Financial Services Commission of Ontario

Neutral Citation: 2002 ONFSCDRS 126 FSCO A01-000916

Between:

Robert L. Welsh Applicant

and

Economical Mutual Insurance Company Insurer

Reasons for Decision

Before: Judith Killoran

Heard: March 4, 5, and 6, 2002 in Gravenhurst and June 6, 2002 in Toronto.

Appearances: David Morin for Mr. Welsh Gordon L. Robson for Economical Mutual Insurance Company

Issues:

The Applicant, Robert L. Welsh, was injured in a motor vehicle accident on February 8, 1998. He applied for and received statutory accident benefits from Economical Mutual Insurance Company ("Economical"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Welsh 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:

1. Is Mr. Welsh entitled to receive a medical benefit for housing expenses when he is unable to travel to and from the island on which he lives, claimed pursuant to section 14 of the Schedule?

2. Is Mr. Welsh entitled to receive a rehabilitation benefit in the amount of $76,556 for a new snowmobile and boat, claimed pursuant to section 15 of the Schedule?

3. Is Mr.Welsh entitled to receive 80 percent of his business losses from self-employment, in addition to the maximum income replacement benefit of $400, pursuant to sections 6 and 7 of the Schedule?

4. Is either party liable to pay the other party's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

Result:

1. Mr. Welsh is not entitled to receive a medical benefit for housing expenses when he is unable to travel to and from the island.

2. Mr. Welsh is entitled to a rehabilitation benefit for a new snowmobile and boat under section 15 of the Schedule. However, the amount of this benefit is subject to subsection 15(10) which requires that the cost of the new vehicles shall be reduced by the amount of the trade-in value of the existing vehicles.

3. Mr. Welsh is not entitled to receive 80 percent of his business losses from self-employment in addition to the maximum income replacement benefit of $400 per week

4. The issue of expenses may now be spoken to.

EVIDENCE AND ANALYSIS:

Background:

Mr. Welsh lives on the southern end of Miller Island in Lake Muskoka. There are many cottagers on the island but no bridge or road access so that a boat is required for transportation in the summer and a snow machine in the winter. The access point is at Campbell's Landing, which is 2 or 3 km. from the island. Mr. Welsh has had his home and business on Miller Island for 14 years. He occupies a small two-bedroom house on two floors. The ground floor is his shop with a walk-out. Mr. Welsh owns a contracting business which offers renovations and dock and boathouse building specifically for people building cottages on islands.

Prior to the accident, Mr.Welsh testified that his job duties and responsibilities included managing accounts, paying employees, seeing clients, ordering materials, paying bills, and estimating the cost of jobs. He acted as a carpenter and engaged in a lot of heavy labour working alongside his employees, who usually numbered two or three. According to his calculations, he spent approximately 85 to 90 percent of his time at physical labour and 10 to15 percent in a managerial capacity. Financially, he made what he termed a "reasonable living," that is, $35,000 to $40,000 annually after expenses.

On February 8, 1998, Mr. Welsh went out on his snowmobile and hit a pressure crack, which is like a mountain in the ice. His snowmobile turned upside down and came down on top of him. Mr. Welsh could not straighten up and remained lying on the ice, trapped under the machine until some neighbours arrived and flipped up the machine. Mr. Welsh was taken to South Muskoka Memorial Hospital where he was told that he had broken his back. The following day he was transported to Orillia for a CAT scan. Mr. Welsh had surgery on his back and remained bedridden for quite some time afterward. He walked with a cane and in order to be vertical, he required a back brace.

After his accident, Mr. Welsh answered the phone for his business and made appointments for estimates and projects but he never managed to regain his physical abilities. Before the accident, he could swim across the lake and back. Afterward, he threw his back out for three days trying to do the Australian crawl. Although a boat and snowmobile are essential for his transportation, they jar his back and trigger nerves which lead to spasms. He is also subject to muscle spasms when he tries to sleep.

