Citation: Aviva General Insurance Company vs. Gurung, 2021 ONLAT 20-000592/AABS

Released: January 29, 2021

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

Bhumika Gurung

Respondent

DECISION

ADJUDICATOR:

Lindsay Lake

APPEARANCES:

For the Applicant:

Amanda Faulkner, Counsel

For the Respondent:

No submissions were filed

HEARD

by way of written submissions

OVERVIEW

1Bhumika Gurung was involved in an automobile accident on May 5, 2017 (the “accident”).

2Ms. Gurung applied for and received income replacement benefits (“IRBs”) from Aviva General Insurance Company (“Aviva”) pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010.¹ Aviva paid IRBs to Ms. Gurung in the amount of $400.00 per week from May 12, 2017 to February 7, 2019.

3Aviva conducted surveillance of Ms. Gurung on various dates throughout 2018. Aviva submitted, and I agree, that this surveillance showed Ms. Gurung working at Bajra Fine Indian Cuisine & Hakka Chinese Cuisine restaurant (“Bajra”) on September 7 and 18, October 16, 17, 24 and 25 and November 27, 28 and 29, 2018. On these dates, Ms. Gurung was observed taking orders, handling cash, completing cash transactions, preparing take-out orders for food delivery services, serving food orders to seated patrons, making beverages, entering the kitchen, preparing foods, cleaning tables and using the restaurant’s telephone.²

4Following a multidisciplinary insurer’s examination (“IE”) assessment, Aviva terminated Ms. Gurung’s IRBs on January 21, 2019 effective February 7, 2019 after Aviva determined that Ms. Gurung was no longer eligible for IRBs.³

5Ms. Gurung attended an examination under oath (“EUO”) on March 13, 2019.⁴ After initially testifying that she had not worked more than 1.5 hours since the accident and denied working as a waitress post-accident,⁵ Ms. Gurung ultimately conceded, after the surveillance evidence was put to her, that she returned to work as a waitress in September 2018.⁶ At the EUO, Ms. Gurung confirmed that:

(i) she did not report her return to work to Aviva;⁷

(ii) she perjured herself under oath when she denied working more than 1.5 hours since the accident;⁸ and

(iii) Bajra was her company and not her friend’s company as she first testified.⁹

6Under s. 33 of the Schedule, Aviva requested various business accounting records of Bajra from Ms. Gurung and along with Ms. Gurung’s personal accounting records including income tax returns, notices of assessment and personal bank statements on August 30, 2019 following her testimony at the EUO.¹⁰

7Aviva also provided notice to Ms. Gurung on August 30, 2019 that it was seeking repayment of IRBs under s. 52 of the Schedule which entitles an insurer to a repayment of benefits paid in error.¹¹ Aviva did not provide the amount of the repayment in the August 30, 2019 correspondence as Aviva noted that it required the requested documents to determine Ms. Gurung’s economic loss.

8On December 13, 2019, Aviva wrote to Ms. Gurung and advised that it was seeking repayment of $36,456.00 which represented all of the IRBs it paid to Ms. Gurung.¹² In this correspondence, Aviva also advised that:

(i) interest would accrue until such time the overpayment amount was repaid in full; and

(ii) that should Aviva not hear from Ms. Gurung by December 31, 2019, that it would commence an application to the Tribunal to obtain an order for repayment.

9Ms. Gurung did not respond to Aviva’s August 30, 2019 letters or to Aviva’s December 13, 2019 repayment request. As a result, Aviva submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”). Ms. Gurung did not file a response to Aviva’s application.

10A case conference was scheduled for May 25, 2020 but Ms. Gurung did not attend. A written hearing was scheduled at that time. Ms. Gurung did not file any submissions or evidence for the written hearing.

ISSUE IN DISPUTE

11The following issue is to be decided:

(i) Is Aviva entitled to repayment of $36,456.00 plus interest from Ms. Gurung relating to Aviva’s payment of IRBs for the period of May 12, 2017 to February 7, 2019?

