Neutral Citation: 2002 ONFSCDRS 8

FSCO A01-000235

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

CASSANDRA FOREMAN

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

REASONS FOR DECISION

Before:

John Wilson

Heard:

September 5, 2001 at London Ontario.

Appearances:

Douglas Bryce for Ms Foreman

Colin Jackson for Motor Vehicle Accident Claims Fund

Issues:

The Applicant, Cassandra Foreman, was injured in a motor vehicle accident on September 26, 1999. She applied for and received statutory accident benefits from Motor Vehicle Accident Claims Fund ("MVAC Fund"), payable under the Schedule.¹ The parties were unable to resolve a dispute over the amount of the income replacement benefits through mediation, and Ms Foreman 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. What is the amount of income replacement benefit payable to Ms. Foreman?

2. Is Ms. Foreman entitled to her expenses in this arbitration pursuant to section 282(11) of the Insurance Act, R.S.O. 1990, c.I.8?

Result:

1. Ms. Foreman is entitled to $400 per week as an income replacement benefit.

2. Ms. Foreman is entitled to her expenses in this matter.

EVIDENCE AND ANALYSIS:

Ms. Foreman is a young woman and a mother of two children currently not living with her. She has a limited education, having not proceeded beyond grade 9 and had, as her first taste of the world of employment, a short career as an exotic dancer.

Ms. Foreman was crossing a street in Woodstock, Ontario, when she was run down by an uninsured motorcyclist and severely injured. She spent a significant time in hospital, before, ultimately, being released to a rehabilitation facility. Since her accident she has been unable to return to her pre-accident work as an exotic dancer.

MVAC, which acts as the insurer in this matter, acknowledges Ms. Foreman's disability and her inability to return to her pre-accident position. It disagrees, however, with Ms. Foreman on the amount of the income replacement benefit that is due to her.

It goes without saying that the exotic dance industry may have a reputation in some quarters as a business that operates on the fringes of legality. Whatever the truth of this generalization, Studio 9 appears to have skimped on normal record-keeping practices.

Ms. Foreman testified that her salary at her first job was paid in cash and that, consequently, she did not declare either her salary or her tips.

Apparently, no T4s were issued by her employer, and the normal paper trail resulting from an employee-employer relationship was substantially missing. Although the first employer, Studio 9 supplied an employer's confirmation of income, it has not provided any more detailed documentation of the employment relationship.

The parties to this dispute have, however, agreed that Ms. Foreman was employed with Studio 9 in Woodstock and had, as well, been employed latterly as an exotic dancer at Blondie’s in London, following the termination of her employment with Studio 9. What is not clear is the actual time worked, and the money actually earned by Ms. Foreman in the weeks preceding the motor vehicle accident.

Ms. Foreman supplied a statement to a representative of MVAC not long after the accident. Her statement mentioned employment at Studio 9, and referred briefly to her last job at Blondie’s which she says she started just before the accident. The statement contains contradictions, but could be read to imply that Ms. Foreman left Studio 9 about a month prior to the accident.

There is no record of employment or other such form substantiating the date of her departure from Studio 9. Ms. Foreman stated that she believes that she left Studio 9 not long before starting at Blondie s, and bases her claim for a higher income replacement benefit on her contention that there was only a short hiatus in employment prior to the accident. The question of whether there was a significant delay between the two employments has important ramifications for the calculation of the level of income earned in the qualifying period prior to the accident.

In the absence of detailed records substantiating her pre-accident income, however, and in light of perceived inconsistencies in Ms. Foreman's post-accident statement, MVAC did not accept her full claim for income replacement benefits and paid Ms. Foreman only $180 per week. Ms. Foreman has applied for arbitration of this dispute.

Under subsection 7(1)2 of the Bill 59 Schedule, the maximum that Ms. Foreman can claim is $400 per week. Ms. Foreman claims that her income significantly exceeded that amount in the qualifying period.

In an attempt to provide some evidence of her earnings, Ms. Foreman testified about the nature of her work, the hours worked, and the conditions of work in her industry. She also called a former co-worker at Studio 9 to provide confirmation of the working conditions and the earning potential for exotic dancers. Another witness, her landlord in Woodstock, Mr. Grieco, testified as to his knowledge of her activities with regard to Studio 9.