Mr. Welsh has attempted to return to his managerial duties. He visits job sites but only for 20 minutes to one-half hour. He may, occasionally, drive a boat loaded with wood or go to the bank to pay his bills. He does some estimating on the phone and spends a fair bit of time attending various medical appointments. He finds that the more he moves, the more he hurts. He has lost his ability to be a carpenter and must employ others to perform his job.

Mr. Welsh also has a bipolar mood disorder and finds that he is encountering more difficulties dealing with his limitations. Prior to the accident, Mr. Welsh was not diagnosed as having a mood disorder. He takes a variety of medications to deal with his mood swings, his pain, anxiety and sleeping problems. He is currently receiving treatment from Dr. Hans Witt, a cognitive therapist. Mr. Welsh was also referred to the Clark Institute of Psychiatry and sees Dr. Robert Cooke at the Mood Disorder Clinic.

A typical day for Mr. Welsh involves attending to his personal care, making breakfast, cleaning dishes, ordering materials for a job site, visiting the site, getting wood from town and bringing it back to the marina. Mr. Welsh does some stretches, goes for a walk at mid-day but finds that by afternoon, he must get off his feet because he starts to tighten up. As a result, he can only devote a couple of hours to business in a typical day.

Mr. Welsh's business is no longer doing well and he is barely breaking even. Paying for replacement labour is eating up his funds and causing him financial difficulty. As well, he is having problems sleeping and claims to have one-half the strength he had formerly.

ISSUES:

1. Housing Expenses:

Economical submitted that the housing or "ice in" "ice out" expenses, as they were sometimes categorized, were not properly before me as the issue had been settled with a release signed by Mr. Welsh on August 2, 2000 (the "settlement") for "home and business relocation" expenses. Economical argued that section 14 of Part V of the Schedule covers medical expenses and as this involves a rehabilitation benefit, it is more properly claimed in section 15. In Economical's opinion, Mr. Welsh has re-applied under another section of the Schedule with essentially the same claim. Mr. Welsh's position was that the settlement resolved only the question of physically moving his home and business from the island, not his housing expenses.

A mediator's report was issued on March 8, 1999 relating to a rehabilitation benefit under Part V, Section 15. The issue at mediation was that Economical refused to pay the balance of the money Mr. Welsh needed to buy a house on the mainland, since continuing to live on the island was very dangerous for him especially during the winter. The mediation failed and Mr. Welsh applied for arbitration.

A letter from Economical dated January 24, 2000 dealt with a claim for accommodation costs in the amount of $2,400 for the period from December 6, 1999 to January 3, 2000.² Economical took the position that the issue of housing was currently in dispute and the subject of an arbitration hearing. Economical was not prepared to consider reimbursement of this expense as there was insufficient information establishing both a medical need for this expense and whether the expense itself was reasonable.

On February 17, 2000, Mr. Welsh's counsel forwarded a letter offering to settle the issue of moving Mr. Welsh's residence from the island to the mainland.³ A further letter from Economical dated March 8, 2000 notes, in respect to accommodation, that it is unable to consider the expense of $600 for renting a place on the mainland for reimbursement as this issue relates to the subject of the current arbitration.⁴ On April 13, 2000, Mr. Welsh's counsel wrote Economical to accept the verbal offer, made the previous day, to settle the dispute set for arbitration and notified FSCO on April 17, 2000 that the arbitration hearing was no longer necessary.⁵

Correspondence dated April 27, May 5, May 29, and June 16, 2000 from Mr. Welsh's counsel to Economical objected to the form of release proposed and made suggestions about the content of the release.⁶ The release which was eventually signed on August 2, 2000 reads:

IN CONSIDERATION of all sums paid to date by the Insurer to the Applicant and the further sum of TWENTY THOUSAND DOLLARS ($20,000), all inclusive of claims, interest and costs, paid by the Insurer to the Applicant, the said Applicant does hereby release and forever discharge the Insurer, its successors and assigns from any and all demands, claims, actions, cause of actions, litigation, mediations, and arbitrations regarding the issues in dispute filed with the Financial Services Commission of Ontario, being file No. A99-000547-LD for Statutory Accident Benefits including past, present and future claims under section 15(5)(h)(i) and (l) of the Statutory Accident Benefits Schedule as described in the attached Written Notice and as provided under the said policy arising out of the accident described above as these particular sections and subsections relate to home and business relocation, without limiting the Applicant's right to claim other benefits under these headings.⁷

Mr. Welsh submitted that the expense of housing during the dangerous winter months is a separate issue from that issue which he settled. He distinguished between the purchase of housing on the mainland and the ongoing cost of paying for his accommodation on the mainland. I disagree with his position.

