Financial Services Commission of Ontario

Neutral Citation: 2018 ONFSCDRS 69

FSCO A16-004632

BETWEEN:

ABEER AL-RIFAEE Applicant

and

AVIVA CANADA INC. Insurer

REASONS FOR DECISION

Before: Morris J. Winer, Q.C., Arbitrator

Heard: In person at ADR Chambers on October 25, 26, 27, November 10 and 21, December 15, 2017, and on February 6, 2018; and by written submissions completed on March 6, 2018

Appearances: Mr. Essam Elbassiouni, Licensed Paralegal for the Applicant Mr. Brian Yung, Lawyer for the Insurer

Issues:

The Applicant, age 34, a single parent with two teenage boys, was injured in a motor vehicle accident on June 2, 2015, and sought accident benefits from the Aviva Canada Inc. (the "Insurer"), payable under the Statutory Accident Benefits Schedule, ("SABS").¹ The parties were unable to resolve their disputes through mediation, and the Applicant, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issues in this Hearing are:

1. Is the Applicant entitled to receive a weekly income replacement benefit of $400.00 from June 9, 2015 to date and ongoing?
2. Is the Applicant entitled to receive a medical benefit of $3885.00 less amounts approved for a chiropractic treatment plan dated September 25, 2015, submitted by Dr. M. Sharif?
3. Is the Applicant entitled to payments for the costs of examinations of $1800.00 for an attendant care assessment dated July 23, 2015 to be provided by Hal Disability Management Inc.?
4. Is the Insurer liable to pay a special award because it unreasonably withheld or delayed payments to the Applicant?
5. Is either party entitled to its expenses of the Arbitration?
6. Is the Applicant entitled to interest on overdue benefit payments?

Result:

1. The Applicant is entitled to receive a weekly income replacement benefit of $400.00 from June 9, 2015 to June 2, 2017, less the sum of $1500.00.
2. The Applicant is entitled to receive a medical benefit of $3885.00, less the amount paid, for a chiropractic treatment plan dated September 25, 2015, submitted by Dr. M. Sharif.
3. The Applicant is not entitled to payments for the costs of examinations of $1800.00 for an attendant care assessment dated July 23, 2015 to be provided by Hal Disability Management Inc.
4. The Insurer is liable to pay a special award in the sum of $ 2000.00 because it unreasonably withheld or delayed payments to the Applicant.
5. The Applicant is entitled to interest on overdue payments.
6. If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

PRELIMINARY ORAL MOTIONS:

The Applicant's representative commenced the Hearing with five oral motions. He sought to exclude evidence of material misrepresentation, telephone voice recordings, the transcript of an examination under oath ("EUO"), and video surveillance. He also asserted, if I understand correctly, that a release signed following a Small Claims Court action barred the evidence and documents gathered in the Small Claims Court action from use in these proceedings. The voice recordings were made, allegedly, of the Applicant on the telephone at her place of work, before and after the accident. The transcript was of the EUO on another, but not unrelated, matter of Mr. Ziad Jarrar, who was in a developing relationship with the Applicant from being the employer, to being a friend, boyfriend, and currently, common law partner, of the Applicant.

The Applicant's representative did not provide documentary authorities, for any of these rather complicated motions, claiming he had mislaid them and stating they would be delivered the next day. He cited some authorities by reading off his computer, spelling out difficult names and citations. The authorities were not delivered, and I made my decisions on these motions.

1. Motion to Exclude Issue of Material Misrepresentation:

In a letter dated December 21, 2015,² the Insurer "terminated" the Applicant's entitlement to Income Replacement Benefits ("IRB"), on the basis of a claimed wilful misrepresentation of material facts, namely, her alleged income loss, citing s. 53 (a) of the SABS,³ in particular, because she allegedly claimed that she had not returned to work in any capacity since the accident, when in fact, investigation had determined that she had carried out "tasks of employment" on several occasions since the accident. A notice required by ss. 53 (b) and 54 of the SABS is not in evidence.⁴ Neither the Pre-Hearing Letter, January 5, 2017, the Mediator's Report, January 12, 2016, the Application for Arbitration, March 31, 2016, nor the Response April 29, 2016, referred specifically to this issue.⁵ The Insurer's Response, showed "Schedule A to follow", in the space for "reasons for refusal" on each of the issues.⁶ No Schedule A followed. Particulars, however, were filed regarding s. 53, 39 days prior to this Hearing when the Joint Arbitration Document Brief Index was delivered.⁷

On the day of the Pre-Hearing, January 5, 2017, the Applicant was aware that the s. 53 issue would be raised. In a letter dated July 24, 2017, to counsel for the Insurer, the Applicant's representative acknowledged their conversation regarding s. 53 at the Pre-Hearing and requested particulars of the misrepresentation investigations including adjusters' log notes, photos, video surveillance, and audio recordings within 10 days, failing which a motion to obtain the documentation⁸ would be brought. A further letter requesting the documentation was sent August 17, 2017 with another warning that a motion would be filed failing delivery by August 25 2017.⁹ There was no request for a resumption of Pre-Hearing and no motion made until these oral ones were made. The Applicant's representative asked me not to allow the issue of s. 53 to be raised because of the failure of the Insurer to provide timely particulars and failure to comply with the rules. He, reading off his computer, referred to various authorities and rules regarding trial by ambush, and the need to comply with the mandatory stipulations and time requirements in the Dispute Resolution Practice Code ("DRPC").

The Insurer's counsel admitted to inadvertence in not supplying Schedule A, but said the complaint about the nonexistent Schedule A was first raised at this Hearing. He also said that the Applicant should have brought the threatened motions, and not have delayed until the Hearing date to raise these matters. He submitted that in any event the documents and particulars were delivered well within the required 30 day period. He submitted that the Applicant knew since December 21, 2015 that this was a main defence to the IRB claim.

I ruled that the s. 53 issue may be raised at the Hearing. The issue of denial of IRB because of alleged work would be an issue in any event at the Hearing. The Applicant should have taken steps to obtain the particulars as she threatened twice to do so. Also the particulars were delivered well within the time limits.

2. / 3. Motions to Exclude Telephone recordings¹⁰ and Video Surveillance Evidence:¹¹

I reserved decision on these issues until I had heard more evidence with the exception that I ruled against the Applicant's request that I refuse to allow alleged evidence of the Applicant's voice, because the Applicant claimed she didn't have time to hire an expert, and that only an expert could be an ear witness to properly tell whether the voices on the telephone recordings were that of the Applicant. No proof was provided of attempts to hire a hearing expert, nor was there a request for a short adjournment to do so. I believed, and I will reason later, that a lay witness with sufficient familiarity can be a good ear witness. The Applicant, later in the Hearing, withdrew her objection to the surveillance evidence. Particulars of this evidence were delivered within 30 days of the Hearing. There was also a contention that the audio evidence was a form of surveillance evidence.

