Citation: Primmum Insurance Company v. Baley-Daley, 2021 ONLAT 20-000970/AABS

Licence Appeal Tribunal File Number: 20-000970/AABS

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

Primmum Insurance Company

Applicant

and

Jacqueline Baley-Daley

Respondent

DECISION

ADJUDICATOR:

Deborah Neilson

APPEARANCES:

For the Applicant:

Primmum Insurance Company, Applicant

Nick Mahdavi, Counsel

For the Respondent:

Jacqueline Baley-Daley, Respondent

Court Reporter:

Guido Riccioni

HEARD by Videoconference

March 8, 2021, followed by written submissions

OVERVIEW

1The respondent, Jacqueline Baley-Daley, was involved in an automobile accident on September 16, 2015 and sought income replacement benefits (“IRBs”) from the applicant, Primmum Insurance Company, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The applicant paid IRBs to the respondent and is now seeking a repayment from the respondent of the IRBs paid from September 23, 2015 to September 19, 2017 plus interest. It submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”)

2The applicant claims that it paid the respondent IRBs in the amount of $400.00 per week based on incorrect and fraudulent information purporting to be from the applicant’s pre-accident employer. The applicant claims that the employment and income information provided by the respondent was inaccurate and false. The respondent denies that she owes the applicant the amount of money it is claiming.

3I find that the respondent is required to repay the applicant the amount claimed.

PROCEDURAL ISSUES

4The respondent claimed that she did not receive the applicant’s submissions or brief of documents until March 2, 2021. The applicant submitted that it served the respondent with its document brief and submissions on January 29, 2021 by email and sent served the applicant with a hard copy of the documents on March 2, 2021.

5Under LAT Rule¹ 6.2(e), a person is deemed to have received a document served by email. The Rule does not apply, however, if, under LAT Rule 6.3, the person for whom the document was intended establishes that through absence, accident, illness or other cause beyond that person’s control, the document was not received until a later date or not at all.

6I have reviewed the certificate of service of the applicant along with the applicant’s email dated January 29, 2021 and I am satisfied that the applicant properly served the respondent. The applicant emailed the respondent on January 29, 2021 advising her that she would receive an email link to download the applicant’s submissions and document brief. I have no reason to doubt the applicant received the email as it was sent to her correct email address. The letter also advised the respondent that if she had any issues with opening the documents, she should contact the law clerk at TD insurance who emailed her.

7The respondent was mailed a copy of the case conference Adjudicator’s Order and, therefore, was aware that the applicant’s submissions were due to be served and filed by January 29, 2021. I received no evidence that the respondent was unable to receive emails for any reason on January 29, 2021. Therefore, LAT Rule 6.3 does not apply.

8If I am incorrect, the respondent advised that she did receive the hard copy of the applicant’s submissions on March 2, 2021. Accordingly, she had a week in which to review the applicant’s submissions and to request an adjournment of the hearing or an extension of the time for her to file submissions. However, the respondent declined my offer of an adjournment. She did not identify any witnesses she would have summonsed to testify. Further, she was also provided with an opportunity to file documents within 30 days after the videoconference portion of the hearing. Accordingly, I find that there was no prejudice to the respondent with proceeding with the hearing.

ISSUES

9The substantive issues were confirmed by the parties as follows and not as is set out in the case conference Order:

a. Is the respondent liable to repay the applicant $42,800.00 in IRBs paid during the period from September 23, 2015 to September 19, 2017?

b. Is the applicant entitled to interest on any overdue payment of benefits?

10The respondent, who was unrepresented, submitted that there is a preliminary issue on whether the applicant was barred from claiming a repayment because the parties settled the issue.

ANALYSIS OF THE PRELIMINARY ISSUE

11The respondent submitted that she entered into a settlement agreement with the applicant to withdraw an application to the LAT for claims for medical benefits and IRBs in exchange for the applicant forgiving the overpayment. The applicant denies that there was such an agreement. The applicant submits that it only advised it would consider not pursuing the repayment of IRBs if the respondent’s claims were withdrawn.

