Released Date: 11/25/2020
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 General Insurance Company
Applicant
and
Letchumanan Muthusamythevar
Respondent
DECISION
ADJUDICATOR: Jesse A. Boyce
APPEARANCES:
For the Applicant: Amanda Fowler
For the Respondent: No submissions
HEARD: Via written submissions
OVERVIEW
1L.M., the respondent in this matter, was involved in an accident on June 1, 2018, and sought various benefits from the applicant, Aviva, including an income replacement benefit (“IRB”), pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 20101 (“Schedule”).
2L.M. received payment for an IRB in the amount of $400.00 per week for the period June 8, 2018 to April 12, 2019. However, L.M. had actually returned to his full-time pre-accident employment on January 2, 2019 and did not notify Aviva. Payment of the IRB continued at the same rate while L.M. was working.
3Meanwhile, on March 25, 2019, Aviva became aware of L.M.’s return to work when L.M.’s representatives e-mailed Aviva to notify it that he had resumed his full-time employment. Aviva followed up and confirmed via telephone and by e-mail that L.M. had returned to his full-time pre-accident employment over two-months earlier, on January 2, 2019.
4Accordingly, via letter dated June 17, 2019, Aviva notified L.M. that there had been an overpayment of IRB in the amount of $5,600.00 and requested repayment. The explanation of benefits letter cited L.M.’s late reporting of his return to work date as the reason for its repayment request.
5To date, L.M. has not repaid the IRB. As a result, Aviva filed an application with the Tribunal to compel the repayment of the overpaid IRB. While L.M. and his representative attended the case conference and filed a response on July 23, 2020, L.M. stated that he is taking no position on the repayment issue but submitted that a deduction for the repayment amount can be arranged from the payment of any ongoing benefits. A written hearing was set down, with no submissions or evidence provided by L.M.
ISSUES IN DISPUTE
6According to the Case Conference Order dated June 23, 2020, the issues in dispute are as follows:
i. Is the applicant (insurer) entitled to a repayment of $5,600.00 from the respondent (insured) relating to the applicant’s payment of an income replacement benefit for the period of January 2, 2019 to April 12, 2019?
ii. Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
7I find Aviva is entitled to a repayment under s. 52 in the amount of $5,600.00, plus interest under s. 52(5), as a result of IRB overpayment made on the basis of wilful misrepresentation.
ANALYSIS
Section 52
8Section 52 of the Schedule governs the repayment of benefits. Under s. 52(1)(a), 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. Sections 52(2) and (3) provide timelines for repayment requests if a person is liable to repay an amount to an insurer. The insurer shall give the person notice of the amount that is required to be repaid within 12 months after the payment of the amount that is to be repaid, unless it was originally paid to the person as a result of wilful misrepresentation or fraud. Aviva has the burden of proving that the IRB was overpaid to L.M. on a balance of probabilities.
9The Tribunal has defined “misrepresentation” as “any manifestation by words or other conduct by one person to another that, under the circumstances, amounts to an assertion not in accordance with the facts.” The Tribunal has also held that “silence or a failure to report” can constitute wilful misrepresentation.2 I agree with Aviva that, on the evidence, it overpaid IRBs to L.M. in error as a result of a wilful misrepresentation of his return-to-work status.
10On the facts, I find that L.M. failed to notify Aviva that he had returned to full-time duties, as required by the Schedule, and continued to collect payment of the IRBs while no longer eligible for same under s. 5 and s. 37(2)(e). In the absence of submissions from L.M. proving the contrary, it is difficult to find how L.M.’s conduct, silence and then apparent concession of the issue does not amount to “an assertion not in accordance with the facts.” That is, L.M. continued to receive payment of IRBs from Aviva while he was working full-time and therefore not entitled to the benefit. Further, the fact that Aviva was only notified by L.M.’s representative of his return to work over two months later while he continued to collect the IRB speaks to his failure to report and undermines any argument that he was unclear on his reporting obligations. L.M. has not disputed the accuracy of his representatives claim or the IRB payment chart with dates, amounts and cheque numbers provided by Aviva.
11Further, I agree with Aviva that L.M.’s failure to produce any employment-related information for this hearing or to provide evidence to rebut his representative’s confirmation that he had returned to full-time work activities as of January 2, 2019 is evidence that the IRB was overpaid to him during a period when he was not eligible. In my view, L.M.’s failure to provide this information also undermines any claim he may have regarding a temporary return to work under s. 11. Ultimately, I agree with Aviva that, based on L.M.’s conduct post-IRB termination and his proposal at the case conference stage that repayment can be arranged through a deduction of ongoing benefits, he has effectively conceded the issue. Indeed, the explanation of benefits letter references a “mutual understanding” regarding L.M.’s IRB claim. The method of repayment can be arranged between the parties. Under 52(1)(a), a person is liable to repay to the insurer any benefit that is paid to the person in error as a result of wilful misrepresentation, provided proper notice is given.
Aviva’s Notice
12I find Aviva’s notice of request for repayment also meets the timeline criteria to support its claim. Aviva first issued payment of IRB on June 8, 2018. It then provided notice to L.M. of its intention to seek repayment of the overpaid IRBs on June 17, 2019. While this date is over one week past the 12-month period to provide notice as prescribed by s. 52(3), this would result in Aviva not being able to claim repayment for one week of IRB. However, having determined that L.M. received the overpayment through wilful misrepresentation of his return-to-work status, the 12-month notice period does not apply and Aviva is entitled to repayment of the full amount in dispute.
13The notice sent to L.M. also meets the substantive criteria outlined by s. 52(2)(a) and the jurisprudence, as it states the type of benefit (IRB - Overpayment), the payment period for which repayment is sought (January 7, 2019 to April 12, 2019) and the amount of repayment sought ($5,600.00, being the amount in dispute), plus interest at 1% per month.3 Accordingly, I find Aviva’s notice complied with all of the procedural requirements for a s. 52 repayment request.
Interest
14Aviva also seeks interest on its repayment claim and provided notice of same to L.M. in its explanation of benefits letter dated June 17, 2019. Sections 52(5) and (6) provide guidance on when an insurer may recover interest when seeking repayment. The insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after the notice is given and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice is given. Accordingly, as I find Aviva is entitled to a repayment of amounts paid to L.M. as a result of wilful misrepresentation under s. 52, it follows that interest is payable on any overdue amounts under s. 52(5).
ORDER
15Aviva is entitled to a repayment under s. 52 in the amount of $5,600.00, plus interest under s. 52(5), as a result of IRB overpayment made on the basis of wilful misrepresentation.
Released: November 25, 2020
Jesse A. Boyce
Vice Chair
Footnotes
- O. Reg. 34/10, as amended.
- 17-000272 v T.T., 2017 CanLII 87539 (ON LAT), at paras. 21 and 22
- See, for e.g., Intact Insurance Company v. Marianayagam, 2016 ONSC 1479; Unica Insurance Inc. v K.B., 2020 CanLII 35550 (ON LAT), at para. 32.