Wawanesa Mutual Insurance Company v. [S.P.], 2019 CanLII 126183

Citation: Wawanesa Mutual Insurance Company vs. [S.P] 2019 ONLAT 19-000982/AABS

Date: November 15, 2019

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:

Wawanesa Mutual Insurance Company

Appellant(s)

and

[S.P.]

Respondent

DECISION [AND ORDER]

ADJUDICATOR: Poeme Manigat

APPEARANCES:

For the applicant: Kathleen O’Hara, Counsel

For the respondent: Andrej Rondas, Paralegal

In-Person Hearing on: September 30 and October 1, 2019

OVERVIEW

1The respondent (“S.P.”) was injured in an automobile accident (“the accident”) on March 12, 2018 and was paid income replacement benefits (“IRBs”) by Wawanesa Mutual Insurance Company (“the applicant”) pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant is claiming a repayment of the IRBs for the period of March 19, 2018 to July 30, 2018 in the amount of $7,600.00 plus interest on the basis that the respondent made a wilful misrepresentation of her employment status for that time period.

3The respondent denied making a misrepresentation of her employment status to the applicant and argued that she was entitled to the IRB paid.

ISSUES

4The issues in dispute were identified and agreed to as follows:

I. Is the applicant entitled to a repayment of IRBs in the amount of $7,600.00 paid from March 19, 2018 to July 30, 2018 because of error, wilful misrepresentation or fraud?

II. Is the applicant entitled to interest on the amount of repayments owing to the insurer?

RESULT

5I find that the respondent made a wilful misrepresentation of her employment status to the applicant. The applicant is entitled to repayment of the $7,600.00 of IRB paid plus interest.

ANALYSIS

Law

6Section 52 of the Schedule² states that a person is liable to repay the insurer if any benefit is paid to the person as a result of an error, wilful misrepresentation or fraud.

7Section 52 (2) of the Schedule³ requires that the insurer give the person notice of the amount that is required to be repaid.

Whether the Respondent was Employed at the Time of the Accident

8The respondent testified under oath that she was employed with [a Janitorial company] (“alleged employer”) from January 2, 2018 to March 11, 2018. The respondent testified that the alleged employer hired her as a cleaner to work at [a tile store] from Monday to Friday from 4 p.m. to midnight. The respondent testified that the alleged employer gave her access to the building at the start of her shift and that the alleged employer was present at the end of her shift to ensure that she completed the work properly before leaving.

9The respondent further testified that she cleaned 5-bathroom stalls for approximately 3 to 4 hours on the first floor of [the tile store]. The respondent testified that she also cleaned and vacuumed a carpeted office area as well as a lunch room the size of the hearing room. The respondent testified that she never went to the second floor of [the tile store], because she was instructed to only access the bathroom, office area and lunch room, which she submits were all on the first floor of [the tile store].

10The respondent testified that no one ever saw her work at [the tire store] other than the alleged employer, because most employees of [the tile store] left work early while she was cleaning the bathrooms. The respondent testified that the building at [the tile store] would be completely empty by 5 p.m.

11In support of her position and as proof of employment with the alleged employer, the respondent relied in part on cash receipts and wage statements.

12In addition to the respondent’s wage statements and cash receipts, the applicant relied on the respondent’s bank statements, cell phone records, the adjuster’s log notes, the transcript of the respondent’s examination under oath, the respondent’s 2018 notice of assessment, a Wawanesa cancelled cheque issued to the respondent, an OCF-1, an OCF-2, the testimony of Wawanesa’s Senior Claim Investigator and the testimony of [the tile store’s] Human Resources Director.

13The applicant raised numerous discrepancies in the respondent’s testimony and evidence. I find that the respondent failed to provide any cogent explanation to address these inconsistencies. I do not find the respondent to be a credible witness. When the respondent was cross-examined by the applicant, she contradicted her own testimony that she gave at the start of the hearing. For example, the respondent testified in her examination in chief that the alleged employer was present at the start and end of her shifts. On cross-examination, she stated that she left work early after she was done cleaning before the alleged employer arrived. The respondent testified that the motor vehicle accident occurred shortly after 3 p.m. on March 12, 2018. However, on cross-examination, she stated that the accident occurred around 7 p.m. Based on the respondent’s inconsistent testimony, it is impossible to get an accurate narration of what occurred on the day of the accident.

14I heard evidence from the Human Resources Director of [the tile store]. Her evidence contradicts the respondent’s evidence in every detail.

(i) The respondent testified that she cleaned a bathroom with 5 stalls at [the tile store]. The Human Resources Director of [the tile store] (“Human Resources Director”) testified that there was only one single unisex bathroom with one toilet and one sink on the first floor of [the tile store].

(ii) The respondent testified that she vacuumed the carpeted office area on the first floor of [the tile store]. The Human Resources Director testified that there is no carpet in the entire building of [the tile store] and that the flooring is grey ceramic tiles.

