Vincent Thomas v. Dominion of Canada General Insurance Company, 2017 ONFSCDRS 327

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2017 ONFSCDRS 327

Appeal P16-00074

OFFICE OF THE DIRECTOR OF ARBITRATIONS

VINCENT THOMAS

Appellant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Respondent

BEFORE:

Edward Lee

REPRESENTATIVES:

Roger Foisy represented Mr. Thomas at the appeal hearing; and Florence Thomas Law Firm provided written submissions

Timothy Crljenica for Dominion

HEARING DATE:

October 25, 2017

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, R.R.O. 1990, as amended, it is ordered that:

1. The appeal is dismissed.

2. If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 13, 2017

Edward Lee Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This matter involves the SABS–2010.¹

This is an appeal from a decision of Arbitrator Mongeon dated September 19, 2016. In his decision, the Arbitrator determined that the Appellant, Mr. Thomas, was not entitled to an Income Replacement Benefit (an “IRB”), because the claim for an IRB had not been proven.

II. BACKGROUND

Mr. Thomas (“the Appellant”) suffered an automobile accident on July 14, 2013. He applied for accident benefits from Dominion of Canada General Insurance Company (“Dominion”) payable under the SABS. Disputes arose about his benefits, and he applied for arbitration.

The issue to be decided at the arbitration hearing was whether Mr. Thomas was entitled to an IRB.

At the hearing, the Arbitrator determined that Mr. Thomas had been an employee of Agricorp at the time of his accident. The Arbitrator had other evidence that Mr. Thomas had also been working for another corporation called Samoht Partners Inc. (“Samoht”), at the time of his accident. Mr. Thomas’ tax returns listed a loss of $50,000.00 as his “net partnership income” for 2012, and a loss of $43,505.00 as his “net partnership income” for 2013.

The partnership losses and Mr. Thomas’ other income were the main questions at the hearing.

Dominion had made repeated requests for financial information about Samoht Inc., commencing shortly after the filing of the Appellant’s application for accident benefits.

At the hearing, the Arbitrator determined that the Appellant and his spouse were the sole directors of Samoht Inc., and the Appellant’s home address was also the registered address of Samoht Inc. He found the two had remained in control of any mail sent to Samoht Inc. Further, the Arbitrator determined that the Appellant’s testimony and evidence had not been credible in regard to Samoht Inc. As a result, the Arbitrator drew an adverse inference whenever evidence touched on Mr. Thomas’ income or losses related to Samoht Inc.

Mr. Thomas never produced the financial documents requested in regard to Samoht Inc. The Arbitrator held that without the financial statements of Samoht Inc., it was not possible to “truly understand the applicant’s income for the relevant period.” He also ruled that the Appellant bore the burden of showing appropriate information in regard to the entries about the partnership income. As these documents were not produced, the Appellant had not met his burden of proof. Therefore, the claim for IRB was not proven.

This is the decision the Appellant seeks to overturn.

III. ARGUMENTS

On the following pages, I have reproduced the Appellant’s arguments exactly as submitted. The Appellant argues the Arbitrator erred in the following manner:

a. The Arbitrator presumed, without citing any specific authority, that the appellant was disentitled to a statutory accident benefit or any interest thereon. Therefore contravening the schedule O. Reg. 34/10 SABS (5)(1)(1)(i).

The Arbitrator did not err in law in determining that the Appellant was disentitled to an IRB pursuant to section 5(1)(1)(i) of the Schedule. The onus was on the Appellant to establish the quantum of any IRB that might have been payable to him.² The evidence before the Arbitrator was that there were significant entries in the Appellant’s income tax returns relating to the Appellant’s partnership losses resulting from the Appellant’s interests in Samoht Inc.

In his decision, the Arbitrator noted how Dominion had made requests to the appellant to provide financial and other information in regard to Samoht Inc. The Arbitrator did not find the Appellant had been credible in his testimony and in his responses to information requests from the Insurer. He also determined the Appellant had not complied with a production order issued by a pre-hearing arbitrator for corporate tax returns from Samoht for 2012 to 2016, and shareholder information.

