Lauren Sparks v. TD General Insurance Company, 2023 CanLII 56005

21-015016/AABS

Licence Appeal Tribunal File Number: 21-015016/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:

Lauren Sparks

Applicant

and

TD General Insurance Company

Respondent

DECISION

ADJUDICATOR: Harry Adamidis

APPEARANCES:

For the Applicant: Steven Glowinsky, Counsel

For the Respondent: Jonathan White, Counsel

HEARD: By way of Written Submissions

OVERVIEW

1Lauren Sparks, the applicant, was involved in an automobile accident on February 6, 2020, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, TD, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

2On December 30, 2022, the applicant filed a Notice of Withdrawal.

3The respondent subsequently filed a motion to resolve the remaining issues.

ISSUES

4The issues in dispute are:

1. Is the respondent entitled to a repayment for an overpayment of an Income Replacement Benefit (IRB)?

2. Is the respondent entitled to interest on the IRB overpayment?

3. Is applicant barred from pursuing an IRB pursuant to 31(1)(a)(ii) of the Schedule?

4. Is the applicant entitled to costs?

5Issues 1 and 2 are the remaining issues from the case conference order. Issues 3 and 4 arise from the motion submissions.

RESULT

6The respondent is entitled to a repayment and interest.

7The applicant is not barred from pursuing an IRB claim.

8The applicant is not entitled to costs.

ANALYSIS

IRB

9Section 5 of the Schedule requires the respondent to pay an IRB for the period in which the insured person suffers a substantial inability to perform the essential tasks of the applicant’s employment or self-employment.

10On June 24, 2021, the respondent approved the IRB for the applicant based on Insurer Examination (IE) reports.

11Section 52 of the Schedule concerns the repayment of benefits. Under 52(1)(b), a person is liable to repay any IRB paid to them if the person was disqualified from receiving the benefit under Part VII of the Schedule. In particular, under 31(1)(a)(ii) of the Schedule which states that an insurer is not liable to pay an IRB to a person who was driving without a valid driver’s licence at the time of the accident.

1252(2) and (3) establish timelines for repayment requests if a person is liable for repayment. The insurer is required to give the person notice of the amount that is to be repaid. If notice is not given within 12 months after the payment of the amount to be repaid, the person ceases to be liable to repay that amount unless it was originally paid to the person as a result of wilful misrepresentation or fraud.

13TD has the burden of proving, on a balance of probabilities, that it is not liable to pay an IRB to the applicant because she was driving without a valid driver’s licence at the time of the accident.

14On October 22, 2021, the respondent issued a letter advising the applicant that the IRB was stopped because the applicant had been driving at the time of the accident without a valid driver’s licence. The respondent advised the applicant that she must repay the benefit in the amount of $18,443.92 pursuant to s. 52.

15The applicant agrees that she did not have a valid driver’s licence at the time of the accident and that the respondent was not required to pay an IRB. However, she disputes that the respondent gave proper notice. Specifically, the respondent has not provided calculations to explain the amount of the repayment. Consequently, the notice of repayment is deficient and the applicant is not required to make repayment.

16I find that the notice is not deficient. Sections 52(2) and 52(3) of the Schedule only require the insurer to provide notice of the amount to be repaid and that notice be given within 12 months after the payment of the amount that is to be repaid. This was done. There are no other requirements. Consequently, I find that the respondent’s notice is not deficient because the notice meets the requirements of the Schedule.

17The respondent submits that they are entitled to entirety of the IRB payments, which represents 20 months of payments, because the applicant was never entitled to the IRB. Allowing her to keep any of the payments is inconsistent with the Schedule. The respondent further submits that 20 months worth of payments were made to the applicant during a four month period, from June to October, 2021, prior to the notice of repayment being provided to the applicant. This period of time is less than 12 months, and as such, the respondent is entitled to repayment of the full amount.

18The applicant submits that if the respondent is entitled to a repayment, then the repayment amount is restricted to the 12-month period covering payments that should have been made to the applicant between October 2020 and October 2021. If the respondent had properly adjusted the file, then the period from February to October 2020 would be unrecoverable. Instead, the respondent now wishes to be rewarded for unreasonably withholding the IRB. The applicant cites five cases, Pries v. Economical Appeal P12-00036, Kulaveerasingam v. State Farm Appeal P17-00011, W.E. v. Aviva 2020 ONLAT 19-003285/AABS, C.Q. v. Pembridge 2020 ONLAT 19-008344/ABBS, and Applicant v. Certas 2019 CanLII 34614. These cases show that the Tribunal has not found in favour of previous respondents who sought repayment beyond the 12 month limitation period.

