Connie Lisowecki v. Dominion of Canada General Insurance Company, 2009 ONFSCDRS 56

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2009 ONFSCDRS 56

Appeal P08-00019 and P08-00019C

OFFICE OF THE DIRECTOR OF ARBITRATIONS

CONNIE LISOWECKI

Appellant/Cross-Respondent

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Respondent/Cross-Appellant

BEFORE:

Delegate Lawrence Blackman

REPRESENTATIVES:

Ms. Connie Lisowecki, representing herself

Ms. Tracy E. Cresswell, for Dominion of Canada General Insurance Company

HEARING DATE:

February 12, 2009

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The Arbitrator's orders dated November 14, 2007 and May 5, 2008 are confirmed, except as set out in paragraph 2 below regarding the cross-appeal. The Appellant’s appeal dated June 4, 2008 is dismissed.

2. The Arbitrator’s finding that the Appellant’s annual income for the purpose of calculating payable income taxes is $7,533 is rescinded. The determination of the Appellant’s income replacement benefit is remitted to the Arbitrator.

3. If the parties are unable to agree on the legal expenses of these appeal proceedings, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003).

May 7, 2009

Lawrence Blackman Director’s Delegate

Date

REASONS FOR DECISION

I. BACKGROUND

On October 30, 2004, the daughter of Ms. Connie Lisowecki (the “Appellant”) was tragically killed in a motor vehicle accident. As a result, the Appellant, as a named insured although not involved in the accident, applied to Dominion of Canada General Insurance Company (the “Respondent”) for statutory accident benefits payable under the Schedule.¹

The July 7, 2008 report of the Appellant’s treating psychologist, Dr. W.T. Melnyk, stated that the Appellant had severe symptoms of depression, anxiety and a prolonged grief reaction, and that the “only focus she has had for a long period of time is her battle to obtain a fair decision concerning her issues with insurance companies. She is obsessed with this mission and driven to complete it.” Dr. Melnyk opined that there was “a high probability that when her legal battles are over she will have a break down. She will need continuous and intensive Psychotherapy to get her through this crisis.”

Five hearing days were held in this matter in late 2007 and early 2008 before Arbitrator Rogers (the “Arbitrator”). Written submissions were completed on April 11, 2008. The Arbitrator issued a decision on preliminary and procedural issues on November 14, 2007 and a further decision on May 5, 2008. The Arbitrator’s May 5, 2008 decision notes his order removing the Appellant’s lawyer as counsel of record on February 11, 2008.

The Arbitrator’s November 14, 2007 decision determined, in part, that the Appellant, who had received a $10,000 death benefit under paragraph 25(2)5 of the Schedule as a person upon whom the deceased was dependent, was not entitled to a further $25,000 death benefit under paragraph 25(2)3, as she “was neither a dependant of her deceased daughter nor a person to whom her daughter had an obligation at the time of the accident to provide support, under a domestic contract.” The Arbitrator further held, following Arbitrator Renahan’s decision in Henderson-Briehl and ING Insurance Company of Canada, (FSCO A01-001620, August 25, 2003), that pre-accident losses from self-employment were not to be deducted from income from all sources in determining the Appellant’s income replacement benefit (“IRB”).

On December 12, 2007, the Appellant, represented by counsel, filed a Notice of Appeal. Ultimately, by letter dated March 26, 2008, on the consent of both parties, I permitted the Appellant to withdraw her Notice of Appeal pursuant to Rule 70.2 of the Dispute Resolution Practice Code (Fourth Edition, Updated – October 2003) (the “Code”), without prejudice to either party to again raise the issues set out in this initial Notice of Appeal.

The Arbitrator’s May 5, 2008 decision noted that the Respondent had paid the Appellant weekly IRBs, except for two fairly short periods. The Arbitrator determined that the Appellant was not precluded from IRB entitlement for these periods by reason of failing to provide a disability certificate, obtain necessary treatment, make reasonable efforts to obtain employment or attend an insurer’s medical examination.

