Citation: Intact Insurance Company v. Divecha, 2024 ONLAT 21-009529/AABS

Licence Appeal Tribunal File Number: 21-009529/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:

Intact Insurance Company

Applicant

and

Kaezad Divecha

Respondent

DECISION

ADJUDICATOR:

Michael Beauchesne

APPEARANCES:

For the Applicant:

Emily Wilson, Counsel

For the Respondent:

Doina Marinescu, Paralegal

HEARD:

By way of written submissions

OVERVIEW

1Kaezad Divecha (the “respondent”) was involved in an automobile accident on June 3, 2019, and sought benefits from Intact Insurance Company (the “applicant”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”).

2The applicant paid income replacement benefits (“IRB”) to the respondent following the accident and up to March 10, 2020. The applicant submits the respondent wilfully misrepresented his employment status to the applicant, causing his IRB to be overpaid and warranting an order that he repay the IRB with interest.

3As the respondent has failed to repay the IRB, the applicant applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

ISSUES

4The issues in dispute are:

i. Is the applicant (insurer) entitled to a repayment of $9,043.27 relating to its payment of an income replacement benefit for the period of June 16, 2019, to March 9, 2020?

ii. Is the applicant entitled to interest on any overdue repayment of benefits?

RESULT

5The applicant is entitled to repayment of the IRB with interest.

ANALYSIS

The applicant has demonstrated that the respondent wilfully misrepresented his employment status and is liable to repay the IRB

Notice of repayment request

6I find the applicant has satisfied the repayment notice requirements as specified in section 52(2) of the Schedule.

7The applicant is permitted to claim the repayment of IRB in certain situations and subject to certain conditions as established by the Schedule. Section 52 of the Schedule addresses repayments to an insurer, with section 52(2) of the Schedule providing that an insurer must give an insured person notice of the amount that is required to be repaid.

8The applicant’s submissions provide copies of notice letters requesting the repayment of IRB that were sent to the respondent on August 17, 2020, and September 29, 2020. These letters both indicate the amount owing is $9,043.27. Therefore, I am satisfied that proper notice was provided per the Schedule.

Willful misrepresentation

9I find the respondent wilfully misrepresented his employment status to the applicant, which warrants an IRB repayment to the applicant per section 51(a) of the Schedule.

10Section 52(1)(a) of the Schedule provides that an insured person is liable to repay an insurer any benefit paid as a result of wilful misrepresentation or fraud. Further, section 52(1)(b) provides that an insured person is liable to repay an insurer any IRB paid if the insured person was disqualified from receiving the IRB repayment.

11The Tribunal has adopted the Black’s Law Dictionary definition of “misrepresentation” as “any manifestation of words or other conduct by one person to another that, under the circumstances, amounts to an assertion not in accordance with the facts.” In addition, the Tribunal has also held that remaining silent or failing to report can constitute wilful misrepresentation. I agree with this interpretation and apply it here.

12The applicant submits that the respondent returned to work on June 16, 2019, and intentionally failed to inform the applicant of this material change in his employment status. The applicant adds that the IRB was paid until March 9, 2020, and that during this period, the respondent failed to attend all scheduled section 44 insurer’s examinations (the “IEs”) to address his continued entitlement to an IRB. The applicant relies on the employment records of No Frills and A&G The Road Cleaners Ltd, as well as the IRB calculation report by S&T Accounting.

13The respondent disputes that he wilfully misrepresented his employment status, and submits the applicant has failed to prove this beyond a reasonable doubt as it is required to do. The respondent contends that this is fatal to the applicant’s case because it did not provide notice within the 12-month period specified at section 52(3) of the Schedule. The respondent further argues that the applicant did not correctly review the certificate of disability (the “OCF-3”) and misinterpreted his statutory declaration, both of which provide truthful representations of his employment status (i.e., that he had attempted a return to work). The respondent adds that since his accident-related injuries made him unable to continue employment in the first 104 weeks following the accident, he is afforded the relief provided by section 11 of the Schedule and should not have to pay back his IRB. The respondent also notes the applicant did not apply the appropriate section of the Schedule during stoppage of the IRB in March 2020, and says his accident-related psychological issues precluded his attendance at the IEs scheduled by the applicant. The respondent relies on a psychological rehabilitation screening report by Dr. Svetlana Gabidulina (psychologist) as well as medical forms completed by Dr. Rudi Chan (chiropractor).

