Moses Cohen v. Aviva Canada Inc., 2018 ONFSCDRS 118

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2018 ONFSCDRS 118

Appeal P17-00040

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MOSES COHEN

Appellant

and

AVIVA CANADA INC.

Respondent

BEFORE:

Maggy Murray

REPRESENTATIVES:

Andrew Stein for Mr. Cohen

Raymond Murray for Aviva Canada Inc.

HEARING DATE:

March 29, 2018

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 Arbitrator's Orders of May 31, 2017 and September 28, 2017 are confirmed and this appeal is dismissed.

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

June 19, 2018

Maggy Murray Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Cohen appeals the orders of Arbitrator Musson dated May 31, 2017 and September 28, 2017, wherein he dismissed Mr. Cohen's claims under the SABS-1996¹ for income replacement benefits (IRBs) and housekeeping expenses and ordered Mr. Cohen to pay Aviva $49,982.10 (including HST and exclusive of disbursements) for its expenses of the arbitration hearing, which lasted nine days and for which the parties also made written submissions following the hearing.

II. BACKGROUND

Mr. Cohen was involved in a motor vehicle accident on March 28, 2006. He went to the hospital after the accident and was told to see his family doctor. Over a month later, he went to his family doctor, Dr. Warner. He returned to his family doctor twice regarding his accident, once in July and again in December 2006.

In his May 31, 2017² decision, the Arbitrator found that Mr. Cohen was not entitled to:

i. Income Replacement Benefits ("IRBs") at the rates of $182.12 per week from April 4, 2006 until March 28, 2008 and $185.00 per week from March 29, 2008 to date and on-going; or

ii. Housekeeping and Home Maintenance Benefits for the period from March 28, 2006 until March 28, 2008.

The Arbitrator did not believe that Mr. Cohen worked earning active income, as opposed to investment or passive income, in the 12 months before the accident. He also found that Mr. Cohen was not entitled to housekeeping expenses.

Mr. Cohen could not recall his job duties at places he claimed to have worked.³ The Arbitrator found that the evidence demonstrated that Mr. Cohen returned to work, earning investment income, in same capacity as before the accident. The Arbitrator concluded that neither Mr. Cohen nor his wife were credible and they provided contradictory evidence.

In his September 28, 2017⁴ decision, the Arbitrator ordered Mr. Cohen to pay Aviva $49,982.10 (including HST and exclusive of disbursements) for its expenses of the arbitration hearing.

Mr. Cohen withdrew his claims for various medical benefits in his written submissions after the oral evidence was complete.

The Arbitrator noted that Mr. Cohen had a number of pre-existing medical issues before this accident which included spurs in his right heel, tennis elbow, plantar fasciitis and stiffness in his neck and back. He received acupuncture regularly for his back and cortisone shots for his foot pain. According to Dr. Lexier, Mr. Cohen’s orthopaedic surgeon, Mr. Cohen also had osteoarthritis in his hips before this accident.

Before this accident, Mr. Cohen was a salesman and had business investments. Between 2004-2014, Mr. Cohen never earned more than $18,000.00. Mr. Cohen’s 2006 income tax return showed $13,500.00 in business income which Mr. Cohen claimed was from his work as a general contractor for a synagogue, despite not having any prior experience as a general contractor. The Arbitrator found that: (i) there was no reliable evidence, such as purchase orders or contracts, that Mr. Cohen earned $13,500.00 for his work as a general contractor at the synagogue before the accident; and (ii) the $13,500.00 was passive (i.e., investment) income.

III. ANALYSIS

A party to an arbitration may appeal an order of an arbitrator to the Director, or his delegate, only on a question of law.⁵ This was a fact-based decision. In that regard, the Divisional Court stated in Kanareitsev v. TTC Insurance Company Limited, ⁶ that "[p]articularly when results turn on the first instance decision maker's view of the credibility of witnesses and involves a fact-driven analysis, appellate review must take 'proper account of the distinct advantage' of the first-instance decision maker's assessments. The appeal judge must not try the case de novo or simply substitute his or her views for those of the trial judge." Moreover, the Arbitrator’s reasons simply need refer to the principal evidence relied upon by the Arbitrator and provide a justification for the conclusions.⁷

Although Mr. Cohen submits the Arbitrator made a number of errors in his decision of May 31, 2017, the reasons turned on Mr. Cohen's lack of credibility and lack of evidence. There was ample evidence to support the Arbitrator's assessment of Mr. Cohen's credibility. They do not establish any error of law. There is thus no reason for me to intervene.

