Neutral Citation: 2008 ONFSCDRS 8

FSCO A06-001294

BETWEEN:

VICTORIA OWUSU

Applicant

and

TD HOME AND AUTO INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: David Muir

Heard: October 22, 23, 24, 25, 26, 29 and 30, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Murray Tkatch for Ms. Owusu Andrew Grayson for TD Home and Auto Insurance Company

Issues:

The Applicant, Victoria Owusu, claims to have been injured in a motor vehicle accident on June 2, 2004. She applied for and received statutory accident benefits from TD Home and Auto Insurance Company (“TD Home”), payable under the Schedule.¹ Although Ms. Owusu made a claim for income replacement benefits, TD Home never paid this claim. The parties were unable to resolve their disputes through mediation, and Ms. Owusu applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

This matter is related to two other arbitrations brought by Ms. Patience Sarpong (FSCO file A05-001817) and Mr. Bismark Asamane (FSCO file A06-001418). At the pre-hearing discussion, a generic Order combining the matters was made pursuant to Rule 30 of the Dispute Resolution Practice Code (Fourth Edition — Updated October 2003). The Order did not specify how the matters were to be combined, pursuant to the Rule. After some discussion with the parties it was agreed that two of the matters² would be heard at the same time by the writer with the evidence in one applying to the other, to the extent that it was relevant to the issues in dispute in each arbitration.

At the heart of the dispute between the parties is the allegation by TD Home that the claims made by both remaining Applicants are in one way or another fraudulent. Related to this central submission is TD Home’s alternative claim that both have made material representations and accordingly are disentitled to the benefits in dispute. In particular it is alleged that the accident giving rise to these claims did not occur, at least not as described, and that neither Applicant was employed by their respective pre-accident employer. In the further alternative TD Home submits that if the allegations of fraud and material misrepresentation are not made out, there remain so many unanswered questions surrounding the elements of entitlement that the Applicants are required to establish, that their claims ought to be dismissed for lack of credible evidence supporting them.

The allegations made against Ms. Owusu by TD Home, at their highest, implicate her in a conspiracy or ring to defraud various insurers including TD Home by the making of false claims to statutory accident benefits. The evidence in support of these allegations is almost entirely circumstantial and largely based on hearsay. As I indicated to counsel early on in the proceeding, while there were evident credibility issues respecting Ms. Owusu’s claims it seemed to me that it would be difficult for TD Home to prove its ultimate allegations based on the type of evidence it was intending to call.

In general terms, TD Home’s theory of these cases is that there exists a ring of individuals who provide “front” employers and false employment documentation to persons who wish to make statutory accident benefits claims. The evidence of this conspiracy centers on the relationships between a number of individual accident benefits claimants. As regards Ms. Owusu’s claims, TD Home alleges the employment she relies upon is a fabrication. To make this case, TD Home relies upon the weakness of Ms. Owusu’s evidence intended to prove this relationship as well the unlikelihood that she would find herself connected in one way or the other with so many other individuals who had also made almost contemporaneous accident benefit claims.

For example the driver of the car, F.A., had been involved in an accident and made a claim in February 2004. In addition, TD Home led evidence that Ms. Owusu’s putative employer was involved in an accident and made a claim subsequent to hers. Most curiously there were five accident benefit claims made in a 15-month period by persons who claimed to have worked at the same hair salon as Ms. Sarpong and Mr. Asamane, the other passengers in F.A.’s vehicle.

TD Home led evidence of the statistical likelihood of this number of persons out of a small population being involved in an accident over the relevant time period. Not surprisingly the chances were extremely remote that all of the claims could have been legitimate.

Ms. Owusu denies the allegations of fraud and misrepresentation. Moreover she has claimed a special award on the basis that TD Home decided, from the beginning, to deny her claim based on irrelevant considerations and that it refused to change that position, ignoring evidence supporting her claims as it became available.

