Ramkelawan v. Aviva Insurance Company, 2022 CanLII 68308

Licence Appeal Tribunal

Citation: Ramkelawan v. Aviva Insurance Company, 2022 ONLAT 20-006937/AABS

Licence Appeal Tribunal File Number: 20-006937/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:

Parmila Ramkelawan

Applicant

and

Aviva Insurance Company

Respondent

DECISION

ADJUDICATOR:

Laura Goulet

APPEARANCES:

For the Applicant:

Parmila Ramkelawan, Applicant

Michael Agulefo, Paralegal

For the Respondent:

Aimee Draper, Counsel

Laura Bassett, Counsel

HEARD:

By Way of Written Submissions

REASONS FOR DECISION

BACKGROUND

1The applicant, Parmila Ramkelawan, was injured in an automobile accident on July 1, 2018 and sought various benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016)¹ (Schedule) from Aviva Insurance Company, the respondent.

2The applicant could not return to work as a result of the accident. In order to calculate her income replacement benefit (IRB), she utilized the assistance of an accountant. The respondent denied the applicant’s claim for it to pay for the accounting report. The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (Tribunal).

3At the case conference held on November 30, 2020, there were numerous issues in dispute for the hearing. Since that time and before submissions were due, the parties settled several of the issues in dispute. The only issue left to decide is the issue of the accounting report.

ISSUES IN DISPUTE

4The issues are as follows:

(i) Is the applicant entitled to the cost of an accounting report in the amount of $2,618.78 for the purpose of the IRB calculation prepared by Great Oak VFA submitted on September 5, 2019?

(ii) Is the applicant entitled to interest on the cost of the report?

RESULT

5I find that the applicant is not entitled to the cost of the accounting report in the amount of $2618.78 for the IRB calculation as it was not reasonable and necessary. In the circumstances, I find that the applicant is not entitled to interest.

ANALYSIS

Is the accounting report reasonable and necessary?

6Section 7(4) of the Schedule requires an insurer to fund an accountant’s report where three preconditions are satisfied as follows:

(i) the insured person must be applying for an IRB that is based on the employment or self-employment considered in the report;

(ii) the report must be prepared by a member of a designated body within the meaning of the Public Accounting Act, 2004; and

(iii) the expense must be reasonable and necessary for the purpose of determining the insured person’s entitlement to an IRB.

7The applicant bears the onus of proving these conditions on a balance of probabilities.

8It is apparent from the submissions of the parties that the first two conditions of s.7(4) are satisfied as the applicant applied for the IRB and the report was prepared by a member of a designated body, being Chang Hwan Kim, CPA GCA, of Great Oak VFA. The issue giving rise to this dispute is whether the Great Oak report was both reasonable and necessary for the purposes of determining the applicant’s IRB.

9On September 5, 2018, Great Oak VFA completed an accounting report which detailed that the applicant was entitled to receive $0.00 towards her IRB for the period of July 9, 2018 to August 15, 2018. The invoice amount for the preparation of this report was $2,618.78. On October 2, 2018, the respondent denied payment of the invoice, stating that it was not reasonable or necessary.

10The applicant argues that the report was necessary because it includes an accurate representation of income loss, with copies of supporting documentation (i.e. tax forms, pay stubs, bank statements and OCF-1 Application for Accident Benefits) which it submits are necessary to provide an opinion regarding the applicant’s IRB entitlement. The applicant also submitted that she had two employers, and that Great Oak analyzed her documents to determine her eligibility for any other income replacement assistance or whether she was entitled to any collateral benefits. The applicant argued that the calculation of her post-accident income was not straightforward as she continued to work on modified hours. The applicant also suggested that the Great Oak report was necessary as the calculations of her IRB were further complicated by the fact that her medical issues “could have” led her to stop working at any time during the first two years of her loss.

11The respondent submits that the report is not reasonable and necessary because the applicant’s IRB calculation was straightforward and easily determined as she was a salaried T4 employee. In addition, the respondent pointed out that the applicant was not entitled to IRBs as 70% of her post-accident income exceeded the policy maximum of $400 per week.

12I find that the applicant has not proven on a balance of probabilities that the preparation of the accounting report was reasonable and necessary. I am not persuaded that the IRB calculation, in this case, was sufficiently complex that it would necessitate an accounting report. I find that the IRB calculation based on her income as a salaried employee would have been relatively straightforward. I fail to see why the applicant could not have submitted the supporting documentation directly to the respondent rather than through the Great Oaks accounting report.

13The respondent also submitted that the applicant prematurely retained the services of the accountant to prepare the report only two weeks after she submitted the Application for benefits, one day after she submitted an OCF-3, and prior to her submitting an OCF-10. I agree with the respondent’s position that this was clearly premature as neither quantum nor entitlement to an IRB were in dispute at that time.

14In coming to my decision, I have reviewed other Tribunal decisions which have considered the issue of whether an accounting report was reasonable and necessary. I am persuaded by the reasoning and the findings in the decisions referenced below and I find they are analogous to the case before me.

15I follow the reasoning set out in M.G. v. Intact Insurance Company, 2020 CanLII 34445 (ONLAT), a decision where the applicant had two sources of income and the accounting report was prepared before there was a quantum dispute with respect to the IRB. The Tribunal held that the IRB calculation was straightforward and the preparation of the accounting report was unnecessary and premature.

16I also agree with the reasoning in S.M. v. Aviva General Insurance Company, 2020 CanLII 12712 (ONLAT), a decision where the applicant was in receipt of employment income and short-term disability payments, and her employment documentation was available. The Tribunal held that in a situation such as this, where expertise was not required to interpret documentation, to consider alternate forms of income, or to navigate tax law, the expense for the accounting report to complete this relatively straightforward calculation was not reasonable and necessary.

17Further, I agree with the reasoning in 16-004674 v. The Co-operators, 2017 CanLII 77361 (ONLAT), a decision where the applicant was off work for 3.5 weeks, sustained no income loss, there was no dispute regarding the amount of the IRBs and the applicant was not self-employed, so it was not difficult to calculate his weekly entitlement. The Tribunal held that in these circumstances, the report was not reasonable and necessary as the calculation was straightforward and the amount of the IRB was not in dispute.

18Another case dealing with a situation where an accounting report was not held to be reasonable and necessary was in S.G. v. Wawanesa Mutual Insurance Co., 2019 CanLII 76979 (ONLAT), where the applicant was paid as an employee, was issued paystubs and a T4, as well as Service Canada records for Employment Insurance sickness benefits. The Tribunal held that that the documents were sufficient to calculate the IRB quantum without an accounting report.

19For the reasons set out above, I find that the applicant has not demonstrated on a balance of probabilities the Great Oaks accounting report was reasonable and necessary for the purpose of determining her entitlement to an IRB, pursuant to s. 7(4)(iii) of the Schedule.

CONCLUSION

20Accordingly, I find that:

(i) The applicant is not entitled to the cost of the accounting report in the amount of $2618.78 for the purpose of the IRB calculation as it was not reasonable and necessary;

(ii) No interest is payable; and

(iii) This application is dismissed.

Footnotes

1. 1Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10. (“Schedule”)