Aslivo v. Aviva Insurance Canada, 2021 CanLII 55229

Citation: Aslivo v. Aviva Insurance Canada, 2021 ONLAT 19-004717/AABS

Release date: 06/25/2021

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:

Juliana Aslivo

Applicant

and

Aviva Insurance Canada

Respondent

DECISION AND ORDER

VICE-CHAIR:

D. Gregory Flude

APPEARANCES:

For the Applicant:

Juliana Aslivo, Applicant

Shen Subramaniam, Counsel

For the Respondent:

Jennifer MacDonald, Claims Representative

Nisaa Khan and Mark Vella, Counsel

Court Reporter:

Athavan Jeyaratnam

HEARD by Videoconference:

October 5, 2020, followed by written submissions

OVERVIEW

1The applicant, Juliana Aslivo, was involved in a motor vehicle accident on June 29, 2018. The respondent, Aviva Insurance Company of Canada (“Aviva”) agrees that Ms. Aslivo meets the test for an income replacement benefit (“IRB”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 O. Reg 34/10 (the ''Schedule''). In fact, it has made two lump-sum back-payments so there is currently no outstanding IRB payment due. The issue before me is whether Aviva must pay interest for the periods during which it did not make payments or suspended payment of the IRB. Ms. Aslivo also submits that Aviva unreasonably withheld or delayed the payment of the IRB and she asks me to make an award of up to 50% of the delayed payments plus enhanced interest under s. 10 of Regulation 664, R.R.O. 1990.

2Aviva submits that the suspension of IRB payments to Ms. Aslivo was due to her failure to produce necessary documentation. As a self-employed person, Ms. Aslivo’s income history was, in Aviva’s submission, complex. Aviva submits that it made numerous requests for documentation that were not answered. On that basis it suspended payment. Once documentation was received it began paying the IRB, including back-payments, but further examination of the documents indicated that it had overpaid her. It made a demand for repayment which remains outstanding.

3Pursuant to s. 51 of the Schedule, interest accrues on unpaid amounts once payment is overdue. Section 36 addresses the obligations of the parties in handling claims for an income replacement benefit. The applicant interprets s. 36 to say that she was entitled to an income replacement benefit from the date of her application. The respondent submits that it was not until she had proven the quantum of benefit she was entitled to receive, which, in its submission, was not until some time after the application.

ISSUES

4The issues in dispute identified and agreed to in the case conference order from the April 6, 2020 case conference are as follows:

a. Is the applicant entitled to a payment of applicable interest on the lump payment on October 4, 2019, of disputed income replacement benefit of $400.00 per week from the date of denial up to the date of the payment?

b. Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments of the income replacement benefit up to October 4, 2019 to the applicant?

c. Is the applicant entitled to a payment of applicable interest on an income replacement benefit disputed, but now re-instated on June 4, 2020, for the period of December 14, 2019 up to June 4, 2020?

d. Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments of the income replacement benefit from December 14, 2019 to June 4, 2020, to the applicant?

e. Is the respondent entitled to repayment of an amount of $20,856.00 for overpayment of an income replacement benefit for the period of January 1, 2019 to December 31, 2019?

5I note that, in defining the issues in dispute, Ms. Aslivo uses less neutral language. I decline to use her characterization of the issues in dispute. I also note that the issues as defined by the Tribunal in the case conference order had not quantified the amount in dispute with respect to [4] e. That amount has now been determined and the issues reflect that determination and the time period in dispute.

ANALYSIS

6The Schedule is a complete code for administering and adjudicating claims for no-fault statutory accident benefits. It sets out obligations for both Ms. Aslivo and Aviva in addressing a claim for an income replacement benefits, from the initiating documents to start the claim, through requests for further relevant documents, to the consequences of a failure to comply with those obligations in a timely manner.

7While the Schedule has been characterized as consumer protection legislation and should be given a broad and liberal interpretation, it is important to bear in mind that the obligations of the parties are mutual. No level of broad and liberal interpretation can save a consumer who simply refuses to cooperate with an insurer.

8In my view the two time periods in dispute in this matter require an independent approach because they engage different obligations on the part of the parties. Before addressing them, I will address Aviva’s submission that Ms. Aslivo abandoned her claim for an award on the October 2019 payment.

