Licence Appeal Tribunal File Number: 21-004854/AABS
21-004854/AABS
Licence Appeal Tribunal File Number: 21-004854/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:
Maria Fatima Oliveira
Applicant
and
Aviva General Insurance Company
Respondent
DECISION
VICE-CHAIR:
Brett Todd
APPEARANCES:
For the Applicant:
Brent McQuestion, Counsel
For the Respondent:
Kevin H. Griffiths, Counsel
HEARD:
By Way of Written Submissions
OVERVIEW
1Maria Fatima Oliveira (the “applicant”) was involved in a motor vehicle accident on July 11, 2016 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). Aviva General Insurance Company (the “respondent”) denied certain benefits. The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2The applicant seeks entitlement to income replacement benefits (“IRB”), two treatment plans, interest, and a special award from the respondent. The respondent initially agreed that the applicant qualified for IRB, and paid the benefit for 2016 and 2017, but disagrees with the quantum sought by the applicant and also challenges the IRB eligibility period. Aviva also takes the position that the treatment plans have not been proven to be reasonable and necessary. As the insurer argues that no benefits are overdue, it holds that interest is not applicable and that it is not liable to pay an award.
ISSUES IN DISPUTE
3The following issues are in dispute:
Is the applicant entitled to an income replacement benefit of $400.00 per week from January 1, 2018 to date and ongoing?
Is the applicant entitled to $3,108.68 for chiropractic services, recommended by Stoney Creek Rehab in a treatment plan/OCF-18 dated January 28, 2019?
Is the applicant entitled to $2,026.76 for massage therapy services, recommended by Stoney Creek Rehab in a treatment plan/OCF-18 dated February 20, 2019?
Is the respondent liable to pay an award under s. 10 of O. Reg. 664 because it unreasonably withheld or delayed payments to the applicant?
Is the applicant entitled to interest on any overdue payment of benefits pursuant to s. 51 of the Schedule?
RESULT
4I find that:
i. The total amount of the IRB that the applicant is entitled to is nil because of post-accident income. It follows that no interest is payable.
ii. The applicant is not entitled to the treatment plans in dispute, or interest, as she has not demonstrated that they are reasonable and necessary.
iii. As no benefits are due, the respondent is not liable to pay an award.
PROCEDURAL ISSUE
What is the eligibility period for the IRB in dispute?
5I find that the applicant is eligible for IRB from January 1, 2018 to date and ongoing.
6While Aviva accepted that the applicant was entitled to IRB during the time in which it paid the benefit in 2016 and 2017, the insurer argues now that the applicant was not actually eligible for IRB before August 21, 2020, as this was the first time that she submitted a Disability Certificate/OCF-3 in accordance with s. 36(3) of the Schedule. This section of the Schedule states that “An applicant who fails to submit a completed disability certificate is not entitled to a specified benefit for any period before the completed disability certificate is submitted.”
7In support of this position, the respondent submitted correspondence showing that the insurer requested submission of an OCF-3 on a number of occasions from August 24, 2016 to July 23, 2020. It claims that it paid the IRB without an OCF-3 from July 18, 2016 to December 31, 2017. A further letter was sent to the applicant on August 13, 2020 notifying her that IRB entitlement was being suspended due to her continued failure to submit the requested OCF-3. On August 21, 2020, the applicant replied by sending an OCF-3 completed by Dr. Maliha Sherman, family physician, and dated August 18, 2020.
8The applicant replies that this was not the first OCF-3 she submitted to Aviva, having sent an initial OCF-3 completed by Frances Laberge, physiotherapist, dated July 20, 2016, much earlier. Although she does not specify a date or include correspondence to prove precisely when this OCF-3 was sent, she does note that the respondent supplied this form to its insurer’s examination (“IE”) assessors, Dr. Allan Kopyto and Dr. Monique Costa El-Hage, in advance of their addendum reports dated July 24, 2019. Each physician listed this OCF-3 as a document that Aviva provided them to review in the course of completing these addendum reports, so Aviva seems to have had the document in its possession by at least early-mid 2019.