Income Replacement Benefits

Mr. Cohen submitted to Aviva an Employer’s Confirmation of Income in June 2012, over six years after the accident. It showed income of $17,156.00 for the 52 weeks prior to the accident. Mr. Woolach, the expert accountant that the Applicant retained, testified that the $17,156.00 was investment income, which is not used to calculate an IRB.

The Arbitrator could not determine what Mr. Cohen did before the accident. For example, Mr. Cohen gave contradictory evidence about whether he worked at a company called Tivon Trading. He testified that it was approximately one week before the accident that he started working at Tivon. However, in a signed statement he gave the Insurer prior to the Hearing, Mr. Cohen said he started working at Tivon Trading four to six months before the accident, but he later denied this when cross-examined.⁸ Then he testified that it was one month before the accident that he started working at Tivon.⁹ Mr. Cohen also testified that he was an investor in Tivon, not a worker.

Mr. Cohen also testified that before the accident, he was self-employed selling dental equipment for American Dental and religious artifacts. He further testified that he travelled to Morocco to personally pick Etrog fruit from trees in the orchard, which was physically demanding work, which he would then import to Canada. The Arbitrator found this not to be credible given the Applicant's medical evidence that prior to this accident, Mr. Cohen had chronic neck, back and elbow pain. The Arbitrator concluded that “The Applicant’s testimony, as it related to his work status and job responsibilities, was vague and contradictory. In the end, he was not able, in a clear and concise manner, to state unequivocally what he did to earn money.”¹⁰

An accountant testified as an expert on behalf of Mr. Cohen. He found that Mr. Cohen’s income information was “sparse.”¹¹ An insured person must prove not only that they provided services, but that they received remuneration for their services.¹² In Mr. Cohen’s case, the Arbitrator concluded that Mr. Cohen was unable to prove how much he earned and did not keep any source documents from his religious artifact business,¹³ nor did his accountant have any source documents because Mr. Cohen would allegedly verbally tell the accountant how much money he earned.¹⁴

Between 2012 and July 2016, Aviva requested financial information from Mr. Cohen 12 times. The Arbitrator found that Mr. Cohen failed to submit evidence to prove that before the accident, he was receiving earned income as opposed to investment income.

Dr. Oshidari initially opined in his addendum report of August 14, 2015 that there was no correlation between the accident and Mr. Cohen’s right shoulder pain.¹⁵ However, in Dr. Oshidari’s further addendum report of June 2016, Dr. Oshidari found that Mr. Cohen’s right shoulder adhesive capsulitis was caused by the accident. ¹⁶ Despite this, Dr. Oshidari concluded that Mr. Cohen could did not suffer a substantial inability to work for the first 104 weeks post-accident.

According to Mr. Cohen, the Arbitrator either did not consider or misapprehended the evidence of Dr. Oshidari when the Arbitrator concluded “there was no evidence presented that conclusively ties the Applicant’s injuries from the accident to his reported complaints, thereby preventing him from working.” I disagree. Both Dr. Warner and Dr. Oshidari recognized that Mr. Cohen did administrative work rather than physical labour. Although Mr. Cohen’s adhesive capsulitis may have been caused by the accident, the Arbitrator concluded that it did not prevent him from working.

There was evidence that Mr. Cohen was working after the accident. For example:

i. Mr. Cohen told a physiotherapist in 2007 that he was “self-employed” and provided his work phone number;¹⁷

ii. Mr. Cohen’s family doctor, Dr. Warner, noted in his clinical notes and records in 2010 that Mr. Cohen had “business and family stress,” and on June 18, 2013, Mr. Cohen told Dr. Warner that he was currently employed. Dr. Warner also testified that he was “sure” Mr. Cohen was working at the time of the arbitration hearing;

iii. Dr. Rozen, an occupational therapist, noted in 2013 that Mr. Cohen is “currently employed;”

iv. Dr. Lexier noted in 2015 that Mr. Cohen “works in investments;”¹⁸

v. Ms. Courts, an adjuster with Aviva, testified that in 2009, she took a statement from Mr. Cohen in which he said he continued to work after the accident.

