Financial Services Commission of Ontario Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 198

FSCO A06-002472

BETWEEN:

ANUNKUMARAN ALAGARATNAM

Applicant

and

TD HOME AND AUTO INSURANCE COMPANY

Insurer

Before: Jeffrey Rogers

Heard: September 28, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Mr. Rameshwer Sangha, solicitor for Mr. Alagaratnam Mr. Dwain Burns, solicitor for TD Home and Auto Insurance Company

Issues:

The Applicant, Anunkumaran Alagaratnam, was injured in a motor vehicle accident on June 4, 2003. He applied for and received statutory accident benefits from TD Home and Auto Insurance Company (“TD Home”), payable under the Schedule.¹ TD Home terminated weekly income replacement benefits and refused to pay certain medical benefits and housekeeping benefits. The parties were unable to resolve their disputes through mediation, and Mr. Alagaratnam applied for arbitration at the Financial Services Commission of Ontario under the *Insurance Act*, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Should Rameshwer Sangha be removed from the record as counsel for Mr. Alagaratnam?
Is Mr. Alagaratnam entitled to the benefits claimed in the Application for Arbitration?
Is Mr. Alagaratnam liable to repay TD Home $39,122.44, plus interest, for the income replacement benefits he received from TD Home, for the period June 13, 2003 to April 25, 2005, pursuant to section 47 of the Schedule?
Is Mr. Alagaratnam liable to pay TD Home’s expenses in respect of the arbitration under section 282(11) of the *Insurance Act*, R.S.O. 1990, c.I.8?

Result:

Rameshwer Sangha is removed from the record as counsel for Mr. Alagaratnam.
Mr. Alagaratnam is not entitled to the benefits claimed in the Application for Arbitration.
Mr. Alagaratnam is liable to repay TD Home $39,122.44, plus interest, for the income replacement benefits he received from TD Home, for the period June 13, 2003 to April 25, 2005, pursuant to section 47 of the Schedule.
Mr. Alagaratnam liable to pay TD Home’s expenses in the amount of $1,846 in respect of the arbitration under section 282(11)

EVIDENCE AND ANALYSIS

Removal from Record and Application for Benefits

A pre-hearing in this matter was held on March 6, 2007. Rameshwer Sangha attended the pre-hearing as counsel for Mr. Alagaratnam. Mr. Alagaratnam did not attend. Counsel brought a motion to be removed from the record. I denied the motion, because of defects in the number of days notice given, in the proof of service of the motion, and because I was not satisfied that best efforts had been made to bring the motion to the attention of Mr. Alagaratnam. I adjourned the motion to May 11, 2007, with instructions to cure the defects. Because March 2, 2007 was the second date on which Mr. Alagaratnam had failed to attend a pre-hearing, I also scheduled the hearing for May 11, 2007. In my pre-hearing letter to Mr. Alagaratnam, I informed him that the issues of his counsel’s removal from the record, his claims for benefits, TD Home’s claim for repayment of benefits and its claim for expenses, would all be addressed on May 11, 2007.

The hearing was adjourned from May 11, 2007 to August 3, 2007 and then to September 28, 2007. Mr. Alagaratnam was sent notice of each date at his last address in the records of the Commission. He has not been in touch with the Commission and did not attend the hearing.

Based upon the material filed by Mr. Sangha, I was satisfied that there has been a breakdown in his solicitor/client relationship with Mr. Alagaratnam. Mr. Sangha is therefore removed from the record.

No evidence having been tendered to support Mr. Alaragatnam’s claim for benefits, I find that he is not entitled to the benefits claimed in the Application for Arbitration. The Application is therefore dismissed.

Repayment

Section 47(1) (a) of the Schedule, among other things, requires an insured person to repay to an insurer, any benefits paid as a result of willful misrepresentation or fraud. Section 47(2) (a) requires an insurer claiming repayment to give the insured person notice of the amount claimed.

I find that TD Home gave Mr. Alagaratnam notice of the amount claimed in repayment as required by section 47(2)(a), no later than December 2006, when it delivered its Response to the Application for Arbitration.