9Granted, this does not prove that the OCF-3 was submitted to Aviva by January 1, 2018. However, it does prove that Aviva had an OCF-3 that would fulfill the applicant’s obligations pursuant to s. 36(3) of the Schedule well before August 21, 2020, and that the insurer’s specific argument here is incorrect. In addition, Aviva did pay IRB in 2016 and 2017. It now submits that it did so in the absence of an OCF-3, although this is open to some question as it seems clear that the insurance company had an OCF-3 well before it claims to have received one. Both factors are enough for me to deny the respondent’s request that the IRB eligibility period in dispute should be changed to start on August 21, 2020.
10With that said, I have no other submissions before me with which to determine the date that the OCF-3 was sent to the respondent. In the absence of such information, I am left with the January 1, 2018 IRB date for the beginning of the eligibility period in dispute, as was noted in the CCRO dated October 28, 2021.
11For the above reasons, I find that the applicant’s eligibility period for IRB started on January 1, 2018.
ANALYSIS
Income Replacement Benefit (“IRB”)
12I find that the applicant’s total entitlement to IRB is nil as a result of her post-accident income.
13To receive payment for post-104-week IRB under s. 6 of the Schedule, the applicant must demonstrate on a balance of probabilities that she suffers from a complete inability to engage in any employment or self-employment for which they are reasonably suited by education, training, or experience. The applicant bears the burden of proving, on a balance of probabilities, that she meets this test and the associated criteria.
14Below, I detail the background of the applicant’s accident-related injuries, employment status, income both before and after the accident, and the arguments presented by each party on the IRB matter. I then address each of the key questions that need to be answered to render my decision.
IRB background
15According to the applicant, injuries sustained in the accident impaired her ability to work as a self-employed administrator and cleaner at Mario Oliveira Cleaning, a janitorial services company that she owns and operates with her husband, Mario Oliveira. These injuries—which included whiplash, headaches, myofascial pain to her right wrist and hand, chest wall pain, low back pain with radiculopathy, post-traumatic stress disorder (“PTSD”), major depressive disorder, and panic disorder—caused the applicant to restrict/halt her work duties. As a result, she made a claim for IRB.
16The applicant used two accounting services to determine the amount of the IRB owed. Each reviewed financial and business records provided by the applicant. RSM Canada Consulting filed a report dated July 11, 2018, while ADS Forensic Accountants filed a second report dated December 1, 2021. Both reports calculated the applicant’s base weekly IRB entitlement based on the 52 weeks immediately preceding the accident.
17As a result of the ADS Forensic report, the applicant claims entitlement to a total of $32,800.22 in IRB for the time period between January 1, 2018 and December 31, 2020, and $400.00 in IRB per month from January 1, 2021 to date and ongoing, plus interest.
18Both parties accept the income numbers as presented in the RSM and ADS accounting reports. These reports are supported by Canada Revenue Agency (“CRA”) tax returns for the years 2015-2021 and a statement of revenue and expenses from Mario Oliveira Cleaning for January-April 2022, all of which have been submitted in addition to the accounting reports themselves.
19Aviva initially agreed that the applicant’s injuries met the test for IRB, and paid $7,403.00 in this benefit for the period from July 18, 2016 to December 31, 2017 based on the information in the RSM Canada report. The insurer did not agree with the quantum of IRB that the applicant was entitled to receive from January 1, 2018 to date and ongoing, however. The respondent submits that the applicant was self-employed as the equal owner/operator of Mario Oliveira Cleaning at the time of the accident and before that to at least 2011. As a result, any IRB must be calculated based upon the most recent completed fiscal year of the business.
20In addition, the respondent claims the ability to deduct passive income generated by the applicant’s business. Due to the amount of income generated by this business and claimed by the applicant as income on her CRA tax returns, and deductions allowed by the Schedule, the respondent takes the position that the IRB owing is nil.
