Citation: Economical Mutual Insurance Company vs. VS, 2019 ONLAT 17-009204/AABS

Between

Economical Mutual Insurance Company

Applicant

and

VS

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES

Counsel for the Applicant: Tim Gillibrand

Counsel for the Respondent: Patrick Mazurek

HEARD in Writing on: January 28, 2019

REASONS FOR DECISION

OVERVIEW

1VS was involved in an automobile accident on November 27, 2014 (“the accident”).

2VS applied for and received income replacement benefits (IRBs) from Economical pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (“the 'Schedule'').

3Economical seeks repayment of IRBs disbursed from January 1, 2016 to August 16, 2017. The overpayment claimed by Economical does not relate to VS’s medical eligibility for IRBs.

4The parties’ dispute over IRBs has been adjudicated by the Licence Appeal Tribunal (“the Tribunal”) before. On May 23, 2018, the Tribunal issued a decision² determining the amount of VS’s IRB entitlement at that time to be:

i. $400.00 per week from the November 24, 2014 to May 18, 2015;

ii. $58.90 per week from May 19, 2015 to December 31, 2015;

iii. $0.00 from December 31, 2015 and thereafter.

5With the consent of the parties, the above-noted decision was limited to the period of time up to December 31, 2016. Economical’s right to dispute the amount of IRBs payable after that date was reserved.

6Following the release of its decision, the Tribunal scheduled a case conference (CC) for September 13, 2018, in order to resolve the parties’ ongoing dispute over IRBs payable after December 31, 2016. Neither VS nor his counsel attended and a hearing was scheduled.

7Following the CC of September 13, 2018, the Tribunal issued an order dated October 12, 2018, which required VS to provide any updated financial records by November 30, 2018, if they might alter the Tribunal’s decision that his ongoing IRB entitlement was $0.00 per week.

8VS did not comply with the Tribunal’s order. Given there was no additional or updated income related evidence provided, Economical accordingly relies on the Tribunal’s decision that VS’s ongoing IRB entitlement after December 31, 2015 was $0.00.

9Economical paid IRBs to VS in the amount of $3,245.86 during the period of January 1, 2016 to August 3, 2017. According to Economical, the amount payable to VS during this period was $0.00. Economical filed this application for repayment of this amount.

ISSUE

10The issues to be decided by the Tribunal are:

1. Is VS required to repay Economical $3,245.86 for an overpayment of IRBs during the period January 1, 2016 to August 3, 2017 (“the contested period”)?

2. Is VS required to pay interest on overpayments sought by Economical under s.52 (5) of the Schedule, with a start date of August 31, 2017?

FINDINGS

11I find that VS is liable to repay $3,245.86 to Economical for overpaid IRBs for the contested period. He is also liable to pay interest on that amount at the prescribed rate, with the start date for interest being August 31, 2017.

ANALYSIS

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.

13Section 52(3) requires the insurer to notify the claimant, within twelve months of the overpayment, that it requires him or her to repay benefits. If the notice is not given within that period, the insured person ceases to be liable for repayment.

14Section 52(5) permits the insurer to charge interest on the outstanding balance of the amount to be repaid, starting on the 15th day after giving the insured person notice of the amount repayable.

15VS’s IRB claim was complex as it involved income from a business he owned and his receipt of disability benefits during the contested period. Calculating overpayments in this case also involved deductions for underpayments made during a previous, uncontested period of time.

16Economical issued a notice of repayment to VS, dated March 7, 2016. A second notice was issued to VS, dated August 16, 2017: it contained amended repayment amounts.

The Parties’ Positions

17VS submits that he has no repayment obligations because Economical failed to provide notice of repayment within the twelve month period prescribed by the Schedule, thereby relieving him of liability for repayment. He bases this on his submission that:

i. Economical’s first notice of repayment dated March 7, 2016 was deficient because it contained an error with respect to the amount of overpayment (one that was adjusted in the second notice).

ii. Economical’s second notice dated August 16, 2017 can only apply to overpayments made after August 16, 2016. Therefore, VS ceased to be liable for repayment of any amounts paid to him between January 1, 2016 and August 23, 2017, in effect all but one week of the contested period³. VS asserts that this notice is the effective one – and the one that Economical “appears to” rely on.

18VS also submits that the Tribunal lacks jurisdiction to order repayment for amounts paid after January 1, 2016 obligations because there has been no expert evidence submitted by either party on the amount of IRBs payable after that date and that earlier proceedings have not dealt with this issue.

19Economical’s position is embedded in my findings and the reasons I give for them.

FINDINGS

20I find that Economical is entitled to repayment of the amount of $3,245.86 in overpaid IRBs, covering the contested period, plus interest calculated at the prescribed rate. My reasons for this finding are:

i. VS had not explained why the March 2016 notice of repayment is insufficient for the purpose of s.52 (3) of the Schedule.⁴ I agree with Economical that the notice it issued in March 2016 was adequate notice and complied with s.52 (3) of the Schedule. The amount stated in this notice only had to be “substantially correct” and not “perfectly correct”⁵ and in my opinion it was. Everything else in the notice was perfectly clear, including information about VS’s right to dispute Economical’s decision. As a result, Economical is not barred, in my view, from claiming repayment of overpaid IRBs for the contested period.

ii. VS had provided no evidence to contest the Tribunal’s findings of May 23, 2018 that his entitlement to IRBs during the contested period was $0.00, nor does he deny that Economical paid him the amount of $3,245.86 during that period. He was expressly ordered to provide any such evidence by November 30, 2018 and did not do so. I agree with Economical that the Tribunal’s decision on entitlement stands, and the calculation of overpayment is simple: VS must repay any amount above what he was not entitled to receive.

iii. I reject VS’s argument that ordering repayment would be “premature” because there is no accounting evidence or determination of IRB quantum beyond January 1, 2016. VS has had ample time to provide such evidence in response to the Tribunal’s order, and this new application by Economical and he did not. There is nothing to suggest that he was somehow unable to communicate any changes in the operation of his business or his receipt of collateral disability benefits.

iv. VS provides no argument that, if overdue payments are repayable, interest should not be charged. Accordingly, Economical is permitted to charge interest on the outstanding amounts owing by VS, at the prescribed rate and in the prescribed manner. In find that the interest became payable on August 31, 2017 as submitted by Economical.⁶

CONCLUSION

21VS is liable to repay $3,245.86 to Economical for overpaid IRBs for the contested period. He is also liable to pay interest on that amount at the prescribed rate, with the start date for interest being August 31, 2017.

Footnotes

1. 1O.Reg. 34/10
2. 217-000751 v Economical Mutual Insurance Company, 2018 CanLII 81896 (ON LAT)
3. 3VS asserts that the Tribunal should add a week to the time period to allow for delivery of Economical’s letter.
4. 4I accept Economical’s submission that the second notice was simply an update and consistent with proper adjustment of VS’s IRB claim.
5. 5Intact Insurance Company v. Marianayagam, 2016 ONSC 1479, led by Economical.
6. 6Although Economical submits, correctly, that the March 2016 notice was sufficient, it has also submitted that it should charge interest from August 31, 2017, because it was in the second notice that it provided correct, up-to-date information on the amount repayable by VS.