Mariyadas v. Wawanesa Mutual Insurance Company, 2022 CanLII 106451

Mariyadas v. Wawanesa Mutual Insurance Company, 2022 CanLII 106451

Citation: Mariyadas v. Wawanesa Mutual Insurance Company, 2022 ONLAT 19-011670/AABS

Licence Appeal Tribunal File Number: 19-011670/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:

Inderani Mariyadas

Applicant

and

Wawanesa Mutual Insurance Company

Respondent

DECISION AND ORDER

VICE-CHAIR: Sandeep Johal

APPEARANCES:

For the Applicant: David Wilson, Counsel

For the Respondent: Ken Yip, Counsel

Court Reporter: Michelle Gordon

HEARD: By videoconference

REASONS FOR DECISION AND ORDER

BACKGROUND

1The applicant was injured in an automobile accident on November 14, 2018 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The parties are in agreement that the applicant meets the disability test for entitlement to the income replacement benefit (“IRB”). Where the parties disagree is on the quantum of the IRB.

ISSUES TO BE DECIDED

3The following are the issues to be decided:

i. Is the applicant entitled to receive an income replacement benefit in the amount of $400 per week for the period of November 21, 2018 to date and ongoing?

ii. Is the applicant entitled to a medical and rehabilitation benefit in the amount of $3,507.44 for chiropractic services recommended by Whitby Wellness Centre in a treatment plan (OCF-18) submitted on September 7, 2019, and denied on September 20, 2019?

iii. Is the applicant entitled to a medical and rehabilitation benefit in the amount of $3,293.75 for physical therapy recommended by Whitby Wellness Centre in a treatment plan (OCF-18) submitted on April 23, 2019, and denied on May 6, 2019?

iv. Is the respondent liable to pay an award under Regulation 664 for unreasonably withheld or delayed payments to the applicant?

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

4At the hearing, the applicant withdrew issue number [4] ii. above and issue [4] iii. was added on consent.

RESULT

5The applicant is entitled to IRBs as calculated by the BDO accounting report in the amount of $320 per week less deductions and less any amounts paid for the period of December 1, 2018 to September 30, 2020.

6The treatment plan in the amount of $3,293.75 is reasonable and necessary.

7The applicant is not entitled to an award.

8The applicant is entitled to interest in accordance with the Schedule.

ANALYSIS

Procedural motions

9The applicant raised a motion seeking to have a hearing on whether she is entitled to proceed to a hearing on the IRB in dispute despite the respondent having agreed that the applicant is entitled to the IRB.

10The applicant seeks to have the protection of s. 281(1) of the [Insurance Act]², which states that after the Licence Appeal Tribunal issues a decision, the insurer shall not reduce benefits to the insured person on the basis of an alleged change of circumstances, alleged new evidence or an alleged error except as provided under this section.

11It is the applicant’s position that despite the respondent agreeing that the applicant is entitled to an IRB, she is still entitled to run a hearing and produce evidence in support to show that she is entitled and meets the test to claim an IRB in order to claim the protection of s. 281(1) of the Insurance Act. The applicant further submits that at the Financial Services Commission of Ontario (“FSCO”) this was a common occurrence and that if I decide not to follow the FSCO line of cases, then I should explain why FSCO is not being followed or why the FSCO cases were incorrectly decided. The applicant also relies upon the certain cases in support of her position.³

12The respondent takes the position that the applicant’s entitlement to an IRB has been conceded and agreed to and for the Tribunal to allow a hearing on entitlement and making an order in this situation would be to grant declaratory relief. To do so in this situation would be a waste of resources to have to present evidence and conduct a hearing. Entitlement and quantum are separate and the dispute in this case is with respect to quantum. The respondent also relies upon case law in support of its position.⁴

13After considering the submissions and reviewing the case law the parties rely upon, my view is that s. 280 of the Insurance Act sets out the jurisdiction of the Tribunal, which is the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits. If the respondent has agreed that the applicant has met the test to claim an IRB, then there is no dispute on that aspect that requires a resolution. To allow a hearing to take place in this scenario would be a waste of Tribunal resources and contrary to s. 280 of the Insurance Act,⁵ to adjudicate on IRB entitlement when there is no dispute. It is not for me to explain why FSCO allowed this practice to happen or whether it was right or not as I am not bound by FSCO jurisprudence, and I refer to the Insurance Act for the authority that either party may apply to the Tribunal for resolution of disputes. In my view, the key word is “disputes”. Where the respondent has agreed that the applicant has met the test for an IRB, then there is no dispute between the parties and the Tribunal has no jurisdiction to proceed to a hearing on applicant’s entitlement to an IRB.