21Therefore, the disagreement between the parties over IRB quantum centres on how it should be calculated. The applicant argues that IRB should be calculated based on the 52 weeks immediately preceding the accident, while the respondent submits that IRB should be based on the most recent completed fiscal years and that it is entitled to deduct business income from any IRB that the applicant is entitled to receive.
What was the applicant’s pre-accident employment status?
22I find that the applicant was self-employed at the time of the accident, and as such, her IRB entitlement is to be calculated pursuant to s. 4(3) of the Schedule, based on income from her self-employment in the last completed taxation year before the accident. I further find that the applicant is the 50 per cent owner of Mario Oliveira Cleaning for the purposes of IRB calculations pursuant to the Schedule for all years in dispute and ongoing.
23Calculation of IRB is outlined in s. 4 of the Schedule. To begin determining IRB, you must first establish the applicant’s gross annual or weekly income pursuant to s. 4(2) and 4(3) in the Schedule. Section 4(2) applies to insured persons who claim IRB pursuant to s. 5(1)1, which applies to claimants who were employed or recently employed at the time of the accident.
24Section 4(3) applies to insured persons who claim IRB only on income from self-employment pursuant to s. 5(1). Section 4(3) provides that “the weekly income or loss from self-employment at the time of the accident is the amount that would be 1/52 of the amount of the person’s income or loss from the business for the last completed taxation year as determined in accordance with Part I of the Income Tax Act (Canada).”
25The onus is on the applicant to prove entitlement to IRB on a balance of probabilities.
26I prefer the respondent’s argument that the applicant should be subject to s. 4(3) of the Schedule, as the applicant’s gross annual income is based entirely on self-employment. I accept that challenges to the interpretation of this section of the Schedule have been tested and denied before at this Tribunal, as cited by the respondent in its submissions (V.H. v. Aviva Insurance Company of Canada, 2019 CanLII 130385 (ON LAT); K.D. v. Aviva Insurance Company, 2020 CanLII 27383 (ON LAT)). Adjudicator Farlam ruled in the latter decision that s. 4(3) is “clear and unambiguous” when it comes to establishing that IRB entitlement shall be calculated based on the last completed year of taxation, and while I am not bound by previous Tribunal decisions, I agree.
27The evidence before me is that the applicant has been the equal owner/operator of Mario Oliveira Cleaning since at least 2011. The RSM Canada report of July 18, 2018 states that: “Mrs. Fatima Oliveira and her husband, Mario Oliveira were self-employed as the equal owners and operators” of the cleaning business and that the income from said business was allocated “equally” between them. The ADS Forensic report dated December 1, 2021, uses similar language, stating that at the time of the accident, the applicant was “self-employed operating Mario Oliveira’s Cleaning as partnership,” and that they reported the business income “equally” on their tax returns. The statements about income sharing are supported by the tax returns, which are included in submissions.
28Due to the above, I do not accept the applicant’s argument in reply submissions that she is an employee in a business owned by her husband. The applicant even acknowledges here that “she has referred to herself as a co-owner and/or self-employed person in relation to her husband’s cleaning business, but has done so in the colloquial sense of the terms.” The applicant submitted business ownership records as part of reply submissions that show Mario Oliveira as the sole proprietor of the cleaning business. But this is not a strong argument. The applicant’s comments, notations in the accounting reports, and, most importantly, how the business income has been equally divided in tax returns speak more strongly to how this is a business owned and operated by both Mario and Maria Fatima Oliveira. Regardless, the plain language of s. 4(3) makes it clear that the income amounts accepted by the CRA in tax returns are to be used when determining pre-accident income from self-employment. As such, there is no need to review who is listed on paper as the owner of Mario Oliveira Cleaning.
29Further, the applicant’s argument that she should be allowed to calculate her pre-accident income based on 52 weeks of self-employment income before the accident is not persuasive. This argument seems based on a misinterpretation of s. 4(2) of the Schedule. Although s. 4(2) applies to self-employed persons, its reference to qualifying under s. 5(1) means that s. 4(2) is applicable only where the self-employed person was also independently employed or recently independently employed in the time preceding the accident. That is not the case here, where the applicant was solely self-employed with the cleaning company that she operated with her husband before the accident.
