What Constitutes Proof of Income

February 21, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Income Replacement Benefits – IRBs; special award; interest; man injured in car accident must provide proof of income; what constitutes proof of income

Qureshi and State Farm

Decision Date: 2017-02-06
Heard Before: Adjudicator Marcel Mongeon

Mr. Mohammad Qureshi was injured in a car accident on October 2, 2013 and sought accident benefits from State Farm payable under the Schedule, however when the parties were unable to resolve their disputes through mediation Mr. Qureshi  applied for arbitration at the FSCO.

The issues in this Hearing are:

1. What, if any, is the amount of the Income Replacement Benefit (“IRB”) that Mr. Qureshi is entitled to?
2. Is Mr. Qureshi entitled to be paid a Special Award on the basis that State Farm unreasonably withheld or delayed payments to Mr. Qureshi?
3. Is Mr. Qureshi entitled to interest for the overdue payment of benefits?

Result:

1. An IRB based on a gross weekly employment income of $461.54 is payable to Mr. Qureshi.
2. A Special Award is not payable to Mr. Qureshi.
3. Mr. Qureshi is entitled to interest on any overdue benefits at the rate of 1% per month.

This case revolves around a simple question: what proof of employment income is an Applicant required to provide?

Facts

Mr. Qureshi was by Fire Experts. Mr. Qureshi’s employment began on July 23, 2013. It continued until the date of his accident on October 2, 2013. Mr. Qureshi’s duties for his employer were related to fire safety inspections and the recharging of fire extinguishers that had passed their in-service deadline. Mr. Qureshi noted that the Prince of Wales Boulevard address was a condominium building that the employer lived at with his girlfriend. Mr. Qureshi also put photographs into evidence which he says show his places of work, some colleagues and some of the duties he fulfilled for his employer.

Mr. Qureshi’s was paid as $2,000.00 per month, or $24,000.00 per year. Section 4(1) of the Schedule in defining “gross weekly employment income” would then mean Mr. Qureshi’s payment expectation was $24,000.00 divided by 52 or $461.54 per week. Mr. Qureshi’s first payment from his employer of $2,000.00 was expected on August 23, 2013. However, the employer failed to make the payment. Mr. Qureshi testified that he believed that the employer was stalling the payment.

Mr. Qureshi was also getting some pressure at home. Mr. Qureshi’s parents wondered if Mr. Qureshi had a real job or if he was just leaving the house every day to ‘hang out’ with some friends. To assuage his parents on this concern, Mr. Qureshi requested his employer to provide him with some proof of his employment. On September 6, 2013, the employer provided Mr. Qureshi with time sheets for his work to date. These time sheets show appropriate dates tied into the revenues that Mr. Qureshi was generating further tied in with invoice numbers.

Mr. Qureshi testified that on September 6, 2013, the employer said that Mr. Qureshi would be paid on September 26, 2013. On September 26, 2013, the employer provided Mr. Qureshi with two cheques which were presented in evidence. Mr. Qureshi also testified that the employer told Mr. Qureshi not to cash the cheques as there was an insufficient balance.

Mr. Qureshi considered cashing the cheques in spite of the advice. However, he determined if the cheques were dishonored, Mr. Qureshi’s own bank would likely charge him significant fees as a result. Accordingly, Mr. Qureshi decided not to immediately cash the cheques but to wait until the employer advised him that funds were available. Mr. Qureshi continued to work for the employer including the morning of the accident, October 2, 2013.

Mr. Qureshi’s testimony of that day is that they had had a good morning with a lot of sales.  Mr. Qureshi went to lunch with his boss and a co-worker. His boss drove, and Mr. Qureshi was in the rear seat. As they made a left turn the car was hit by a streetcar and Mr. Qureshi was injured. He incurred spinal fractures sitting in the back seat. The driver and passenger in the front seat were uninjured.

Mr. Qureshi provided testimony about what next happened that is at odds with the official Police Report. Mr. Qureshi testified that the employer – who was driving – sped away a short distance and then called someone. Shortly thereafter, the employer’s girlfriend came to the scene of the accident. From that point on, the girlfriend represented that she had been the driver through the accident. This is what the official Police Report states.