Ms. Owusu said very little about her pre-accident work and the reasons for her alleged inability to perform those duties post accident. TD Home’s evidence was that because these Applicants were the second claimants in a four-month period, there being another claim on the insurance policy in February, the claims were red-flagged and although this was not expressly stated, the fair inference is that they were subject to more rigorous scrutiny. In any event, TD Home initially denied Ms. Owusu’s claims based on a lack of documentation supporting employment. At one point in 2004, TD Home took the position that it could not consider Ms. Owusu’s income replacement claim until she provided a Notice of Assessment for that year. A requirement that presumably could not have been met until sometime in 2005. In any event as TD Home’s investigation continued, it became clear to it that there were substantial issues with these claims which ultimately led to the allegations of fraud and misrepresentation. Having taken this approach to the claim, TD Home conducted no assessments of Ms. Owusu’s ability, or not, to perform the essential tasks of her pre-accident work.

With this background in mind, the issues in this hearing can be stated formally as follows:

Is Ms. Owusu entitled to be paid an income replacement benefit pursuant to section 4 of the Schedule?
Is TD Home required to pay a special award to Ms. Owusu pursuant to section 282(10) of the Insurance Act, because it unreasonably withheld payment of a benefit to Ms. Owusu?

Result:

Ms. Owusu is not entitled to be paid an income replacement benefit, pursuant to section 4 of the Schedule.
TD Home is not required to pay a special award to Ms. Owusu pursuant to section 282(10) of the Insurance Act, because it unreasonably withheld payment of a benefit to Ms. Owusu.

An interpreter was available to assist the parties as required. Ms. Owusu indicated, and I was satisfied, that she did not require an interpreter for her to participate fully in the arbitration hearing.

TD Home had wanted a court reporter to transcribe the evidence but had failed to make arrangements for same. I declined to adjourn in order to afford time for the reporter to arrive and the hearing proceeded with the evidence of Ms. Owusu, in chief. A reporter did arrive during the course of her examination, and the remaining days of evidence as it relates to both of the related matters was transcribed. Neither party requested a transcript of the hearing and accordingly, these reasons are based on the record as it was put before me.

As indicated, the allegations of fraud and misrepresentation are based in large part on materials filed by other insured persons in other statutory accident benefits claims made of TD Home and other insurers. All or part of these individuals’ statutory accident benefits files were introduced in evidence.

There was no request for an Order anonymizing these decisions. However, the several third parties whose claims became central features of TD Home’s case were not before me to make that request. To my mind it would be a gross violation of their privacy to be readily identifiable in these reasons. On the other hand their identities, except to the extent that they are related in some way to Ms. Owusu, are irrelevant to my reasons. Accordingly, I have decided that they will be referred to by their initials and not their full names. Other identifiers will also not be used, except to the extent that they are essential to a proper understanding of these reasons.

EVIDENCE AND ANALYSIS:

In order to be entitled to an income replacement benefit Ms. Owusu must establish that she was employed prior to the automobile accident, and as a result of the injuries sustained in the accident is substantially unable to perform the essential tasks of that employment.

Ms. Owusu claims that she was injured in an accident on June 2, 2004 and, as a result of injuries sustained at that time, was unable to work for a period of 8 months. Ms. Owusu was 16-years old at the time and a High School student. She claims that she was a passenger in a vehicle driven by F. A. There were four individuals in the vehicle. One of these, Mr. Asamane, was her stepfather. Another was Patience Sarpong. All were in F.A.’s car and said to be returning from a visitation. Near the intersection of Lawrence and Jane, they were rear ended by a rental vehicle driven by K.S.

As indicated earlier, TD Home takes the position that Ms. Owusu was a participant in a ring or conspiracy to defraud TD Home, made material misrepresentations that disentitled her to benefits and/or simply ought to be disbelieved entirely beginning with whether or not she was involved in an accident on June 2, 2004.