RESULT

12I find that Aviva is entitled to a repayment of IRBs from Ms. Gurung under s. 52 of the Schedule in the amount of $36,456.00, plus interest under s. 52(5), as a result of overpayments made for the period of May 12, 2017 to February 7, 2019 on the basis of willful misrepresentation.

ANALYSIS

Section 52

13Section 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 willful misrepresentation or fraud. Aviva has the burden of proving that IRBs were overpaid to Ms. Gurung on a balance of probabilities.

14The 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 willful misrepresentation.¹³

15I agree with Aviva that, on the evidence, it overpaid IRBs to Ms. Gurung in error as a result of a willful misrepresentation by Ms. Gurung regarding her return-to-work status.

16On the evidence, Ms. Gurung returned to work in some capacity at least as of September 7, 2018. There is no evidence before me that Ms. Gurung ever notified Aviva that she returned to work as required by the Schedule. Rather, Ms. Gurung continued to collect payment of $400.00 per week from Aviva for IRBs while no longer being entitled to some or all of this amount.¹⁴

17Moreover, Ms. Gurung did not only fail to notify Aviva of her return-to-work status, she also knowingly provided false information regarding her post-accident return-to-work to Dr. Amena Syed, psychologist, during two IE assessments. In the September 12, 2018 IE Psychology Assessment report, Ms. Gurung reported to Dr. Syed that she was currently unemployed and that she has been unable to work since the accident.¹⁵ Similarly, in the December 28, 2018 IE Psychology Report, Ms. Gurung again reported to Dr. Syed that she was currently unemployed, that she was unable to work after the accident and that she had not returned to work after the accident.¹⁶

18Ms. Gurung also signed a November 26, 2018 Disability Certificate (“OCF-3”),¹⁷ certifying that the information provided in it was true and correct. I find that this OCF-3 also contained false information as it indicated that Ms. Gurung was substantially unable to perform the essential tasks of her employment at the time of the accident as a result of and within 104 weeks of the accident. This information is contradicted by the surveillance evidence that showed Ms. Gurung working at Bajra the day immediately after the date of the OCF-3 on November 27, 2018.

19In the absence of submissions from Ms. Gurung proving the contrary, it is difficult to find how Ms. Gurung’s conduct, concession that she returned to work in September 2018 at the March 13, 2019 EUO, failure to produce requested documents and silence at this hearing does not amount to “an assertion not in accordance with the facts.” That is, Ms. Gurung continued to receive payment of IRBs from Aviva while she was working in some capacity. Furthermore, Ms. Gurung’s failure to produce any employment-related information for this hearing or to rebut Aviva’s position on her return-to-work also undermines any claim she may have regarding a temporary return to work under s. 11 of the Schedule.

Aviva’s Notice

20Under 52(1)(a) of the Schedule, a person is liable to repay to the insurer any benefit that is paid to the person in error as a result of a willful misrepresentation, provided proper notice is given. Sections 52(2) and (3) provide timelines for repayment notices if a person is liable to repay an amount to an insurer. These sections require an insurer to give the insured 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 insured person as a result of willful misrepresentation or fraud.

21Aviva first notified Ms. Gurung that she was eligible for IRBs on June 29, 2017 and issued payment of IRBs retroactively to May 12, 2017.

22Aviva did not provide notice of repayment to Ms. Gurung that met the substantive criteria outlined by s. 52(2)(a) of the Schedule and the jurisprudence until December 13, 2019. Aviva’s December 13, 2019 correspondence included the type of benefit (IRBs), the payment period for which repayment is sought (the entire payment period of IRBs) and the amount of repayment sought ($36,456.00, being the amount in dispute), and noting that interest would accrue until the full amount was re-paid. Accordingly, I find Aviva’s December 13, 2019 notice complied with all of the procedural requirements for a s. 52 repayment request.

23Although Aviva was well-outside of the 12-month period as provided for in s. 52(3) of the Schedule to provide notice of repayment to the date that it commenced payment of IRBs to Ms. Gurung, I find that the 12-month notice period does not apply given my finding that Ms. Gurung received an overpayment of IRBs through willful misrepresentation of her return-to-work status. Therefore, I find that Aviva is entitled to request an order for repayment of the full amount in dispute.