12The respondent submitted that if she had known that the applicant was going to pursue her for the overpayment, she would not have withdrawn her application. However, at no point did she ask the LAT to reinstate her appeal for IRBs and medical benefits. She did not provide any documentation confirming a settlement. The case conference Order from the respondent’s 2018 application to the Tribunal only states that she withdrew her appeal. There is no mention of a settlement. In fact, the respondent later admitted under cross-examination that there was no settlement with the applicant. Accordingly, I find that there was no settlement. This means that the applicant is not barred from pursuing its claim for repayment of IRBs.

ANALYSIS OF THE SUBSTANTIVE ISSUES

13Section 52 of the Schedule concerns the repayment of benefits. Under s. 52(1)(a), a person is liable to repay to the insurer any benefit that is paid to him or her as a result of an error on the part of the insurer, the insured person, or any other person, or as a result of wilful misrepresentation or fraud. Under ss. 52(2) and (3) of the Schedule, timelines for an insurer’s repayment requests are set out. An insurer is required to give the person notice of the amount that is required to be repaid. If the required notice is not given within 12 months after the erroneous payment by the insurer, the person to whom the notice would have been given ceases to be liable to repay. If the erroneous payment was made by the insurer because of the insured person’s wilful misrepresentation or fraud, the notice of repayment may be made more than 12 months after the insurer made the erroneous payment.

14The respondent submits that she earned employment income in the six-month period leading up to the accident and that she did not receive notice of repayment from the respondent. The applicant submits that the respondent was not working as alleged. In the alternative, if she was, she willfully provided the applicant with false income information, knowing the applicant would rely on the information to calculate the respondent’s IRB.

Willful Misrepresentation

15The applicant has the burden of proving that the IRB was paid as a result of an error, wilful misrepresentation, or fraud on a balance of probabilities. I find that the applicant has satisfied its onus to prove all of the requirements under s. 52 of the Schedule to justify repayment of the amount claimed.

16The applicant relies on the definition of "misrepresentation" as defined in Black's Law Dictionary² which is “any manifestation by words or other conduct by one person, to another that, under the circumstances, amounts to an assertion not in accordance with the facts”. "Wilful" has been defined as “a deliberate or intentional action”.³ I accept the applicant’s definitions of wilful and misrepresentation.

17The applicant relies on Rajendrakumar v. Aviva Canada Inc. in which Arbitrator Barrington noted that, "Even if one assumed that her original misinformation had been inadvertent, she made no attempt to rectify the error by advising the Insurer of her true employment history."⁴ In that case, the insured had stated on her application for accident benefits that she was employed at the time of the accident and filed an OCF-2 for a different employer. The insurer was unable to verify that the insured was employed as she alleged. Its investigations indicated the employers listed by the insured did not exist. The insured failed to provide any employment records, payslips, tax returns etcetera to support her claim of earning pre-accident employment income. I am not bound by decisions issued from the Financial Services Commission of Ontario. However, I find the reasoning of the Arbitrator in Rajendrakumar v. Aviva Canada Inc. persuasive.

18It is well known that insurers and their insureds owe each other a duty of good faith. The duty on an insured person is to disclose information that would materially affect the amount of policy premiums or the payment of claims. In other words, there is an obligation on the insured to notify their insurer of the proper pre-accident income and any post-accident income, the receipt of other benefits, a return to work or, generally, a change in circumstances that may affect the payment or quantum of IRBs.

19When applying for accident benefits, the respondent represented that she was a personal support worker ("PSW") and submitted financial documentation to confirm her pre-accident income and employment. The applicant paid the respondent IRBs in the amount of $400 per week based on the OCF-2, Employer’s Confirmation of Income Form (“OCF-2”), dated October 6, 2010 and based on a paystub attached to the OCF-2. The OCF-2 was signed by “Diana Thompson” from Human Resources at the respondent’s purported employer, Brandon MedStaff/NHI Nursing and Homemakers Inc.

