Date: 2018-06-01

Tribunal File Number: 17-004906/AABS

Case Name: 17-004906 v Coachman Insurance Company

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

Applicant

Applicant

and

Coachman Insurance Company

Respondent

DECISION

ADJUDICATOR: Marisa Victor

APPEARANCES:

Counsel for the Applicant: K.G. Triantafillopoulos, counsel

Counsel for the Respondent: Megan Cui, counsel

Heard: Written Hearing 1: February 6, 2018

REASONS FOR DECISION AND ORDER:

I. INTRODUCTION

1The applicant was driving when he was involved in a car accident on March 11, 2016. As a result of the accident he sought Statutory Accident Benefits from the respondent, Coachman Insurance Company.

2The applicant, who is a self-employed handyman, claimed income replacement benefits (IRBs) as well as medical and rehabilitation benefits under the Statutory Accident Benefit Schedule (the Schedule). These claims were denied resulting in an appeal to the Licence Appeal Tribunal (the LAT).

3On November 8, 2017 a case conference was held in this matter. As a result of the case conference, the issues were narrowed.

4On January 5, 2018, the respondent agreed that the applicant was entitled to IRBs up to the 104-week mark, but the issue of quantum remained in dispute. The applicant is claiming $329.81 in weekly IRBs. The respondent maintains that until the applicant provides adequate proof of income, no IRBs are payable.

5Also on January 5, 2018, the respondent agreed the applicant was entitled to all denied and incurred medical and rehabilitation treatment plans (OCF-18s).

6The parties disagree as to whether interest is payable on IRBs as well as the medical benefits.

7In addition, the applicant seeks a special award of $23,100.00 on the basis that the respondent has unreasonably withheld or delayed the payment of benefits.

II. ISSUES

8The issues are:

a. Is the applicant entitled to IRBs in the amount of $329.81 weekly from March 18, 2016 to date and ongoing?

b. Is the applicant entitled to interest on any overdue payment of benefits?

c. Is the applicant entitled to an award due to the respondent unreasonably withholding or delaying the payment of benefits pursuant to s. 10 of Ontario Regulation 664 (Regulation 664).

III. Result

9Based on a review of the evidence presented, I find that:

a. The applicant has established on a balance of probabilities that he is entitled to the quantum of IRBs claimed;

b. The applicant is entitled to interest on the overdue payment of benefits;

c. The applicant is not entitled to an award.

IV. EVIDENCE AND ANALYSIS

A. The applicant has established on a balance of probabilities that he is entitled to the quantum of IRBs claimed

The Facts

10The parties agree that the applicant has been unable to work and entitled to IRBs up to this hearing. The only issue is whether the applicant has proven the quantum of the IRBs he is entitled to.

11On March 29, 2016, the applicant submitted an Application for Benefits (OCF-1) and a Disability Certificate (OCF-3).

12The respondent then retained BDO (previously H&A Forensic Accounting) to quantify IRB entitlement amount.

13On May 31, 2016, BDO sent a letter to the applicant requesting, among other items, the following information:

a. 2015 personal income tax return;

b. Schedule of revenues and expenses for the post-accident period (March 12, 2016 onward);

c. Copies of Harmonized Sales Tax Returns for 2015;

d. Bank statements for March 2015 onward; and

e. Accounting books and records for 2015.

14On June 8, 2016, the applicant provided BDO with his 2014 and 2015 tax returns.

15BDO, on behalf of the respondent, sent regular letters throughout requesting further information. It never made its own IRB calculation based on the income tax documents received.

16On June 12, 2017, the applicant provided the respondent with Lynch & Associates accounting report claiming $329.81/week in IRBs based on his 2015 income tax return.

17On August 2, 2017, BDO requested the applicant’s 2016 income tax documents.

18Further, in its letter of August 23, 2017, BDO expressed the opinion that it is unusual for an individual who has been doing renovation work for ten years to incur zero business expenses. There were also questions raised by the respondent about lack of supporting documents such as bank statements and why they were not provided.

