Aviva General Insurance Company v. Fynn-Williams, 2021 CanLII 35582

Aviva General Insurance Company v. Fynn-Williams

Citation: Aviva General Insurance Company v. Fynn-Williams, 2021 ONLAT 20-002276/AABS Release date: 04/26/2021

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

Regina Fynn-Williams

Respondent

DECISION

ADJUDICATOR:

Jesse A. Boyce, Vice-Chair

APPEARANCES:

For the Applicant:

D. Dakota Forster, Counsel

For the Respondent:

Ramendeep Minhas, Counsel

Anna Korolkova, Paralegal

HEARD:

By way of written submissions

OVERVIEW

1Regina Fynn-Williams, the respondent in this matter, was involved in an accident on May 30, 2018, and sought an income replacement benefit (“IRB”) from the applicant, Aviva, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').¹ Aviva paid the respondent an IRB in the amount of $400 per week from June 7, 2018, before terminating payment of the benefit on October 23, 2019.

2Pursuant to s. 52 of the Schedule, Aviva now seeks repayment of IRBs paid plus interest as a result of overpayment due to the respondent’s misrepresentation of her return to work and receipt of maternity benefits while she received IRBs.

ISSUE IN DISPUTE

3The following issues were identified as being in dispute:

a. Is Aviva entitled to a repayment of $20,103.00 relating to its payment of IRBs to the respondent from October 23, 2018 to October 23, 2019?

b. Is Aviva entitled to interest on repayable amounts?

RESULT

4Pursuant to s. 52, Aviva is entitled to repayment in the amount of $14,568.36 due to the overpayment of IRBs to the applicant.

ANALYSIS

Section 52

5Section 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.

6Aviva 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. I find that Aviva has demonstrated that it meets all of the requirements under s. 52 to justify repayment.²

IRB payments

7Following the accident of May 30, 2018, the respondent submitted her OCF-1 dated June 27, 2018, and an OCF-10 electing IRBs. Her Disability Certificate followed on July 17, 2018 and an OCF-2 from her employer was submitted on July 19, 2018. Aviva notified the respondent of her eligibility for IRBs in the amount of $400 per week effective June 7, 2018. The explanation of benefits letter dated September 5, 2018 provided the quantum calculation, the first payment and subsequent payment schedule and informed the respondent to notify Aviva if she returned to work.

8Aviva proceeded to pay the IRB. Then, in September 2019, it scheduled s. 44 musculoskeletal and psychological examinations to assess the respondent’s ongoing entitlement to IRBs and a multidisciplinary report dated October 9, 2019 was produced. At Dr. Lee’s assessment, Aviva submits that the respondent admitted to returning to work “last week,” being on or around the week of September 9, 2019, and was working seven hours per day for four days per week. Similarly, at Dr. Nesovic’s assessment one week later, Aviva submits that the respondent reported returning to work “two weeks ago.” Aviva asserts that the respondent’s self-reporting during these assessments, confirmed in the reports, constituted the first notice it received from the respondent of her return to work, as she did not independently advise Aviva of same.

9In an explanation of benefits letter dated October 23, 2019, Aviva provided the respondent with the reports and advised that she had told the assessors that she had returned to work. The notice advised that s. 37(2) of the Schedule allowed Aviva to discontinue the IRB once she resumed her pre-accident employment duties. Aviva’s letter notified the respondent that her IRB would be stopped effective October 23, 2019, that payments for the period of October 10-23, 2019 would be cancelled and requested that the respondent provide her exact return-to-work date.

Maternity benefits

10Further, on October 23, 2019, Aviva also sent correspondence to the respondent advising that her IRBs had been paid in error, due to her being in receipt of a maternity benefit in addition to her reported return to work in September 2019. Aviva advised that it would be seeking repayment of $20,103.00 pursuant to s. 52 of the Schedule. Aviva also advised that it was entitled to apply interest on the unpaid amount at the bank rate.