20I heard testimony from Delores Lawrence, the President and CEO of NHI Nursing and Homemakers Inc. (“NHI”) and NHI Health Care. She is the current Director of NHI and has been since the inception of her company in 1985. NHI had a satellite office at the same location as that listed on the OCF-2 for Brandon MedStaff/NHI Nursing and Homemakers Inc. Ms. Lawrence testified that she has never heard of Brandon MedStaff. She did a search of her records back to 2014 and there was no record of the respondent ever having worked for her. However, upon cross-examination, Ms. Lawrence confirmed that the respondent was interviewed by her company and underwent testing on September 22, 2015 but was not hired.

21Ms. Lawrence testified that no person by the name of Diana Thompson was or is employed by NHI. Nor has Ms. Lawrence ever met or worked with Diana Thompson. Ms. Lawrence never heard of Brandon MedStaff. In 2015, NHI had a satellite office located at 50 Commerce Avenue in Ajax to deal with employment applications in the region. NHI’s home office is located at the same location that the respondent deposed it was on her examination under oath.

22On her completed Ontario Works application dated November 3, 2016, the respondent indicated the last time she was employed was November 26, 2014, not as a PSW but through a temp agency doing general labour or working in a factory. This is confirmed from the payroll records of Staff Plus.⁵ The Ontario Works file further indicates that the applicant had been receiving Ontario Works since July 1, 2015 and was reportedly attending job fairs and resume workshops in August 2015. The respondent testified that she applied for Ontario Works in June 2015, which is substantiated by her Ontario Works file.

23The pay stub attached to the respondent’s OCF-2 allegedly shows that the respondent worked 23.5 weeks as a PSW earning $21,481.16, having worked 53 hours in the two week pay period leading up to the accident at $22.00 per hour. In other words, she worked an average of 41.56 hours per week. The respondent reported to Ontario Works on September 16, 2015, that the only income she received in September 2015 was from Ontario Works. On September 2, 2015, she reported that her employment income for the period of August 16 to September 15, 2015 was “n/a” or non-applicable. No money was deposited into her bank account that resembles the income reported on the OCF-2. She reported on August 16, 2015 to Ontario Works that the only income she received that month was the child tax benefit. She also swore under oath on June 15, 2015 to Ontario Works that she had been living on her credit card, her savings, and an insurance policy that she cashed in. She did not tell Ontario Works that she had been earning employment income since March 2015.⁶

24A note in the Ontario Works file of October 15, 2015, indicates that the respondent was offered a position with NHI. Ontario Works provided her with additional money to obtain equipment she needed to start the job. The next note dated June 3, 2016 states that the respondent advised Ontario Works that she never commenced working at NHI due to a shoulder injury. No mention was made of the motor vehicle accident.⁷

25I find that the OCF-2 and the paystub attached to the applicant’s OCF-2 are fraudulent for the following reasons. The respondent testified that she had never seen it before. At her EUO, she denied ever earning the amounts listed on the paystub or working the hours that she did. Ms. Lawrence testified that the pay stub attached to the applicant’s OCF-2 was not issued by her company. The logo on the fraudulent pay stub appears to be from her company’s website. However, she testified that the real paystubs do not contain a logo and provide different information or information under different headings than what is listed in the fraudulent pay stub. Further, the respondent deposed at her EUO that she did not earn the amount of money set out in the pay stub. The income set out in the paystub was not declared on the respondent’s tax return. The only income she declared on her 2015 tax return was the childcare benefit and her social assistance.⁸

26The applicant submitted that its counsel tried to contact Diana Thompson at the phone number provided on the OCF-2 and on a letter signed by her dated October 30, 2017. In the October 30, 2017 letter, Ms. Thompson purports to be the Director and Shareholder of HMI Brandon Med Staff. The company name is notably different from the name of the company Ms. Thompson listed on the OCF-2. Ms. Thompson declared that the respondent started work for her company on May 7, 2015 until September 16, 2015, earning $26.00 per hour, which is not what is listed on the fraudulent paystub.⁹

27I have no evidence of the applicant’s attempts to contact Diana Thompson. Submissions are not evidence. However, it is notable that the respondent did not summons her as a witness to the hearing.

