Aviva General Insurance Company v. Mehrdadian, 2023 CanLII 96365

Citation: Aviva General Insurance Company v. Mehrdadian, 2023 ONLAT 21-007346/AABS

Licence Appeal Tribunal File Number: 21-007346/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 General Insurance Company

Applicant

and

Mehrzad Mehrdadian

Respondent

DECISION

ADJUDICATOR: Brian Norris

APPEARANCES:

For the Applicant: Yalda Aziz, Counsel

For the Respondent: Ivy So, Paralegal

HEARD: By way of written submissions

OVERVIEW

1Mehrzad Mehrdadian (“Mehrdadian”) was involved in an automobile accident on May 1, 2017, and sought benefits from Aviva General Insurance Company (“Aviva”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”).

2Aviva paid income replacement benefits (“IRBs”) to Mehrdadian following the accident. It claimed that it overpaid IRBs to Mehrdadian and requested a repayment of the benefits paid. Mehrdadian refused to repay the benefits and Aviva applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

ISSUES

3The issues to be decided in the hearing are:

1. Is Aviva entitled to the repayment of income replacement benefits in the amount of $18,935.40 for the period from May 8, 2017 to April 28, 2018?
2. Is Aviva entitled to interest for the overdue payment of income replacement benefits from May 8, 2017 to date?

RESULT

4I find that Aviva is entitled to a repayment of IRBs in the amount of $18,935.40, plus interest.

BACKGROUND

5Mehrdadian was denied IRBs and medical and rehabilitation benefits by Aviva and submitted an Application to the Tribunal to dispute those decisions. After hearing the parties’ evidence and submissions, the Tribunal determined that Mehrdadian did not meet the eligibility test for IRBs. In M.M. v. Aviva General Insurance, 2020 CanLII 51292 (ON LAT) (“MM v. Aviva”), the Tribunal concluded that the Mehrdadian’s testimony was overwhelmingly contradicted by the documentary evidence and that the testimony of her alleged employer was also contradictory and, at some points, lacked credibility. The Tribunal concluded that Mehrdadian was not employed at the time of the accident; was not employed for 26 of the 52 weeks preceding the accident, and was not receiving EI benefits. Repayment was a live issue prior to the hearing but was withdrawn as Aviva wished to bring it forward in a separate Application.

6Following the hearing, Aviva concluded that Mehrdadian misrepresented her pre-accident employment based on the testimony at that hearing from her and the alleged employer.

7Based on the above and the evidence presented at this hearing, Aviva requests a repayment of $18,935.40 for IRBs paid during the period from May 8, 2017 to April 28, 2018 plus interest pursuant to section 52 of the Schedule.

8Mehrdadian submits that she never committed an act of wilful misrepresentation or fraud and that the Tribunal’s decision and reconsideration were made without consideration towards pay stubs and bank statements she provided for the hearing at hand. She submits that she was a victim of her employer’s decision to reconsider her as a contract worker instead of an employee. Mehrdadian also submits that Aviva is statute barred from claiming a repayment of IRBs pursuant to section 52(3) of the Schedule because she never committed wilful misrepresentation and because the request was made more than one year following the payment of IRBs.

9I find that Mehrdadian wilfully misrepresented her employment status in order to secure IRBs. Aviva is entitled to a repayment of benefits and is not bound by the one-year time constraint as a result. My reasons are as follows.

ANALYSIS

10Section 52(1)(a) of the Schedule permits Aviva to claim a repayment of any benefit paid to Mehrdadian as a result of wilful misrepresentation or fraud.

11Section 52(2) of the Schedule provides that Aviva must give Mehrdadian notice of the amount that is required to be repaid.

12Section 52(3) of the Schedule states that if Aviva fails to give notice of repayment to Mehrdadian within 12 months after the payment of the amount that is to be repaid, then Mehrdadian is not liable to repay the amount claimed unless the payment was made as a result of wilful misrepresentation or fraud.

13The onus is on Aviva to demonstrate that Mehrdadian wilfully misrepresented her pre-accident employment in order to claim entitlement to IRBs and that it followed the proper procedures to claim repayment of a benefit.

