Aviva Insurance v. R.R., 2018 CanLII 130848

Citation: Aviva Insurance vs. R. R., 2018 ONLAT 16-004445/AABS

Date: December 06, 2018

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 Insurance Canada

Applicant

and

R.R.

Respondent

DECISION

PANEL:

Christopher A. Ferguson, Adjudicator

APPEARANCES:

For the Applicant:

Nathalie Rosenthall

For the Respondent:

R.R.

HEARD:

In Writing on: February 26, 2018

OVERVIEW

1RR was involved in an automobile accident on December 2, 2014 ("the accident").

2RR applied for and received income replacement benefits (IRBs) from Aviva Insurance pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule''). Aviva paid IRBs to RR from December 10, 2014 to November 5, 2015.

3Aviva looked into RR's claim and determined that statements made by RR in his claim for IRBs were untrue. Aviva seeks repayment of IRBs under s.52 of the Schedule which entitles an insurer to repayment of benefits paid in error. Aviva is also seeking to recover the money it paid an accountant to calculate the amount of RR's IRBs.

4Aviva issued a notice to RR on December 15, 2015 informing him of its intention to recover the IRBs it paid him in error and its accounting fees, and requesting repayment within 15 days. It notified him that it would begin charging interest on the overdue amounts. It notified him that it would pursue all avenues to recovering the overpaid IRBs.

5RR has not, to date, responded to Aviva's repayment request.

6RR participated in one case conference at the outset of this proceeding, but failed to participate in the case conference of January 26, 2018. RR did not participate in the adjudication process after the case conference and he did not file any submissions or evidence in response to Aviva's claims.

7Aviva has applied to the Tribunal to determine its entitlement – and RR's obligation -- to repay the disputed amounts.

ISSUE IN DISPUTE

8Is Aviva entitled to repayment of IRBs in the amount of $9,673.38, plus applicable interest and accountant fees in the amount of $2,353.93?

FINDINGS

9I find that there was an overpayment of benefits by Aviva. This means that RR is liable to repay Aviva $9,673.38 that it erroneously paid in IRBs to him, plus accrued interest at the prescribed rate. This part of the application is allowed.

10The Tribunal lacks jurisdiction to determine whether or not RR is liable to pay Aviva the costs of adjusting his file, including accountant fees paid to calculate IRB amounts. This part of the application is denied

11Aviva's request for costs in this proceeding is denied.

REASONS

Is RR liable to repay benefits paid by Aviva?

12Section 52 of the Schedule prescribes that a claimant is liable to repay any benefit paid to him or her as the result of an error or as the result of wilful misrepresentation or fraud.

13Section 52(3) requires the insurer to notify the claimant of the requirement to repay benefits within 12 months of the overpayment; however, this limitation period does not apply to payments involving wilful misrepresentation or fraud.

14Aviva's evidence that the respondent RR's claim to be an employee of the business named in his OCF-2s was untrue is that:

i. The person who signed RR's OCF-2 dated February 3, 2015 was not the owner of the business purported to be RR's employer at the time of the accident – nor was he the owner on the date the OCF-2 was signed. He is not listed as a director of the small corporation that owned and operated the business RR claimed as his employer.² RR has failed to identify who the author of the OCF-2 is, or if he is in fact a real person.

ii. The person identified by RR as his employer's contact was eventually reached by Aviva and denied ever having worked for the business that RR claimed was his employer at the time of the accident.

iii. RR submitted an OCF-1 dated January 8, 2015 indicating that he was a self-employed business owner, at odds with his later claim to be an employee in the OCF-2. His explanation for this discrepancy makes no sense: the business he claimed to own was destroyed by fire two years before the accident, and he acknowledged claiming no income from it.³ He has produced no documentation to support this part of his claim.

iv. RR has produced no evidence, despite repeated requests, to support his claim to have worked for the business named in his OCF-2 – no employment records or tax returns.

15In reviewing Aviva's evidence, which was uncontested by RR, because he didn't participate in the hearing, I concluded that RR's claims were untrue, and that any payment made in reliance on those statements was therefore an error.

16I note that none of Aviva's allegations, evidence or arguments were contested by RR. I draw an adverse inference from RR's failure to respond to Aviva's submissions.

17I accept Aviva's documentary evidence that RR was served with all of the documents and notices required for him to respond to Aviva's appeal to the Tribunal and to the allegations made by Aviva in support of its repayment claim.

18Based on the foregoing evidence I find that RR's statements in his claim for IRBs were untrue, that any payments made in relying on those statements were therefore made in error by Aviva, and that RR is liable to repay Aviva all of the IRBs it paid to him, in accordance with s.52 of the Schedule.

Repayment of Accountant Fees Incurred by Aviva

19My reading of s.52 of the Schedule is that it only prescribes a repayment obligation for benefits described in the Regulation. I find that this limits RR's repayment liability to the wrongly paid IRBs, and does not extend to costs incurred by Aviva in adjusting RR's claim.

20The Schedule is silent with respect to costs incurred by the insurer in adjusting a claim, and Aviva does not draw my attention to any other statutory or regulatory provision that would give me the authority to decide that repayment of such costs is due. Its submissions simply asks the Tribunal to order that RR repay the accounting fees it paid for adjusting his claim. Accordingly, I find that no repayment obligation exists for Aviva's accounting costs.

21I conclude that the Tribunal lacks the authority to determine whether RR is liable to repay the amounts claimed by Aviva for the costs of having an accountant calculate IRBs.

Request for Interest

22Section 52(5) permits the insurer to charge interest on the outstanding balance of overpaid benefits beginning on the 15th day after the repayment notice is given and ending on the day repayment is received in full, calculated at the Bank of Canada rate in effect on the 15th day after the notice of repayment is given.

23I find that RR is liable to pay interest on the $9,673.38 in overpaid IRBs that is due to Aviva, at the prescribed rate.

COSTS

24Rule 19.1⁴ permits a party to request that the Tribunal order the other party to pay costs, where the requesting party "believes that another party in a proceeding [emphasis mine] has acted unreasonably, frivolously, vexatiously, or in bad faith".

25Aviva's request for costs is based on RR's bad faith in submitting what it alleges to be a fraudulent claim, by his failure to repay the benefits and by his refusal to attend the second case conference or to engage with the adjudication process with submissions.

26Aviva's request does not include a suggested cost amount, nor does it point me to any Tribunal precedent on the assessment of costs in repayment applications made by insurers.

27I have decided not to award costs against the respondent RR, because I am not persuaded that his actions during the proceeding itself, namely his failure to submit written submissions, actually imposed additional costs on Aviva. RR's misstatements to Aviva during the adjustment of his claim are not covered by the Rule's criteria for cost awards.

CONCLUSIONS

28RR is liable to repay $9,673.38 to Aviva, plus accrued interest at the prescribed rate, for benefits paid to him in error.

29I have no jurisdiction over the issue of RR's liability to pay $2,353.93 to Aviva to reimburse its costs of adjusting his claim, specifically the accounting fees it paid to calculate IRBs.

30Aviva's request to recover its costs in this proceeding is dismissed.

Footnotes

1. 1O.Reg. 34/10
2. 2Corporate Profile Report of RR's purported employer, a numbered corporation, obtained by Aviva from MGCS, dated March 30, 2017.
3. 3RR's Examination Under Oath – transcript dated November 17, 2015.
4. 4All references to a "Rule" are made to the Licence Appeal Tribunal Rules of Practice and Procedure, Version I (April 1, 2016) http://www.slasto.gov.on.ca/en/lat/Pages/The-Law/Rules-of-Practices.aspx