of the evidence rejected by the arbitrator, that is not my role on appeal. For these reasons, I declined to award interim transcript expenses.

B. Fresh evidence

Mr. McAngus seeks a full rehearing of the evidence, including an unspecified recent medical report about his left ankle injury. The arbitrator found that Mr. McAngus' left ankle problems were neither disabling nor related to the accident. Fresh evidence is admissible on appeal if it could not have been obtained with due diligence at arbitration, it is reasonably capable of belief, and it relates to a potentially decisive issue when considered along with all the other evidence.² Based on the more contemporaneous medical evidence, I find it unlikely that any new report prepared for the purpose of litigation would be potentially decisive. This is not a case for full or partial rehearing.

III. BACKGROUND

Mr. McAngus was a 27-year-old construction worker at the time of the accident. On October 16, 1995, he was the passenger in a car that sideswiped another car that had pulled out of a parking lot on its right. Mr. McAngus immediately felt pain in his low back, neck and left ankle. He was taken by ambulance to hospital, where he was examined and released.

A month later, Mr. McAngus saw Dr. R.A. Gibb, his family doctor, complaining of low back, neck and left ankle pain. Dr. Gibb referred him to the Canadian Back Institute ("CBI"). On initial assessment on November 27, 1995, Mr. McAngus reported that he was unable to work, but could perform most of his activities of daily living (especially household chores), albeit more slowly and less frequently than usual. He complained of left ankle pain and giving way, central low back pain radiating bilaterally, numbness to both legs posteriorly, posterior neck pain radiating to both upper trapezii and occipital headaches once or twice a week. Stephanie Rhea, the physiotherapist who assessed him, felt he could not return to work. She recommended that he participate in the CBI's early rehabilitation program, which he did, between November 27, 1995 and January 19, 1996. In her discharge report, Ms. Rhea stated that Mr. McAngus had significantly less neck pain, low back pain and left ankle instability, and was "nearly a job match." However, given the heavy nature of his work, she felt he was not yet ready to return to work. At the CBI's recommendation, Mr. McAngus completed a CBI physical conditioning program ending on March 5, 1996. On discharge Ms. Rhea reported that he was functionally able to return to work, though a gradual return to work was recommended given the heavy nature of the job.

Around the time of the CBI's initial assessment, Mary Pat Scarfone, an occupational therapist, completed an occupational therapy assessment and job analysis at Guardian's request. Ms. Scarfone found that Mr. McAngus had "maintained function in most areas of activities of daily living," though he performed some tasks less frequently or more slowly than before.

On November 29, 1995, Guardian sent Mr. McAngus an Explanation of Assessment form stating that no benefits would be paid until they received the report they had requested from Coopers & Lybrand ("Coopers"), chartered accountants. Guardian took the position that Mr. McAngus was not partially or completely unable to carry on his activities of normal life, and therefore was not entitled to minimum benefits of $185 per week under subsection 10(2) of the SABS-1994.³ In March 1996, Coopers recommended that benefits be paid at the rate of $272.54 per week. However, no benefits were paid.

Dr. S.W. Bartol, an orthopaedic surgeon, assessed Mr. McAngus at Guardian's request on July 30, 1996. Dr. Bartol diagnosed soft tissue injuries of the neck, upper back, lower back and left ankle. He felt that Mr. McAngus' ongoing symptoms were at a "nuisance" level only and would not prevent him from returning to work.

Mediation failed on August 9, 1996, and Mr. McAngus applied for arbitration on August 12, 1996.

Guardian paid Mr. McAngus no benefits until late August 1996, when, following mediation, they paid benefits of $185 per week between October 23, 1995 and November 28, 1995. After November 28, 1995, benefits were reduced to $105.91 based on Ms. Scarfone's opinion that Mr. McAngus was not unable to carry on activities of normal life. Benefits were terminated effective March 12, 1996 based on the CBI's discharge report.⁴ A week later, on August 27, 1996, Guardian issued a stoppage notice stating that benefits would be terminated effective September 12, 1996 based on Dr. Bartol's report.⁵

Mr. McAngus disputed the stoppage and requested a disability assessment at a Designated Assessment Centre ("DAC") pursuant to section 64 of the SABS-1994. In mid-September 1996, Guardian sent out an Explanation of Assessment form indicating that benefits would be paid pending receipt of the DAC report, but not until a further report could be obtained from Coopers.⁶ However, benefits had been terminated in March 1996 and were never reinstated.