Has Ms. Aslivo abandoned her claim for an award with respect to the October 4, 2019 payment?

9Aviva submits that Ms. Aslivo abandoned her claim for an award with respect to the October 4, 2019 payment. The claim for interest and an award was first identified in the Tribunal’s case conference report of October 9, 2019 which recognized that the issue of payment of an IRB was resolved but the matter would proceed on the issues of interest and entitlement to an award. This issue was repeated in the case conference report and order arising out of the July 28, 2020 case conference, order released on August 17, 2020.

10By letter dated August 21, 2020, four days after the release of the latest case conference report and order, Ms. Aslivo’s counsel advised Aviva that she would proceed only on her claim for interest with respect to the October 4, 2019 payment and would no longer be seeking a “special award” She stated: “Please be advised that the applicant will be abandoning claim for special award [sic] in relation to the first Application only.”

11Later correspondence confirmed that Ms. Aslivo would seek interest only on this payment. In an email dated September 21, 2020 Aviva wrote to Ms. Aslivo’s counsel stating:

Further to your letter dated August 21, 2020, you confirmed that you will not be proceeding with the Special Award claim for the 1st LAT Application.

To confirm, the issues in dispute proceeding to the hearing for the above matter are as follows:

1. Special Award on IRB paid from December 14, 2019 to June 4, 2020

2. Interest on IRB paid from December 14, 2019 to June 4, 2020

3. Repayment

Please confirm if you will be proceeding with the interest claim for the 1st LAT Application.

To which Ms. Aslivo’s counsel replied on the same day:

Yes, I will be proceeding with the interest claim for the 1st LAT Application.

12The oral part of the hearing commenced on October 5, 2020. Ms. Aslivo was silent on the question of her abandonment of her claim for an award with respect to the October 4, 2019 part of her claim in her opening and closing submissions. Rather, her opening submissions laid out a general non-specific claim for an award. The written closing submissions reiterated a claim for an award, including an award for the first claim.

13Aviva did not specify its understanding that the award claim only related to the second lump sum IRB payment in its opening submissions. In the circumstances there was nothing in Ms. Aslivo’s opening statement that would put Aviva on notice of an intention to claim an award with respect to the October 2019 IRB. Aviva did raise the question in its closing submissions, drawing my attention to the correspondence above and arguing it would be denied procedural fairness if Ms. Aslivo were permitted to pursue an award for the October 14, 2019 payment. Ms. Aslivo did not respond in her reply submissions to confirm or deny Aviva’s position, restricting herself to arguing for entitlement to an award.

14The above exchange of correspondence is clear and unequivocal. Ms. Aslivo withdrew her claim for an award under Regulation 664 on August 21, 2020 and confirmed that position by an exchange of emails on September 21, 2020, that is, 2 weeks before the hearing. She did nothing at the hearing to disabuse Aviva that she was resiling on that abandonment, denying Aviva the right to make submissions on the matter at the time or adjust its approach to the litigation to address it. I find that she has abandoned her claim for an award regarding the lump sum payment of IRB up to October 4, 2019.

Is Ms. Aslivo entitled to interest on the payment of income replacement benefits issued to the applicant on October 4, 2019?

15There are two distinct periods when considering the lead up to Aviva’s payment of an IRB on October 4, 2019. In the first period, leading up to Aviva’s letter to Ms. Aslivo dated Mach 20, 2019, Aviva was clearly not in compliance with its obligations under the Schedule. It brought itself into compliance with the Schedule on March 20, 2019 by making a request for documents. Thereafter, other provisions of the Schedule placed an onus on Ms. Aslivo to respond to the requests. She did not do so until September 27, 2019.

16Section 36 of the Schedule sets out the procedure for filing a claim for an IRB. It has mandatory provisions governing steps to be taken by both Ms. Aslivo and by Aviva. Aviva failed to take the required steps for the period before March 20, 2019. The consequence of that failure is that it is liable to pay interest on payments not made during that period.