19The applicant provided his 2016 income tax return on November 23, 2017 and his notice of assessment on November 27, 2017.

20The applicant’s proof of income documents disclosed to date include:

a. Income tax returned for 2010-2015;

b. T1 General for 2015;

c. Income tax return for 2016;

d. Notice of Assessment for 2016; and

e. Lynch & Associates Report calculating IRBs based on 2015 income tax assessment.

The Law

21The onus is on the applicant to prove on a balance of probabilities the quantum of IRBs he is entitled to.

22Under s. 4(3) of the Schedule, a self-employed person’s weekly income at the time of the accident is the amount that would be 1/52 of the amount of the person’s income for the last completed taxation year. Section 4(4) explains the calculation for post-accident self-employment losses.

23Under s. 33(1) of the Schedule, if an insurer requests any information reasonably required to assist the insurer in determining the applicant’s entitlement to a benefit, the applicant is required to provide that information within 10 days.

24If the applicant does not provide that information, then, under s. 33(6) of the Schedule the insurer is not liable to pay the benefit during the time within which the insured person fails to comply with the request. It is on this basis that the respondent denies payment of the IRBs

Analysis

25The applicant applied promptly for IRB benefits following his accident.

26BDO requested taxation information on May 31, 2016. I find that within ten days of that request, on June 8, 2018, the applicant provided proof of income for 2014 and 2015 in accordance with the Schedule. There was no delay in providing documents that would have engaged s. 33 of the Schedule.

27The applicant proved his entitlement to the quantum of IRBs claimed based on the provision of his Income Tax records at the time. I accept that it is reasonable to base IRB calculations on the year prior’s gross business income and that this is contemplated in s. 4(3) of the Schedule. As such, the applicant is entitled to IRBs based on the income tax documents he provided.

28Regarding the continuing requests for further and supporting information from BDO and the insurer, I find, that the applicant is only required to prove his self-employment income in accordance with the Schedule. He has done so. Not only has he provided his income tax returns, he has also provided an accounting report setting out his IRB entitlement based on those income tax records. The continuing requests from BDO for supporting documents (other than income tax records) were excessive.

29Regarding the applicant’s 2016 income tax documents, these were requested by BDO on August 2, 2017. The applicant did not disclose these documents until November 23, 2017 following a Case Conference in this matter. The applicant then stated that it would provide the notice of assessment for 2016 as soon as it was received from Revenue Canada. This was provided promptly on November 27, 2017.

30That being said, there was a period of non-compliance from August 2, 2017 until November 23, 2017 when the applicant failed to provide his 2016 tax information and provided no explanation as to the delay in providing these documents. Section 33(6) of the Schedule allows an insurer to withhold benefits during a period of non-compliance.

31It may seem unfair to the applicant that an insurer who has failed to pay benefits during an entitlement period can at the same time rely on s. 33 to deny benefits from the applicant due to failure to provide updated documents. However, the insurer has an obligation to assess ongoing entitlement to benefits. Had the applicant provided an explanation for the delay in providing 2016 tax information, payments withheld during the non-compliance period could have been due upon receipt of the 2016 tax documents in accordance with s. 33 and s. 34 of the Schedule. The applicant did not provide an explanation for the delay. As such, in accordance with the schedule, I find that the insurer is entitled to withhold IRB payments for the period of August 2, 2017 until November 23, 2017.

32In conclusion, the applicant is entitled to $329.81/week in IRBs from March 29, 2016 to August 2, 2017 and then from November 23, 2017 onwards in accordance with the Schedule.