11Aviva submits that it was subsequently made aware through the respondent’s representative and the respondent’s file with her employer that she returned to full-time employment on August 12, 2019, was on unpaid sick leave from May 31, 2018 to August 23, 2018, and on a maternity leave of absence from August 24, 2018 until August 9, 2019. Aviva asserts that the respondent’s EI records show that she applied for maternity benefits on August 27, 2018, was approved on September 26, 2018 for 15 weeks, with 35 weeks of parental benefits thereafter. A Supplementary Record of Claim note dated August 14, 2019 indicates that the respondent reported returning to work on August 12, 2019.

The application and the parties’ positions

12Aviva commenced its application with the Tribunal on February 27, 2020 seeking repayment of the IRBs paid to the respondent for the period of October 23, 2018 to October 23, 2019 pursuant to s. 52(1), as a result of her failure to disclose her receipt of a maternity benefits during the period she was receiving IRBs.

13Aviva submits that the respondent engaged in wilful misrepresentation and/or fraud. After submitting her completed accident benefits application package and all necessary forms electing receipt of IRBs by July 19, 2018, Aviva asserts that she subsequently applied for EI maternity benefits on August 27, 2018. She was approved for receipt of IRBs on September 5, 2018, retroactive to June 7, 2018. A Supplementary Record of Claim note dated September 12, 2018 shows that the respondent reported her $400 weekly IRB income to Employment and Social Development Canada.

14To this end, Aviva submits that the respondent was therefore aware, or ought to have been aware, of her corresponding obligation to report her application and EI maternity benefit income to Aviva once made on August 27, 2018 and at least once approved on September 26, 2018. Aviva submits that the respondent failed to do so, and indeed never reported her EI maternity benefit income prior to Aviva terminating her IRBs and seeking repayment of same on October 23, 2018, despite being represented. Aviva therefore submits that the respondent is liable to repay the deductible amount of EI maternity/paternity benefit income received prior to October 23, 2018 as a result of her wilful misrepresentation and/or fraud pursuant to s. 52(3) of the Schedule.

15In response, the respondent first submits that if Aviva committed an error in paying her IRBs, that it did so outside of the required 12-month notice period in s. 52(2) and 52(3) and therefore she should not be held liable. Second, the respondent asserts that she did not make a wilful misrepresentation or commit fraud when collecting IRBs because she made Employment and Social Development Canada aware that she was receiving IRBS within one week of being approved and that she freely and openly told the s. 44 assessors that she was on maternity leave. Third, the respondent submits that Aviva should have been aware of her being on maternity leave due to her medical documentation, namely the Ambulance Report that stated she was six months pregnant and the fact that she attended the psychological examination with her baby. In sum, the respondent submits that she is an unsophisticated party and her actions, on balance, do not reflect wilful misrepresentation and/or fraud.

Sections 52(2) and 52(3)

16I agree with Aviva that the respondent’s position on the applicability of the notice limitation period contained in ss. 52(2) and (3) is incorrect. The 12-month period referred to in s. 52(3) refers to the period of time from the date of notice under s. 52(2)(a) that an insurer is entitled to claim back repayment.³ Further, I agree with Aviva there is no requirement under s. 52(3) that the notice must be given within 12 months of the first payment. Rather, the requirement is for notice to be given within 12 months “after payment of the amount that is to be repaid.”⁴

Aviva’s request for repayment is proper

17While I am alive to the respondent’s submissions, I agree with Aviva that the onus is on the insured to notify their insurer of any post-accident income, the receipt of other benefits, a return to work or, generally, a change in circumstances that may affect the payment or quantum of IRBs. The respondent did not provide authority for her position that Aviva is under a positive obligation to inquire as to her receipt of maternity benefits or a return to work.

18To this end, I agree with Aviva that the respondent’s disclosure to the s. 44 assessors that she was on maternity leave was not equivalent to her obligation to report to Aviva that she was in receipt of maternity and paternal benefits. Further, I agree with Aviva that the respondent reporting to the assessor on September 16, 2019 that she had returned to work is not equivalent to her informing Aviva of her return to her pre-accident employment. Indeed, on the evidence, despite being represented, it does not appear that the respondent ever directly reported to Aviva her receipt of benefits or her return to work prior to it terminating her IRB payments and seeking repayment.