30Additionally, I agree with the respondent that the change in the applicant’s income from 50 per cent of the business income from Mario Oliveira Cleaning during 2015 to 2020 to 25 per cent in 2021 and the first four months of 2022 is an arbitrary change.
31The applicant’s explanation to Aviva that the change in ownership and profit-sharing as of 2021 was made because this new 75/25 per cent split “simply better reflects Fatima’s inability to work” does not stand up to scrutiny. Aside from how the evidence recounted above establishes that Mario Oliveira Cleaning is owned and operated jointly by Mario and Maria Fatima Oliveira, there is no indication that the applicant stopped working in any substantial way after the accident. Evidence shows that the applicant has been working on at least some basis since at least 2019. Dr. El-Hage, for example, notes in her psychological assessment report that the applicant told her that she continued to work for the cleaning business, although not as much as her husband would have preferred. The applicant provided a similar account to Dr. Kopyto, telling him that she was doing office work and light janitorial duties. In addition, the applicant’s 2021 tax return shows that she spent $12,818.37 to operate a vehicle for the cleaning business, which does not align with claims that she had stopped working.
32In summation, the applicant has not substantiated that her claims of being unable to work to such a point where her share of the business could reasonably be cut from 50 per cent to 25 per cent. If anything, the evidence shows that the applicant continued to work for the cleaning company in a significant fashion, given her comments to assessors and her claiming of vehicle expenses in 2021.
33Accordingly, as the applicant was fully self-employed at the time of the accident, her IRB entitlement is to be calculated pursuant to s. 4(3) of the Schedule. This calculation is to be based on income from her self-employment as declared in her CRA tax returns. And for the purposes of calculating the applicant’s income, the applicant is to be regarded as a 50 per cent owner/operator of Mario Oliveira Cleaning for all years in dispute, including 2021 and the first four months of 2022.
What is the quantum of the IRB owed?
34I find that the applicant is entitled to an IRB quantum of nil due to the post-accident income of the business she jointly owns and operates with her husband.
35As I have determined that the applicant is self-employed and any IRB calculation must be based on s. 4(3) of the Schedule, it follows that the IRB calculations made by both RSM Canada and ADS Forensic are erroneous. Both reports are incorrect as they were determined based on self-employment income earned in the 52 weeks before the accident in accordance with s. 4(2) of the Schedule.
36As noted above, CRA tax returns show that Mario Oliveira Cleaning was a profitable enterprise in 2018, 2019, 2020, 2021, and the first four months of 2022. The respondent submits the following, supported by the tax returns in submissions:
i. IRB for 2018: Mario Oliveira Cleaning had revenue of $277,153.59, with profit of $141,162.67. The applicant’s share declared as income to CRA was $68,842.58.
ii. IRB for 2019: Mario Oliveira Cleaning had revenue of $282,349.21, with profit of $156,046.69. The applicant’s share declared as income to CRA was $65,779.98.
iii. IRB for 2020: Mario Oliveira Cleaning had revenue of $260,695.04, with profit of $143,574.40. The applicant’s share declared as income to CRA was $60,055.54.
iv. IRB for 2021: Mario Oliveira Cleaning had revenue of $306,816.05, with profit of $162,223.41. The applicant’s 50 per cent share of this profit is $81,111.70.
v. IRB for January 1, 2022 to April 30, 2022: The applicant’s profit-and-loss statement for the first four months of 2022 reported that Mario Oliveira Cleaning had revenue of $77,311.58 with profit of $22,671.85. The applicant’s 50 per cent share of this profit is $11,335.93.
37I accept the respondent’s contention that it is entitled to deduct this income generated by the applicant’s business post-accident, regardless if it was earned actively with the applicant working or passively with the applicant not working. The respondent cites the Financial Services Commission of Ontario (“FSCO”) appeal decision in Perth Insurance Company v. Salmi Surani, 2017 ONFSCDRS 221 and the resulting Division Court Appeal Surani v. Perth Insurance Company, 2018 ONSC 7254 in support of its position. Aviva also refers to the past Tribunal decision K.W. v. Aviva General Insurance, 2020 CanLII 12709 (ON LAT), where it is noted that passive earned income has to be included as a deduction in any IRB calculations under s. 4 and s. 7 of the Schedule.