4. Motion to Exclude Redacted Transcript of the EUO of Ziad Jarrar:¹²

Coincidentally the Applicant along with Mr. Ziad Jarrar, her boss, and Ambassador Car Service ("Ambassador"), her employer, owned by Mr. Jarrar, were sued in Small Claims Court by this Insurer,¹³ for $20,464.00. A separate allegation against the Applicant was that she misrepresented herself as owner of the corporation when in fact she was an employee. The allegations against all the defendants were that they misrepresented the nature of the operation of the corporation by indicating that it was in business of repairing vehicles and providing courtesy vehicles during repairs, when in fact it was really a vehicle rental company, which was a materially different risk. The Insurer had paid out a total of $20,464.00 for damages to two cars owned by Ambassador, one of which by happenstance was the Volkswagen driven by the Applicant on June 2, 2015 which gave rise to this SABS claim, and sought repayment of this amount in the action. The Insurer refunded the premiums. The action was settled by the payment of $7,500.00 by the defendants to the Insurer and the delivery of a final release (issue 4 below)¹⁴, by the Insurer. Prior to the commencement of the action the Insurer conducted the EUO of Mr. Jarrar on September 25, 2015; and then the Insurer, purporting to keep out any extraneous material, without consent, or asking for an order to do so, included in the Joint Arbitration Document Brief, a redacted portion, 7 pages out of over 100, of Jarrar's EUO.

The Applicant objected to the admission of the redacted transcript into evidence, on the grounds that the EUO was akin to an examination for discovery under the Rules of Civil Procedure¹⁵ and was used to provide grounds for the cancelling of the insurance policies and commencing the Small Claims Court action. As such the EUO qualified under the deemed undertaking rule, a Common Law rule which states that the parties are deemed to undertake not to use evidence obtained from discovery for any purposes other than those of the proceeding in which the evidence was obtained. The Applicant relied upon the codification of the rule in the Rules of Civil Procedure, of the Superior Court, Rule 30.1, in particular Rule 30.1.01 (3) below:

30.1.01 (1) This Rule applies to,

(a) evidence obtained under,

(i) Rule 30 (documentary discovery),

(ii) Rule 31 (examination for discovery),

(iii) Rule 32 (inspection of property),

(iv) Rule 33 (medical examination),

(v) Rule 35 (examination for discovery by written questions); and

(b) information obtained from evidence referred to in clause (a). O. Reg. 61/96, s. 2; O. Reg. 627/98, s. 3.

(2) This Rule does not apply to evidence or information obtained otherwise than under the rules referred to in subrule (1). O. Reg. 61/96, s. 2.

Deemed Undertaking

(3) All parties and their lawyers are deemed to undertake not to use evidence or information to which this Rule applies for any purposes other than those of the proceeding in which the evidence was obtained. O. Reg. 61/96, s. 2; O. Reg. 575/07, s. 4.

Exceptions:

(4) Subrule (3) does not prohibit a use to which the person who disclosed the evidence consents. O. Reg. 61/96, s. 2.

(5) Subrule (3) does not prohibit the use, for any purpose, of,

(a) evidence that is filed with the court;

(b) evidence that is given or referred to during a hearing;

(c) information obtained from evidence referred to in clause (a) or (b). O. Reg. 61/96, s. 2.

(6) Subrule (3) does not prohibit the use of evidence obtained in one proceeding, or information obtained from such evidence, to impeach the testimony of a witness in another proceeding. O. Reg. 61/96, s. 2.

Order that Undertaking does not Apply

(8) If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) does not apply to the evidence or to information obtained from it, and may impose such terms and give such directions as are just. O. Reg. 61/96, s. 2; O. Reg. 263/03, s. 3.

The Applicant also argued further, without giving any particulars, that the Insurer, by the redaction of the transcript of the EUO, left out relevant parts or took words out of context.

The Insurer's counsel said he purposely redacted the transcript in order to leave out extraneous material, that he supplied the Applicant with the full transcript, and that he offered to include any other portion requested by the Applicant. He implied that a consent or prior order was not required for the use of the transcript from Mr. Jarrar. Perhaps not on account of subrule 6 above, but on account of subrule 8,¹⁶ he should have asked for an order.

Jumping ahead a bit, Mr. Jarrar was eventually cross-examined on the redacted transcript at the Hearing. Mr. Jarrar was on the Insurer's list of witnesses and the Insurer's process server had attempted to serve him with a summons but was informed by an adult, at the premises given for service, that Mr. Jarrar was unknown at that address where Mr. Jarrar in fact later admitted that he was living with the Applicant.¹⁷ The process server identified two cars parked at the premises belonging, I was told, to a corporation owned by Mr. Jarrar. Actually, Mr. Jarrar was not on the Applicant's list of witnesses (even though the Applicant's representative told me he was), but the Applicant served him with a summons, and Mr. Jarrar eventually attended in answer to that summons and gave evidence. The Applicant vehemently demanded the right to cross-examine Mr. Jarrar, his witness, and after some earnest discussions, the Insurer not objecting, I permitted both parties to cross-examine Mr. Jarrar.

The Insurer submitted that there is no examination for discovery in Small Claims Court. It argued that subrule (2) above applies because the EUO was not one of the items in subrule 30.1.01. (1) (a), and therefore the rule does not apply to these proceedings. Alternatively counsel argued that subrule (3) above, applied and the transcript of Mr. Jarrar's EUO can be used for impeachment purposes. Again in the alternative the Insurer contended that subrule (8) applied, and therefore, I may order that subrule (3) does not apply if the interest of justice outweighs any prejudice that would result to Mr. Jarrar by the disclosure of this evidence. I ruled in favour of the Insurer that the redacted transcript was admissible, but as I only had rule 30.1 to refer to, and the promised authorities had not been delivered, I later informed counsel that I may elaborate on the decision, and having provided the authorities below to them, I do so now.

The parties and the issues are not unrelated. The Applicant, along with Mr. Jarrar and Ambassador, were parties to the Small Claims Court action. The action concerned Mr. Jarrar and in part, the same accident, the Applicant driver, car, and insurance company, as the ones in this Arbitration. The enquiry in the EUO was, in part, to discover the structure of the business which included the duties of the employees, among them, the Applicant, a crucial issue in this Hearing. The transcript discloses: "the receptionist", Abeer, known as Cindy, "works full time", "works in the office", and "managing the front of the office". Her duties are, "everybody does everything". Her "specific duties" were "office , paperwork, phones", "typing, sending bills", "invoice to insurance companies", and "banking", "Regular stuff for the office" and "just clerical work".

Mr. Jarrar did not specifically mention cleaning cars and driving cars as one of the Applicant's duties. He mentioned "the guy who cleans". He said of the two women who work for him that Cindy works in the office and Natania works on call from home. This evidence is prima facie relevant to the issue of Ms. Al-Rifaee's "essential tasks of... employment",¹⁸ especially if it might contradict evidence given by Mr. Jarrar on other occasions, or evidence given by the Applicant. This is evidence of the Applicant's employer and owner of Ambassador, who should know the jobs of the employees.

In the Supreme Court of Canada case of Juman v. Doucette,¹⁹ Binnie J., writing for the court, stated:

[35] The case law provides some guidance to the exercise of the court's discretion. For example, where discovery material in one action is sought to be used in another action with the same or similar parties and the same or similar issues, the prejudice to the examinee is virtually non-existent and leave will generally be granted.

[41] Another situation where the deponent's privacy interest will yield to a higher public interest is where the deponent has given contradictory testimony about the same matters in successive or different proceedings. If the contradiction is discovered, the implied undertaking rule would afford no shield to its use for purposes of impeachment. In provinces where the implied undertaking rule has been codified, there is a specific provision that the undertaking "does not prohibit the use of evidence obtained in one proceeding, or information obtained from such evidence, to impeach the testimony of a witness in another proceeding".