An Arbitrator can look at pre and post-accident work capacity to determine entitlement to income replacement benefits within the first 104 weeks. And, someone who returns to work in the same capacity as prior to the accident does not meet the threshold for IRB’s,¹⁹ which is what the Arbitrator found.

This case is similar to Bruno and State Farm²⁰ in which the Arbitrator found that Mr. Bruno failed to prove that he:

i. Was employed at the time of the accident because the evidence about his employment status and income was too inconsistent and unreliable;

ii. Sustained an impairment as a result of the accident;

iii. Satisfied the test for entitlement to IRBs.

The Arbitrator found that Mr. Cohen continued to work after the accident. However, IRBs are only payable if, as is stated in s. 4(1)1 of the SABS, within 104 weeks after the accident Mr. Cohen suffered a substantial inability to perform the essential tasks of his pre-accident employment. Based on the Arbitrator's findings that Mr. Cohen continued to work after the accident, Mr. Cohen failed the basic test of eligibility for IRBs.

The Applicant submitted that the Arbitrator did not consider certain evidence, such as vocational reports. However, an Arbitrator is not required to mention every piece of evidence. The Arbitrator also considered Wadhwani v. State Farm Mutual Automobile Insurance Company,²¹ in which the Court of Appeal determined that if an Applicant does not suffer a substantial inability to perform the essential tasks of their employment within 104 weeks after the accident, the Applicant will not qualify for post 104-week IRBs. Consequently, it was not necessary for the Arbitrator to look at vocational reports because he concluded, based on evidence presented at the hearing, that Mr. Cohen was working and doing the same tasks post-accident as he did prior to the accident.

I find no error in the Arbitrator’s conclusion that Mr. Cohen failed to prove he was disabled from working as a result of the accident.

Housekeeping

I will now address the housekeeping claim.

Mr. and Mrs. Cohen live in a condominium where the condo corporation maintains the exterior of the property, including shoveling snow, cutting grass and gardening. The Arbitrator found that Mr. and Mrs. Cohen’s evidence regarding whether or not he and his wife had housekeeping assistance before the accident was contradictory.

Mr. Cohen testified that before the accident, he mopped and swept the floor and vacuumed the floor and carpets, set the table, carried the plates, did laundry, washed and bathed the kids, cleaned the bathtubs and washrooms, made the beds in the morning, prepared lunch for the kids for school and did the household shopping.²² However, Mr. Cohen later testified that housekeeping is a woman’s responsibility.²³ Mrs. Cohen testified that before the accident, Mr. Cohen’s help with housework before the accident was “limited”²⁴ and she could not remember what Mr. Cohen did.

Mr. Cohen testified that before the accident, they only had a housekeeper to assist with all Jewish holidays.²⁵ Then Mr. Cohen testified that they hired a housekeeper after the accident.²⁶ When Mr. Cohen was cross-examined and asked about his evidence that he had a housekeeper before the accident, he responded: “Ask my wife … I don’t know nothing about all these things.”²⁷ Then Mr. Cohen testified that he couldn’t recall if they had a housekeeper before the accident.²⁸

Mrs. Cohen testified that before the accident, she had a cleaning lady once a week, and after the accident, the cleaning lady came to their house three times a week.²⁹ Then Mrs. Cohen testified that after the accident, the cleaning lady came to their house twice a week.³⁰ Mrs. Cohen also testified that before the accident, the housekeeper would come to their house once a week as well as for certain holidays.³¹

The Arbitrator found that Mr. Cohen’s evidence regarding payment for housekeeping expenses was vague and convoluted. Aviva sent Mr. Cohen accident benefit forms in April 2006. However, Mr. Cohen did not submit an Application for Expenses to Aviva for his housekeeping claim until six years after the accident. In addition, the Application for Expenses for alleged housekeeping expenses is for the period March 2006-March 2008, but is dated December 6, 2006. It did not include information such as the hourly rate charged by the housekeeper, the number of hours per week the housekeeper worked or an explanation of what services were provided.³²

Mrs. Cohen handwrote, but did not date, a letter³³ allegedly signed by the housekeeper³⁴ who was deported from Canada in 2008 or 2009.³⁵ As well, the alleged housekeeper’s name is spelled differently on the Application for Expenses³⁶ and the handwritten letter,³⁷ as well as differently within the handwritten letter.