Neither party made submissions on the quality of evidence required, to prove in a civil proceeding, what amounts to criminal conduct. Much has been written about this in the context of labour arbitrations dealing with disciplinary matters, and elsewhere where serious misconduct is alleged to have occurred.

I found the following passage from Pratt and Whitney Canada Inc. and Ministry of Labour and John Machado, [1992] OESAD No. 246, useful in considering the evidence of the parties:

There can be no doubt that the allegations against the Claimant are very serious. A.P.'s allegation is tantamount to sexual assault. The consequences of the allegations have been no less serious: the Claimant was not only fired from a responsible position, but he has been unable to obtain work since. The appropriate standard is something higher than a mere balance of probabilities; the Employer can only discharge its onus with evidence which is, to use the language most frequently associated with 'wilful misconduct' cases, both clear and cogent. This is, of course, something less than the criminal standard.

The Supreme Court of Canada in Hanes v. Wawanesa Mutual Insurance Co. (1963), 1963 CanLII 1 (SCC), 36 D.L.R. (2d) 718 quoted with approval the following passage from the judgement of Denning, L.J, in Bater v. Bater [1950], 2 All E.R. 458 at page 733:

The difference of opinion which has been evoked about the standard of proof in these cases may well turn out to be more a matter of words than anything else. It is true that by our law there is a higher standard of proof in criminal cases than in civil cases, but this is subject to the qualification that there is no absolute standard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard. Many great judges have said that, in proportion as the crime is enormous, so ought the proof be clear. So also in civil cases. The case may be proved by a preponderance of probability but there may be degrees of probability within that standard. The degree depends on the subject-matter. A civil court, when considering a charge of fraud, will naturally require a higher degree of probability than that which it would require if considering whether negligence were established. It does not adopt so high a degree as a criminal court, even when it is considering a charge of an criminal nature, but it still does require a degree of probability which is commensurate with the occasion.

The following comments of the Divisional Court in Re Bernstein and College of Physicians and Surgeons of Ontario (1977), 1977 CanLII 1072 (ON HCJ), 76 D.L.R. (3d) 38 at page 61 are also helpful:

The important thing to remember is that in civil cases there is no precise formula as to the standard of proof required to establish a fact.

In all cases, before reaching a conclusion of fact, the tribunal must be reasonably satisfied that the fact occurred, and whether the tribunal is so satisfied will depend on the totality of the circumstances including the nature and consequences of the fact or facts to be proved, the seriousness of an allegation made, and the gravity of the consequences that will flow from a particular finding.

TD Home led no evidence that directly linked Ms. Owusu to the alleged ring or conspiracy. Its theory as it relates to Ms. Owusu rests almost entirely on her connection with various other accident benefit claimants, including her putative employer, as well as her connection to Ms. Sarpong and Mr. Asamane, who are in turn linked through their putative employer with another number of accident benefit claimants. Having considered the voluminous evidence in support of the conspiracy theory, almost all of which was indirect and/or hearsay, I am unable to find that Ms. Owusu was a knowing participant in the alleged ring. However, while the conspiracy theory of the Insurer was not established, the substantial questions surrounding Ms. Owusu’s claims were not answered in her evidence and accordingly I have concluded that she is not entitled to an income replacement benefit.

As regards TD Home’s position that there was no accident at all, there is very little evidence that would support the conclusion that there was not and some evidence that there was. In particular, the driver of the second vehicle, K.S., reported the accident and, other than apparently living within two miles of one of the occupants of F.A.’s vehicle, was not connected to any of the passengers in any way. TD Home commissioned an accident reconstructionist’s assessment but the assessor only concluded that the accident might not have occurred as described, not that it did not occur at all. Although it does not much matter given my findings below on other points, it is more likely than not that there was an accident as defined involving the vehicle in which Ms. Owusu claims to have been a passenger and that driven by K.S.

