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Volume. 4 Issue. 19 – May 13, 2020
3 Fundamentally Flawed Accountant’s Reports
The Tribunal addresses the quantum of IRB for the self-employed in 3 cases, taking into consideration the applicable pre-MVA timeframe and the contrasting accounting reports relied upon by the parties. Despite a flawed accountant’s report, the Applicant was granted a 20% award on the report in one scenario
Award on Incorrect Accountant’s Report – In 18-009156 v Aviva, the Applicant, self-employed on the date of loss, March 2017, sought IRB quantum determination based upon his prior 52 weeks earnings. Claiming entitlement to do so under s.4(2), the Tribunal noted that “the applicant fails to appreciate that although section 4(2) applies to self-employed persons, the reference to qualifying under section 5(1) means section 4(2) is only applicable when the self-employed person was also employed or recently employed in the time preceding the accident.”
The Tribunal noted that for a self-employed individual, s.7(2)2 provides for an increase in the IRB weekly base where there is a loss from self-employment. This was not available to the Applicant in 2017, having shown a profit, however, was available (and paid) in 2018 as the Applicant reported losses for fiscal year 2018. Further, the Respondent ultimately agreed to pay the accountant’s report, despite same having incorrectly calculated the IRB amount. In granting an award of 20% on same, the Tribunal noted that “there is no requirement in section 7(4) specifying the applicant must make a successful, or positive quantum, claim for IRBs in order for such an expense to be reasonable and necessary”. The Respondent had “created its own requirement” and failed to “consider the applicant may have suffered a loss from self-employment.”
Check Your Blind Spot – In 18-011646 v Aviva, the Applicant, self-employed since 2010, and injured in an October 2017 accident, sought to have his IRB calculated based upon his previous 52 weeks earnings. He too argued the applicability of s.4(2), further suggesting that forcing him to rely upon the last taxation year would create an “unintentional blind spot”. The Tribunal did not find this line of reasoning to be persuasive.
In this instance, the Applicant had declared $0 business income in 2016, and $38,400 in 2017, the year of the accident. Finding the Applicant’s entitlement to be based upon the last taxation year, as “he had no declared income in 2016, the IRB amount is nil.” Note that while this decision references “the last completed taxation year which was 2016”, the SABS specify the requirement being the “the last fiscal year of the business’. It is therefore presumed that the business in question used December 31 as the end of the fiscal year.
Business Loss = $2,685.71 IRB – In 18-006959 v Aviva, the Applicant, a real estate agent, sought weekly IRB in the amount of $6,514. The calculations provided by the Applicant were found to be invalid “as that report did not take into account, money earned by the applicant for the periods of the times in dispute.” The Respondent’s accounting report properly accounted for same, with the self-employed business losses resulting in weekly IRB entitlement of $2,685.71.
While the actual calculations were not provided in the decision, the case drives home the fact that, despite the Schedule indicating that IRB is the lesser of an amount calculated or $400, s.7(2)2 does allow for the addition of 70% of weekly self employed losses to either amount.
Hot Drink Spill in Vehicle Not “Accident”
Addressing whether injuries caused by hot tea spilled on the Applicant in a vehicle constituted an “accident”, the Tribunal considered a somewhat similar Court decision. While the distinguishing factors between these two scenarios may seem subtle, in the case at hand the fact that she was in a vehicle was simply incidental, and the “the securing of an improperly placed lid, and the spilling of the hot beverage in an attempt to secure the lid that was the sole cause of her injuries.”
Not My Cup of Tea – In 18-012641 v Allstate, the Applicant, while stopped at a red light, noticed that the lid on the cup of tea just purchased at a drive-thru was not secured properly. Having then removed the cup from the tray on her passenger seat, the Applicant was burned by split tea while trying to secure the lid. The Tribunal described the actions of the Applicant as “out of the ordinary”, as it was “not necessary to have lifted the cup out of the tray and then place it in front of her and then attempt to secure the lid. She could have simply left the cup where it was and then tried to secure the lid.” Determining this as an intervening act that broke the causation link, so too was the employee having failed to properly secure the lid. The latter point at least was conceded by the Applicant.
The Applicant relied upon Dittmann v Aviva in which the plaintiff spilled hot coffee on her lap while transferring it from a drive-through window into her vehicle cup holder. In this matter, the Court found, “but for her use of the vehicle she would not have been in the drive-through lane, would not have received the coffee while in a seated position, would not have been transferring the coffee cup to the cup holder across her body, and would not have had the coffee spill on her lap. In addition, but for her being seated and restrained by a lap and shoulder harness she may have been able to take evasive action to avoid or lessen the amount of coffee that was spilled on her.”
Jurisdiction Confirmed But Dispute at an End
Jurisdiction Confirmed, However No Dispute – In 18-000715 v Unifund, the Respondent contended that the Tribunal lacked jurisdiction to hear the appeal for IRB, as they had reinstated same eight days prior to the hearing. Given there was no longer a dispute between the parties there was accordingly no jurisdiction for the Tribunal. However, it was confirmed that “the Tribunal’s jurisdiction over a matter is determined as of the date upon which the Notice of Application for Dispute Resolution is first filed with the Tribunal.” In this case, “at the time the application was filed, the issue of entitlement to an income replacement benefit was still in dispute…(and) the Tribunal has jurisdiction over this matter.”
Despite this finding, it was then noted that “The dispute between the parties with respect to that issue is now at an end.” The Applicant argued that “the wording of s. 280 of the Insurance Act allows the Tribunal to make a finding of entitlement in the absence of a denial of the benefit.” Agreeing with the Respondent that this was a request for declaratory relief, the Tribunal confirmed that “s. 281 of the Insurance Act suggests that the section is intended to give an insured person procedural protection once the Tribunal issues a decision…”. In this matter, “there is no Tribunal decision as the respondent reinstated the applicant’s income replacement benefit prior to the commencement of a hearing. The dispute between the parties with respect to that issue is now at an end.”
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