38The Schedule is clear and unambiguous here. Section 7(1) states that the weekly maximum base amount of IRB is $400.00 (without optional insurance coverage, which is not claimed by the applicant). And s. 7(3)(b) of the Schedule details how an insurer can deduct IRB payable from self-employment income:
(3) The insurer may deduct from the amount of an income replacement benefit payable to an insured person,
(b) 70 per cent of any income from self-employment earned by the insured person after the accident and during the period in which he or she is eligible to receive an income replacement benefit.
39I agree with Aviva’s argument, as well as its base numbers, which I have calculated to arrive at the following results:
i. 2018: $68,842.58/52 weeks x 70 per cent = $926.72 deduction per week.
ii. 2019: $65,779.98/52 weeks x 70 per cent = $885.49 deduction per week.
iii. 2020: $60,055.54/52 weeks x 70 per cent = $808.44 deduction per week.
iv. 2021: $81,111.70/52 weeks x 70 per cent = $1,091.89 deduction per week.
v. January 1, 2022 – April 30, 2022: $11,335.93/17 weeks x 70 per cent = $466.73 deduction per week.
40As the deductions as provided for in the Schedule would render the IRB quantum for each year in contention to be nil given the $400.00 weekly maximum prescribed in s. 7(1) of the Schedule, it follows that the applicant is not entitled to any IRB.
41The applicant’s response as provided in reply submissions, is not persuasive. It relies almost entirely on the ownership status of Mario Oliveira Cleaning, implying that the applicant is essentially just an employee of this business. As I have already explained above, I find this to be a mischaracterization of how the company is owned and operated and how the Oliveiras divide income derived from it.
42For the above reasons, the applicant is entitled to an IRB quantum of nil for all periods of time in dispute.
The Treatment Plans
43To receive payment for a treatment and assessment plan under s. 15 and 16 of the Schedule, the applicant bears the burden of demonstrating on a balance of probabilities that the benefit is reasonable and necessary as a result of the accident. To do so, the applicant should identify the goals of treatment, how the goals would be met to a reasonable degree and that the overall costs of achieving them are reasonable.
44Both parties agree that the applicant is subject to the transition rules detailed in s. 2(1.2) 1. Section 12 of the Schedule. These rules apply because the applicant entered into her contract for auto insurance with Aviva on October 21, 2015, during the transition period between the previous version of the Schedule and the one currently in effect. As a result, she is subject to a $50,000 limit on medical rehabilitation benefits, not the $65,000 limit that generally applies to accidents that occur on or after June 1, 2016.
45Further, the applicant accepts that she has exhausted her medical rehabilitation benefits of $50,000. Aviva provided her with a standard benefit statement to this effect on May 11, 2022.
46The applicant is therefore not seeking the full amount of the treatment plans in dispute. Instead, she is requesting a decision that finds the plans reasonable and necessary, so that she would then be entitled to interest on the incurred and overdue amounts of these plans despite her benefits being exhausted.
47Aviva counters that these plans are ineligible because the policy limit on medical rehabilitation has been reached, and interest cannot be applied over that limit.
Are the treatment plans reasonable and necessary?
48I find that the applicant has not demonstrated that the treatment plans in dispute are reasonable and necessary. I further find that even if the applicant had demonstrated the treatment plans to be reasonable and necessary, she would not be entitled to interest as she has exhausted her available medical benefits.
