Neutral Citation: 2001 ONFSCDRS 161
FSCO A00-000998
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
PHILIP SIMON
Applicant
and
CUMIS GENERAL INSURANCE COMPANY
Insurer
REASONS FOR DECISION
Before:
K. Julaine Palmer
Heard:
October 16, 2001, at the offices of the Financial Services Commission of Ontario in Toronto
Appearances:
Roland E. Henderson for Mr. Simon
Philippa Samworth for Cumis General Insurance Company
Issues:
Philip Simon was injured in a motor vehicle accident on October 21, 1994. He applied for weekly income replacement benefits from Cumis General Insurance Company ("Cumis"), payable under the Schedule.1 Cumis never paid him any weekly income replacement benefits. The parties were unable to resolve their disputes through mediation, and Mr. Simon applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issues in this hearing are:
Is Mr. Simon entitled to receive a weekly income replacement benefit from October 28, 1994, and ongoing, pursuant to section 7 of the Schedule, on the basis that he suffers a substantial inability to perform the essential tasks of his employment? Is he suffering a partial or complete inability to carry on a normal life as a result of the accident?
What is the amount of weekly income replacement benefit that Mr. Simon should receive, pursuant to section 10 of the Schedule? The calculation here relates to Mr. Simon's claim for reasonable salary expenses that were paid to replace his active participation in his business.
Is Mr. Simon entitled to supplementary medical expenses for medical reports, claimed under subparagraph 36(1)(a) of the Schedule, or are these reports expenses of the arbitration?
Should either party pay the expenses of this arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Result:
The application is dismissed.
The issue of expenses of the arbitration is deferred.
EVIDENCE AND ANALYSIS:
Introduction
This case principally relates to a claim for loss of income by Mr. Simon resulting from an accident which occurred seven years ago, in October 1994. Although Mr. Simon claimed more than $67,000 for wages paid to workers to replace him in his electrical contracting business, Mr. Simon presented very few documents in support of his claim. The Commission had set aside three days to hear this matter, in consultation with the parties at the prehearing conference, but only one hearing day was ultimately required. The only witness who testified was Mr. Simon himself. Mr. Simon's whole testimony was completed in about three hours. Normally, in a hearing on these types of issues I would have heard evidence from several witnesses, who would have information on either or both the disability issues and the financial issues in the hearing.
The Law
In order to be entitled to weekly income replacement benefits under the Schedule, an employed person who has suffered an impairment as a result of an accident must demonstrate a certain level of disability. The drafters of the Schedule set this out as "a substantial inability to perform the essential tasks" of the person's job. Thus, an applicant must suffer, a sizeable disability, not just some inability, and the disability must be related to the key job tasks in order to qualify for income replacement benefits. No weekly income replacement benefit is payable for the first week of disability.2
The Evidence - Ability to perform essential job tasks
Very little pertinent evidence was adduced about Mr. Simon's job tasks. I find Mr. Simon was an electrician engaged in renovations for commercial customers. At the time of the accident, he was very focussed on building up his business, Philip's Electric, and had secured a contract to perform the electrical work for a new chain of nine seafood restaurants in various parts of Ontario. Mr. Simon testified that shortly after the accident, because of shoulder pain, he could only do 15 to 20 minutes of overhead work before he had to take a rest or go home. He also testified that he used to feel "tremendous discomfort" in his neck. However, I have no evidence of Mr. Simon's personal work hours after the accident, or indeed, any evidence of the days and hours of the replacement workers hired to replace Mr. Simon's active participation in his electrical contracting business. I have no evidence that after October 28, 1994 (one week following the accident) Mr. Simon ever missed a single day of work because of his injuries, although he may well have missed many days or worked shortened days. I simply do not know.
I do have evidence that Mr. Simon took some physiotherapy treatment after the accident, from October 25, 1994 to May 1995, then again in July 1995. The surveillance evidence discloses that by March 1995, at least, sometimes he would attend for physiotherapy early in the day, then go on to work. I know he visited his doctor eight times between October 24, 1994 (three days after the accident) and February 28, 1995, but I have no narrative report from his doctor, nor even a form report. I have the first page of a report from an orthopaedic surgeon, Dr. Rick Zarnett, who examined him on February 6, 1995. In that report, Dr. Zarnett diagnoses a soft tissue injury of the cervical spine and rotator cuff tendonitis. He recommended continued therapy and anti-inflammatory medication. Dr. Zarnett relates that Mr. Simon had not been able to return to work at the time he examined him. I do not know if this statement in Dr. Zarnett's report is accurate.
The physiotherapy notes filed as an exhibit are very difficult to read and do not appear to comment much on Mr. Simon's ability to work. On February 16, 1995, the therapist appears to have recorded that Mr. Simon's back felt better and he was able to drive for nine hours. He was beginning to do more work but his shoulders felt stiff.
With some reluctance, I come to the conclusion that Mr. Simon has failed in his attempt to prove he suffered a substantial inability to perform the essential tasks of his job after the accident. Neither his testimony, nor the documents presented, focussed on the question in issue. I find Mr. Simon was in an accident that he was hurt and received treatment, but I simply do not have enough evidence about the nature of his injuries, their extent and duration to find he was substantially impaired. Likewise, with respect to how the injuries impacted on his ability to work, I have little evidence and it is insufficient to determine that Mr. Simon's disabilities were significant enough to meet the test of the Schedule.