28The applicant submits that on March 28, 2018, it contacted NHI. One of the human resources professionals from NHI, Charmaine Buenaventura, confirmed by email that they had no record of the respondent, and that Brandon Med Staff had no affiliation with NHI. She also advised that she was unaware of a "Diana Thompson" as indicated on the OCF-2. NHI also advised that the pay stub attached to the OCF-2 is fraudulent.¹⁰ This was corroborated by Ms. Lawrence’s testimony.

29At her examination under oath, the respondent stated that majority of the communication with the workplace was not true.¹¹ She testified that Ms. Lawrence lied. The respondent produced a photo identification tag from NHI of herself and testified that she received it the day she wrote her test, which was sometime in August or September 2015. She also testified that she required her photo ID in order to be fitted for her mask. Her testimony supports Ms. Lawrence’s testimony that the applicant came for an interview and wrote the test on September 22, 2015.

30The respondent testified that she worked for NHI from March 2015 to August or September 2015 without having to provide any documentation to them, without having to take any tests or do any mask fittings or without having to show any identification to the clients she was caring for. The respondent testified that that NHI must have contacted the clients to announce her arrival each day. However, it makes little sense that people would not require some identification from her before allowing her into their homes.

31The respondent deposed at her EUO that she did not claim her employment income as a PSW on her tax return because NHI failed to issue her a T4. She asked Diane Thompson to issue her a T4 and she refused. As a result, she filed a complaint with Revenue Canada. I find the respondent’s submission that NHI was uncooperative makes little sense in light of the respondent’s evidence that Ms. Thompson willingly prepared an OCF-2 for her the same day that the respondent signed it.¹²

32The respondent’s testimony is not coherent and does not make sense in light of the other evidence. For example, the respondent testified that she told NHI to pay her cash because she was receiving benefits from Ontario Works. However, this makes no sense if the respondent started working in March 2015 and did not apply for Ontario Works until June 2015 as set out in her Ontario Works file. The respondent could provide no other explanation as to why she would ask to be paid under the table. The respondent’s evidence as to who interviewed her changed from Diana Thomson to Delores Lawrence back to Diana Thompson. The respondent’s explanation for why she did not tell Ontario Works of her income from NHI was because she needed the money to buy her medication and needles for her diabetes. This does not ring true given the respondent’s testimony that Ontario Works allows a person to work up to 20 hours per week without penalty. These are just some examples of the how the respondent’s evidence is not coherent and does not ring true. Because of the respondent’s inconsistencies together with her admission that she has lied under oath, I am unable to accept her testimony as true.

33I find that there is no dispute that the applicant paid the respondent IRBs a total amount of $42,000.00 from September 23, 2015 to September 19, 2017. I find that the applicant paid the respondent an IRB based on false and inaccurate income information. On the evidence, I find the respondent did not independently inform the applicant of her correct pre-accident income information. I find this information was in her exclusive knowledge and therefore constitutes an assertion not in accordance with the facts justifying repayment.

34The applicant submits that, even if the OCF-2 report of income was inadvertent, the respondent made no attempt to rectify the error. Instead, she proceeded with a post-104 IRB LAT application, only withdrawing it once her employment investigation was put to her and her former lawyer, who notably got off the record.

35I find that the respondent knew or ought to have known that the OCF-2 and the paystubs did not accurately reflect her income in either the half year prior to the accident nor her income in the four weeks preceding the accident. Except for where the respondent’s testimony has been corroborated by other testimony or the applicant’s evidence, I am unable to accept the respondent’s testimony as true for the following reasons.