An undertaking implied by the court (or imposed by the legislature) to make civil litigation more effective should not permit a witness to play games with the administration of justice.

The reasoning in the Juman case was followed in the case of Raul Lince – Mancilla v. Ricardo Garcia et al,²⁰ a decision of Himel J. of the Ontario Superior Court. The plaintiff and an employee named Solares were injured inside a car repair shop, when another customer, Garcia, backed his car into them inside the repair garage. The plaintiff sued the owner of the shop, Solares, Garcia and Aviva. Solares also sued Garcia, the manager, and the owner of the shop, and that action was settled. Aviva, with the support of the plaintiff, moved to compel the production of the transcript of the discovery of Solares in the settled action. The main issues were whether Solares instructed Garcia to back the car up before the brakes were checked, or whether Garcia backed up on his own. The owner of the shop raised the deemed undertaking rule. Himel J. stated:

[19] The action launched by Mr. Solares and the action launched by the plaintiffs in this action arise from the same events and circumstances. In the case before me, the sole issue is liability and the evidence of Mr. Solares who was also a witness to the incident is critical. It would be prejudicial to the plaintiffs to deny them the opportunity to review Mr. Solares' sworn evidence taken from his discovery in relation to the same incident on July 12, 2006. That evidence may be critical in order to impeach the testimony of the witness. Where the discovered material is to be used for an action which is related to the action in which the discovery material was obtained, or the parties are the same or similar, and the issues are the same or similar, the prejudice is non-existent: see Juman v. Doucette, supra at para. 35. This is particularly so where it is alleged that the deponent may give contradictory testimony about the same matters in successive or different proceedings: Juman v. Doucette, supra at para. 41.

[20] In my view, the right of privacy is outweighed by interests at stake in the action before me. Accordingly, the transcript of the examination for discovery is ordered produced but it may not be used for any collateral purpose. The use of the transcript is confined to the opportunity to impeach the testimony of Mr. Solares in these proceedings if that becomes necessary.

As shown below, contrary to Himel J.'s judgment above, the use of the transcript in this arbitration is not confined to impeachment only, because hearsay evidence is permitted by the Statutory Powers Procedure Act ("SPPA").

The redacted transcript is admissible for relevance and for impeachment purposes whether rule 30.1 applies by analogy, or whether the deemed undertaking common law rule applies, or even if the deemed undertaking rule does not apply.

A. Rule 30.1 Allows the Redacted EUO to be Used as Evidence in this Arbitration:

The SPPA provides:²¹

15. (1) Subject to subsections (2) and (3), a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject-matter of the proceeding and may act on such evidence, but the tribunal may exclude anything unduly repetitious.

This section gives this tribunal the power to admit hearsay evidence if it is relevant. The fact that it is hearsay may go to the weight or reliability of the evidence.

Section 20 of the Insurance Act provides:²²

20 (1) This section applies with respect to proceedings under this Act before the Tribunal or the Superintendent. 2014, c. 9 Sched. 3, s. 7.

(2) A person referred to in subsection (1) has exclusive jurisdiction to exercise the powers conferred upon him or her under this Act and to determine all questions of fact or law that arise in any proceeding before him or her and, unless an appeal is provided under this Act, his or her decision thereon is final and conclusive for all purposes.

Also section 22 of the Insurance Act²³ provides, regarding the powers of arbitrators, as follows:

22. (1). For the purpose of exercising the powers and performing their duties under this Act...every arbitrator has the power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents records and things as is vested in the Ontario Court (General Division), for the trial of Civil actions, [now the Superior Court].

Section 22 was in force when this arbitration was commenced March 28, 2016. It had been repealed, but the repeal came into force on April 1, 2016. The effect of the SPPA and the Insurance Act provisions above is to direct arbitrators to rule by analogy in accordance with the procedures of the Superior Court, but with relaxed rules of evidence.

In Frank Mizzi and York Fire & Casualty Insurance Company the above sections of the SPPA and Insurance Act were applied and the Arbitrator defined "proceeding":²⁴

Black's Law Dictionary, 6th edition defines a "proceeding" as follows:

"Proceeding" means any action, hearing, investigation, inquest, or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which, pursuant to law, testimony can be compelled to be given.

In IWA, Local1-324 v. Wascana Inn Ltd,²⁵ O' Sullivan J. said:

22 I agree that the word "proceeding" is one of those words of very wide import that must be interpreted according to the context in which it is used.

An EUO serves some of the purposes of an examination for discovery. The examination is under oath and it is recorded. Transcripts may be ordered. It enables the Insurer to evaluate the claim. It is also a part of a quasi-judicial proceeding provided by statute law.

I believe by analogy to the practice of the Superior Court, that rule 30.1 allows the redacted transcript to be used at the Hearing for the purpose of impeachment and as some evidence, albeit hearsay, which must be weighed along with all the other evidence to get at the truth about whether the Applicant "suffers a substantial inability to perform the essential tasks of her employment." There is no evidence of prejudice to Mr. Jarrar. Any possible prejudice is outweighed by the injustice to the Insurer in not allowing the transcript.

B. The Common Law Rule Allows the Redacted EUO to be Evidence at the Hearing:

The deemed or implied undertaking rule is a common law rule of civil procedure recognized in Ontario. In the case of Goodman v. Rossi,²⁶ a decision of the Court of Appeal, Morden, ACJO, proposed that the rule be incorporated into the Ontario Rules of Practice and Procedure. The rule was expressed by Moldaver J. in the lower court as follows at p. 7:

Where a party has obtained information by means of court compelled production of documents or discovery, which information could not otherwise have been obtained by legitimate means independent of the litigation process, the receiving party impliedly undertakes to the court that the private information so obtained will not be used, vis-à-vis the producing party, for a purpose outside the scope of the litigation for which the disclosure was made, absent consent of the producing party or with leave of the court...

Morden ACJO states at p. 17:

Also, I think that it would be useful to consider whether the obligation should extend to preventing the use of material obtained on discovery from being used for impeachment purposes. It could defeat the impeachment process to require the leave of the court before discovered material could be used for this purpose...

I have concluded...that...the implied undertaking rule should be recognized in Ontario...

(at p. 9) .

...I am prepared to consider the applicable test ... as one tolerating some injustice to the discovered party if it is outweighed by a greater injustice to the discovering party if he or she could not make use of the discovered documents…(p. 19)

As far as the scope of the rule is concerned there is also the question of what range of pre- trial disclosures should be covered. Within the area of discovery itself, there is the question whether the rule should cover oral evidence given on examination for discovery. This question does not arise in this case and need not, therefore, be decided. Having said this, I must acknowledge that, having regard to the compulsory nature of oral discovery and its impingement on the right of privacy of a party, it is difficult to see why, as a matter of principle, the rule would not apply to this form of discovery. (p. 17)

The above decision was obviously the basis of rule 30.1.