It is true that the cost of purchasing a new home on the mainland would exceed the amount of money that Mr. Welsh could obtain from the sale of his house on the island. It may also be the case that the money paid by Economical does not accurately reflect how large the difference is between the cost of a house on the island and the cost of a house on the mainland. However, it is in the nature of a settlement that both parties compromise their positions in order to reach a resolution and avoid an arbitration of the issue. Mr. Welsh accepted the funds but chose not to relocate his business and residence, which was his prerogative. However, it is not then open to him to proceed with a claim which he insists is an entirely separate issue; that is, the cost of accommodation during those periods of the year when it is too dangerous for him to remain on the island. In my view, the claim for housing expenses is simply a reframing of the issue which was settled. Mr. Welsh negotiated and accepted money from Economical in a full and final settlement of his claim relating to the relocation of his home and business. It is not a fresh claim when he seeks compensation from Economical for the cost of living on the mainland when he is unable to travel back and forth to the island in the winter.

I find that Mr. Welsh is not entitled to reimbursement of his housing expenses because this issue was settled as of August 2, 2000.

2. Entitlement to New Boat and Snowmobile under section 15 of the Schedule:

Mr. Welsh has claimed a new boat and snowmobile under section 15 of the Schedule as part of a rehabilitation claim.

Presently, Mr. Welsh owns three boats:

1. 1986 RDL17 Boat - inboard/outboard, purchased in 1986 for approximately $12,000.

2. 1969 21.5 Grew boat - inboard/outboard (classic boat), purchased July 3, 1998 for approximately $3,000.

3. Steel-work boat purchased July, 2001 for $6,000, 25 H.P. Mercury outboard, purchased July, 2001 for $800.⁸

Mr. Welsh also owns a snowmobile which is a 1999 Touring SLE purchased January 27, 1999 for $7,391.33.⁹ He uses it to get back and forth to the island in the winter and to tow equipment to and from job sites. Mr. Welsh challenged the notion that the purchase of a new boat and snow machine was not going to help him do his job and testified that they would improve his working conditions in terms of comfort, safety and decreased pain.

Dr. Donna Ouchterlony, Mr. Welsh's treating physician, a neuro-rehabilitation specialist, testified at the hearing about the new machines in terms of keeping Mr. Welsh functional and maintaining him on the island. Mr. Welsh had a bone graft which resulted in a non-union, causing him chronic back pain. As a result, Dr. Ouchterlony worked with Mr. Welsh to develop changes in his lifestyle to assist with rehabilitation. She explored many options, including a new boat and snowmobile, which would reduce the impact on his back and keep him mobile. She was also concerned with his safety while travelling back and forth to the island and to job sites.

On July 6, 2000, Dr. Ouchterlony reported on Mr. Welsh's ongoing psychological problems which led to his being unemployable. Her goal was to find activities which he liked to do and would improve his physical condition. Dr. Ouchterlony testified that her treatment plan was completed on September 7, 2000,¹⁰ taking into consideration that Mr. Welsh had a burst fracture of the L1 vertebrae that required extensive surgery, with both an ATLP plate and screws in T12 and L2, and surrounding soft-tissue injuries so that any impact or pounding from the machines exacerbated his pain. Her treatment plan also relied on the findings of Dr. G. Delaney, an orthopedic surgeon, that Mr. Welsh had a severe compressed fracture with a flexion distraction type of injury and a complete tear of his anterior cruciate ligament with a stable partial tear of his MCL as well.