36I received further documents from the respondent after the hearing that included a time sheet that records hours of work. The work sheet lists hours from March 24 to March 30 of an unknown year. I am unable to find that the documents support the respondent’s submissions that she worked from March 2015 to the date of the accident. Further, the formatting of the time sheet is uneven, something that I would not expect from a company the size of NHI. If I am mistaken and the uneven formatting is due to photocopying, there is no evidence to corroborate when the time sheet was made or why the respondent has it. Her testimony was that she submitted all of her time sheets to NHI and did not keep copies of any of them. She also testified that she received time sheets with her package of papers from NHI when she went for her test and obtained her photo ID card. As testified to by Ms. Lawrence, this took place on September 22, 2015. Accordingly, I agree with the applicant that the documents only support the evidence that the respondent received some documents from NHI when she attended to write the tests on September 22, 2015.

37Even if I were to believe the respondent’s testimony that she worked from March to September 2015, which I do not, the respondent has failed to prove she earned any income during that time. She testified that when she worked at NHI, she was not paid anything. She also testified that she was paid biweekly in cash by Diana Thompson and sometimes by a Money Mart Western Union cheque. This is contrary to her tax returns and her sworn statement to Ontario Works.

38Under s.4(5) of the Schedule, if, under the Income Tax Act (Canada) the respondent is required to report the amount of her income, then her income before the accident shall be determined for the purposes of calculating her IRB without reference to any income, she has failed to report contrary to the Income Tax Act.¹³ This means that because she reported earning no employment income for 2015, her IRB quantum is $0.

39The respondent testified that she received an envelope from Diane Thompson after the accident containing the OCF-2 and the pay stub, but she did not look at it. She just gave it to her lawyer. However, she knew that the applicant relied on the information in those forms to calculate her IRB. I find that if there was any doubt, the applicant’s November 27, 2015 letter advised that the IRB was calculated based on 70% of the respondent’s gross weekly income to a maximum of $400.00 per week.¹⁴

40The respondent testified that her children looked at the OCF-2 and pay stub because she had too much anxiety to do so. At her EUO she testified that someone from NHI gave the paystub to her,¹⁵ which implies she must have seen it. Otherwise, I am unable to account for how the respondent knew she was given a paystub.

41The respondent could not answer whether she signed the OCF-2 before or after giving it to Ms. Thompson. If it was after, then she must have seen the document. It was, however, apparently signed by both the respondent and Ms. Thompson on the same day. I find that, if it is true that the respondent did not look at the OCF-2 or the paystub, her omission was wilful and deliberate. She was paid $400.00 per week IRB, which she was advised was based on 70% of her weekly income. According to her testimony, she did not work more than 20 hours per week.¹⁶ She testified that she was paid $16.00 per hour. This means the maximum gross weekly income the applicant would have earned is $320.00 per week or well below the $400.00 per week she received from the applicant. The respondent also claimed that she did not know of the October 30, 2017 letter written by Diana Thompson. However, it was sent to her lawyer. By failing to correct the applicant, the respondent willfully turned a blind eye to what was in her so-called employment records and what the applicant had used to calculate her IRB. This is wilful misrepresentation.

42Having said that, I find that the respondent represented to the applicant that she was earning employment income before the accident. I find that this was a deliberate misrepresentation made for the purpose of claiming IRBs at the maximum rate when she knew she was not entitled to them.

Notice of Repayment

43The last payment for IRBs was made on September 20, 2017. On July 4, 2018, the applicant mailed a notice letter to the respondent, advising that as per s.52 of the Schedule, a person was liable to repay to the insurer any benefit that was paid in error or as a result of wilful misrepresentation or fraud, and sought repayment for the period of September 23, 2015 to September 19, 2017, in the amount of $42,800.00. The applicant wrote to the respondent again on July 23, 2018, and December 5, 2018.¹⁷ The respondent submits that she never received the letters. However, there was no evidence that she has moved or why the mail would not have reached her.

