Neutral Citation: 2004 ONFSCDRS 92 FSCO A03-000562 and A03-001119

Between: Elie Chaher Rizk and Narsai Isho, Applicants and Allstate Insurance Company of Canada, Insurer

Reasons for Decision

Before: Catherine Skinner Heard: April 26 and 27, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: L. Brent Vickar for Mr. Rizk Joseph Rizzotto for Mr. Isho Ian D. Kirby for Allstate Insurance Company of Canada

Issues:

The Applicants, Elie Chaher Rizk and Narshai Isho, claim to have been injured in a motor vehicle accident on October 14, 2002. They applied for statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.¹ Allstate denied benefits on the basis that Mr. Rizk and Mr. Isho had wilfully misrepresented material facts with respect to their applications for accident benefits. The parties were unable to resolve their disputes through mediation, and Mr. Rizk and Mr. Isho applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue in this hearing, common to both Mr. Rizk's and Mr. Isho's applications, is

Are Mr. Rizk and Mr. Isho precluded from receiving accident benefits because they wilfully misrepresented material facts with respect to their applications for accident benefits, pursuant to section 48 of the Schedule?

The further issues in Mr. Rizk's case are:

Is Mr. Rizk entitled to income replacement benefits of $332.51 per week, plus interest, from October 21, 2002, for a period of 14 months?
Is Mr. Rizk or Allstate obligated to pay the other's reasonable arbitration expenses?

The further issues in Mr. Isho's case are:

Is Mr. Isho entitled to income replacement benefits of $400 per week, plus interest, from January 26, 2003 to February 17, 2003?
Is Mr. Isho entitled to a medical benefit of $945, plus interest, for treatments from Total Care Management, pursuant to section 14 of the Schedule?
Is Mr. Isho or Allstate obligated to pay the other's reasonable arbitration expenses?

Results:

Mr. Rizk and Mr. Isho are precluded from receiving accident benefits because they wilfully misrepresented material facts with respect to their applications for accident benefits, pursuant to section 48 of the Schedule.
Mr. Rizk is not entitled to income replacement benefits and there is no interest owing.
Mr. Isho is not entitled to income replacement benefits or medical benefits and there is no interest owing.
Mr. Rizk is ordered to pay 50% of Allstate's reasonable arbitration expenses and Mr. Isho is ordered to pay 50% of Allstate's reasonable arbitration expenses.

Evidence and Analysis:

1. Are Mr. Rizk and Mr. Isho precluded from obtaining accident benefits because they wilfully misrepresented material facts with respect to their applications for accident benefits, pursuant to section 48 of the Schedule?

Allstate takes the position that Mr. Rizk and Mr. Isho wilfully misrepresented material facts when they asserted that they had been involved in a motor vehicle accident on October 14, 2002. Allstate is of the view that Mr. Rizk and Mr. Isho were not involved in a motor vehicle accident on that date. In its submission, such a misrepresentation is deliberate and fundamental to the Applicants' entitlement to accident benefits and to the Insurer's adjustment of the files.

Mr. Rizk and Mr. Isho maintain their position that they were involved in a motor vehicle accident on October 14, 2002. They both indicate that they met in a coffee shop that evening, and Mr. Isho agreed to drive Mr. Rizk home. They were proceeding southbound on Weston Road at approximately 8:00 p.m. when a vehicle struck Mr. Isho's vehicle from the left at the intersection of Imogene Drive and Weston Road.

Section 48 of the Schedule provides that an insurer may terminate payment of a benefit if an insured person wilfully misrepresented material facts with respect to an application for a benefit. In this case, the Insurer alleges that the Applicants were not involved in an accident and are not entitled to accident benefits. In Allstate's submission, the Applicants' assertion that they were in an accident amounts to a wilful misrepresentation of a material fact.

The parties agree that Allstate bears the onus of proving that Mr. Rizk and Mr. Isho wilfully misrepresented material facts. It must therefore prove that Mr. Rizk and Mr. Isho were not involved in an accident, but deliberately reported that they were.

Recent appeal decisions in Szabo² and Fisk³ confirm that the arbitrator's focus in deciding cases under section 48 should be the nature of the misrepresentation and the effect of the misrepresentation on the insurer. The appeal decision in Szabo confirms that section 48 can be relied on to deny a claim even in cases where no benefits have been paid. I have applied these principles in arriving at my conclusions in this case.

In support of its position, Allstate relies on the testimony of Mr. Lino Garcia and Mr. Scott Walters, and a report they co-authored dated November 25, 2002.

