Unifund Assurance Company v. Fernandez, 2024 CanLII 23452

Citation: Unifund Assurance Company v. Fernandez, 2024 ONLAT 22-001827/AABS

Licence Appeal Tribunal File Number: 22-001827/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:

Unifund Assurance Company

Applicant

and

Abraham Fernandez

Respondent

DECISION

VICE-CHAIR: Brett Todd

APPEARANCES:

For the Applicant: Gurpreet Singh, Counsel

For the Respondent: No Submissions Filed

HEARD: By way of written submissions

OVERVIEW

1Abraham Fernandez (the “respondent”) was involved in an automobile accident on November 1, 2019 and sought benefits from Unifund Assurance 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 that it alleges were made in error due to the wilful misrepresentation of the respondent regarding his work status. The applicant applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) to seek a repayment order regarding this IRB plus interest.

ISSUES

3The issues in dispute are:

1. Is the applicant (insurer) entitled to a repayment of $3,328.34 relating to its payment of IRB from November 2, 2019 to June 30, 2020?
2. Is the applicant entitled to interest on any overdue payment of benefits?
3. Is the applicant entitled to costs of $1,000.00?

4I have added the costs request above first made by the applicant in its written submissions to the list of issues in dispute. Rule 19.2 of this Tribunal’s Rules allows for a cost request to be made in writing or orally at a case conference or hearing at any time before a decision or order is released.

RESULT

5The respondent is ordered to repay $3,328.34 in IRB to the applicant due to wilful misrepresentation, pursuant to s. 52(1)(a) of the Schedule. Interest is applicable, in accordance with ss. 52(5) and (6) of the Schedule.

6The respondent is not liable to pay costs.

ANALYSIS

Proceeding with the Hearing in the Absence of the Respondent

7I find that the Tribunal has met its reasonable notice obligations. Therefore, I am proceeding with this written hearing in the absence of the respondent.

8Proceeding with a written hearing where a party fails to participate, under s. 7(2) of the Statutory Powers Procedure Act, RSO 1990, c. S.22 (“SPPA”), requires the Tribunal to be satisfied that the absent party received notice of the written hearing that complies with ss. 6(1) and 6(4) of the SPPA.

9The respondent represented himself at a case conference held with regard to this application on March 1, 2023. This was the resumption of a case conference on December 20, 2022 that was adjourned due to the non-attendance of the respondent.

10As a result of the March 1, 2023 case conference, a Case Conference Report and Order (“CCRO”) was released on March 11, 2023 that identified the issues in dispute as noted above and set the matter down for a written hearing. This CCRO also established a timeline for both parties regarding productions and submissions.

11On April 20, 2023, the Tribunal sent a Notice of Written Hearing (“NoWH”) to each of the parties that set a written hearing date of December 8, 2023. The timeline established by the CCRO and the NoWH required the applicant’s submissions to be filed by November 8, 2023 and the respondent’s submissions to be filed by November 24, 2023. Applicant reply submissions, if any, were due by December 1, 2023.

12The applicant filed its submissions by the deadline noted above. The respondent failed to file submissions.

13Tribunal records indicate that the Tribunal contacted the respondent via phone calls and emails on November 29, 2023 regarding these missing submissions. The respondent informed the Tribunal that his lawyer was handling this matter and that the Tribunal needed to contact this representative. He provided a phone number for this counsel.

14However, no Declaration of Representative (“DoR”) form had been filed. When contacted by the Tribunal to request that a DoR be filed, the legal counsel named by the respondent denied representing him in this matter. The respondent did not respond to further Tribunal queries regarding the missing submissions, the issue with the respondent’s alleged representative, or if he was intending to hire other counsel to represent him in this application.

15Given the respondent’s participation in the March 1, 2023 case conference and his later communications with the Tribunal, it is apparent that he knew of this proceeding and chose not to participate.

16Tribunal records also do not indicate any request from the respondent to change the format from a written hearing in accordance with s. 6(4)(b) of the SPPA.

17As a result, I am satisfied that the Tribunal has met its notice obligations pursuant to s. 7(2) of the SPPA and is in compliance with ss. 6(1) and 6(4) of the SPPA. Accordingly, I may proceed with this hearing.

