Licence Appeal Tribunal File Number: 19-010035/AABS
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
Applicant
and
Breanne Simmonds
Respondent
DECISION
ADJUDICATOR:
Brian Norris
APPEARANCES:
For the Applicant:
Amanda Fowler, Counsel
Mark Vella, Counsel
For the Respondent
Kwaku Bona, Paralegal
HEARD:
By way of written submissions
OVERVIEW
1Breanne Simmonds, (“the Respondent”), was involved in an automobile accident on July 3, 2017 and sought benefits from Aviva General Insurance, (“Aviva”), pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”).
2Aviva claims to have overpaid income replacement benefits (“IRBs”) to the Respondent and now claims a repayment of the benefits paid. Aviva has applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for resolution of this dispute.
ISSUES
3The issues in dispute in this hearing are:
i. Is Aviva entitled to the repayment of IRBs in the amount of $12,731.87 for benefits paid to the Respondent during the period spanning July 10, 2017 to April 26, 2019?
ii. Is Aviva entitled to interest on the overdue repayment of the income replacement benefit?
iii. Is Aviva entitled to costs?
RESULT
4Aviva is entitled to a repayment of IRBs as sought.
BACKGROUND
5The Respondent was involved in an accident and was employed at a jewellery store and a shoe store at the time it occurred. The Respondent applied for IRBs, but Aviva was initially unsure if she qualified for the benefit because, at that time, it was unclear if the Respondent was employed at the time of the accident. This issue was clarified, and the Respondent elected to claim IRBs on or around September 25, 2017.
6Aviva spoke with a manager at the jewellery store on September 26, 2017. The manager advised that the Respondent returned to work on September 12, 2017. Following that, and almost four months following the accident, Aviva received an OCF-2 from that employer, dated November 17, 2017. The document noted that the Respondent returned to work at that place of employment on August 4, 2017.
7Aviva had no information as to whether the Respondent returned to work at the shoe store. Nevertheless, Aviva paid IRBs to her.
8Aviva continued to issue full payment of IRBs to the Respondent but, according to the Adjuster’s log notes, spoke with the Respondent’s representative on May 29, 2018 because the payments were not being cashed. The Adjuster’s log notes state that Aviva suggested that direct deposit payment be established.
9Aviva eventually sought to have the Respondent participate in an insurer’s examination (“IE”) to determine her ongoing entitlement to IRBs. The IE occurred after being rescheduled twice and, in the corresponding report dated May 8, 2019, the Respondent was noted to be working at a new place of employment, a tourist attraction.
10Aviva spoke with counsel for the Respondent on April 24, 2019, about two weeks prior to receiving the IE report. The purpose of the call was to discuss stale-dated cheques, which appears to have been an ongoing issue, and reschedule an IE. Records from that call note that counsel for the Respondent advised that he believed that the Respondent returned to work in November 2018 and would confirm same. Other than that, there is no indication that the Respondent notified Aviva of her new employment. Further, there is no evidence to show that counsel for the Respondent ever clarified the Respondent’s return to work date. Aviva wrote the Respondent about a month later, on July 15, 2019, again asking for the date she returned to work. It also advised that it was seeking a repayment of IRBs which, at that time, totalled $3,108.48. The July 15, 2019 letter also went unanswered.
11Aviva filed an Application with the Tribunal on September 11, 2019. Case Conferences were scheduled for March 25 and May 1, 2020, but the Respondent never attended. A third case conference was scheduled for July 28, 2020. On the day before the third case conference, the Respondent sent Aviva pay stubs from the tourist attraction employer.
12The Respondent attended at the third Case Conference. There, Aviva revised its repayment claim. It claimed that the pay stubs provided the day earlier indicate that the Respondent was working for that employer for a period starting in 2017, and asked for all IRBs to be repaid on account of material misrepresentation. The Adjudicator permitted the revised claim and ordered the Respondent to provide Aviva with income tax returns for the years 2017, 2018, and 2019, her complete employment file from the tourist attraction, and a record of employment from the jewellery store. Aviva was ordered to provide the Respondent with the adjuster’s log notes for the period from the date of the accident to the day the Application was filed, subject to redactions for privilege and reserves, with the basis for the redaction indicated. The parties agreed to exchange the documents by January 28, 2021. Aviva produced the log notes on February 2, 2021. On March 22, 2021, the Respondent produced her employment file from the tourist attraction and tax records, more than three weeks after Aviva’s initial submissions and more than a week after responding submissions were made.