In arriving at their conclusions, Mr. Garcia and Mr. Walters relied on representations made by the drivers of the two vehicles and witnesses to the accident to the effect that Mr. Jama was turning left onto Weston Road when he struck Mr. Isho. In a statement given by Mr. Isho to Allstate on October 23, 2002⁴, he indicates that the other driver had started to make a left turn at the time of impact. In a statement given on the same date, Mrs. Isho, who was also in the car, indicated that the other driver was trying to turn left. In the Collision Report prepared by Mr. Isho in the morning of October 15, 2002, the diagram of the impact shows Mr. Jama's car approaching from the left. In Mr. Jama's report to the Self-Reporting Collision Centre, he states that he was making a left turn from Imogene onto Weston Road when he struck Mr. Isho's car.

Lino Garcia, an engineer, was accepted as an expert in the area of accident reconstruction. Mr. Garcia was retained by Allstate to investigate the accident reported by Mr. Rizk and Mr. Isho. He reviewed the self-reporting collision reports of both drivers, photographs taken at the collision centre and damage estimates for the vehicles. He examined Mr. Isho's Pontiac Sunfire on October 25. He also examined the other car allegedly involved in the accident, a Chevrolet Cavalier driven by Mr. Jama.

Based on the physical evidence and the witnesses' statements, Mr. Garcia concluded that the accident could not have occurred in the manner described. The damage on Mr. Jama's car was on the left side of the vehicle, which is inconsistent with hitting Mr. Isho's car during a left turn. If Mr. Jama was turning left, one would expect to see damage on the right side of the vehicle at the point where it impacted with the other car. Mr. Garcia also noted other aspects of the physical evidence that were inconsistent with an accident as described.

Mr. Scott Walters, an engineer, was accepted as an expert in forensic engineering and accident reconstruction. Having reviewed the same materials as Mr. Garcia, Mr. Walters could not find evidence of the collision having occurred as reported. He found the damage to the two vehicles to be irreconcilable with the witnesses' accounts of the accident, particularly in terms of the orientation of Mr. Jama's car and the speed of Mr. Isho's car. If Mr. Isho was travelling at 50-60 km/hour, as reported, Mr. Walters would expect to see more rearward damage to the vehicle.

The only scenario Mr. Walters could suggest to account for the damage to the two cars consists of Mr. Isho's car moving either very slowly or actually stopped and Mr. Jama's car turning right instead of left, also at a low speed.

Mr. Walters prepared a supplementary report in response to a February 27, 2004 report prepared by Raftery Engineering Investigations Ltd. The Raftery Engineering report was prepared on behalf of the Applicants and suggests that Mr. Jama's car may not have been turning left at the time of impact. Instead, Mr. Barry Raftery suggests that Mr. Jama may have struck Mr. Isho in a perpendicular fashion, directly from the left. The other alternative suggested by Mr. Raftery is that Mr. Jama had aborted his left turn and had begun turning right at the time of impact.

In his supplementary report and testimony, Mr. Walters noted that Mr. Raftery's suggested scenarios do not coincide with the statements given by the drivers and witnesses, all indicating that Mr. Jama was turning left. He also noted that, if Mr. Jama's car had struck Mr. Isho's straight on from the left, damage would be across the entire front of Mr. Jama's car. This is not the case, as the damage to Mr. Jama's car was concentrated on the left front bumper and left side. He also noted that the damage to the two vehicles is inconsistent with the reported speed of Mr. Isho's car, regardless of their orientation at the time of impact.

In support of their submission that they were involved in a motor vehicle accident, Mr. Rizk and Mr. Isho rely on their own testimony and the report prepared by Raftery Engineering. I find that I cannot rely on Mr. Rizk's and Mr. Isho's testimony, which in both cases was marked by inconsistency, vague and evasive responses and, at times, implausible explanations.

Both men agree that they met at a coffee shop at Weston and Finch in the early evening of October 14.⁵ They were casual acquaintances before the accident. Mr. Rizk indicated that Mrs. Isho came into the coffee shop with her husband and stayed for approximately half an hour. Mr. Isho, and Mrs. Isho in her written statement, indicate that she stayed in the car and did not come into the coffee shop.

Mr. Isho agreed to drive Mr. Rizk and another man, Adnan, home in his car. They were proceeding southbound on Weston Road when they were struck by another automobile. Both men indicate that they did not see the car before it struck them and that Mr. Isho did not brake or slow down before impact.