Mr. Simon testified that his wife, a nurse, would have been a good observer to bear witness to the difficulties he suffered after the accident. Unfortunately, Mr. Simon's wife was not a witness at the arbitration and I heard no explanation as to why she or others with information about the issues in the arbitration were unavailable to testify.
Loss of Income Claim
For the sake of completeness, I will deal with this issue, despite Mr. Simon's failure to prove his claim for disability.
Not much information was provided by Mr. Simon to substantiate his earnings over the 52 weeks or 156 weeks before the accident. The chartered accountant hired by the Insurer met with Mr. Simon in the spring of 1995 and tried over the next nine months to obtain the documents he required to calculate Mr. Simon's income replacement benefits. This information would have been important to calculate Mr. Simon's net weekly income from employment, 90 percent of which would have been his weekly income replacement benefit. According to the provisions of subsection 10(8) of the Schedule, Mr. Simon was entitled to claim expenses to prevent a loss of revenue in his business, salary expenses to replace his active participation in the business and non-salary expenses that were necessary to prevent or reduce any losses resulting from the accident. The maximum weekly benefit would have been $1,000 per week.
Little financial evidence was presented at the hearing. Mr. Simon acknowledged that many of his records had been lost or discarded when he moved and accepted responsibility for this lack of documentation. I heard no evidence that Mr. Simon had attempted to recover any records by making inquiries from his bank, from the government (relating to his GST returns), from the contractors he worked for or the suppliers from whom he purchased material. The evidence that was presented mainly dealt with wages paid after the accident and contained significant inconsistencies.
Mr. Simon testified that he was unable to complete one contract as a result of the accident—he was en route to perform electrical renovations at R & S Autobody when the accident occurred. A document relating to this contract was presented to the Insurer at the hearing for the first time. After hearing submissions relating to its inclusion in the exhibits to be filed at the hearing, I ruled it could not be included because it was presented too late and the author of the document was not available to be cross-examined. To assist in maintaining fairness and order in arbitrations, the rules of the arbitration process in force for this hearing generally call for all documents to be exchanged at least 10 days prior to the hearing.
Mr. Simon presented copies of his income tax returns from 1992 and 1993 and Revenue Canada printouts of his income from 1994 to 1996. They showed his business earnings as follows:
Year
Net Business Income $
1992
-14,581.00
1993
-11,085.00
1994
6,941.00
1995
-13,443.00
1996
-7,207.00
Mr. Simon presented affidavit evidence relating to amounts alleged to have been paid to workers that performed duties to replace him in his business. As stated above, according to the Schedule, these costs may be recognized if they were reasonable expenses paid to replace Mr. Simon's active participation in the business.3 However, these amounts are required to help determine Mr. Simon's net income from self-employment and his income replacement benefit. They are not recoverable as separate items of damages" that are reimbursed directly. In addition, if a self-employed person incurs losses as a result of the accident, 90 percent of these losses are recoverable and must be added by the Insurer to the weekly income replacement benefits payable to the insured person.4
Mr. Simon presented affidavits relating to the work of six people over the period from October 1994 to May 1996 — his brother, his three sons (aged 18, 16, and 14 at the time of the accident), and two others. The affidavits were sworn by his brother, two of his sons, and Mr. Simon himself, relating to the work of Allistair Devenish and Diankanga Mufuele. The affidavits were simple ones, each in three paragraphs. For example, Compton Simon, his brother, after declaring that he was aware of the circumstances surrounding the accident, deposed that:
Due to the circumstances [of the accident], I had occasion in my qualified capacity to work as a replacement worker for Mr. Simon in his business during the period November 1, 1994 to December of 1995, due to his disability from the accident.
I am attaching as Exhibit "A" to this my Declaration a true copy of a signed invoice previously produced in this matter, indicating 1500 hours of endeavour at a rate of $20.00 per hour for a total of $30,000.00.
The Insurer submitted, and I concur, that it is not reasonable to view that many people as replacing Mr. Simon's "active participation in the business" at the same time, without a very detailed explanation. Mr. Simon admitted that he had engaged subcontractors before the accident. He could also have hired them after the accident. His sons also worked for him on occasion prior to the accident. No breakdown of the hours worked or details of the activities of the replacement workers was provided. Mr. Simon did testify, however, that his brother, Compton Simon, was a licensed electrician who was capable of doing work that the other apprentices and helpers could not undertake.
Mr. Simon presented four invoices dating from 1996 relating to work done between October 1994 and May 1996 by two of his sons, his brother, and Allistair Devenish. He testified that the information used to complete the wage invoices came from his "black book." Mr. Simon testified he gave the information to his son Allister who typed the invoices. The source document, the black book, was not available: Mr. Simon testified that he did not know where it was. No payroll ledger was produced. No duplicates of T-4 forms were filed.
