Certas Home and Auto Insurance Company v. Yogesvaran, 2023 CanLII 93016

Certas Home and Auto Insurance Company v. Yogesvaran

Citation: Certas Home and Auto Insurance Company v. Yogesvaran, 2023 ONLAT 21-011323/AABS Licence Appeal Tribunal File Number: 21-011323/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:

Certas Home and Auto Insurance Company Applicant

and

Subashini Yogesvaran Respondent

DECISION

ADJUDICATOR: Ulana Pahuta

APPEARANCES:

For the Applicant: Jonathan Schrieder, Counsel

For the Respondent: No submissions were filed

HEARD: By way of written submissions

OVERVIEW

1Subashini Yogesvaran, the respondent, was involved in an automobile accident on May 13, 2007, and sought ongoing income replacement benefits (“IRBs”) from Certas Home and Auto Insurance Company, formerly known as State Farm Automobile Insurance Company (“Certas”). When Certas terminated IRB payments, the respondent applied to the Financial Services Commission of Ontario (“FSCO”) for resolution of the dispute. Pursuant to two FSCO decisions, dated November 26, 2009 and October 28, 2010, Certas was ordered to reinstate IRBs to the respondent, on an interim basis, subject to the final determination of entitlement to IRBs.

2Due to a series of unusual circumstances, the final decision on entitlement to IRBs was not rendered until June 29, 2020, when the FSCO arbitrator found that Certas was not liable to pay IRBs after January 16, 2008. After the release of the decision, Certas sent correspondence to the respondent requesting repayment of the IRBs that had been paid pursuant to the 2010 interim order, in the amount of $233,243.50, plus interest. The respondent did not respond to the correspondence.

3As such, Certas initiated the present application on September 16, 2021, claiming a repayment of IRBs paid, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

4The respondent did not file a response to Certas’ application. A case conference was held on July 21, 2022, but the respondent did not attend. A written hearing was scheduled at that time. The respondent did not file any submissions or evidence for this written hearing.

ISSUES

5The issues in dispute are:

i. Is Certas entitled to repayment of $233,243.50 for IRBs which were paid to the respondent between the period of January 16, 2008 and June 29, 2020?

ii. Is Certas entitled to interest on any benefits to be repaid?

RESULT

6I find that Certas has not established entitlement to repayment of IRBs for the period in dispute. As no benefits are owing, no interest is payable.

BACKGROUND

7The present matter has a complicated procedural history. Certas submits that after the May 13, 2007 accident, the respondent initially received IRBs in the amount of $360.50 per week, until the benefit was terminated on January 16, 2008. The respondent disputed the IRB denial, and in a FSCO decision dated November 26, 2009, the arbitrator held that Certas had failed to properly terminate the IRBs pursuant to s. 37 of the Schedule. As such, Certas was ordered to reinstate payment of the IRBs to the respondent.

8Certas appealed this decision, and in an October 28, 2010 appeal order, the FSCO arbitrator found that the respondent was still required to prove her entitlement to the IRBs. As such, the November 26, 2009 decision was varied, by the addition of a paragraph stating that, “The above orders are interim. This matter shall proceed to an arbitration hearing to determine the Respondent’s final entitlement to this award.”

9The matter was heard in 2012 by FSCO Arbitrator Miller, but the parties had requested additional time after completing the four day hearing. The arbitrator retired before completing the arbitration and it was determined that the matter should be heard de novo.

10A subsequent hearing was not held until 2017. Certas did not provide any submissions as to the reasons behind the five-year delay. However, in the procedural summary detailed in the June 29, 2020 FSCO decision, it was noted that this delay was due to interim motions and the “schedules of counsel”. In 2017 and 2018, the matter proceeded before FSCO Arbitrator Mervin. As a number of additional issues had been added, including catastrophic impairment, the oral hearing took 15 days. However, the arbitrator passed away before rendering a decision.

11A final decision on the substantive entitlement was rendered on June 29, 2020, almost ten years after the appeal order dated October 28, 2020. FSCO Arbitrator Stramwasser found that all of the respondent’s claims were discredited by her lack of credibility. All of the respondent’s claims were dismissed, and the respondent was ordered to pay Certas’ expenses in the amount of $40,000.00. With respect to IRBs specifically, the arbitrator further held that Certas was not liable to pay IRBs “after January 16, 2008”. However, the decision was silent on the issue of repayment of IRBs. Certas submits that at the time of the June 29, 2020 decision, it had been making IRB payments from January 17, 2008, which totalled $233,243.50.