17The initial procedural steps set out in Section 36 required Ms. Aslivo to file an Auto Insurance Claims Form (“OCF-1”) and a Disability Certificate (“OCF-3”). According to the adjuster’s log notes, the adjuster and Ms. Aslivo first spoke on July 18, 2018, approximately a month after the accident. In response to that conversation, the adjuster forwarded claims forms, including an OCF-1 and an OCF-3. Through the fall the adjuster followed up to request the return of the completed claims form. It is agreed that Ms. Aslivo forwarded the completed OCF-3 to Aviva on November 22, 2018, Ms. Aslivo asserts that she forwarded the OCF-1 on July 12, 2018. In this she has misread the date which is written as 12/07/2018. The form itself is dated November 23, 2018, so I accept Aviva’s submission that it was received on December 7, 2018, not July 12, 2018 as asserted by Ms. Aslivo.

18Receipt of the two forms triggered an obligation on Aviva under s. 36(4) to, within 10 days, pay the specified benefit; give the applicant a notice explaining the medical and any other reasons why it did not believe the applicant was entitled to the specified benefit and, if it required an examination under section 44 relating to the specified benefit, advising the applicant of the requirement for an examination; or send a request to the applicant for further information under subsection 33 (1) or (2). Aviva did none of these things until March 20, 2019 when it sent a request for documents pursuant to s. 33. There are consequences for its failure.

19The consequences of Aviva’s failure to act within 10 days are set out in s. 36(6). It must pay that benefit starting on the date of receipt of the OCF-1 and OCF-3 until it complied with s. 36(4). Interest is calculated on the outstanding amount daily at the rate of 1% per month compounded monthly.

20Aviva argues that it required further documents from Ms. Aslivo that she took several months to deliver. On receipt of those documents it paid Ms. Aslivo in compliance with s. 36(5). I would find this argument convincing had Aviva provided a request for documents within 10 days, but its failure to do so attracts an independent remedy for Ms. Aslivo, her entitlement to interest until Aviva complied with s. 36(4).

21I find that Aviva is liable for interest at the rate of 1% per month compounded monthly on any outstanding IRB at the rate of $400 per week commencing on December 7 to December 31, 2018. Aviva has alleged an overpayment for the calendar year 2019, I will deal with January 1 to March 20, 2019 when I discuss the overpayment claim later in these reasons.

22Having complied with its obligations on March 20, 2019, it was no longer required to pay interest until it received sufficient meaningful disclosure under s. 33. Aviva concedes that it received sufficient disclosure shortly before the October 18, 2019 case conference and commenced payment, including back payments within the timelines set out in the Schedule. Indeed, despite only receiving a completed application for an IRB on December 7, 2018, Aviva paid IRB from July 7, 2018, one week after the accident. I find no interest is payable between March 20, 2019 and the disclosure and payment on October 4, 2019 as, according to s. 36(4) and s. 51, no amount was due.

23The obligation to pay interest in s. 51 requires Aviva to pay interest on overdue amounts if it failed to pay the benefit within the time required under this Regulation. As stated above, with respect to the pre-March 20, 2019 period, s. 36(6) makes interest payable starting on the date of receipt of the OCF-1 and OCF-3 and ending on the date of compliance with s. 36(4). In my view s. 36(6) captures two concepts. Firstly, there is a clear definition of Aviva’s obligation to comply with s. 36(4) or be liable for interest. But the section does not stop there. It makes it equally clear that, once Aviva complied with s. 36(4) by sending document requests under s. 33, the obligation to pay interest ceased.

24Clearly the provisions of s. 36(6) do not give carte blanche to insurers to make extensive and unreasonable documentary demands to defer payment. In this case, from March 20, 2019 to September 27, 2017, Aviva asked for a copy of Ms. Aslivo’s corporate T2 tax form for the 2017 tax year. Notwithstanding Ms. Aslivo’s vehement submissions that she provided extensive other documentation; I was not directed to any contemporaneous correspondence from Ms. Aslivo or her counsel suggesting that this demand was unreasonable. In fact, Ms. Aslivo submits that the quantum of her entitlement to an IRB depends on her declared taxable income from the previous taxation year, that is, 2017. I do not find Aviva’s request for a copy of the 2017 T2 corporate tax documents was unreasonable.