IRB Repayment

Notice of repayment request

18I find that the applicant has satisfied the repayment notice requirements as specified in ss. 52(2) and 52(3) of the Schedule.

19An insurer is permitted to claim the repayment of IRB in certain situations and subject to certain conditions as established by the Schedule. Section 52(2) provides that an insurer must give an insured person notice of the amount that is required to be repaid. Section 52(3) mandates that such notice be provided within 12 months of the payment of the amount that is to be repaid, unless the amount was originally paid as a result of wilful misrepresentation or fraud.

20The applicant submits that correspondence sent by Unifund to the respondent on December 8, 2020 meets the notice requirements of s. 52. This letter, which was followed by reminders sent on January 21, 2021 and July 28, 2021, identified the amount of IRB being sought for repayment. The applicant further submits that the IRB repayment period should not be limited to 12 months due to the respondent wilfully misrepresenting his employment status while receiving IRB.

21As noted above, the respondent has not provided submissions.

22I agree with the applicant. The December 8, 2020 letter is compliant with the repayment notice provisions provided in s. 52 of the Schedule. The 12-month limitation provision of s. 52(3) does not apply, as I also find that the respondent has committed wilful misrepresentation (see below) with regard to not informing his insurer about continuing to work while claiming IRB.

23As a result, the applicant may seek repayment of IRB.

Wilful misrepresentation of employment and IRB repayment

24I find that the applicant is entitled to the repayment of $3,328.34 in IRB that was paid to the respondent from November 2, 2019 to June 30, 2020, as a result of the respondent’s wilful misrepresentation. The applicant is also entitled to interest on this amount.

25Section 7(2) of the Schedule details how the weekly base amount of IRB is calculated. Sections 7(3)(a) and (b) of the Schedule allows an insurer to deduct 70 per cent of any gross employment or self-employment income received by an insured person as a result of being employed after an accident and during the period during which he or she is eligible to receive IRB.

26Section 52(1)(a) of the Schedule establishes that an insured person is liable to repay the insurer any benefit “paid as the result of an error on the part of the insurer, the insured person or any other person, or as a result of wilful misrepresentation or fraud.”

27Here, the applicant submits that IRB was paid to the respondent following the subject accident. This IRB was based on a Disability Certificate/OCF-3 dated November 13, 2019 in which it was noted that the respondent was unable to work following the accident. According to information provided in an Employer’s Confirmation Form/OCF-2 from the respondent’s employer, Pinnacle Technical-Resources Canada, the respondent was entitled to $151.29 per week in IRB.

28The insurer informed the respondent of the above information in an Explanation of Benefits (“EoB”) letter dated February 28, 2020. This EoB included the provision that the respondent was responsible for informing the insurer if/when he returned to work, and that failure to do so might result in an overpayment of IRB that would later be required to be repaid.

29A cheque in the amount of $2,723.18 was issued at the same time to cover the IRB period from November 8, 2019 to March 12, 2020. This was cashed by the respondent on March 5, 2020. Two further IRB payments of $302.58 each were made covering the period between March 13, 2020 and April 9, 2020. Both were cashed by the respondent on June 8, 2020. In total, $3,328.34 in IRB was paid to the respondent for the period between November 8, 2019 and April 9, 2020.

30The applicant alleges that all of this IRB was incorrectly paid. It claims that the respondent committed wilful misrepresentation by failing to disclose all of his sources of income and that he continued to work while receiving IRB. In a signed statement dated February 18, 2020, the respondent noted that at the time of the accident, he was working as both a car jockey for Pinnacle Technical-Resources Canada and as a paid superintendent in his apartment building. However, he did not disclose this superintendent position to his insurer when he applied for IRB.

31An OCF-2 dated June 30, 2020 and pay stubs from this superintendent employer—H&R Property Management Ltd.—sent to the insurer on October 19, 2020 indicated that the respondent continued to work in this position during the time he was receiving IRB. As a result, the insurer engaged Williams & Partners to complete a forensic accounting investigation. In a report dated November 24, 2020, the firm determined that the respondent had not been entitled to any IRB due to the undisclosed income.

32As has been already detailed above, the respondent did not file submissions.