I find that both Mr. Rizk and Mr. Isho were evasive when it came to describing the damage to Mr. Jama's car. Mr. Rizk indicated in his testimony that he had no idea about damage to Mr. Jama's car, despite having provided a description of the damage to Allstate in a written statement on November 25, 2002. Mr. Isho testified that he did not look at the other car after the accident and could not tell from photographs whether the damage to Mr. Jama's car was on the left or right side. He also indicated that he did not know whether Mr. Jama was turning right or left. His testimony conflicts with his written statement in which he indicated that Mr. Jama was turning left and described specific damage to Mr. Jama's car.

There are discrepancies in their testimony concerning the timing of their attendance at the Self-Reporting Collision Centre in the early hours of October 15. Mr. Rizk indicates that it was 3:00 a.m., Mr. Isho says 12:30 a.m. and the police officer's notation indicates 3:50 a.m. Neither Applicant offered a plausible explanation for their delay in reporting the accident, despite the proximity of the Self-Reporting Collision Centre to the accident scene. They indicate that they went to Mr. Isho's home at about 9:00 pm and waited between 4 and 6 hours to go to the Collision Centre.

There are also significant and unexplained discrepancies in the evidence concerning both Mr. Rizk's and Mr. Isho's attendance at Dr. Tong's office and Four Winds Physiotherapy Clinic in the days after the accident. Mr. Rizk states that he attended at Dr. Tong's office about three days after the accident, when he began to feel pain. Although he had not been examined or treated by Dr. Tong before the accident, he testified that he had visited the facility out of curiosity several months before.

Both Dr. Tong's and OHIP's records indicate that Mr. Rizk attended on October 15, 2004, the day after the accident. Mr. Rizk was unable to offer an explanation for this discrepancy except to say that Dr. Tong's and OHIP's records are incorrect. Likewise, Dr. Tong's records indicate that Mr. Rizk stopped attending for treatment in January 2003. Mr. Rizk testified that he received six months of treatment after the accident. Mr. Rizk could not offer an explanation, except again to allege that Dr. Tong's records are wrong.

Mr. Isho also went to Dr. Tong's office and the Four Winds Physiotherapy Clinic, although he could not recall whether it was one or two days after the accident. Mr. Isho had not been seen by Dr. Tong before the accident. He testified that he had seen Dr. Tong's sign several times and decided to contact him, when he could not get in touch with his regular family doctor. Mr. Isho could not recall how many months or weeks he attended for physiotherapy.

In her written statement, Mrs. Isho stated that the driver of the other car had given Mr. Isho a card with the name of Dr. Tong and the Four Winds Physiotherapy Clinic, suggesting that he attend there for treatments. Mr. Isho denied this in his testimony and insisted that it was a coincidence that all four occupants of the motor vehicle received treatment from Dr. Tong and the Four Winds Physiotherapy Clinic.

In light of the inconsistency, vagueness and implausibility of their testimony, I find Mr. Rizk and Mr. Isho to have been unreliable witnesses.

The Applicants also rely on the report prepared by Raftery Engineering. Mr. Barry Raftery is an engineer working in the field of accident reconstruction. In his report, Mr. Raftery suggests alternate theories of the accident in which Mr. Jama turned right instead of left, or hit Mr. Isho directly from the side, thereby accounting for the damage on the left side of Mr. Jama's vehicle. Mr. Raftery does not indicate what evidence he relies on in support of these theories, and I find none in the evidence before me. I also agree with Mr. Walters's analysis that the physical damage to the two vehicles is inconsistent with Mr. Raftery's theories. I note that Mr. Raftery did not examine either Mr. Isho's or Mr. Jama's car. For these reasons, I find Mr. Raftery's report of little value.

I find that Allstate has met its burden of proving that Mr. Rizk and Mr. Isho wilfully misrepresented material facts when they reported that they were involved in an accident on October 14. The expert reports and testimony offered by Allstate establish that the accident could not have occurred in the manner described by Mr. Rizk and Mr. Isho. Neither the Applicants' evidence nor the Raftery report effectively rebut Allstate's position. Mr. Raftery offers alternate theories of the accident without any supporting evidence. The best evidence available with respect to Mr. Jama's actions is his own statement in which he indicates that he was turning left at the time of the collision.

I am satisfied that Mr. Rizk and Mr. Isho acted deliberately in representing that they were involved in an accident, and that the occurrence of an accident is fundamental to their entitlement to accident benefits. Mr. Rizk and Mr. Isho wilfully misrepresented material facts with respect to their application for accident benefits and are precluded from receiving benefits by operation of section 48 of the Schedule.