The Arbitrator was unable to calculate the Appellant’s exact IRB as he did not have information on the Canada Pension Plan (“CPP”) and Employment Insurance (“EI”) premiums to be deducted. The Arbitrator ordered a further exchange of information between the parties, remaining seized of any outstanding disputes in this regard.

The Arbitrator found that the Appellant’s gross annual income was $22,059 and that her annual income, for the purpose of calculating payable income taxes, EI premiums and CPP contributions was $7,553. The Arbitrator determined that the Appellant’s post-accident losses from self-employment did not increase her weekly IRB. The Arbitrator found that the Appellant’s claimed post-accident losses were not “as a result of the accident,” as required by subsection 6(5) of the Schedule, the Appellant’s post-accident losses being less than her pre-accident losses.

The Arbitrator held that the decision in Welsh and Economical Mutual Insurance

Company, (FSCO P02-00024, October 7, 2003), upon which the Appellant relied, did not

increase her IRB entitlement to more than $400 per week, as amendments to the Schedule, effective October 1, 2003, now limited the maximum IRB to $400.

In response to the Appellant’s claim for entitlement based on projected future income, the Arbitrator agreed with prior arbitration decisions that such loss was not recoverable under the Schedule. The Arbitrator cited Delegate Naylor in Jambor and Dominion of Canada General Insurance Company, (OIC P-003703, May 1, 1996), that:

Claims for lost business opportunities or for future loss of income are not benefits that are available under the Schedule, no matter how meritorious they may be.

The Arbitrator further held that the Appellant was not entitled to payment of $15,000 for lost educational expenses, claimed pursuant to subsection 20(1) of the Schedule. The Arbitrator found that the Appellant was not a registered student at the time of the accident, and hence not enrolled in an educational program as required by subsection 20(1), although the Appellant intended to complete a program at the Southern Alberta Institute of Technology (the “Southern Alberta Institute”) sometime within a five-year period.

The Arbitrator found that the Appellant was entitled to a special award under subsection 282(10) of the Insurance Act, R.S.O. 1990, c. I. 8 regarding the Respondent’s IRB calculation that did not follow the decision in Henderson-Briehl. Unless the parties resolved the issue, the Respondent was to provide a statement setting out the amount upon which the special award was to be calculated no later than 60 days after the issue of the quantum of IRBs was resolved. The Arbitrator remained seized of the issue of the quantum of the special award, and would reconvene the hearing at the request of either party.

The Arbitrator reserved the question of entitlement to legal expenses until all issues in dispute had been resolved.

II. NATURE OF THE APPEAL

On June 12, 2008, I acknowledged the Applicant’s Notice of Appeal. By letter dated June

23, 2008 I acknowledged the Respondent’s cross-appeal.

Noting that the special award issue was still to be determined, the Respondent initially submitted that pending a decision on that issue, which was likely to be appealed, the parties should not proceed with the appeal. However, by letter dated July 4, 2008, the Respondent was of the view that it was better that the appeal proceed.

By letter dated July 28, 2008, over the Appellant’s objections, I combined these appeals. Rather than having multiple proceedings, I was persuaded that combining the appeals (which arose out of the same arbitration and the same decisions of the same arbitrator) would result in the quickest and least expensive, as well as the most just means of dealing with these matters.

Further, I did not stay the appeal pending the determination of a special award. As it was not known when the special award decision might be expected, I was persuaded that it was best that these appeals proceed expeditiously, as the Appellant requested.

By letter dated October 8, 2008, I determined that an oral appeal hearing by telephone conference call arranged by the Financial Services Commission was the best means of producing, overall, the most just, quickest and least expensive resolution of these appeal proceedings, again following the criteria set out in Rule 1.1 of the Code.