Dr. Ouchterlony encouraged Mr. Welsh to find a boat and snowmobile which provided the most suitable shock absorption. She explained in her treatment plan that if Mr. Welsh was provided with a reasonable shock absorption-type of boat and snowmobile, he could use these machines to maintain himself on the island. The new boat and snowmobile would allow Mr. Welsh to maintain his business and lifestyle on the island.

Dr. Ouchterlony acknowledged that the need for the new machines would not be as much a concern if Mr. Welsh were not living on the island. However, Mr. Welsh had explored the option of moving off the island but found it would be more expensive and not as satisfying a life for him. Dr. Ouchterlony emphasized that Mr.Welsh was reconstructing his life to be as full as possible but needed the tools to be as safe and comfortable as possible.¹¹

Dr. Ouchterlony's treatment plan had an estimate from MetalCraft Marine Incorporated for a boat which offered safety, comfort and long-term benefits and an estimate from Campbell's Landing Winter Sports Limited for a snow machine that had an air-ride suspension with less vibration.¹² Dr. Ouchterlony pointed out that the money for a new boat and snowmobile pales in contrast to rehabilitation costs. Apparently, there is only approximately $53,000 left of the $100,000 in medical/rehabilitation costs to which Mr. Welsh is entitled if his impairment is found to be non-catastrophic. The classification of his impairment was not before me at this hearing.

On November 16, 2000, the medical rehabilitation DAC at South Muskoka Memorial Hospital declined to consider the issue of whether a new boat and snow machine were reasonable and necessary expenses even though Economical requested a DAC assessment.¹³ The facility concluded that the technical nature of the questions posed regarding the purchase of a custom-designed Kingfisher boat and a 2001 Grandtouring Skidoo were beyond the scope of a medical rehabilitation DAC assessment.

The treatment plan and testimony of Dr. Ouchterlony, together with the report dated February 28, 2002 of Matt Sutherland,¹⁴ an occupational therapist, support Mr. Welsh's claim for a new boat and snow machine as a rehabilitation benefit under section 15 of the Schedule. Economical did not present any significant countervailing evidence to dispute this claim.

I find that Mr. Welsh is entitled to a new boat and snow machine as a rehabilitation benefit necessary to reintegrate him into the labour market. Although Dr. Ouchterlony filed a treatment plan for which it was obligatory for Economical to follow up, Economical did not respond, did not confirm the pricing or seek alternative plans, nor seek to schedule another DAC assessment.

Purchasing the new machines is a reasonable and necessary measure to enable Mr. Welsh to engage in employment that is as similar as possible to employment in which he was engaged before the accident and to lead as normal a work life as possible. However, the amount of the rehabilitation benefit for the purchase of the new vehicles is subject to subsection 15(10) of the Schedule which requires that the amount of the rehabilitation benefit shall not exceed the cost of the new vehicles, less the trade-in value of the existing vehicles.

3. Calculating Mr. Welsh's Income Replacement Benefits:

Sections 6 and 7 of the Schedule are of particular importance when calculating the amount of an income replacement benefit for a self-employed person. More specifically, subsections 6(1) and (2) specify:

(1) The amount of the income replacement benefit shall be,

(a) for each of the first 104 weeks of disability, 80 per cent of the insured person's net weekly income from employment determined in accordance with section 61; and

(b) for each week after the first 104 weeks of disability, the greater of the amount specified in clause (a) and $185.

(2) The insurer may deduct from the amount of the income replacement benefit payable to an insured person 80 per cent of the net income received by the insured person in respect of any employment subsequent to the accident.

Subsection 6(4) states:

For the purpose of subsection (2), net income from self-employment for an insured person who was self-employed at the time of the accident shall be determined without making any deductions for,

(a) expenses that were not reasonable or necessary to prevent a loss of revenue;

(b) salary expenses that were paid to replace the person's active participation in the business except to the extent that those expenses were reasonable for that purpose; and

(c) non-salary expenses that were different in nature or greater than the non-salary expenses incurred before the accident, except to the extent that those expenses were necessary to prevent or reduce any losses resulting from the accident.