In the case of Tanner v. Clark ²⁷the issue was whether rule 30.1 01. (3) prevents production of medical reports from the arbitration proceedings to the companion tort case. Carthy J.A. states:

[3] In her reasons, Epstein J. finds the documents are relevant to the tort proceedings and are not privileged. She then analyzes rule 30.1.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the deemed undertaking rule) and concludes that, by its own terms, [rule 30.1] does not apply to the AB proceedings, [because of rule 30.1.01.(2)], but that the common law implied undertaking may have such application.

I believe as an alternative conclusion, that the common law deemed undertaking rule applies, with the same exemptions and exceptions as rule 30.1, to allow the EUO to be admissible for both relevance and impeachment.

C. If Neither Deemed Undertaking Rule Applies, the EUO is Still Admissible:

Alternatively, if the EUO not being a part of a court case, is not considered a "proceeding", because sub rules 30.1.01(a) and (2) make the rule self limiting, then the deemed undertaking rule doesn't apply and thus the EUO is allowable evidence because s. 15 of the SPPA and s. 22 of the Insurance Act apply as discussed above.

Conclusion on Redacted Transcript:

I conclude that the redacted transcript of the EUO is admissible for relevance and or impeachment.

5. Does the Release Signed After the Settlement of the Small Claims Court Action Bar the Documents Filed In the Small Claims Court Action for use in this Arbitration:

The release²⁸ was signed after the settlement of the Small Claims Court Action by the Insurer against the Applicant, Mr. Jarrar, and Ambassador, by the payment to the Insurer of $7500.00, a repayment for monies paid to the defendants for car damage. The action did not involve personal injuries or SABS. The release covers claims, demands, and actions by the Insurer, not defences to SABS claims. It leaves open SABS claims:

The Releasor acknowledges that this release does not release Aviva ...from any...obligations under the said insurance policies, and as provided in the insurance policies and dictated by law.

If the Applicant's submission, which was difficult to follow, is that the Insurer is barred by the release from defending this claim by using documents filed in the action or in support of the action, as evidence in this Arbitration, I disagree. Only the terms of settlement are confidential by this release, but not the record of the Small Claims Court or the transcript of the EUO, or the investigations of the Insurer. In fact the release was supplied to the Insurer by Applicant's representative. This submission is without merit.

EVIDENCE AND ANALYSIS:

It is useful to set out the chronology of events to get a sense of whether there was an entitlement to the benefits claimed, a material misrepresentation giving the right to void the benefits, and whether a special award is warranted, and if so, in what amount.

As mentioned above, before the accident, the Applicant was employed by Ambassador which was actually owned by Mr. Jarrar, and insured by this Insurer. She was described however in documents on file with the Insurer as an owner²⁹ and as a driver.³⁰ The Volkswagen driven by the Applicant was violently struck by another car on the passenger side and was spun around facing the opposite direction. The airbag was engaged. The car was a wreck. The Applicant's nose was broken and deformed. She was dazed, bruised, swollen, and bleeding. She was taken by ambulance to the emergency department of the Mississauga Hospital and later that day released to the care of her doctor.

Since the accident she claims to have had and to still have headaches, neck, shoulder, back and knee pains, and nasal discomfort, combined restrictions in mobility, anxiety, and depression. She says that none of these symptoms were present before the crash. She claims to be unable to work at her job with Ambassador and has attended physiotherapy regularly since the accident.³¹ She says the rehabilitation treatments give her temporary relief.

On behalf of her employer, Ambassador, Mr. Jarrar, signed An Employer's Confirmation Form dated June 26, 2015, in which he described her "Essential Tasks of Job" as "Clean Car, Deliver Vehicles, answer phone, filing etc,"³² and signed a statement to that effect later on August 13, 2015.³³

On July 7, 2015 she had an abortion at the Brampton Women's Clinic. She had been bleeding and the doctor at the clinic reported she may have gone on to miscarry. She had urged the doctor to report that she had a miscarriage.³⁴

After seeing her family physician and other doctors, she was referred to a chiropractor, Dr. Mansoor Sharif, who signed a Disability Certificate on July 31, 2015, and described the injuries as "Comminuted fracture of nasal bone, Whiplash associated disorder [WAD2] with complaint, Low back pain," and "Personality & Behaviour". Dr. Sharif checked off the "yes" boxes in the form that indicated that the Applicant is "substantially unable to perform the essential tasks of her employment...." , and "cannot return to work or modified hours or duties".³⁵

On July 23, 2015 Dr. Dahir Hashi, chiropractor, of HAL Disability Management Inc. submitted a Treatment and Assessment Plan for an occupational therapy attendant care assessment in the amount of $1800.00 to determine the Applicant's "needs and assess her personal care and housekeeping limitations".³⁶

On August 14, 2015 Mr. Ron Findlay OT, reported after a thorough examination on behalf of the Insurer, that the Applicant had been assessed in conversational English at her home, to determine if the above HAL treatment plan was reasonable and necessary, and he determined that it was not.³⁷ He acknowledged that there was some pain and stiffness. She was able to manage her personal care and housekeeping needs by pacing herself and continuing with her home exercises. She told him that her employment was office management in a car leasing company. She could get in and out of the bath and bed, and reach the shelves at head level. She could lift and carry light (5lb.) loads. Her boys were independent now and didn't require much attendant care. He noted that in unguarded moments her movements were better than what she let on. He concluded that she should be encouraged in participating in her pre-accident tasks. Mr. Findlay was a believable witness. His opinion withstood cross-examination well. I don't find the treatment and assessment plan dated July 23, 2015 to be reasonable and necessary.

On September 25, 2015, Dr. Sharif completed a Treatment and Assessment Plan citing WAD 2 type injury with complaints of neck pain with musculoskeletal signs, and low back pain among other impairments. He checked off the boxes that the impairments affected the Applicant's ability to carry out her tasks of employment and her activities of normal life. The treatment would help to return her to modified work activities, pre-accident work activities, and activities of normal living. The cost of this plan was quoted at $3885.00.³⁸

Meanwhile the Insurer had been investigating Ambassador, Mr. Jarrar, and the Applicant in connection with alleged material misrepresentations regarding the nature of the business of Ambassador, and regarding the Applicant claiming to be owner of Ambassador.

The EUO of Mr. Jarrar took place on September 25, 2015. I have referred to portions of Mr. Jarrar's EUO above. I have also referred to the Small Claims Court action commenced April 29, 2015, and the Release signed September 15, 2016.

I found Mr. Jarrar to be a petulant and unreliable witness. At the Hearing he refused to be cross-examined on his EUO and asked permission to leave. I told him he could not leave and had to answer questions. He testified that the Applicant was not allowed to answer the phone unless there was an Arabic caller, but would have to put the caller on hold. He emphasized the physical and menial aspects of her job. At his EUO he had said that she managed the front office and answered the phones. He was critical of her testimony to the effect that Ambassador was a car rental company. By the time he was giving evidence at the Hearing, he had been living with and supporting the Applicant since January 2017. He could not identify Cindy/Abeer's voice on the recordings and couldn't identify that voice among his three female employees (it was two on the EUO transcript). Mr. Jarrar's EUO transcript is summarized above.

In the EUO he did not specifically refer to the Applicant cleaning or driving cars, but he did say, "everybody does everything". He repeated this at the Hearing, and in his statements given to the Insurer's adjuster. I accept this statement because it is consistent despite the rest of his unreliable evidence. He did mention at the Hearing that one of his employees was a woman who cleans cars, but this was a man at the EUO. In a small operation like that of Ambassador, with seven to nine people, it is not too surprising that "everyone does everything" when required. Even though both the Applicant and Mr. Jarrar are exaggerating the significance of the physical aspect of cleaning cars and driving in order to maximise her benefits, I believe car cleaning is a minor but still essential task of her employment.

