LICENCE APPEAL TRIBUNAL
Safety, Licensing Appeals and Standards Tribunals Ontario
Date: December 19, 2016
Tribunal File Number: 16-000409/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:
Aviva Canada
Applicant
and
S. A
Respondent
REASONS FOR DECISION
Adjudicator: J. H. Bass
Hearing In Writing: October 12, 2015
Representatives:
Counsel for the Applicant Insurance Company: Amanda Faulkner
Representative for the Respondent: Jorge Pignalosa, Paralegal
Overview:
The Respondent was injured in an automobile accident on October 29, 2013 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').1 The Applicant Aviva Insurance Company of Canada (“Aviva”) paid income replacement benefits (IRB’s) for the period November 6, 2013 to June 2, 2014 totalling $12,000.
Aviva now seeks repayment of the IRB’s in the amount of $11,942.86 on the basis that they were paid due to material misrepresentations by the Respondent.
The issues in dispute are as follows:
Was the Respondent entitled to receive income replacement benefits at the rate of $400.00 per week for the period November 6, 2013 to June 2, 2014?
If not, is the Respondent liable to repay Aviva in the amount of $11,942.86 for the Statutory Accident Benefits received from them?
Chronology
The applicant applied for IRBs in an OCF-1 dated November 25, 2013 (“the application for benefits”). The application for benefits was confusing, since he checked the box indicating that he had worked for 26 of the 52 weeks prior, but did not list 26 weeks of work. The applicant did not check the box indicating that he was on Employment Insurance (EI).
Aviva paid IRBs for the period from November 6, 2013 to June 2, 2014.
Aviva paid the IRBs on the basis of the applicant’s signed statement of December 5, 2013 indicating that he was on EI at the time of the accident – I find that this was a misrepresentation on the part of the applicant.
On June 3, 2014, the applicant advised Aviva that he had returned to work on June 2. However, an examination of the applicant’s pay stubs indicated that he in fact returned 5 weeks prior to this date. This led to an investigation of the entire file.
On October 30, 2014 Aviva sought repayment of those 5 weeks of benefits and now seeks repayment of all IRBs paid.
Issue No 1 - was the Respondent entitled to IRBs?
- The criteria for the receipt of income replacement benefits are set out in section 5 of Ontario Regulation 34/10, and can be summarized as follows:
a. being employed at the time of the accident;
b. having been employed for 26 of the 52 weeks preceding the accident (in this case October 30, 2012 to October 29, 2013) or
c. being in receipt of Employment Insurance Benefits at the time of the accident.
The Insurance company alleges that none of the above criteria apply to the respondent.
With regard to being employed, the respondent indicated on the application for benefits that he was not employed at the time of the accident.
With regard to having been employed in the last 52 weeks, in the application for benefits the respondent listed his only employment in the previous 52 weeks as at Dicrete Construction, for 18 weeks and one day, although he did check the box indicating that he had been employed for 26 of the preceding 52 weeks.
On December 5, 2013 the respondent provided Aviva with the signed statement noted above, stating that he was or would be in receipt of EI, as follows:
“prior to the accident I was on EI and had been since the end of September. . . .I have not received any payment at all from EI. I should be receiving a cheque shortly.”
Taken together these statements are confusing, but give the impression that the Respondent was asserting that he had been approved for EI benefits and was awaiting his first cheque.
Aviva takes the position that the sole reason the respondent was found to be entitled to benefits was that he was on EI as per his signed statement of December 5, 2013, although Aviva did not explicitly state this at the time. Aviva commenced paying benefits to the respondent on February 11, 2014, retroactive to November 6th 2013.
The respondent now concedes that he was neither employed nor on EI benefits at the time of the accident. In fact, he had applied for EI benefits on October 19, 2013, but his application was rejected on December 11, on the basis that he did not have enough insurable hours. He also applied for EI a second time on November 24, 2014, as discussed below.
Had the Respondent worked for 26 of the 52 preceding weeks?
If the respondent was not on EI benefits, the only basis on which he could have been entitled to income replacement benefits is that he had been employed for 26 of the 52 weeks preceding the accident – the relevant weeks being October 30, 2012 to October 29, 2013. In the application for benefits, the Respondent listed his only employment in the previous 52 weeks as at Dicrete Construction, for 18 weeks and one day.
In the submission to this Tribunal, the Respondent now alleges that the necessary 26 weeks are made up of the following three components:
a. The work at Dicrete Construction for 18 weeks and one day from April 29 to September 3, 2013 – this period is not in dispute.
b. 4 days of his employment at Quattro Construction, where he was employed from September 13, 2012 to October 15, 2012. The Respondent submits that the cheque he received from Quattro on November 1st, relating to work completed in October, means that he was "employed" by Quattro until November 1, although his last day worked was October 15. To include these four days, the Respondent argues for a “large and liberal construction” of the employment relationship and relies on the cases of Co-operators General Insurance Co v. Joyce [1998] O.J. No. 6557 (Ont. Div Ct.) and Longworth v. Economical Mutual Insurance Co., 2006 Carswell Ont 3614. However, these cases can be distinguished from the case at hand: in Co-operators, Ms Joyce was a registered nurse who provided services through two agencies. It was held that “There was an ongoing relationship between Ms Joyce and the agencies for which she worked.” And “Ms Joyce continued in an employment relationship at the time of the accident, even though she did not actually have a case-assignment at that time”. In Longworth, Mr Longworth was a member of a construction union and the Financial Service Commission Member found that “the union had an obligation to provide assignments to Mr Longworth and Mr Longworth had a guarantee of ongoing employment.” There is no evidence of such an ongoing relationship with Quattro Construction in the present case, and I find that the employment at Quattro ended before the start of the 52 week period.
c. Self-employment in home renovation from December 1st 2012 to January 23, 2013, for which he received a cheque for $4,500 on January 23, 2013, representing 8 weeks’ work. The Respondent submits that the self-employment in construction can be deduced from the deposit into his bank account on January 23rd. However, there is no evidence to support the nature of this payment. The Respondent did not mention this self-employment on the OCF-1 of November 25, 2013, nor on the signed statement of December 5, 2013. The bank record reads “TD ATM DEP 000506”. This on its own is not enough to support the contention that the Respondent was self-employed.