Based on his credibility findings, the Arbitrator drew adverse inferences where documents had not been provided to support propositions advanced by the Appellant in regard to Samoht Inc. and entries in the Appellant’s income tax returns concerning Samoht Inc. Without these documents, the Arbitrator concluded he could not understand the Appellant’s income for the relevant period, and he dismissed the claim for IRBs because the Appellant had not met his burden of proof.

An order of an Arbitrator may only be appealed on a question of law. All the Arbitrator’s factual findings mentioned above were properly made and based on evidence before him. I find no error in the Arbitrator’s conclusion, based on section 5(1)(1)(i) of the Schedule.

b. The Arbitrator presumed, without citing any specific authority, that the appellant was disentitled to a statutory accident benefit or any interest thereon, for the Arbitrator’s failure to recognized and give weight to the fact that the appellant had fully satisfied and complied with section 33 of the schedule.

c. The Arbitrator presumed, without citing any specific authority, that the appellant was disentitled to a statutory accident benefit or any interest thereon despite section 34 of the Schedule O. Reg. 34/10 SABS, Ontario regarding reasonable explanation to section 33 of the schedule.

d. The Arbitrator presumed, without citing any specific authority, that the appellant was disentitled to a statutory accident benefit or any interest thereon, for the Arbitrator misinterpretation of section 33 , that a breach of section 33(1) should results to forfeiture of benefits, but not a suspension as in the case of …

These three arguments all pre-suppose that the Arbitrator based his decision on sections 33, 34, and 33(1) of the Schedule. In fact, the Arbitrator did not do so, and I do not find the Arbitrator committed the errors suggested by the Appellant.

e. The Arbitrator misapplied the law with respect to awarding legal expenses, taking a very unusual and “rather unprecedented step” in ordering the appellant(insured) representative to personally pay costs as opposed to the respondent(insurer) obligation to fulfill the duty of good faith and fair dealing under the Insurance Act.

I do not find the Arbitrator misapplied the law or erred in law as suggested. Nothing in the order suggests the Arbitrator ordered the Appellant’s representative to personally pay any costs.

f. The Arbitrator “failed to give consideration to available, applicable and relevant evidence.” The confirmation of change of directors –Form6 was presented to the Arbitrator during the trial but instead relied on unreliable information from Innovation, science and Economic Development Canada website despite the third-party information liability disclaimer on the same website instructing the public to request copies of documents filed with corporations Canada.

The Arbitrator made factual findings in regard to Samoht Inc. based on his assessment of the evidence and witnesses (including the Appellant) before him at the hearing. It was within the Arbitrator’s jurisdiction to make these assessments of credibility, and to determine which sources of evidence were more probative. The Arbitrator addressed the question of the directors of Samoht Inc. in detail on pages 3-9 of his decision. I do not find the Arbitrator made any of the errors in law suggested by the Appellant.

g. The Arbitrator in his award of expenses contravene Rule 76., for his failure to give particular consideration to a written “Offer to settle" served on the respondent on May 18, 2016, and open for acceptance, after the conclusion of pre-hearing discussion on May 16, 2016, but before the trial on July 19,& 20, 2016.³

I do not find the Arbitrator committed the error suggested by the Appellant. Nothing in the decision suggests that a written offer to settle had been made, and the Appellant was entirely unsuccessful at the Arbitration.

h. The Arbitrator misapplied the law in contravention of the principle of interpreting non participating partnership loss as an EI benefits in calculating the appellant’s gross income…”

I do not find the Arbitrator committed the error of law suggested by the Appellant. There is no indication that the Arbitrator made any calculation whatsoever in regard to the non-partnership losses as an EI benefit. This appears to be an entirely new argument raised by the Appellant, and such an argument is not permitted at an appeal proceeding.⁴

Instead, the Arbitrator accepted the factual evidence of the accounting witness and ruled that without Samoht Inc.’s financial statements, it was not possible to understand the Appellant’s income for the relevant period. Based on these findings, he ruled the Appellant was not entitled to an IRB.

i. The Arbitrator misapplied the law in contravention of the principle of interpreting non participating partnership loss of $50,000 and $43,000 on the appellant’s 2012 and 2013 T4 filing as an EI benefits in calculating the appellant’s gross income.

