AMENDED RECONSIDERATION DECISION
Before: Kevin Lundy
Licence Appeal Tribunal File Number: 21-005745/AABS
Case Name: Kamal Sandhu v. The Personal Insurance Company
Written Submissions by:
For the Applicant: Ryan Jeffries, Paralegal Jessica Friend, Paralegal
For the Respondent: Jonathan Schrieder, Counsel
BACKGROUND
1This request for reconsideration was filed by The Personal Insurance Company (the ‘respondent’) in this matter.
2Kamal Sandhu (the ‘applicant’) alleges that he was involved in an automobile accident on September 28, 2019 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the ‘Schedule’). After the respondent terminated payment of accident benefits, the applicant applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the ‘Tribunal’) for resolution of the dispute.
3The issues before the Tribunal were as follows:
a. Was the applicant involved in an “accident” as defined by subsection 3(1) of the Schedule?
b. Is the respondent entitled to terminate the payment of benefits because the applicant wilfully misrepresented material facts with respect to the “accident” and his application for benefits under section 53 of the Schedule?
c. Is the respondent entitled to repayment of the benefits paid to the applicant as a result of his wilful misrepresentation or fraud, pursuant to section 52(1)(a)? If so, what is the quantum of the repayment?
4In its decision issued on June 26, 2023, the Tribunal found that:
a. The applicant was not involved in an “accident” as defined by section 3(1) of the Schedule;
b. The respondent is entitled to terminate the payment of benefits because the applicant wilfully misrepresented material facts with respect to the “accident” and his application for benefits under section 53 of the Schedule; and
c. The insurer is entitled to repayment of the full benefits paid to the applicant as a result of his wilful misrepresentation or fraud, pursuant to section 52(1)(a) of the Schedule.
5The respondent submits that pursuant to Rule 18.2, there are two grounds for reconsideration of the quantum ordered to be paid, specifically that:
a. The adjudicator made a significant error of fact such that the Tribunal would have likely reached a different decision – given the wilful misrepresentation, the expenses paid in investigating and adjusting this claim are subject to repayment; and
b. There is evidence that was not before the Tribunal when rendering its decision, [that] could not have been obtained previously by The Personal, and this information would have affected the result – the legal fees and other expenses incurred for the hearing and investigation were not confirmed until after the hearing was completed but are now available and would have supported a claim for repayment of all benefits paid and expenses incurred.
6The respondent seeks reconsideration and variance of the decision to include the following:
i. The respondent is entitled to repayment of all benefits paid to the applicant and expenses incurred by the respondent as a result of the applicant’s wilful misrepresentation or fraud, pursuant to subsection 52(1) of the Schedule in the amount of $42,094.83.
7Consequently, the respondent seeks a reconsideration of the decision issued on June 26, 2023 to vary the order from repayment of “any and all benefits paid to the insurer” to “repayment of any and all benefits paid and expenses incurred by the insurer.”
RESULT
8The respondent's request for reconsideration is dismissed.
ANALYSIS
9The grounds for a request for reconsideration to be allowed are contained in Rule 18 of the Tribunal’s Common Rules of Practice and Procedure. A request for reconsideration will not be granted unless one or more of the following criteria are met:
a. The Tribunal acted outside its jurisdiction or violated the rules of natural justice or procedural fairness;
b. The Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different decision;
c. The Tribunal heard false or misleading evidence from a party or witness, which was discovered only after the hearing and would have affected the result; or
d. There is new evidence that could not have reasonably been obtained earlier and would have affected the result.
10For the respondent to be successful in this reconsideration, the respondent must demonstrate that the Tribunal made a significant error of fact which would have resulted in a different outcome. The error of fact alleged by the responded is in failing to find that expenses paid in investigating and adjusting this claim are subject to repayment. However, it should be noted that the respondent never made such a request for a repayment at the hearing. As a result, I agree with the applicant that it is impossible for me to have erred in law or fact when the relief the respondent now seeks was never requested at the hearing.
11Prior to the calling of evidence at the hearing, counsel for the respondent took the opportunity to rephrase the issues in dispute from the wording used in the case conference order and report issued on November 5, 2021. The applicant consented to this rephrasing and the final wording is properly characterized in paragraph 3(i) to (iii) of the decision dated June 26, 2023 and reproduced at paragraph 3 above. The respondent effectively requests an amendment of the decision to add an order for expenses that were only quantified after the release of the decision and submits that such an award reasonably flows from its successful repayment argument. The applicant frames the proposed amendment as an improper request for costs. However, as whether the request is better characterized as costs or expenses, this request for this remedy was never raised at first instance.
Authority to Order Costs
12As a costs submission, the respondent’s inclusion of this request through a reconsideration request is improper pursuant to Rule 19.2, which requires that “a request for costs may be made to the Tribunal in writing or orally at a case conference or hearing, at any time before the decision or order is released.”
13As the respondent has neither produced any written request for costs made to the Tribunal submitted before the release of the order, nor was the issue of costs ever raised before me during the course of the hearing, I find that the respondent has not complied with Rule 19.2 and is now barred from making the request for costs as its request was made after the release of the decision in this matter, contrary to Rule 19.2.
14The respondent relies upon subsection 280(6) of the Insurance Act for its submission that the Tribunal has the authority to order “costs/expenses” even if those amounts are not costs or amounts to which a party is entitled under the Schedule. However, the applicant rightly notes that this provision of the Insurance Act only deals with the fact that “regulations may provide for and govern” orders to pay these amounts. The respondent cites no regulation or any other authority that would authorize the respondent to make such a request.
