This case, an appeal from a decision of the Licence Appeal Tribunal (LAT), involves the interpretation of the provisions surrounding income replacement benefits (IRBs) under the Statutory Accident Benefits Schedule (SABS). The respondent, Mr. Switzer, was in a motor vehicle collision on February 3, 2018. He claimed benefits from his insurer, the appellant Waterloo Insurance, including IRBs.
Mr. Switzer was a self-employed lawyer who started his own firm in May of 2017, less than a year before the collision, and had not yet made a profit. He previously worked with a law firm and had a substantial annual income of over $500,000. In this case, there was no dispute that Mr. Switzer was entitled to IRBs, the issue was the quantum. The respondent argued he was entitled to $1,000 per week based on his previous income under s. 4(2)3, while the appellant argued that his weekly entitlement came to $0 per week based on his self-employed income at the time of the collision. The adjudicator at the LAT accepted the respondent’s argument and determined that he was entitled to $711.15 per week from February to December 2018 due to some post-accident income earned and $1,000 per week going forward.
Waterloo Insurance appealed the LAT’s decision on the basis that it had been more than eight months since Mr. Switzer left his previous law firm and started his own firm, and as such, s. 4(2)3 should not be available to him.
The court determined that Mr. Switzer was a self-employed person pursuant to s. 5(1)2 of the SABS. The court found that the adjudicator erred in overlooking the requirements of s. 4(2)3 as being a person employed per the criteria listed in s. 5(1)1, which the respondent was not. The court determined that the adjudicator should have calculated the respondent’s entitlement to IRBs pursuant to s. 4(3), which states that “a self-employed person’s 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).”
Because there was not enough evidence available to the court to conduct an adequate analysis based on s. 4(3) and the respondent’s self-employed income, the court remitted this matter back to the LAT for a new hearing on the IRBs, with updated financial disclosure.
