Tribunal File Number: 17-004352/AABS
Case Name: Aviva Insurance Canada v 17-004352
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
D. P.
Respondent
DECISION
ADJUDICATOR: Christopher A. Ferguson
APPEARANCES
For the Applicant: Nathalie Rosenthall, Counsel
HEARD in Writing on January 22, 2017
OVERVIEW
1D. P. claims to have been involved in an automobile accident on June 2, 2016 (“the accident”), as a passenger in a rental vehicle insured by Aviva Canada Inc. (“Aviva”).
2The respondent applied for and received benefits from Aviva Insurance pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 20101 (the ''Schedule'').
3Aviva determined that D. P. was not entitled to various claimed benefits: it asserts that the respondent was not a passenger in the insured vehicle when the accident occurred.
4Aviva issued a notice to D. P. dated March 13, 2017 informing him of the overpayment and requesting repayment. The respondent D. P. has not, to date, responded to Aviva’s repayment request. Although he attended a case conference in this matter, D. P. did not file any submissions in response to Aviva’s claims.
5Aviva, having determined that the overpayment was the result of wilful misrepresentation or fraud by the respondent, is also seeking to recover the costs it incurred in conducting an insurer’s examination (“IE”) of the respondent and in adjusting his claim.
6Aviva has applied to the Tribunal to determine its entitlement – and the applicant’s obligation -- to repay the disputed amount.
DISPUTED BENEFITS
7The issues to be decided by the Tribunal are:
Is the Aviva entitled to repayment of a benefit in the amount of $2,400.00 for physiotherapy services incurred by the respondent from Medlife Care Inc?
Is Aviva entitled to reimbursement of the cost of examination in the amount of $4,118.85 for an insurer's examination assessment incurred by the insurer for the purposes of adjusting the respondent’s claim?
Is Aviva entitled to reimbursement in the amount of $1,633.97 for miscellaneous adjusting expenses?
Is Aviva entitled to reimbursement in the amount of $135.60 for transportation expenses relating to insurer's examination, including no show fee?
Is D. P. liable to pay interest on any overdue repayments to the applicant?
Is Aviva entitled to recover its costs in this proceeding?
FINDINGS
8I find on balance that there was an overpayment and that the overpayment by the respondent D. P. was made as the result of wilful misrepresentation. This means that D. P. is liable to repay Aviva $2,400.00 that it paid in benefits to him, plus accrued interest at the prescribed rate.
9The respondent D. P. is not liable to reimburse Aviva pay $5,752.82 for the costs it incurred in adjusting his claim. This part of the application is denied.
10Aviva’s request for costs in this proceeding is denied.
REASONS
11Section 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.
12Section 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 overpayments involving wilful misrepresentation or fraud.
Is the respondent D. P. liable to repay benefits paid by Aviva?
13This matter turns on whether or not the respondent D. P. was an occupant in the vehicle insured by the applicant when the accident happened. Aviva asserts that he was not.
14Aviva’s evidence that the respondent D. P. was, on a balance of probabilities, not an occupant of the insured vehicle at the time of the accident is that:
i. D. P. gave two significantly different versions of the accident in a sworn statement dated August 2, 2016 (as part of his claim) and an examination under oath (EUO) dated November 21, 2016. For example:
a. His sworn statement was that there were no passengers in the vehicle when he was picked up by the insured vehicle driver, “LC”2 but in his EUO he indicated that was another passenger already in the vehicle when he was picked up.
b. His sworn statement states that he was picked up by LC just before noon, while his EUO gives the time as about 1:30.
c. His sworn statement states the time of the accident as between 12:00 noon and 1:00 p.m. while his EUO gives a time of 2:00 – 3:00 p.m.
ii. The insured vehicle driver, LC, reported no passengers in the incident report he filed with the vehicle rental company on June 8, 2016, but reported five passengers in his Self-Reporting Collision Centre Report, dated June 6, 2016. In addition, LC indicated that he dropped D. P. off at the intersection of Weston and Finch streets in North York – D. P.’s statements are that he left the vehicle at the intersection of Keele and Finch streets.
15I am further persuaded by the uncontradicted evidence of “ED”, who was the driver of the other vehicle involved in the accident. ED swore an affidavit dated January 3, 2018 that she believes that the driver LC was the sole occupant of the insured vehicle at the time of the accident. She recalled waiting with LC for a tow-truck for about 30 minutes after the accident and does not recall seeing any passengers enter or exit the insured vehicle.
16ED has no interest in the outcome of this matter and I give her evidence considerable weight.