The answer to section h also applies to this section.

j. The Arbitrator "failed to give consideration, that the respondent agreed all along from mediation to trial that the appellant was entitled and qualified for weekly IRB, but somehow the respondent believed through fishing expedition could make the quantum of the weekly IRB to be zero.

There is nothing in the decision to suggest that Dominion had at any time agreed the Appellant qualified for a weekly IRB. Nor is there anything to suggest the Appellant raised this point at his arbitration hearing. The decision references a letter sent by Dominion to the Appellant only days after the Appellant’s initial application, wherein Dominion requested further financial information in regard to his benefits.

The Arbitrator addressed himself to the question as to whether the Appellant was entitled to an IRB at the hearing and attempted to quantify that IRB. I see no error in the Arbitrator’s decision.

k. The Arbitrator contravene O Reg. 34/10 SABS(5), for awarding disentitlement of weekly IRB below $185.00 per week which is for non-earner.

I do not find the Arbitrator erred as suggested above. The Arbitrator did not award any IRB to the Appellant.

l. The Arbitrator in ruling that the applicant is not entitled to an Income Replacement Benefit, erred in law in relying exclusively on the findings of the document production (corporate document of SAMOHT PARTNER INC.) Requested by the insurer (DOMINION OF CANADA GENERAL INSURANCE COMPANY) and totally disregarded the applicant’s 2012 and 2013 General T1 Tax return filing with Canada Revenue Agency produced by the applicant.

The Arbitrator addressed his concerns with the Appellant’s document production concerning Samoht Inc. at pages 3-9 of his decision. It is clear that the Arbitrator weighed and assessed the probative value of the sources of evidence he received at the hearing, including the individual tax returns of the Appellant and the corporate tax returns of Samoht Inc. In making his assessments, he determined those sources to which he would attribute the greater weight. He could also make adverse inferences when he found it appropriate. These were factual findings based on evidence that was properly before the Arbitrator. I find no error in law as suggested by the Appellant.

m. The arbitrator in ruling that the Applicant is not entitled to an Income Replacement Benefit, erred in law in relying exclusively on the findings of the document production (corporate document of SAMOHT PARTNER INC.) Requested by insurer (DOMINION OF CANADA GENERAL INSURANCE COMPANY) and totally disregarded the applicant’s 2012 and 2013 Notice of assessment from Canada Revenue Agency produced by the applicant.

The answer to section l also applies to this section.

n. The arbitrator erred in law for failure to recognized from the applicant’s notice of assessment and General T1 Tax return for the two years prior to the accident of May 28, 2013 …

The answer to section l also applies to this section.

o. The arbitrator erred in law for failure to properly quantify the applicant’s weekly income benefit entitlement during the entirety of the post-accident period by refusing to calculate the quantum based on the applicant General T1 tax return and notice of assessment from CRA for the year 2012 and 2013 …

The answer to section l also applies to this section.

p. The arbitrator erred in law for failure to follow SABS SCHEDULE in quantifying the applicant’s weekly income benefit entitlement during the entirety of the post-accident period based on the applicant four weeks earning prior to the accident of May 28, 2013 …

The Arbitrator addressed the issue of the quantum of the Appellant’s IRB over the course of the hearing. The decision demonstrates how he assessed and weighted the many sources of evidence in the quantification of the IRB. I find no error of law in the manner in which the Arbitrator made his conclusions and determinations of credibility. I do not find the Arbitrator erred as suggested in this section.

q. the arbitrator erred in law by not applying the common law rule in the Ontario Court of Appeal decision in Howard v. Benson Group in which the court provides important guidance to employer in relation to the use of fixed-term contracts for employees and the early termination of those contracts.

I do not find that Arbitrator erred as suggested in this section. The Arbitrator made no rulings whatsoever that dealt with fixed term contracts for employees or their early termination.

r. The arbitrator erred in law in concluding that the applicant was self-employed contrary to the fact that the applicant was an employee prior to the accident based on information in his T1 General tax return, notice of assessment and employment contract.