Notwithstanding the Respondent’s request that this appeal be determined on the written record alone, I was of the view that an oral hearing was required, as allowed by Rule 56.5 of the Code. Specifically, I had questions arising from the material filed, including the requests for fresh evidence, and an oral hearing would be more efficient in addressing these questions, rather than a series of written questions and answers.

Neither party requested a face-to-face appeal hearing. I noted that the arbitration hearing had been held in Thunder Bay, which was some distance from the Respondent’s residence and which, from the materials filed, appeared to have lead to accommodation expenses. The winter months also raised the possibility of inclement weather.

The Appellant was provided an opportunity to consult with further counsel, who was not retained. By letter dated November 17, 2008, I confirmed the oral appeal hearing date of February 12, 2009 and the time guideline under the Code that an appeal decision would be issued within 60 to 85 days from the conclusion of the oral hearing.

My November 21, 2008 letter confirmed the Appeals Administrator’s advice that the Appellant had called her on November 18, 2008 advising that she was unable to communicate with the Commission either by letter or by fax.

The Appellant’s June 4, 2008 Notice of Appeal, as expanded upon by her written submissions of July 8 and 20 and September 10, 2008, and January 23 and February 10, 2009 (in addition to her written submissions of July 21 and September 19, 2008 regarding the cross-appeal), sets out the following alleged errors of the Arbitrator:

1. The Arbitrator erred in calculating the Appellant’s pre and post accident business losses

The Appellant submits that at the time of the accident she was in the first year of self-employment in a new business venture, having received expert advice regarding income projections based on similar viable businesses. The Appellant submits that her reasonable income expectations were cut short by the accident and that her losses continue.

The Appellant’s Notice of Appeal requested an order that her weekly IRB was $339.62,

plus a quantum based on business losses, as assessed by an accountant, the latter amount not limited by any cap, as further set out below.

The Appellant’s September 10, 2008 written submissions sought a weekly IRB of $345.01.

In addition, the Appellant submitted that her pre-accident business plan (accepted and approved by “HRDC” on September 12, 2004) projected earnings of $30,687 for the period November 1, 2004 to October 30, 2005, had the accident not occurred.

The Appellant further submitted that $52,337 represented the difference between her projected earnings and her actual earnings from October 31, 2004 to October 30, 2005. On this basis, the Appellant claimed an additional weekly benefit of $805.18, ongoing from November 6, 2004 (the first week post-accident not being payable), plus interest in accordance with the Schedule of 2% per month, compounded monthly and a special award pursuant to the Insurance Act, “expected at the maximum of 50%.”

The Appellant noted her accident related disabilities, her efforts to overcome her disabilities in “maintaining a marginal business” and that she “should be applauded for her stellar efforts in the face of great adversity, and compensated for the gap in revenue caused by the accident.”

The Appellant cited subsection 4(1) of Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, O. Reg. 461/96, that:

4. (1) For the purpose of paragraph 2 of subsection 267.5 (1) of the Act, a person’s net income loss for a period of time shall be determined by subtracting the person’s actual net income for the period from the net income the person would have earned for the period if the incident had not occurred.

The Appellant agreed with the Respondent’s PricewaterhouseCoopers’ November 28, 2005 accounting report that her self-employment from June 13 to October 30, 2004 (the accident date) resulted in a loss of $15,089. The Appellant submitted that she was entitled to an additional $12,101.20, which she calculated as 80% of her pre-accident loss. These monies were, in her view, recoverable losses resulting from the accident as they were incurred in setting up and running her business she was now maintaining online to facilitate her reintegration into her family, the rest of society and, if possible, the labour market.

The Appellant submitted that she was at a distinct disadvantage in arbitration in not having counsel and not being accommodated, as required by the Ontario Human Rights Code, R.S.O. 1990, c. H.19, in being allowed to make oral rather than written submissions.

The Respondent, in its September 25, 2008 written submissions, stated that:

Other than the inadvertent assumption that the EI benefits are not taxable income and

thus subject to deduction [the Respondent] agrees with the calculation of entitlement pursuant to the decision of [the Arbitrator] dated May 5 2008.

