Citation: Certas Home and Auto Insurance Company v. Howe, 2024 ONLAT 20-014898/AABS

Licence Appeal Tribunal File Number: 20-014898/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:

Certas Home and Auto Insurance Company

Applicant

and

James Howe

Respondent

DECISION

ADJUDICATOR:

Harry Adamidis

APPEARANCES:

For the Applicant:

Michael Prosia, Counsel

For the Respondent:

James Howe

HEARD:

By written submissions

OVERVIEW

1James Howe, the respondent, was involved in an automobile accident on October 7, 2010, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”). The applicant, Certas Home and Auto Insurance Company, paid the respondent an income replacement benefit (IRB) from October 15, 2010, to November 4, 2019. The applicant applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of a repayment dispute.

ISSUES

2The issue(s) in dispute is/are:

i. Does the Tribunal have jurisdiction to decide this matter?

ii. Is the applicant entitled to a repayment of $85,181.38 relating to its payment of an income replacement benefit paid for the period of November 15, 2010, to November 4, 2019?

iii. Is the applicant entitled to interest on the overpayment?

RESULT

3The applicant is entitled to the quantum of $85,181.38, plus interest pursuant to the Schedule.

PROCEDURAL ISSUES

4The Amended Case Conference Report and Order (Amended CCRO) of Adjudicator Pinto set the following schedule for the parties to serve and file their submissions:

• Applicant’s submissions and evidence: 30 calendar days prior to the scheduled hearing

• Respondent’s submissions and evidence: 14 calendar days prior to the hearing

• Applicant’s reply submissions: 7 calendar days prior to the scheduled hearing

5A Notice of Written Hearing was sent to the parties by email on February 2, 2023. The notice advised the parties that the written hearing would take place on September 15, 2023.

6The applicant filed its submissions on August 14, 2023.

7In an email dated September 15, 2023, the applicant advised the Tribunal that it received the respondent’s submissions on September 7, 2023.

8On September 29, 2023, the applicant filed a motion to extend the filing date of its reply submissions. Its reply submissions were received by the Tribunal that same day. In its motion, the applicant submits that it received the respondent’s submissions after the previously ordered due date. In light of these circumstances, the applicant asked the Tribunal to allow for the late filing of its reply submissions.

9The Tribunal received the respondent’s submissions on the substantive issues October 5, 2023. He provided no explanation for the late filing. He made no submissions on the applicant’s motion.

10In order to ensure procedural fairness for all parties, I am allowing the late filing of the parties’ submissions: in my view, excluding the respondent’s submissions would prevent him from defending this application. Similarly, it would be procedurally unfair to admit respondent’s late submissions but deny the applicant an opportunity to reply when the lateness was caused by the respondent.

ANALYSIS

Jurisdiction

11In a Statement of Claim dated November 29, 2013, the respondent sought payment of the IRB in Superior Court. This action remains unresolved.

12At the first case conference, Adjudicator Flude raised the issue of jurisdiction because the same type of benefit is being considered in two forums. The applicant’s position is that this current accident benefits dispute, the repayment of an IRB, can only be resolved by the Tribunal. The respondent agrees.

13I find that the Tribunal has jurisdiction to resolve this dispute. The application for repayment arose during the period where the Tribunal has the sole authority under s. 280(2) of the Insurance Act to determine accident benefits disputes, including the repayment of an IRB.

Repayment and interest

Misrepresentation of Work History and Ability to Work

14For the reasons that follow, I find the respondent engaged in willful misrepresentation while receiving an IRB.

15Section 52 of the Schedule concerns the repayment of benefits. Under s. 52(1)(a), a person is liable to repay to the insurer any benefit that is “paid to the person” as a 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. Sections 52(2) and (3) provide timelines for repayment requests if a person is liable to repay an amount to an insurer. The insurer shall give the person notice of the amount that is required to be repaid.