Mehrdadian Committed an Act of Wilful Misrepresentation

14In M.M. v. Aviva, the Tribunal concluded that Mehrdadian was not credible as a witness or as a claimant; that her evidence was self-serving and, when confronted with anything contradictory, claimed that errors were made by others. The Tribunal also concluded that Mehrdadian’s documents did not support her purported employment, including a Notice of Assessment for 2017 that indicates Mehrdadian reported income considerably less than what was noted in her claims documents and her CPP Disability Application, the latter of which notes that her disability started prior to the accident.

15The Tribunal’s findings in MM v. Aviva demonstrate that Mehrdadian wilfully misrepresented her employment status in order to receive IRBs. Mehrdadian’s testimony was rejected by the Tribunal because it was not credible due to the numerous contradictions between Mehrdadian’s claims and her evidence. Notably, Mehrdadian’s initial claims forms indicated that she was not working at the time of the accident yet, five months later, she reported that she was employed at the time of the accident. Further, at least one medical record indicates that she was enrolled in school at the time she claims to have been employed.

16Furthermore, the Tribunal found that Mehrdadian was not credible in her claims that she attempted to return to work following the accident but was unable due to injuries. At the hearing, her alleged employer (“Yarkhani”) denied that an attempt to return to work ever occurred; testified that some pay stubs tendered by Mehrdadian to support her claim did not originate from his company, and noted discrepancies between those documents and the ones he agreed that he produced. This evidence suggests that Mehrdadian submitted falsified evidence.

17Turning my attention to this hearing, I find that the evidence before me demonstrates that Mehrdadian was not employed at the time of the accident and that she committed an act of wilful misrepresentation when she claimed to be employed with Yarkhani’s company.

18Aviva submits for this hearing, and I agree, that Mehrdadian’s initial claims forms are inconsistent, rendering them to carry no weight in establishing that she qualifies for IRBs. Mehrdadian’s OCF-1, dated June 5, 2017, indicates that she was unemployed at the time of the accident but had worked 26 of the last 52 weeks prior to the accident at a jewelry store. The OCF-3 from one week later, dated June 12, 2017, indicated that Mehrdadian was not working at the time of the accident; did not work at least 26 of the 52 weeks preceding the accident, and was not receiving EI benefits at the time of the accident. The OCF-3 noted that her last day worked was February 1, 2017. An amended OCF-3 was submitted five months later, on October 12, 2017, indicating that Mehrdadian worked at least 26 of the last 52 weeks prior to the accident. Subsequently, Mehrdadian submitted an OCF-10 electing to receive IRBs, dated November 21, 2017.

19The OCF-2 (“employer’s confirmation form”) form by Yarkhani states that Mehrdadian was employed for the period from January 3, 2017 to April 28, 2017, and earned $1,488.46 in the four weeks preceding the accident.

20Given the timing of her employment and her gross weekly income, Mehrdadian would have had to demonstrate that she was employed with both employers in order to qualify for IRBs at the rate of $400.00 per week. Otherwise, her period of employment from one employer is insufficient to meet the 26-week threshold to qualify for IRBs pursuant to section 5(1) of the Schedule and her weekly payment for IRBs would be less than the $400.00 per week she seeks because her gross weekly income would also be less.

21However, the claims forms submitted to Aviva by Mehrdadian contradict the income she reported to the Canada Revenue Agency. Her tax records indicate that she reported T4 earnings of $1,048.00 for the entire year, which is significantly less than the earnings she reported to Aviva.

22I find that the Notice of Reassessment fails to confirm that Mehrdadian was employed with Yarkhani. The Notice of Reassessment, dated September 26, 2019, shows that Mehrdadian’s total income for 2017 was amended to be $27,142.00. However, this information does not confirm that her income is from employment as total income is inclusive of all sources of income, which includes employment, self-employment, and government-issued benefits. Mehrdadian provided no other documents with the Notice of Reassessment to clarify what her total income was based on. As a result, I am unable to confirm that the income reported in the Notice of Reassessment is as a result of employment income, let alone employment income earned while working with Yarkhani. As a result, Mehrdadian has still not demonstrated that she was employed with Yarkhani at the time of the accident.