The Respondent submitted that the Arbitrator correctly found that Appellant’s pre-accident self-employment losses did not result from the accident, as required by subsection 6(5) of the Schedule, and that there was nothing in the Schedule compensating such loss.

The Respondent submitted that the Arbitrator made a finding of fact that the Appellant’s post-accident losses were significantly lower than her pre-accident losses, a finding supported by the evidence and that should not be disturbed. The Respondent also argued that there was no evidence adduced at the arbitration hearing to support the Appellant’s position that her post-accident losses were a result of the accident.

Regarding the CPP and EI deductions, the Respondent provided a further report from PricewaterhouseCoopers dated May 16, 2008. The Respondent submitted that the correct weekly IRB was $287.54.

The Respondent submitted that the Appellant has had several legal counsel and was given ample opportunity to put forward her evidence at the arbitration hearing.

2. The Arbitrator erred in capping IRBs at $400

The Appellant argued that subsection 6(5) of the Schedule did not cap on her IRB based on business losses, as a result of the decisions in Welsh and more recently in Johnston and AXA Insurance Canada, (FSCO A04-002670, February 8, 2008).

The Appellant further submitted that if there are any limits placed on weekly benefits, the Commission had advised her that losses above the $400 cap could still be claimed in the Application for Mediation (Form B under the Code) in the section entitled “other disputes.”

The Respondent submits that this October 30, 2004 accident is governed by the Schedule for accidents occurring on or after October 1, 2003. Subsection 7, therefore, now provides that despite subsections 6(1) and 6(5), losses from self-employment cannot be used to increase weekly IRBs above a $400 cap, optional benefits having not been purchased.

The Respondent argues that Welsh and Johnston applied to accidents that occurred before October 1, 2003.

3. The Arbitrator erred in denying the Appellant $15,000 for lost educational expenses

The Appellant cites the Guideline for Identifying Students who Qualify for the Non-Earner Benefit (Bill 59) as saying that a “student who is in a co-operative programme and working at the time of the accident is also eligible for education disability benefits.”

The Appellant submits that at the time of the accident she was enrolled in a co-operative program at the Southern Alberta Institute, having registered in May 2002, and would have continued to have been registered until May 2007. The Appellant submits that the trauma from the accident caused her to drop out of school, entitling her to “$15,000.00 compensation for the losses caused by her inability to attend school.”

The Appellant’s written submissions indicated that an October 31, 2004 statement from TD Canada Trust showed $14,534.19 owing on a student line of credit and that as of July 31, 2008, $11,598.79 was still owed. Further, an Ontario Student Loan of $5,090 was obtained for the same program and as May 30, 2008, $3,861.62 was owed.

The Appellant submitted that she has no other insurance to cover these debts and expects, in addition to the sum of $15,000, interest and a special award.

The Respondent submitted that the Arbitrator correctly concluded that the Southern Alberta Institute confirmed that the Appellant was not a registered student at the time of the accident and that her transcripts confirmed that she had not been enrolled in the program

since the winter of 2002/2003.

The Respondent argued that, in any event, even if the Appellant was enrolled at the time of

the accident, the expenses claimed were not, as required, incurred as a result of the program term or program year in which the Appellant was enrolled at the time of the accident.

4. The Arbitrator erred in denying the Appellant a further death benefit of $25,000

The Appellant reads subsection 25(2) of the Schedule to mean that as the deceased did not have a spouse, the Appellant was entitled to the $25,000 death benefit under paragraph 25(2)3 as she had qualified with Revenue Canada for the “equivalent to married/spouse tax credit” since 1986, and specifically qualified in 2004. The Appellant’s written submissions thus crossed out the middle of paragraph 25(2)3 so that it read “[if] no payment is required by paragraph 1, an additional … if the accident occurred on or after October 1, 2003, i. $25,000.” The Appellant further sought interest from March 1, 2005, when she applied for this benefit, and a special award of 50%.