16In 17-000272 v T.T., 2017 CanLII 87539 (ON LAT), the Tribunal defined “misrepresentation” as “any manifestation by words or other conduct by one person to another that, under the circumstances, amounts to an assertion not in accordance with the facts.” The Tribunal also held that “silence or a failure to report” may constitute wilful misrepresentation, depending on the circumstance.

17The parties agree that the respondent received an IRB between December 3, 2010, and November 4, 2019, in the amount was $169.58 per week until October 7, 2012, when it was increased to $185.00 per week. The parties also agree that the total amount of the IRB received by the respondent is $85,181.38.

18According to the applicant, the respondent was employed after he began receiving the IRB in 2010 and that this was never disclosed to the applicant. Instead, the respondent misled the applicant’s assessors by denying that he worked post-accident.

19The respondent acknowledges working post-accident. However, this employment was always short term and sporadic because accident-related pain prevented him from maintaining long-term employment.

20The applicant conducted insurer three examinations (IEs) in which the respondent denied working post-accident. I note the following excerpts:

• From the Independent Psychiatry Evaluation dated November 20, 2019, by Dr. Velan Sivasubramanian: “Mr. Howe states that he last worked just after his index motor vehicle accident, perhaps working for half a day but leaving secondary to the pain.”

• From the Independent Physiatry Evaluation dated November 20, 2019, by Dr. R.A. Williams: “At the time of the motor vehicle accident dated October 7, 2010, Mr. Howe was employed at Magna through an employment agency. He worked 30 to 40 hours per week as a machine operator. The physical demands involved frequent standing, twisting, bending and lifting automotive parts weighing up to 100 pounds with other employees. He reported that he returned to his employment the day following the subject motor vehicle accident on light duties. He reported that he was unable to perform the job and was sent home. Mr. Howe reported that he was attempting to gain employment as a delivery driver but was not given ‘clearance’ and did not secure employment. He reported that he has attempted to find work which was not as physically demanding as being a machine operator but has been unsuccessful.”

• From the Independent Vocational Evaluation dated November 20, 2019, by Kelly-Ann Smith, certified vocational evaluation specialist: “He indicated that he returned to work following the subject accident on October 11, 2010. He explained that he was provided light duties, albeit he could not recall the specific light duties. He discontinued working partway through the shift. He has not worked in any capacity since that time.”

21In submissions, the respondent agrees that he made these statements.

22The applicant cites three documents which show that the respondent worked post-accident:

• The applicant received the respondent’s Ontario Works file in December 2018 by way of the Superior Court proceeding. A notation dated October 31, 2012, from the Ontario Works file states “Client states that he last worked sporadically with friends in the summer of 2012 doing home renovations and construction work.”

• An undated Application for Accident Benefits (OCF-1) with CAA Insurance Company signed by the respondent indicates that he worked as a driver from January 2, 2013, to February 15, 2013.

• Surveillance report by Titan Investigations Inc. dated August 6, 2019, documents the respondent attending Co-Ex-Tec at 140 Staffern Drive, in Concord, Ontario on July 18, 2019, at 9:15p.m. wearing a yellow safety vest, ear plugs, and protective glasses.

23The respondent submits that he worked a total of four days in home renovations and construction in 2012.

24The respondent also confirms in submissions that he started his own driving and delivery business that he operated from January to February 2013. A subsequent motor vehicle accident on February 15, 2013, led to him closing the business.

25The respondent confirms that he was working as a quality inspector at Stratosphere Quality Inc from July 18, 2019, to August 11, 2019. He notes that this is the same timeframe when he allegedly attended work at Co-Ex-Tec on July 18, 2019.

26The respondent further confirms that he worked at UPS from May 20, 2019, to June 28, 2019.

27In submissions, the respondent confirmed four occasions when he worked post-accident. This contradicts what he previously advised the applicant while he was receiving an IRB. Of particular note, a letter dated June 14, 2018, from his lawyer Sidney Lebowitz, states, “Our client as well confirms that he has not earned any income since October 7, 2010.”