Mr. Grieco testified that he attended at Studio 9 on more than one occasion to collect rent money from Ms. Foreman. The last date he recalled visiting her at the workplace was September 12, 1999. His recollection of that date is bolstered by a dated receipt for rent money, a copy of which he gave to Ms. Foreman.

Although no medical evidence was presented at this hearing, Ms. Foreman testified that she suffered a severe head injury and has a limited recollection of events surrounding the accident. She was, however, capable of remembering much that preceded the accident as well as the period after September 1999.

I found Ms. Foreman to be a sincere and compelling witness. She readily acknowledged her limitations at times when she had little or no recall. Notwithstanding her occasional memory lapses, she was capable of giving a credible account of her work situation prior to the accident.

She testified that she had been hired by Mr. Nick Bulut of Studio 9 in Woodstock, as an exotic dancer. As part of her work she performed certain dances for customers, and between performances, mingled with the customers and helped generate further income for the bar by promoting products such as "Hooter-shooters." In addition, she would engage in table dancing.

A normal shift would be of about six hours, from either 2:00 p.m to 8:00 p.m. or 8:00 p.m. until 2:00 a.m. A double shift would entail some 12 hours of work. Ms. Foreman testified that she would work around six shifts a week, of which 4 to 5 would be double shifts. In return, Mr. Bulut would pay the dancers $50 in cash for a single shift, and $100 in cash for a double shift.

The single shift rate was later unilaterally reduced to $45 by management. In addition, the dancers were allowed to keep any "tips" received from customers at the establishment. These were also received in cash and not reported as income by Ms. Foreman to the Canada Customs and Revenue Agency.

Although income tax returns and accounting records provide the best picture of an insured's pre-accident income, jurisprudence at the Commission has accepted that, in their absence, parties may call other evidence to establish their pre-accident income.

Ms. Foreman testified that, when she first started with Studio 9, she lived on the premises in a room supplied by Mr. Bulut, the manager. Mr. Bulut would deduct $140 per week, the cost of this room from any payments made to her. This arrangement continued until about September 1, 1999, when she moved into her own apartment in Woodstock.

Thus, if Ms. Foreman's evidence is to be accepted, she would be paid about $500 per week (assuming four double shifts) directly by the establishment. To this amount would be added any tips received from clients. Ms. Mindy Crawford, a co-worker with Ms. Foreman, confirmed her testimony with regard to wages and testified that tips would average $50 to $75 per day midweek with $100 to $200/day possible on Thursdays, Fridays, and Saturdays. Both testified that there was no requirement to share tips with the management.

Again, if the evidence is to be taken at face value, even taking a combination of the lowest estimated salary, with the lowest estimated level of tips, the resulting income is still well in excess of the $400 limit on income replacement benefits.

While it is clear that Ms. Foreman has some difficulty determining her pre-accident income with any precision, it is also clear that she has adduced credible evidence that it would have been well above the maximum provided for in the Schedule. As Director's Delegate Draper noted in Younathan & Gan Company of Canada, Ltd. (formerly known as Simcoe & Erie General Insurance Company), (P96-00088, July 29, 1997 ):

While I accept that the minimum rate is appropriate where an applicant fails to establish that his or her pre-accident income was more than $232.00 per week, it is not appropriate simply because the pre-accident income cannot be determined with precision. If an applicant can establish on a balance of probabilities that his or her income was at least a certain amount, that amount should be used, not $232.00.

I find that Ms. Foreman provided credible, if not precise evidence, with regard to her pre-accident income. Her evidence was corroborated by a co-worker, and to a lesser degree by her landlord, and stood up under cross-examination. At the very least, she offered prima facie evidence of income entitlement well beyond the $400 limit set in the Schedule.

Duration of pre-accident work:

The Insurer's position is that Ms. Foreman was unemployed, at least between August 29, the last date shown as on the Employer's confirmation form, and just a day or so prior to the accident.