The Respondent submitted that paragraph 25(2)3 requires that the Appellant show that at the time of the accident she was dependent on her daughter or that her daughter had an obligation to provide her support under a domestic contract or court order. The Respondent submitted that there was absolutely no evidence adduced in this regard.

5. Other issues

The Appellant wished to have the following evidence put before me:

(a) the January 8, 2008 report of North York Rehabilitation Centre regarding catastrophic determination;

(b) reports of Dr. W.T. Melnyk, psychologist, of October 9, 2007, July 7, 2008, October 14, 2008 (to Canada Student Loans) and February 10, 2009;

(c) a November 13, 2008 letter from Human Resources and Social Development;

(d) correspondence from the Respondent and to the Commission included in the Appellant’s July 8, 2008 written submissions;

(e) evidence concerning the Appellant’s self-employment included in her September 10, 2008 written submissions;

(f) evidence regarding TD Canada Trust Student Line of Credit, OSAP and Revenue Canada;

(g) documentation in the Appellant’s September 19, 2008 written submissions, including correspondence with the Respondent; and,

(h) a law firm account, dated February 11, 2008.

The Appellant submitted that this was not fresh evidence, that it was included in mediation

and would have been filed at arbitration had she had the full time scheduled for the latter.

The Appellant submitted that some of these documents were “suppressed” during the

arbitration, and supported her claims for post-104 week IRBs under clause 5(2)(b) of the Schedule, as well as catastrophic impairment, education, housekeeping and loss of earning capacity benefits.

The Appellant also raised the issues of deceptive and unfair business practices, fraud and misrepresentation of material facts and asked that her file be reviewed “in accordance with the Insurance Act.” As noted, the Appellant claimed interest, in accordance with the Schedule, of 2% per month, compounded monthly and indicated that she expected, pursuant to the Insurance Act, the maximum special award of 50% on the $15,000 education benefit, the $25,000 death benefit and all outstanding IRBs.

The Appellant also sought payment of housekeeping and home maintenance expenses. The Appellant asked that the Respondent recalculate overdue interest and pay retroactive IRBs from April 15, 2007. The Appellant disagreed with the Arbitrator’s findings regarding the propriety of certain insurer assessments and submitted that the Respondent had not arranged proper assessments regarding her post-104 week IRB entitlement.

The Appellant also sought payment of her arbitration legal expenses of $7,068.22 incurred, in part, with two law firms, and $9,065.72 incurred with a third law firm.

The Appellant further requested a full settlement because “to pay the benefits periodically would have the effect of preventing myself from obtaining full recovery of a claim arising

out of the incident.” Lastly, the Appellant requested information concerning pursuing judicial review.

The Respondent had no difficulty allowing the reports of Dr. Melnyk as fresh evidence, although it did not see how they were relevant to the issues in appeal. It submitted that the balance of the documents sought to be introduced as evidence were available at arbitration and it was the Appellant’s choice not to file them. To now accept these documents would be to allow a new hearing. The Appellant replied that if a new hearing were required, then a new hearing should be held, as the arbitration only took one and a half days, instead of the

scheduled four days.

III. NATURE OF THE CROSS-APPEAL

The Arbitrator states, at page 21 of his May 5, 2008 decision, that it “appears that, because of her limited taxable income, no taxes would be payable after the basic tax credit is applied. In fact, no taxes were deducted in the calculation that PriceWaterhouse made when it calculated [the Appellant’s] annual income at $6,970.” At page 22, the Arbitrator states that the only portion of the Appellant’s pre-accident income that should be used to calculate income taxes, CPP and EI premiums was $7,553. The latter was earned from the Appellant’s job at Atikokan Information Solutions and would exclude her EI benefits.

