Licence Appeal Tribunal
Licence Appeal Tribunal File Number: 22-010839/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:
Ilyas Saleh
Applicant
and
Intact Insurance Company
Respondent
DECISION
ADJUDICATOR:
Brian Norris
APPEARANCES:
For the Applicant:
Michael Rotondo, Counsel
For the Respondent:
Dylan Crosby, Counsel
HEARD:
By way of written submissions
OVERVIEW
1Ilyas Saleh (“the Applicant”) was involved in an automobile accident on December 18, 2011, and sought benefits from Intact Insurance Company (“the Respondent”) pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).
2The applicant was denied income replacement benefits (“IRBs”) by the Respondent and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUES
3The preliminary issue in dispute is:
i. Is the Applicant barred from proceeding to a hearing for all the benefits claimed in this application because he failed to dispute the Respondent’s denial within the 2-year limitation period?
ISSUES
4The issues in dispute are:
i. Is the Applicant entitled to an income replacement benefit in the amount of $126.88 per week for the period from December 26, 2011 to October 26, 2012?
ii. Is the Respondent liable to pay an award pursuant to section 10 of Regulation 664 because it unreasonably withheld or delayed the payment of benefits to the Applicant?
iii. Is the Applicant entitled to interest on the overdue payment of benefits?
RESULT
5I find that the Applicant is entitled to IRBs in the amount of $30.29 per week for the period from April 13, 2012 to May 31, 2012.
6Interest is payable on the overdue payment of IRBs, effective November 11, 2015.
7The Applicant is entitled to an award of 20% of the amounts withheld.
BACKGROUND
8The Applicant was the driver of a vehicle which was struck from behind. He was taken by ambulance from the scene of the accident to the hospital. He was examined at the hospital and discharged with soft-tissue injuries.
9The Applicant claimed entitlement to IRBs as a result of the accident. In response, the Respondent requested additional information and insurer’s examinations (“IEs”) to determine the eligibility and quantum, if any, of the Applicant’s IRBs.
10Once the IEs were completed, the Respondent wrote to the Applicant and denied funding for further IRBs, effective October 26, 2012.
11The Respondent does not dispute that the Applicant meets the legal test for eligibility to IRBs during the period of dispute. At issue is the weekly quantum owed to the Applicant during the period of dispute, if any. The Applicant submits that he is entitled to $126.88 per week, plus interest, for the period, while the Respondent submits that the Applicant is not entitled to anything because his entitlement to IRBs was suspended pursuant to section 33 of the Schedule.
ANALYSIS
The Respondent never addressed the limitation period
12The Applicant made submissions regarding the preliminary issue. However, the Respondent never addressed the preliminary issue, despite being the party to raise it at the case conference.
13The lack of submissions from the Respondent on the preliminary issue cause me to conclude that it has conceded the issue and/or no longer wishes to pursue it. Accordingly, my focus of this decision will be on the merits of the Applicant’s claims – not whether he disputed his claims within 104 weeks of a refusal to pay.
Period of eligibility starts April 13, 2012
14I find that the Applicant is not entitled to IRBs for any period prior to the submission of an OCF-3, pursuant to section 36(3) of the Schedule.
15Section 36(2) of the Schedule provides that an applicant for a specified benefit shall submit a completed disability certificate and section 36(3) states that there is no entitlement prior to submitting a disability certificate.
16The Applicant submitted the OCF-3 on April 13, 2012. The OCF-3 by Dr. P. Bhalesar, chiropractor, dated April 11, 2012, was sent to the Respondent via fax on April 13, 2012. Accordingly, his potential period of entitlement starts no sooner than April 13, 2012.
Section 33 requests
17I find that the Respondent made a valid request pursuant to section 33 of the Schedule however, I find that it is not permitted to rely on section 33 of the Schedule to avoid payment of the Applicant’s IRBs.
18Section 33 of the Schedule provides the Respondent the ability to request information from the Applicant. Section 33(1) states that, within 10 business days, the Applicant shall respond to the Respondent’s request for information reasonably required to assist it in determining his entitlement to a benefit.
19Section 33(6) of the Schedule states that the Respondent is not liable to pay a benefit in respect of any period during which the Applicant fails to comply with the request.
20Section 33(8)(b) provides that the Respondent shall resume paying a benefit and pay all the amounts withheld during the period of non-compliance, if the Applicant provides a reasonable explanation for the delay in complying with the section.
21The Applicant submits that he is entitled to $126.88 per week, plus interest, for the relevant period. The Respondent contends that the Applicant is not entitled for the following reasons:
i. The Applicant failed to comply with requests made March 28 and April 4, 2012 to provide OCF-5 forms to permit the release of hospital and family physician records, and pay stubs;
ii. The Applicant failed to comply with a July 10, 2012 request for financial documents requested to calculate the quantum of IRBs owed; and
iii. The Applicant’s accountant’s report inaccurately quantified the weekly quantum based on the four weeks prior to the accident, rather than 52 weeks prior.
22In reply, the Applicant submits that the Respondent never intended to withhold payment of the Applicant’s IRBs and made a clear and unambiguous agreement to pay the benefit, subject only to the determination of quantum.