49The applicant relies on the treatment plans/OCF-18s in dispute, the specifics of which are as follows:
i. The OCF-18 for chiropractic services dated January 28, 2019 was completed by Dr. Angelo Frisina, chiropractor. It includes 16 sessions of chiropractic treatment to treat whiplash associated disorder (“WAD III”) with complaint, tension-type headache, and the sprain and strain of the thoracic and lumbar spine. Other injuries and symptoms are noted in the additional information section. These are: suboccipital neuralgia, right wrist strain, right arm neuralgia, nausea, and dizziness. Three goals are listed in pain reduction, increased range of motion, and a return to the activities of daily/normal living.
ii. The OCF-18 for massage therapy is dated February 20, 2019 and was also completed by Dr. Frisina. This plan recommends 16 sessions of massage therapy to treat the same injuries and symptoms noted above. The goals of this treatment are the same as those in the chiropractic plan.
50In addition, the applicant relies on two medical reports. Dr. Zohar Waisman, psychiatrist, diagnosed the applicant with major depressive disorder, somatic symptom disorder with predominant pain that is severe and persistent, and PTSD in a report dated June 19, 2020 that resulted from an in-person assessment done on April 6, 2019. Dr. Selig Krajden, plastic and reconstructive surgeon, assessed the applicant on March 9, 2021 and submitted a report dated August 10, 2021 that diagnosed the applicant with right-wrist soft-tissue injuries and trauma involving the right median nerve that were directly caused by the accident.
51In response, Aviva relies on the IE and addendum report of Dr. Kopyto already noted above in the section on the IRB claim.
52I am not persuaded that the applicant has demonstrated these treatment plans to be reasonable and necessary. Although the applicant cites the reports of Dr. Waisman and Dr. Krajden to demonstrate the extent of her injuries, I assign them little weight as neither refers to the OCF-18s in dispute. The Dr. Waisman report is a psychiatry assessment, which is of minimal evidentiary value in my opinion as the treatment plans deal with physical therapy, not psychological therapy. This assessment was conducted over a year after the dates of the two plans, so it is also not contemporaneous with the OCF-18s. The Dr. Waisman report is a plastic surgery assessment requested to “assess post-traumatic sequelae” following the subject accident. Again, it does not refer to the treatment plans. And also again, this assessment took place late, some two years after the plans.
53As a result, the only significant support for the treatment plans comes from the plans themselves, which the Tribunal has held to be insufficient without objective medical evidence. I prefer the argument of the respondent, which focuses on the applicant’s failure to submit corroborating medical evidence. I take note of the respondent’s citation of past Tribunal decisions (including Oliveira-Guerrero v. Aviva 19-006710 CanLII 97081 (ON LAT); S.A. v. Intact 19-000107 CanLII 57372 (ON LAT); L.S. v. Royal and Sun Alliance 16-002381 CanLII 39566 (ONLAT); and Applicant v. Aviva 17-002689 CanLII 2311 (ONLAT)), each of which holds that it is well settled that treatment plans are not compelling evidence on their own to prove that their recommendations are reasonable and necessary. I agree. An applicant requires the support of medical practitioners such as a family physician or a specialist, which has not been adduced here.
54Further, I prefer the medical evidence of the respondent. Dr. Kopyto provides the only medical opinion on the OCF-18s outside of that in the treatment plans, which as I have already noted are not sufficient evidence on their own. As of his examination on April 9, 2019, Dr. Kopyto found the applicant to have no current accident-related impairment from a musculoskeletal perspective, and that she had been already provided with adequate rehabilitation. His final opinion was that neither plan was reasonable and necessary.
55Lastly, these plans are also not payable because the applicant has exhausted her medical rehabilitation benefits. I agree with the respondent that exhausting these benefit limits is a “complete defence” to these claims, and as a result she is not entitled to their base amounts or interest.
56Accordingly, the applicant is not entitled to either treatment plan or interest.
AWARD
57As no benefits are owing, the respondent is not liable to pay an award.
ORDER
58I find that:
i. The total amount of the IRB owed is nil. No interest is owed.
ii. The applicant is not entitled to the treatment plans in dispute, or interest, as she has not demonstrated that they are reasonable and necessary.
iii. As no benefits are due, the respondent is not liable to pay an award.
Released: June 6, 2023
Brett Todd
Vice-Chair