Mr. Simon was unable to explain the discrepancies between two documents pertaining to work performed by his brother, Compton Simon. One document, dated November 13, 1995, described Compton as having worked from October 24, 1994 to May 31, 1995 and having earned $23,870 for 1,240 hours at $19.25 per hour. Another invoice, undated but attached to an affidavit sworn by Compton Simon on June 8, 2001, describes Compton Simon as having worked from November 1, 1994 to December 1995, for 1,500 hours at $20 per hour, for a total of $30,000. Mr. Simon testified he paid his brother $20 per hour. He could not account for the inconsistencies between the two documents.
Another document described a worker as having worked 300 hours at $15 per hour, for a total of $4,500. It was contrasted with a second document describing the same individual as having worked 640 hours for $12 per hour, for a total of $7,680. Mr. Simon could not affirm which of these records, if either, was accurate. However, at the hearing, he testified he paid $15 per hour and stood by the document stating this worker was paid for 300 hours.
A third worker was described in one document as having earned $20,000 at $12 per hour from January 1, 1995 to May 1996 but in a second document as having earned $8.50 per hour to November 1995 for a total of $5,100. Mr. Simon testified he paid this worker $8.50 per hour.
A fourth worker, Mr. Simon's son Andrew, was described in one document dated November 13, 1995 as having worked 12 weekends at $6.50 per hour for 14 hours each weekend, totalling $1,092. A second document claimed Andrew Simon had worked from October 1994 to January 1996 for a total of 919 hours and had earned $8 per hour for a total of $7,350. At the hearing Mr. Simon testified that he knew Andrew worked more than 12 weekends. He believed he started his son at $6.50 per hour but increased his pay over time as his performance improved. Mr. Simon agreed that if that was the case, then neither document was accurate as to what he had actually paid Andrew Simon.
The invoice presented in the name of Glen Simon showed that he worked from October 1994 to January 1996 and was paid $7 per hour. Glen Simon's name did not appear at all on the list provided in the document dated November 13, 1995. With respect to the work of Allister Simon, similar discrepancies to the ones listed above in hours of work and rates of pay were noted. Mr. Simon testified he took his sons out of school for a period of time to travel with his brother to out-of-town jobsites. Mr. Simon testified that he did not always go on these trips, but he had been to all the worksites, sometimes working, most times not.
The financial evidence presented by Mr. Simon at this hearing was insufficient to calculate his income replacement benefit. Mr. Simon testified honestly at the hearing and indicated he would not have done all the work his company was contracted for after the accident by himself. He stated that he would have required help on the Eastside Mario's job, for example, but likely for the seafood restaurants, he could have done the jobs alone. He also testified that he could have afforded to hire helpers, but he had to have the help of someone with journeyman's experience, like his brother Compton, after the accident.
The claim presented for Compton Simon's time following the accident is $30,000. On the meagre evidence presented at the hearing, I cannot conclude that all this money was reasonably paid as a salary expense to replace Philip Simon's active participation in Philip's Electric. In any event, even if I were to so conclude, those expenses would form only part of the calculation of Mr. Simon’s income replacement benefit.
Partial Inability to Carry on a Normal Life
The evidence presented by Mr. Simon did not establish that he suffered from a partial or complete inability to carry on a normal life, as defined in sections 2 and 3 of the Schedule.
Report Costs
I heard no evidence or submissions about the two reports claimed, one for $250 and one for $75. Clearly the claim for $250 relates to the report of Gordon J. van der Pol, dated August 1, 1996. I am not sure which report the claim for $75 for Lawrence West Rehabilitation Centre relates to, the certificate dated February 7, 1995, the discharge report dated May 29, 1995, or the letter dated May 17, 1996 from Atily Gunaratne, a physiotherapist. In view of the dearth of evidence about these matters, they should be dealt with by the parties as expenses of the proceeding. The Insurer's counsel indicated that she had no difficulty in accepting the amounts of the invoices for the reports as reasonable expenses of the hearing if they were required for the hearing.
EXPENSES:
Both parties are claiming expenses from the other in this arbitration. However, neither party advised me whether they wished to have an Offer to Settle considered in accordance with the Dispute Resolution Practice Code - Third Edition (April 15, 1997), which governs this proceeding. If there is no such offer, the parties should attempt to resolve the issue of expenses between themselves. In the event that no resolution can be reached or if there is an Offer to be considered, a party should contact the case administrator within 60 days of the date of this decision, so that we might resume this hearing for submissions on the issue of expenses.
November 9, 2001
K. Julaine Palmer Arbitrator
Date
Neutral Citation: 2001 ONFSCDRS 161
FSCO A00-000998
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
PHILIP SIMON
Applicant
and
CUMIS GENERAL 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:
- This application is dismissed for reasons delivered.
November 9, 2001
K. Julaine Palmer Arbitrator
Date
Footnotes
- The 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. O.R. 776/93 was extensively modified by O.R. 781/94; accordingly, where necessary, "1994 Schedule" refers to the original O.R. 776/93, and "1995 Schedule" refers to O.R. 776/93 as amended.
- See s. 8(4) of the Schedule.
- See subsection10(6) .
- See subsection 10(7).