The DAC assessment was conducted by Dr. J. Pepin, an orthopaedic surgeon, C. Yeung, a physiotherapist, and S. Brunet, a kinesiologist. Their joint report, dated October 30, 1996, stated that Mr. McAngus could return to work, though a back brace was recommended. Dr. Pepin found no neurological deficits or weakness. A termination notice, based on the DAC, was issued on November 12, 1996.⁷ The notice indicated that benefits would be "considered" to October 9, 1996, the last day of the DAC assessment. However, no additional benefits were paid.

Dr. Gibb prepared several brief reports in late 1996, stating that Mr. McAngus was unable to return to the physical duties of his construction job, and could only work in a supervisory capacity. However, the arbitrator found these reports unconvincing. Dr. Gibb referred Mr. McAngus to Dr. G.M. Annisette, an orthopaedic surgeon. Dr. Annisette reported on October 25, 1996. He gave no opinion as to disability, but diagnosed whiplash, mechanical low back pain, and left ankle sprain.

The hearing was held over six days in August and December 1997. Final submissions were heard by teleconference in February 1998.

Mr. McAngus claimed income replacement benefits on the basis that he was unable to perform the essential tasks of his pre-accident self-employment, pursuant to section 8 of the SABS-1994, and, alternatively, on the basis that he was partially or completely unable to carry on a normal life, pursuant to subsection 10(2). Both parties focussed on the first branch of the claim. Mr. McAngus relied on the reports of Dr. Gibb and Dr. Annisette, and on lay witnesses who testified about his work activities before and after the accident. Guardian relied on the reports of Dr. Bartol and the DAC assessors, as well as investigation and surveillance evidence.

The arbitrator was not convinced that Mr. McAngus was disabled from working after March 12, 1996. He relied on his assessment of the expert reports, as well as certain discrepancies in Mr. McAngus' evidence about his income and expenses before and after the accident. Because of these discrepancies, he did not accept Mr. McAngus' claim for weekly benefits of $832.91, or his claim that he suffered a post-accident business loss of $14,731.65. He found that Mr. McAngus was entitled to $446.93 per week, plus a lump sum of $752.32 based on post-accident losses, plus interest under section 68 of the SABS-1994. The arbitrator also ordered Guardian to pay Mr. McAngus a special award of $500 based on Guardian's non-compliance with the provisions of section 64 of the SABS-1994.

IV. ANALYSIS AND CONCLUSION

The basis for Mr. McAngus' appeal is his disagreement with the arbitrator's assessment of the evidence. As Mr. McAngus filed his application for arbitration before the Insurance Act was amended on November 1, 1996, his appeal is not restricted to questions of law. However, it is well established that it is not my role on appeal to conduct a rehearing of the matter. In order to succeed, the appellant must show that the arbitrator made a specific error, disregarded important evidence, or considered irrelevant factors. Mr. McAngus submits that the arbitrator made a number of specific errors. I am not satisfied any error was made.

A. Disability

Onus and Standard of Proof

Mr. McAngus submits that the arbitrator used the criminal standard of proof (beyond a reasonable doubt) rather than the civil standard (balance of probabilities). The arbitrator stated the test correctly at four places in the decision.⁸ It is, of course, possible that an arbitrator might recite the correct test while applying another test. However, Mr. McAngus offers no reason to believe this happened except that he disagrees with the arbitrator's assessment of the evidence. I find no merit in this submission.

Mr. McAngus submits that Guardian bears the onus of proving that he is able to return to work because "he who makes a proposition must prove it." It is well established that the applicant bears the onus of proving entitlement to the benefits claimed.

The Disability Test

Mr. McAngus submits that because of the heavy physical demands of construction work, he is entitled to income replacement benefits until he is "physically healthy and therefore completely recovered." The arbitrator rejected this position. I find no error in the arbitrator's explanation of the test, which is "whether Mr. McAngus suffers a substantial (meaning significant) inability to engage in the essential (meaning key) tasks of his construction employment."⁹ This test involves a two-step analysis. The first step is to determine the insured person's essential tasks. The second is to determine whether he is substantially unable to perform them. As a practical matter, the heavier the essential tasks of the insured person's employment, the easier it will be for him to prove that he is substantially unable to perform those tasks, all else being equal. However, the regulation does not mandate a preliminary determination of "the degree of recovery and recuperation necessary for the Applicant to perform the essential duties of his self-employment" or "to physically carry on business profitably."¹⁰ The test for substantial inability does not vary depending on the nature of the essential tasks.