Subsections 6(5) and 6(6) state:

(5) If the insured person was self-employed at the time of the accident and the person incurs losses from self-employment as a result of the accident, the insurer shall add to the amount of the income replacement benefit payable to the person 80 per cent of the losses from self-employment incurred as a result of the accident.

(6) For the purpose of subsection (5), losses from self-employment shall be determined in the same manner as losses from the business in which the person was self-employed would be determined under subsection 9(2) of the Income Tax Act (Canada) and the Income Tax Act (Ontario), without making any deductions for,

(a) expenses that were not reasonable or necessary to prevent a loss of revenue;

(b) salary expenses that were paid to replace the person's active participation in the business, except to the extent that those expenses were reasonable for that purpose;

(c) non-salary expenses that were different in nature or greater than the non-salary expenses incurred before the accident, except to the extent that those expenses were necessary to prevent or reduce any losses resulting from the accident;

(d) expenses that are eligible for capital cost allowance or an allowance on eligible capital property; or

(e) losses deductible under section 111 of the Income Tax Act (Canada).

Subsection 7(1) 2.states:

Despite subsection 6(1) but subject to subsections 6(2) to (6), the weekly amount of an income replacement benefit payable to a person shall be:

2. The greater of the following amounts:

i. $400.

ii. If the optional income replacement benefit referred to in section 27 has been purchased and is applicable to the person, the amount fixed by the optional benefit.

Subsection 62(1) states:

For the purpose of the Regulation, 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 the Income Tax Act (Canada) and the Income Tax Act (Ontario), but without taking into account,

(a) expenses that are eligible for capital cost allowance or an allowance on eligible capital property;

(b) capital gains or losses; or

(c) losses deductible under section 111 of the Income Tax Act (Canada).

Mr. William Stuart, a chartered accountant, was hired by Economical to prepare an update to the income replacement benefit ("IRB") calculation for Mr. Welsh and testified at the hearing. The initial and subsequent updated calculations to June 30, 1998 were prepared by Ernst & Young. On January 28, 1999, Mr. Stuart provided a report based on the information available and his discussions with Mr. Welsh which estimated his adjusted IRB benefit for the period ending December 31, 1998 as $392.03 per week. Mr. Stuart recommended that Mr. Welsh's ongoing benefits continue at his pre-accident rate of $389.88, subject to the length of his indemnity period and his post-accident income.¹⁵

Mr. Stuart did not include the capital cost allowance for a new truck purchased just prior to the accident when calculating post-accident or pre-accident income or losses. Mr. Stuart relied on section 62 of the Schedule to decide that capital cost allowance was not an allowable deduction pre- or post-accident.

On August 25, 1999, Mr. Stuart provided another updated report which amended the IRB benefit for the period which ended June 30, 1999 to $377.47 per week from $354.61 resulting in an underpayment of $1,600.18. Mr. Stuart attached schedules which summarized Mr. Welsh's post-accident income up to and including June 30, 1999 and provided the basis for the updated IRB benefit calculation and the estimated cumulative payable position as of August 22, 1999.¹⁶Further updated reports were provided by Mr. Stuart as of October 22, 1999,¹⁷ March 12, 2000,¹⁸ and February 6, 2000, which was the 104-week mark.¹⁹

An updated report from Mr. Stuart dated March 5, 2001 shows a gross income loss of $2,706.05 which equals a $17.92 weekly adjustment to Mr.Welsh's income replacement benefit. Income replacement benefits were capped at $400 in compliance with section 7 of the Schedule. In this report, Mr. Stuart disagreed with the position taken by Ms. KathrynWelsh, a chartered accountant, who reviewed her brother's business records. Ms. Welsh recommended that 80 percent of the estimated incremental labour costs incurred because of the accident should be recoverable.

Mr. Stuart testified that adding these costs to the income replacement benefit as a loss was, in terms of methodology, not consistent with subsections 6(5) or 6(6) of the Schedule. Rather, he concluded that Ms. Welsh's basis for her estimates was more consistent with an economic loss calculation under a tort claim. While Mr. Stuart agreed that having to hire sub-contracted labour reduced Mr. Welsh's profit, he explained that even if losses were added, the amount of the income replacement benefit would not exceed $400. He used the added expense of replacement labour to reduce the income Mr. Welsh earned.