On November 19, 2015, K. Wruck and Associates reported on surveillance of the Applicant. Mr. Kurt Wruck reported that the Applicant was not observed attending any places of employment during business hours starting on September 10, 11, 15 and 20, 2015; on October 29, and 30, 2015; and on November 12, 13, and 16, 2015.³⁹

An EUO was conducted by the Insurer of the Applicant on November 25, 2015. She was examined with the aid of an Arabic interpreter by Ms. Jessica Martin, insurance fraud investigator for the Insurer, who later gave evidence at this Hearing. The transcript has been filed.⁴⁰

Calls to and from Ambassador and the Insurer had been and were routinely recorded as part of the business practice of the Insurer. The parties had ongoing business dealings before and after the accident. The Insurer would place insurance from time to time on rental vehicles owned by Ambassador and they would discuss delivery dates, contracts and premiums. The Applicant, Ms. Al-Rifaee, was known to the Insurer's employees as Cindy. The Applicant acknowledged that she was known as Cindy at Ambassador. The Insurer recorded these telephone calls. The Insurer pulled all 41 recordings of its calls with Cindy from January 1, 2015 to September 9, 2015. In particular, there were seven calls post-accident involving Cindy: June 3, 10, 15 twice, and 23, 2015; July 9, 2015, and August 27, 2015. The Insurer believed that the Applicant was working when she claimed she was not able to do so and that it was her voice on the recordings.

Some of the recordings before and after June 2, 2015 were played in evidence at the Hearing, before the day that Martin testified. The same person by the name of Cindy was heard on all the recordings before and after June 2, 2015. She spoke with ease in fluent accented English on all occasions with the apparent familiar jargon of the business, with various members of the Insurer. The discussions were business discussions concerning rates and deliveries apparently in the ordinary course of business between the parties. I don't believe these calls were a form of surveillance as contended, and in any event, the particulars thereof were delivered on time. Just as I am entitled to take a view, I am also entitled to take a listen to these recordings as real evidence and to better understand the evidence. The Applicant speaking through an Arabic interpreter at the Hearing denied that it was her voice the recordings, and maintained that she was not working on those dates.⁴¹

Ms. Martin, Insurance Fraud Investigator, conducted the EUO of the Applicant, gave evidence at the Hearing and was present at the meeting referred to below. Around October 16, 2015, to prepare for the EUO which she conducted of the Applicant, she listened to the recordings post-accident two to three times in order to familiarize herself with the Applicant's voice. She does not remember listening to the recordings before June 3, 2015. She was not giving an opinion at the Hearing. She was testifying about the voice and language that she heard of the Applicant during her conversations with the Applicant at the EUO, and comparing them to the voice and language on the recordings. During the EUO there were three breaks, and for nine to twelve minutes during the breaks, she spoke with the Applicant in English. The Applicant showed her pictures from her cell phone of herself in the hospital following the accident, and they also talked about the Applicant's family. The pictures of the Applicant's face showed significant injuries. When questioned on how the Applicant could work the next day Ms. Martin answered that people respond to injuries differently.

Ms. Martin testified that the Applicant spoke in fluent accented English worthy of an office setting in a distinctive high pitched voice. Ms. Martin was certain that the person she was speaking with and the person on the voice recordings were the same, "same accent same tone". She also was "100%" sure that person speaking on the recordings was the Applicant. Ms. Martin gave her evidence in a fair but firm manner, conceding points when required. I accept her evidence that Cindy's voice on the recordings is the Applicant. She had sufficient familiarity with the voice on the recordings to compare with the Applicant's voice during the breaks at the EUO.

The Applicant argued that I should reject Ms. Martin's evidence because she has no expertise in voice recognition. In R v. Williams,⁴² Finlayson J.A. writing for the court said:

He did not rely upon expertise for his identification of the accused but upon familiarity with his voice. As such he was testifying as a witness of fact. Any attack on his credibility went to weight, not admissibility. There were no mandatory factors that had to be considered before identification evidence could be considered.

I believe the Applicant was not telling the truth about not returning to work for the seven days in June, July and August 2015 on the recordings. I believe she attempted to work on those days as she said she did. She said she returned once or twice. It was more. I don't believe that after she picked up the phone on those occasions, she held it for someone else as she testified. She picked up the phone and worked. I don't believe that she couldn't name the person on those calls if it wasn't her in such a small company with two or perhaps three women. Her explanation that some unknown person took her identity is ludicrous. There is no proof offered. She gave prevaricating answers to questions that would require a direct answer. Parts of her evidence contradicted other parts of her own evidence. She said she had good customer service and clients sought her out. She said she communicated by using signals and body language. In short, she lied about not working, about her voice on the recordings not being hers, and about her English proficiency. She may well have been working on other days when she wasn't using the phones. On a conservative estimation I would deduct two weeks or $1500.00 from any IRB award.

On December 10, 2015 Dr. Derek LeFebvre, chiropractor, after examining the Applicant at the request of the Insurer, "partially" approved the Treatment and Assessment Plan dated September 25, 2015 for $2,792.44 which was approved and later paid for instead of the $3,885.00 claimed in the proposed plan. He agreed with Dr. Sharif that the treatments were reasonable and necessary as a result of her injuries in the accident, but there should be 24 and not 30 treatments. He also said in cross-examination that the Applicant would have difficulty turning her neck to check for traffic in her blind spot when driving. He opined, "that the claimant sustained soft tissue strain/ sprain injuries to the cervical spine, thoracic spine, and lumbosacral spine as well as a nasal fracture as a direct result of the accident." Essentially he agreed with Dr. Sharif. His criticism is that there should be six sessions not nine. He admitted that there could be an honest difference of opinion. He was not the treating doctor and as such I prefer to accept the entitlement to the $3885.00.⁴³

On December 15 2015 the Insurer's "Anti-fraud Decision Panel" held a meeting regarding "potential misrepresentation regarding type of business operated by insured entity". The case lead was Ms. Shannon Mann, Investigative Advisor and author of the letter dated December 21, 2015, denying the IRB claim for alleged material misrepresentation. Ms. Mann did not give evidence at the Hearing. Ms. Martin was also present at the meeting. There were at different times 12 down to 6 members present dealing with the joint issues during that afternoon. No lawyer was present. The claim of the Applicant for IRB was included in the discussions. The result of the meeting was a decision to void the policy of Ambassador for material misrepresentation, and deny the claim of the Applicant for IRB "by reason of misrepresentation regarding her employment and entitlement to IRB". Ms. Mann was designated as the person to take action on the decision. Ms. Martin agreed with the decision.

To prepare herself for the meeting, Ms. Martin read the file at least twice, but significantly, does not remember reading the Wruck surveillance report, which did not find the Applicant working during the months of September to November 2015. This may have made a difference to her views on voiding the IRB claim.⁴⁴

At the Hearing, Ms. Martin was asked for a lay person's definition of material misrepresentation. She answered to the effect that it was going back to work when claiming to be too ill to work, or providing information which isn't true. She was one of the important members that supported voiding the claim for IRB on the ground of material misrepresentation. The term "material" is missing from her considerations. It may have been missing from the consideration of the committee.