The Respondent’s June 19, 2008 Notice of Appeal submitted that the Arbitrator erred in law in finding that the Appellant’s EI benefits of $14,506 were not taxable income, contrary to the Appellant’s benefit statement and 2004 T4E Statement of EI Benefits, which the Respondent believed was in evidence. The Respondent submitted that such an inadvertent finding was contrary to subsection 56(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), which provides that:

Other Sources of Income

Amounts to be included in income for year

56. (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year, Pension benefits, unemployment insurance benefits, etc. …

From paragraph 12 of the Respondent’s August 21, 2008 written submissions, it appears that the Respondent concedes that CPP and EI premiums are not deducted from EI income. The Respondent submitted that if income tax is deducted from the EI benefits, the correct weekly IRB is $287.54 and in its written submissions, sought an order to that effect. In oral submissions, however, the Respondent indicated it was not expecting me to fix the correct IRB. The Appellant indicated, however, that she was expecting such a determination.

In her July 21, 2008 Response to Appeal, the Appellant, calculated her weekly IRB as

$676.26, consisting of $345.01 for her pre-accident employment income, including EI, and $331.25 for her ongoing business loss. The Appellant stated that she would accept this as her “pre-accident earning capacity,” as $38,000 or $730 a week, is the actual average entry level salary for an Information Technology Professional (ITP) Program graduate.

The Appellant argued that no tax should be payable on her employment income, nor any CPP or EI deducted, based on her ongoing business loss resulting from the accident, her qualification for a disability tax credit, her equivalent to married status tax credit and further deductions for interest paid on student loans and lines of credit and a carry forward of unused tuition/education tax credits. The Appellant argued that, in any event, section 61 of the Schedule does not require income tax to be deducted from EI benefits.

Regarding the disability tax credit, the Respondent submitted the Arbitrator correctly concluded that the IRB calculation was based on the Appellant’s pre-accident income, while the disability upon which her entitlement was based was caused by the accident. The Appellant could not both claim the disability credit as a result of the accident and apply it against her pre-accident income.

Regarding the equivalent to spouse tax credit, the Respondent submitted that the Appellant indicated in her Application for Accident Benefits that she was single for tax purposes.

The Respondent wished to introduce as fresh evidence the PricewaterhouseCoopers’ May 16, 2008 report prepared, it submitted, to comply with the Arbitrator’s order. The Respondent indicated it was not requesting that May 26 and June 5, 2008 correspondence to the Arbitrator, and the Arbitrator’s June 6, 2008 response, be entered as fresh evidence.

IV. ANALYSIS

I find that the Arbitrator provided fair, balanced and extremely expeditious decisions after properly narrowing in on the specific issues to be determined in the arbitration proceeding. Regarding the question of deductibility of income tax from EI benefits, I do not see in the 52 exhibits marked by the Arbitrator the evidence now advanced by the Respondent, nor is

it clear that that subsection 56(1) of the Income Tax Act (Canada) was brought to his attention.

The Appellant has firmly held views as to her entitlement under the Schedule. The Schedule, however, does not provide full compensation for all economic losses that may follow a motor vehicle accident. Rather, the Schedule provides limited compensation, as determined by the Legislature.

The role of adjudicators is to apply the Schedule to the facts of a case, as established by the evidence. If the plain meaning of the legislation is unclear, the adjudicator’s role is to interpret the legislation, in a purposive manner, in accordance with the rules of statutory interpretation. It is not the role of adjudicators to redraft legislation.

I now turn to the specific grounds for appeal.

1. The Appellant’s pre and post accident business losses

The Arbitrator has not yet finally determined the Appellant’s precise IRB and remains seized with that issue. That determination is properly left with the Arbitrator.

I agree with and confirm the Arbitrator’s decision that the Appellant is not entitled to

$12,101.20 for her pre-accident losses, as the latter does not result from, but rather precedes the accident. That the Appellant wishes to work as part of her rehabilitation, is commendable. It does not, however, make her pre-accident losses recoverable.