19I find that the respondent is entitled to a repayment of the full amount of the IRB. Under 52(1)(b) of the Schedule, the respondent is entitled to the repayment of “any income replacement” benefit paid to the insured person. The only limitation to the repayment of any income replacement benefit is in 52(3) of the Schedule which requires the notice of repayment to be given within 12 months after the payment of the amount that is to be repaid. In this case, all payments of the amount to be repaid were made less than 12 months before the respondent provided notice of repayment to the applicant.

20In the cases cited by the applicant, the other respondents were seeking repayment for payments made more than 12 months before the notice of repayment. Those facts are distinguishable from the applicant’s own case because she received payments for only four months before receiving the notice of repayment.

21The applicant alleges that the respondent improperly withheld IRB payments to the applicant but provides no further explanation of this allegation. The respondent provided correspondence that documents its attempts to obtain completed forms and conduct an insurer’s examination prior to finding the applicant entitled to an IRB. On the face of it, there is no indication that the respondent improperly withheld payments of the IRB.

22The respondent initially submitted that it is irrelevant whether the applicant knew that her licence was suspended because they were seeking repayment under 52(1)(b) of the Schedule. As noted above, this section prevents the applicant, under 31(1)(a)(ii) of the Schedule, from receiving and IRB because she was driving with a suspended licence at the time of the accident. The applicant tailored her responding submissions to this point.

23In the respondent’s final submissions, it submits that the applicant willfully misrepresented herself to the respondent by not disclosing that her licence was suspended and that she is liable to repay the respondent under 52(1)(a) of the Schedule. Specifically, for inducing an error on the part of the insurer through willful misrepresentation. In my view, I cannot consider this submission. The applicant was not previously alerted to the applicability of 52(1)(a) and has not had the opportunity to respond to this submission. The respondent had a fair opportunity to make this alternate argument in their initial submissions. It would be unfair to now consider these submissions given these circumstances.

24For these reasons, I find that the respondent is entitled to the quantum of $18,443.92 of repayment.

Interest

25The Schedule in section 52(5) and (6) allows the respondent to charge interest on the outstanding balance of the amount to be repaid from the 15th day after the notice of repayment is given until the day repayment is received in full. The interest rate is the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule I of the Bank Act.

26The applicant makes no submissions on interest.

27As such, I find that the applicant must pay the “bank rate” interest from 15 days after the repayment request was made on October 22, 2021, pursuant to the Schedule.

Is the applicant Barred from Pursuing an IRB?

28The Schedule does not bar insured persons from applying for benefits.

29However, the respondent submits that 31(1)(a)(ii) of the Schedule does, in fact, bar the applicant from pursuing an IRB

30This section relates to insurers not being required to pay an IRB if an insured person was driving without a valid driver’s licence at the time of the accident. This section does not prevent insured persons from applying for an IRB. Therefore, I find that the applicant cannot be barred from pursuing an IRB for the reasons provided by the respondent.

COSTS

31Under 19.4 of the Licence Appeal Tribunal, Animal Care Review Board, Fire Safety Commission, Common Rules of Practice and Procedure (“Common Rules”), the Tribunal considers unreasonable, frivolous, vexatious, or bad faith conduct when determining whether costs should be awarded.

32The applicant seeks costs of $1,000.00 for having to oppose an unnecessary motion. She submits that the respondent’s true purpose for the motion is to exert pressure on the applicant to influence the next stage of her accident benefits claim.

33The respondent submits that their motion is necessary in order to obtain repayment.

34I find that the applicant is not entitled to costs. A dispute exists between the parties regarding the repayment of the IRB. Resolving this issue at the Tribunal by way of motion is a legitimate means of resolution.

35The applicant makes allegations regarding the respondent’s true purpose for this motion. The applicant does not reference any evidence to support her allegations. Consequently, there is no basis to find that the respondent engaged in bad faith behaviour.

36The request for costs is dismissed.

ORDER

37The respondent is entitled to the quantum of $18,443.92 of repayment.

38The respondent is entitled to interest.

39The applicant is not barred from pursuing an IRB.

40The applicant is not entitled to costs.