Licence Appeal Tribunal File Number: 23-000741/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:
TD General Insurance Company
Applicant
and
Netharshan Haribalan
Respondent
DECISION
ADJUDICATOR: Tami Cogan
APPEARANCES:
For the Applicant: Michael Kennedy, Counsel
For the Respondent: Netharshan Haribalan (Did Not Attend)
Heard by Videoconference: March 1, 2024
OVERVIEW
1Netharshan Haribalan, (the “Respondent”), was involved in an automobile accident on September 20, 2020, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”).
2The Respondent applied for and received Non-Earner Benefits (“NEB”) from the Applicant between October 12, 2020, and May 5, 2022. The Applicant claims that these benefits were paid as the result of the Respondent’s wilful misrepresentation of material facts provided when he entered into his contract for automobile insurance. The Applicant, TD General Insurance Company, applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
ISSUES
3The issues in dispute are:
i. Is the Applicant entitled to a repayment in the amount of $7,585.00 relating to its payment of NEB for the period of October 12, 2020 to May 5, 2022?
ii. Is the Applicant entitled to interest on any overdue repayment of benefits?
RESULT
4I find that:
i. As a result of his wilful material misrepresentation to the Applicant, the Respondent shall repay $2,035.00 in NEB, the amount identified in the Applicant’s letter of notice for repayment.
ii. The Respondent shall pay interest on the above amount.
PROCEDURAL ISSUES
Proceeding Without the Respondent
5I find that the Tribunal has met its reasonable notice obligations. Therefore, I proceeded with this videoconference hearing in the absence of the Respondent.
6Proceeding with an electronic hearing where a party fails to participate, under s. 7(3) 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 electronic hearing that complies with ss. 6(1) and 6(5) of the SPPA.
7The Respondent has failed to meaningfully participate in the Tribunal process. He has not communicated with the Tribunal at any time, despite clear communication and repeated reminders of process requirements and deadlines. The Respondent failed to attend a case conference that was scheduled for September 23, 2023. This resulted in the issuing of the Case Conference Report and Order (CCRO) on September 13, 2023, that set the matter down for a 1-day electronic hearing. This CCRO included production orders to be exchanged no later than 60 calendar days after the case conference, deadlines for final witness lists 30 days prior to the hearing, and evidence due 10 days prior to the hearing.
8The Tribunal sent a Notice of Videoconference Hearing (“Notice”) to both parties on October 27, 2023. In accordance with s. 6(5) of the SPPA, the Notice:
i. set March 1, 2024, at 9:30am EST as the date and time for the electronic hearing;
ii. included details about the purpose of the hearing;
iii. provided details about the format of the electronic hearing with a User’s Guide;
iv. advised that an in-person hearing could be requested if the electronic hearing would cause significant prejudice, and;
v. contained a provision that if they do not attend, the Tribunal may make a decision in their absence and will not be entitled to any further notice in the proceeding.
9The Applicant filed its evidence for the hearing on February 22, 2024, in accordance with the timeline as established by the CCRO and the Notice. The Respondent failed to exchange documents as per the CCRO, nor did he file any evidence for the hearing. According to Tribunal records, the Respondent did not answer or reply to multiple attempts by mail or email to discuss the status of this application. On the day of the hearing, when the Respondent did not attend at the scheduled time, the Tribunal further attempted to contact him, without success, and waited 30 minutes before proceeding.
10I am satisfied that the Tribunal has met its notice obligations pursuant to s. 7(3) of the SPPA and is in compliance with ss. 6(1) and 6(5) of the SPPA.
11There is no evidence that the Respondent’s address changed or was otherwise incorrect in Tribunal records. If the Applicant’s contact information changed, he had an obligation under Rule 4.4 of the Licence Appeal Tribunal Rules to correct this with the Tribunal in writing.
12Given the above, I ordered that the hearing proceed in the absence of the Respondent.
ANALYSIS
Issue 1: Is the Applicant entitled to a repayment in the amount of $7,585.00 relating to its payment of NEB for the period of October 12, 2020 to May 5, 2022?
13I find the Applicant is entitled to $2,035.00 in repayment of the NEB paid to the Respondent.
14The onus rests with the Applicant to prove entitlement to repayment of the NEB from the Respondent on a balance of probabilities.
15The Schedule provides circumstances in which the Insurer is not required to pay an NEB. In accordance with s. 31(1)(b), this includes if a person has made a material misrepresentation that induced the insurer to enter into the contract of automobile insurance. If a person is disqualified from receiving the NEB due to a material misrepresentation, then they are liable to repay the benefits in accordance with s. 52(1)(b) of the Schedule.
16The Schedule allows the Applicant to claim repayment of benefits that have been paid to the Respondent in certain situations and subject to conditions. Section 52 of the Schedule addresses repayments, with s. 52(2) providing that an insurer must give an insured person notice of the amount that is required to be repaid. If the Applicant did not provide notice to the Respondent, then repayment is not required.
