Aviva General Insurance v. E.R., 2021 CanLII 19479

Aviva General Insurance v. E.R.

Citation: Aviva General Insurance v. E.R., 2021 ONLAT 19-001839/AABS

Released Date: 02/17/2021
File Number: 19-001839/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

E.R.

Respondent

DECISION

ADJUDICATOR:

Jesse A. Boyce, Vice-Chair

APPEARANCES:

For the Applicant:

Catherine H. Zingg, Counsel

For the Respondent:

Kateryna Vlade, Counsel

HEARD:

Via written submissions

OVERVIEW

1[E.R], the respondent in this matter, was involved in an accident on August 12, 2017, and sought an income replacement benefit (“IRB”) from the applicant, Aviva, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010¹ (Schedule).

2In his Election of Benefits Form (OCF-10) dated August 25, 2017, the respondent elected to receive IRBs. He then submitted an Employer’s Confirmation Form (“OCF-2”), dated November 22, 2017, confirming that he worked as a general labourer at [“RIM”] and that he last worked on August 11, 2017. Aviva provided an Explanation of Benefits letter dated December 6, 2017 confirming that the respondent’s IRB claim was accepted and that his weekly benefit payable would be $400.00.

3However, at a s. 44 psychological examination in January 2018, the respondent advised the assessor that he had returned to work in December 2017. On receipt of the s. 44 report, Aviva sent a letter to the respondent requesting post-accident income. On February 9, 2018, a Statement of Earnings and Deductions was submitted by the respondent. On review, Aviva determined that an overpayment had been made as the respondent had been working for some time.

4By way of an Explanation of Benefits, dated March 1, 2018, the respondent was advised of the overpayment and that repayment was being claimed in accordance with s. 52 of the Schedule. A demand letter dated March 1, 2018 was sent to the respondent providing the calculation of the overpayment in the amount of $8,650.60. To date, Aviva has yet to receive repayment from the respondent. Aviva filed an application with the Tribunal seeking repayment of the IRB, giving rise to this written hearing.

ISSUE IN DISPUTE

5The sole issue in dispute is as follows:

i. Is Aviva entitled to repayment of an IRB in the amount of $8,650.60, with interest, as a result of its overpayment?

RESULT

6Aviva is entitled to repayment pursuant to s. 52 of the Schedule in the amount of $8,650.60, plus applicable interest calculated from March 16, 2018, as a result of its overpayment.

ANALYSIS

Section 7 and 52

7Section 7(3)(a) provides that the insurer may deduct 70 per cent 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.

8Section 52 of the Schedule 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.

9Aviva has the burden of proving that the IRB was paid as a result of an error or wilful misrepresentation or fraud on a balance of probabilities. On the facts, I find that the overpayment of IRBs was clearly made in error as Aviva was unaware that the respondent had returned to work until it received the s. 44 report of psychologist Dr. Bacchiochi in January 2018. I find that Aviva has demonstrated that it meets all of the requirements under s. 52 to justify repayment.²

10In response, the respondent submits that he complied with all statutory provisions of the Schedule in order to initiate his IRB claim, that all of the requested documents were submitted to Aviva and that it is prejudicial for his own insurer to penalize their insured as a result of the insurer’s error. Furthermore, the respondent submits that Aviva did not fulfill the requisite due diligence in investigating and calculating his loss of income, arguing that he only received one cheque and believed that is what he was entitled to based on Aviva’s calculations. He submits that there was no further Explanation of Benefits provided and that for each payment period, Aviva ought to have provided him with a decision letter outlining the IRB paid and a detailed breakdown correctly.

11I disagree. I find that Aviva complied with all of its obligations under the Schedule and acted diligently when it was made aware of the respondent’s return to work. Specifically, I find that Aviva was not aware of the respondent’s return to work until it received the s. 44 report of Dr. Bacchiochi, who assessed the respondent on January 8, 2018 and whose report was not completed until January 17, 2018. When it became aware of the respondent’s return to work, Aviva requested particulars of his post-accident earnings by way of letter dated January 19, 2018. The notice indicated that the IRB was to be suspended effective February 2, 2018 if the information was not provided.

12The respondent’s Statement of Earnings and Deductions submitted covered the period from September 2, 2017 to January 20, 2018 and provided the particulars of his post-accident earnings. It showed that he had been working post-accident for periods beginning in September 2017. While I am alive to the respondent’s submission that he was only capable of working limited hours due to pain, I agree with Aviva that the Statement of Earnings from RIM actually shows overtime earnings in excess of 60 hours per pay period during October, November and December 2017, in addition to his regular pay. I find this evidence difficult to ignore. Further, it is unclear how a detailed breakdown of IRB payments would have assisted the respondent where he failed to notify Aviva of his return to work, even if he cooperated with all of its requests for information.

13To this end, I would also not give effect to the respondent’s submissions that it is prejudicial for his own insurer to penalize their insured as a result of the insurer’s error. First, the prejudice is actually to Aviva, as it was relying in good faith on the information provided to it by the respondent when issuing the IRB. Second, insureds have a responsibility to notify their insurers of a return to work when in receipt of an IRB, so it is difficult to accept how the respondent was penalized by receiving IRB he was not entitled to. This was confirmed for the respondent in the letter Aviva sent him on December 6, 2017, which specifically stated, “Should you return to work please inform us immediately as Aviva is entitled to repayment of any money paid in error”. Third, and in any case, I agree with Aviva that an insured is obligated to repay the amounts paid in error “regardless of the source of the error”.³ Accordingly, I find the evidence indicates that Aviva paid the respondent a lump sum of IRB during a period when he had already returned to work but had failed to notify Aviva of same. As a result, I find Aviva has demonstrated that it meets the requirements of s. 52(1)(a).

14Further, pursuant to s. 52(2) and (3), I find Aviva’s notice of request for repayment meets the timeline criteria to support its claim. Aviva provided notice of its intention to seek repayment promptly on March 1, 2018 after receiving the s. 44 report indicating that the respondent had returned to work, which I find is well within the 12-month period prescribed by s. 52(2). Aviva also sent a follow-up letter dated May 28, 2018 advising that if repayment was not made, that interest would be applied to the unpaid portion.

15On review, the notices sent to the respondent 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 (August 12, 2017 to February 4, 2018) and the amount of repayment sought ($8,650.60, being the amount in dispute).⁴ The notice provided the respondent with the calculations made, showing that the sum of $10,000.00 had been paid out in IRB for the period from August 12, 2017 to February 4, 2018 when the respondent’s entitlement to IRB during that time frame was only $1,349.40. I find Aviva complied with all of the procedural requirements for a s. 52 repayment request.

16As noted, Aviva seeks interest on the repayment. 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 IRB paid as a result of overpayment under s. 52, it follows that interest is payable on overdue amounts under s. 52(5), calculated from March 16, 2018, as notice was provided March 1, 2018.

ORDER

17Aviva is entitled to a repayment under s. 52 in the amount of $8,650.60, plus applicable interest calculated from March 16, 2018, as a result of its overpayment of IRB to the respondent.

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, Unifund Assurance Company and R.O., 2018 CanLII 13186 (ON LAT), at 10.
4. 4See, Intact Insurance v. Marianyagam, 2016 ONSC 1479, at 45.