23For the following reasons, I find that the Respondent’s request made April 4, 2012 was a valid request pursuant to section 33 of the Schedule. However, I find that the Respondent is not permitted to use section 33 noncompliance as a reason for not paying a benefit. This is because the Applicant substantially complied with the request and the Respondent clearly and unequivocally agreed to pay IRBs, subject to determining quantum, in accordance with section 33(8) of the Schedule.
The requests made March 14 and April 4, 2012
24I find that the request made March 14, 2012 is not compliant with section 33 of the Schedule, but the April 4, 2012 request is.
25The request made March 14, 2012 is not compliant with section 33 of the Schedule because it is erroneous. This request sought medical and employment records from the Applicant and made correct reference to section 33. However, the Respondent erred when it advised the Applicant that a failure to comply with the request will result in the suspension of entitlement to any benefits. This notice is incorrect because the Respondent is not permitted to suspend all benefits due to a failure to comply with a request made pursuant to section 33 of the Schedule, it can only suspend the benefits related to the request.
26The Respondent sent a second notice, dated April 4, 2012, which complies with section 33 of the Schedule. The April 4, 2012 notice states the documents the Respondent requires, refers to section 33 of the Schedule, and clearly explains that the Applicant’s entitlement to IRBs will remain suspended until the information is received.
27I find that the Applicant substantially complied with the section 33 request by no later than November 11, 2015. The Applicant provided his family physician’s records to the Respondent on July 11, 2012, and the OCF-2 on April 18, 2012, and that he provided other employment documents to the Respondent on November 11, 2015.
28The Respondent discontinued its section 33 request for information in a letter dated June 26, 2016. The letter states that the Respondent received the relevant information to substantiate possible income loss and that it was in the process of assigning the file to an accountant. The letter also indicates that settlement negotiations are ongoing, and it would assign the file to an accountant by July 5, 2016, to calculate any owed IRBs. It is clear from this letter that the Respondent intended to pay IRBs to the Applicant, subject to a calculation from an accountant. Nowhere in the letter does the Respondent indicate that payment of IRBs during the alleged period of non-compliance would not be considered.
29The letter dated June 26, 2016 is a clear indication that the Applicant complied with the Respondent’s requests made pursuant to section 33 of the Schedule, and that the Respondent never required a reasonable explanation for the delay, thus, engaging section 33(8). Section 33(8) provides that the Respondent shall resume payment of the benefit, if a benefit was being paid, and shall pay all amounts that were withheld during the period of non-compliance, if the Applicant provides a reasonable explanation for the delay in complying. Here, there is no argument that the Applicant has failed to provide a reasonable excuse and the language in the Respondent’s letter dated June 26, 2016 is clear that it has sufficient information to calculate IRBs, and there is nothing in that letter, or subsequent notices to the Applicant, indicating that the Respondent intended to continue to withhold payment of IRBs due to non-compliance with a request made pursuant to section 33 of the Schedule, subject to receiving a reasonable excuse for the delay.
30I find that the Respondent is obliged to pay IRBs to the Applicant following the submission of the OCF-3 until the clear and unequivocal denial of October 26, 2012. Further, based on the June 26, 2016 letter, the Respondent is not permitted to suspend payment of the benefit due to non-compliance with section 33 of the Schedule because the Applicant substantially complied with the request and the Respondent agreed to pay the benefit, subject only to a calculation of quantum.
Quantum
31I reject the quantum proposed by the Applicant, derived from the report by J. Marino, forensic accountant, dated May 10, 2023 (“the Marino report”) because, in my view, it is calculated erroneously.
32The Marino report include fundamental errors which renders the conclusions demonstrably inaccurate. The Marino report calculates the Applicant’s income based on income that was not reported to the CRA. Section 4(5) of the Schedule imposes that a person’s income is calculated in accordance with the income reported under the Income Tax Act. The Marino report concludes that the Applicant earned a gross income of $725.00 from his wife’s business, but the Applicant’s tax returns show no T4 income – suggesting he earned no income from employment, but instead self-employment.
33The Marino report incorrectly calculated the Applicant’s quantum based on the four weeks preceding the accident. The Applicant never reported his income from employment under the Income Tax Act and it follows that he is therefore unable to base his calculation on the four weeks preceding the accident by operation of Section 4(5) of the Schedule. The Applicant cannot get the benefit of recording employment income if the income has not been reported under the Income Tax Act.
34The Applicant’s IRBs should be calculated pursuant to section 4(2)(2)(i), because he reported no T4 income on his tax returns, and the returns instead suggest his income was from self-employment. The Applicant’s 2011 tax returns show “other income” in the amount of $2,250.00 for the year, and report no T4 income, which is consistent with income from self-employment. The calculation method in 4(2)(2)(i) assesses the Applicant’s income on the bases of the last year preceding the accident. Applying the formula to the Applicant’s claim, based on the income reported under the Income Tax Act, I find a weekly entitlement of $30.29 based on the following calculation: ($2,250.00/52) x 0.70 = $30.29.