(iii) The respondent testified that the lunch room at [the tile store] was on the first floor. The Human Resources Director testified that the lunch room is on the second floor.

(iv) The respondent testified that the building at [the tile store] was empty around 4:30 to 5:00 p.m. The Human Resources Director testified that she worked to approximately 6:30 p.m. and that approximately 100 employees are on site until 5 p.m. She further testified that she would see the cleaners come in to clean the building.

(v) The respondent testified that she started work at 4 p.m. from Monday to Friday. The Human Resources Director testified that the cleaning staff arrived at the building at 5:45 p.m. because [the tile store] closed at 5 p.m. and it is not convenient to have the cleaners clean while most of [the tile store’s] staff are still on the premises.

(vi) The applicant asked the respondent to describe the layout and provide an overall description of [the tile store]. The respondent struggled to describe the workplace that she allegedly worked at on a full-time basis for 2 1/2 months. The respondent provided a very vague description, she stated that part of the building was carpeted and there was a bathroom with 5 stalls on the first floor. She further stated that there was a lunch room on the first floor the size of the hearing room. This description was mostly inaccurate based on the detailed description provided by the Human Resources Director. The Human Resources Director confirmed that there is a gym on the first floor, which the respondent failed to mention. She also confirmed that the lunch room located on the second floor was fairly large and that it could accommodate approximately 40 employees. The respondent stated that the lunch room is the size of the hearing room, which cannot accommodate 40 people.

(vii) The Human Resources Director confirmed that she has no knowledge of the respondent and that she does not have her information in [the tile stores’] system. She also confirmed that she never issued an access card to the respondent, which is necessary to access the building.

15In summary, the testimony of the Human Resources Director contradicts the respondent’s testimony. I find the Human Resources Director to be a more credible witness and therefore afford more weight to her evidence. During her examination, the Human Resources Director was forthcoming and answered all the questions without hesitation. As well, the respondent failed to provide any reasonable explanation or evidence to refute the Human Resources Director’s testimony.

Documentary and Oral Evidence

16The respondent produced cash receipts and wage statements to prove that she was employed with the alleged employer.

17The cash receipts provided by the respondent do not correspond with the wage statement for the same period. As well, there is no corresponding deposit in the respondent’s bank account for these cash receipts. Furthermore, I find it very problematic that these cash receipts were only signed by the respondent herself and not by her alleged employer. I would expect the cash receipts to be signed by the alleged employer if it is used as a proof of payment.

18There are no corresponding bank deposits for the wage statements provided by the respondent. This is questionable, given the fact that the respondent testified that she deposited the funds in her bank account to pay her mortgage when she received them from the employer.

19At the start of the hearing, the respondent was asked to confirm her residential address from January 1, 2018 to present. What is most troubling about the wage statements is the fact that the address appearing on them is the respondent’s future address which the alleged employer could not have known at the time they were allegedly produced. The respondent failed to provide a plausible explanation for this discrepancy. The respondent simply stated that she is not the one who prepared the wage statements.

20The respondent testified that the alleged employer issued her last pay via cheque. When the applicant requested a proof of this cheque, the respondent produced a copy of a cancelled cheque⁴ for $800.00 from her financial institution. This cheque that the respondent tendered as proof of payment from her employer was in fact an IRB payment that was issued to the respondent by Wawanesa. In her defense, the respondent alleged that it was a mistake and as soon as she realized this error, she informed her legal representative. However, the respondent made no effort to rectify this error or notify the applicant of same. To date, the respondent still has not produced a proof of the alleged cheque that she received from her alleged employer.

21The respondent’s testimony at her examination under oath is inconsistent with her testimony on the day of the hearing. Some of these differences are as follows:

(i) At her examination under oath, the respondent testified that she cleaned the entire first floor at [the tile store], including the showroom. At the hearing, the respondent denied cleaning the entire first floor and stated that she only cleaned the bathroom, lunch room and office area.

(ii) At her examination under oath, the respondent stated that her husband was traveling outside the country from January 2018 to March 2018. At the hearing, the respondent testified that her husband was not out of the country during that period, but rather that he was traveling in and out of the country.

(iii) At her examination under oath, the respondent testified that she had the contact information of the alleged employer in her phone for 4 years prior to working with her. At the hearing, the respondent stated that she got the alleged employer’s telephone number from an old lady at her temple, whom she could not identify.