Mr. Qureshi was seriously injured in the accident and was transported to a hospital for medical attention. His employment was effectively terminated by his inability to work due to the injuries he sustained. Mr. Qureshi testified that he tried to contact the employer on several times to obtain payment for his work. In addition, two pages of texts were submitted into evidence as proof of his efforts to collect payment for his work from the employer. He has never been paid for his work.

Despite never having received payment for his work and, in preparation for this Hearing, on October 17, 2016, Mr. Qureshi requested Canada Revenue Agency to amend his income for the 2013 income tax year by declaring an additional $4,000.00 in income. No other actions were taken by Mr. Qureshi to be paid his employment income. He testified that he believes his former employer has left the jurisdiction for the east coast. He did not specify a timeframe for this departure.

Mr. Qureshi sought payment of an IRB for both pre- and post-104 week periods.

In support of the payment of the IRB, an OCF-2 was obtained from the employer and submitted to State Farm. State Farm has conceded many aspects of Mr. Qureshi’s claim for an IRB. State Farm concedes that Mr. Qureshi meets the medical tests for the IRB for both the pre- and post-104 week periods to this Arbitration Hearing, and that Mr. Qureshi did have employment as described.

However State Farm argues that Mr. Qureshi had not yet provided reasonable proof of his income that would allow State Farm to calculate the appropriate quantum. State Farm submits that the last proof of remuneration was dated September 23, 2013, or about a week and a half prior to the accident. If Mr. Qureshi wishes to claim the benefit on the basis that he was working at the time of the accident (October 2, 2013), he needed to produce additional documentation to show his being paid up to and including this date. If Mr. Qureshi is not able to prove he was working at the time of the accident, then he had to produce additional documentation to show his having worked in 26 of the 52 weeks preceding the accident. The Arbitrator acknowledged that such proof has not been received.

Analysis

State Farm asked for T4s (which would establish income), Records of Employment (which include detailed information about income per week prior to termination of employment) and the employment file (which could usually be expected to have detailed information about days and hours worked as well as remuneration paid). Mr. Qureshi has testified that he has provided State Farm with everything that he was given by his employer. He was never provided with T4s, Records of Employment or employment files by his employer and, therefore, he cannot produce these.

State Farm’s representative on cross-examination admitted that Mr. Qureshi could not produce something which he did not have.

The Arbitrator was asked to draw an adverse inference because Mr. Qureshi did not call his former employer to testify. The Arbitrator noted that:

In civil cases, an unfavourable inference can be drawn when, in the absence of an explanation, a party litigant … fails to call a witness who would have knowledge of the facts and would be assumed to be willing to assist that party.

In his testimony, Mr. Qureshi made it clear that his relationship with his former employer ended badly. The tribunal has the text messages allegedly between the two parties which suggest that the employer had failed to pay Mr. Qureshi. Mr. Qureshi has also provided a hearsay view that he had heard that the employer had moved to the east coast.

In this case, the Arbitrator determined that he had been provided a reasonable explanation of why the employer was not called, and accepted the text message evidence of a deteriorated relationship. It should be clear that the Arbitrator did not accept the text messages as accurate messages between two stated parties: I have had insufficient evidence tendered about their origin. The Arbitrator also accepted that Mr. Qureshi would have difficulty in locating the former employer and that, even if summonsed, it is unlikely that he would have given any clearer evidence to support Mr. Qureshi’s case than Mr. Qureshi himself has given.

The Arbitrator noted that State Farm’s representative left a phone message for the employer at the number she had. She never heard back from him. Only one phone message was left. They determined the company existed.

On the evidence presented the Arbitrator determined that Mr. Qureshi has made out employment with a business named Fire Experts. The time sheets, the uncashed cheques, the text messages, Mr. Qureshi’s testimony, State Farm’s investigations and the business names registration, all lead  to the reasonable conclusion that Mr. Qureshi was working on the date of the accident, that his expected income was $2,000.00 per month, and that his employer had not paid him this income up to and including the day of the accident. On a balance of probabilities, Mr. Qureshi has made his case for employment at the time of the accident and having commenced on August 23, 2013 at the rate of $461.54 per week.

The Arbitrator did not find that State Farm’s actions were unreasonable.

The Arbitrator determined that since IRBs should have been paid to Mr. Qureshi such IRBs shall accrue interest in accordance with s. 51 of the Schedule at 1% per month compounding. Interest shall be calculated at this rate from the date on which the IRB was payable until it is actually paid to Mr. Qureshi.

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.