Mr. McAngus also argues that the arbitrator erred in not determining his essential tasks "in a detailed manner." The arbitrator accepted the CBI's description of Mr. McAngus job as "very heavy and physical."¹¹ He also accepted Ms. Scarfone's report that Mr. McAngus' job duties "included roofing, installing interlocking brick, cement work and home remodelling, which required constant standing and frequent walking (sometimes on uneven surfaces such as roofs and scaffolding), carrying and lifting (up to 150 lbs. by himself), climbing, crouching, kneeling."¹² Mr. McAngus does not specify any particular detail of his essential tasks that he feels the arbitrator disregarded. Based on my review of the documentary evidence, I find no error in the arbitrator's findings.

In any event, the arbitrator's decision did not turn on this issue. Guardian conceded that Mr. McAngus' essential tasks "required medium to heavy physical labour." The more important issue in this case was the severity of any residual symptoms suffered by Mr. McAngus. To make that decision, the arbitrator considered the expert evidence, lay evidence about Mr. McAngus activities before and after the accident, and the reliability of Mr. McAngus' testimony.

The arbitrator's assessment of the expert evidence

Mr. McAngus alleges a number of errors in the arbitrator's assessment of the expert evidence. He submits that the arbitrator erred in relying on Ms. Scarfone's assessment of his ability to return to work. In his view, she is not qualified to give an opinion as to whether he is disabled. Ms. Scarfone is an occupational therapist. She prepared an occupational therapy functional assessment of Mr. McAngus, focusing on his activities of daily living. Based on her interview with Mr. McAngus, she concluded that he "has maintained function in most areas," with frequency of performance affected rather than ability to complete tasks. She recommended that he pace his activities and that a Tub Scrub be provided. She did not feel he needed occupational therapy.

Ms. Scarfone did not give a medical opinion. She assessed Mr. McAngus' functional level. This was squarely within her expertise. Her report was consistent with the November 1995 report of the CBI's physiotherapist that Mr. McAngus was doing "the majority of the household activities however, less frequently and complains of increased levels of pain while doing his activities." The arbitrator relied on these two reports in dismissing Mr. McAngus' claim for benefits based on inability to carry on a normal life. I find this conclusion was amply supported by the evidence.

Mr. McAngus objects to the arbitrator's acceptance of Ms. Scarfone's report about her conversation with Dr. Gibb. In a one-page addendum to her report, Ms. Scarfone reported what Dr. Gibb told her in a meeting on December 5, 1995. The arbitrator relied on this evidence in dismissing Mr. McAngus' claim that his left ankle problems result from the accident.¹³ Mr. McAngus submits the arbitrator erred in relying on hearsay evidence.

According to Ms. Scarfone, Dr. Gibb told her Mr. McAngus had complained of left ankle instability on July 7, 1994 and July 19, 1994. Dr. Gibb had an x-ray done, and ordered a bone scan, but Mr. McAngus did not return after the second visit and Dr. Gibb had no information about the bone scan. Dr. Gibb is also reported to have said that Mr. McAngus did not ask for pain medication after October 17, 1994. Finally, Dr. Gibb allegedly said he could not comment on the relationship between the accident and the prior injury because he had not seen Mr. McAngus between July 19, 1994 and November 16, 1995.

Dr. Gibb's clinical notes and records confirm Ms. Scarfone's account. In a Health Practitioner's Certificate dated September 23, 1996, Dr. Gibb reported that Mr. McAngus suffered a work related low back strain on August 22, 1989, neck and left ankle injury in a motor vehicle accident on September 10, 1989, and left ankle instability in July 1994. Under "test results" he indicated that the left ankle x-ray done in October 1995 was consistent with an old trauma. In these circumstances, and considering Mr. McAngus' failure to call Dr. Gibb to correct any deficiencies in his records and in Ms. Scarfone's account, I find no error in the arbitrator's reliance on her evidence.

