Aviva General Insurance v. 17-007666/AABS, 2018 CanLII 112104

Aviva General Insurance v. 17-007666/AABS

Date: 2018-09-13 Tribunal File Number: 17-007666/AABS Case Name: Aviva General Insurance v 17-007666/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 General Insurance Applicant

and

17-007666/AABS Respondent

DECISION

ADJUDICATOR: Dawn J. Kershaw

APPEARANCES: For the Applicant: Monica Pathak, Counsel/Representative For the Respondent: Anna Szczurko, Counsel

HEARD: By Telephone on June 14, 2018

OVERVIEW

1The respondent was a self-employed dump truck driver who was injured in a motor vehicle accident on August 31, 2015. [The respondent] sought benefits from the applicant insurance company, Aviva General Insurance, (the “insurer”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”).

2The insurer paid [the respondent] income replacement benefits (“IRB”) from September 8 to October 9, 2015 in the total sum of $147.55 per week. He was also receiving a disability benefit from Co-operators Insurance (“the Edge benefits”) during that same time. From October 10, 2015 to November 15, 2016, the insurer paid [the respondent] IRB in the total sum of $24,788.39. [The respondent] continued to receive some IRB when he began working again on April 19, 2016.

3The insurer is now requesting repayment of some of the IRB benefits paid to date. In addition, [the respondent] asks that he continue to be entitled to IRB to the two year mark.

ISSUES IN DISPUTE

4The disputed claims in this hearing are:

(1) Is the insurer entitled to repayment in the amount of $7,885.31 for IRB paid from September 14, 2015 to December 7, 2016? (Issue 1)

(2) Is [the respondent] entitled to IRB from August 31, 2015 to August 31, 2017? (Issue 2)

(3) What is the quantum of IRB payable? (Issue 3)

(4) Is the insurer entitled to interest on any overdue repayment of benefits? (Issue 4)

(5) Is [the respondent] entitled to interest on any overdue payment of benefits? (Issue 5)

(6) Is [the respondent] entitled to costs because the insurer has acted unreasonably, frivolously, vexatiously or in bad faith in the proceeding? (Issue 6)

RESULT

5Based on the evidence before me, I find that:

i. The insurer is entitled to repayment of $7,885.31 for IRB paid from September 14, 2015 to December 7, 2016, plus interest (Issues 1 and 4).

ii. [The respondent] is entitled to IRB from August 31, 2015 to August 31, 2017 in the sum of $408.00 per week plus interest, less any income and IRB already paid during the relevant period (Issues 2, 3 and 5).

iii. [The respondent] is not entitled to costs (Issue 6).

REPAYMENT OF IRB

6Subsection 52(1) of the Schedule entitles an insurer to request repayment of IRB under certain circumstances.

7In this case, the insurer asks for repayment of IRB in the sum of $7,885.31 based on a joint forensic accounting report, dated October 26, 2016 (“joint report”). It acknowledges that two of its previous accounting reports assessed the overpayment at $13,497.74 (based on an average of aggregate income) and $6,497.92 (calculated on a weekly basis), respectively.

8[The respondent] takes the position that the insurer is not entitled to repayment of any IRB for three reasons:

i. [The respondent]’s Edge benefits are not deductible from his IRB entitlement;

ii. The insurer’s request for repayment was made past the 12 month time limit; and

iii. The insurer is estopped from claiming repayment of the IRB.

9Before I turn to the issues to be determined, I must first address the procedural issue of the admissibility of a new accounting report introduced by the insurer.

New Accounting Report from the Insurer

10To address the questions of entitlement and quantum of IRB, the insurer and [the respondent] commissioned a series of accounting reports. First, the insurer commissioned the November 4, 2015 accounting report. The parties then commissioned the joint report. [The respondent] then commissioned two additional reports, dated March 15 and April 6, 2018, from Ian Wollach, who also gave evidence at the hearing. In response to Mr. Wollach’s April 6, 2018 report, the insurer delivered on May 17, 2018 (as part of its written submissions and evidence) a new accounting report, dated May 17, 2018, and sought to include it as evidence at the hearing.