22The respondent produced a copy of her 2018 notice of assessment which stated that she earned $756.00. The respondent submits that her taxes are being reassessed by the Canada Revenue Agency (“CRA”) and that she is awaiting the updated assessment. Notwithstanding the possibility that the respondent’s 2018 taxes are pending a reassessment by the CRA, it does not explain why the respondent’s income for her 2018 tax returns is contrary to what she claimed with the applicant. The applicant stated that she only received 3 payments from the alleged employer, and she does not dispute the amounts of these payments that she reported to the applicant. Therefore, she clearly remembers the amounts of these alleged payments months after they were made. However, these same alleged payments were not reported at the time she filed her taxes for 2018. The respondent submitted that she never obtained a T4 from the alleged employer and that is why she could not report the income that she earned with the alleged employer. I do not find this explanation convincing because there was nothing preventing the respondent from reporting her alleged income in 2018 to the CRA even without a T4 from the alleged employer.

23IRB is a benefit paid to an insured who was employed at the time of the accident. The amount of IRB payable is calculated based on the income reported by the insured. There are many ways to prove income and one of the most reliable proof of income for an insured is their notice of assessment from the CRA. In the present case, the respondent’s notice of assessment confirmed that she did not earn the alleged income that she claimed to have received from the alleged employer, which supports the proposition that she was never employed with the alleged employer. Furthermore, the amount reported in the respondent’s 2018 notice of assessment strongly suggests that she was not employed in 2018. The applicant suggested to the respondent that the $756.00 in the 2018 notice of assessment is likely the child tax benefits that she received that year and the respondent agreed that it was probably the case.

24The alleged employer failed to attend the hearing, despite being summoned by the applicant, to corroborate the respondent’s claim that she was employed with her. The alleged employer’s absence at the hearing does not assist the respondent in proving that she was employed at the time of the accident. The alleged employer’s absence at the hearing raises even more concerns, given the fact that the applicant and their internal senior claim investigator made numerous unsuccessful attempts to contact the alleged employer in order to obtain her evidence.

25The senior claim investigator testified that she spoke several times with the alleged employer via telephone and scheduled multiple appointments at the alleged employer’s convenience, which she failed to attend. The senior claim investigator testified that despite her efforts to obtain a statement from the alleged employer regarding the respondent’s employment with her, she never received one. The alleged employer’s doubtful behavior and lack of cooperation with the senior claim investigator adds uncertainty to the respondent’s claim that she was employed with the alleged employer. Some employers are disorganized and it may be the case for the alleged employer, however failing to attend multiple confirmed appointments with an investigator, failing to provide a statement confirming the employment of one of your employees and failing to attend a hearing at the Tribunal, after being summoned, where the legitimacy of one of your employee’s employment is questioned, is not common of most employers.

26I find the senior claim investigator to be a credible witness. She answered all the questions she was asked without hesitation and referred to her notes when she was unsure. The senior claim investigator and the applicant maintained contemporaneous detailed notes of the events that occurred throughout their internal investigation and interaction with the respondent. I find these notes to be reliable and consistent with the chronology of events as presented by the parties.

27Not a single person corroborated the evidence presented by the respondent. Not a single shred of documentary evidence, free of any defect, confirming the employment income claimed by the respondent at the time of the accident, was presented at the hearing. There is no conclusive proof before me that the respondent was employed at the time of the accident. On the contrary, there is an abundance of evidence to confirm that the respondent was unemployed at the time of the accident, which disentitles her from IRB.

28The facts as presented by the respondent are inconsistent, incomplete and questionable. The respondent’s explanation for the contradictions in her evidence, raised by the applicant, are not persuasive. Factual evidence is necessary to provide coherence to her story, which was not presented at this hearing.

29The applicant bears the onus of proof to show that the respondent misrepresented her income by alleging that she was employed at the time of the accident. I find that the applicant has satisfied its onus by providing documentary evidence such as bank statements, notice of assessment, wage statements and a cancelled cheque confirming that the respondent was not employed at the time of the accident. As well, the applicant produced two credible witnesses (Human Resources Director of [the tile store] and Senior claim investigator) who testified that the respondent was not employed with the alleged employer and did not work at [the tile store]. The respondent was not eligible for IRBs as she was not employed at the time of the accident.

30I find that the applicant has met the requirements under sections 52 and 53 of the Schedule to be entitled to a repayment $7,600.00 plus interest. The applicant gave proper notice to the respondent in accordance with section 53 of the Schedule and is therefore authorized to obtain a repayment. The respondent takes no issue that she was served proper notice.

CONCLUSION

31For the reasons outlined above, I find that:

i. The respondent made a wilful misrepresentation of her employment to the applicant. The respondent is not entitled to IRB as she was not employed at the time of the accident.

ii. Additionally, the applicant is entitled to repayment of the IRB paid to the respondent as a result of her wilful misrepresentation.

iii. The applicant is entitled to repayment of the $7,600.00 of IRB, paid out previously to the respondent, plus interest.

iv. The application is granted.

Footnotes

1. 1O. Reg. 34/10.
2. 2S. 52 (1) (a) of the Schedule
3. 3S. 52 (2) of the Schedule
4. 4A cancelled cheque is a proof of a cheque deposited in a bank account obtained from the financial institution.