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 Company
Applicant
and
H.H.
Respondent
DECISION
ADJUDICATOR: Billeh Hamud
APPEARANCES:
For the Applicant: Thomas R. Hughes, counsel for the Applicant
For the Respondent: Alina Kaganovich, counsel for the Respondent
Heard in writing: August 13, 2018
BACKGROUND:
1The Respondent was involved in a motor vehicle accident on July 2, 2016 and sought benefits from the Applicant pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”). The Applicant paid non-earner benefits (“NEBs”) to the Respondent.
2The Applicant believed that it made an error in providing the respondent with NEBs when, according to the Applicant, it applied an incorrect waiting period to the Respondent’s eligibility for NEBs. According to the Applicant, the Respondent should have been entitled to NEB only after the first 26 weeks after the onset of the complete inability to carry on a normal life. Instead, the Applicant paid the Respondent NEBs after the first 4 weeks after the onset of the complete inability to carry on a normal life. The Applicant filed this application with the Tribunal seeking a repayment for the difference.
ISSUES TO BE DETERMINED:
3The following are issues to be determined:
(a) Is the Respondent liable to repay the Applicant the $2,193.57 in NEB she received from the Respondent?
(b) Is the Respondent entitled to costs against the Applicant?
RESULT:
4Based on the written submissions and evidence before me, I find that the Applicant is not entitled to a repayment of the non-earner benefits paid.
5The Respondent is not entitled to costs against the Applicant.
LAW:
6Section 52(1)(a) of the Schedule states that a person is liable to repay the insurer any benefit that is paid to the person as a result of an error on the part of the insurer, the insured person or any other person, or as a result of wilful misrepresentation or fraud.
7Under s. 52(3) of the Schedule, the insurer must give notice of the amount that is required to be repaid within 12 months after the overpayment; otherwise, the person ceases to be liable. The 12 month requirement does not apply if the benefit was paid as a result of wilful misrepresentation or fraud.
8In this case, the parties agree that there is no issue regarding wilful misrepresentation or fraud. Instead, the Applicant submits that it applied an incorrect waiting period to the Respondent in error.
ANALYSIS:
9In order to decide this issue and whether the Respondent is liable to repay the NEBs she received, the Applicant must satisfy me on a balance of probabilities of the following:
(i) Was adequate notice of the amount that was required to be repaid provided to the Respondent?
Was adequate notice of repayment provided to the Respondent?
10The Applicant has not satisfied me that it provided adequate notice within the required 12 month period to the Respondent pursuant to s. 52(3) of the Schedule.
11Prior to June 1, 2016, NEBs were not payable under section 12 of the Schedule for the first 26 weeks after the onset of the complete inability to carry on a normal life. However, after June 1, 2016, section 12 was amended and reduced the waiting period to receive NEB payments from 26 weeks to 4 weeks.
12On July 2, 2016, the Respondent was involved in a car accident. However, the Applicant notes that the Respondent’s insurance renewed on May 27, 2016 and according to Ontario Regulation 251/15, the 26 week waiting period applied since the Respondent’s insurance was renewed before June 1, 2016.
13On July 30, 2016, the Respondent started receiving NEB payments from the Applicant. She received these NEBs payments from July 30, 2016 until January 13, 2017.
14On October 23, 2017, the Applicant, for the first time, sent notice to the Respondent that there was an error in the application of the NEB waiting period. According to the Applicant, it incorrectly applied the 4-week waiting period instead of the 26 week waiting period under the Schedule. As a result, the Applicant requested repayment of NEB from October 23, 2016 to January 13, 2017.
15The Applicant maintains that the Respondent received the NEB payments in error because her policy effective date was May 27, 2016 and as such, the Respondent was subject to s. 12 of the Schedule before it was amended on June 1, 2016.
16With respect, I disagree. There is no doubt that the Applicant first provided notice to the Respondent about an error on October 23, 2017 and well over the 12 month limitation period under s. 52(3) of the Schedule.
17However, the Applicant still maintains that it was within the limitation period under s.52(3) of the Schedule since the Respondent was still receiving NEB payments until January 13, 2017.
18By contrast, it is the Respondent’s position that the 12 month limitation period under s. 52(3) of the Schedule commenced after the first payment of NEBs were received on July 30, 2016. Therefore, the Respondent maintains that she ceased to be liable for repayment after July 30, 2017. The Respondent also relies on the FSCO decision, Slater v. The Personal Insurance Company, FSCO A07-000592 (“Slater”).
19Although the Applicant is correct that the Tribunal is not bound to follow any FSCO decisions, I find the decision in Slater to be persuasive and similar to the facts in this case and I adopt it.
20At p.7 of Slater, Arbitrator Ashby reviewed s. 47(3) of the Schedule (as it was then) to interpret the meaning of “payment”:
“I find that the meaning of “the payment” is ambiguous in circumstances where an insured is receiving serial payments. For example, if an insured is entitled to a benefit which is paid out in one payment, then the error must be discovered and notice given within 12 months of “the payment” in order for the insurer to be repaid. However, an insured entitled to successive benefits would be subject to a renewed notice period with each payment of the benefit. This results in an inconsistent application of the notice period to different classes of benefits. As well, it creates a “rolling limitation period.” I accept the Arbitrator’s reasoning in Murugappa and find that in respect of an insured an insurer cannot rely on a “rolling limitation period.” To avoid the creation of a rolling limitation period “the payment” must be interpreted as meaning the first payment made in error.”
21The Schedule is remedial consumer protection legislation and I agree that the term “payment” contained in s. 52 of the Schedule is ambiguous and should be interpreted in favour of the insured. Interpreting the term “payment” in the manner argued by the Applicant would lead to a “rolling limitation period” and create unfairness and unpredictability. I also find s. 52 of the Schedule creates a balance since repayments are not subject to any limitation period when payments made as a result of wilful misrepresentation or fraud.
22In their submissions, the Respondent also relies on the FSCO decision Pries v. Economical Mutual Insurance Company from Director Delegate Evans which does not follow Arbitrator Ashby’s interpretation of the term “payment”. Although I am not bound by the decision in Pries, I have reviewed the decision and find that it dealt with a different issue involving the deduction of CPP payments received when the insured also received IRBs. Nevertheless, I prefer the analysis in Slater and do not find the decision in Pries to be persuasive.
COSTS
23Rule 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”.
24The Respondent’s request for costs is based on the Applicant submitting a frivolous and vexatious claim since the repayment application was brought outside the 12 month limitation period and that the Applicant acted unreasonably by failing to submit a case conference summary and requesting an adjournment.
25The Respondent requests $500.00 as costs.
26I have decided not to award costs against the Applicant because I am not persuaded that the decision to commence an application for repayment was frivolous or vexatious. Since I found the term “payment” under s. 52(3) to be ambiguous, it is not clear that that the Applicant should not have instituted these proceedings. Furthermore, I do not find the conduct described by the Respondent regarding the case conference summary and adjournment sufficient to warrant an award of costs.
CONCLUSION
27The application is dismissed.
Released: January 31, 2019
_____________________
Billeh Hamud
Adjudicator