Mr. Stuart disagreed with the approach taken by Ms. Welsh which resulted in an estimated loss of $41,956.21 for Mr. Welsh's business as of January 26, 2001. Mr. Stuart looked at profit or loss on an annualized basis rather than on an accrual basis and grounded his analysis of revenue and expenses on his interpretation, as an accountant, of subsections 6(5) and 6(6) of the Schedule. Mr. Stuart insisted that the accident benefits scheme was very specific as to the manner of calculating an IRB benefit. In his opinion, subsection 62(1) of the Schedule provides that income from self employment is to be determined in the same manner as provided for under the relevant income tax legislation. Therefore, the regulations do not provide for a benefit to be based solely on the incremental difference in one expense category of a business, as calculated by Ms. Welsh. According to Mr. Stuart, a "true economic loss" is not within the provisions of the Schedule.

Ms. Welsh testified at the hearing about the two types of losses experienced by her brother's business as a result of his injuries from the accident. First, there were the incremental losses accruing as a result of Mr. Welsh hiring people to do the work he formerly did himself. She looked at the hard labour cost dollars with the aggregate losses added back so that the dollars lost by the business included labour costs. Second, there were opportunity losses represented by Mr. Welsh's inability to build his business during a robust economy. The first are direct losses attributable to the cost of replacement labour and the second are lost economic opportunities.

Ms. Welsh reviewed Part II of the Schedule which deals with income replacement benefits and relied on subsection 6(6) which states that losses from the business in which the person was self-employed should be determined in the same manner as under subsection 9(2) of the Income Tax Act (Canada). Therefore, subsection 6(5) interfaces with subsection 9(2) of the Income Tax Act when calculating losses from self-employment. Ms. Welsh calculated business losses of $41,956.91 for replacement labour during the period from February 9, 1998 to December 31, 2000. The losses as of February 10, 2002 were $84,321.44 which represented the review of each item to see if Mr. Welsh could have done the work himself, the figure was adjusted for GST and then 80 percent of that figure was $67,457.15.

Ms. Welsh reviewed Mr. Stuart's reports, particularly his last report dated December 31, 2001.²⁰She admitted that Mr. Welsh had suffered no business losses if an analysis of his business were based on Mr. Stuart's very narrow focus. Mr. Stuart relied on a straight line accounting method with expenses and gross revenues which, in her opinion, does not reflect Mr. Welsh's injuries and excludes the final two months of the year. She argued that it was illusory because the losses from income were not properly reflected and hence, were not compatible with subsection 6(5). In her opinion, subsection 6(5) requires that you recognize the losses from self-employment as a result of the accident and attempt to calculate what the business would look like if there was no accident.

According to Ms.Welsh, the aggregate business loss for Mr. Welsh is $233,129.73 of which 80 percent is compensable for a total of $186,503.78. The fiscal period reviewed was December 1998 to December 2001.

I prefer the approach taken by Mr. Stuart in calculating Mr. Welsh's income replacement benefit, with one exception. The capital cost allowance of the truck which Mr. Welsh purchased shortly before his accident should be included in the calculations for both pre- and post-accident income. I agree with the conclusion in Aramakis²¹ that the method of financing a business asset should not unduly affect the calculation of income and loss from self-employment. Someone who leases an asset and someone who purchases an asset should be treated similarly under the Schedule. This is accomplished by taking the CCA into account in the calculation of income and losses from self-employment.

While I considered Ms. Welsh's approach to calculating the income replacement benefit for a self-employed person as creative and certainly worthy of serious consideration, I concluded that it was not possible to endorse her interpretation under the present statutory scheme. As ruled in Jambor and Dominion of Canada General Insurance Company,²² the purpose of the statutory accident benefits scheme as it relates to weekly income benefits, is to compensate for an actual, concrete loss of income from employment or self-employment as a result of an accident. This scheme does not compensate applicants for lost opportunity or loss of potential income. This type of loss can only be compensated for by an award of damages in a civil tort action.

