Aviva Insurance Canada v. WT, 2018 CanLII 76422

Aviva Insurance Canada v. WT

Date: 2018-04-23

Tribunal File Number: 17-004341/AABS

Case Name: 17-004341 v WT

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

WT

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES:

Applicant: Nathalie Rosenthall, Counsel

Respondent: Did not attend.

HEARD: In-Writing on January 22, 2018

OVERVIEW

1WT claimed 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 WT was not entitled to any benefits: it asserts that the respondent was not a passenger in the insured vehicle when the accident occurred.

4Aviva issued a notice to WT informing him of the overpayment and requesting repayment. The respondent WT has not, to date, responded to Aviva’s repayment request. Although he attended an initial case conference in this matter, WT stopped participating in the adjudication process and he 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.

PRELIMINARY ISSUE

7The preliminary issue is whether the Tribunal has jurisdiction to determine if the Aviva’s expenses of adjusting the respondent’s claim can be recouped if the respondent wilfully misrepresented his involvement in the accident of June 2, 2016?

SUBSTANTIVE ISSUES

8The issues to be decided by the Tribunal are:

1. Is the applicant entitled to repayment of $678.00 for the cost of an Insurer’s Examination (IE) no-show fee charged by HVE Healthcare Assessments, submitted March 22, 2017?

2. Is the applicant entitled to repayment of $200.00 for a disability certificate completion fee by MediLife Care, submitted March 22, 2017?

3. Is the applicant entitled to repayment of $1,633.97 for miscellaneous, file investigation, and adjustment expenses, submitted March 22, 2017?

4. Is the applicant entitled to interest on any outstanding repayment amounts claimed?

5. Is the applicant entitled to an award for costs?

FINDINGS

9The Tribunal lacks jurisdiction to determine whether or not WT is liable to pay Aviva the costs of adjusting his file. This part of the application is denied

10I find that there was an overpayment of benefits, and that the overpayment by Aviva was made as the result of wilful misrepresentation by WT. This means that WT is liable to repay Aviva $200.00 that it paid in benefits to him or on his behalf, plus accrued interest at the prescribed rate.

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

REASONS

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 overpayments involving wilful misrepresentation or fraud.

14In reviewing Aviva’s evidence, which were uncontested by WT, I concluded that WT was not involved in the accident and that his claims were based on wilful misrepresentations.

Repayment of Adjustment Costs Incurred by Aviva

15A plain reading of s.52 of the Schedule appears to limit the repayment obligation to “any benefit described in this Regulation”.

16The 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.

17My 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.

18Aviva 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. I find that none of these cases support Aviva’s argument because:

i. Hassan and State Farm²: I found unpersuasive because all of the costs repayable were for accident benefits – the insurer’s other costs were never mentioned.

ii. Levy, Price, et al. v. Wawanesa³: 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. Field⁴, because the court in those cases 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. Aviva does not make it clear to me that I can exercise the same jurisdiction as the Superior Court can in this kind of matter.

19I conclude that the Tribunal lacks jurisdiction to determine whether WT is liable to repay the amounts claimed by Aviva for the costs of adjusting his claim.

Is the respondent WT liable to repay benefits paid by Aviva?

20This matter turns on whether or not the respondent WT was an occupant in the vehicle insured by the applicant when the accident happened. Aviva asserts that he was not.

21Aviva took statements and later conducted examinations under oath (EUOs) of at least two other people claiming to be occupants of the insured vehicle when the accident occurred. It used initials in its submissions to protect the identities of persons who are not parties to this matter.

22Aviva’s evidence that the respondent WT was, on a balance of probabilities, not an occupant of the insured vehicle at the time of the accident is that:

i. WT identified a person called “D****” as the driver of the insured vehicle. All other accounts name “LC” as the driver – and LC identified himself as such. The likelihood of error is low because WT, a barber, stated that LC is a customer and friend, and he indicated that he and LC had spent much of the day together and were seated side-by-side at the time of the accident.

ii. WT stated that all occupants exited the vehicle after the accident. All other accounts indicate that no-one except LC left the vehicle at the time of the accident.

iii. WT stated that the accident occurred between 7:00 and 8:00 pm. Other accounts of the time the accident happened, from persons claiming to have been there are between 12:00 noon and 1:00 p.m. or 2:00 – 3:00 p.m.

iv. In addition, LC indicated that he dropped WT off at the intersection of Weston and Finch streets in North York, which is consistent with statements from other persons claiming to have been occupants of the subject vehicle. WT’s statements are that he was picked up from the scene of the accident by a taxi (his initial sworn statement on August 9, 2016) or by a close friend (his EUO of December 6, 2016).

23I 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.

24ED has no interest in the outcome of this matter and I give her evidence considerable weight.

25The 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. This raises concerns about the credibility of everyone claiming to have been involved in the accident, except for ED.

26None of this evidence is contested by WT in submissions: he made no submissions on the applicant’s claims. This reinforces my decision to accept Aviva’s evidence as true.

27The unexplained discrepancies I have noted in the reporting of this accident, and ED’s account lead me to conclude that WT was not there when the accident occurred.

28Where 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 amounts to a wilful misrepresentation or fraud.⁵

29Where 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.⁶

30It 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.

31Based on the foregoing evidence I find that WT 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.

Request for Interest

32Section 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.

33I find that WT is liable to pay interest on the $200.00 in overpaid of benefits due to Aviva, at the prescribed rate.

Costs

34Rule 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”.

35Aviva’s request for costs is based on WT’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.

36Aviva’s submission 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.

37I have decided not to award costs against the respondent WT, 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

38My review of the Tribunal’s records indicates that all notices and documents relating to this proceeding were properly served on WT. Efforts to contact him by telephone were unsuccessful.

CONCLUSIONS

39I have no jurisdiction over the issue of WT’s liability to pay $2,311.97 to Aviva to reimburse its costs of adjusting his claim.

40WT is liable to repay $200.00 to Aviva, plus accrued interest at the prescribed rate, for overpaid benefits.

41Aviva’s motion to recover its costs in this proceeding is dismissed.

Footnotes

1. 1O.Reg. 34/10
2. 2Hassan and State Farm Mut. Ins. Co., 2015 FSCO A13-003484 at page 9, submitted by Aviva
3. 3Levy, Price, Lopez and Odzenna v. Wawanesa Mutual Insurance Company, 2016 FSCO A13-013340
4. 4Dhaliwal v. Coseco 2014 ONSC 6679 (Div.Ct.) and RBC v. Field 2016 ONSC 5584
5. 5Levy, 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
6. 6Hassan and State Farm Mut. Ins. Co., 2015 FSCO A13-003484 at page 9, submitted by the Aviva