Citation: Vieira v. Aviva Insurance Company of Canada, 2023 ONLAT 21-002773/AABS

Licence Appeal Tribunal File Number: 21-002773/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:

Ramiro Vieira

Applicant

and

Aviva Insurance Company of Canada

Respondent

DECISION

ADJUDICATOR:

Ulana Pahuta

APPEARANCES:

For the Applicant:

Michelle F. Jorge, Counsel

For the Respondent:

Jeffrey F. Pasternak, Counsel

HEARD:

1Ramiro Vieira, the applicant, was involved in an automobile accident on March 7, 2019, 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, Aviva Insurance Company of Canada, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

2The parties attended a case conference on July 14, 2021 where a number of issues were set for a videoconference hearing, including attendant care benefits and treatment plans. At the case conference the respondent also raised the issue of repayment of income replacement benefits, which was added as an issue in dispute for the hearing.

3On December 22, 2022, the applicant filed a Notice of Withdrawal and the Tribunal closed the Application on December 23, 2022. The respondent subsequently filed a Notice of Motion requesting that the Tribunal reopen the file for the purpose of adjudicating the sole issue of IRB repayment.

4By way of Motion Order dated January 31, 2023, the Tribunal granted the respondent’s motion and held that the matter would proceed to a written hearing on the sole issue of repayment of income replacement benefits.

ISSUES

5The issue in dispute is:

i. Is the respondent entitled to a repayment of income replacement benefits (“IRBs”) totalling $54,552.79 paid between March 15, 2019 and April 4, 2021?

RESULT

6The respondent is entitled to repayment of IRBs in the amount of $54,552.79, with interest, as a result of overpayment.

ANALYSIS

Income Replacement Benefits

7Section 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.

The respondent has established entitlement to repayment pursuant to s. 52

8The respondent submits that it overpaid the applicant IRBs in the amount of $54,552.79 as a result of an error and the applicant’s wilful misrepresentation. It contends that it began paying the applicant IRBs in March 2021, after receiving various documentation from applicant’s counsel with respect to employment earnings. In its correspondence dated February 24, 2021, the respondent noted that the first payment of $27,691.54 would cover the period of March 15, 2019 to the date of the letter. The respondent further requested details of the applicant’s collateral benefits with Great West Life disability and noted that any IRB amount would be reduced by any long-term disability provided under collateral benefits.

9The respondent sent a subsequent letter dated March 10, 2021, admitting an error in IRB calculation and advising that a subsequent cheque in the amount of $48,978.06 would be sent to cover the period from March 15, 2019 to March 10, 2021. However, the respondent submits that upon receipt of the Canada Life long-term disability file on March 25, 2021, it realized that the applicant was receiving loss of income benefits from Canada Life.

10By letter dated March 26, 2021, the respondent advised the applicant that once the amount of loss of income benefits was deducted from the IRB rate, the quantum of the applicant’s IRB was reduced to zero, pursuant to s. 47 the Schedule. The respondent further stated it had overpaid IRBs to date in the amount of $54,552.79. The respondent requested repayment pursuant to s. 52 of the Schedule. In evidence are a series of follow-up letters sent from the respondent to the applicant throughout 2021 and 2022, all reiterating its request for repayment.

11In his submissions, the applicant concedes that he is receiving long-term disability benefits, and did not provide any submissions or evidence to rebut the respondent’s position that it is entitled an IRB repayment. Rather, the applicant has only provided submissions on the quantum of IRBs to be repaid and the timing of the repayment.

12As such, I find that the evidence shows that the respondent paid the applicant IRBs for a period when he was receiving long-term disability benefits from Canada Life. The applicant did not provide any evidence to dispute this. As a result, I find that the respondent has demonstrated that it meets the requirements of s. 52(1)(a) and that it acted diligently on receipt of information that the applicant was no longer entitled to the IRB claimed as a result of his receipt of collateral benefits. As such, the respondent is entitled to repayment of IRBs, however, the parties dispute the quantum of the repayment.

Quantum of IRB repayment

13The applicant submits that if the respondent is entitled to an IRB repayment, then repayment should be restricted to a 12-month recovery period, rather than the two year period the respondent claims. He argues that s. 52(3) of the Schedule holds that an insurer is only entitled to collect the IRB repayments for the 12-month period prior to the date of notice. As the date of notice was March 26, 2021, the applicant submits that the respondent is only entitled to IRB repayment for the period of March 26, 2020 to March 26, 2021, which would be a maximum of $26,511.63.