19The Tribunal has consistently held that wilful misrepresentation constitutes “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.”⁵ I find that Aviva paid the respondent an IRB during a period when she was receiving maternity benefits and also while she had returned to her pre-accident employment. Other than asserting that she was being honest in reporting that she was pregnant and that she had returned to work, the respondent does not refute this position. On the evidence, I find the respondent did not independently inform Aviva of her maternity or parental income or her return to work. I find this information was in her exclusive knowledge and therefore constitutes “an assertion not in accordance with the facts” justifying repayment.

Aviva’s notice

20Further, pursuant to s. 52(2) and (3), I find Aviva’s notices of request for repayment meet the timeline criteria to support its claim. Aviva provided notice of its intention to seek repayment in two letters, both dated October 23, 2019. I find these notices were provided within the 12-month period prescribed by s. 52(2).

21On review, the first s. 52 notice sent to the respondent meets the criteria outlined in s. 52, as it clearly states the type of benefit paid (IRB), the reason for repayment (a return to work; s. 44 reports finding no substantive entitlement; the receipt of a maternity benefit) and the amount of repayment sought ($20,103.00, being the amount in dispute).⁶ Both notices indicate that interest could apply and invited the respondent to discuss repayment options. I note that all correspondence was also sent to her counsel. I find Aviva complied with all of the procedural requirements for a s. 52 repayment request.

22The notice letters provided by Aviva indicted that, while it was entitled to interest, it “deferred our option to do so at this time.” However, Aviva now seeks interest on the outstanding balance. 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.

23Accordingly, as I find Aviva is entitled to repayment of IRBs paid under s. 52, it follows that it may seek interest on overdue amounts under s. 52(5), calculated from November 15, 2019, as it is undisputed that repayment notice was first provided to the respondent via letter on October 23, 2019.

The repayment totals

24I agree with Aviva that it is entitled to deduct 70% of the amounts received by the respondent for maternity benefits, as well as interest.⁷ The IRBs paid to the respondent did not take into account the deduction for EI maternity/paternity benefits received by the respondent from October 23, 2018 to her return to work on August 12, 2019. Where the respondent received $14,574.00 in EI maternity/paternity benefits from October 23, 2018 to October 23, 2019, 70% of this total is $10,201.80. This amount may be included in repayment.

25In addition, I agree that Aviva is entitled to repayment of the IRBs paid to the respondent from her return to work on August 12, 2019 to the termination of her IRBs on October 23, 2019, being $4,116.00.

26Accordingly, I find that Aviva is entitled to repayment under s. 52 of the Schedule in the amount of $14,317.80, plus interest at 1.75% annually, being $250.56 to the date of submissions, for a total of $14,568.36.

ORDER

27Pursuant to s. 52, Aviva is entitled to repayment in the amount of $14,568.36 due to the overpayment of IRBs to the applicant.

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: Aviva Insurance Canada v. H.H., 2019 CanLII 94057 (ON LAT Reconsideration).
4. 4See, for e.g., JVM v. Aviva General Insurance Company, 2020 CanLII 12706 (ON LAT); Aviva General Insurance Company v. Muthusamythevar, 2020 CanLII 94791 (ON LAT); Applicant v. ACE INA Insurance, 2017 CanLII 85687 (ON LAT).
5. 5Unifund Assurance Co. v. M.D.C., 2020 CanLII 94799 (ON LAT) at paras. 8-11; Aviva General Insurance Company v. Muthusamythevar, 2020 CanLII 94791 (ON LAT) at paras. 9-10.
6. 6See, Intact Insurance v. Marianyagam, 2016 ONSC 1479, at 45.
7. 717-005302 v. Aviva Insurance Company of Canada, 2018 CanLII 83535 (ON LAT); see, also: Nelson v. State Farm Mutual Insurance Co., 2015 CarswellOnt 11170 and Veeran v. State Farm Mutual Automobile Insurance Co., 2016 CarswellOnt 10005.