23I find that Aviva paid IRBs to Mehrdadian based on the information she provided. On February 1, 2018, Aviva advised her that IRBs would be payable at the rate of $400.00 per week, retroactive to May 8, 2017. It was only after conducting insurer’s examinations (“IEs”) that Aviva determined that Mehrdadian no longer met the disability test for IRBs, and ceased payments effective April 29, 2018. Mehrdadian disagreed with Aviva’s denial of IRBs and applied to the Tribunal for resolution of the dispute, the result being MM v. Aviva.

24From the evidence submitted for this hearing, it appears that Aviva discovered evidence following the hearing that continued with the pattern of being inconsistent with Mehrdadian’s initial claims forms. In what appears to be preparation for the pending hearing in MM v. Aviva, Aviva followed up with Yarkhani via telephone and email and received conflicting information. In an email dated October 3, 2019 Yarkhani states that “as far as I know (Mehrdadian) never worked for my company”. A subsequent email from Yarkhani, dated October 7, 2019, states that after checking records, he found out that Mehrdadian worked for a three-month period “last year” as a contractor and left after her accident, and noted that she was responsible for her own expenses and taxes.

25On January 31, 2020, following the hearing in MM v. Aviva, Aviva wrote to Mehrdadian and advised that it seeks a repayment of IRBs in the amount of $18,935.40. It concluded that Mehrdadian received CPP disability benefits, earned some post-accident income, and that it believes she may have not worked with Yarkhani. In the letter, Aviva stated that payment of IRBs appears to have been issued as a result of wilful misrepresentation or fraud. Aviva followed-up with Mehrdadian on September 2, 2020 with an unequivocal request for repayment. No repayment was received, and Aviva applied to the Tribunal for resolution of the dispute.

26I find that the evidence presented by Aviva is sufficient to conclude that Mehrdadian misrepresented her employment status in order to receive IRBs. Further, I find that Mehrdadian’s submissions are contradicted by the evidence presented at this hearing and fail to upset my conclusion that she misrepresented her employment status, and as was concluded by the Tribunal in MM v. Aviva. Mehrdadian continues to argue that she held some form of employment at the time of the accident but the evidence is too inconsistent to corroborate her claims. She submits that she is the victim of an employer who hired her as an employee but later recanted and decided to treat her as an independent contractor after she failed to return to work. Yet, the pay stubs in evidence for this hearing include payroll deductions for regular employees that would not otherwise be included for independent contractors. Additionally, Mehrdadian’s excuse, provided here and at the prior hearing, does not explain why her claims forms indicated that she was unemployed at the time of the accident. If I were to accept that her employer went back on its agreement with Mehrdadian and treated her like an independent contractor, it doesn’t explain why she denied being employed, or self-employed, at the time of the accident and never initiated a claim for IRBs at the outset of her claim.

27Mehrdadian’s bank statements, provided as new evidence at this hearing, hold no weight and further the narrative that she misrepresented her employment in order to claim IRBs. Mehrdadian submits that the bank statements were not available for the prior hearing and that they support her claims that she was employed. However, I find that the pay stubs and bank statements are inconsistent with each other and with Mehrdadian’s submissions. As noted in MM v. Aviva, Mehrdadian alleged that she attempted to return to work following the accident, yet her alleged employer denied that fact and denied that the pay stub for that period originated from his company. Even if I were to accept the pay stubs as evidence, the dates on them do not correspond with the deposit dates noted in the bank statements submitted for this hearing. The bank statements indicate that three payments were deposited - on February 28, March 31, and May 1, 2017, while the two pay stubs provided indicate that they were created after those dates, on March 3, and April 7, 2017. No pay stub was provided for the May 1, 2017 deposit. The fact that the alleged deposits were rendered before the pay stubs were issued, contrary to standard practice, leads me to conclude that the documents do not represent what Mehrdadian submits they do.

28Mehrdadian provided unauthentic documents to support her claim for IRBs. This is an act of fraud or wilful misrepresentation. Accordingly, I find that Mehrdadian was not employed at the time of the accident as she proports and wilfully misrepresented her employment status in an effort to obtain IRBs.