However, there are a great many contradictions and gaps in Ms. Owusu’s evidence concerning her alleged pre-accident employment, the circumstances surrounding the accident and most importantly, what, if any, impairments she may have suffered as a result of the accident. As a result of these contradictions, inconsistencies and gaps it is difficult to give any credit to Ms. Owusu’s evidence.

Amongst the more significant contradictions or misstatements was Ms. Owusu’s claim in her statement taken on August 13, 2004 (the August statement) that she did not know another of the passengers in the car, Mr. Asamane, her stepfather. Ms. Owusu testified that she did not acknowledge knowing Mr. Asamane because her mother had forbidden her to have anything to do with him and accordingly she should not have been in the car with him that night. In cross-examination, she expanded on that explanation a little by stating that there had been family troubles and that her being with him might raise “police issues”. She further added, when confronted with the fact that she had told her mother the day after the accident but not the Insurer in the August statement, that for her it was not a big deal, he was not her real father and his most significant role in her life had been as a sponsor to Canada. She also later added when shown Mr. Asamane’s statement wherein he denies knowing her, that she believed that they had previously agreed that they would each deny knowing the other. She did not explain when they would have concocted this scheme, nor why it would have been necessary given that her mother was made aware of the facts on June 3. I do not find Ms. Owusu’s explanation of this misstatement persuasive.

Ms. Owusu testified that she came to be in the car with Mr. Asamane as a result of a call from him inviting her to take a ride with a friend to and from the visitation.

In the August statement she related an entirely different story. In that version of events she did not state how she got to the visitation but stated that at the event, a relative of the deceased, Afiah, arranged for the lift directly with the driver, F.A.

At the hearing, Ms. Owusu testified that the accident occurred on the way to the visitation. In her August statement, she claimed that it had occurred on the way home from the visitation. Ms. Owusu had no explanation for this contradiction. Given that the accident occurred at or about 10:30 in the evening, if it occurred at all, it is more likely to have occurred after the event rather than prior to it.

In the August statement, Ms. Owusu claimed that after the accident she took a taxi with Mr. Asamane to the Collision Reporting Centre. However in her evidence before me, she stated that she went home in a taxi with Mr. Asamane. In this regard, Ms. Sarpong testified that after the accident all of those involved in the incident, including Ms. Owusu, attended at a Collision Reporting Centre. Ms. Owusu did not explain this contradiction.

There were other contradictions in the evidence as it related to her pre-accident employment at Kleopatra’s Natural Mystique (“Kleopatra’s”). Ms. Owusu claimed before me to have worked seven days a week. Indeed she claimed to have worked every single day between March 8, 2003 and June 2, 2004, the day of the accident. In addition to being borderline implausible on its face, this evidence is plainly contradicted by the August statement, as well as the limited evidence provided by her putative employer, which are consistent in saying that she worked 6 days per week. When confronted with this contradiction, she maintained that the August statement was in error and that she had said she had worked seven days per week at that time. Given that she was given an opportunity to review the statement and signed it, her explanation was not persuasive.

In addition to these blatant contradictions, Ms. Owusu’s testimony about her employment at Kleopatra’s was quite vague. For example when asked how she could keep up with her school work while working a full-time job, Ms. Owusu explained that she had lots of time to do her homework and although she worked until 9 p.m. each weekday night, the store “usually” closed at 7 and there were few customers after 6. She testified that she would work on clean-up after the store closed without saying what that might entail or why it took two hours per day. Based on her evidence, it is not clear what she did for her employer other than be there in the event a customer appeared.

Ms. Owusu’s evidence about how her employment ended with Kleopatra’s also does not accord with what her putative employer told TD Home. According to Ms. Owusu, she had been advised that the business would be shut down for a period of time for renovations and that her last day of work, pending the renovations would have been June 2. This contradicts her employer’s statement to TD Home that her next shift was June 3 and which makes no mention of renovations but states that Ms. Owusu called on June 3 to say that she could not come to work because of an accident.