12After the release of the final decision, Certas sent correspondence to the respondent and her counsel, dated June 29, 2020, February 10, 2021 and February 12, 2021, requesting payment of the $40,000.00 in costs and a repayment of the IRBs paid as interim benefits. While the first email dated June 29, 2020 did not specify the amount of IRBs to be repaid, the subsequent correspondence dated February 10, 2021 and February 12, 2021 identified the amount as being $233,243.50, plus interest. Certas submits that it has not received any response to these repayment requests.

ANALYSIS

Can the Tribunal proceed with the matter in the absence of the respondent’s submissions?

13As noted, the respondent did not attend the case conference or provide written submissions for this hearing. Accordingly, I must be satisfied that the respondent received notice of this written hearing, in compliance with the Statutory Powers Procedure Act (“SPPA”).

14Section 7(2) of the SPPA allows this Tribunal to proceed with a scheduled written hearing in the absence of a party if it is satisfied that the absent party was given proper notice of the written hearing. In reviewing the Tribunal’s file, I find that the respondent was served notice by way of regular mail, to the address noted in the Tribunal’s records, of both the case conference and the written hearing. Therefore, in accordance with s. 7(2) of the SPPA, the respondent is not entitled to any further notice in the proceeding, and I may proceed in her absence.

Lack of jurisdiction on interim benefit repayment

15In its submissions, Certas does not address the issue of whether the Tribunal has jurisdiction to grant repayment of interim IRB payments. In the Case Conference Report and Order dated July 21, 2022, the respondent identified the primary issue in dispute as being IRB repayment. Although typically IRB repayment claims are brought pursuant to the repayment provisions of the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”), namely s. 52 of the Schedule, from its submissions, it does not appear that Certas is claiming repayment pursuant to s. 52.

16Rather, it submits that s. 279(4.1) [repealed] of the Insurance Act, had granted FSCO arbitrators the authority to make interim orders for benefits pending a final order. As such, Certas has submitted a number of FSCO decisions where the arbitrator found that interim benefits, subject to the final order of the arbitrator, are repayable if the insured person is ultimately found not to be entitled to the benefit, see, for e.g.: Allstate Insurance Company of Canada v. Ketheeswaran Sellathamby, 2002 ONFSCDRS 200; Stalin Thiruchelvan v. AXA Insurance (Canada), 2003 ONFSCDRS 125; Z. v. Dominion of Canada General Insurance Company, 2003 ONFSCDRS 17; Colin Scott Akehurst v. Aviva Canada Inc., 2006 ONFSCDRS 46.

17Section 279(4.1) was repealed on April 1, 2016, when the jurisdiction to resolve auto accident claims was transferred from FSCO to the Tribunal. The repeal of s. 279(4.1) has been considered in a number of Tribunal decisions, with respect to the issue of whether the Tribunal has jurisdiction to grant interim orders, see, for e.g.: 17-007152 v State Farm Insurance, 2018 CanLII 141015 (ON LAT) and Gilani v Travelers Insurance Company of Canada, 2021 CanLII 97409 (ON LAT). In these decisions, Tribunal adjudicators noted that the deliberate removal of s. 279 in 2016 was a significant departure from the FSCO practice of granting interim orders and restricted Tribunal adjudicators’ powers with respect to interim orders, unlike previous FSCO arbitrators. As such, the Insurance Act has been amended for applications filed with the Tribunal after April 1, 2016, and pursuant to s. 280.6, does not provide the Tribunal with jurisdiction to grant orders for interim benefits without a regulation.

18I note that while the respondent’s original IRB claim was filed with FSCO under the previous version of the Insurance Act, Certas’ current repayment claim was filed post-2016, with the Tribunal. As such, I find that I must consider whether the Tribunal has the jurisdiction to order a repayment of an interim benefit. Certas does not direct me to any statutory authority in support of its claim for repayment of interim IRB payments granted pursuant to s. 279(4.1). Rather, it solely relies on pre-2016 FSCO caselaw. However, the FSCO arbitrators in these cases were subject to a different statutory regime and had explicit authority to address interim benefits, unlike Tribunal adjudicators. In addition, I note that FSCO decisions are not binding on the Tribunal.