2. Mr. Rizk's Entitlement to Income Replacement Benefits

Even had I found differently on the preliminary issue, Mr. Rizk and Mr. Isho did not prove their claims to entitlement to income replacement benefits or medical benefits. Mr. Rizk offered no reliable evidence in support of his claim for income replacement benefits. He testified that he was unable to return to his work as a landscape gardener's assistant for over a year because he was in pain. There is no objective medical evidence to substantiate Mr. Rizk's testimony in this regard. Dr. Tong completed a disability certificate on October 15, 2002, indicating that Mr. Rizk was unable to return to work because of pain. Mr. Rizk testified that he did not see Dr. Tong on October 15, 2002. He also testified that he did not begin to experience pain until 2 or 3 days after the accident. Dr. Tong's assessment that Mr. Rizk was in pain on October 15 is therefore difficult to reconcile with Mr. Rizk's testimony. There is no reliable evidence on which to find that Mr. Rizk was substantially unable to perform the essential tasks of his pre-accident employment.

3. Mr. Isho's Entitlement to Income Replacement Benefits and Medical Benefits

Mr. Isho did not prove his entitlement to income replacement benefits from January 26, 2003 to February 17, 2003. He testified that he returned to his work as a sorter at Purolator Courier approximately three or four months after the accident. He also testified that he returned to work when his short-term disability benefits ran out, which appears to have been on January 26, 2003. There is no evidence in the record of a disability beyond that date. The disability certificate completed by Dr. Tong with respect to Mr. Isho on October 15 is not reliable. Mr. Isho testified that he does not speak English well, and that nobody in Dr. Tong's Clinic spoke Arabic or Assyrian. It is unclear how Dr. Tong was able to properly assess Mr. Isho's condition and ability to return to work, in the absence of an interpreter. Mr. Isho attended at several assessments at Pro-Norm Assessment Centre in 2002 and 2003. These reports speak to Mr. Isho's condition and on-going symptoms as a result of the accident. Mr. Isho's counsel did not refer me to these assessment reports, and I find them to be of little use. Having reviewed them, I find that they do not provide any reliable conclusive information about Mr. Isho's ability to return to work.

Mr. Isho did not prove his entitlement to medical benefits for treatments received at Total Care Management in the amount of $945. The only documentary evidence in support of this claim is a Treatment Plan prepared by Terry Vu, a physiotherapist at Total Care Management, and an invoice for $945. The Treatment Plan describes a number of suggested rehabilitation services at a cost of $2,340. The invoice for $945 does not specify the types of treatments, their duration or frequency, or their value in treating Mr. Isho's symptoms. Mr. Isho himself offered no testimony in this regard. There is no evidence on which to find that the treatments Mr. Isho received at Total Care Management, if any, were reasonable and necessary as a result of the accident.

Expenses:

Rule 75 of the Dispute Resolution Practice Code authorizes me to award expenses to either party having regard to the criteria set out in Rule 75.2. For the purpose of this proceeding, the relevant criteria set out in rule 75.2 include: each party's degree of success in the outcome of the proceeding; the conduct of a party that tended to prolong, obstruct or hinder the proceeding; and whether any aspect of the proceeding was improper, vexatious or unnecessary.

Having regard to these criteria, I find that Mr. Rizk and Mr. Isho are responsible for paying Allstate's reasonable expenses of arbitration. Allstate was entirely successful in this proceeding. The claims being advanced by Mr. Rizk and Mr. Isho were not clarified until the first morning of the hearing, with both Applicants withdrawing some or all claims for medical benefits at the last minute. I find that this conduct attracts an award of expenses because the discussion around the withdrawal consumed a significant amount of hearing time and because the Insurer was obligated to prepare to respond to claims that were not pursued. And, most significantly, I found that Mr. Rizk and Mr. Isho wilfully misrepresented material facts with respect to their applications for accident benefits. I was satisfied that they were not involved in an accident as they described and that the basis for their claims was a misrepresentation. I find that the Applicants' conduct in advancing a claim based on false allegations is improper.

Mr. Rizk is responsible for 50% of Allstate's reasonable arbitration expenses and Mr. Isho is responsible for 50% of Allstate's reasonable arbitration expenses.

June 11, 2004

Catherine Skinner Arbitrator

Arbitration Order

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

Mr. Rizk and Mr. Isho are precluded from receiving accident benefits, in accordance with section 48 of the Schedule, because they wilfully misrepresented material facts with regard to their applications for accident benefits.
Mr. Rizk will pay Allstate 50% of its reasonable arbitration expenses.
Mr. Isho will pay Allstate 50% of its reasonable arbitration expenses.