On March 18, 2016 the Applicant was examined by psychologist Dr. Louise Koepfler at the request of the Insurer to assess the feasibility of a psychological treatment plan.⁴⁵ Dr Koepfler did not find the plan reasonable and necessary stating the Applicant was magnifying her difficulties.

Dr. Hashnat Khan on June 14, 2016 reported⁴⁶ to the Insurer regarding a plan by Dr. Sharif dated April 1, 2016 for physiotherapy and chiropractic treatment. This plan is not in issue but Dr. Khan confirmed:

• Whiplash Associated Disorder
• Lumbar spine sprain/strain
• Right knee sprain/strain
• Post-traumatic headache
• Nasal fracture.

Dr. Khan confirmed mild decreased ranges of motion of the cervical spine and knee. He said the Applicant's treatment can be transitioned to a home exercise program.

On August 31, 2016 Dr. Al-Samak of Rivlin Medical Group Chronic Pain Management, reporting to Dr. Laftah, the Applicant's family physician, following an examination, diagnosed chronic back pain following the accident.⁴⁷

Dr. Michael Ko, physiatrist, on January 26, 2017 examined the Applicant at the request of the Insurer regarding another plan dated November 1, 2016 for rehabilitation services. He found no objective evidence of impairment and as such the treatment plan was not reasonable or necessary.⁴⁸

On September 15 2017, Dr. Getahun, orthopedic surgeon with a certificate in chronic pain assessments, reported following an examination of the Applicant. The Applicant complained of pain in the back, neck, shoulder, right knee, nasal discomfort, headaches, dizziness, difficulty concentrating, anxiety and depression, and sleep disturbance. Having reviewed her history and most of the reports on file, he diagnosed chronic strain to the cervical and lumbosacral spine, left frozen type shoulder, knee pain, and nasal fracture deformity. The Applicant told Dr. Getahun in English that she worked in an office setting doing administrative and managerial work. She was also responsible for doing physical work including cleaning cars. He stated, "In my opinion Ms. Al-Rifaee suffers a substantial inability to perform the essential tasks of her pre-accident employment."

There is no medical evidence to specifically counter Dr. Getahun's professional opinion⁴⁹ that the Applicant is unable to substantially perform the essential tasks of her employment. He confirms the original opinion of chiropractor Dr. Sharif. He confirms the diagnosis by Dr Al-Samak of chronic pain. Doctors Khan, Ko, and Koepfler were not instructed and did not give opinions on the specific question, namely whether the Applicant can substantially perform the essential tasks of her employment.

RESOLUTION OF THE ISSUES AND EVIDENCE:

The Applicant has the overall onus of proving probable entitlement to the benefits claimed including the claim for a special award. The Insurer has the obligation to demonstrate that the Applicant is not entitled to the IRB claimed by reason of material misrepresentation.

Substantial Inability to Perform the Essential Tasks:

There came a time after November 19, 2015, after Wruck reported that the Applicant was not spotted working in September, October and November 2015, when the Insurer should have realized that the Applicant wasn't working, and that there were medical professionals who had diagnosed impairment resulting from the accident which prevented her from working. If the Insurer didn't believe the eligibility for IRB, it should have taken steps to prove that the Applicant can do the essential tasks or that she can return to work after a shorter time than two years. Section 6 (1) and (2) of the SABS provide:

6. (1) Subject to subsection (2), an income replacement benefit is payable for the period in which the insured person suffers a substantial inability to perform the essential tasks of his or her employment or self-employment. O. Reg. 34/10, s. 6 (1).

(2) The insurer is not required to pay an income replacement benefit,

(a) for the first week of the disability; or

(b) after the first 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience. O. Reg. 34/10, s. 6 (2).⁵⁰

The terms "substantial inability" and "essential tasks", are defined in Lopez and State Farm,⁵¹ a decision of (then) Arbitrator Blackman:

"Essential tasks" are the "necessary and key" tasks of one's employment. Essential tasks are those duties which a person must be able to perform as a pre-requisite to being hired for a position.

"Substantial inability to perform essential tasks" of one's employment ... has been held to be a sizeable inability... or a considerable or significant inability to perform the necessary or key requirements....

The Applicant testified at the Hearing that her job consisted of cleaning cars, driving cars to customers, managing the office, preparing leases, speaking with customers. She said she had good customer relations and was able to use signs and body language to make up for her lack of English. She testified that she was unable to work because of her injuries. The cleaning consisted of polishing, sweeping, vacuuming, and taking cars to the car wash. She described herself as a manager and did everything. She lied about not working and may be exaggerating the cleaning cars part of her job, but nevertheless, I accept her evidence of inability to work at her job because the disability is otherwise authenticated by the medical evidence, and not challenged by any specific medical evidence on behalf of the Insurer that she can perform the essential tasks of her employment. The Applicant said:

I cannot do the duties that I used to perform. I cannot answer the phone calls. I cannot clean cars. I cannot drive the cars to clients...and this is...too scary...and I do not have...the patience to answer phone calls... when you're answering phone calls you have to have patience, and the headaches that I have, they're preventing me from answering the phone.⁵²

Arbitrator Blackman also said in Lopez:

Although lifting of some items might be occasional, it is still an integral requirement of the job. I received no evidence that a worker may pick and choose what items one is required to move.

Unless there are any material misrepresentations, the medical evidence in the chronology above from the Applicant's chiropractors and doctors, prima facie, support income replacement payments.

Even Dr. LeFebvre, the Insurer's appointee chiropractor, acknowledges the impairments and states that the Applicant would have difficulties driving a car. Put another way, the Insurer has supplied no specific medical or kinesiological type of evidence to counter that the Applicant is not entitled to IRB from June 9, 2015 to June 2, 2017, with the exception of the seven days that she was recorded working. I believe the Insurer was preoccupied with alleged misrepresentations and failed to assess her disability.

Her evidence was that she was paid $3000.00 per month.⁵³ Bank statements,⁵⁴ cheques,⁵⁵ and an Employee Confirmation Form⁵⁶ were filed. Her income loss claimed is over $400.00 weekly. I accept her IRB claim less $1500.00. The Insurer did not question the amount of $400.00 weekly except for the Income Tax Issue referred to below. The Insurer was fixated on the issue of material misrepresentation.

Income Tax Issue:

Insurer's counsel raised an issue in the closing submissions that he did not mention in his opening submissions. He relied on s. 4(5) of the SABS⁵⁷ which reads as follows:

(5) If, under the Income Tax Act (Canada) or legislation of another jurisdiction that imposes a tax calculated by reference to income, a person is required to report the amount of his or her income, the person's income before an accident shall be determined for the purposes of this Part without reference to any income the person has failed to report contrary to that Act or legislation. O. Reg. 34/10, s. 4 (5).

The section is not a condition precedent, but is a limitation on proving pre-accident income for the purpose of calculating IRB. Initially there is an obligation on the Insurer to demand reports of income made to the Canada Revenue Agency ("CRA") from the Applicant. IRB may be proved without the production of reports of income to the CRA if those reports have not been demanded. On cross-examination the Applicant answered that she had filed 2014 and 2015 tax returns. She said she couldn't remember what her income was for those years; that such documents were not at the Hearing, and that her accountant had them. The Applicant's representative objected to this surprising line of questions.