11[The respondent] objected to the new accounting report, because it was not delivered in accordance with Rules 10.2 and 10.3 of The Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, Version I (October 2, 2017) (“Rules”), which requires the insurer to file any expert report at least 30 days before the hearing date.

12[The respondent] takes the position that the hearing commenced on May 17, 2018 (i.e., when the insurer’s submissions and evidence were due), and, therefore, the new accounting report had to be delivered no later than April 17, 2018.

13The insurer takes the position that, in accordance with the Tribunal’s order (dated April 5, 2018), it was required to file its written submissions and evidence, which included its new accounting report, no later than May 17, 2018, which it did.

14I agree with the insurer. Rule 10.3(c) provides that the Tribunal may depart from the 30 day requirement, which it did in its order setting out the dates upon which the parties’ submissions and evidence were due. As such, I admit the new accounting report. It is of note that the new accounting report provides information upon which the insured does not rely for its calculation of the overpayment amount and therefore although I admitted it, I accorded it little weight.

15I turn now to [the respondent]’s claims that the insurer’s request for repayment is out of time and/or that it is estopped from claiming a repayment.

Estoppel

16[The respondent] claims the insurer is estopped from pursuing its claim for a repayment because, in his view, the insurer continued to incorrectly calculate the amount owing to him, despite having all the information it needed to make a correct calculation.

17The insurer alleges it did not have all of [the respondent]’s pay stubs, which he denies.

18[The respondent] did not provide sufficient evidence to convince me that he provided all his paystubs, nor that the insurer knew there were missing paystubs, and thus unequivocally and consciously intended to abandon the right to assert an overpayment.

19As such, the estoppel argument must fail.

Out of Time

20[The respondent] asserts the insurer is out of time to claim repayment of IRB. Section 52(3) of the Schedule provides that an insurer must give notice within 12 months after a payment is made to the insured in relation to which the insurer claims repayment, or else the insured ceases to be liable for repayment. The only exception is in the case of wilful misrepresentation or fraud, neither of which the insurer has asserted.

21[The respondent] asserts that the insurer argues the overpayment resulted because it did not deduct the Edge benefits from the applicant’s IRB entitlement at the time it paid him the IRB.

22However, the insurer did, in fact, deduct these benefits from the IRB at the time [the respondent] received the Edge benefits. [The respondent] did not dispute these deductions from his IRB entitlement until the joint report was done a year later and concluded that the insurer had overpaid [the respondent]

23[The respondent] received Edge benefits from September 8 to October 9, 2015, and [the respondent] submits that the Edge benefits were referred to in the insurer’s accounting report, dated November 4, 2015. As I understand [the respondent]’s argument, he asserts that the insurer should have claimed repayment within 12 months of the period of time when it paid the IRB, specifically, at the latest, within 12 months of October 9, 2015. The insurer first requested repayment on November 1, 2016.

24I find that [the respondent]’s assertion that the insurer is out of time to request repayment must fail, at least insofar as it relates to the Edge benefits. The requested overpayment amount could not have included any amount owing due to [the respondent]’s receipt of the Edge benefits because they had already been deducted. Mr. Wollach confirmed this at paragraph 6 of his accounting report, dated March 15, 2018, and in his testimony. Therefore, any overpayment being claimed by the insurer was paid to [the respondent] sometime after October 9, 2015 when [the respondent] ceased getting the Edge benefits.

25The overpayment issue arose as a result of the joint report showing an overpayment, not from the insurer’s failure to deduct the Edge benefits from the IRB. As a result, given that the time limit for requesting a repayment begins to run from the time the benefits are paid, I find that the earliest the time limit began in this case was October 9, 2015. The only possible out of time period is between October 9, 2015 and November 1, 2015.

26I turn now to the substantive issue of whether or not the insurer is entitled to repayment of IRB, which includes an assessment of the deductibility of [the respondent]’s Edge benefits.

Deductibility of Edge benefits

27An insured is entitled to IRB if he or she meets certain conditions. From the amount payable, the insurer is permitted to deduct the total of all other income replacement assistance. This includes, in part, the amount of any gross weekly payment for loss of income that is received by the person under any income continuation benefit plan, subject to some exceptions that do not apply in this case.