13Aviva served its reply submissions in accordance with the Tribunal Order and it also filed a motion to permit it an opportunity to introduce the employment file from the tourist attraction and make submissions on the evidence. A motion hearing occurred, and the evidence was found to be relevant. The motion was granted. Aviva was provided a chance to file supplemental submissions based on the new evidence that was only recently produced. The prejudice to the Respondent was cured because she was afforded an opportunity to respond to the new submissions.
14I have reviewed the evidence and submissions in their totality, and I find that Aviva paid IRBs to the Respondent as a result of material misrepresentation.
REPAYMENT OF BENEFITS
15Pursuant to section 52 of the Schedule, a person is liable to repay the insurer any benefit described in the Schedule 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.
16Pursuant to section 52(3), the repayment of payments made in error are limited to the one-year period prior to the notice. Payments made as a result of wilful misrepresentation are not subject to the same time limit.
Positions
17Aviva submits that the Respondent misrepresented the date that she returned to work. It further submits that an adverse inference be drawn because the Respondent failed to produce relevant employment records for this hearing, contrary to a Tribunal Order. It submits that the Respondent failed to produce her employment records because they would show that she never missed any work as a result of the accident. Thus, she must repay the IRBs paid to her, plus interest.
18The Respondent submits that Aviva’s “claim should be dismissed because of the principle of in pari delicto in that it continued to send IRB payments to her when it knew or ought to have known that she had returned to work.” She adds that the Respondent is statute-barred for failing to provide notice in accordance with section 52 of the Schedule and for failing to bring the claim within the two years limitation period.
19In reply, Aviva submits that the principle does not apply because the Schedule allows it to reclaim payments made in error or as a result of wilful misrepresentation. It characterizes her argument as absurd and devoid of any common sense and is attempting to deflect from her acts of wilful misrepresentation.
Did the Respondent wilfully misrepresent her return to work?
20In Aviva General Insurance Company vs. Letchumanan Muthusamythevar (“Muthusamythevar”)1, referring to 17-000272 v T.T.2, “misrepresentation” is defined 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.” It added that “silence or a failure to report” can constitute wilful misrepresentation.
21I find that the Respondent failed to disclose her return to work and as a result, wilfully misrepresented her employment status.
22The Respondent never advised Aviva that she started new employment. The evidence shows that the Respondent started working at the tourist attraction on October 11, 2017 but she never told Aviva about it before disclosing it during an IE assessment, on January 23, 2019, more than a year later. The Respondent or her representative knew or ought to have known that she was required to advise Aviva of any return to work following the accident.
23The Respondent never replied to Aviva’s requests for confirmation of the date she returned to work. Aviva wrote to the Respondent on May 14, 2019, and July 15, 2019, and requested confirmation of her return to work date. Likewise, Aviva spoke with counsel for the Respondent on April 24, 2019 and during the case conferences on March 25, 2020, May 1, 2020, and July 28, 2020. However, there is no evidence that the Respondent ever answered those requests until March 12, 2021, when she advised, in her responding submissions, that she returned to work at the jewellery store on September 12, 2017.
24The Respondent failed to produce the records requested and I draw an adverse inference as a result. The Respondent was ordered to produce the record of employment from the jewellery store but failed to do so. She has provided no reason why she failed to comply with the Order, which she consented to at the case conference. I am left to conclude that the record of employment was not produced because it was unfavourable to the Respondent.
25The principle of in pari delicto does not apply to this situation. The Respondent’s position is that Aviva is not entitled to a repayment because it knew or ought to have known that she returned to work, but continued to pay IRBs anyway. The Respondent further submits that Aviva should have known that she returned to work because she advised her treatment provider that she returned to work and she expected the treatment provider to relay this information to Aviva. However, she led no evidence to support these claims and fails to appreciate that in pari delicto requires a finding that Aviva paid IRBs despite knowing that the Respondent was not entitled to them. In 17-001090/AABS v Certas Home and Auto Insurance, the insured was paid IRBs despite the insurer knowing that the impairment arose after 104 weeks, which disentitled the insured from receiving the benefit3. Here, Aviva was reasonably unsure if the Respondent remained entitled to IRBs because the Respondent may have returned to work on a gradual basis. Or, the Respondent may still be disabled from working at her other place of employment. Thus, it was reasonable for Aviva to seek clarification as to when the Respondent returned to work.
