Kfouri v. TD General Insurance Company, 2021 CanLII 93348

Citation: Kfouri v. TD General Insurance Company, 2021 ONLAT 19-006916/AABS

Release date: 10/01/2021

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:

Maha Kfouri

Applicant

and

TD General Insurance Company

Respondent

DECISION

ADJUDICATOR: Brian Norris

APPEARANCES:

For the Applicant: Oneal Banerjee, Counsel

For the Respondent: Patrick Baker, Counsel

HEARD: By way of written submissions

OVERVIEW

1Maha Kfouri, (“the Applicant”), was involved in an automobile accident on February 6, 2019, and sought benefits from TD General Insurance Company, (“the Respondent”), pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The Applicant and Respondent were unable to agree on the weekly quantum of Income Replacement Benefits (“IRBs”) that the Applicant was entitled to. The Applicant submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for resolution of this dispute.

ISSUES

2The issues to be determined are:

a. What is the weekly quantum of the Applicant’s IRBs for the period from February 13, 2019 to April 14, 2021?

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

c. Is the Applicant entitled to an award pursuant to O. Reg 664?

RESULT

3The Applicant is entitled to $80.77 per week in IRBs for the period from February 13, 2019 to April 14, 2021, plus interest pursuant to section 51 of the Schedule.

4No award is payable.

BACKGROUND AND POSITIONS

5The Applicant was injured when she slipped while entering her vehicle in a commercial parking lot. The parties agree that her injuries entitle her to IRBs for the period from February 13, 2019 to April 14, 2021. However, their respective opinions diverge on what the quantum of the weekly benefit should be.

6The Applicant submits that she is an employee of a limousine company, which is owned by her husband. She submits that the weekly IRB payment should be calculated based on income from employment, which according to her calculations, totals a weekly quantum of $989.08.

7The Respondent submits that the Applicant is self-employed according to her tax filings. It submits that her weekly IRB quantum is calculated based on her income from self-employment. According to the Respondent’s calculation, the Applicant is only entitled to a weekly IRB payment of $80.77. However, I understand that no IRB payment(s) have been made to-date.

8Upon review of the submissions, legislation, and evidence, I find that the Applicant is entitled to IRBs in the weekly amount of $80.77.

ANALYSIS

9IRB payments are based on the Applicant’s income as reported to the Canada Revenue Agency (“CRA”), pursuant to section 4(5) of the Schedule. The payments are based on the insured’s gross annual income from employment or self employment. Generally speaking, weekly IRB payments are 70% of the insured’s gross weekly employment income. For those who are self-employed, it is 70% of the net weekly income from self-employment. In addition, the weekly quantum may be further reduced by deducting other employment replacement benefits, such as short or long-term disability payments from an extended health carrier.

10The Applicant’s employment status impacts how the calculation is made. The calculation for employed persons is based on lost income. Whereas the calculation for self-employed persons is based on the weekly loss from self-employment.

11The Applicant’s position in this matter fails to appreciate that she reports income as earnings from self-employment only. This is how her income is reported to the CRA. Her payments from the limousine company were infrequent and without any source deductions typical of regular employees. Her earnings from the limousine company are reported in a T4A, “Statement of Pension, Retirement, Annuity, and Other Income”, which is the form used by self-employed persons. The Applicant, if she were treated as an employee, would have received a T4 “Statement of Remuneration Paid” instead. The Applicant’s income tax returns show no employment income. The only relevant income reported is that of self-employment.

12The Applicant’s IRB entitlement is therefore $80.77 per week. The Applicant reported a gross income from self-employment of $6,000.00 for the last fiscal year prior to the subject accident. This amounts to a weekly gross income of $115.38, of which the Respondent is liable to pay 70%, or $80.77 per week. She provides no evidence to show that her weekly IRB should be adjusted to account for other losses, such as hiring someone to replace her. The $80.77 figure is based entirely on the information before me and I recognize that this amount may be adjusted according to additional tax filings, be it gains or losses, pursuant to section 4(6) of the Schedule.

13Lastly, I reject the accounting report dated March 25, 2019, by McCully & Associates Inc. This is because the report assumes that the Applicant is an employee and fails to explain why it characterized the Applicant’s self-employment income as employment income. The evidence unequivocally shows that she reports no income from employment to the CRA.

INTEREST

14The Applicant is entitled to interest on the overdue payment of IRBs, pursuant to section 51 of the Schedule.

AWARD

15The Applicant claims entitlement to an award pursuant to section 10 of O. Reg 664. She submits that the Respondent unreasonably withheld the payment of her IRBs. She submits that it unreasonably relied on its accountant’s steadfast insistence that further documents are required to make the IRB quantum calculation. She submits that this matter is analogous with Degroot v. Security National Insurance Company.¹ In that matter, the Respondent was found to have wrongly relied on its accountant’s request for additional information when, according to that hearing Adjudicator, it had enough information to calculate the IRB quantum, even on a preliminary basis.

16The Respondent submits that there was a legitimate dispute over the quantum of the benefit payable. It felt that the documents requested by its accountant were necessary for the calculation, and that the information requested was never provided. It also noted that the quantum of $80.77, as discussed above, benefits the Applicant because it does not include any other potential deductions that may be available to the Respondent.

17I find that no award is payable. The Applicant provided an inaccurate account of her self-employment and it was reasonable for the Respondent to follow the direction of its accountant and seek additional information.

18I acknowledge that the Respondent may have had enough information to initiate payment of IRBs. If that initial calculation is incorrect, the Respondent is permitted to request an adjustment or repayment. However, the failure to initiate payment in this matter does not rise to a level that warrants an award. To me, the withholding of payment was not unreasonable and the interest payable by the Respondent is sufficient penalty for its failure to initiate payment of IRBs, considering the Applicant’s inaccurate account of her self-employment.

CONCLUSION AND ORDER

19The quantum of the Applicant’s IRBs is derived from the information she provides to the CRA. Here, she reported her income as a self-employed individual. As a result, her IRBs must be calculated in the same way.

20The Applicant is entitled to a weekly IRB payment of $80.77 for the period from February 13, 2019 to April 14, 2021. She is also entitled to interest on the overdue payments, pursuant to section 51 of the Schedule.

21No Award is payable.

Footnotes

1. 12021 CanLII 30277 (ON LAT)