28Payments for loss of income under an income continuation plan are deemed to include, among other things, periodic payments of insurance to persons who are employed while the contract for the insurance is in effect.

29The question to be answered is whether the Edge benefits constitute an income continuation benefit.

30[The respondent] did not object to the deduction of his Edge benefits until the joint report showed an overpayment. It is notable that the deductibility of the Edge benefits is the smallest part of the repayment claim. [The respondent] received $147.55 per week for 40 days from September 8 to October 9, 2015. The disputed amount is the difference between $400.00 per week (if the Edge benefits are not deductible) and the amount actually paid.

31Mr. Wollach testified that the Edge benefits should not be deductible from [the respondent]’s IRB for two reasons. The first reason is that the Edge benefits were calculated on the basis of [the respondent]’s gross business revenue, and, therefore, were not income replacement. Mr. Wollach did concede that a letter to [the respondent] from the Edge benefits provider referred to the benefits as income replacement.

32The second reason is that the Edge benefits do not fit the definition of payments for loss of income under an income continuation benefit plan, because that definition refers to those who are employed, whereas [the respondent] was self-employed. Mr. Wollach conceded that his report is the only one that took this position.

33The parties referred me to cases, including Amini v. AIG Insurance Company of Canada¹, in which the insured was a self-employed truck driver and had collateral disability benefits coverage through a private insurance policy. The maximum amount he could receive was calculated with respect to his income from employment, and it paid him a certain percentage of his gross income that the Financial Services Commission of Ontario (the “Commission”) concluded was meant to cover his loss of income and therefore was deductible. In order to determine that the benefits were deductible, the Commission considered the definitions of employed and self-employed in the private insurance policy and concluded that the insured was employed. [The respondent] submits that this is the reason the Commission found the private insurance benefits deductible in that case.

34In this present case, my ability to determine if [the respondent] was considered employed or self-employed is hampered by the fact that I do not have the Edge benefits policy, nor did the insurer. The only evidence before me is the letter to [the respondent] that referred to the benefit as an income replacement benefit, as well as the correspondence exchanged between [the respondent] and the insurance company when he bought the insurance. The Revised Schedule of Benefits, dated February 17, 2012, also referred to a monthly loss of income benefit.

35When the company approved payment to [the respondent] of the Edge benefits, its October 1, 2015 letter to him stated that his claim for disability benefits was approved, and further advised that his loss of income from injury coverage was limited to 40 days for a soft tissue injury. The benefit summary attached showed that his entitlement was calculated based on his gross business revenue, as opposed to his employment income or net earned income. Finally, the joint report also referred to the Edge benefits as a disability benefit for income loss.

36The parties also referred me to Stojanov v. Dominion of Canada General Insurance Company², in which the insured was self-employed and was paid benefits under a private insurance policy. The insurer in that case took the position that those benefits should be deducted from the IRB.

37The Commission ultimately found that, to determine deductibility, it had to first determine what the benefits were meant for. It found that the insured’s benefits were deductible because they were income continuation benefits. The policy under which he was insured required him to be employed and his entitlement was based on the amount of his income. The Commission found he was employed and that the benefits he received were meant to be income replacement. The Commission did not make a distinction between employed and self-employed, but instead focused on what the benefits were for.

38It should also be noted that while the insured in Stojanov argued that those benefits could not be considered income, because he did not have to disclose his income when he bought the insurance policy, the Commission did not accept this argument. Instead, it found he bought the policy to continue income. In addition, the amount paid under the policy was based on his employment income, despite not having to disclose his income when he bought the policy.

39In this present case, on his application form for benefits for injury that he completed in October 2011, [the respondent] had to disclose either his gross business income times 50% or his annual net earned income. He also selected the amount that would be payable to him on a monthly basis. It is worth noting that when the Edge benefits provider wrote to [the respondent] in response to his advising it that he was going to make a claim, its response included a request for proof of income, and enclosed a document entitled “Determination of Qualifying Insurable Monthly Earnings”.