In any event, the arbitrator's dismissal of any causal connection between the accident and the ankle injury must be seen in the larger context of Mr. McAngus very weak claim that he is disabled. The arbitrator described Mr. McAngus testifying "that his problem climbing and walking on uneven surfaces only affects him 'once in a while.' His main concern is that his ankle 'might' give out." In dismissing the claim relating to the ankle, the arbitrator also relied on Mr. McAngus' failure to comply with Dr. Bartol's recommendation that he use an ankle brace or laceup work boots.¹⁴ The arbitrator rejected Mr. McAngus' explanation that he could not afford this expense. The arbitrator's assessment of Mr. McAngus' credibility deserves considerable deference.

Mr. McAngus submits there was no evidence that he ever knew about Dr. Bartol's recommendation. When asked when the July 30, 1996 report was given Mr. McAngus, his counsel replied that he did not know, but it may have been at the mediation in August 1996.¹⁵ He did not suggest this problem was identified at the arbitration hearing. In any event, there is no documentary evidence suggesting that Mr. McAngus has a non-trivial problem with his ankle. Nor does the surveillance evidence reveal any sign of ankle problems. I find no error.

Mr. McAngus submits that the arbitrator erred in preferring the evidence of Dr. Bartol (who performed an IE assessment) and the DAC assessors over the opinions of his treating doctors, Dr. Gibb and Dr. Annisette. I find the arbitrator had ample reason for assessing the evidence as he did. Dr. Gibb's reports were very brief. In his form report of September 1996, he noted that Mr. McAngus could return to work, albeit with restrictions to accommodate his low back (bending, twisting), upper back (lifting, repetitive arm movements) and ankle (ladder climbing). On February 24, 1997, he added a handwritten seven-line note to Mr. McAngus' Job Analysis. The note says: "In this patient's present, medical condition, he is unable to conduct most of the above described job duties. His prognosis is long term — meaning little prospect for improvement within the next 6 - 12 months." In November 1997, he responded to Mr. McAngus' counsel's request for a narrative report by adding handwritten answers to the questions posed. The answers indicate that Mr. McAngus can work "only in a supervisory capacity" and is indefinitely disabled.¹⁶ Dr. Gibb's final report states, in summary, that Mr. McAngus suffers from chronic left ankle instability/tendonitis, chronic mechanical lumbar pain/muscle strain, and chronic neck/upper back strain. Limitations were lifting, twisting, bending, repetitive or forceful arm movements, pushing, pulling, carrying, or walking on uneven surfaces.¹⁷

Dr. Gibb's reports supporting Mr. McAngus' claim are not persuasive because are not supported by reference to physical findings. The arbitrator also found it significant that Mr. McAngus did not seek medical help between March and late September 1996; all Dr. Gibb's reports were prepared after mediation failed in August 1996.

Dr. Annisette assessed Mr. McAngus at Dr. Gibb's request in late October 1996. The arbitrator found his report unhelpful because he saw Mr. McAngus only once, gave no opinion about disability, and diagnosed only soft tissue injuries.¹⁸ Despite Dr. Annisette's statement that soft tissue symptoms "usually take about 18 months to two years to settle," this report offered no significant help to Mr. McAngus claim.

Dr. Bartol's IE report was much more thorough, and the arbitrator quoted from it at length.¹⁹ I find no error in the arbitrator's preference for this report, which set out the documents reviewed, Mr. McAngus complaints, and Dr. Bartol's physical findings. Dr. Bartol concluded that Mr. McAngus was not disabled, based on Ms. Scarfone's Job Analysis, and has symptoms "at a nuisance level."

The arbitrator also referred to the disability DAC conducted by an orthopaedic surgeon, a physiotherapist and a kinesiologist. The assessors concluded that Mr. McAngus was not disabled. Mr. McAngus does not identify any specific problem with the report, and I find no error in the arbitrator's reliance on it.

Mr. McAngus presented no authority for the proposition that "as a matter of law the medical opinions of treating physicians are to be preferred over the opinions of non-treating physicians." He relies on the principle that direct evidence should be preferred over other evidence, but Dr. Bartol and the DAC assessors examined Mr. McAngus; they did not simply review his file. An arbitrator is required to weigh all the evidence in its entirety. Any expert report must be assessed with respect to a number of factors, including familiarity with the insured person, expertise, completeness, accuracy and impartiality. In this case, it is difficult to imagine that another arbitrator could have assessed the evidence differently.