19Moreover, I note that in one of the FSCO decisions cited by Certas, Z. v. Dominion General Insurance Company, the arbitrator considered the statutory basis for ordering repayment of interim benefits. When discussing the issue of interest, Director’s Delegate Makepeace noted that “repayment of interim benefits is ordered under s. 279(4.1) of the [Insurance] Act”. As such, given the deliberate repeal of this section in 2016, it does not appear that the Tribunal has jurisdiction to order repayments on interim benefits for applications filed with the Tribunal after 2016.

20Rather, the appropriate course of action would have been for the FSCO arbitrator rendering the final decision on June 29, 2020, to address the issue of IRB repayment contemporaneously with entitlement. Although this decision was rendered after the April 1, 2016 repeal of s. 279(4.1), the application being considered had been filed pre-April 1, 2016 and, as such, the FSCO arbitrator would have had the authority to consider issues stemming from interim orders. Certas has not provided any submissions as to why the IRB repayment issue was not raised as part of the FSCO proceedings.

21Although Certas cites FSCO decisions where the substantive decision on entitlement was silent on the issue of repayment, but a subsequent arbitrator ordered the repayment of interim benefits, I find that these decisions are distinguishable. For example, in Z. v. Dominion General Insurance Company, the arbitrator noted that the substantive decision was silent on the issue of repayment. She considered s. 279(4.1) of the Insurance Act, and varied the prior arbitrator’s order by adding a paragraph ordering repayment of interim benefits paid. However, I note that Tribunal adjudicators lack the jurisdiction to vary a FSCO order. When the current Insurance Act came into force on April 1, 2016, the applicable Regulations at that time contained transitional provisions which allowed the Tribunal to vary FSCO orders. However, on June 8, 2019, new Regulations came into force, R.R.O. 1990, Regulation 664, which stated:

22. (1) No party may commence any of the following proceedings on or after June 8, 2019:

23. An application for a variation or revocation of an order under subsection 284 of the pre-transition date Act.

22As such, I find that the legislative intent is clear that after June 8, 2019, the Tribunal cannot not vary FSCO orders. Certas has not provided me with any cases where the Tribunal has considered a post-2019 request for repayment of an interim benefit made pursuant to s. 279(4.1). As such, I find the decisions cited by Certas to be of limited persuasive value. Further, Certas has not provided any submissions on the issue of jurisdiction or the statutory basis for any IRB repayment.

23As the Tribunal does not have the jurisdiction to vary a FSCO order or to consider interim benefits granted pursuant to the repealed s. 279(4.1) of the Insurance Act, repayment of IRBs would be considered pursuant to s. 52 of the Schedule. However, Certas has not made any submissions regarding its entitlement to a repayment claim under s. 52, other than to state that interest on repayment should be provided pursuant to s. 52(2). It has not addressed whether the IRBs were provided as a result of an error or wilful misrepresentation. Nor has Certas provided any submissions as to whether its correspondence satisfies the notice of repayment provisions of s. 52(2) of the Schedule. Where Certas has the burden of demonstrating entitlement to the IRB repayment, given its lack of submissions on s. 52, I am unable to consider whether Certas is entitled to repayment of IRBs pursuant to this section of the Schedule.

24Although I have found that the Tribunal lacks jurisdiction to consider interim benefits granted pursuant to the repealed s. 279(4.1), I further find, in the alternative, that Certas has not met its evidentiary burden to establish entitlement to IRB repayments.

Certas has not met its evidentiary burden to establish entitlement to IRB repayment

25Certas has based its claim for IRB repayment almost exclusively on pre-2016 FSCO caselaw, which found that interim benefits are subject to the final order of the arbitrator, and are repayable if the insured person is ultimately found not to be entitled. Given this FSCO jurisprudence, Certas argues that since the respondent failed to establish that she was entitled to ongoing IRBs at the final hearing, it is correspondingly entitled to repayment of all IRBs which were paid pursuant to the interim order. However, I do not find that the repayment of interim benefits automatically flows from the final determination of entitlement.