I find that TD Home paid Mr. Alagaratnam $39,122.44 for income replacement benefits for the period June 13, 2003 to April 25, 2005, based upon his willful misrepresentation of both his pre-accident and post-accident income.

In his Application for Accident Benefits, Mr. Alagaratnam claimed that he was employed as a pizza maker at Pizzaville, located at 734 Kingston Rd., Pickering, from April 29, 2001 to June 3, 2003. He provided an Employer’s Confirmation of Income, showing income of $750 per week. He then provided a statement to TD Home claiming that he worked there 60 to 65 hours a week, earning $700 per week, paid in cash. In his statement, he indicated that he had declared income in the amount of $28,000 in his 2002 tax return. Mr. Alagaratnam’s tax return for 2001 shows income of $1,167. In 2002 he declared income of $4,335 and received social assistance of $1,798. In 2003, the year of the accident he reported income of $1.

Linda Liorti testified that in 2006 she spoke to Mr. Visvanathan, the owner of the Pizzaville.

Mr. Visvanathan confirmed that he was the owner of Pizzaville for the period that Mr. Alagaratnam claimed to be employed there. He did not recognize Mr. Alagaratnam’s name, even after it was spelled, and he denied ever having an employee by that name. I recognize that this evidence is hearsay. However, I give it some weight in view of Mr. Alagaratnam’s silence in the face of TD Home’s allegation of misrepresentation. Based upon that evidence, along with the discrepancy between his declared income and the income he claimed to have declared and his failure to provide TD Home with further requested information to confirm his income, I find that Mr. Alagaratnam willfully misrepresented his pre-accident income.

On April 15, 2005, Mr. Alagaratnam signed a Declaration of Post-Accident Income in which he stated that he had received no income from employment or self-employment, since the date of the accident. Surveillance conducted on February 22, 23 and 24, 2005 shows Mr. Alagaratnam working at Free Topping Pizza, located at 1050 Simcoe Street North, Oshawa. Further surveillance conducted on May 11, 12, 13, 14 and 15, 2005 again showed Mr. Alagaratnam working at Free Topping Pizza. On June 9, 2006, Linda Liorti spoke to Mr. Jeffreys, the property manager for the plaza in which Free Topping Pizza is located. She showed him a copy of Mr. Alagaratnam’s driver’s licence. Mr. Jeffreys identified Mr. Alagaratnam as the person who had signed the lease on behalf of Free Topping Pizza in January 2004. Ms. Liorti was also able to confirm, by speaking to other tenants in the plaza, that Mr. Alagaratnam was the person who had operated Free Topping Pizza for at least two years. She observed him working there on February 17, 2006, June 9, 2006, March 6, 2007 and April 18, 2007. I find, contrary to his Declaration, Mr. Alagaratnam, had post-accident income from the business he operated as “Free Topping Pizza”, at least from January 2004 and throughout the subsequent period during which he received income replacement benefits from TD Home.

Because TD Home paid Mr. Alagaratnam income replacement benefits of $39,122.44, based upon his misrepresentation, he is required to repay that amount. Mr. Alagaratnam is also required to pay interest on that amount, pursuant to section 47(6) of the Schedule, from December 24, 2006.

EXPENSES

Based upon its success and Mr. Alagaratnam having commenced an improper proceeding, TD Home is entitled to its expenses of the arbitration. Counsel claimed 20 hours. I find that time reasonable. The Legal Aid rate, as required by Rule 78 of the Dispute Resolution Practice Code is $92.34. The amount payable for counsel fees is therefore $1,846. I find that TD Home is not entitled to recover $8,415.36 it paid to conduct surveillance on Mr. Alagaratnam. The expense was incurred prior to the commencement of the proceeding. It is therefore not an “out of pocket expense incurred in furtherance of the arbitration” as required by section 4.4 of the Expense Regulation.

I find no jurisdiction to award the assessment fee of $3,000, based on an abuse of process, following the repeal of section 282(11.2) of the *Insurance Act*.

October 15, 2007

Jeffrey Rogers Arbitrator

Date