In any event, the arbitrator did not just rely on the expert reports. He also considered the gap in medical complaint between late March and late September 1996, Mr. McAngus' failure to pursue the rehabilitation recommendations of his doctors, the prior ankle injury, the absence of persuasive lay evidence that Mr. McAngus was disabled after the accident, and Mr. McAngus' ability to keep his business going.²⁰

Mr. McAngus submits that the arbitrator erred in finding that "[h]is explanations to numerous possible inconsistencies raised by the Insurer, taken individually appeared conceivable, but when taken collectively, seemed implausible and inconsistent with the intelligence and logic manifested by this Applicant."²¹ This comment preceded a discussion of certain discrepancies relating to Mr. McAngus' income and expenses before and after the accident. As has often been said in arbitration and appeal decisions, soft tissue claims often depend on the insured person's credibility, because there may be little or no objective evidence of injury. I find the arbitrator had ample reason to be concerned about "the overall reliability of Mr. McAngus' evidence."

B. Benefit Rate

The arbitrator had to decide four issues in order to determine Mr. McAngus' benefit rate. First, he had to determine when Mr. McAngus began the self-employment in which he was engaged at the time of the accident. The arbitrator accepted Mr. McAngus' claim that he began his construction business on September 1, 1995, 6.57 weeks before the accident. This allowed Mr. McAngus to extrapolate his income from those few weeks over the entire year, pursuant to subsection 9(3) of the SABS-1994.

The arbitrator's second task was to determine Mr. McAngus' gross income in the 6.57 weeks before the accident. Mr. McAngus claimed he earned $12,000 from four contracts during that time. Based on the corroborative evidence of the four customers, the arbitrator accepted Mr. McAngus' claim and dismissed Guardian's concerns about the legitimacy of the contracts.

Mr. McAngus' appeal relates to the arbitrator's findings with respect to his pre-accident expenses and net post-accident income.

Mr. McAngus claims that he incurred pre-accident expenses of $2,433, which represents 25.4 percent of his $12,000 gross income. He claimed also that his expenses after the accident rose to 147.7 percent, and as a result he incurred a loss of some $14,000. The arbitrator did not accept this evidence. He concluded that Mr. McAngus "sought to maximize both his pre-accident net income and his post-accident loss." He agreed with Daniel Edwards, a chartered accountant with Coopers, that "the documentation supplied by Mr. McAngus does not support any specific benefit quantum and one can only 'guess intelligently' at a fair number."²² He estimated that Mr. McAngus' legitimate post-accident expenses were 41.9 percent of gross income, then applied that figure to Mr. McAngus' pre-accident gross income as well. On this basis, he concluded that Mr. McAngus is entitled to income replacement benefits of $446.93 per week, before consideration of post-accident income and losses.

Mr. McAngus alleges that the arbitrator misapplied s. 9(3) of the SABS-1994. He submits that s. 9(3) is entirely backward-looking and does not permit the arbitrator to consider an insured person's post-accident expenses in calculating his "gross income." He also submits that s. 9(3) requires the arbitrator to use actual figures and does not permit guessing.

The arbitrator found that subsection 9(3) applies to Mr. McAngus, as a person who was entitled to income replacement benefits based on being self-employed before the accident, elected to have his benefits based on his income in the 52 weeks before the accident (rather than 156 weeks), was self-employed at the time of the accident, and started the self-employment in which he or she was engaged at the time of the accident during the fifty-two weeks before the accident.

Accordingly, s. 9(3) allows Mr. McAngus to:

elect that [his] gross income from employment for the fifty-two weeks before the accident be deemed to be the amount determined by taking [his] income from the self-employment in which he . . . was engaged at the time of the accident for the part of the fifty-two-week period for which [he] earned income from that employment and extrapolating it over the rest of the fifty-two-week period. [emphasis added]

Based on the italicized words, I accept Mr. McAngus' submission that s. 9(3) requires a retrospective analysis of the insured person's income. However, the section does not say how the arbitrator is to do determine what was the insured person's "income from the self-employment in which he . . . was engaged at the time of the accident." That task is governed by section 83 of the SABS-1994, which states that "a person's income from self-employment shall be determined in the same manner as the person's profit from the business in which the person was self-employed would be determined" under federal and provincial income tax laws.²³ In this case, the arbitrator accepted Mr. McAngus' evidence about his gross income before the accident, but did not accept his evidence about his expenses before or after the accident.