40As such, there is little doubt that the Edge benefits were based on income and meant to continue his income. In the words of Mr. Wollach, this was an indemnity policy. Given that, and the fact that his benefits were called income replacement when he received them, I find they were meant as income continuation benefits and should be deductible.

41I make this finding despite the fact that the Schedule refers to “employed” and not specifically to “self-employed”. No distinction was made between these terms in Stojanov, and I agree with the approach in Stojanov that determined that the real question to be answered is what the benefits were meant for. In my opinion, the word “employed” in the Schedule was used in the broadest sense to mean someone who was working as opposed to not working. I disagree with the approach in Amini where the focus was on whether the insured fit the narrow definition of “employed”. I do not think that deductibility of an income continuation benefit should turn on whether or not the insured had income from self-employment or employment, when both of those scenarios involve an insured who has another income replacement benefit available.

42In this case, because of my finding that the Edge benefits were an income continuation benefit, they properly are deductible.

43[The respondent] also directed me to the case of Demers v. B.R. Davidson Mining & Development Ltd.,³ but this tort case does not change my finding. It dealt with the deductibility of Canada Pension Plan (“CPP”) and Hospitals of Ontario Pension Plan ("HOOP") disability benefits. The court concluded that they were not deductible from any income replacement benefits payable by the insurer on the basis of a private insurance exemption. However, the court found that the benefits were not deductible because they were not for loss of income but for the appellant’s disability. In addition, the CPP and HOOP benefits did not depend on her being employed. The CPP and HOOP benefits are not the same as [the respondent]’s Edge benefits. As an aside, it is interesting to note that CPP benefits are specifically deemed under the Schedule to be a form of income continuation benefits, and are, therefore, deductible.

44In summary, I find that the Edge benefits are deductible from [the respondent]’s IRB.

Is the insurer entitled to repayment in the amount of $7,885.31 for income replacement benefits paid from September 14, 2015 to December 7, 2016, plus interest?

45The joint report calculated the overpayment in the sum of $7,885.31.

46Despite several different accounting reports, and the different calculations in each of them, the applicant’s submissions focused on the deductibility not the amount being requested by the insurer. Since I have found the Edge benefits deductible, I find the insurer is entitled to a repayment of $7,885.31 for IRB from September 14, 2015 to December 7, 2016, plus interest.

47However, this amount must take into account that the insurer is unable to claim repayment for the period of September 14, 2015 to November 1, 2015, due to the failure to provide notice within 12 months of these payments.

ENTITLEMENT TO IRB FROM AUGUST 31, 2015 TO AUGUST 31, 2017

48Subsection 5(1) of the Schedule provides in part that an insurer shall pay IRB to an insured who sustains an impairment as a result of an accident if the insured person, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of his employment.

49In the year prior to his accident, [the respondent] had his own truck and trailer and chose his loads. He carried about three loads a day over 10 hours. He also cleaned and maintained his truck and trailer; shoveled gravel as required; manually evened out loads; and tarped and untarped his loads. He could not perform these activities after the accident, and so he sold his truck because of the expense of it sitting idle.

50While the physiotherapist told him he could return to working half days, he testified that these limited hours would not have covered his expenses. His restrictions precluded him from taking suggested micro-breaks and from shoveling gravel, which exceeded his lifting restriction.

51[The respondent] got work as a grip in the film industry in about April 2016, but after two days, he found it too physically demanding.

52He then did less physical, non-daily on-call movie and shuttle work. In that work, he trucked sets from one location to another for between two and six hours, including about an hour of driving, a half hour of laying or picking up cable and the rest of the time waiting around. His shuttle work involved driving people somewhere, then sometimes having between four and 12 hours to wait when he could walk and stretch before driving them somewhere else. His discomfort ceased when he was doing the shuttle work.

53[The respondent] testified his IRB stopped in April 2016, but was reinstated to permit a gradual return to work. He returned to work in April 2016 and continued to work and get IRB, until his IRB was suspended on November 15, 2016 (due to his failure to attend a section 44 psychological assessment). It then was terminated based on a multidisciplinary assessment report, dated December 5, 2016 (“MDA report”). The insurer also submits that an October 2016 Disability Certificate clearly indicated that [the respondent] no longer met the test for IRB from that date.