28The respondent’s admission to working while receiving an IRB also contradicts what he told three IE assessors; specifically, that he made one failed attempt to work immediately following the accident and has not worked since. The respondent explains he made these factually incorrect statements because at the time of the IEs his only source of income was the IRB and because he was unable to return to work due to ongoing pain.

29Financial need does not justify making factually incorrect statements to mislead IE assessors. In my view, this constitutes willful misrepresentation within the meaning of 52(1)(a) of the Schedule.

30I note that the respondent failed to proactively notify the applicant of the occasions when he worked. These circumstances show that the respondent was silent and failed to report his employment to the applicant. This causes me to further find, on a balance of probabilities, that the respondent’s willful misrepresentation pre-dates the IEs, at least to 2012.

31The respondent relies on the same IEs to establish that he has psychological and physical limitations that have prevented him from working since the accident.

32In his report, Dr. Sivasubramanian concludes that the respondent described signs and symptoms of somatic symptom disorder, and adjustment disorder, and specific phobia (driver and passenger anxiety). However, he does not diagnose the respondent with a psychological disorder. He also concludes, from a psychiatric perspective, that the respondent does not suffer a substantial inability to perform the essential tasks of his pre-accident employment. He further concludes, again from a psychological perspective, that the respondent does not suffer a complete inability to engage in any employment for which he is reasonably suited by education, training, or experience.

33Dr. Williams diagnoses the respondent with post-traumatic headache, lumbar spine strain/sprain, and right shoulder strain/sprain. Dr. Williams acknowledges that the respondent’s significant self-limiting behaviour and outright refusal to participate in some aspects of the clinical examination means that the results of the assessment represent the “bare minimum” of what the respondent is capable of performing. In any event, Dr. Williams concludes that the respondent does not have a substantial inability to perform the essential tasks of his pre-accident employment, nor does the respondent suffer a complete inability to engage in any employment for which he is reasonably suited by education, training, or experience.

34As such, the medical evidence cited by the respondent does not support his assertion that accident-related impairments caused him to suffer a substantially inability to work after the accident.

Quantum

35Under section 52(2)(a) of the Schedule, the applicant must give the respondent notice of the amount to be repaid. I find that this requirement was satisfied by the applicant’s letter dated March 24, 2020, which advises the respondent that he is liable to repay the IRB in the amount of $85,181.38. This amount is the entire IRB covering the period from October 15, 2010, to November 4, 2019.

36Under section 52(3) of the Schedule, an insured person does not have to repay any benefit where notice was not given within 12 months after the payment of the amount to be repaid, unless it was originally paid to the insured person as a result of wilful misrepresentation or fraud.

37The applicant argues that the respondent has not disclosed any post-accident employment records despite being ordered to do so by the Tribunal. It submits that these circumstances are similar to the case of Aviva General Insurance Company v Gurung, 2021 CanLII 11858 (ON LAT) where the Tribunal found that if an insured person fails to particularize post-accident income, then the insurer is entitled to repayment of all IRBs. The applicant is seeking repayment of the entire IRB based on the respondent’s willful misrepresentation and his failure to disclose records verifying his post-accident employment.

38The respondent submits that he has no obligation to provide particulars of his post-accident employment because he does not have a contract with the applicant. His insurance policy is with State Farm.

39The respondent further submits that Aviva v Gurung does not apply. The insured person in Gurung was observed working in a restaurant on multiple days. However, in this case, surveillance only shows him working one day at a part-time job that is significantly different from his pre-accident employment. Moreover, the respondent did not perjure himself under oath as was the case in Gurung.

40According to the respondent, he earned around $7,242.00 while receiving the IRB. He submits that if a repayment is ordered, then this amount should be taken into consideration.

