Safety, Licensing Appeals and Standards Tribunals Ontario Automobile Accident Benefits Service Licence Appeal Tribunal Mailing Address: 77 Wellesley St. W., Box 250, Toronto ON M7A 1N3 Tel.: 416-327-6500 1-844-242-0608 TTY: 416-916-0162 1-844-650-2819 Fax: 416-325-1060 1-844-618-2566 Website: www.slasto-tsapno.gov.on.ca
Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario Service d'aide relative aux indemnités d'accident automobile Tribunal d'appel en matière de permis Adresse postale : 77, rue Wellesley Ouest, Boîte n^o 250, Toronto ON M7A 1N3 Tél.: 416-327-6500 Sans frais Tél: 1-844-242-0608 TTY: 416-916-0162 1-844-650-2819 Téléc: 416-325-1060 Sans frais Téléc: 1-844-618-2566 Site Web : www.slasto-tsapno.gov.on.ca
RECONSIDERATION DECISION
Before: Jonathan Batty, Associate Chair Date: January 7, 2019 File: 17-000053/AABS Case Name: V. K. vs. Travelers Insurance
Written Submissions By: For the Applicant: Adrian Lomaga For the Respondent: N.A.
Overview
This reconsideration request arises from a decision by the Licence Appeal Tribunal (the “Tribunal”) confirming the quantum of income replacement benefits (“IRBs”) the applicant, V.K., was entitled to receive. The Tribunal accepted the respondent’s, Travelers Insurance (“Travelers”), position and confirmed the quantum of IRBs as paid. V.K. now asks that I vary the Tribunal’s decision and award her an additional $2,758.01 in IRBs including interest.
Pursuant to her authority under s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, the Executive Chair delegated to me her responsibility to decide this reconsideration request.
Having reviewed V.K.’s submissions, it was unnecessary for me to request submissions from the respondent as V.K.’s submissions did not raise sufficient question that the decision warranted reconsideration.
As explained below, I deny this reconsideration request.
The Facts
V.K. was involved in a motor-vehicle accident on September 22, 2016 and sought IRBs from Travelers under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”).
Before the accident, V.K. was self-employed and worked as a house cleaner. After the accident, she was unable to continue cleaning houses and her business became inactive as a result. V.K. testified that she maintained contact with her clients and that she intended to resume working once she had sufficiently recovered from her injuries.
Travelers paid V.K. IRBs in the amount of $272.21 per week between September 23 and December 31, 2016 and $269.33 per week between January 1 and April 30, 2017. Travelers calculated the quantum of IRBs, in accordance with s.7 of the Schedule, by adding 70% of V.K.’s pre-accident earnings and 70% of her ongoing business losses. When calculating V.K.’s ongoing business losses, Travelers excluded certain fixed business expenses, such as management and administrative fees, on the basis that V.K. did not incur these expenses while her business was inactive after the accident.
V.K. disagreed with Travelers’s calculation of her ongoing business losses. In her view, her fixed business expenses were the same after the accident when her business was inactive, as they were when she was actively working before the accident. Based on this, V.K. calculated her ongoing business losses as $86.23 per week, as opposed to $53.42 per week as calculated by Travelers. As a result, she argued she should have been paid $301.54 per week in IRBs between September 29, 2016 and May 31, 2017.
V.K. applied to the Tribunal for the determination of her eligibility to receive an additional $2,758.01 in IRBs including interest, as well as an award under s. 10 of Ontario Regulation 664 (a “s. 10 award”). V.K.’s eligibility for IRBs was not disputed. Similarly, the parties’ calculation of the portion of IRBs tied to V.K.’s pre-accident gross income differed only marginally with V.K. proposing $215.31 and Travelers proposing $215.91. As a result, the major point of contention between the parties regarding the quantum of IRBs was the amount of IRBs tied to V.K.’s ongoing business losses.
The Tribunal reviewed both parties’ calculations of V.K.’s ongoing business losses and decided in this appeal that Travelers’ should be applied. The Tribunal agreed that V.K. had not incurred certain fixed business expenses post-accident, which she had when her business was active before the accident. As a result, the Tribunal confirmed the IRBs as calculated by Travelers. As the Tribunal found there was no overdue IRBs, it also found V.K. was not owed interest.
V.K. also sought a section 10 award on the basis that Travelers had unreasonably delayed the payment of her IRBs as it waited for V.K. to provide additional financial information. The Tribunal found it was reasonable for Travelers to request further financial documents and therefore dismissed V.K.’s request for a section 10 award; a decision which V.K. does not request to be reconsidered.
