Citation: Sonnet Insurance Company vs. L.O., 2020 ONLAT 19-004559/AABS
Released Date: 03/31/2020
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:
Sonnet Insurance Company
Applicant
and
[L.O.]
Respondent
DECISION
ADJUDICATOR:
Patricia Conway
APPEARANCES:
For the Applicant:
Kathleen O'Hara, Counsel
For the Respondent:
No one appeared
HEARD:
By way of written submissions
REASONS FOR DECISION AND ORDER
OVERVIEW
1The respondent was involved in an automobile accident on February 11, 2018, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The respondent claimed that he was employed at the time of the accident.
2The applicant paid Income Replacement Benefits (IRB’s) to the respondent from February 11, 2018 to October 28, 2018, totaling $14,457.14.
3The applicant subsequently requested further documentary evidence of the respondent’s employment and the respondent failed to provide it. The applicant applied to the Licence Application Tribunal - Automobile Accident Benefits Service (“Tribunal”).
4The applicant demanded repayment of the IRB’s it has paid in the amount of $14,457.14 plus interest, claiming that these payments were made either in error or as a result of a deliberate misrepresentation by the respondent.
5The respondent has maintained that he was employed when the accident occurred. However, he has not responded to the application and did not participate in the case conference. He has filed no submissions or documents for this hearing.
ISSUES
6Is the applicant entitled to repayment of IRB’s in the amount of $14,457.14 paid to the respondent from February 11, 2018 to October 28, 2018 because the payment was made because of error, wilful misrepresentation or fraud?
7Is the applicant entitled to interest on the amount in accordance with section 52(5) of the Schedule?
RESULT
8Based on the evidence before me, I find that the applicant has proven on the balance of probabilities that it is entitled to repayment of the IRB’s it has paid to the respondent.
9I find that the applicant is entitled to interest in accordance with section 52(5) of the Schedule.
LAW
10A 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.1
11The insurer must demand repayment from the person within 12 months of the payment, if the payment was made as a result of an error.2 If the payment was made as a result of misrepresentation or fraud, the 12- month period does not apply.3
ANALYSIS
12There are four sub-issues which must be determined to establish the respondent’s liability in this case:
a. Did the applicant rely on statements made by the respondent in paying IRB benefits to him?
b. Were those statements correct?
c. Was adequate notice given to the respondent to repay the benefits?
d. Was notice given to the respondent in a timely manner?
13The onus is on the applicant to prove, on the balance of probabilities, that it is entitled to the repayment sought.
(a) Did the applicant rely on statements made by the respondent in paying IRB benefits to him?
14The respondent submitted to the applicant an application for accident benefits (OCF-1) dated March 9, 2018. That application stated that at the time of the accident, the respondent was working as a general labourer at [a production company]. The application stated that the respondent worked 40 hours per week and earned $740.00 gross.
15The respondent also submitted an Employer’s Confirmation Form (OCF-2) completed by [K.R.] a “manager” at [the production company]. That form confirmed that the respondent was employed by [the production company] on a full-time basis from February 6, 2017 to February 9, 2018, working 40 hours a week and earning $740.00 gross per week, doing “stonework, snow removal and floor tiling”.
16The applicant requested paystubs for four weeks prior to the accident and the respondent’s T4 statement. The respondent provided paystubs for the period in question that showed he was receiving $740.00 gross per week with deductions for taxes, CPP and IE.
17The evidence indicates that the applicant then paid a lump sum of $10,457.00 to the respondent on August 10, 2018. A covering letter with the payment stated that this was a payment of IRB’s for the period of February 18 to August 19, 2018. The evidence indicates that the applicant also paid the respondent $400.00 a month until October 28, 2018, a total amount of $14,457.14.
18It is evident that the applicant had only information it had received from the respondent when it made the payments. I find therefore that the payments were made as alleged by the applicant, and that the payments were made because of the representations made by the respondent through the OCF-1 and OCF-2 he submitted and paystubs he provided to the applicant. The answer to this question is “Yes”.
(b) Were the statements made by the respondent correct?
19The evidence is that on September 21, 2018, the applicant conducted a corporate search on [the production company]. The Corporate Profile Report, which is in evidence, states that the company is owned by [R.A.].
20The applicant contacted [R.A.] and on March 27, 2019, [R.A.] provided a written statement which is in evidence. [R.A.] states that he owns the company. The company has no employees, only subcontractors. He has never heard of the respondent and his company has never employed him. He has never heard of [K.R.] and the company has never employed him.
21[R.A.] also says that the documents submitted by the respondent to the applicant are not documents from [the production company]. He reports that the company does not issue earning statements, does not withhold taxes and never issues paystubs. He states that he did not write and has no knowledge of the OCF-2 submitted by the respondent to confirm his employment.
22The applicant retained counsel who examined the respondent under oath. During the examination, the respondent maintained that he had been employed by [the production company] at the time of his accident. However, he was not able to name any other employees; he could not describe the premises where he allegedly worked; he stated that he did deliveries for four to eight hours a day and otherwise worked in the [production company] premises but was unable to describe what he did when he was not out on deliveries. He did not know who [R.A.] was, and was unable to remember the last name or any other information about his “manager” [L.R.] whose name was on the OCF-2.
23During the examination, the respondent agreed to produce certain documents to substantiate his employment, including his T4 slip for 2017 and a record of employment from [the production company]. Despite repeated reminders and demands by the applicant, these documents were not provided.
24I have no difficulty in concluding from this evidence that the respondent was never employed by [the production company]. I have noted that the written statement from [R.A.] is not under oath. But the corporate profile names him as the owner of the company, and he has no reason to lie. The respondent, on the other hand, had very good reason to lie, even under oath. The vagueness of his responses during the examination, and his failure, without explanation, to produce documents which he ought to be available to him if he was in fact employed by [the production company] further persuade me that the documents he submitted to the insurer were false. The answer to the second question is certainly “No”.
(c) Was adequate notice given to the respondent to repay the benefits?
25The applicant has provided a letter written by it to the respondent and dated April 3, 2019 demanding the he repay to the applicant all of the IRB’s paid to date in the amount of $14,457.14, because he was not employed by [the production company] at the time of the accident, as indicated on the OCF-1 and OCF-2 he had submitted to the applicant. There is evidence that this letter was delivered to the respondent at the address he had provided to the applicant in his application for benefits. There is no evidence that he did not receive the notice.
26I have read the notice, and it is very clear about what the respondent is to do and why he is to do it. The answer to this question is therefore “Yes”.
(d) Was the notice given in a timely manner?
27The documentary evidence submitted by the applicant establishes that the first payment to the respondent was made on August 10, 2018, and the demand for repayment was made on April 3, 2019. This is well within the 12- month period stipulated by the Schedule.
28As the notice was given within the 12- month period, I need not decide whether the payment was made in error or because of misrepresentation or fraud. In either case, the applicant is entitled to repayment of the benefits paid to the respondent.
29The applicant also claims interest on the $14,457.14. The Schedule provides that the insurer may charge interest on the amount owing, from the 15th day after the notice to repay is give until the money is repaid in full.4
30Having found that the applicant is entitled to repayment, I conclude that the applicant is also entitled to interest on the amount owed, at the rate set out in the Schedule.
ORDER
31The Tribunal orders the respondent to repay to the applicant the amount of $14,457.14 plus interest calculated in accordance with the Schedule.
Released: March 31, 2020
Patricia Conway
Adjudicator