17Section 52(3) of the Schedule provides a 12-month time limit on a claim for the repayment of a benefit under s. 52(2), unless this amount was “originally paid to the person as a result of wilful misrepresentation or fraud”.
18Both ss. 31(1)(b) and 52(3) of the Schedule hinge on a determination as to whether or not the Respondent has made a “wilful misrepresentation of material facts”.
Wilful Misrepresentation of Material Facts
19I find the Respondent has wilfully misrepresented material facts. It follows that under s. 31(1)(b) of the Schedule, the NEB is not payable; under s. 52(1)(b) the Respondent is liable for repayment; and, under s. 52(3) the 12-month time limit on a claim for repayment is not applicable.
20The Applicant submits the following position:
i. The Respondent wilfully misrepresented material facts that induced TD General Insurance Company to enter into a contract for automobile insurance. Specifically, the Applicant alleges:
(a) the Respondent represented that he was the owner of the 2018 Mercedes Benz and that he would register himself as the owner;
(b) the Respondent represented that the vehicle was not financed; and
(c) the Respondent represented that the vehicle would not be used for any commercial purpose.
ii. As a result of the above misrepresentations, TD General Insurance Company was induced into providing an automobile insurance policy for a vehicle the Respondent did not own, was financed without the Applicant being provided the financier’s information, and for a vehicle that was used for commercial purposes. Had the truth of any one of these been known, the policy would have been denied.
21The Respondent did not submit evidence or provide submissions, he is silent on this matter.
22In support of its position, the Applicant relies on Primmum Insurance Company v Baley-Daley, 2015 CanLII 154395 (ON LAT), at paragraph 16, for a definition of “misrepresentation” and “wilful” that has been accepted and applied by the Tribunal:
“Misrepresentation”: 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.
“Wilful”: has been defined as “a deliberate or intentional action”.
23The Applicant also relies on the FSCO case Carol McIntosh-Smith v Belair Insurance Company Inc, 2004 ONFSCDRS 110, which at page 4, provides:
A more generalized definition of misrepresentation in the insurance context is found in Black's Law Dictionary:
A statement of something as a fact which is untrue and material to the risk, and which assured states knowing it to be untrue and with intent to deceive, or which insured states positively as true, not knowing it to be true, and which has a tendency to mislead. One that would influence a prudent insurer in determining whether or not to accept the risk, or in fixing the amount of the premium in the event of such acceptance.
24The Applicant relies on Kosmopoulos v. Constitution Insurance Co., 1987 CanLII 75 (SCC), [1987] 1 SCR 2, to support that the Respondent misrepresented his insurable interest, in that being he was a driver of the vehicle, not the owner. Furthermore, in support of its position that misrepresenting interest, or ownership, may affect the coverage of the policy, the Applicant relies on Lambton Mutual Insurance Company v. General Accident Insurance Company, 1995 ONICDRG 193.
25The Applicant submitted evidence of the recorded “Binding Call” between the Applicant and Respondent on June 9, 2020, which resulted in an insurance contract for a 2018 Mercedes Benz C45 automobile. During the call the Respondent clearly indicated he was purchasing the vehicle to be registered in his name, and that he would not be using the vehicle for any commercial purpose. On the issue of financing for the vehicle, the Respondent initially stated the vehicle was being financed but was unsure who the financier would be. When he was informed that the vehicle could not be insured without the details of the financier, he stated the financing should be removed, as the vehicle was paid off. The Respondent was directed that he must inform the insurer of any changes, such as addresses, drivers, uses, and milage. The Respondent acknowledged affirmatively.
26The Applicant submitted evidence of a Ministry of Transportation Ontario “Vehicle Identification Number (VIN) history without Address” report obtained by the Applicant on July 9, 2021. The report spans from September 19, 2017, to the date it was obtained and details the registered owners of the vehicle. The Respondent is not listed as having been an owner. I note that the vehicle had a new Ontario plate attached to it on June 11, 2020, 2 days after the Respondent obtained insurance for the vehicle, which remained registered under the name Krishan Balasingam.
27The Applicant also submitted a Statutory Declaration signed by the Respondent on January 29, 2022, in which he indicated that he is not the registered owner of any vehicle and he does not have use of any other vehicle, including through his employer. The Respondent did not complete the questions regarding the purchase and registration of the vehicle, other than to state it was a private sale.
28The Applicant required the Respondent to attend an Examination Under Oath (EUO) on July 13, 2022. The transcript of the EUO was submitted into evidence. During the EUO the Respondent stated he purchased the vehicle in 2019 from “Krishan” but it was being repaired until it was insured. He bought the vehicle for $38,000.00 to $40,000.00, paid cash for most of it and owed $5,000.00 to $8,000.00. He could not answer why the vehicle was newly registered to Krishan Balasingam on May 1, 2020, one month before the Respondent called the insurer and entered into an insurance contract. The Respondent stated that between 2018 and one month before the accident he worked for Uber, Uber Eats and DoorDash, as well as delivered parts for his father’s garage and other delivery jobs, but that he used his father’s vehicle. He stated that he only drove his vehicle for fun. The Respondent also stated that he believed he could produce the registration for the vehicle.