Mr. McAngus submits that the arbitrator disregarded the evidence of three of his four customers that they provided the materials for the work he did for them before the accident. (It was agreed that Mr. McAngus had supplied the materials for the fourth contract.) However, the arbitrator clearly stated that he accepted "the sworn evidence of the Applicant's lay witnesses" on this point.²⁴ That was his reason for rejecting Mr. Edwards' proposal that benefits be calculated on the assumption that Mr. McAngus supplied the materials for all four contracts.

The arbitrator identified several discrepancies in Mr. McAngus' evidence. Mr. McAngus claimed that materials represented 80 percent of his gross post-income. This was inconsistent with his evidence that his total pre-accident expenses came to 25.4 percent of gross income. The arbitrator rejected Mr. McAngus explanation "that this massive increase was due to the incompetence of employees he had to hire, who would spill paint or waste other materials."²⁵ On appeal, Mr. McAngus alleged no specific error with this finding.

The arbitrator also noted that Mr. McAngus included personal expenses (dry cleaning, eyeglass tinting and dog vaccinations) in a category marked "miscellaneous" expenses. He noted that transportation had increased from less than 2 percent of gross income before the accident to 7 percent afterwards. "Food and promotion" was now almost 15 percent, although it had been .01 percent before the accident.

Another discrepancy was in Mr. McAngus evidence about his post-accident losses. He claimed that he lost $1,157.24 in February and March 1996, a loss partially accepted by the arbitrator.²⁶ The arbitrator noted that Mr. McAngus' own calculations showed he made a profit between April and August 1996. The arbitrator did not accept Mr. McAngus figures, which showed a loss of 250 percent between September 1996 and September 1997. Absent an explanation, this claim is inherently implausible, since one would normally expect business losses to be greatest immediately after the accident, when injuries are most acute. That this loss occurred only after benefits were terminated does not enhance the believability of the claim. The arbitrator also found that Mr. McAngus banking records did not support such large losses.²⁷

I find that the arbitrator had good reason to be cautious in relying on Mr. McAngus evidence about his financial affairs. This left the arbitrator with several options. He could have awarded no benefits on the basis that the inconsistencies in Mr. McAngus evidence about his business expenses raised a doubt whether the business made any profit at all before the accident. Another option was to find that Mr. McAngus did not prove entitlement to more than the minimum benefit of $185 per week on the basis that the evidence did not establish entitlement to any greater benefit. The arbitrator found that neither of those options would be fair.²⁸

Arbitration and appeal decisions have taken a flexible and pragmatic approach to assessing small business income claims.²⁹ It is recognized that it may not be possible to pinpoint the amount precisely. As Director's Delegate Naylor observed in Agha and General Accident, "[t]he goal is to come up with a sensible approximation of earnings during the periods in question, based on the evidence."³⁰ This is what the Arbitrator did in this case. Mr. McAngus offered no specific reason on appeal why I should interfere with the arbitrator's calculation and I see no reason to do so on my review of the evidence. Given the discrepancies in the expense documentation, I find no error in the arbitrator's assessment of the evidence.

C. Gym Membership

Mr. McAngus submits that the arbitrator erred in requiring proof of payment before awarding a gym membership. In fact, the arbitrator denied the claim based on a lack of particulars. Mr. McAngus did not correct this deficiency on appeal.

D. Special Award

The Arbitrator ordered a special award of $500, inclusive of interest. Mr. McAngus submits that the award should have been higher, but gives no reasons in support of this submission. Arbitrators are entitled to "considerable leeway" in deciding to give (or deny) a special award because a finding that an insurer has "unreasonably withheld or delayed benefits" depends on the arbitrator's assessment of the facts. The decision as to the amount of the award is even more deserving of deference. In the circumstances of this case, I find that the special award was, if anything, generous. Whether another arbitrator might have come to a different decision, I find no error in the award made.

VI. EXPENSES

Mr. McAngus essentially repeated the submissions he made before the arbitrator, who did not accept them after six days of hearing and explained his reasons in a 25-page decision. Each party will bear its own expenses.