Is the applicant entitled to receive interest on the payment of income replacement benefits for the period December 13, 2019 to June 4, 2020?

25Aviva stopped payment of Ms. Aslivo’s IRB on December 13, 2019 for medical reasons. It received multidisciplinary medical reports finding that Ms. Aslivo did not meet the test for entitlement to an IRB, that is, a substantial inability to carry out the essential tasks of her self-employment. Approximately 6 months later it received a report finding that Ms. Aslivo now satisfied the substantial inability test due to a deterioration in her psychological condition. Ms. Aslivo submits that she was continually unable to perform her self-employment duties and that the IRB should never have been stopped.

26Aviva’s right to terminate the IRB once it had undertaken to pay it is set out in s. 37. Not surprisingly, given that entitlement to benefits flows from impairments sustained in an accident with expected recovery over time, Aviva has the right to periodically examine Ms. Aslivo to determine her continuing entitlement to an IRB. It exercised this right in the fall of 2019, arranging for Ms. Aslivo to undergo musculoskeletal, neurological and psychological assessments. All three assessors determined that Ms. Aslivo did not meet the test for entitlement to an IRB as set out in the Schedule. I will focus on the psychological assessment of Dr. Monique Costa El-Hage.

27Dr. Costa El-Hage assessed the applicant on November 7, 2019. She found that the applicant had psychological issues arising out of the accident but ultimately concluded that a return to employment would be therapeutic. She stated:

With respect to Ms. Aslivo’s ability to return to work, the claimant is reporting cognitive difficulties that prevent her from returning to pre-accident employment tasks. At this time the claimant’s symptoms are not such that they would prevent her from a return to pre-accident employment tasks. Rather a return to gainful employment would return the claimant to a sense of normalcy, productivity and stability which may have a positive impact on her psychological functioning. As such, from a purely psychological perspective the claimant does not suffer a substantial inability to engage in pre accident employment activities.

28In accordance with its obligations under s. 37, Aviva sent the medical reports to Ms. Aslivo and notified her that it was terminating her IRB on December 13, 2019 on the basis of the medical reports and the totality of the medical information in her file. Over the next several months, Ms. Aslivo forwarded further medical documentation to Aviva in support of her claim. The evidence is clear that, on each occasion, Aviva forwarded the new medical information to the three assessors and asked if the new information would change their opinion. In each case the assessors maintained their position.

29On April 27, 2020 Ms. Aslivo forwarded a psychiatric report from Dr. Jodi Grenier. Dr. Grenier largely agreed with Dr. Costa El-Hage about Ms. Aslivo’s psychological issues but differed in her conclusion about their impact on Ms. Aslivo’s ability to work. She concluded that:

All her symptoms as outlined in this report impact on her ability to work in any capacity, including sleep disturbance, depressed and anxious mood, panic attacks, fatigue, decreased motivation, social withdrawal, driving related anxiety for more than short distances, and cognitive impairment. All of her symptoms adversely impact on Ms. Aslivo’s ability to return to work in her former capacity as a self-employed business owner or to any retraining or work in other fields. She would not be able to return to her pre-collision employment given her ongoing symptoms. Furthermore, given her ongoing symptoms the likelihood of her ability to obtain and maintain any employment including self-employment is guarded.

30The report was forwarded by Aviva to Dr. Costa El-Hage. Dr. Costa El-Hage concluded that Ms. Aslivo’s condition had deteriorated between the time of her assessment on November 7, 2019 and the time of Dr. Grenier’s assessment on February 14, 2020. Dr. Costa El-Hage advised Aviva that Ms. Aslivo now met the test for an IRB. As a result, Aviva reinstated Ms. Aslivo’s IRB effective June 4, 2020 and paid a lump sum to cover the period from December 13, 2019 to June 4, 2020.

31The question is whether Aviva should pay interest on the lump-sum payment. I find that it should. In arriving at this finding, I do not fault Aviva for the position it took in stopping payment. On the medical evidence available to it, including reviewing the medical documentation on file and in forwarding new documentation for further review by its assessors, it was acting reasonably. It actively adjusted the file during the period from December 2019 to June 2020, however, it finally concluded that the IRB was payable during the period of stoppage based on the totality of the medical evidence. That evidence certainly established that Ms. Aslivo met the test as early as February 14, 2020, and possibly earlier, given the indicia of deterioration and Dr. Costa El-Hage’s identification of stressors likely to lead to deterioration.