26There is no evidence suggesting that the Respondent was referred to a preferred clinic, where she advised of her return to work. The Respondent alleges that Aviva referred her to the treatment facility discussed above, and that she had good reason to believe the treatment provider would communicate her return to work to Aviva. No clinical notes and records from the facility were produced to support the Respondent’s position. Further, Aviva denies the allegation in its reply submissions. It suggests that, instead, the Respondent’s family physician—whose office is located on Grossbeak Drive, which is on the same block as the Meadowvale Physical Medicine (where the Respondent sought treatment from)—was the practitioner who referred the Respondent to the treatment facility.
27Further, the Respondent provides no evidence to support her suggestion that the redacted log notes hide evidence that Aviva is withholding information about the exchange with the treatment provider. The Respondent suggests that Aviva has information to confirm that it referred her to a preferred clinic and is withholding this information. Aviva, both in its submissions for this hearing and in emails exchanged between counsel prior to the hearing, denies that such a referral occurred. Again, the Respondent provides no information, such as clinical notes and records or a statement from the facility, that supports this claim.
28Having found that the Respondent materially misrepresented her return to work date by withholding that information from Aviva, I must now determine if Aviva provided proper notice of the repayment, and after that, what the quantum of the repayment is.
Notice of Repayment
29Aviva must first notify the Respondent of the amount that it requires to be repaid, pursuant to section 52(2)(a).
30Aviva submits that it notified the Respondent of the repayment on July 15, 2019. That letter identifies November 19, 2019 as the Respondent’s return to work date, states that it represents 24 weeks of overpayment, and requests payment in the amount of $3,108.48, due by July 30, 2019. The letter also states that neither the Respondent, nor her counsel, have responded to Aviva’s overpayment claims.
31Aviva further submits that it notified the Respondent of a revised repayment amount on August 12, 2020. In that letter, Aviva stated:
A recent review of your file has revealed that your income replacement benefit has been paid in error. We previously sent you a request for repayment in the amount of $3,108.48. Since that request, we have learned that you were working the entire time Aviva paid income replacement benefits. We will be seeking repayment of $12,731.87 as you were employed during the time you collected income replacement benefits from Aviva Insurance and that you failed to advise Aviva Insurance that you had returned to work.
The above amount, paid by Aviva Insurance represents the entire amount paid to yourself. These benefits were paid from July 10, 2017 to April 6, 2019. In accordance with section 52 of the Statutory Accident Benefits Schedule, we are requesting payment of the full amount, per s. 51(1)(a). Please issue payment in the amount of $12,731.87 payable to Aviva Canada Inc.
You have the option of repaying the amount in full at any time or we would be please to discuss repayment plan options with you.
We are entitled to apply interest on the unpaid portion at the bank rate but we maintain our option to charge interest if payment(s) are not be made on a regular basis. Please accept this as proper notice in accordance with Section 52 of the Statutory Accident Benefit Schedule.
32The Respondent contends that Aviva failed to provide notice within 12 months of the overpayment. In the alternative, the Respondent submits that Aviva is statute-barred from claiming a repayment because Aviva failed to file this application within two years of the overpayment.
33I find that the notice complies with section 52 of the Schedule. According to section 52(2)(a), Aviva is only required to give the Respondent notice of the amount that is required to be repaid. Here, it states that it requested one amount but, upon further review, revised the repayment amount to $12,731.87.
34The limitation period in section 52 of the Schedule does not apply to this scenario. As noted above, the Respondent wilfully misrepresented her return to work date by failing to advise Aviva of same. Thus, the 12-month overpayment limit outlined in section 52(2) does not apply.