14I do not agree with the respondent’s position that the applicant failed to provide notice of repayment within the 12-month period provided at section 52(3) of the Schedule. This section says, that if repayment notice 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. In this case, the 12-month period starts March 9, 2020—the day before the applicant suspended the IRB. Notice of repayment was first provided on August 17, 2020, which is well within 12 months of March 9, 2020.

15I am not convinced that the respondent accurately represented his employment status in his statutory declaration. The respondent completed his declaration on December 5, 2019, which the applicant relied upon to calculate and issue a lump-sum IRB payment of $6,067.68 that same month, as well as bi-weekly payments of $500.52 thereafter. The respondent’s declaration indicates he “attempted” to return to work and provides an incomplete set of paystubs.

16While I accept the respondent provided all the pay stubs he had available at the time he completed the declaration—which include six weeks of work in May, June, and September of 2019—I find he wilfully misrepresented this as his complete employment status. The respondent was asked to indicate if he had or had not returned to work. His answer is that he “attempted” to return to work. When asked to provide a date for his return to work, the respondent points to the paystubs he attached, which suggest he did not work for periods in June and September, as well as the entire months of July, August, October, and November 2019. When asked if he missed any additional days after his initial return to work, the respondent confirmed that various days were missed due to physical issues and conditions, after which he could not return to work. The respondent again pointed to the pay stubs he provided as evidence of his post-accident income.

17The respondent says he answered these questions truthfully in the context of how the questions were structured, and that any discrepancies between his answers and other evidence are, at most, a misunderstanding on his part. But I find his answers amounted to an assertion not in accordance with the facts, which is consistent with the accepted definition of misrepresentation. I further find the respondent’s misrepresentation of the facts was wilful. The respondent would have been aware he worked many more hours and shifts than he disclosed up to December 5, 2019, and I agree the respondent had a duty to disclose that the pay stubs he provided did not fully represent his working hours and income up to December 5, 2019. In fact, the pay data in the summary report obtained from No Frills on April 16, 2020, establishes the respondent had returned to work on June 16, 2019, and performed shifts for 20 consecutive weeks (the entire months of June, July, August, September and October 2019) until the week of November 9, 2019, when he called in sick for a week, was a no-show for four scheduled shifts the following week, and was then deemed to have voluntarily resigned (i.e., quit) after failing to attend a meeting to discuss his attendance.

18The correct test to apply when considering whether the respondent wilfully misrepresented his employment status is a balance of probabilities and not reasonable doubt as submitted by the respondent. In my view, this evidence shows, on balance, that the respondent wilfully misled the applicant into believing he had merely attempted a return to work at No Frills that was interrupted at multiple intervals because of pain from accident-related injuries, when, in fact, he had fully returned to work in his pre-accident role and continued to do so without missing a shift for five months up to November 2019.

The respondent was not unable to continue his employment as a result of the accident in the first 104 days after the accident

19I am not convinced the respondent had to stop working because of physical conditions and issues relating to the accident.

20The respondent seeks relief provided by section 11 of the Schedule, which specifies that the respondent’s entitlement to an IRB cannot be affected within the first 104 days after the accident if he is unable to continue a start or return to work as a result of the accident.

21Up until November 2019, the pay data from No Frills shows the respondent did not miss a scheduled shift since returning from vacation in June 2019. The respondent’s submissions do not point to contemporaneous medical evidence that supports his accident-related injuries prevented him from working in November 2019 or thereafter. Further, the employment file of A&G The Road Cleaners confirms the respondent started working as a snow-plow operator on November 23, 2019, which is 21 calendar days after his final day of paid work at No Frills. The IRB calculation report—prepared by S&T Accounting on July 28, 2021—indicates the respondent then began working at Ferrovial Services Canada at some point in 2020. While the respondent submits the applicant has not proved beyond a reasonable doubt that the respondent worked in 2020, I find, on a balance of probabilities, that it is more likely than not he did because the accounting report lists $1,124.85 in gross income at Ferrovial Services Canada in 2020.