17None of this evidence is contested by D. P. in submissions. As noted, D. P. made no submissions on the applicant’s claims. This reinforces my decision to accept Aviva’s evidence as true.
18The unexplained discrepancies I have noted in the reporting of this accident, lead me to conclude that D. P. was not there when the accident occurred.
19Where an insured claims that he was an occupant of an insured vehicle involved in in an accident and investigation determines that he was not, the claim amount to a wilful misrepresentation or fraud.3
20Where wilful misrepresentation or fraud go to the foundation of an entire claim for accident benefits, the claimant is liable to repay all sums paid by the insurer in relation to his claim.4
21It is hard to imagine anything more foundational to an entire claim than a misrepresentation as to whether the claimant was actually there when it happened.
22Based on the foregoing evidence I find that D. P. made a wilful misrepresentation in his claim, that it was foundational to his claim, and that he is liable to repay the applicant all of the benefits paid by Aviva in accordance with s.52 of the Schedule.
Repayment of Adjustment Costs Incurred by Aviva
23A plain reading of s.52 of the Schedule appears to limit the repayment obligation to “any benefit described in this Regulation”.
24The 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.
25My reading of the Schedule is that where it is intended to create a payment or repayment obligation, such as with costs, interest, awards and repayment, the language is express and clear.
26Aviva contends that because its costs of claim adjustment – such as an insurer’s examination – were made on the foundation of a fraudulent claim, they become payable, and cites a number of cases in support of its contention. None of these cases support Aviva’s argument because:
i. Hassan and State Farm5, which I found persuasive because all of the costs repayable were for accident benefits – the insurer’s other costs were never mentioned.
ii. Levy, Price, et al. v. Wawanesa6 -- unhelpful because it dealt with legal costs of the arbitration proceeding, which at the time of that decision were available under regulation, and not claims adjustment costs.
iii. Dhaliwal v. Coseco and RBC v. Field7, because the court did not explicitly address whether or not the language of the Schedule limits me to determining an insured person’s obligation to repay benefits to an insurer.
27In RBC v Field, the insurer’s claim for repayment of costs incurred in conducting IEs and assessments was denied. Aviva contends that the case is distinguishable from the instant case, because the link between claimant misrepresentation and insurer costs was too weak, not because of any limitation imposed by the Schedule.
28I conclude that D. P. is not liable to repay the amount of $5,752.82 claimed by Aviva for the costs of adjusting his claim.
Request for Interest
29Section 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.
30I find that D. P. is liable to pay interest on the $2,400.00 overpayments of benefits due to Aviva, at the prescribed rate.
Costs
31Rule 19.1 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 has acted unreasonably, frivolously, vexatiously, or in bad faith”.
32Aviva’s request for costs is based on D. P.’s bad faith in submitting a fraudulent claim, by his failure to repay the fraudulently obtained benefits and by his refusal to engage with the adjudication process with submissions.
33Aviva’s submission does not include a suggested cost amount, not does it point me to any Tribunal precedent on the assessment of costs in repayment applications made by insurers.
34I have decided not to award costs against the respondent D. P., who is unrepresented, 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.
Procedural Note
35My review of the Tribunal’s records indicates that all notices and documents relating to this proceeding were properly served on D. P.. Efforts to contact him by telephone were unsuccessful.
CONCLUSIONS
36D. P. is liable to repay $2,400.82 to Aviva, plus accrued interest at the prescribed rate, for overpaid benefits.
37D. P. is not liable to pay $5,752.82 to Aviva to reimburse its costs of adjusting his claim.
38Aviva’s motion to recover its costs in this proceeding is dismissed.
Released: February 27, 2018
___________________________
Christopher A. Ferguson, Adjudicator
Footnotes
- O.Reg. 34/10
- Initials were used by the applicant in its submissions to protect the privacy of persons who are third parties to this proceeding.
- Levy, Price, Lopez and Odzenna v. Wawanesa Mutual Insurance Company, 2016 FSCO A13-013340, pp.11-12; MD and Intact Insurance Company, 2017 CanLII 87155 (LAT) para. 60-61; Intact v. Thompson et al. submitted by the applicant
- Hassan and State Farm Mut. Ins. Co., 2015 FSCO A13-003484 at page 9, submitted by the applicant
- Hassan and State Farm Mut. Ins. Co., 2015 FSCO A13-003484 at page 9, submitted by Aviva
- Levy, Price, Lopez and Odzenna v. Wawanesa Mutual Insurance Company, 2016 FSCO A13-013340
- Dhaliwal v. Coseco 2014 ONSC 6679 (Div.Ct.) and RBC v. Field 2016 ONSC 5584