The Arbitrator concluded that there was no credible evidence of how much was paid to the housekeeper or what housekeeping tasks Mr. Cohen performed before the accident. I find no error in the Arbitrator's conclusions regarding the housekeeping claim, as he had evidence before him to support his conclusion that Mr. and Mrs. Cohen’s evidence was contradictory and not reliable.

Costs

The arbitration hearing lasted nine days and the parties also made written submissions following the hearing. Aviva claimed $99,964.19 in legal fees, based on the legal aid rates, which did not include the 60 hours of time to prepare its written submissions following the hearing. The Arbitrator applied the principle of fairness and ordered Mr. Cohen to pay Aviva $49,982.10 (including HST and exclusive of disbursements), which was 50% of the amount claimed.

According to Mr. Cohen, the Arbitrator erred in law in applying a fairness test and reducing Aviva’s claim for costs by 50% and instead should have applied a ratio of either 3:1 or 4:1 (three or four hours of preparation time to every one hour of hearing time). According to Aviva, if its written submissions were included in the Arbitrator’s cost award: (i) a ratio of 3:1 would have resulted in an award of $42, 255.76 in expenses; and (ii) a ratio of 4:1 would have resulted in an expense award of $51, 569.70.

The Arbitrator set out the following criteria, which are contained in Rule 75.2 of the Dispute Resolution Practice Code – Fourth Edition, for determining entitlement to expenses of the arbitration proceeding which are:

1. Each party's degree of success in the outcome of the proceeding.

2. Any written offers to settle made in accordance with subsection (3).

3. Whether novel issues are raised in the proceeding.

4. The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.

5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.

6. Whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation.

The Arbitrator then considered the first five criteria and found that the sixth criteria did not apply.

The Arbitrator found that the numerous motions and Mr. Cohen’s withdrawal of the issues of medical benefits at the conclusion of the hearing, rather than the start, contributed to the length of the hearing.

In determining an award of expenses, an arbitrator can use a percentage of the amount claimed, as was done in Tran and TD Home and Auto Insurance Co., in which the Arbitrator found that “a reasonable number of total hours would be 50 per cent of what is being claimed.”³⁸ Moreover, “In determining the appropriate quantum of expenses, the objective is to fix an amount that is fair and reasonable given the number of issues, their complexity and the amounts in dispute. In so doing, a pragmatic, broad-stroke approach (rather than a line-by-line assessment) is frequently favoured.”³⁹

As stated above, the arbitration hearing lasted nine days. I find that there was no error in law in the Arbitrator awarding Aviva costs of $49,982.10 which was 50% of the original amount claimed that was calculated based on the legal aid rate.

Procedural Matters

Before the hearing began, the Arbitrator heard a number of motions:

i. Motion #1: The Applicant requested an adjournment the day before the hearing because his rabbi was preparing for a funeral, one of the witnesses was not available and Mr. Cohen’s daughter was going to have a baby in New York City. Aviva opposed Mr. Cohen’s request for an adjournment. The Arbitrator found that neither the Applicant’s rabbi or the additional witness were identified, pursuant to Rule 41 of the Dispute Resolution Practice Code – Fourth Edition, at least 30 days before the hearing. In addition, Mr. Cohen was aware of his daughter’s pregnancy when the hearing was adjourned, at Mr. Cohen’s request, from April to September 2017. The Applicant relied on Gehi and Guarantee Co. of North America⁴⁰ as authority that an adjournment will be granted where a party will be prejudiced. However, I find that Gehi is distinguishable because in Gehi, the Applicant’s representative was not prepared,⁴¹ and Mr. Gehi was in India on a family emergency until just before hearing, neither of which are similar to Mr. Cohen’s reasons for the requested adjournment. There was no error of law in the Arbitrator’s decision on this motion.

ii. Motion #2: Aviva sought to exclude four documents, which were sent to it less than 30 days before the hearing and included a document with a fax date of June 21, 2016. Between 2012 and July 2016, Aviva requested financial information from Mr. Cohen 12 times. The Arbitrator refused to admit into evidence three of the four documents because: (1) they were served less than the 30 days before the hearing, contrary to Rule 32 of the DRPC which requires that parties exchange documents at least 30 days before the hearing; and (2) there was no valid reason for their late service. The fourth document was served late due to a government delay and was admitted into evidence. The Arbitrator found that there was no valid reason why Mr. Cohen did not produce three of the four documents in compliance with Rule 32 of the DRPC. There was no error of law in the Arbitrator’s decision on this motion.

iii. Motion #3: Mr. Cohen made a motion on the morning of the hearing to add three individuals to his witness list, which included his rabbi. These individuals were the authors of the letters that the Arbitrator denied admitting into evidence at the hearing in motion #2 above. The Arbitrator found that there was no reason why these witnesses were not identified at least 30 days before the hearing, as required by Rule 33 of the DRPC which requires that witnesses be identified at least 30 days before the hearing. There was no error of law in the Arbitrator’s decision on this motion.