14I disagree with the applicant’s interpretation of s. 52(3) and find that the respondent is entitled to a repayment of the full amount of IRB overpayment, being $54,552.79.

15Under s. 52(1)(b) of the Schedule, the respondent is entitled to the repayment of any IRB paid to the insured person. The only limitation to the repayment is in s. 52(3) which requires that the notice of repayment “be given within 12 months after the payment of the amount that is to be repaid”. The applicant appears to be arguing that this section requires that notice be given within 12 months of the IRB payment period rather than 12 months from the date that the payment was made.

16In the matter at hand, the respondent did not make any IRB payments in 2019 or 2020. Rather, once entitlement to IRBs was established, the respondent made lump sum payments beginning in March 2021. Given that the respondent’s notice of repayment was given on March 26, 2021, it was well within the requisite 12-month period. The applicant has not cited any caselaw in support of his position that s. 52(3) requires that the notice of repayment be given within 12 months of the IRB payment period. Rather, I find that the section is clear that notice must be given within 12 months of IRB payment.

17As such, I find that the respondent is entitled to repayment of IRBs for the period of March 15, 2019 to April 4, 2021 in the amount of $54,552.79.

The respondent is entitled to a lump sum repayment

18The respondent requests a repayment of the full amount of $54,552.79. In contrast, the applicant submits that the respondent is not entitled to a lump sum repayment. Instead, the applicant claims that pursuant to s. 52(2)(b) of the Schedule, the respondent can only request payments of 20% of the payment amount, once the applicant’s IRBs become payable.

19Section 52(2)(b) states that an insurer may, if the person is receiving IRBs, give notice to the insured that it intends to collect the repayment amount by reducing each subsequent payment of IRBs by up to 20% of the amount that would otherwise be the amount of the benefit.

20From his submissions, the applicant appears to be arguing that s. 52(2)(b) is mandatory, and that the respondent’s ability to collect the amount to be repaid is limited to a claw back which is a reduction of each subsequent payment of the IRBs. Further, since the applicant is presently not receiving any IRBs due to the fact that he is receiving long-term disability payments, the applicant argues that the respondent must wait until he turns 65, to collect any IRB repayment. The applicant’s reasoning appears to be that since long-term disability payments stop at the age of 65, he will then be entitled to IRBs and at that point, the respondent can begin reducing IRB payments to obtain its repayment. The applicant does not cite any caselaw in support of his position.

21I do not agree with the applicant’s position that the respondent is obligated to use the claw back provisions in s. 52(2)(b) of the Schedule and collect the amount owing from future IRB payments.

22The wording of s. 52(2)(b) is clearly permissive and not mandatory. The provision states that an insurer “may”, if the person is receiving an income replacement benefit, give notice that it intends to collect the amount to be repaid by reducing the person’s IRBs. The respondent is not obligated to collect the repayment amount by reducing the applicant’s IRBs. Moreover, the applicant concedes that he is not presently receiving IRB payments and as such, the respondent is not even able to pursue this claw back remedy. While the applicant argues that the respondent must wait until he turns 65 when he would potentially be eligible to begin receiving IRBs, he provides no legal basis or caselaw in support of his assertion that s. 52(2)(b) is mandatory or that an insurer must wait, potentially decades, to collect an IRB repayment. A plain reading of s. 52 does not support the applicant’s submission that any such restriction on the respondent exists. Had the legislature intended to limit insurers in the way the applicant suggests, particularly in the context of consumer protection legislation that the Schedule is, the legislature would have written the Schedule accordingly. It did not and I do not read one in.

Interest

23The respondent requests interest on the repayment. Sections 52(5) and (6) provide guidance on when an insurer may recover interest when seeking 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.

24As I find the respondent is entitled to a repayment of IRB paid as a result of overpayment under s. 52, it follows that interest is payable on overdue amounts under s. 52(5). Accordingly, I find that the applicant must pay the “bank rate”, within the meaning of s. 52(6), interest calculated from the 15th day after the repayment request was made on March 26, 2021, pursuant to the Schedule.

ORDER

25The respondent is entitled to a repayment under s. 52 in the amount of $54,552.79, plus applicable interest, as a result of its overpayment of IRBs to the applicant.

Released: July 25, 2023

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