I agree with and confirm the Arbitrator’s decision that no claim for the $805.18 per week difference between projected future earnings and actual earnings (or loss) is recoverable under the Schedule, in accordance with Jambor. Loss of earning capacity benefits, which were available under the prior Bill 164 – Accidents After December 31, 1993 and Before November 1, 1996 (“Bill 164”), are not available under the applicable Schedule.

Subsection 4(1) of the Court Proceedings for Automobile Accidents that Occur on or After

November 1, 1996, states that it is addressing a person’s net income for the purposes of paragraph 267.5(1) of the Insurance Act. The latter pertains to third party tort claims, not first party statutory accident claims under the Schedule.

I am not persuaded that the Appellant was not properly accommodated at the arbitration hearing. No evidence, such as a transcript or contemporaneous correspondence, was put forward of the Appellant having requested oral rather than written submissions. In addition, this submission is inconsistent with the Arbitrator’s statement, at page two of his May 5, 2008 decision, that the Appellant “indicated that she could not limit her submissions” and on page seven that the Appellant made “unsolicited written submissions.”

2. The Arbitrator erred in capping IRBs at $400

I agree with and confirm the Arbitrator’s decisions that Welsh and Johnston are not applicable to this case, as they pertained to accidents which preceded the amendments to the Schedule, effective October 1, 2003. Subsection 7(1), which sets the maximum weekly IRB, previously read “[d]espite subsection 6(1).” The same provision now reads “[d]espite subsection 6(1) and (5),” the maximum IRB is $400 per week, unless optional IRBs have been purchased, which is not argued here.

The section “other disputes” in the Application for Mediation form may provide room for one to state one’s claim. The form does not create entitlement.

3. The Appellant’s claim for $15,000 for lost educational expenses

The Appellant’s reference is actually to the Commissioner’s Guideline No. 4/95. The latter specifically states that it applies to Bill 164. This earlier version of the Schedule provided weekly education disability benefits. No such weekly benefits are available under the Schedule applicable to this proceeding.

The function of section 20 of the Schedule is not to insure existing educational debts, no matter when incurred, if one is unable to continue earning one’s prior income.

Rather, subsection 20(1) of the Schedule provides for payment of “lost education expenses.” Subsection 20(3) defines “lost educational expenses” as expenses incurred before the accident, as enumerated, “in respect of the program term or program year in which the person was enrolled at the time of the accident, if the expenses are related to the program that the insured person is unable to continue.”

The Appellant’s education expenses were not incurred in respect of the program term or

program year in which the Appellant was enrolled at the time of the accident. Further, the Arbitrator had an evidentiary basis for his finding of fact that the Appellant was not enrolled at the time of the accident, as required by paragraph 20(1)(a) of the Schedule. Subsection 283(1) of the Insurance Act restricts internal Commission appeals to questions of law. Accordingly, I confirm the Arbitrator’s decision in this regard.

4. The Appellant’s claim for a further death benefit of $25,000.

I agree with and confirm the Arbitrator’s decision that the Appellant was not entitled to a

further $25,000 death benefit under paragraph 25(2)3 of the Schedule, as she did not meet the clear statutory pre-requisite that she was either a dependant of her deceased daughter or a person to whom her daughter had an obligation at the time of the accident to provide support under a domestic contract or court order. I am not persuaded that the Income Tax Act (Canada) amends paragraph 25(2)3 of the Schedule.

5. Other issues

In Budd and Personal Insurance Company of Canada, (FSCO P99-00032, January 8, 2000)

Delegate McMahon set out the following regarding fresh evidence:

The principles that guide the introduction of fresh evidence at the appellate levels of Canadian courts are well established. In Palmer v. The Queen, [1980] l S.C.R. 759, an appeal on a criminal matter, the Supreme Court of Canada, set out the following four criteria:

• The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial;

• The evidence must be credible, in the sense that it is reasonably capable of belief;

• The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial; and

• The evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result

On the consent of both parties, I allow into the evidence the reports of Dr. Melynk as requested. I am persuaded that these reports are relevant in understanding the Appellant’s pursuit of this appeal.