Ms. Owusu has little to document her employment with Kleopatra’s other than a handwritten payroll record on a sheet of paper, which was provided to TD Home’s investigator by the putative employer. There is no T4 slip or Record of Employment because, Ms. Owusu claims, neither of these documents were provided to her. Nor are there pay stubs or bank records. Ms. Owusu testified that she did not put her wages in the bank although she did have an account at the time.

There are other issues with Ms. Owusu’s evidence. The OCF-2, submitted by Ms. Owusu, had the address of her employer in Mississauga. It appears that this error was made by her employer, and not Ms. Owusu. The business was not in Mississauga, it was located at Dundas and Scarlett Road in the old City of Toronto. Ms. Owusu did know how to get there and named the bus routes she would have to take to get from her school near Keele and Wilson to Jane and Dundas from where she would walk to 3801 Dundas Street West, just past Scarlett Road. Ms. Owusu claims that she was able to get from her school to her workplace in less than 45 minutes. While not impossible this seems unlikely given the lengthy bus trip involving one transfer and ending with a walk of more than one kilometer, from Jane Street to Scarlett Road.

In her evidence Ms. Owusu initially denied having any further contact with her putative employer after June 2, but then when asked how she had signed for her last pay, and then later when asked how she got the OCF-2 completed, Ms. Owusu testified that her employer came to her home on two occasions to complete these transactions. I note that the employer told TD Home that Ms. Owusu had come to her to have these forms completed.

Ms. Owusu relied upon tax return information for the 2004 taxation year, likely filed in September 2006 to support her claim to have been employed prior to the accident. In her testimony, she stated that she thought that she had filed earlier but that there was some problem that required her to re-file. The material, from Canada Revenue Agency (CRA), does not support that suggestion.

The tax return information does not necessarily support the other limited evidence tendered on behalf of Ms. Owusu and, in the end, establishes very little. For example, the payroll record provided by the owner of Kleopatra’s indicates that the employer was deducting and presumably required to remit income tax on Ms. Owusu’s behalf in the amount of approximately $640. The tax return information from the CRA indicates that only $14.95 in tax was deducted per the information slips. A fair inference that can be drawn from this information, at a minimum, is that Kleopatra’s did not submit a T4 slip in respect of Ms. Owusu’s alleged employment. Ms. Owusu was unable to say anything meaningful about the tax returns because she did not prepare them. She testified merely that she believed it reflected her income from McDonald’s and Kleopatra’s.

Ms. Owusu’s claim to have been employed on a full time basis at Kleopatra’s is not enhanced by other evidence tendered by TD Home in support of its conspiracy theory. In particular, I note that Ms. Owusu’s employer, V.B.P., in a sworn statement taken in the context of her accident benefits claims, downplayed the viability of Kleopatra’s as a business, describing it is a hobby and while this is not entirely clear, her statement can be read as indicating that the business never had any employees.

The only evidence of Ms. Owusu’s that had the ring of truth about it was her testimony concerning the layout of the store and its contents. She was able to describe in some detail the layout of the store, where the cash was, where products were displayed and stored, etc. Although not greatly detailed this evidence was related with a degree of confidence not evident elsewhere in her testimony. More significantly, when asked if she had ever heard of Goldenstool, a business apparently operated by the spouse of Kleopatra’s owner, Ms. Owusu stated that business cards for the business were in the store. Clearly, she had attended this business. However, I note that she testified that she did shop at Kleopatra’s. I also note that her descriptions of the store were contradicted to some degree by one of the several investigators called by TD Home.

Ms. Owusu was extremely vague about her post accident health. In terms of her ability to return to her pre-accident activities, Ms. Owusu said almost nothing about the course of her recovery, except to say that after 8 months she felt able to return to work, and did so. She did not say what essential tasks of her work she could not perform. In her August statement, she stated that by that time she was 80 per cent recovered.