33I agree with the position of the applicant. It has thoroughly substantiated its claims that the respondent committed wilful misrepresentation in failing to disclose the income that he continued to receive from his superintendent employment during the same time that he was receiving IRB.

34The evidence adduced by the applicant is unassailable. In the written statement dated February 18, 2020, the respondent admits that he has “another job being a superintendent at my building” in addition to the position at Pinnacle, and that he receives income for this work. The respondent does not explain in this statement why he failed to inform his insurer of this employment and income when he applied for and accepted IRB payments.

35Information on the OCF-2 dated June 30, 2020 regarding this superintendent job shows that the respondent was receiving income of $521.65 per week from H&R Property Management Ltd. during the four weeks before the accident and that he received gross income of $27,070.06 during the 52 weeks prior to the accident.

36The OCF-2 also indicates that the respondent had worked in this position from March 17, 2008 to present, and that no time off was taken post-accident. According to the respondent’s pay stubs from H&R and the calculations in the Williams & Partners accounting report of November 24, 2020, the respondent had gross income of:

i. $5,671.26 for the period between November 2, 2019 and December 31, 2019, resulting in gross weekly income of $661.76; and

ii. $15,487.20 for the period between January 1, 2020 and June 30, 2020, resulting in gross weekly income of $609.51.

37As noted in the Williams & Partners report, the gross weekly income for both periods of time exceeds the maximum of $400.00 for IRB in the respondent’s insurance policy. Following s. 7(3)(a) of the Schedule, which allows an insurer to deduct 70 per cent of an insured person’s post-accident gross weekly employment income from the IRB amount payable, results in the following calculation, as detailed in the Williams & Partners report:

i. November 2, 2019 – December 31, 2019: $661.76 x 70% = $463.23 in IRB deduction per week. This results in nil IRB as $400.00 - $463.23 = $0.

ii. January 1, 2020 – June 30, 2020: $609.51 x 70% = $426.66 in IRB deduction per week. This results in nil IRB as $400.00 - $426.66 = $0.

38The respondent’s admission that he was working a second, undisclosed, job during the same time in which he was receiving IRB demonstrates that he committed wilful misrepresentation. It is clear that he knew or should have known that he was required to notify his insurer of this fact when claiming IRB. The income information listed above also shows that the respondent’s actual IRB entitlement during this period of time was $0, due to this previously undisclosed source of income.

39For the above reasons, the applicant is entitled to the repayment of $3,328.34 in IRB that was paid to the respondent during the period between November 2, 2019 to June 30, 2020. The applicant is also entitled to interest on this amount.

COSTS

40I find that the respondent is not liable to pay costs.

41Rule 19 of this Tribunal’s Rules establishes that a party may make a request to the Tribunal for costs if it believes that the other party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith.

42In submissions, the applicant alleges that the respondent acted in bad faith by failing to disclose his additional employment as a superintendent with H&R Property Management. It further submits that the respondent was unreasonable in failing to participate in the Tribunal proceedings by not filing either a Response or a Case Conference Summary for the case conference and by not filing submissions for this written hearing.

43As a result, the applicant requests a costs award of $1,000.00, due to the above actions of the respondent creating “delay.”

44I disagree that the respondent’s conduct here rises to the level of a costs order.

45First, the bad faith allegations largely involve the respondent’s conduct prior to this Tribunal proceeding, not during the proceeding itself.

46Second, the failure to file submissions is insufficient to establish that a party is acting in bad faith or is being unreasonable. Ordering costs due to a self-represented party not filing submissions would have a potentially negative impact on individuals accessing the Tribunal system, which is one of the criteria that I am obligated to consider in accordance with Rule 19.6.

47Third, I have not been directed to evidence demonstrating that the respondent’s conduct interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process, which is another consideration listed under Rule 19.6.

48Correspondingly, the respondent is not liable to pay costs.

ORDER

49The respondent is ordered to repay $3,328.34 in IRB to the applicant due to wilful misrepresentation, pursuant to s. 52(1)(a) of the Schedule. Interest is applicable, in accordance with ss. 52(5) and (6) of the Schedule.

50The respondent is not liable to pay costs.