54[The respondent]’s family doctor, Dr. Levine, diagnosed him with whiplash-associated disorder, driving anxiety and a minor concussion as a result of the accident. [The respondent] testified that he continues to suffer as a result of the accident.

55Additionally, as recently as April 3, 2018, Dr. Khumbare, a specialist in physical medicine and rehabilition, reviewed an October 2017 neck MRI that showed acquired C4-5 right side and C5-6 and C6-7 left sided foraminal stenosis with probable compression of the exiting right C5 and left C6 and C7 nerve roots. He recommended another MRI to determine if [the respondent] has post-traumatic myelomalacia (though not considered likely) and a consultation with a neurosurgeon to rule out surgical intervention.

56The insurer submits the medical information shows [the respondent] does not suffer a substantial inability to perform the essential tasks of his pre-accident employment. The insurer states that [the respondent] had not submitted any treatment plans since November 23, 2015. In addition, the clinical notes and records (“CNRs”) of [the respondent]’s family doctor showed full range of motion in the neck on November 11, 2015; no mention of the accident on January 27 and March 1, 2016, and that [the respondent] returned to the gym and running as of March 1, 2016.

57Further, the MDA report stated that [the respondent] has intermittent, not daily, right upper back pain that depends on the type of work he does. With stretching, it resolves within half an hour. He is reported to have been working daily since August 2016 as a film industry transport driver. In the MDA report, Dr. Khan also concluded that [the respondent] suffered a whiplash-associated disorder II injury and did not suffer a substantial inability to perform the essential tasks of his employment.

58The MDA report also included a full day functional capacity evaluation by a kinesiologist. During testing, [the respondent] reported bilateral trapezius and upper back pain. It was reported he could bend, sit, stand, crouch, kneel, walk and climb stairs or ladders for between 34-66% of his day. He was also reported to be able to do elevated work on an occasional basis. He was reported to have no functional limitations to returning to his pre-accident job.

59In support of his claim for IRB, [the respondent] relied on the February 11, 2016 Activities of Normal Living (ANL) report completed by a social worker, Jay Bierbrier, after he assessed [the respondent] on January 15, 2016 that stated he could not return to work. It reported that [the respondent] had sadness, depression, pain in his back and right shoulder, headaches, dizziness, stiffness in his upper back and poor sleep. He had limitations in sitting, standing, walking and climbing, and could only lift about 20 pounds. It recommended more physiotherapy and some psychological intervention. It also recommended vocational involvement.

60[The respondent] also highlighted the CNRs from Dr. Khumbare. First, Dr. Khumbare saw [the respondent] in March 2017. [The respondent] had been working since August 2016. Dr. Khumbare wrote that the physiotherapist and kinesiologist’s notes from the Canadian Back Institute (“CBI”) stated that—as of [the respondent]’s last attendance in November 2016—he was able to do most tasks without pain. [The respondent] began attending a different physiotherapy clinic in February 2017 for acupuncture, stretches for his neck and thoracic manipulation. He also received a lumbar support. On examination, Dr. Khumbare reported that the applicant had developed chronic myofascial neck pain, chronic extensor tendinopathy of the left forearm, chronic post-traumatic headaches and driving anxiety.

61Dr. Khumbhare later reviewed the October 2017 neck MRI (that showed acquired C4-5 right side and C5-6 and C6-7 left sided foraminal stenosis with probable compression of the exiting right C5 and left C6 and C7 nerve roots), and he provided an April 3, 2018 addendum and recommended another MRI and a surgical consultation.

62Finally, an occupational therapy (OT) report was done in March 2018, five months after the 104 week mark after the accident. [The respondent] had resumed most of his pre-accident leisure and social activities and some of his household tasks, except the heavier ones. [The respondent] reported functional range of motion in his neck and upper extremities, and no problems walking, standing, sitting, bending, crouching, kneeling and squatting. However, he also reported he could only drive for about two hours and could only lift or carry 25 to 50 pound cables at work for about 10 minutes before having to rest.