The Insurer submits that because no tax returns or assessment notices were filed as exhibits at the Hearing, it follows that I should draw an adverse inference, namely, that the Applicant did not report her income to the CRA; and as a result, refuse any claimed IRB. I disagree, and I decline to draw an adverse inference that she failed to file tax returns or report her income. It doesn't necessarily follow.

The raising of this issue is also is an unfair surprise. There is no evidence that the Applicant failed to report her income. There was no motion or specific demand for production at or before the Hearing for the production of these returns. This case is distinguishable from those cases in which tax returns were demanded or ordered but not produced.

Were the Misrepresentations of the Applicant Material to Justify Termination of Benefits:

Section 53 of the SABS provides:⁵⁸

53. An insurer may terminate the payment of benefits to or on behalf of an insured person,

(a) if the insured person has wilfully misrepresented material facts with respect to the application for the benefit; and

(b) if the insurer provides the insured person with a notice setting out the reasons for the termination. O. Reg. 34/10, s. 53.

In this case, I have found that the Applicant was not truthful when she denied working on the seven days of June, July and August mentioned above. She wilfully misrepresented facts. She was also not telling the truth by denying it was her voice on the recordings. She claimed that someone else might have or probably has used her name, "Cindy", and copied her style because she has such good customer relations. She could not tell whose voice it was on the recordings. If the section didn't have the term "material", I would have no problem denying the IRB, but it does, and I have to interpret and apply every word.

Ms. Martin was asked for a lay person's definition of material misrepresentation. She answered to the effect of going back to work when claiming to be too ill to work or providing information which isn't true. She was one of the important members that supported voiding the claim for IRB on the ground of material misrepresentation. The term "material" is missing from her considerations. There is a dearth of evidence on how the falsehoods about the seven days of work materially prevented the Insurer from adjusting the claim. The lead investigator may have given some assistance, but she was not called by the Insurer. She was not on the Insurer's list of witnesses. The Applicant wanted to cross-examine her, and this resulted in another squabble about producing witnesses on the seventh day of a scheduled three-day Hearing. If the Applicant wanted to secure the presence of any witness she should have summonsed her or him.

There was no lawyer at the anti-fraud meeting to advise the members regarding material misrepresentation. Even so, the jurisprudence on this section had been in existence for over 20 years and surely would have filtered down to the adjusters. It may well be that the Insurer's representatives became very distrustful of the behaviour of the Applicant and Mr. Jarrar regarding both claims, and this beclouded their thinking.

In Michalowski and St. Paul,⁵⁹ the Applicant did not inform St. Paul that he had returned to work and Arbitrator Blackman held:

"Wilful" was found to mean a "deliberate or intentional act" ...

I ... find that the onus is...on the Insurer that it has complied with the requirements of the subsection 48(2) of the Schedule.

"Misrepresentation" is defined in Black's Law Dictionary ...as: any manifestation by words or other conduct by one person to another that ...amounts to an assertion not in accordance with the facts.

Turning to the requirement that the misrepresentation be "material," St. Paul submits that this term means "important." That is indeed one of the definitions of "material" found in the Concise Oxford Dictionary of Current English (8th Edition, Oxford: Clarendon Press, 1990). The same entry, however, also defines "material" as "essential," which I[sic] find goes significantly beyond the meaning of the word "important."

A major consideration in determining the correct meaning of the adjective "material" as used in section 48 must be the remedy available to the Insurer. Both parties herein submit that the effect of section 48 is to deny an insured all further entitlement to the benefit in respect of which the misrepresentation was made. Therefore, in this case, if the requirements of section 48 were met, Mr. Michalowski would be denied entitlement to any further weekly income replacement benefits, regardless of the extent of his disability. Assuming, without deciding, that this draconian result indeed follows from section 48, I find that the facts misrepresented must not be merely "important," but rather must be "sufficiently basic or fundamental" to justify the relief submitted to be available under section 48. The question of whether the misrepresentation is "material" will depend on the facts of the particular case, and may include a consideration of, amongst other things, what is misrepresented, what is obtained as a result of the misrepresentation, the relationship in monetary and other terms between the misrepresentation and the potential benefit available, and the availability of other provisions to assist the insurer (such as section 47

which deals with repayments).

In the case before me the Applicant was, I find, working the many days in June, one day in July, and one day in August of 2015. There are provisions to reduce payments of IRB if the Applicant is in fact working. See section 52 of the SABS.⁶⁰ If she was lying about working those days would not the deduction of earned salary be the reasonable solution rather than the "draconian" cancelling all her entitlement to IRBs?

In Darren Fisk and ING Insurance,⁶¹ Fisk failed to inform ING that he worked on the side for a month and still claimed benefits. He also falsified the date on a letter purporting to inform the Insurer of the work. Arbitrator Skinner found that the misrepresentation was wilful but not material. The Arbitrator ruled:

I rely on the analysis in Michalowski and Szabo, and find that a consideration of materiality must be made with reference to the specific facts of the case. An important consideration is whether the fact misrepresented is fundamental to the relationship between insurer and insured. In this case, Mr. Fisk misrepresented the fact that he returned to work for a period of approximately six weeks and that he earned approximately $3700 in income. It is undisputed that Mr. Fisk has not returned to work since May 22, 2001. The extent of Mr. Fisk's disability is not in dispute. Section 47 of the Schedule permits a repayment to ING of any overpaid benefits during the six-week period employment.

In consideration of these factors, I find that Mr. Fisk's misrepresentation was not "material" within the context of Section 48 of the Schedule. I find that Mr. Fisk's return to work for a period of six weeks is not a sufficiently fundamental aspect of the relationship between himself and ING to be material. This case is distinguishable from Szabo, where the applicant's misrepresentation of his employment status affected his eligibility for benefits, the amounts and the commencement and termination dates for 13 weekly benefits. In this case, Mr. Fisk failed to report post-accident income and ING has a remedy available to it for the recovery of any overpaid benefits during that period.

I believe on the basis of the above cases the misrepresentation in this case was wilful, but not material. An example of a wilful and material misrepresentation may be found in the case of Szabo and CAA Insurance,⁶² a decision of Delegate Makepeace. Mr. Szabo applied for non-earner benefits and lied that he wasn't working. He then applied for IRB when he was found out. The Delegate reasoned:

In a claim for accident benefits, I agree with the Arbitrator that "employment status is fundamental in an application for weekly benefits" because it "determines the eligibility criteria, the amounts, and the commencement and termination dates for these benefits."11 Further, in adjusting the claim based on Mr.Szabo's misrepresentation about his employment status, CAA incurred a number of expenses. These included, at least, the out- of-pocket expenses of an occupational therapy assessment and multidisciplinary insurer examination, and the administrative cost of obtaining and reviewing the application forms and statutory declaration. These costs were likely significant, and they were thrown away on a groundless NEB claim. For these reasons, I have no hesitation in concluding that Mr. Szabo's misrepresentation was material to his NEB claim, and CAA need not establish that benefits were overpaid as a result.