14Where the parties do disagree is on the quantum of IRB to which the applicant is entitled. Each has their own accountant’s report detailing a separate amount. That is a genuine dispute between the parties and in accordance with s. 280 of the Insurance Act, the Tribunal may resolve that dispute by way of a hearing.

15I will now turn to discuss what quantum of IRB the applicant is entitled to.

What is the quantum of IRB payable to the applicant?

16I find the applicant is entitled to an IRB in accordance with the accounting report of BDO dated May 4, 2021 for the following reasons.

17The applicant is self-employed as a 50% owner of a cleaning company with her husband.

18The issue between the parties is how to treat post-accident sub-contractor expenses. The applicant takes the position that the replacement labour was hired after June 2019 to replace the applicant’s labour and therefore the appropriate deduction is against the applicant’s portion of the business. This is how the applicant’s accounting report from ADS Forensic Accountants dated March 26, 2021 (the “ADS report”) calculated her IRB’s. The ADS report allocated all replacement wages to the applicant’s portion of the business income once her husband returned to work on June 14, 2019.

19The respondent’s position is that the BDO report took the actual revenues and expenses when calculating the IRB for the different time periods, whereas the ADS report took the total revenues and converted it into a weekly amount assuming it was the same for all the time periods. The other difference was the treatment of the sub-contractor expenses. BDO took the total revenue and deducted the sub-contractor expenses and then took 50% (as the applicant was self-employed as a 50% owner of the company) of the net income or loss to calculate the IRB. The ADS report took the total revenue and only deducted 24% of the sub-contractor expenses consistent with the pre-accident period, then took 50% and attributed it to the applicant and deducted the rest at 100%. The result of this difference between the two reports, increases the loss for the applicant.

20I place more weight on the BDO report as opposed to the ADS report because the BDO report relies upon the more recent case law of the Tribunal,⁶ and the Divisional Court decision in Surani,⁷ which is binding on the Tribunal when calculating the deductions and proportioning the expenses. The ADS report relies upon older FSCO cases for post-accident losses and provides opinions on pre-and post-accident income that are contrary to the Surani decision which states that in accordance with s. 4(4) of the Schedule, the self-employed’s loss following an accident is to be determined in the same manner as losses from the business in which the person was self-employed.⁸ (emphasis mine). In my view, that means the expenses or loss should be apportioned to the entire business and not just one person’s share of that business.

21The applicant relies upon several FSCO cases in support of her position,⁹ however FSCO decisions are not binding on the Tribunal; further, I find that they are all older decisions which deal with previous versions of the Schedule. In any event, the Garic decision that the applicant relies upon in support of her position that the sub-contractor expenses should be allocated to the applicant and not the business is contrary to the more recent Divisional Court decision in Surani which has found the opposite. I am bound by Divisional Court decisions, and I find the Surani decision applicable to the current case that the applicant’s loss following an accident is to be determined in the same manner as losses from the business. As the court in Surani stated, “...[T]he IRBs is to provide compensation for income loss - but subject to statutory limits. The SABs reflect the fact the self-employed person who has been injured may not have lost anything financially, so as to be entitled to the $400 weekly benefit sought here, if he or she has a business that continues to operate after the accident and to generate income. If the individual has incurred losses because of the accident-for example, by having to hire replacement staff – he or she is compensated by s. 7(2)”.¹⁰ I find that the BDO report calculates the applicant’s IRB in accordance with the Surani decision.

22As a result of the above, I find that the applicant’s quantum of IRB should be as calculated by the BDO report. I will now turn to discuss whether the treatment plans are reasonable and necessary.

The treatment plan in the amount of $3,293.75 is reasonable and necessary

23The treatment plan for physical therapy is reasonable and necessary for the following reasons.

24The applicant submits that she has a number of physical impairments as noted in the physiatry report of Dr. Kekosz dated March 1, 2020 which also recommends continued physical therapy and a strengthening program. Furthermore, the treating facilities’ clinical notes and records that are contemporaneous to the treatment plan note that the applicant has had improvements in her back pain.

25The respondent submits the treatment plan is not reasonable and necessary as the treatment only helps the applicant for a few hours at a time before the pain returns and that the clinical notes and records state that she did not want to go back to the clinic for more treatment and that the pain has not changed, it has plateaued.

