Insured operating rental units found to have complete inability to perform work.

July 12, 2014, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Heard Before: Adjudicator Knox Henry

Date of Decision May 9, 2014




Mike Kozumplik was injured in a motor vehicle accident on August 29, 2004 when he entered an intersection and collided with a car that had proceeded into his path. Mr. Kozumplik did not suffer any immediate distress following the collision, but the next morning he experienced back pain and he needed his wife’s assistance to get out of bed.  He underwent extensive medical treatment to overcome the debilitating effects of the collision, and he was unable to resume his self-employment activities in purchasing, renovating, and maintaining the dwellings that he, and in many cases, his wife, owned.


He applied for and received statutory accident benefits from his insurer, Aviva Canada Inc.. In addition to medical benefits received from Aviva, Mr. Kozumplik received some income replacement benefits (IRBs) for the period from September 5, 2004 to May 8, 2013 –when benefits were terminated by Aviva following a Multidisciplinary Insurer’s Examination, which stated that Mr. Kozumplik no longer suffered a complete inability to engage in any employment for which he is reasonably suited by age, experience, or education.


The issue in this hearing:


  1. Is Mr. Kozumplik entitled to further income replacement benefits for the period of August 29, 2006 to June 25, 2013?




  1. Mr. Kozumplik is entitled to an income replacement benefit at the rate of $273.68 per week from August 29, 2006 to June 25, 2013, less 80 per cent of his net income as set out in his income tax returns, plus the prescribed interest.




Mr. Kozumplik immigrated to Canada on November 21, 1968 and worked for 20 years at a factory job until the plant closed. While working, he obtained his real estate license and he and his wife began purchasing and renovating dwellings which were then resold or rented out to tenants.  This part-time activity became full-time when Mr. Kozumplik lost his.


Mr. Kozumplik disputes the amount and duration of the IRBs. Mr. Kozumplik’s IRB has been calculated at $273.68 per week based on his pre-accident self-employment income.  If he has not been engaged in employment for which he is reasonably suited by education, training or experience during the relevant time period, he is entitled to income replacement benefits in the sum of $273.68 per week from August 29, 2006 through June 25, 2013, together with the prescribed interest.


Aviva submits Mr. Kozumplik is not entitled to the amount of income replacement benefits he seeks, as he is earning some income from his self-employment status.


The Arbitrator reviewed the law in the case focussing on the phrase “complete inability”. He also reviewed previous decisions and concluded that “complete inability” does not require the degree of impairment that is as high as a catastrophic impairment so as to preclude legitimate claims for ongoing disability, nor so low as a substantial inability, as that would encourage specious claims after the first 104 weeks. The ability to engage in reasonably suitable job must be considered as a whole, including reasonable hours and productivity.


What is the impact of Mr. Kozumplik’s post-accident income and losses on the amount of income replacement benefits to which he is entitled? Mr. Kozumplik’s post-accident net income is set out in his income tax returns.  During the 104 weeks following his motor vehicle accident, Aviva paid Mr. Kozumplik income replacement benefits in the amount of $273.68 per week.


Aviva submits that Mr. Kozumplik does not have a complete inability to have some gainful employment since he does visit their current rental properties, and occasionally hires individuals to undertake some maintenance on the properties. Aviva submits that Mr. Kozumplik is employed.


However the Arbitrator found that Mr. Kozumplik’s level of ability to perform any work as defined in section 5.2 of the Schedule is severely limited and meets the test of a complete inability to engage in any employment for which he is reasonably suited by education, training, or experience.


Aviva paid to Mr. Kozumplik IRBs of $31,917.25, which includes interest at the rate of 2% per month up to September 20, 2013. Pursuant to the Schedule Aviva may deduct from the amount of the income replacement benefit payable to an insured person, 80 per cent of the net income received by the insured person in respect of any employment subsequent to the accident.  The Arbitrator found Aviva is entitled to such a deduction in this case.

Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Chronic Pain, Fractures, Pain and Suffering, Treatment

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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 or call us toll-free at 1-866-414-4878.

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.

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