I do not find the Arbitrator erred as suggested in this section. The Arbitrator’s conclusions were not necessarily based on determining that the Appellant was self-employed. Instead, as already mentioned, as a result of the Appellant’s non production of documents, the Arbitrator determined the Appellant was unable to meet his burden of proof to establish his entitlement to the benefit.

s. The arbitrator erred in law for failure to proper apply the definition of self-employed person under SABS, O Reg 34/10, which states…

I do not find the Arbitrator erred as suggested in this section. There was no requirement on the Arbitrator to apply the definition of a self-employed person.

t. The arbitrator erred in law for failure to identify and apply any legal test, especially from the supreme court decision in the cases of (671122 Ontario Ltd. v. Sagaz Industries Canada Inc. and Wiebe Door Services Ltd. v. MNR) for the determination of an employee relationship vs self-employed.

I do not find the Arbitrator erred as suggested in this section. There was no requirement on the Arbitrator to determine the applicant was self-employed as opposed to being in an employee relationship.

u. The arbitrator erred in law for failure to identify and properly apply any labour standard interpretations, policies and guidelines, especially from the website of Employment and social development Canada to determine the existence of an employer/employee relationship to help him conclude on the applicant's employee vs self employed status.

I do not find the Arbitrator erred as suggested in this section. Not only does this appear to be an entirely new argument, not raised at the hearing, the Arbitrator was not required to make a conclusion on the Appellant’s employee or self-employed status.

w. The arbitrator erred in law for failure to identify and properly apply any income tax act rules and guidelines necessitated by the SABS schedule especially from service Canada website which concludes that in a corporation or limited company, a person who controls more than 40% of the voting shares is not necessarily self-employed, but is still considered uninsurable under the EI Act.

I do not find the Arbitrator erred as suggested in this section. Not only does this appear to be an entirely new argument, not raised at the hearing, the Arbitrator was not required to identify or apply any of the provisions suggested by the Appellant.

x. the arbitrator erred in law for weighing more probative value on an unreliable information, from Innovation, science and Economic Development Canada website despite the …

I do not find the Arbitrator erred as suggested in this section. I have already addressed how the Arbitrator made his findings in regard to the corporate, fiscal, and income documents adduced as evidence at the hearing, and I find no error in the Arbitrator’s ruling.

y. Further arguments

More arguments were provided by the Appellant’s new counsel, Mr. Foisy, at the appeal hearing. Mr. Foisy had not been the Appellant’s legal representative at the initial arbitration hearing and had not been present at that hearing. He stated he had been retained in June 2017, but no other written submissions had been provided by him before the appeal hearing. Nor had he made any requests to amend the extensive submissions already received.

At the appeal hearing, Mr. Foisy argued the Arbitrator was supposed to deal only with the question of quantum of the IRB at the arbitration hearing, and that any decision disentitling the Appellant or suspending his right to an IRB could only be effective for a specified period until the Appellant produced the documents that had been requested under section 33 of the Schedule. Further, the documents in question were now available and could be considered in the calculation of an IRB.

Mr. Crljernica, the legal representative of Dominion, was present at the initial arbitration hearing and disagreed with Mr. Foisy’s statements. I find most of Mr. Foisy’s arguments amount to an attempt to re-argue the case before me, or to provide new evidence in the form of corporate documentation. The appeal is not an opportunity to re-argue a case; nor is it open to the Appellant to file any documentation in this manner.

Based on the Arbitrator’s decision, it was clear the Arbitrator did seek to quantify the IRB at the hearing. For reasons already discussed, I find no error in how the Arbitrator weighed the evidence and testimony before him, and how he determined that he could not compute the Appellant’s income during the relevant period. Based on this determination, the Arbitrator found the Appellant was disentitled to an IRB. I find no error in the Arbitrator’s ruling.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 13, 2017

Edward Lee Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Grewal and AIG Commercial Insurance Company of Canada (FSCO P14-00032, August 13, 2015), at page 10
3. 3The Appellant's number 8 submission is essentially identical to this one.
4. 4Rule 51.2 Dispute Resolution Practice Code