Was it also material to his IRB claim? Mr. Szabo's disclosure of the truth, about a year and a half into the claim, forced the Insurer to embark on a new investigation with respect to his entitlement to IRBs. As a result of Mr. Szabo's misrepresentation, CAA lost the opportunity to conduct a timely investigation of his IRB claim. All else being equal, this makes Mr. Szabo's misrepresentation material to his IRB claim too.

I agree with the Arbitrator that this case is distinguishable from Michalowski. Mr. Szabo's

misrepresentation was not trivial. He lied about his employment status, a fundamental aspect of his weekly benefits claim, and he "maintained the misrepresentation for many months."14 As a result of his misrepresentation, CAA wasted money adjusting the claim as an NEB claim, and lost the opportunity for an early assessment of his entitlement to IRBs. I find that Mr. Szabo's misrepresentation about his employment status was material to his IRB entitlement as well as NEB entitlement.

I conclude that the defence of material misrepresentation has not been established.

Does the Insurer's Conduct Warrant a Special Award:

Section 282. (10) of the Insurance Act⁶³ mandates an award if:

(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule. R.S.O. 1990, c. I.8, s. 282 (10); 1993, c. 10, s. 1.

The Oxford dictionary defines unreasonable as follows:⁶⁴

1. going beyond the limits of what is reasonable or equitable.

2. not guided by or listening to reason.

In Plowright and Wellinton Insurance Arbitrator Palmer stated unreasonable behaviour by an Insurer to be, "behaviour by an Insurer in withholding or delaying payments can be seen as behaviour which was excessive, imprudent, stubborn, inflexible, unyielding, or immoderate".

In Aviva Canada and Peters Delegate Makepeace wrote:⁶⁵

In any event, there is abundant case-law for the principle that an insurer is not held to a standard of perfection in responding to a claim, that an insurer's claims decision is to be judged on the basis of the information available at the time, and not from hindsight, and that an insurer is not to be found unreasonable just because an arbitrator concludes its claims decision was wrong. In this case, the insurers had a reasonable basis for their decision, and a special award was not available. I am persuaded the arbitrator exceeded his authority in ordering a special award.

In the Peters case the Delegate reversed an arbitrator's decision to award a special award. The Insurer didn't pay because there had to be a prior determination of a complicated legal issue and therefore the Delegate didn't find the Insurer to be unreasonable.

The Insurer in this case ignored the medical evidence referred to above that she could not perform the essential tasks of her job. This evidence went unchallenged. After the surveillance report of Wruck in November 2015, it would have been reasonable to try to adjust the claim, have the Applicant examined to challenge the findings of the chiropractor, or if not, to pay the claim or part of it.

The Insurer in a reckless fashion failed to properly consider or at all, the meaning of the adjective "material". It seemed to believe that telling lies on a claim, in and of itself, invalidates the claim.

It used excessive tactics of cancelling all IRB, when it had the power to deduct the payments for work. It was imprudent not to reach out for legal advice on the meaning of "material". Even without specific legal advice the jurisprudence on material misrepresentation had been around for many years and should have been in the minds of the staff. I believe the Insurer's conduct goes beyond being wrong.

I believe a special award is warranted. Here the Insurer was subjected to lies by the Applicant and her live-in spouse. The award is directed to correct the behaviour of the Insurer, but I believe the conduct of the Applicant played a large part in the behaviour of the Insurer by creating an atmosphere of distrust, and therefore I will temper the reward to the Applicant.

In Macdonald and Pilot Insurance,⁶⁶ the Applicant, a newspaper box collector, stole cash from some boxes, and backdated an exculpating letter. Arbitrator Sampliner awarded IRBs and awarded a special award, but considered MacDonald's contribution to Pilot's distrust when it refused IRB. Arbitrator Sampliner said:

In my opinion his conduct does not bar a special award... but it certainly affects the amount of the award.

I award a special award of $2000.00 which is below the 50% mark in s. 282 (10) of the Insurance Act.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

March 28, 2018

Morris J. Winer, Q.C Arbitrator

ARBITRATION ORDER

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

1. The Applicant is entitled to receive a weekly income replacement benefit of $400.00 from June 9, 2015 to June 2, 2017, less the sum of $1500.00.
2. The Applicant is entitled to receive a medical benefit of $3885.00, less the amount paid, for a chiropractic treatment plan dated September 25, 2015, submitted by Dr. M. Sharif.
3. The Applicant is not entitled to payments for the costs of examinations of $1800.00 for an attendant care assessment dated July 23, 2015 to be provided by Hal Disability Management Inc.
4. The Insurer is liable to pay a special award in the sum of $ 2000.00 because it unreasonably withheld or delayed payments to the Applicant.
5. The Applicant is entitled to interest on overdue payments.
6. If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

March 28, 2018

Morris J. Winer, Q.C Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule, - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Ex. 2 A1 T1.
3. 3O. Reg.34/10.
4. 4Supra.
5. 5Ex.1 A1 T17, Ex. 3 A1 T13, Ex. 4 A1 T15.
6. 6Ex. 5 A1 T16.
7. 7Ex. 9 B2 F9.
8. 8Ex. 6 B2 F1.
9. 9Ex. 7 B2 F2 .
10. 10Ex. 36 A2 T38.
11. 11Ex. 37 A2 T39.
12. 12Ex. 33 A2 T37.
13. 13Ex. 12 A2 T40.
14. 14Ex. 12 A2 T46.
15. 15O. Reg. 575/07 s.6
16. 16Both parties showed a casual regard for procedures.
17. 17Ex. 34 A2 T37E.
18. 18S.5. (1) 1 i O. Reg. 34/10.
19. 192008 SCC 8, [2008] 1 S.C.R. 157.
20. 202013 ONSC 1388.
21. 21R.S.O. 1990 c. S.22.
22. 22R.S.O. 1990 c. I.8.
23. 23R.S.O. 1990 c.1.8; Repealed S.O. 2014 c.9, effective 2016.
24. 24FSCO A01-000176, November 9, 2001.
25. 251977 Carswell Man. 12.
26. 261994 CanLII 10551 (ON CA).
27. 272003 CanLII 41640 (ON CA)
28. 28Ex. 13 A2 T45.
29. 29Ex. 53 B1T D1, Ex 54 B1T D2 & Ex 12 A2 T40.
30. 30Ex. 53 B1T D1, Ex 54 B1T D2.
31. 31Ex. 20 A 1T 28.
32. 32Ex. 30 A 2T 33.
33. 33Ex. 40 A2 T37 E.
34. 34Ex. 17 A1 T25 & Ex 16 a1 T 23.
35. 35Ex. 55 A1 T24 A.
36. 36Ex. 31 A1 T6.
37. 37Ex. 26 A1 T29.
38. 38Ex. 44 A1 T2.
39. 39Ex. 52 A2 T39D.
40. 40Ex. 33 A2 T37E.
41. 41Ex. 36 A2 T36.
42. 421995 CanLII 695 (ON CA).
43. 43Ex. 43 A2 T30.
44. 44Ex. 50 B1 T C21.
45. 45Ex. 22 A2 T33.
46. 46Ex. 24 B2 T2.
47. 47Ex. 15 A1 within T 27.
48. 48Ex. 23 A2 T33.
49. 49Ex. 20 A1 T28.
50. 50O. Reg. 34/10.
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64. 6410th Ed/
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