26I agree with the applicant and find that she has satisfied her onus on a balance of probabilities that the treatment plan is reasonable and necessary. The fact that she has some pain relief as a result of the treatment is a reasonable goal, and there is no requirement to show the pain has significantly decreased but if the treatment allows the applicant to function as a result of pain relief that is, in my view, a reasonable and necessary goal of treatment. Furthermore, the applicant’s subjective comments in the clinical notes and records about not continuing with treatment or that her pain has plateaued was not contemporaneous to the date of the treatment plan. As a result of the above, I find that the treatment plan is reasonable and necessary.

27I will now turn to discuss whether the applicant is entitled to an award if the respondent unreasonably withheld the payment of benefits.

AWARD

28The applicant is not entitled to an award for the following reasons.

29The applicant bears the onus to prove on a balance of probabilities that the respondent unreasonably withheld or delayed the payment of benefits so as to be entitled to an award in accordance with s. 10 of Regulation 664. The applicant submits she should be entitled to an award because the respondent made several demands for documentation to determine an IRB when the applicant is not a sophisticated person. The applicant further submits that once the ADS report was provided to determine her IRB on June 14, 2019, there was silence from the respondent until August 27, 2019. However, upon review of the evidence, the insurer requested insurer examinations (“IE’) on June 21, 2019. And as a result of the IE’s, IRBs were terminated effective September 1, 2019. I am not persuaded of conduct on the part of the respondent that shows that it unreasonably withheld or delayed the payment of IRBs.

30Furthermore, upon receipt of the financial information provided by the applicant, on August 28 and September 11, 2019, BDO required additional information in order to calculate the respondent’s IRB. I am not persuaded that this is evidence of conduct that is unreasonable. The respondent has an obligation to continuously adjust the applicant’s file based on new information that is received. Also, on September 5, 2019, the respondent made a goodwill payment of $3,600 to allow time for the respondent’s accounting firm to review the information to make its own determination of the IRBs payable.

31As a result of the above, I have not been persuaded on a balance of probabilities that the respondent unreasonably withheld or delayed the payment of benefits and I find that the applicant is not entitled to an award.

ORDER

32The applicant is entitled to IRBs as calculated by BDO in the amount of $320 per week less deductions and less any amounts paid for the period of December 1, 2018 to September 30, 2020.

33The treatment plan in the amount of $3,293.75 is reasonable and necessary.

34The applicant is not entitled to an award.

35The applicant is entitled to interest in accordance with the Schedule.

Footnotes

1. 1O. Reg. 34/10 as amended.
2. 2RSO 1990, c l.8
3. 317-001173 v Aviva Insurance Canada, 2017 CanLII 93462 (ON LAT); Nelson v Liberty Mutual Insurance Company (FSCO A00-000253); Kulasekarampillai and State Farm Mutual Company (FSCO A03-001063); Simpson and Allstate Insurance Company of Canada (FSCO Appeal P01-00057); Kulaveerasingam and State Farm Mutual Automobile Insurance Company (FSCO A13-004423)
4. 417-001937 v Primmum Insurance Company, 2018 CanLII 140991 (ON LAT) (“J.R”); 17-005168 v. TD Insurance Meloche Monnex, 2019 CanLII 58142 (ON LAT) (“E.V.”); M.S. v Unifund Assurance Company, 2020 CanLII 27395 (ON LAT); Godin v Sabourin, 2016 ONSC 770; T.N. v TD Insurance Company, 2020 CanLII 27380 (ON LAT); 17-008584 v Certas Direct Insurance Company, 2018 CanLII 83532 (ON LAT); and 17-006525 v Aviva Insurance Canada, 2018 CanLII 141002 (ON LAT) (“D.M.”).
5. 5See J.R. and E.V.
6. 616-003197 v Economical Insurance Company, 2018 CanLII 28266 (ON LAT) (“A.S.”); 17-000751 v Economical Insurance Company, 2018 CanLII 81896 (ON LAT) (“V.S.”))
7. 7Surani v. Perth Insurance Company, 2018 ONSC 7254 (“Surani”)
8. 8Surani at para. 16.
9. 9Garic v Markel Insurance Company of Canada (FSCO A07-000909); (“Garic”): Erickson and The Guarantee Company of North America, (FSCO,A-000560); Melchiorre and Wawanesa Mutual Insurance Company (FSCO A-05-000491 and A05-000492); J.W. and Canadian General Insurance Group, FSCO A96-001645; Fimiani and Liberty Mutual Insurance Company, (FSCO A97-001518).
10. 10Surani at para. 22.