29The Applicant submits that as a result of the information obtained during the EUO, a production order was requested during the case conference. The Respondent was ordered to produce:
i. financial and employment records (including vehicle information registered with the application) from Uber, Uber Eats, DoorDash and all other delivery employers for whom the claimant worked from one year pre-accident to date;
ii. MTO vehicle registration slip for the vehicle involved in the accident; and
iii. contact information for the individual from whom the claimant purchased the vehicle.
30The Applicant submits the Respondent did not produce any of the ordered items. Production of these documents could have proven that the Respondent was the registered owner, the vehicle was not used for commercial purposes, and that the vehicle was not financed. The Applicant submits an adverse inference should be drawn from the Respondent’s disregard for the Tribunal’s order, failure to submit evidence, and over all lack of participation in the dispute resolution process. That adverse inference being that the Respondent was using the insured vehicle for commercial purposes, was not the registered owner of the vehicle, and wilfully made material misrepresentations when entering into a contract for insurance.
31I do agree with the Applicant that the Respondent made wilful material misrepresentations that induced TD General Insurance Company to enter into a contract for automobile insurance. I find the allegations made by the Applicant have been corroborated with external, objective evidence that meet the Applicant’s burden in proving that the Respondent made wilful misrepresentations that warrant the repayment of the NEB.
Notice of repayment request
32The Applicant has satisfied repayment notice requirements in accordance with ss. 52(2) of the Schedule for the amount of $2,035.00.
33The Applicant submitted a letter which provided the Respondent information about his entitlement to NEB on December 15, 2020. In the letter a lump sum amount for the period of October 19, 2020 to January 3, 2021 was identified, as well as an ongoing biweekly amount of $370.00 thereafter. I have not been directed to evidence of the biweekly payments being made.
34The Applicant relies on three letters provided to the Respondent. These letters were dated May 5, 2022, July 28, 2022, and September 12, 2022. The first letter informs him of the Applicant’s determination that the Respondent misrepresented his ownership of the insured vehicle and that the vehicle was not financed. On the grounds of Material Misrepresentation, the Respondent’s claim for NEB was denied, and the Applicant made a demand for repayment of the NEB paid in the past 12 months, in the amount of $2,035.00. Attached to the letter was information on the Respondent’s right to dispute. Both the second and third letter inform the Respondent that as a result of Material Misrepresentation he is required to repay the full amount of NEB in the amount of $2,035.00 and provide information on the Respondent’s right to dispute. The third letter also informed the Respondent that the Applicant may charge interest starting 15 days later.
35I note that s. 52(2) of the Schedule requires the Applicant to give notice of the amount that is required to be repaid. In each of the letters, the Applicant indicated that the amount to be repaid is $2,035.00.
36In this application, the Applicant is seeking repayment of the IRB in the amount of $7,585.00. I have not heard evidence of how the amount of $7,585.00 was calculated. Furthermore, none of the letters of notice provided to the Respondent specified that amount. The Applicant has not met its burden to prove entitlement to repayment in the amount of $7,585.00.
37I find that the Respondent must repay the NEB that was paid to him between October 12, 2020 and May 5, 2022, in the amount of $2,035.00 pursuant to s. 52(1)(a) of the Schedule as a result of material misrepresentation.
Issue 2: Is the Applicant entitled to interest on any overdue repayment of benefits?
38I find the Applicant is entitled to interest on $2,035.00, starting September 27, 2022, which is 15 days after the notice of repayment of NEB with interest was given to the Respondent.
39The Schedule allows the Applicant to charge interest on the outstanding balance to be repaid. Section 52(5) provides that interest charges can start 15 days after notice under s. 52(2) has been given, and interest ends on the day repayment is made in full. The rate of interest is set as the “bank rate” in effect on the 15th day. Section 52(6) defines the bank rate as:
[T]he bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule I to the Bank Act (Canada).
40The Applicant submits notice under s.52(2) was properly given to the Respondent, triggering ss. 52(5) and 52(6). The bank rate on the 15th day after the notice was given was 1%.
41In the absence of submissions from the Respondent, I accept the position of the Applicant. As stated above, the notice of repayment request given on September 12, 2022, was proper. Interest may be calculated at 1% from September 27, 2022, onward until the repayment is received in full.
CONCLUSION and ORDER
42I find that:
i. The Respondent wilfully misrepresented material facts with respect to his application for automobile insurance.
ii. As a result of his wilful misrepresentation to the Applicant, the Respondent shall repay $2,035.00 in NEB.
iii. The Respondent shall pay interest on the above amount.
Released: March 21, 2024
Tami Cogan
Adjudicator