Ms. Owusu relied upon two disability certificates dated September 8,2004 and January 17, 2005. The disability certificates indicate nothing other than these were uncomplicated WAD II injuries which she sustained. The first states that Ms. Owusu was disabled from her employment for a further 9 to 12 weeks and should avoid prolonged standing and back bending. The January 2005 certificate suggests that while her physical status is improved, Ms. Owusu was perhaps even more disabled because of post traumatic headache and distress. It also suggests that her disability will continue for more than 12 weeks beyond January 17 because of residual pain over neck and back.

I am not inclined to give the disability certificates any weight. The first suggests Ms. Owusu’s limitations from working are prolonged standing and bending. There is no evidence that her work required such activity. As for the second, it suggests Ms. Owusu was getting worse. This contradicts Ms. Owusu’s evidence before me that she “felt better” and returned to work 8 months post accident – February 2005.

The Med-Rehab DAC, although not expressly saying that Ms. Owusu had sustained only WAD II injuries, concluded that there was no reason or necessity to go beyond the treatment provided for in the PAF. I have considered the fact that one assessor identified some level of anxiety which was ascribed to the accident, however to my mind this is simply to thin a reed upon which can be hung an 8 month income replacement claim, when considered together with all of the other evidence.

On balance and in considering all of the evidence, I find that Ms. Owusu is not entitled to an income replacement benefit.

I find that Ms. Owusu is not a credible or reliable historian. In her evidence before me she almost entirely disavowed her August 2004 statement, without actually doing so. Given the passage of time, it is not inconceivable that her memory might fade about some of the details of her life in the weeks surrounding the accident. But when given the opportunity to explain the contradictions, she neither reverted to the August 2004 statement or explained why she might have misspoken so completely then.

As regards her explanation for denying knowing Mr. Asamane, her stepfather, while at first blush plausible, in the end it was vague and unconvincing. Once her mother knew about her transgression in being with her stepfather, it makes little sense to have maintained that she did not know him two months later when providing a statement to TD Home.

Her inability to be consistent about when the accident occurred - before or after the visitation - is further indication of the made up nature of much of Ms. Owusu’s evidence. When linked with her testimony at the hearing that afterwards she went home in a cab with her stepfather, this later version of events amounts to a complete repudiation of the one related in the August statement.

The stark contradiction in the evidence respecting her hours of work is also troubling. Ms. Owusu’s statement of August 2004 supported by the limited information provided by her putative employer is crystal clear - she worked 6 days a week. It seems to me unlikely, if she worked at Kleopatra’s seven days a week, that she would have forgotten that when she gave her statement in August 2004 but then recall her actual hours of work correctly three years later.

Although the evidence does support the conclusion that Ms. Owusu had some connection with Kleopatra’s, and possibly more than merely a customer, I am unable to find based on the evidence as a whole that she worked there seven days a week, in excess of 45 hours per week every day from March 8 to June 2, 2004, as she has claimed. The credibility issues arising from the many contradictions in her evidence and almost complete lack of any documentary evidence of employment compel the conclusion that her relationship with the putative employer was not as she has claimed.

I find that she has, at a minimum, grossly exaggerated the nature of her relationship with Kleopatra’s and whatever its true nature, there is no credible basis for positive finding respecting her actual hours of work or earnings, if any.

I also find that there is no real evidence of any inability to perform the essential tasks of her pre-accident employment. It is not enough to state, as Ms. Owusu did, that she did not feel well for 8 months and then returned to work because she felt better. In the absence of any real evidence of an impairment arising from the accident, I would dismiss the claim to income replacement benefits for this reason as well.

As regards the special award, Ms. Owusu did raise some issues respecting the handling of the file by TD Home, however given that I have found no basis for an Order of entitlement there is no basis for a special award.

EXPENSES:

The parties requested that the question of expenses be deferred pending the release of my reasons. If unable to resolve any issue respecting expenses on their own they may request an appointment before me within 30 days of the release of these reasons.

January 17, 2008

David Muir Arbitrator

Financial Services Commission of Ontario