Jevco Insurance v. Owusu-Achiaw, 2021 CanLII 18941

Jevco Insurance v. Owusu-Achiaw, 2021 CanLII 18941

Citation: Jevco Insurance v. Owusu-Achiaw, 2021 ONLAT 19-012474/AABS

Released Date: 02/25/2021

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:

Jevco Insurance

Applicant

and

Raymond Owusu-Achiaw

Respondent

DECISION

ADJUDICATOR:

Jesse A. Boyce, Vice-Chair

APPEARANCES:

For the Applicant:

Mary-Catherine Lill, Counsel

For the Respondent:

Self-Represented

HEARD:

Via Written Submissions

OVERVIEW

1Raymond Owusu-Achiaw, the respondent in this matter, was involved in an automobile accident on April 7, 2018, and sought an income replacement benefit (“IRB”) from the applicant, Jevco, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').¹

2This matter involves a request for repayment by Jevco as a result of IRB payments made based on the respondent’s material misrepresentation over his address and the resulting insurance premiums.

3The respondent has failed to attend case conferences and resumptions scheduled to allow for his participation. The final case conference took place on August 5, 2020. Despite efforts by the Tribunal to contact him, the respondent did not participate. The case conference proceeded in his absence and a written hearing was set down. A notice of written hearing was provided to the parties and mailed to the respondent’s address on file. The notice outlined the hearing date and the deadlines for the parties’ submissions on the issues in dispute. Jevco provided its submissions and evidence in a timely manner. Despite attempts by the Tribunal to reach the respondent to determine if he intended to participate, no submissions were filed.

ISSUES IN DISPUTE

4The issues in dispute are as follows:

a. Is Jevco entitled to repayment of $7,181.76 relating to its payment of IRB for the period of April 14, 2018 to December 11, 2018?

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

c. Is the applicant entitled to costs?

RESULT

5Jevco is entitled to IRB repayment in the amount of $7,181.76, plus interest calculated from December 26, 2018, due to the respondent’s material misrepresentation. Jevco is entitled to a $106 costs order under Rule 19 as a result of having to submit an application to the Tribunal to secure an order.

ANALYSIS

Wilful misrepresentation

6On May 8, 2018, the respondent submitted his Application for Accident Benefits (OCF-1) dated May 1, 2018 with an OCF-3 dated April 12, 2018, indicating he met the test for IRBs. Jevco paid $7,181.76 in IRB to the respondent for the period of April 14, 2018 to December 11, 2018. However, on April 19, 2018, an adjuster for Jevco had spoken with the respondent, who indicated that while he worked in Ottawa, he spent time with his family in Toronto on weekends.

7Inconsistencies regarding the respondent’s residence continued, with mail addressed to his Ottawa home consistently being returned. On November 30, 2018 a Jevco investigator went to 2194A Elmira Drive, Ottawa, to determine if it was the respondent’s correct address. The investigator was advised by the tenants at the address that they had lived at 2194A Elmira Drive since 2012. They reported they did not know the respondent but had received mail addressed to him which they returned to sender.

8On December 5, 2018, the Jevco investigator met with the respondent and his wife at his counsel’s office to obtain their statement. During the interview, the respondent reported that he and his family resided at 30 Humberline Drive, in Etobicoke. The respondent further stated he had lived at the Humberline Drive address for two years and confirmed that the address was his residence at the time of the accident.

9Notably, the respondent’s insurance policy with Jevco listed A-2194 Elmira Drive, Ottawa, ON, K2C 1H5, as his address, attracting premiums of $2,322. Meanwhile, the premium payment for the same period with the Etobicoke address would have been $6,312, a difference of $3,990.

10On December 11, 2018, Jevco wrote to the respondent and advised that he was not eligible to receive IRBs as a result of wilful misrepresentation of material facts on the basis that the address he provided was not his residence. The letter advised that Jevco would be seeking repayment of the IRB with interest. Jevco sent additional letters to the respondent requesting repayment with interest on February 15, 2019 and June 11, 2019.

Sections 31 and 52

11Section 31(1)(b) of the Schedule states that an insurer is not required to pay an IRB in respect of any person who has made, or who knows of, a material misrepresentation that induced the insurer to enter into the contract of automobile insurance or who intentionally failed to notify the insurer of a change in a risk material to the contract.

12Section 52 concerns 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. If the notice required is not given within 12 months after the payment of the amount that is to be repaid, the person to whom the notice would have been given ceases to be liable to repay the amount unless it was originally paid to the person as a result of wilful misrepresentation or fraud.

Jevco is entitled to an IRB repayment, plus interest

13While the respondent did not provide written submissions or a defence, Jevco has the burden of proving that the IRB was paid as a result of an error, wilful misrepresentation or fraud on a balance of probabilities. Based on the investigative report and documents in evidence, I find that Jevco has demonstrated that the respondent’s misrepresentation meets s. 31(1)(b) and that its request meets all of the requirements under s. 52 to justify repayment.²

14In Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, the Court of Appeal stated, at para. 51, “A fact is relevant or material if it would influence a prudent insurer in deciding whether to issue the policy or in determining the amount of the premium.” In Aviva Insurance Canada v. “Mr. P”, 2017 CanLII 148395 (ON LAT), the Tribunal found at para. 35, that, “generally, a fact is material if it would influence a prudent insurer to determine the amount of premium”, holding that a $400 difference in premium was sufficient to be “material” pursuant to s. 31(1)(b). In V.A.D. v. Intact Insurance Company, 2020 CanLII 47710 (ON LAT), the Tribunal stated at paras. 21-23, that, “the applicant’s non-disclosure that her province of residence had changed allowed her to benefit from a substantially lower annual automotive insurance premium” finding that “on a balance of probabilities that the Insured had intentionally failed to notify the Insurer of a change in risk material to the contract and as a result contravened the requirements set out within s. 31(1)(b) of the Schedule.”