As then Senior Arbitrator Naylor ruled in Bress and State Farm Insurance:²³

... I have no jurisdiction to award benefits or compensation for losses that do not fall within the existing statutory no-fault benefits scheme. I have no jurisdiction to award income replacement benefits on any other basis, regardless of whether the legislation works unfairly in individual cases, or whether it fails to compensate an applicant to the full extent of his or her loss. I have no jurisdiction therefore to award compensation for loss of potential or future business profits, or for future economic loss.

Subsection 27(1) states:

Every insurer shall offer the following optional benefits:

1. An optional income replacement benefit that fixes the amount referred to in subparagraph ii of paragraph 2 of subsection 7(1) at $600, $800 or $1000, as selected by the named insured under the policy, for the purpose of determining the weekly amount of an income replacement benefit.

It is not within the ambit of the statutory accident benefits scheme to interpret subsection 6(5) as allowing the addition of losses from self-employment beyond the $400 maximum. Such an exercise would result in the possibility of an IRB for self-employed applicants which could be limitless when not subject to the $400 maximum. On the contrary, it appears that the statutory scheme has offered the option of purchasing optional income replacement benefits to raise the maximum income replacement benefit to $600, $800 or $1000. This option is the only means by which the amount of the income replacement benefit can exceed the $400 maximum.

I find that Mr. Welsh is not entitled to receive 80 percent of his business losses from self-employment in addition to the maximum income replacement benefit of $400 per week.

EXPENSES:

The parties made no submissions with respect to expenses. I encourage the parties to resolve this issue. If they are unable to do so, they may request an expense hearing before me.

August 16, 2002

Judith Killoran Arbitrator

Date

ARBITRATION ORDER

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

1. Mr. Welsh is not entitled to receive a medical benefit for housing expenses when he is unable to travel to and from the island.

2. Mr. Welsh is entitled to a rehabilitation benefit for a new snowmobile and boat under section 15 of the Schedule. However, the amount of this benefit is subject to subsection 15(10) which requires that the benefit for the new vehicles shall be reduced by the amount of the trade-in value of the existing vehicles.

3. Mr. Welsh is not entitled to receive 80 percent of his business losses from self-employment in addition to the maximum income replacement benefit of $400 per week.

4. The issue of expenses may now be spoken to.

August 16, 2002

Judith Killoran Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.
2. 2Exhibit 1, Tab 73
3. 3Exhibit 1, Tab 74
4. 4Exhibit 1, Tab 76
5. 5Exhibit 1, Tab 78
6. 6Exhibit 1, Tabs 81, 82, 83, and 84
7. 7Exhibit 1, Tab 86
8. 8Exhibit 1, Tab 71
9. 9Ibid.
10. 10Exhibit 1, Tab 45
11. 11In its final submissions, Economical argued that the issue of the new boat and snow machine was not properly before me because it related to Mr. Welsh's refusal to move his home and business from the island. Economical submitted that the matter had been settled by the release signed on August 2, 2000. I disagree, and in any event, it was not open to Economical, after each party had completed its presentation of the evidence and closed its case, to make this submission in final argument.
12. 12Exhibit 1, Tabs 64 and 65
13. 13Exhibit 1, Tab 67
14. 14Exhibit 2
15. 15Exhibit 1, Tab 92, Schedules 1, 2, 3 and 4
16. 16Exhibit 1, Tab 95, Schedules 1, 2 and 3
17. 17Exhibit 1, Tab 96, Schedules 1, 2 and 3
18. 18Exhibit 1, Tab 97, Schedules 1, 2 and 3 and i and ii
19. 19Exhibit 1, Tab 101, Schedules 1, 2 and 3
20. 20Exhibit 1, Tab 109
21. 21Aramakis and Royal Insurance Company of Canada, (OIC A96-000025, October 18, 1996)
22. 22(FSCO A-003703, August 14, 1995)
23. 23(OIC A-000191 and OIC A-000192, March 23, 1992)