V.K. requests that the Tribunal’s decision with regard to her entitlement to the balance of IRBs be overturned and that she be awarded an additional $2,758.01 in IRBs including interest.
Decision and Reasons
In paragraph 23 of its reasons, the Tribunal found that the amount of V.K.’s fixed business expenses depended on whether her business was active or not. Specifically, the Tribunal found that V.K. did not incur certain fixed business expenses while her business was inactive. I agree with the Tribunal’s reasoning.
V.K. testified she was unable to work but maintained contact with her clients after the accident. According to her own testimony, the nature and scope of her business changed dramatically following the accident. The Tribunal acknowledged this dramatic change when it stated her business became inactive after the accident.
V.K. offered no explanation why her fixed business expenses would not be affected by the dramatic change in the nature and scope of her business following the accident. Instead, she asserted, and continues to assert, that she continued to incur the same fixed business expenses. The Tribunal rejected this argument and provided its reason for doing so. V.K. now attempts to reargue the same point by asserting “By definition, a fixed business cost must necessarily continue to be incurred, regardless of whether a business can continue operating.”
Fixed business expenses, by definition, do not fluctuate with the volume of business activity; however, V.K.’s inability to continue her business after the accident cannot be characterized merely as a change in the volume of her business activity. In this case, her business became wholly inactive. V.K. had to completely cease her main business activity, cleaning, and was limited to maintaining contact with her clients as she waited to recover from her injuries. Based on this, the Tribunal found the change in V.K.’s business was significant enough to affect her fixed business expenses and accepted Aviva’s submission that she did not incur certain fixed business expenses after the accident. I have no reason to find otherwise.
V.K. also relies on her 2015 tax return to argue that her calculation of her fixed business costs was accepted by the Canada Revenue Agency (“CRA”). While I accept that as true, it is not pertinent. There is no dispute regarding V.K.’s ability to work in 2015. At that time her business was active and, following the Tribunal’s reasoning, she would have incurred a broader set of fixed business expenses. CRA’s acceptance of V.K.’s fixed business expenses before the accident was not relevant to whether she continued to incur the same fixed business expenses after the accident.
Furthermore and more broadly, the CRA’s assessment of V.K.’s income and expenses for tax purposes had no bearing to the Tribunal’s determination of the quantum of IRBs to which V.K was entitled under the Schedule. V.K. is advancing the same argument in this reconsideration request as she previously submitted to the Tribunal. The Tribunal rejected that argument and found sections 9(2) and 18(12)(a) of the Income Tax Act (Canada)1 supported Travelers’ method for calculating V.K.’s fixed business expenses. I agree with the Tribunals decision on this point and have no reason to vary that decision.
V.K. claims the Tribunal misapprehended the evidence found in paragraphs 16 and 17 of her submissions, which I have reproduced below:
Business losses continued to accrue notwithstanding [V.K.’s] inability to work. Those expenses include business licence fees, accounting, administration, telephone, utilities, car insurance and registration, internet, and home office. (See page 13 of Mr. Grewal’s report at Tab 1.)
On April 25, 2017, Travelers conducted an examination under oath. During that examination, [V.K.] confirmed she was incurring those ongoing business losses. [V.K.] maintains contact with her clients so that when she recovers sufficiently from her injuries, she can return to cleaning their homes. Attached at Tab 4 is the transcript from that examination. (See pgs. 12, 14-16, 23-4)
V.K. does not explain how the Tribunal misapprehended this evidence any further than implying the Tribunal’s misapprehension is demonstrated by its finding that she did not incur certain fixed business expenses when her business was inactive after the accident.
I disagree that the Tribunal misapprehended V.K.’s evidence. The Tribunal considered and accurately characterized every claim found in paragraphs 16 and 17 of V.K.’s submissions in paragraphs 16, 17, and 22 of its reasons. Furthermore, it accepted parts of this evidence and provided reasons for rejecting the remainder. V.K. submits the Tribunal was simply “wrong in fact and law” in reaching its decision. While, as in this request, a party might disagree with the Tribunal’s assessment of the evidence before it, this is not sufficient basis for revisiting a decision.
Based on the above, I find no error in the Tribunal’s decision.
Conclusion
- This request for reconsideration is denied.
Jonathan Batty Associate Chair Licence Appeal Tribunal
Released: January 7, 2019