32In my view, given Aviva’s ultimate concession that Ms. Aslivo was entitled to an IRB from the December 13, 2019 date of stoppage to June 4, 2020, the situation is analogous to an applicant being successful in an application for an IRB to the Tribunal. Notwithstanding that Aviva was not acting unreasonably, an IRB award at the Tribunal would attract interest on back payments. I find Ms. Aslivo is entitled to interest during the period of stoppage.

Award Under SECTION 10 of RegULATION 664

33It follows from my finding above that Aviva actively adjudicated the file between the date of its denial on December 13, 2019 and June 4, 2020 that it did not unreasonably withhold or delay payment. I accept the evidence of Jennifer McDonald that she reviewed the whole of the medical record when the initial denial decision was made. The denial decision was not made in a vacuum but was based on the best medical evidence available.

34I also note that Ms. McDonald did not unreasonably maintain the denial position as new medical documentation was made available. The record shows that she referred that new medical documentation for medical review by expert assessors. The evidence further shows that when Dr. Costa El-Hage questioned her original conclusions, Aviva immediately reinstated the benefit. In fact, I conclude that Aviva’s handling of the claim was exemplary and a model of ongoing adjustment even after litigation had been commenced.

Repayment and Quantum of IRB from January 1 to October 14, 2019 and December 13 to December 31, 2019

35Aviva asserts that the reason it did not pay Ms. Aslivo an IRB from December 7, 2018 was that it needed further documents to calculate quantum. I have already concluded that this position is valid from March 20, 2019 when Aviva complied with s. 34(4) ongoing, but before that date, while it was not in compliance with s. 36(4) it was liable to pay an IRB. In recognition of this obligation, Aviva paid a lump sum back payment of IRB on October 4, 2019 after receiving the corporate tax documents for the 2017 tax year. On further review of the corporate documents by its accountants, Williams and Partners, Aviva determined that Ms. Aslivo had actually earned a substantial sum in 2019 and that its calculation of her entitlement to an IRB was $0 per week for that period. It seeks repayment of the amount paid in 2019, $20,856.

36Ms. Aslivo has made no submissions on the repayment issue. In the absence of submissions, I conclude that Ms. Aslivo concedes that she is liable for the repayment and that her entitlement to an IRB during the 2019 calendar year was $0. It follows from this that no amount is owing for the periods from January 1, 2019 to March 20, 2019, when Aviva complied with s. 36(4). The interest for that period is zero. Equally, there was no amount outstanding for the period from December 13, 2019 to December 31, 2019. Interest for that period is zero.

ORDER

37Based on the extensive evidence in this case, I find that Aviva is liable to pay interest pursuant to s. 51 on IRB entitlement for the period from December 7, 2018 to December 31, 2018. It is not liable to pay interest for any period during 2019 as Ms. Aslivo’s entitlement to an IRB in that calendar year was zero.

38Aviva is also liable to pay interest on IRB for the period from January 1, 2020 to June 4, 2020.

39Ms. Aslivo is not entitled to an award under s. 10 of Regulation 664, R.R.O. 1990.

40Aviva is entitled to a repayment of $20,856 representing an overpayment of IRB during the calendar year of 2019.

COSTS

41Aviva has asked for costs largely based on its assertion that Ms. Aslivo failed to comply with Tribunal orders as to submission page limits. Costs before the Tribunal are designed to have a punitive dimension where a party has acted unreasonably, frivolously, vexatiously, or in bad faith. Accepting Aviva’s position at its highest, the complained of behaviour falls far short of the threshold for costs. In making this finding I should not be taken as endorsing breaches of Tribunal Rules, orders or procedures, but equally, in these circumstances, I do not make any finding on the behaviour of Ms. Aslivo and whether her extensive use of endnotes violated the Tribunal’s order.

Date of Issue: June 25, 2021

__________________________

D. Gregory Flude, Vice-Chair