Period of Repayment

24Aviva conceded in its submissions that the surveillance evidence only showed Ms. Gurung working at Bajra as of September 7, 2018.¹⁸ Aviva, however, submitted that this evidence should not impact its right to repayment of the total amount of IRBs paid to Ms. Gurung of $36,456.00 for the period of May 12, 2017 to February 7, 2019. I agree.

25Section 7 of the Schedule sets out the method of calculating IRBs payable to an insured person. In calculating the amount of IRBs payable, an insurer is entitled to deduct:

(i) 70 percent of any gross employment income received by the insured person as a result of being employed after the accident and during the period in which he or she is eligible to receive an IRB; and

(ii) 70 percent of any income from self-employment earned by the insured person after the accident and during the period in which he or she is eligible to receive an IRB.¹⁹

26In addition to Ms. Gurung’s eventual concession that she was working at Bajra as of September 2018, Ms. Gurung also ultimately testified at the March 13, 2019 EUO that Bajra was her restaurant.

27There is no documentation or evidence before me that provides any particulars or details of Ms. Gurung’s position at Bajra or how she received income (i.e. if she was receiving employment income or income from self-employment). As such, there is no information before me that permits a calculation of the quantum of repayment of IRBs given the deduction of post-accident income that Aviva is entitled to make. I am also unable to determine the applicable period of repayment as I do not accept Ms. Gurung’s EUO evidence that she only returned to work in September 2018 given her inconsistent and perjurious testimony. This inability to make any determinations regarding the IRB repayment rests solely on Ms. Gurung as I agree with Aviva that this information lies exclusively with Ms. Gurung and Aviva’s attempt to obtain further documentation went unanswered. Given all of these facts, I am left with no other option but to find that the entire amount of IRBs paid to Ms. Gurung of $36,456.00 for the period of May 12, 2017 to February 7, 2019 is repayable to Aviva by Ms. Gurung.

Interest

28Aviva also seeks interest on its repayment claim and provided notice of same to Ms. Gurung in its explanation of benefits letter dated December 13, 2019.

29Sections 52(5) and 52(6) of the Schedule 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.

30Accordingly, as I have found that Aviva is entitled to a repayment of $36,456.00 for IRBs amounts paid to Ms. Gurung as a result of willful misrepresentation under s. 52, it follows that interest is payable on any overdue amounts under s. 52(5) of the Schedule.

ORDER

31For the reasons outlined above, I order Ms. Gurung to repay $36,456.00, plus interest under s. 52(5) of the Schedule, to Aviva as a result of an IRB overpayment for the period of May 12, 2017 to February 7, 2019 on the basis of willful misrepresentation pursuant to s. 52 of the Schedule.

Footnotes

1. 1O. Reg. 34/10 (the “Schedule”).
2. 2Investigation Report of Discovery Group of Investigators dated October 16, 2018 and Surveillance Report of the Discovery Group of Investigators Ltd. Dated February 20, 2019, Written Submissions of the Applicant, tabs H and I, respectively.
3. 3Written Submissions of the Applicant, tab M.
4. 4EUO Transcript of Bhumika Devi Gurung dated March 13, 2019, Written Submissions of the Applicant, tab N.
5. 5Ibid. at pages 39-43.
6. 6Ibid. at page 51.
7. 7Ibid. at page 52.
8. 8Ibid. at page 49.
9. 9Ibid. at page 54.
10. 10Written Submissions of the Applicant, tab O.
11. 11Written Submissions of the Applicant, tab P.
12. 12Written Submissions of the Applicant, tab Q.
13. 1317-000272 v T.T., 2017 CanLII 87539 (ON LAT) at paras. 21 and 28.
14. 14Schedule, s. 5 and 37(2)(e).
15. 15Written Submissions of the Applicant, tab X, page 21.
16. 16Written Submissions of the Applicant, tab AA, page 27.
17. 17Written Submissions of the Applicant, tab Y.
18. 18Written Submissions of the Applicant, para. 37.
19. 19Schedule, s. 7(3).