15Subsection 280(6)(2) of the Insurance Act allows for regulations to be enacted by parliament granting the Tribunal the jurisdiction to make orders for payments of amounts “not entitled” under the Schedule. An example is the award provision enacted in section 10 of Reg 664, which provides for a payment in excess of benefits where an insurer has unreasonably withheld or delayed payments to an insured. However, with respect to the relief sought by the respondent in this reconsideration request, there is no regulation that has been enacted to allow for the payment of the “costs/expenses” incurred by an insurer in adjusting files. As a result, I agree with the applicant that the relief sought in this request is not founded in law.
16Ironically, although the respondent sought relief pursuant to subsection 52(1)(a) of the Schedule, the respondent acknowledged at paragraphs 10 and 15 of its reconsideration request that the respondent had not actually paid any benefits to the applicant, a fact that would have been known to both parties at the start of the hearing and relevant with respect to rephrasing of the issues in dispute. In any event, nothing is payable under the Schedule.
17The respondent further relies on subsection 233 of the Insurance Act. These provisions are immaterial to the issues on this request as they primarily address misrepresentation at the time the insurer and insured enter into a contract. The only partially relevant subsection is subsection (c) which relates to making a false statement in respect of a claim. However, the only consequence is that the claim by the insured may be deemed invalid and the right of the insured to recover indemnity is forfeited. This section does not apply in any way to the recovery of the “costs/expenses” for which the respondent now seeks reimbursement.
Repayment of Expenses
18Even putting aside the procedurally improper timing of the request, the Tribunal has previously addressed the ability of an insurer to request payment to retained law firms and experts. In Intact Insurance v. Samim Hashemi, 2023 CanLII 1443 at paras. 44 through 54 (‘Hashemi’), the Tribunal found that expenses related to a law firm retained to conduct an examination under oath and fees paid to an accounting firm for IRB calculations were not payable. As in Hashemi, the respondent in the present case has submitted no case law to support its position that these types of expenses are recoverable at the Tribunal, or that there is any legal basis to request these types of expenses.
19The respondent submits that it did not submit evidence of the now requested costs and expenses to the Tribunal before the decision was issued because the quantum of costs was not known until after the hearing. However, not only was a request for costs never made during the hearing, but with the exception of a list at paragraphs 7 and 8 of the request that includes an invoice from Victory Verbatim and the second of two invoices from Jenish Engineering, the respondent has also produced no evidence to support its contention that the evidence was not available until after the hearing. None of the documents or the correspondence related to any of these costs and expenses were submitted. Even the list included in the respondent’s reconsideration request suggests that the vast majority of the expenses claimed by the respondent in this request were available prior to the hearing. However, the respondent chose not to make a claim for the recovery of these expenses.
20As well, the Tribunal as also held that this ground for reconsideration is intended to address instances where evidence that was available at the time of the decision could not reasonably have been produced, not that a change in circumstance following a decision provides a ground for reconsideration. For instance, in 11283. v. Registrar of Motor Vehicles, 2018 CanLII 127590 at paragraph 6 (‘11283’), the Tribunal found as follows:
This ground for reconsideration is intended to address instances where evidence that was in existence at the time of the decision could not reasonably have been submitted to the Tribunal. That is what “new evidence” means in this context. It does not envision that later changes of circumstances following a decision provide grounds for reconsideration.
21Furthermore, at paragraph 10 of the same decision, the adjudicator emphasized that the reconsideration process is not intended as an opportunity to argue that circumstances have changed since the time of the decision. In the present request, the respondent submits that because the full extent of the “costs/expenses” were not known prior to the hearing, it should now be effectively permitted to add a new issue in dispute or introduce a new argument by way of reconsideration that it neglected to argue at first instance let alone permit the opposing party an opportunity for submissions. Following the analysis in 11283, this is a misuse of the reconsideration process and should not be permitted. 11283 was subsequently cited with approval in A.N. v. Aviva Insurance Canada, 2022 CanLII 4514. I find the reasoning in this line of cases persuasive and find no basis to depart from it.
The Applicant’s Costs Request
22The applicant has also requested an order for $2,500.00 in costs for the costs incurred by the applicant for having to respond to this reconsideration request on the basis that the reconsideration request is frivolous and vexatious.
23Costs are a discretionary remedy, which may be imposed when a party has acted unreasonably, frivolously, vexatiously, or in bad faith in a proceeding, pursuant to Rule 19.1 of the Rules. In considering the test for costs, the Tribunal may consider the seriousness of the misconduct, whether the conduct was in breach of any Tribunal orders, or whether the parties’ behaviour interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process, prejudice to the other parties, and the potential chilling effect a cost award may have on individuals accessing the Tribunal system.
24While I find no merit to the respondent’s request for reconsideration, I do not find that this attempted misuse of the reconsideration process rises to a level of severity that would merit an order for costs against the respondent. Moreover, as the Tribunal noted in Hashemi, the purpose of costs under Rule 19 is to discourage unreasonable, frivolous, vexatious and/or bad faith behaviour before the Tribunal and not to repay parties for wilful misrepresentations.
CONCLUSION
25For the reasons noted above, I deny the respondent’s request for reconsideration.
26I decline to order costs against the respondent.
Kevin Lundy Adjudicator Tribunals Ontario – Licence Appeal Tribunal
Released: October 6, 2023