44The respondent submits that had she known of the applicant’s claim for repayment, she would have had her lawyer involved in the proceedings. However, the respondent had ample time to advise her lawyer of the allegations after attending the case conference summary. However, no notice from any lawyer advising they were representing the respondent in this matter was ever filed with the tribunal. Further, the applicant filed proof that its July 4, 2018 letter was faxed to the respondent’s lawyer at the time.¹⁸ Accordingly, I am satisfied that the respondent received proper notice by way of her counsel that the applicant was seeking a repayment.

45Since I have found that the applicant made a material misrepresentation by relying on fraudulent documents to claim IRBs, the requirement that the applicant’s notice be given within 12 months of the payment of IRBs does not apply. Accordingly, I find that the respondent is required to repay to the applicant the full amount of IRBs claimed.

Interest

46The applicant submits that interest is payable from the day of the first payment of IRB. I heard no authority for why that is the case. In fact, s.52(5) of the Schedule states that interest is payable starting on the 15th day after notice is given. This implies that interest does not start to run until 15 days after the July 4, 2018 notice was faxed.

47If I had any discretion as to when interest is payable, I would have to consider the applicant’s admission that the respondent offered to start paying back the applicant at the rate of $100.00 per month but that the applicant refused to accept any payment until a decision was issued. I find that by refusing to accept the payments, the applicant prevented the respondent from mitigating the damages. However, I have been provided with no authority that I may vary the date upon which interest is payable. Accordingly, I find that interest is payable from July 19, 2018.

48ORDERThe applicant has proven on the balance of probabilities that it paid the respondent IRBs in error because of the respondent’s wilful misrepresentation or fraud. Accordingly, I order the following:

a. The respondent shall repay the applicant the amount of $42,800.00 in IRBs paid during the period from September 23, 2015 to September 19, 2017;

b. The applicant is entitled to interest at the rate set out in the Schedule on $42,800.00 commencing July 19, 2018.

Footnotes

1. 1Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, Version I (October 2, 2017) [“LAT Rules”]
2. 2Blacks Law Dictionary (Revised Fourth Edition, St. Paul, Minnesota: West Publishing Co, 1968, at p. 1152)
3. 3Adu-Poku and Kingsway General Insurance Company, (FSCO OICA96-000433, Arbitrator Blackman at para. 53) 3 Michalowski and St. Paul Fire and Marine Insurance Company (FSCO A98-001492, Blackman, July 9, 1999), Adjudicator Blackman, at para. 16)
4. 4Rajendrakumar v. Aviva Canada Inc., [2017] O.F.S.C.D. No. 293
5. 5Applicant’s submissions Tab 16: Staff Plus payroll records
6. 6Applicant’s submissions Tab 17: Ontario Works file
7. 7Applicant’s submissions Tab18.
8. 8Applicant’s submissions Tab 23
9. 9Applicant’s submissions Tab 20
10. 10Applicant’s submissions Tabs 20 and 21, email correspondence between the applicant and NHI dated March 28, 2018
11. 11Examination under oath of Jacqueline Daley-Baley taken on the 11th day of December 2020 (“EUO”), p.76, q.374. line 6 to 8
12. 12Applicant’s submissions Tab 4, OCF-2 Employer’s Confirmation of Income Form dated October 6, 2015 by Jacqueline D. Baley and October 6, 2015 by Diana Thompson
13. 13Income Tax Act, RSC 1985, c 1 (5th Supp), s.150(1)(d) requires individuals to file tax returns every year reporting their income
14. 14The November 27, 2015 letter from the applicant purports to enclose a calculation of how the applicant arrived at the quantum of IRBs. However, no such enclosure was attached to the letter at Tab 8 of the applicant’s submissions.
15. 15EUO p.65 q.337 lines 5-7
16. 16However, she report on her accident benefit application that she worked 40 hours per week.
17. 17Applicant’s submissions Tabs 24, 25 and 26
18. 18See also the adjuster’s notes