Although the Insurer called no evidence, it appeared to rely on that form, together with a statement of Ms. Foreman, apparently made on November 25, to a representative of the Insurer.

If these documents are correct, Ms. Foreman did not work from August 29 almost to the date of the accident, substantially reducing any calculation of qualifying income for the purposes of income replacement benefits.

The employer's confirmation of employment form produced by Nick Bulut for Studio 9 listed August 27 as her date of departure. Ms. Foreman stated that this was the date that she moved out of Studio 9 but remained working there. She also testified that the form was inaccurate inasmuch as it did not show the value of the room rental deducted from her pay, and showed the incorrect end date for her employment.

She also indicated that she had a dispute with Mr. Bulut when she left Studio 9, and stated that he still owed her for arrears of pay. She does not know his current whereabouts.

Ms. Foreman testified that she stopped living at Studio 9 on or about the beginning of September. Although her memory of the time surrounding the accident is fuzzy, she is buttressed in her belief by the date of her move from a room at Studio 9 into her own apartment. The lease documents show the commencement date as September 1. Her landlord, Mr. Grieco confirmed, however, that she moved in just prior to end of August, perhaps August 27, or 28, since she was anxious to get into her own apartment.

The Insurer suggests that, by the move-in date, she had already left the employ of Studio 9, which, if true, would account for her need to move into the apartment early. If she had resigned from or been dismissed by Studio 9, she could hardly expect to remain in their building. If this is true, then there would also be a significant hiatus between the end of employment at Studio 9 and the commencement of employment at Blondie’s in London, a period when she would have received no income.

Ms. Foreman has testified that she believed that the was only a gap of 3 to 4 days between the two employments. Both Mr. Grieco and Ms. Foreman testified as to their belief that she remained employed at Studio 9 well after the beginning of September.

Mr. Grieco testified that he recalled attending at Studio 9 to collect rent from Ms. Foreman more than once, including a visit on September 12. On that date he gave her a dated receipt for her rental payment, which was produced as an exhibit. He further testified that he met Ms. Foreman later, on the street, perhaps on the 17th, or 18th September, when she informed him that she was now going to work in London.

Ms. Foreman produced a document, dated, September 25, from Blondie's which detailed work by a dancer known as "Kayla." She testified that "Kayla" was her stage name. This was confirmed, as well, by Ms. Crawford in her testimony.

I find that Ms. Foreman has presented credible evidence supporting her contention that she continued to work, with a minimal interruption between Studio 9 and Blondie s. The only potential difficulties with her evidence arise from her own statement given to the Insurer's representative, and the Employer's Confirmation of Income form filled out by Mr. Bulut of Studio 9.

Ms. Foreman states that she suffered a serious head injury that damaged her ability to recall events surrounding the accident. She has gradually gained some recollection as time has passed, but it was apparent, even at the hearing, that she still suffers from the after-effects of the accident. Her assertion is consistent with her lengthy hospitalization and with the agreed statement of facts, jointly submitted by the parties, which recognizes Ms. Foreman's ongoing disability.

I note that Ms. Foreman’s statement to the Insurer contains contradictory information that could support either her position on employment or that of the Insurer. Ms. Foreman states that any inconsistencies in her statement to the Insurer were due to her diminished recollection of events in the time leading up to the accident.

The statement was taken while Ms. Foreman was still in hospital, and contains numerous references to memory problems arising from the accident and states that she learned the details of the accident by reading the newspaper reports. In the circumstances, I find her explanation credible.

Ms. Foreman also provided an explanation for the discrepancies in the Employer's Confirmation of Income. She stated that she left Studio 9 after an argument with management, and, indeed was owed money by the manager, Mr. Bulut. She pointed out, as well, other errors on the face of the document that further brought its reliability into question.

It is a reasonable inference from the descriptions of management practices at Studio 9 by both Ms. Foreman and Ms. Crawford, that all the business activities of the club may not have been diligently recorded or appear on the books of the establishment. Without some indication of the source of the dates and the payroll information provided by the club, I do not accept Mr. Bulut's employer's confirmation as definitive of Ms. Foreman's pre-accident employment.

