A.M. v. The Dominion of Canada General Insurance Company, 2019 CanLII 58194

Tribunal File Number: 18-003763/AABS

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

Between:

A.M.

Applicant

and

The Dominion of Canada General Insurance Company

Respondent

DECISION

ADJUDICATOR: Kimberly Parish

APPEARANCES:

Counsel for the Applicant: Georgiana Masgras, Danica Maslow

Paralegal for the Applicant: Carlos Ortiz

Counsel for the Respondent: Sarah Scott

HEARD In Writing ON: September 18, October 1 and 11, 2018

OVERVIEW

1The applicant was injured in an automobile accident on December 21, 2017 when his vehicle was rear-ended by another vehicle. He then sought benefits from the respondent pursuant to Ontario Regulation 34/10, known as the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”). The benefit in dispute in this application is an income replacement benefit or “IRB.”

2There is no dispute that the applicant satisfies the substantial inability test in s. 5(1) of the Schedule for an IRB. The respondent paid the applicant an IRB commencing February 6, 2018 and ongoing but, as described in more detail below, the parties dispute the amount and duration of the IRB that the applicant should receive. The central dispute between the parties arises over whether the applicant was an employee at the time of the accident. The applicant maintains that he was an employee at the time of the accident and, thus, his IRB should be calculated in accordance with s. 4(2)1 of the Schedule. However, the respondent maintains the applicant was self-employed at the time of the accident and, therefore, the IRB should be calculated in accordance with s. 4(2)(3) of the Schedule.

3The applicant applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute. A case conference was held on July 31, 2018 but the parties were unable to resolve the dispute and proceeded to this written hearing.

4Although there were other issues included in the applicant’s application, these are now resolved. The applicant’s legal representative, Mr. Ortiz, emailed the Tribunal and respondent’s counsel on September 18, 2018 confirming the same. Based on the parties’ written submissions, the only remaining substantive issues are the IRB quantum and the timeframe for which it is payable.

ISSUES

5The issues in this hearing are:

1. What is the amount of weekly income replacement benefit?

2. Is the applicant is entitled to receive an income replacement benefit for the period December 28, 2017 to date and ongoing?

3. Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments to the applicant?

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

RESULT

6The respondent shall pay the applicant a weekly income replacement benefit in the amount of $232.96 per week for the period payable from December 28 - 31, 2017, and from February 6, 2018 and ongoing, less any amounts paid.

7The claim for an award under Regulation 664 is dismissed.

8The respondent shall pay interest on the income replacement benefit owing for the period December 28 - 31, 2017, and from February 6, 2018 in accordance with s. 51 of the Schedule.

ANALYSIS

Quantum for the IRB

9I find the applicant was an employee at the time of the accident and the calculation of his IRB to be based in accordance with s. 7 of the Schedule. More specifically, the applicant is entitled to base his IRB calculation on his gross employment income for four weeks prior to the accident, pursuant to s. 4(2)1i of the Schedule.

10The applicant was employed part-time as a production worker from May 4, 2017 to December 21, 2017. This information was confirmed by the initial Employer Confirmation Form (“OCF-2”) dated January 15, 2018, which was signed by the President of the applicant’s employer, Henry’s Tempeh. This OCF-2 noted the applicant’s income four weeks prior to the accident and his income earned 28 weeks prior to the accident.

11A second OCF-2 dated February 12, 2018 and signed by the applicant was submitted to the respondent. This OCF-2 indicated that the applicant also worked as an Uber driver for the period of November 6, 2017 to February 5, 2018, during which time he earned $3,970.95. The applicant has not been able to return to his work as a production worker since the accident, and has ceased driving for Uber as of February 5, 2018.

12As noted in s. 4(2)1 of the Schedule, the gross income calculation for an insured person who was not a self-employed person at any time for the four weeks prior to the accident can be determined through two different scenarios. The insured person can designate the IRB calculation to be based upon their gross employment income four weeks prior to the accident, multiplied by 13, or the IRB calculation can be based on their gross employment income 52 weeks prior to the accident. The gross annual employment income for an insured person who was a self-employed person at any time during the four weeks prior to the accident is based on their gross employment income for the 52 weeks prior to the accident. The gross employment income amounts for the IRB calculation must be based on reported income for income tax purposes as noted within s. 4(5) of the Schedule.

13My reasons for finding the applicant was an employee at the time of the accident and that he is therefore entitled to an IRB based on his gross employment income four weeks prior to the accident are as follows:

i. The applicant completed and signed an Application for Accident Benefits (“OCF-1”) dated January 3, 2018. Under part 5 of this form the applicant checked off a box which indicated he was employed and working at the time of the accident. The January 15, 2018 OCF-2 from Henry’s Tempeh supports this and also confirms he earned salary income from his employer for more than four weeks prior to the accident. This information satisfies that he was an employee at the time of the accident.

ii. The applicant is not precluded from earning additional self-employment income. I find that, just because he earned self-employment income from Uber seven weeks prior to the accident, that fact does not establish he was self-employed at the time of the accident. There is a distinction between, on one hand, income earned as the result of being an employee and having that income supplemented by self-employment income versus, on the other hand, income earned solely through being self-employed.

14The applicant retained Durani and Associates (“Durani”) to calculate the IRB amount he is entitled to receive. A report dated April 26, 2018 was issued. The applicant maintains that the weekly IRB to which he is entitled is $232.96. This amount is based on one of three IRB calculations done by Durani which assumes the applicant was an employee at the time of the accident and relies on the applicant’s gross income four weeks prior to the accident, as noted on the OCF-2 dated January 15, 2018. This amount totals $1,331.00 which, extrapolated over 12 months, equates to an annual amount of $17,306.00.