26Rather, in some of the FSCO decisions cited by Certas, it was noted that the final arbitrator “may” after hearing all of the evidence, order repayment of interim benefits paid, see: Z. v. Dominion General Insurance Company; and Stalin Thiruchelvan v. AXA Insurance (Canada). Accordingly, the onus is still on the insurer to meet its evidentiary burden to establish entitlement to repayment. Other than providing FSCO caselaw regarding repayment of interim benefits, Certas has submitted limited objective evidence to meet its evidentiary onus.

27Although Certas claims repayment of interim IRBs in the amount of $233,243.50, it has not provided any details as to its calculation of the quantum. In its submissions, it simply states that this is the amount that was paid pursuant to FSCO’s interim order, but no breakdown or particulars were provided. From its submissions, I infer that the amount was calculated by multiplying the repayment period of January 16, 2008 to June 29, 2020, by the weekly IRB amount of $360.50 per week specified in its submissions, however, this has not been confirmed by Certas.

28The repayment amount proposed by Certas, $233,243.50, is a substantial sum of money. Given that a repayment of this amount could potentially be onerous for the respondent, at a minimum, Certas must clearly establish that these IRB payments have been made to the respondent. I have not been provided with any evidence confirming such payments. No bank transfers, proof of payment or any historic correspondence showing the initiation, reinstatement or ongoing payment and amount of IRBs, have been submitted. Further, the June 29, 2020 FSCO decision on entitlement to IRBs, is silent on the amount of IRBs that had been paid to date.

29The only correspondence submitted by Certas as evidence, is the previously mentioned emails and letter, dated June 29, 2020, February 10, 2021 and February 12, 2021. However, I do not find that this correspondence substantiates that IRB payments have been made. Certas’ June 29, 2020 email was sent immediately after the release of the FSCO decision and simply requests a repayment of “IRBs paid as interim benefits”. While the February 10, 2020 email and February 12, 2021 letter state the amount of IRBs paid as $233,243.50, again, no evidence of such payment was provided to the Tribunal.

30In addition, I note that Certas has not provided me with sufficient information to fully understand the reason for the significant delay in these proceedings. Certas is claiming repayment for the full 12 year period of IRB payments, including the 10 years after the interim order. However, to have a 10 year period of interim benefit payments is very unusual. It is well-settled that an interim order is by its very nature, meant to cover a short period of time. In the cases cited by Certas, the time periods for interim benefits payments ranged from 17 weeks to one year. While Certas has provided some reasons for the delay, including the retiring and passing away of two FSCO adjudicators, there remain significant gaps in time that have not been explained.

31For example, Certas has not provided any information about the five year gap in proceedings from 2012-2017. The only information I have gleaned about this period is from Arbitrator Stramwasser’s June 29, 2020 decision, which stated that this period of delay was due to “interim motions and schedules of counsel”. Further, I note that in her decision, Arbitrator Stramwasser discussed how both parties unnecessarily prolonged the proceedings, although she assigned greater blame to the respondent. However, she noted that three days before the scheduled 2011 arbitration, Certas brought a motion to stay the arbitration pending the respondent’s attendance at assessments. Although I have not been provided with Arbitrator Miller’s March 1, 2012 decision, in her June 29, 2020 decision, Arbitrator Stramwasser quotes from this decision. She notes that Arbitrator Miller found that Certas’ conduct was “completely unreasonable” and “significantly delayed [the respondent’s] ability to have her case heard in a timely manner.”

32Given that Certas is claiming repayment for the full period of interim benefit payments, it bore the onus to establish entitlement to the entire period in dispute. However, I have not been provided with sufficient evidence with respect to significant portions of this period, to properly assess this excessive delay in proceedings. Further, as previously noted, Certas has not led sufficient objective evidence confirming payment of IRBs during the period of January 16, 2008 to June 29, 2020. As such, I find that Certas has not met its evidentiary burden to prove entitlement to IRB repayment for the period in dispute.

Interest

33The respondent seeks interest on the IRB overpayment, pursuant to s. 52(5) of the Schedule. As I have found that Certas has not established entitlement to an IRB repayment, no interest is owing.

ORDER

34For the foregoing reasons, Certas has not established entitlement to a repayment of IRBs in the amount of $233,243.50. As no repayment is owing, no interest is payable. The application is dismissed.