Volume. 6 Issue. 40 – October 12, 2022
The first case this week, ‘A Losing Proposition’ considers the implications of self-employed business losses on the Applicant’s IRB quantum.
In ‘No Draconian Measures Called For’ the Tribunal’s conclusions were at odds with its own precedents in concluding there was no remedy called for under the Schedule when an Applicant attends an IE found have been secured by way of a deficient notice.
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Business Losses Not Factored Into IRB Calculation
A Losing Proposition – At issue, in 20-012014 v TD Insurance, was the appropriate quantum of IRB to which the Applicant Mears was entitled for the period April 30, 2016, through to June 22, 2022, with entitlement not being disputed.
Prior to the accident, Mears was both employed as a health information professional as well as being the self-employed owner/operator of a hair styling salon. Following the accident, Mears returned to her employment until January 21, 2017, at which time she was unable to work further. She also ceased operations of her salon on or before May 31, 2017. For the period in question, TD’s expert calculated IRB payable of $152, 478, whereas Mears’ expert calculated $166,812, The main point of contention being the amount of post accident losses of the salon, and the extent to which same was attributable to the subject accident.
Mears contended that TD’s calculation fails to fully consider post accident losses from self-employment, as evidenced by the CRA returns, specifically noting the forced shut down of the business in May 2017. TD’s expert countered that the business operated at a loss even prior to the accident, with the CRA records confirming a much larger loss during the year end of May 31, 2016, the majority of which was prior to the accident. They indicated that “given the average weekly business loss after the accident…is similar to the pre-accident weekly loss from June 1, 2015 to April 22, 2016, and the average weekly business loss after the accident…is similar to the pre-accident weekly loss…we have not considered the loss to be an additional loss due to the accident.”
The Tribunal found TD’s position persuasive, and as the losses were occurring prior to the subject accident, they could not be claimed as any part of an IRB award from the date of loss until the cessation of the business. Further, any IRB calculation had to be based upon a standard of proof demonstrating that any such losses were attributable to the accident, with evidence required to confirm “the negative impact of the subject accident on the ability of the applicant to operate the business in question.” However, the evidence supplied by Mears, CRA records 2014 – 2017, rather served to “show a relatively consistent pattern of losses sustained by New Way Beauty Depot Limited both before and after the subject accident”.
Ultimately, the evidence failed to demonstrate “enough of a decline or change in financial status to be clear that such losses are entirely a result of the accident. Even if one wanted to assign some value to the accident here, it would be impossible to determine a number with any sense of accuracy, as no evidence was presented by the applicant to demonstrate how and why the business suffered losses as a result of her injuries. We just have the financial records, which as noted above, do not demonstrate that the accident caused the losses”.
No Remedy For Improperly Scheduled IE
No Draconian Measures Called For – In 20-002008 v Unica, the Tribunal was asked to consider an appropriate remedy with respect to inclusion of an IE report in the record, given a subsequent finding that the notice used by Unica to secure same was found to have been deficient. The Applicant Carleton contended that the OT IE ought to be excluded from the record, citing a precedent Tribunal case. We have previously featured an identical case where this very issue was canvassed, with a finding that Tribunal case law had established that a “significant remedy” was required.
For the within matter however, the Tribunal found that by excluding the IE from the record, this would be “creating a remedy for a breach of s. 44(5) when none exists in the Schedule, would be reading into the Schedule a remedy that was not provided for.” Noting that other sections of the Schedule provided for remedies for failing to comply, and “the Legislature could have included a remedy for a section 44(5) non-compliance as it did for other sections of the Schedule, but it chose not to.” Excluding the evidence, when same was provided in accordance with the production deadlines in the Order “would be a draconian remedy.” Rather, the parties were asked to provide submissions as to the weight that ought to be afforded the report in question due to its deficient notice.
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