15I find these cases persuasive. On the facts, I find that the respondent made a willful misrepresentation in failing to disclose his correct address in order to attract a lower premium. He initially reported that at the time of the accident his address was in Ottawa even after Jevco questioned if the Ottawa address was correct in April and May 2018. The respondent reported that his Ottawa address was valid, and he did not know why his mail was bouncing back. He further reported he came to Toronto after the accident to help his wife.

16It was not until December 5, 2018 did the respondent admit that his residence was in Etobicoke and had been since 2016, more than a year before the accident. Jevco’s investigator discovered that the tenants of the respondent’s alleged Ottawa address had lived there since 2012. I agree with Jevco that the respondent’s failure to disclosure that he had moved from Ottawa to Etobicoke allowed him to benefit from a substantially lower annual automotive insurance premium. Further, I agree with Jevco that the significant difference of $3,990 in the premium rate is material. Accordingly, I agree with Jevco that the respondent failed to notify Jevco of a change in risk material to the contract and as a result he contravened the requirements set out in s. 31(1)(b) of the Schedule.

17After paying IRB for the period of April 14, 2018 to December 11, 2018, Jevco sent a letter dated December 11, 2018, advising the respondent that he was no longer eligible for IRB as a result of wilful misrepresentation of material facts, as it concluded that the respondent’s address provided was not where he resides. The letter references s. 31(1)(b) and s. 53(a) of the Schedule, which allows an insurer to terminate the payment of benefits if the insured has wilfully misrepresented material facts. In the same letter, Jevco requested repayment of the IRB, plus interest, pursuant to s. 52.

18Accordingly, I find the uncontroverted evidence indicates that Jevco paid the respondent an IRB during a period where he had wilfully misrepresented a material fact in order to lower his premium. As a result, I find Jevco has demonstrated that it meets the requirements of s. 52(1)(a) and that it acted diligently on receipt of information that the respondent had misrepresented a material fact that would contravene s. 31(1)(b) and s. 53(a).

Jevco’s notices were proper

19Further, pursuant to s. 52(2) and (3), I find its notice of request for repayment meets the timeline criteria to support its claim. Jevco provided the notice of its intention to seek repayment on December 11, 2018 and sent follow-up notices on February 15, 2019 and June 11, 2019. All of the notices were sent via regular and registered mail. I find these notices were provided within the 12-month period prescribed by s. 52(2), as IRB payments began in April 2018. In any event, the 12-month period does not apply if there is misrepresentation.

20On review, the notices sent to the respondent also meet the criteria outlined in s. 52(3), as they clearly state the type of benefit paid (IRB), the payment period for which payment is sought (being April 14, 2018 to December 11, 2018) and the amount of repayment sought ($7,181.76, being the amount in dispute).³ The notice provided the respondent with the calculations made, showing that the sum of $10,729.76 had been paid out in the form of $7,181.76 for IRB for the period in dispute, with an additional $3,548 paid for an assessment. The notice indicated that Jevco would also be seeking interest pursuant to s. 52(5). While the notice indicated that Jevco was seeking repayment for “all monies paid”, its application here is only seeking amounts paid out for the IRB and not the additional $3,548 it paid for the assessment. In any case, I find Jevco’s notices complied with all of the procedural requirements for a s. 52 repayment request.

21As noted, Jevco seeks interest on its repayment request. Sections 52(5) and (6) provide guidance on when an insurer may recover interest on 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 Jevco is entitled to repayment of IRB paid as a result of wilful misrepresentation under ss. 31(1)(b), 52(1)(a) and 53 of the Schedule, it follows that it may seek interest on overdue amounts under s. 52(5), calculated from December 26, 2018, as notice was first provided on December 11, 2018.

Costs

22In submissions, Jevco sought $1,000 in costs pursuant to Rule 19 of the Tribunal’s Common Rules of Practice & Procedure. Under Rule 19, the Tribunal may award costs if it determines that a party acted unreasonably, frivolously, vexatiously or in bad faith during the proceedings.

23To support its claim, Jevco submits: that the respondent wilfully misrepresented his residence, which allowed him to benefit from a substantially lower annual automotive insurance premium; that he has not responded to its communications, has not filed a response to its Tribunal application, did not attend the case conferences and did not file written submissions, despite being aware of the proceedings. Jevco submits that these actions constitute bad faith.

24I find a nominal costs order in the amount of $106 is appropriate. While Jevco’s frustrations are understandable and the respondent’s misrepresentations are worthy of deterrence, under Rule 19.5, the respondent’s behaviour (or, lack of participation entirely) did not interfere with the Tribunal’s ability to carry out a fair, efficient and effective process and the respondent did not breach a direction or order issued by the Tribunal. Instead, the $106 costs order is meant to cover the prejudice faced by Jevco in having to file an application with the Tribunal to secure a repayment and interest order as a result of the respondent disregarding its notices and requests.

ORDER

25Pursuant to s. 52, Jevco is entitled to IRB repayment in the amount of $7,181.76, plus interest calculated from December 26, 2018, due to the respondent’s material misrepresentation. Jevco is entitled to a $106 costs order under Rule 19 as a result of having to submit an application to the Tribunal to secure an order for repayment and interest.

Footnotes

1. 1O. Reg. 34/10, as amended.
2. 2See, Michalowski v. St. Paul Fire and Marine Insurance Company, (FSCO A98-001492, July 9, 1999).
3. 3See, Intact Insurance v. Marianyagam, 2016 ONSC 1479, at 45.```