41The respondent’s assertion that applicant is not his insurer is inconsistent with his letter dated June 14, 2018, referred to in paragraph 29 above. The letter is addressed to the applicant and provides information about the respondent’s post-accident work history. The letter shows the respondent accepted the applicant as his insurer and that he provided particulars of his post-accident employment to the applicant. The respondent now denies this relationship but provides no evidence to support his position. Consequently, I find that the applicant is the correct litigant in this matter because the respondent previously accepted the applicant as his insurer and has provided no evidence to show otherwise.

42As noted above in paragraph 19, the respondent agrees that he received $85,181.38 in IRBs.

43I am not bound by the Tribunal’s decision in Gurung, however, I find this decision persuasive for the purpose of determining the quantum of repayment.

44In Gurung, Adjudicator Lake found:

There is no documentation or evidence before me that provides any particulars or details of Ms. Gurung’s position at Bajra or how she received income (i.e. if she was receiving employment income or income from self-employment). As such, there is no information before me that permits a calculation of the quantum of repayment of IRBs given the deduction of post-accident income that Aviva is entitled to make. I am also unable to determine the applicable period of repayment as I do not accept Ms. Gurung’s EUO evidence that she only returned to work in September 2018 given her inconsistent and perjurious testimony. This inability to make any determinations regarding the IRB repayment rests solely on Ms. Gurung as I agree with Aviva that this information lies exclusively with Ms. Gurung and Aviva’s attempt to obtain further documentation went unanswered. Given all of these facts, I am left with no other option but to find that the entire amount of IRBs paid to Ms. Gurung of $36,456.00 for the period of May 12, 2017 to February 7, 2019 is repayable to Aviva by Ms. Gurung.

45As noted in the above case, there was no documentation to verify the particulars of the insured’s employment and the Tribunal gave no weight to the insured’s testimony because she perjured herself. Under these circumstances the Adjudicator did not have the evidence needed to calculate the quantum of repayment, nor the applicable period of repayment. The inability to make determinations that would mitigate the burden of repayment lay exclusively with the insured who failed to provide the pertinent evidence. As a result, the Adjudicator had no option but to order the re-payment of the entire IRB.

46The reasoning in Gurung is applicable here due to the circumstances of this case.

47At the case conference, the Tribunal ordered the respondent to provide to the applicant “Confirmation with breakdown of all post accident income earned from November 15, 2010, to November 4, 2019.” The respondent did not comply with this order because, according to him, he has no contractual relationship with the applicant. As noted above, I reject this position.

48For the respondent’s own sake, he could have provided evidence of his previous employment that might mitigate repayment. This was not done. The respondent’s only evidence is a single page consisting of a Service Canada printout showing that two Records of Employment (ROE) were issued while he received an IRB. The printout shows the last day of work and the names of two employers. No other employment details are provided.

49Similar to Gurung, I am left with a situation where there is no evidentiary basis to calculate the quantum of the repayment and the inability to determine quantum rests entirely with the respondent.

50Consequently, in the absence of evidence to the contrary from the respondent and based on the evidence that the applicant has submitted in support of its IRB repayment claim, I find that $85,181.38, the entire amount of IRBs, is repayable to the applicant.

Interest

51Sections 52(5) and (6) allow the applicant to charge interest on the outstanding balance of the amount to be repaid from the 15th day after the notice of repayment is given until the day repayment is received in full. The interest rate is the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule I of the Bank Act.

52The applicant notes that the Notice of Repayment was made on March 24, 2020. It submits that it is entitled to interest from 15 days after the notice.

53The respondent rejects the notion that the applicant is his insurer. Consequently, he argues that the applicant is not entitled to interest because the applicant never paid an IRB to him.

54As noted before, I do not accept the respondent’s submission that the applicant is not his insurer.

55Consequently, I find that the respondent must pay the “bank rate” interest from 15 days after the repayment request was made on March 24, 2020, pursuant to the Schedule.

ORDER

56The respondent shall repay the applicant $85,181.38, plus interest pursuant to ss. 52(5) and (6) of the Schedule.