22I place little weight on Dr. Gabidulina’s psychological report, which offers diagnoses of depressive episode and somatic symptom disorder. The assessment was completed in October 2019 after the respondent had returned to work four months prior, and I was not pointed to evidence of post-accident work stoppages owing to psychological symptomology during that period. Further, I was not pointed to medical evidence that supports the respondent’s employment at No Frills, A&G The Road Cleaners, or Ferrovial Services Canada ended or was otherwise interrupted because of psychological issues that were related to the accident. While the respondent complained to Dr. Gabidulina that his ability to execute his cashier’s job tasks at No Frills was “seriously hampered” by exacerbation of physical pain—and to the extent his work hours were reduced—I was not pointed to evidence in the employment files of No Frills that support he was given modified duties or less hours to accommodate his pain.

23Similarly, the forms completed by Dr. Chan do not persuade me that the respondent stopped work because of accident-related injuries. Pertaining to the OCF-3 completed on August 14, 2019, I am not persuaded the respondent was substantially unable to perform the essential tasks of his employment as a result of the accident—and could not return to work on modified duties—as indicated by Dr. Chan. The employment records of No Frills do not support this medical opinion as they prove the respondent worked all his scheduled shifts up to November 2019. The substantive aspects of the respondent’s self-reports that Dr. Chan relied on (i.e., missed work hours and sick days because of neck and low back pain within the first two months after the accident) are also inconsistent with the employment records of No Frills. While the respondent reported that financial stress caused him to work despite Dr. Chan’s recommendation to remain off work, I find there is insufficient evidence to support the respondent’s submission as he failed to produce tax records as ordered by the Tribunal, or produce other income-related evidence to establish financial difficulty.

24This is not to say I disagree the respondent was experiencing pain from his accident. On the contrary, he reports difficulties with dressing, bending, lifting, twisting, and tasks involving prolonged sitting and standing. However, the evidence does not support his accident-related pain and injuries caused him to miss or stop work—or require modified duties—at any point prior to the stoppage of his IRB in March 2020.

25I do not agree the respondent lost time from work as a result of the accident as indicated by Dr. Chan in the minor injury treatment discharge report (the “OCF-24”). The OCF-24 does not specify when the respondent lost time from work as a result of the accident. The employment files of No Frills and A&G The Road Cleaners do not support lost hours due to the accident, nor do they support Dr. Chan’s opinion that the respondent is unable to do his pre-accident work activities. The respondent did not produce the employment file of Ferrovial Services Canada to substantiate that he lost time at work as a result of the accident while employed there.

26While I accept the respondent’s tenure with all three employers ended within the first 104 weeks after the accident as indicated in the employment files and IRB calculation report, I find there is insufficient contemporaneous medical or employment evidence that proves he was unable to continue his employment as a result of the accident. I therefore am not persuaded that the respondent qualifies for the relief provided at section 11 of the Schedule.

Applicability of sections 57(2) and (4) of the Schedule to the issues in dispute

27I find the applicant’s submissions on the IEs missed by the respondent—as well as the corresponding submissions from the respondent, and including those pertaining to sections of the Schedule relied upon by the applicant to stop the IRB—are not relevant to whether the respondent wilfully misrepresented his employment status. I therefore did not assign any weight here.

Interest

28I find the applicant is entitled to interest.

29Interest applies on the payment of any overdue benefits pursuant to section 52(5) and (6) of the Schedule. Section 52(5) of the Schedule says an insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after repayment notice is given, and ending on the day repayment is received in full.

30The respondent submits that the applicant’s notices say only that “an insurer may charge interest…” which does not convey an intention to claim interest. The applicant’s initial submissions argue that it properly informed the respondent of its intention to seek interest on the repayment. The applicant’s reply submissions say the Schedule does not require an insurer specify an intention to seek interest.

31In my view, Section 52(2) of the Schedule requires only that the respondent be given notice of the amount that is required to be repaid (emphasis added). The respondent did not point me to an authority to support his position that proper notice constitutes an intention to claim interest as mandated by the Schedule. I find that the amount to be repaid does not include interest because interest is payment of an additional amount above repayment of the principal sum owing. It is separate and distinct from the amount to be repaid. Therefore, I agree with the applicant’s reply and find the Schedule does not require an insurer to notify an insured of its intention to claim interest on the benefit repayment—the requirement under section 52(2) pertains only to notice of the repayment itself.

32I am therefore satisfied that interest applies in this case, and is payable to the applicant on the amount of IRB repayment owed at the time of this decision, calculated from the 15th day after the first notice was provided to the respondent by the applicant, and ending on the day repayment is received in full.

ORDER

33The applicant is entitled to repayment of the IRB in the amount of $9,043.27, plus interest, pursuant to section 52 of the Schedule.