I am not allowing into evidence the other documents proffered by the Appellant or the Respondent (including evidence regarding income tax being deducted from EI income that was not entered as an exhibit before the Arbitrator). This is evidence that by due diligence, could have been adduced at the arbitration hearing. The Appellant submits that the arbitration was scheduled for four days and only took a day and a half and that she was not given sufficient time to present her case. The Arbitrator’s decision, however, indicates two hearing days in October 2007 and three additional hearing days in February 2008.

I also find that the proposed fresh evidence now proffered by the Appellant either not relevant to the issues in these appeals (such as the report regarding catastrophic determination) or, when taken with the other evidence adduced at the arbitration hearing, could not be expected to affect the result, the Appellant’s appeal essentially being based on her own interpretation of certain statutory provisions.

I do not have jurisdiction to determine, as separate and independent claims, deceptive and unfair business practices, or review the Appellant’s file as requested. Rather, the issues of a special award and the legal expenses of the arbitration hearing are left to be determined by the Arbitrator, without prejudice to either party to appeal same.

The issues of the Appellant’s entitlement to housekeeping and home maintenance expenses and post-104 week IRB entitlement were not before the Arbitrator. Accordingly, I have no jurisdiction to address these claims on the basis of alleged errors of law. Nor do I have jurisdiction to order the Respondent to recalculate overdue interest. Regarding the propriety of certain medical assessments, the Arbitrator found that the Appellant was not disentitled to payment of IRBs. That order has not been appealed.

I do not have jurisdiction to order a lump sum settlement of all future benefits. Regarding judicial review of this decision, I cannot provide legal advice to either party.

6. The Cross Appeal

The Arbitrator’s May 5, 2008 decision specifically accepts the Appellant’s submission that no EI or CPP would be deducted from her EI benefits. The Arbitrator does not give a reason in his decision for his implicit finding that the Appellant’s EI income was not subject to taxation, limiting the Appellant’s taxable income to that earned from Atikokan Information Solutions.

I am not persuaded by the Appellant’s argument that section 61 of the Schedule overrides subsection 56(1) of the Income Tax Act (Canada) and excludes EI income from taxation. Rather, section 61, in addressing the formula for determining a person’s net weekly income from employment, specifically includes “the income tax payable by the person under the Income Tax Act (Canada)” on the gross annual income from employment.

Subsection 56(1) of the Income Tax Act (Canada) provides that unemployment insurance benefits shall be included in computing the income of a taxpayer for a taxation year. Accordingly, I respectfully find that the Arbitrator erred in law in his finding at page 22 of his May 5, 2008 decision that the Appellant’s annual income for the purpose of calculating payable income taxes was $7,533.

The Arbitrator left open the determination of the amount of the EI and CPP premiums to be deducted and remained seized regarding determining the exact IRB quantum. Based on his determination regarding the deduction of income tax, the Arbitrator found certain of the Appellant’s submissions regarding her tax status moot. These submissions may no longer be moot, and if not already determined, may now need to be decided by the Arbitrator.

Accordingly, I refer back to the Arbitrator, in concordance with his being seized with determining the correct quantum of the IRB payable, the issue of what precise income tax

is deductible.

VI. EXPENSES

If the parties are unable to agree on the legal expenses of these appeals, an expense hearing may be arranged in accordance with Rule 79 of the Code.

If either party has served a Bill of Costs regarding these appeals, then the other party shall forthwith provide a written response to the account, identifying the items in dispute and the reasons for the dispute, including whether there is an issue as to entitlement to expenses. If a party seeking its legal expenses of these appeals has not yet served a Bill of Costs describing the expenses claimed, services received and costs, it shall do so forthwith.

May 7, 2009

Lawrence Blackman Director’s Delegate

Date

¹ The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended to the date of the accident.