15In response, the Williams report dated May 16, 2018 was produced by the respondent to determine the IRB quantum. Based on this report, the respondent maintains that the applicant’s weekly IRB payment should be $127.95. The calculation of the applicant’s gross annual employment income was based upon the applicant’s income in the last completed taxation year, pursuant to s. 4(2) and s. 4(3) of the Schedule. The applicant’s gross weekly income was calculated by Williams to reflect $9,505.28 divided by 52 weeks, for a total of $182.79 per week. The weekly IRB amount was then calculated at 70%, in accordance with the Schedule, to arrive at the weekly IRB amount of $127.95. The Williams report noted bank statements from the applicant, reflecting bank deposits from Uber on the following dates: November 15, 22, 29, December 6, 13, 20, 28, 2017, and January 31, February 7, 14, 2018. Williams was provided with the applicant’s 2017 personal income tax return, which noted no self-employment activities reported by the applicant in 2017. Williams did not factor in any income from self-employment activities into their IRB calculation.

16Given my finding that the applicant was an employee at the time of the accident, I find that the calculation in the Durani report to be the correct one. The Durani report calculated the weekly IRB at a rate of $232.96, which was based on the applicant’s gross income four weeks prior to the accident. The Durani report was able to calculate this weekly IRB quantum based upon the OCF-2 dated January 15, 2018. Additionally, while the applicant’s second OCF-2, dated February 12, 2018, noted that he earned self-employment income from Uber, this income was not reported and, therefore, cannot form part of the IRB calculation pursuant to s. 4(5) of the Schedule.

17The respondent paid IRBs to the applicant in the amounts as follows:

i. $1,791.30 ($127.95 per week) for the period of February 6, 2018 to May 14, 2018; and

ii. $511.80 for the period of May 15, 2018 to June 11, 2018.

At the time of this hearing, the respondent continued paying the applicant at a weekly IRB rate of $127.95 from June 12, 2018 onward.

Entitlement to IRBs Post-Accident for Period December 28, 2017 - February 5, 2018

18The trickier part of the parties’ IRB dispute concerns the period from December 28, 2017 - February 5, 2018. Again, during this period the applicant earned income as an Uber driver (In fact, his OCF-2 dated, February 12, 2018, noted a gross income of $3,970.95 from November 6 - December 21, 2017.) This was significant to the respondent. Specifically, the respondent held that, based on this fact, the applicant was not entitled to an IRB for this period for the following reasons:

i. The respondent calculated the applicant’s IRB based on what it viewed as the “self-employment” income from Uber;

ii. The respondent then deduced, pursuant to s. 7(3) of the Schedule, all post-accident income from the IRB;

iii. As a result of this calculation, the respondent determined that there was no IRB to pay since the applicant’s self-employment income wiped out the applicant’s entitlement to any IRBs.

Findings Regarding the IRBs Payable

19I have determined the applicant was an employee at the time of the accident and is entitled to a weekly IRB payment in the amount of $232.96. I find the applicant is owed IRBs plus interest at the rate of $232.96 per week for the period payable from December 28 - 31, 2017 and from February 6, 2018 to date and ongoing, less any amounts paid. I have broken down the entitlement to IRBs within the time periods as follows:

i. For the period December 28 - 31, 2017, the applicant is owed an IRB for this period based upon him being an employee at the time of the accident and the applicant’s entitlement to receive an IRB one week post-accident. There was no self-employment income reported by the applicant on his 2017 personal income tax return as confirmed by the Williams report. Therefore, the IRB calculation for this period is based upon the applicant’s gross income four weeks prior to the accident, as noted on the OCF-2 dated January 15, 2018, and elected by the applicant pursuant to s. 4(2)1i of the Schedule;

ii. For the period January 1 - February 5, 2018, I find the IRB quantum for this period cannot be confirmed due to the applicant remaining silent on whether the self-employment income earned from Uber during this period was income which was reported for 2018. This information was not produced for the hearing. The applicant submitted he earned supplemental income in the amount of $112.00 driving for Uber one month prior to the accident. However, this information does not coincide with what was noted on the OCF-2 dated February 12, 2018;

Ongoing Entitlement to IRBs

iii. From February 6, 2018 and ongoing, the applicant had not returned to any form of work. Therefore, the applicant is entitled to IRBs at the rate of $232.96 and ongoing, less amounts paid.

Claim for an Award

20The applicant made no submissions regarding a claim for an award. The respondent submitted that it is not liable to pay an award under Regulation 664, as it has not unreasonably withheld or delayed payments to the applicant. This dispute arose over whether the applicant was self-employed at the time of the accident. The OCF-2 dated January 15, 2018 confirmed the applicant was employed at the time of the accident. The applicant also earned self-employment income as an Uber driver seven weeks prior to the accident. The respondent relied on its accounting report and the interpretation of s. 4(2) (3) of the Schedule to calculate the IRB on the basis that the applicant was a self-employed person at the time of the accident. Therefore, I find the respondent’s reliance on their own accounting report was not a deliberate withholding of benefits and the claim for an award under Regulation 664 is dismissed without merit.

Interest

21I find interest to be payable on the income replacement benefit owing for the period December 28 - 31, 2017, and from February 6, 2018 in accordance with s. 51 of the Schedule.

CONCLUSION

22The respondent shall pay the applicant a weekly income replacement benefit in the amount of $232.96 per week for the period payable from December 28 - 31, 2017, and from February 6, 2018 and ongoing, less any amounts paid.

23The claim for an award under Regulation 664 is dismissed.

24The respondent shall pay interest on the income replacement benefit owing for the period December 28 - 31, 2017, and from February 6, 2018 in accordance with s. 51 of the Schedule.