Res Judicata

29In reply submissions, Aviva submits that whether Mehrdadian was employed at the time of the accident is subject to the legal doctrine of Res Judicata because that issue was determined in the previous litigation. Mehrdadian did not have an opportunity to respond to Aviva’s reply submissions.

30Nevertheless, I do not accept Aviva’s submissions made in reply as it is a matter of case-splitting. It is established law that a party must put their best foot forward at first instance. It would have been reasonably anticipated that Mehrdadian would maintain her position from the initial hearing and thus, it was reasonable for Aviva to address the legal doctrine of res judicata in initial submissions. I will not consider Aviva’s submissions on this issue as a result.

Aviva’s notice of repayment is compliant with the Schedule

31I find that Aviva properly notified Mehrdadian of the amount that it sought repayment for in correspondence dated September 25, 2020.

32Aviva’s initial notice to Mehrdadian failed to comply with the Schedule. The notice dated January 31, 2020 is equivocal in that it starts with notice that it “will be seeking a repayment of $18,935.40.” This suggests to Mehrdadian that Aviva is not currently seeking a repayment, but putting Mehrdadian on notice that it will be. While Aviva makes a clearer request for repayment later in the letter, it is insufficient to remedy the equivocal statement made at the beginning of the notice.

33However, the September 25, 2020 letter from Aviva complies with the Schedule. In that letter, Aviva states that, it paid IRBs in error due to wilful misrepresentation. It states that based on her testimony, Mehrdadian did not meet the required employment status under section 5(1) of the Schedule at the time of the accident. It further notes that it paid IRBs for the period from May 8, 2017 to April 28, 2018. It requests repayment of the full amount of IRBs paid, being $18,935.40.

34I acknowledge some minor ambiguity in the September 25, 2020 notice but find it does not detract from the overall effectiveness of the notice. The notice clearly states at the beginning that IRBs were paid in error due to wilful misrepresentation and it requests repayment of the full amount of IRBs paid to Mehrdadian. The last sentence in the first paragraph of the notice states that Aviva “will be seeking repayment”, which mirrors the language in the letter dated January 31, 2020. However, this letter is different in that the sentence is not at the outset of the letter and is preceded and followed by clear language. When read together with the sentence before it, it states “(f)or these reasons we requesting full repayment of your income replacement benefits. We will be seeking repayment of $18,935.40 (sic)”. The following sentence states “Aviva paid income replacement benefits from May 8, 2017 to April 8, 2018 in the amount of $18,935.40 for which we are requesting repayment under the SABS.” It then requests payment within 30 days and asks that payment be issued to Aviva Canada Inc. To me, the single imperfect sentence in the September 25, 2020 letter is insufficient to upset the balance of the notice, rendering the notice to be compliant with the Schedule.

35As noted previously, section 52(3) of the Schedule provides that Aviva is required to provide notice of a request for repayment within 12 months after the payment was made, unless the payment was made as a result of misrepresentation or fraud. Having found that Mehrdadian wilfully misrepresented her employment status in order to obtain IRBs, it follows that Aviva is not required to make the request for repayment within 12 months after the payment.

Interest

36Interest applies to the overdue repayment of benefits, pursuant to section 52(5) of the Schedule. Having concluded that the Aviva is entitled to a repayment of benefits in the amount of $18,935.40, it would follow that it is entitled to interest is payable pursuant to the bank rate as per in sections 52(5) and 52(6) of the Schedule.

37While Aviva notified Mehrdadian that it was deferring a claim for interest on the repayment, I find that interest remains payable. Indeed, Aviva advised Mehrdadian that it was deferring its claim for interest on September 25, 2020, and never strayed from this position in subsequent letters on November 30, 2020, January 29, 2021, and March 26, 2021. However, deferring a claim for interest is unlike waiving a claim for interest. As a result, I find that interest is payable pursuant to sections 52(5) and 52(6) of the Schedule.

ORDER

38Aviva is entitled to a repayment of IRBs in the amount of $18,935.40.

39Interest is payable in accordance with s. 52 of the Schedule.