- I find that the respondent was not employed for 26 of the 52 weeks prior to the accident, and accordingly was not entitled to the Statutory Accident Benefits.
Issue No 2 - Repayment
The applicant seeks repayment of all of the $12,000 paid to the respondent, with the exception of the $57.14 already repaid for the day of June 2, 2014 by cheque received on October 30, 2014.
The provisions governing repayments are found in section 52 of the Schedule. It provides that a person is liable to repay benefits paid in error, but notice of the error must be given within 12 months unless the benefits were originally paid to the person as a result of wilful misrepresentation or fraud.
When was Repayment Notice Given?
- On October 29, 2015, the respondent admitted that he had returned to work five weeks earlier than he had previously stated, that is, in April 2014 rather than June. Accordingly on October 30, 2015, Aviva requested re-payment of $2,000 for five weeks of IRB at $400 per week. This has not been repaid. Since this notice to repay came more than 12 months after the payment, the respondent is not liable to repay this amount, or the other repayments, “unless it was originally paid . . . as a result of wilful misrepresentation or fraud” as provided in subsection 52 (3) of the Schedule.
Was there Wilful Misrepresentation or Fraud?
Thus, to address the claim for repayment of benefits, I must determine whether Aviva has satisfied the onus of proving on a balance of probabilities that the respondent’s actions represent “wilful misrepresentation or fraud”.
In Michalowski and St. Paul Fire and Marine Insurance Company (FSCO A98-001492, Blackman, July 9, 1999), Arbitrator Blackman held,
. . . the onus is on St. Paul to prove that this provision applies to Mr. Michalowski in the factual situation herein, and if so, that he has indeed made a misrepresentation, that the misrepresentation was wilful, and that what was misrepresented were material facts respecting his application for income replacement benefits. . .
Misrepresentation is defined in Black’s Law Dictionary (Revised Fourth Edition, St. Paul, Minnesota: West Publishing Co, 1968), as: 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.
Although not binding on this tribunal, I find this summary of the test for determining misrepresentation and fraud persuasive.
The respondent’s various versions of the facts include the following:
a. In the application for benefits on page 5, the respondent indicated that he was unemployed, but had worked 26 weeks in the past 52 weeks. However, on page 6, in the section starting “Give details of your employment for the past 52 weeks” the only employer listed is Dicrete Construction, with the dates April 2013 to Sept 2013 (about 18 weeks)
b. In the application the respondent did not check the box “receiving Employment Insurance Benefits. ” However, in the signed statement of December 5, 2013, the Respondent states “Prior to the accident I was on EI and had been since the end of September 2013”, although he went on to say “I have not received any payment at all from EI. I should be receiving a cheque shortly.”
c. His representative submits that the respondent “misspoke” and meant that he had applied for EI by the end of September 2013. In fact this is also incorrect, as the EI application is dated October 19th (and was rejected on December 11). The respondent never reported the rejection of his EI claim to Aviva.
d. In his EI application of October 19, 2013, the respondent listed his employment at Dicrete Construction, and on page 9 of the form indicated that he had no other periods of employment in the last 52 weeks (prior to October 19, 2013). This contradicts his current submissions as to his employment status during that time.
e. On the December 5, 2013 signed statement, the respondent asserted that he was “employed by Quattro Construction March 20 up to mid-November 2012”. (The word December was crossed out and replaced by November, implying that some thought had been given to dates). In fact, as discussed above, the employment at Quattro ended on October 15th.
f. The respondent reported to Aviva that he had returned to work on June 2, 2014, when in fact he returned to work 5 weeks earlier, on April 28. (This did not become apparent to Aviva until they received the paystubs they had requested in the context of the respondent’s application for reinstatement of benefits). The respondent does not offer any explanation for this false information, other than to say that “communication between all parties should have been managed differently from the beginning of the application process.”
g. On page 14 of his second application for EI benefits of November 24, 2014, the respondent indicated that he had not been “unable to work for medical reasons” in the past 2 years. The two years in question would cover the entire period when the respondent was receiving income replacement benefits, on the basis that he was unable to work.
h. In the Case Conference “Response by Injured Person” of July 4, 2016, the respondent’s representative states “Our client at the time of the accident was an employee of Dicrete Construction.” This was not the case.
- I do not find the respondent’s version of the above facts to be credible. Taking the respondent’s shifting version of the facts as a whole, I find that they show a persistent attempt to receive benefits to which he was not entitled and amount to wilful misrepresentations.
Conclusion:
- In light of the foregoing, I find that
a. The respondent was not entitled to received income replacement benefits for the period November 6, 2013 to June 2, 2014, and
b. Since these benefits were obtained as a result of wilful misrepresentations, the respondent is liable to repay to the insurer the sum of $11,942.86.
Released: December 19, 2016
J. H. Bass, Vice-Chair
Footnotes
- Note that, pursuant to s. 68 of the Schedule, certain accident benefits are deemed to be included in a motor vehicle liability policy that is in effect on September 1, 2010, if an accident occurs on or after September 1, 2010 and before the earlier of (a) the first expiry date under the policy and (b) the day on which the policy is terminated by the insurer or the insured