Released Date: 09/03/2020

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:

Aviva Insurance Canada

Applicant

and

K.B.

Respondent

DECISION

ADJUDICATOR:

Jesse A. Boyce

APPEARANCES:

For the Applicant:

Jeffrey Pasternak

For the Respondent:

No submissions

HEARD:

Via written submissions

OVERVIEW

1K.B., the respondent in this matter, was injured in an accident on November 10, 2015, and sought an income replacement benefit (“IRB”) from Aviva, the applicant, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (''Schedule'').

2Aviva initially paid the IRB to K.B. in the amount of $400.00 per week based on an OCF-1 (Application for Accident Benefits) dated December 3, 2015 that indicated she was employed and working on the day of the accident, and an OCF-2 (Employers Confirmation Form) dated December 11, 2015 from a company called [B.A.E.] which indicated that she was employed as a labourer from April 30, 2015 to November 9, 2015 and earned $3,600.00 per month.

3Aviva paid the IRB from November 17, 2015 until December 10, 2018. Aviva then terminated the IRB based on medical evidence in the file and a series of Insurer’s Examinations (“IEs”). Prior to the termination, Aviva paid K.B. $64,800.00 in IRBs during this period.

4K.B. initially disputed Aviva’s IRB termination and, during the course of that litigation, provided Aviva with a copy of her income tax returns from 2012 to 2016. Notably, K.B.’s tax returns did not show any employment income earned at any point prior to the motor vehicle accident in November 2015.

5As a result of receiving and reviewing the income tax returns, Aviva mailed a letter to K.B. dated March 22, 2019, outlining the overpayment of IRBs in the amount of $15,028.57, pursuant to s. 52(1)(a) of the Schedule, for the period March 22, 2018 to December 10, 2018.

6Aviva submits that the reason for the IRB overpayment was based on the fact that IRBs are to be calculated based on the amount of reported employment income declared to the Canadian Revenue Agency (“CRA”) under s. 4(5) of the Schedule. Aviva is therefore seeking a repayment of the IRBs due to “error” and submits that it is entitled to request a repayment of benefits under s. 52 dating back one year from the notice it provided to K.B.

7Aviva filed an application with the Tribunal on June 20, 2019, which was served on K.B. A case conference proceeded on December 4, 2019. K.B. did not attend. A written hearing was set in her absence to determine whether Aviva is entitled to a repayment of IRBs made in error, plus interest. Despite attempts to contact her, K.B. made no submissions.

ISSUES IN DISPUTE

8The following issues are in dispute:

a. Is Aviva entitled to a repayment of an income replacement benefit in the amount of $15,028.57 for the time period of March 28, 2018 to December 10, 2018?

b. Is Aviva entitled to interest on any overdue payment of benefits?

result

9Aviva is entitled to a repayment of IRBs in the amount of $15,028.57, plus applicable interest under s. 52(5).

ANALYSIS

Section 4 and K.B.’s IRB quantum

10Section 4(5) of the Schedule is clear that if, under the Income Tax Act or legislation of another jurisdiction that imposes a tax calculated by reference to income, a person is required to report the amount of his or her income, the person’s income before an accident shall be determined without reference to any income the person has failed to report contrary to that Act or legislation.

11On review of K.B.’s income tax returns from the years 2012 to 2016 that are in evidence, I agree with Aviva that K.B. did not have any reported income during the pre-accident period in 2015. Further, I also agree with Aviva that, since K.B. filed income tax returns in 2014 and 2015 and did not report any employment income earned during this period—only declaring social assistance—under s. 4(5) of the Schedule, her IRB quantum would actually be $0.00 per week and not the $400 per week that was paid to her by Aviva based on the OCF-2 from B.A.E. indicating she earned $3,600.00 per month.

12As noted, K.B. did not provide submissions to explain this concerning discrepancy. Accordingly, on the evidence and in the absence of argument from K.B., I agree that the IRB payments by Aviva were made in error because the IRB calculation was not based on reported employment income under the Income Tax Act, as mandated by s. 4(5) of the Schedule but rather on an OCF-2 that is not supported by K.B.’s income tax returns. Therefore, I find Aviva is entitled to request a repayment of IRBs made in error under s. 52.

Section 52 and Aviva’s notice

13Repayments to an insurer are governed by s. 52 of the Schedule. Section 52(1)(a) states that a person is liable to repay to 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. Section 52(2) provides that, if a person is liable to repay an amount to an insurer under s. 52, that the insurer shall give the person notice of the amount that is required to be repaid within twelve months after the payment of the amount is to be repaid. Section 52(5) permits the insurer to charge interest on the outstanding balance of the repayment for the period starting on the 15th day after the notice is given under ss. (2) and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice under ss. (2) is given.

14It should be noted that Aviva is not seeking a repayment of the entire amount of IRB paid, but only $15,028.57, representing the time period of March 28, 2018 to December 10, 2018, or the last twelve months following its notice to K.B. that the overpayment was made in error, in accordance with s. 52(2).

15Aviva submits, and I agree, that it provided proper notice to K.B. under s. 52(2) when it requested repayment. On review of the letter dated March 22, 2019, I find Aviva provided notice within twelve months after the payment of the amount that is to be repaid. K.B.’s address on the letter matches her address on file with the Tribunal. The letter clearly states the grounds for the repayment request under s. 4(5) (“We are in receipt of your income tax returns from 2012-2016 which indicate that you do not have any reported income for the period of 2012-2016”), that Aviva was requesting repayment under s. 52(1)(a) and that interest under s. 52(5) would apply.

16To date, K.B. has not repaid the $15,028.57 that was requested by Aviva as an IRB overpayment and she has not defended herself in this application. As a result, I find Aviva is entitled to a repayment of IRBs under s. 52 where K.B.’s IRB was based on alleged employment income that was not reported under s. 4(5), where Aviva’s notice of repayment was properly served under s. 52(2) and where notice of this written hearing was properly sent to K.B. and no defence was offered. Interest applies to the overdue amounts pursuant to s. 52(5) of the Schedule.

CONCLUSION

17Pursuant to s. 52, Aviva is entitled to a repayment of IRBs paid in error to K.B. in the amount of $15,028.57, plus applicable interest.