B. The applicant is entitled to interest on all the recently approved medical benefits

33The applicant claims interest on the following items:

a. IRBs payable from March 18, 2016 onward;

b. Medical benefit in the amount of $3,355.20 for chiropractic services recommended by Alexander Yu in OCF-18 submitted March 31, 2016;

c. Medical benefit in the amount of $1,531.20 for chiropractic serves recommended by Alexander Yu in OCF-18 submitted September 27, 2016;

d. Medical benefit in the amount of $3,368.79 for psychological services recommended by Dr. Svetlana Gabidulina in OCF-18 submitted December 6, 2016;

e. Medical benefit in the amount of $1,621.50 for chiropractic services recommended by Tam Pham in OCF-18 submitted January 4, 2017; and

f. Medical benefit in the amount of $2,919.95 for psychological services recommended by Dr. Svetlana Gabidulina in OCF-18 submitted February 1, 2017.

34As I have found the applicant is entitled to IRB payments as detailed above, the applicant is therefore entitled to interest on the past due amounts according to the Schedule. From June 16, 2016 until the dispute was filed on July 31, 2017, the rate specified is found in s. 51(3) of the Schedule: 1% per month, compounded monthly. From July 31, 2017 until this judgment is released, the rate specified is found in s. 51(4) of the Schedule and calculated at the prejudgment interest rate described in subsection 128 (3) of the Courts of Justice Act that is used for past pecuniary loss.

35With regard to the medical benefits, the applicant claims interest is owed from the date the OCF-18s were submitted to the Insurer.

36The respondent claims that no interest is payable because:

a. The medical benefits were approved as part of a settlement agreement on January 5, 2018 and as such is a private matter between the parties which is not properly before this Tribunal;

b. The medical benefits did not become payable until the applicant provided the following documentation:

i. clinical notes and records of treating neurologists (Dr. Safina, Dr. Gawel, Dr. Maehdriatta, and Dr. Sadeghian), pain specialist Dr. Surkont and psychiatrist Dr. Gabidulina until they were submitted with the written submissions for this hearing;

ii. Post-accident OHIP summary and MRI report provided December 18, 2017;

1. Neuropsychological assessment report served on December 22, 2017; and

c. The applicant has not proved that any of the above medical benefits were incurred and therefore no interest is payable as a result.

37Despite the insurer’s arguments, s. 51(4) of the Schedule is quite clear on the issue of interest payable even in the event of a settlement and I therefore I must dismiss the respondent’s arguments.

38Interest is payable according to the Schedule under s. 51(3). From the date each OCF-18 was submitted until the dispute was filed on July 31, 2017. The interest for that period is 1% monthly, compounded monthly. From the date of July 31, 2017 until the settlement of the medical benefits was reached on January 5, 2018, the interest rate is calculated at the prejudgment interest (PJI) rate described in subsection 128(3) of the Courts of Justice Act in accordance with s. 51(4) of the Schedule.

C. The respondent is not liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments to the applicant

39Regulation 664 states that if this Tribunal finds that an insurer has unreasonably withheld or delayed payments, the Tribunal may award an additional lump sum of up to 50 percent of the amount to which the person was entitled to at the time of the award together with interest. This is a discretionary award.

40With regard to the IRB entitlement, I decline to use my discretion to grant an award. I note that the insurer conceded that the applicant was entitled to IRBs on January 9, 2018. This coincided with the applicant’s disclosure of much more medical evidence. The medical documents helped show that the applicant could not work, therefore proving his entitlement to IRBs. Although I have found that the insurer was wrong with regard to its position that the applicant had not proved the quantum of IRBs he was entitled to, this is not enough for the granting of an award. I find that the late provision of further medical documents is inextricably linked to the concession that the applicant was entitled to IRBs. As such, I decline to use my discretion to grant an award.

41The respondent also did not approve medical benefits until it received a significant amount of relevant medical documentation as a result of the appeal process before this Tribunal. As such, I find that the payments were not unreasonably withheld and I decline to award with regard to the medical benefits.

V. ORDER

42I order the following:

a. The applicant has proven the quantum of IRBs owed and therefore IRBs are payable in accordance with my reasons above;

b. The applicant is entitled to interest on IRBs owed and medical benefits now approved, calculated in accordance with my reasons above; and

c. There is no award under Regulation 664.