Licence Appeal Tribunal File Number: 20-009069/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 Insurance Company of Canada
Applicant
and
Errol Saunders
Respondent
DECISION
ADJUDICATOR: Jesse A. Boyce, Vice-Chair
APPEARANCES:
For the Applicant: Michal Baura, Counsel
For the Respondent: Louis Mostyn, Counsel
HEARD: In Writing
OVERVIEW
1The respondent, Errol Saunders, was involved in an automobile accident on January 12, 2018, and was paid an income replacement benefit (“IRB”) by the applicant, Aviva, pursuant to the Statutory Accident Benefits Schedule Effective September 1, 2010 (“Schedule”).
2The respondent was paid an IRB in the amount of $1,600 for the period January 19, 2018 to February 15, 2018 and then $400 per week from February 16, 2018. However, it is uncontested that the respondent resumed his employment as of January 29, 2018, entitling Aviva to a deduction of the IRB under s. 7(3). Aviva provide written notice of the amount of IRB repayment owed by the respondent pursuant to s. 52, in the amount of $7,428.56.
3On June 29, 2018, the respondent and Aviva reached a repayment settlement agreement with the respondent agreeing to repay $200 per month, confirmed via email dated June 29, 2018 and letter dated August 22, 2018. While the respondent has made some repayments to Aviva to cover the initial outstanding amount, Aviva asserts that the respondent has failed to make consistent repayments, breaching the settlement agreement. It submits that it is still owed $4,528.56, plus interest, and submitted this application to the Tribunal for an Order providing same.
ISSUES
4The issues in dispute are as follows:
a. Is the Aviva entitled to a repayment of $4,528.56 relating to its payment of an IRB for the period of January 29, 2018 to June 7, 2018?
b. Is Aviva entitled to interest on any overdue payment of benefits?
RESULT
5Pursuant to s. 52, Aviva is entitled to repayment of the IRB in the amount of $4,528.56, plus interest from the date of its application, as a result of the respondent’s misrepresentation over his return to work.
ANALYSIS
Section 52
6Section 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.
The respondent committed wilful misrepresentation
7The Tribunal has defined wilful misrepresentation as “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.” Further, the Tribunal has held that “silence or a failure to report” can constitute wilful misrepresentation.1 Section 52(1)(a) provides that a person is liable to repay an insurer any benefit that is paid to the person as a result of an error, wilful misrepresentation or fraud.
8I find that Aviva has demonstrated that it continued to pay IRB to the respondent after the respondent’s wilful misrepresentation over his return to work. The OCF-3 Disability Certificate dated June 6, 2018 confirms that the respondent resumed his employment as a butcher after two weeks and did not advise Aviva of his return to work while he continued to receive IRB payments. In a telephone call on June 14, 2018, the respondent confirmed to Aviva that he returned to full-time work on January 29, 2018, which is also confirmed in an email of the same date. Aviva made requests for the respondent’s pay stubs, which have gone unfulfilled. Aviva suspended the IRB effective June 26, 2018.
9Aviva’s written notice to the respondent dated June 18, 2018 satisfied the requirements for repayment notice under s. 52, as it describes the reason for the repayment, the amounts to be repaid, the relevant sections of the Schedule and the benefits at issue. The notice was provided within 12 months of the period to be repaid. That the respondent entered into a settlement agreement to repay the IRB funds, while represented by counsel, is compelling evidence of an express agreement to repay the amounts received. The settlement agreement is confirmed in email and via explanation of benefits letter dated August 22, 2018.
The respondent’s failure to repay and interest
10Despite the agreement, Aviva asserts that the respondent’s repayments have been inconsistent, and he has not fulfilled his obligation to date. It submits that the initial outstanding amount was $7,428.56. The respondent made $2,300 in payments prior to the Case Conference, making the outstanding amount owed at the time of the Case Conference Report $5,129.56. Aviva submits that since the Case Conference of March 21, 2021, the respondent has provided an additional $600 in repayments. Deducting these amounts, Aviva seeks an Order for repayment in the amount of $4,528.56, plus interest.
11The respondent purports that direct deposit payments were made. However, in response, Aviva denied that direct deposit information was provided to the respondent and submits that, as a general practice, it does not provide direct payment information for repayments. All repayments are made by cheque. In any event, there is no credible evidence to support that repayment transactions were made in this manner. The respondent’s assertion that Aviva is not entitled to interest is also unsuccessful. While I note Aviva initially indicated that it was not exercising its right to collect interest on the repayment, s. 52(5) provides that an insurer may collect interest on repayment claims. Where the respondent has breached the settlement agreement, it follows that Aviva is within its rights to seek interest on overdue amounts.
12Sections 52(5) and (6) provide guidance on when an insurer may recover interest on repayment. Aviva 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. However, I note that Aviva is only seeking interest on the amount of $4,528.56 since the date of the filing of its application with the Tribunal, being July 23, 2020. Accordingly, as I find Aviva is entitled to repayment because of misrepresentation under s. 52, it follows that it may seek interest on the overdue amounts under s. 52(5) from this date.
ORDER
13Pursuant to s. 52, Aviva is entitled to repayment in the amount $4,528.56, plus interest since the date of the application, for IRB repayments made to the respondent as a result of misrepresentation over his return to work.
Released: February 8, 2022
________________________
Jesse A. Boyce, Vice-Chair
Footnotes
- Unifund v. MDC, 2020 CanLII 94799 (ON LAT).