Unable to make a determination on quantum beyond May 31, 2012
35I find that the Applicant has not met his onus to demonstrate any quantum after May 31, 2012. I am unable to make a determination on the quantum of entitlement because the evidence indicates that the Applicant returned to work by the end of May 2012, and the Respondent is entitled to a deduction in quantum relative to the Applicant’s income earned during this period.
36I conclude that the Applicant returned to work by no later than May 31, 2012. The Applicant reported to IE assessors on two occasions that he returned to work in May 2012. The report by occupational therapist B. O’Grady, dated June 15, 2012, from an assessment on June 5, 2012, states that “(t)he claimant reported that the company was dormant until approximately two weeks to the current assessment. The claimant reported that they are currently working on rebuilding their clientele.” The report by Dr. A. Casses, dated August 13, 2012, from an assessment on June 28, 2012, states the following regarding the Applicant: “(t)he previous business of buying and selling meat was restarted three weeks ago in the company of his wife. He has put in approximately one hour a day, being on the phone, directing some of the sales.” The Respondent raised the issue of the Applicant’s return to work in its submissions for this hearing, and the Applicant never denied them.
37Accordingly, the Respondent is entitled to a deduction of the quantum of IRBs payable to the Applicant’s following his return to work in May 2012. However, this amount cannot be calculated without knowing the Applicant’s income during that time. The Applicant reported T4 income in 2012, but there is no independent evidence to indicate when that income was earned – whether it was before or after the stoppage date of October 26, 2012.
38As the onus lies with the Applicant to demonstrate entitlement to the benefits claimed. I find that he has not met his onus to demonstrate entitlement to any quantum of IRBs following his return to work.
Interest
39Interest applies on the payment of any overdue benefits pursuant to section 51 of the Schedule.
40The Respondent submits that, in the event any IRBs are owed to the Applicant, no interest should accumulate before the Applicant provided his income documents, on November 11, 2015. The Applicant had an opportunity for reply, but never addressed this issue.
41I find that the interest starts to accumulate on November 11, 2015. The Applicant provided employment and other documents on November 11, 2015, as confirmed by the Respondent on June 26, 2016. The production of the employment and other documents was in response to a request made pursuant to section 33 of the Schedule. Pursuant to section 33(8), the Respondent is required to resume paying a benefit, if a benefit was being paid.
42The fact that the Respondent never paid IRBs does not upset the operation of section 33(8) of the Schedule. Primarily, this is because the Respondent agreed to pay IRBs in its letter dated June 26, 2016, subject only to a calculation of the quantum owed. However, it is also the reasonable application of the consumer protection framework of the Schedule which seeks to compensate automobile accident victims in a timely manner. It cannot be said that it was the legislature’s intention to permit the Respondent to prolong the delayed payment of IRBs to an insured person simply because it had not yet paid IRBs prior to the request made pursuant to section 33 of the Schedule.
Award
43The applicant sought an award under section 10 of Regulation 664. Under section 10, the Tribunal may grant an award of up to 50 per cent of the total benefits payable if it finds that an insurer unreasonably withheld or delayed the payment of benefits.
44The Applicant submits that it cannot be ignored that the Respondent has been in receipt of relevant documents for over eight years and has done nothing to calculate or pay the Applicant’s IRBs. He submits that the Respondent continuously sought to avoid its payment obligations under the Schedule by seeking to deprive a vulnerable consumer of his rights, which to him is a clear case of unreasonable withholding and delaying of a payment, and amount to bad faith. The Respondent submits that its position is not unreasonable as the Applicant took over three years to comply with a request made pursuant to section 33 of the Schedule, has not provided some of the documents requested, and has provided no explanation for the delay.
45I find that the Respondent’s failure to calculate the Applicant’s IRBs upon receipt of his income and other documents, warrants an award. The Respondent’s letter dated June 26, 2016 clearly demonstrates an intention to pay IRBs to the Applicant and clearly states that his IRBs will be calculated if a settlement cannot be reached. There is no evidence before me to suggest that a settlement was reached. Yet the Respondent never calculated the Applicant IRBs. This warrants an award.
46The Applicant’s significant delay, absent any reasonable explanation, partly mitigates the Respondent’s liability to pay an award. The Applicant took over three years to comply with a reasonable request made pursuant to section 33 of the Schedule. To-date, his return to work status and post-accident income is unclear, despite having an opportunity to address the issue in his submissions.
47The Respondent must actively adjust the Applicant’s claims. This includes actions such as following through on its representations in seeking an accountant’s report, or following up with the Applicant on the production of relevant information. Accounting for the Applicant’s contribution in the delayed payment of his IRBs, I find that the Respondent is liable to pay an award of 20% of the amounts withheld.
CONCLUSION AND ORDER
48The Applicant is entitled to IRBs in the amount of $30.29 per week for the period from April 13, 2012 to May 31, 2012.
49Interest is payable on the overdue payment of IRBs, effective November 11, 2015.
50The Applicant is entitled to an award of 20% of the amounts withheld.
Released: December 2, 2024
Brian Norris
Adjudicator