Volume. 5 Issue. 44- October 6, 2021
This week’s focus is on IRB where we review two recently released decisions dealing with calculating post accident income involving self-employment.
In the first case, the Tribunal calculated the IRB base rate, however, determining an inability to calculate IRB payable, given conflicting post-accident earnings evidence.
In the second case, the Applicant was confirmed as suffering from a substantial inability, until credibility issues essentially nullified the claim.
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Post-Accident Earnings Quandary Negates IRB Entitlement
Money From the Streets – As the result of an August 2018 accident, Travelers, in Giannoulis v 20-000280 v Travelers ( 20-000280), conceded that Giannoulis met the test for entitlement to IRBs from February 20, 2019 to January 11, 2021. However, the parties disagreed on the quantum for the self-employed labourer for a construction business owned and operated by his father. Giannoulis relied upon an accountant’s report proposing IRB in the amount of $361.59 weekly, however the Tribunal found this to have been calculated incorrectly. The calculation was based upon Giannoulis’ last 52 weeks earnings, rather than the income from the 2017 taxation year as required by S.4(3) of the Schedule, given the self-employed status.
The Tribunal nonetheless found that Giannoulis had provided sufficient records, being the 2017 and 2018 tax returns, to allow for a calculation. To that end, Traveler’s accountant’s continued request for documentation other than tax records was found excessive, as the focus ought to have been on the amount accepted by the CRA. The Tribunal calculated IRB based upon same to be $355.38, however noted that “(t)he analysis, however, does not end here”, as the Travelers was entitled to deduct 70% of any post-accident income earned.
While there were no tax records for 2019 and 2020, bank records confirmed bank deposits totalling $105,581 in 2019, $73,924 in 2020. This stood in contrast to information relied upon by Giannoulis’ accountant, that he had worked only one hour per week, earning $20. Addressing these deposits, Giannoulis contended that the deposits were “loans” from his father, and that he also “borrowed money from the streets”. The Tribunal placed no weight on these contentions, given the failure to comply with an Order to provide further particulars therein. Therefore, the Tribunal was unable to calculate the amount payable for the period in question, being unable to calculate post-accident earnings. As a result, Giannoulis had not met his burden of providing sufficient evidence to allow for a calculation of IRB payable.
Credibility Issues Nullifies IRB Entitlement
Credibility Trumps Disability – In NC v Aviva (19-001405), NC, a real estate agent, injured in a December 2016 accident, sought ongoing IRB from May 2018, when entitlement was denied by Aviva. The Tribunal found “that the medical evidence supports that, at the time his IRBs were terminated, NC still suffered a substantial inability to carry out the essential tasks of his employment as a real estate agent.” This was as a result of evidence that there was confirmed driving anxiety, which would represent a large part of his duties. In addition, he had consistently reported “he had low self-confidence that resulted in reduced motivation which, in my view, would interfere with selling homes and finding new clients.” The Tribunal agreed that success in sales requires energy, motivation, and a positive attitude.
Similar to the previous case however, the analysis did not end there, as Aviva raised valid arguments regarding NC’s credibility. Ultimately, the Tribunal found that “(a)s a result of these credibility issues, NC has failed to persuade me on a balance of probabilities that his accident-related impairments resulted in a substantial inability for him to complete the essential tasks of employment.”
NC commissioned an accountant’s report that confirmed he had not been “forthright with any of the assessors about his pre- or post-accident income.” The report confirmed that he “made more income from real estate transactions in the year following the accident, which discredits his position that he has a substantial inability…”. As a result, the Tribunal found “the applicant’s self reports to assessors about the accident causing him financial distress to be contradictory.”
The Tribunal agreed with Aviva that this “undermines his credibility and the value of his assessors’ reports.” The Tribunal noted that the “matter is complicated by the fact that NC has been diagnosed with a psychological impairment by both his and Aviva’s IE assessors.” However, all four assessors during cross examination acknowledged their reliance upon the NC’s self reports regarding pre and post accident employment. It was found that “an accurate history of NC’s pre-accident employment and documentation to support it is necessary to determine to what extent his accident-related impairment resulted in his inability to work. This was not done in this case.”
Related LAT inFORMER Issues:
Insurer Not Obliged to Pay Disability Benefits Despite Failing to Comply with Notice Provision
EI Maternity Deduction & $0 Quantum vs. Eligibility
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