35Further, Aviva applied to the Tribunal within the timelines prescribed by the Schedule. The two-year limitation period outlined in section 56 states that an application “in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed.” To me, this means that the limitation clock starts on the date which Aviva refuses to pay the benefit. Here, the Respondent refers to a return to work date of September 12, 2017, implying that the two-year limitation period started then and submits that any overpayment claim would have accrued prior to September 11, 2017. This is incorrect. The evidence before me shows that Aviva requested that the Respondent provide a firm return to work date on April 24, 2019. Yet, the first refusal to pay IRBs occurred on May 14, 2019, which triggered the limitation clock, and the application was made September 11, 2019. The date which the Respondent returned to work, which remains unclear because no employment file was produced, has no impact on when the limitation clock starts.
Amount of Repayment
36As a result of her wilful misrepresentation, I find that Aviva is entitled to repayment of all IRBs paid to the Respondent to-date.
37The Respondent produced records that show she failed to report her new employment at the tourist attraction. Moreover, she failed to produce a Record of Employment from the jewellery store. Employers are required to produce a Record of Employment whenever there is an interruption in earnings, and this would clarify when or whether the Respondent stopped working as a result of the accident. I draw an adverse inference as a result of this failure and infer that the Respondent missed no time, or, had no interruption in earnings as a result of the accident. Therefore, Aviva overpaid IRBs to the Respondent as a result of wilful misrepresentation and is entitled to full repayment.
INTEREST
38Section 52(5) of the Schedule provides that Aviva may charge interest on the outstanding balance of the amount to be repaid. Having found that Aviva is entitled to a repayment, it follows that it is also entitled to interest on the amounts to be repaid.
COSTS
39Pursuant to Rule 19 of the LAT Common Rules of Practice and Procedure, Costs may be awarded in a proceeding where a party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith.
40Aviva seeks costs in the amount of $500.00 because the Respondent never filed a Response to the Application, never filed a Case Conference Summary, failed to attend two case conferences, and failed to produce documents that she agreed to produce and was ordered to do so. In its supplemental submissions, it submits that the Respondent’s behaviour is analogous with 18-001031 v. Aviva Insurance Canada.4
41The Respondent never addressed Aviva’s cost submissions specifically, but submits that there is no basis for Aviva’s claim for costs. Instead, she seeks her costs and further right to make written submissions on the claim. She made no supplemental reply submissions.
42Pursuant to Rule 19.5, I must consider several factors when contemplating whether to order costs. The factors are: the seriousness of the misconduct, whether the conduct was in breach of a Tribunal order, whether the behaviour interfered with the Tribunal’s ability to carry out the process, the prejudice to the other party, and the potential impact costs would have on individuals accessing the Tribunal system. I am permitted to grant the request for costs in a different amount than requested.
43I agree with Aviva and find that the Respondent’s behaviour during the proceeding amounts to bad faith. The Respondent neglected to participate in the Tribunal process for a considerable period, which lead to unreasonable delays. She failed to attend two case conferences and never submitted the required response and case conference summary forms. Further, she failed to comply with a Tribunal order which she consented to and provided no reasonable explanation for it. Lastly, the Respondent submitted her employment records after initial and responding submissions were made, forcing Aviva to bring a motion to extend the hearing and make further submissions.
44While I agree that the Respondent’s behaviour warrants a costs award, I decline to award the amount requested by Aviva. This is because the Respondent attempted to mitigate the issue by eventually providing most of the employment records requested. While the Respondent never produced her Record of Employment, this inaction caused me to draw of an adverse inference, which is a significant consequence for the behaviour. Thus, I choose to reduce the amount requested and award $100.00 in costs to Aviva, payable by the Respondent.
CONCLUSION
45Aviva met its onus to prove that the Respondent withheld her return-to-work date, thus she wilfully misrepresented her employment status to Aviva. Aviva is entitled to a repayment of IRBs as a result.
46The Respondent failed to produce her Record of Employment from the jewellery store, which would clarify the period of absence and her losses, if any. She provides no reason for her failure to produce the records and therefore, I find that an adverse inference be made that she never produced the documents because they would not support her case.
47The Respondent must repay $12,731.87 in IRBs, plus interest pursuant to section 52 of the Schedule.
48The Respondent must pay $100.00 in costs to Aviva.
Released: December 17, 2021
_______________________
Brian Norris, Adjudicator
Footnotes
- 2020 ONLAT 19-009392/AABS
- 2017 CanLII 87539
- 17-001090/AABS v Certas Home and Auto Insurance Company [formerly State Farm Insurance] 2017 CanLII 146181.
- 2019 ONLAT 22213