The Arbitrator correctly applied the law and made factual findings that are not subject to review on appeal. Accordingly, the appeal is dismissed and the Arbitrator's decisions are affirmed.

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 – Fourth Edition.

June 19, 2018

Maggy Murray Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Cohen v. Aviva (Cohen) (FSCO, A13-014632, May 31, 2017)
3. 3Cohen, QL at paragraph 33
4. 4Cohen and Aviva Canada Inc. (Cohen expense decision) (FSCO A13-014632, September 28, 2017)
5. 5Rule 50.1 of the Dispute Resolution Practice Code – Fourth Edition and s. 283(1) of the Insurance Act, R.S.O. 1990, c. I.8
6. 6(2008), 2008 CanLII 26262 (ON SCDC), 66 C.C.L.I. (4th) 46, 297 D.L.R. (4th) 373, QL at para. 28 (Ont. Div. Ct.)
7. 7Kanareitsev, QL at para. 32
8. 8Transcript of Moses Cohen, September 23, 2016, p. 137
9. 9Transcript of Moses Cohen, September 23, 2016, p. 124
10. 10Cohen, QL at para. 80
11. 11Cohen, QL at para. 50
12. 12L.C. v. Pafco Insurance Co., QL at para. 17 (FSCO, P02-00019, June 18, 2003)
13. 13Transcript of Mr. Cohen, September 23, 2016, at pp.’s 177-178
14. 14Transcript of Mr. Cohen, September 23, 2016, at pp.’s 178, 199-200
15. 15Applicant’s Compendium of Key Evidence, Tab 1 B, at 6
16. 16Applicant’s Compendium of Key Evidence, Tab 1 B, at 4 and 5
17. 17Aviva’s Compendium of Key Evidence, p. 34
18. 18Aviva’s Compendium of Key Evidence, p. 37
19. 19D.F. v. Wawanesa Mutual Insurance Co. QL at para. 20 (FSCO A05-000779, August 23, 2006)
20. 20QL at para. 10 (FSCO P13-00019, March 26, 2014)
21. 212013 ONCA 662, [2013] 52 M.V.R. (6th) 1, 26 C.C.L.I. (5th) 173, QL at para. 12 (Ont. C.A.)
22. 22Transcript of Mr. Cohen, September 22, 2016 at 50
23. 23Transcript of Mr. Cohen, September 22, 2016 at 152-153
24. 24Transcript of Mrs. Cohen, November 29, 2016 at 5-6
25. 25Transcript of Mr. Cohen, September 22, 2016 at 53
26. 26Transcript of Mr. Cohen, September 22, 2016 at 58
27. 27Transcript of Mr. Cohen, September 23, 2016 at 149
28. 28Transcript of Mr. Cohen, September 23, 2016 at 150
29. 29Transcript of Mrs. Cohen, November 29, 2016 at 7
30. 30Transcript of Mrs. Cohen, November 29, 2016 at 38
31. 31Transcript of Mrs. Cohen, November 29, 2016 at 38
32. 32Aviva’s Compendium of Key Evidence at 138
33. 33Transcript of Mrs. Cohen, November 29, 2016 at 42-43
34. 34Aviva’s Compendium of Key Evidence at 139
35. 35Transcript of Mrs. Cohen, November 29, 2016 at 43-44
36. 36Aviva’s Compendium of Key Evidence at 138
37. 37Aviva’s Compendium of Key Evidence at 139
38. 38QL at para. 17 (FSCO A12-004354, May 22, 2014)
39. 39Tesfagiorgis and State Farm Mutual Automobile Insurance Co. QL at para.34 (FSCO A14-003779, April 24, 2017)
40. 40(FSCO A04-000521, June 24, 2005)
41. 41Gehi at p. 5