63The OT reported that [the respondent]’s pre-accident job was classified as heavy, because he intermittently had to shovel metallic slag off the truck, which weighed more than 44 pounds (per shovelful). It further noted that [the respondent] was limited to working three days a week since January 2018, though he sometimes worked full-time hours. He turned down some work due to pain exacerbation. It was noted that his prior contract work in 2017 involved lighter duties, and he had been able to work up to 12 hours a day.

64Based on all of the medical information, I find that [the respondent] is entitled to IRB up to the 104 week mark, because he was substantially unable to perform the essential tasks of his employment. I find that the medical evidence is not entirely inconsistent in this case. The MDA report found that he had pain on testing, even though it concluded that [the respondent] had no functional limitations that would prevent his return to his former employment. In addition, the report stated that, although [the respondent]’s pain was intermittent, it depended on the type of work he did, which is consistent with the findings in the OT report.

65It is noteworthy that [the respondent] was able to do the lighter work for up to 12 hours a day, but as soon as he had to do heavier work again, he was set back and had to do fewer hours and turn down work. He also was noted to continue to have difficulty driving for more than a couple of hours or lifting or carrying more than 25 to 50 pounds for more than 10 minutes. I accept the applicant’s evidence that, as stated in the OT report, his former employment can be classified as heavy work.

66Dr. Khumbare also reported that, by March 2017, the applicant’s pain was considered chronic. The October 2017 neck MRI also supports the applicant’s inability to return to his former employment, given the heavy component of shoveling. I have placed less weight on the ANL report, because it was done in February 2016, and the evidence suggests that [the respondent]’s health status had changed since that date.

67Given the applicant’s ongoing pain, as well as the more recent MRI findings of nerve involvement in the neck, I find [the respondent] was substantially unable to perform the essential tasks of his employment up to the 104 week mark on August 15, 2017.

QUANTUM OF IRB and INTEREST

68[The respondent] submits that if he is entitled to IRB for the 104 week period, it should be in the sum of $326.00 per week, plus interest of $82.00 per week for a total of $408.00 per week. This sum is supported not only by the reports authored by RSM Canada Consulting LP, but also by Mr. Wollach. The insurer did not take a different position, and, therefore, I find that [the respondent] is entitled to the sum of $408.00 per week during the 104 week post-accident period, less any employment income and IRB already paid.

COSTS

69According to Rule 19.1, costs may be awarded when “another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith”. That is, the focus is on a party’s actions during a proceeding at the Tribunal.

70[The respondent] submitted he is entitled to costs because the insurer:

i. disregarded the medical evidence;

ii. failed to approve treatment and rehabilitation interventions that were clearly reasonable and necessary;

iii. repeatedly calculated his benefits incorrectly; and

iv. unreasonably withheld medical and rehabilitation benefits and IRB, all to [the respondent]’s physical and psychological detriment.

71Though Rule 19.1 grants me the authority to award costs, my authority is based on a party’s behaviour during a hearing. [The respondent]’s submissions provided me with no reasons why I should award costs on the enumerated bases. The focus of an award of costs is the behaviour of a party during a proceeding. [The respondent] did not provide any submissions with respect to how the insurer’s behaviour during this telephone hearing would have warranted a costs award.

72J.R.’s claim for costs is dismissed.

CONCLUSION

73I order the following:

i. [The respondent] shall repay the insurer the sum of $7,885.31 for IRB paid from September 14, 2015 to December 7, 2016, plus interest.

ii. The insurer shall pay [the respondent] IRB from August 31, 2015 to August 31, 2017 in the sum of $326.00 per week, plus interest in the sum of $82.00 per week (for a total of $408.00 per week), less any income and IRB already paid during the relevant period.

iii. [The respondent]’s claim for costs is dismissed.

Footnotes

1. 1FSCO A15-009292 (“Amini”).
2. 2FSCO A12-004572 (“Stojanov”).
3. 3(2012), 2012 ONCA 384, 111 O.R. (3d) 42; 2012 ONCA 384.