As noted, the Insurer did not call any evidence. It relied on the weaknesses and the perceived inconsistencies in Ms. Foreman's statements to support its contention that she left her employment at Studio 9 in August, and was unemployed for much of the month preceding the motor vehicle accident.

While the general onus of proving entitlement remains with Ms. Foreman, her credible testimony called for rebuttal evidence by the Insurer, which was not forthcoming.

In McQueen v. Great Western Railway (1875) L.R. 10 Q.B. 569, Cockburn C.J. stated:

If a prima facie case is made out, capable of being displaced, and if the party against whom it is established might by calling particular witnesses and producing particular evidence displace that prima facie case, and he omits to adduce that evidence, then the inference fairly arises, as a matter of inference for the jury and not as a matter of legal presumption, that the absence of that evidence is not to be accounted for by the fact that even if it were adduced it would not displace the prima facie case.

This inference, sometimes referred to as a shifting tactical burden, has been consistently recognized by the courts, more recently by the Ontario Court of Appeal in Northern Wood Preservers Ltd. v. Hall Corporation Shipping (1969) Ltd et al. 1973 CanLII 811 (ON CA), 2 O.R. (2d) 335, and by the Supreme Court of Canada in Levesque v. Comeau 1970 CanLII 4 (SCC), [1970] S.C.R. 1010.

There was evidence to suggest that Ms. Foreman was, at times, short of money. She had some difficulty with rent payments, and, indeed made her payments in installments. It would not be plausible that she would sit at home without either income or support, when there was acceptable work available to her in her field. Rather, it is probable that Ms. Foreman remained at Studio 9, notwithstanding her difficulties with management, until she had alternate employment available at Blondie’s in London.

The evidence is that, in all probability, Ms. Foreman continued working at Studio 9 until about a week or less prior to her commencement at Blondie s. At most, she would have missed one week of work.

The Insurer had the opportunity to call either of Ms. Foreman's employers, or to call evidence to contradict her testimony of the effect of the head injuries on her memory. One can infer that the Insurer had no probative evidence to support its opinion of Ms. Foreman's income in the weeks preceding the accident.

I prefer Ms. Foreman's evidence of pre-accident employment to the Insurer's unsubstantiated theory that she was unemployed for much of September. Even the lack of employment for one of the four weeks preceding the accident, would, at the minimum estimated income level, still leave Ms. Foreman with sufficient gross income in the qualifying period to surpass the maximum possible level of income replacement benefit.

I find that Ms. Foreman has presented a prima facie case that she earned at least $500 per week in salary, based on six shifts per week, of which at least four would be double shifts. For the same duration she would earn at least $450 per week in tips, based on $50 per shift, weekdays and at least $100 per shift Thursdays, Fridays ,and Saturdays. Both figures are in the low estimated range of tips.

$950 per week would translate into $2,850 per month based on Ms. Foreman missing one week in the transition between the two jobs. This, in turn would compute to $712.50 per week of eligible gross income. The Commission's net tax tables convert this figure to $530.40 net, at the highest deduction rate. Factoring in the 80% net income formula from the Schedule, Ms. Foreman is left with a final figure of $424.32 per week. Since the weekly limit for income replacement benefits is $400, Ms. Foreman would qualify for this amount, with some room to spare.

I accept Ms. Foreman's uncontradicted evidence that she earned sufficient income in the four weeks prior to the motor vehicle accident to qualify for the maximum $400 per week of income replacement benefits, and so find in favour of her claim.

EXPENSES:

Ms. Foreman shall have her expenses in this matter. If parties are unable to agree as to the amount of these expenses, I remain seised of this matter and may be spoken to.

January 9, 2002

John Wilson Arbitrator

Date

Neutral Citation: 2002 ONFSCDRS 8

FSCO A01-000235

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

CASSANDRA FOREMAN

Applicant

and

MOTOR VEHICLE ACCIDENT CLAIMS FUND

Insurer

ARBITRATION ORDER

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

1. Ms. Foreman is entitled to income replacement benefits in the amount of $400 per week.

2. Ms. Foreman is entitled to her expenses in this matter.

January 9, 2002

John Wilson 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 and 303/98.