Licence Appeal Tribunal File Number: 23-002989/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:
Sonnet Insurance Company
Applicant
and
Ahmad Kallaa
Respondent
DECISION
ADJUDICATOR:
John Mazzilli
APPEARANCES:
For the Applicant:
Sonnet Insurance Company*, Applicant
Courtney Sparks, Representative
Veronica Gorrell, Counsel
For the Respondent:
Ahmad Kallaa, Respondent
Ahmad Hamzeh, Counsel
HEARD: by Videoconference:
May 21, 2024
OVERVIEW
1Ahmad Kallaa, the ("respondent"), alleges that he was involved in an automobile accident on July 25, 2018, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the "Schedule"). The applicant ("Sonnet Insurance Company") paid benefits to the respondent; however, the applicant argues that the accident was staged and is seeking repayment of the benefits paid, insurer examinations, investigative costs and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the "Tribunal") for resolution of the dispute.
Adjournment
2The respondent submits that he was only able to retain counsel on May 16, 2024, one business day before the start of the hearing. The respondent's counsel submits that he has another previously scheduled hearing beginning at 10:30 a.m. and is only present to seek an adjournment for his client as he did not have time to review the file and would not be able to represent his client should the scheduled hearing take place. The respondent further submits that he has had difficulties in retaining counsel for the hearing as his previous counsel is no longer representing him.
The applicant submits that they have been seeking a remedy on this file for two years and that the respondent made the same request for an adjournment at the case conference held on October 25, 2023, as he was also still seeking counsel at that time. It argues that the respondent did not provide ample notice for an adjournment in accordance with rule 16.1 of the Licence Appeal Tribunal Rules. Further, the applicant submits that it has arranged for the testimony of its expert witness and a court reporter for the hearing and that not proceeding would be a waste of its time and the Tribunal's time and resources.
I denied the respondent's request for an adjournment as I considered the factors of Rule 16.2 which allows oral requests for adjournments in compelling circumstances where the party did not and could not have known the circumstances giving rise to the adjournment request prior to the event. Upon review of the Case Conference Report and Order dated October 25, 2023, it appears that the respondent did try to adjourn that event because he was unable to retain counsel. Further, the notice of hearing for this hearing was sent to the parties by the Tribunal on November 17, 2023, just over six months prior to today's hearing date. This to me is not a compelling circumstance that should give rise to granting an adjournment request. After I denied the respondent's request for an adjournment, the respondent participated in the hearing as a self represented individual, and his counsel advised me that he would be removing himself as counsel for the respondent.
The respondent's counsel did not comply with LAT Rule 24 for the proper removal as a representative of record and as such, they will remain on record.
ISSUES
3The issues in dispute are:
i. Is the applicant entitled to the repayment of $59,592.86 for income replacement benefits ("IRB") paid to the respondent?
ii. Is the applicant entitled to the repayment of $33,406.59 for medical and rehabilitation benefits paid to the respondent?
iii. Is the applicant entitled to the repayment of $22,529.64 for the cost of independent examinations and medical documents?
iv. Is the applicant entitled to the repayment of $23,675.44 for the investigation costs associated with this matter?
v. Is the applicant entitled to interest on the benefits paid.
RESULT
4The applicant is entitled to the repayment of $59,592.86 for Income replacement benefits paid to the respondent plus interest.
5The applicant is entitled to the repayment of $33,406.59 for medical and rehabilitation benefits paid to the respondent plus interest.
6The applicant is not entitled to the repayment of $22,529.64 for the cost of independent examinations and medical documents. Since this expense is not re-payable interest does not apply.
7The applicant is not entitled to the repayment of $22,675.44 for the investigation costs associated with this matter. Since this expense is not payable interest does not apply.
ANALYSIS
Did the respondent stage the accident on July 25, 2018?
8I find that a motor vehicle accident did not occur but rather the accident was staged.
9Section 52 of the Schedule provides repayments to the insurer for any benefit described in this regulation that is paid to the person because 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. In this case, the onus is on the applicant to prove that the respondent on a balance of probabilities willfully misrepresented or committed fraud.
10The applicant submits that the respondent staged the accident. It argues that the vehicle was not moving, and that the respondent and his wife pushed the vehicle into the ditch, causing damage to the vehicle that is inconsistent with the damage reported and statements made by the respondent. She argues that the respondent's friend damaged the vehicle with his tow truck by smashing the tow truck's stinger into the vehicle's rear end several times. The applicant asserts that it paid medical benefits and income replacement benefits in good faith and in accordance with the Schedule. To this end, the applicant relies on the transcript of examination under oath of Salwa Raheba, (currently ex-wife of the applicant) who was the driver of the vehicle at the time of the alleged accident. The applicant further relies on the testimony of Karla Cassidy an expert in motor vehicle collision, reconstruction, and injury biomechanics and a report from Kodsi Engineering.
11The respondent argues that on the date of the subject accident he was the passenger and his wife at the time was the driver of the vehicle. He testified that they saw an animal in front of them and slowed down to avoid hitting the animal and in the process were rear-ended by another vehicle, which caused them to end up in a ditch. The driver of the vehicle that rear-ended them fled the scene and approximately one hour later the police arrived on the scene. The respondent argues that his ex-wife has stated to him that she will ruin his life and that she made up the story that they pushed the vehicle into the ditch and had his friend damage the vehicle with his tow truck all in an effort to discredit him and continue to destroy his life.
12I find that an accident as defined by the Schedule did not occur and that the accident was staged.
13Ms. Raheba's version of events was supported by the expert evidence of Karla Cassidy and Sam Kodsi. Their evidence satisfies me that the damage to the subject vehicle's rear bumper is consistent with an impact by the stinger of a tow truck and is inconsistent with a rear-end collision involving another motor vehicle. I accept Mr. Kodsi's opinion that the damage to the respondent's vehicle was concentrated on a narrow band across the lower edge of the rear tailgate and that this is consistent with an impact by a tow truck stinger. I accept that if the collision had occurred as is alleged by the respondent, the damage would have occurred to the top of the tailgate which was not the case. I found the crash testing performed by Kodsi to have been persuasive in this regard. Further, I accept Mr. Kodsi's opinion that a collision that caused the damages to the respondent's vehicle would have caused the vehicle to move forward in a straight line rather than rotating and into the ditch as alleged by the respondent.
14I find that the evidence as a whole supports Ms. Rehaba's allegation that the accident was staged, and I so find. I find that the respondent misrepresented that there had been an accident and that the applicant paid the benefits in dispute on the basis of that misrepresentation. Accordingly, I find that the applicant has satisfied the test for repayment of benefits set out in s. 52 of the Schedule. In particular, I find that the applicant paid the respondent income replacement benefits in the sum of $59,592.86 as well as medical and rehabilitation benefits in the sum of $33,406.59 in error and as the result of the respondent's misrepresentation. Therefore, the applicant is entitled to the repayment of those benefits.
Is the applicant entitled to the repayment of independent examinations, medical documents, and investigation expenses?
15The applicant is not entitled to $22,529.64 for the cost of independent examinations and medical documents, or $23,675.44 for the cost of the investigation.
16Since the repayment of independent examinations, medical documents and investigation expenses are not owing, interest is not owing.
17Section 52 of the Schedule provides repayments to the insurer for any benefit described in this regulation that is paid to the person because 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.
18In its closing remarks, the applicant asked that when I consider repayment of the independent examinations, medical documents, and investigation expenses payable under s. 52 of the Schedule, I also consider the applicability of s.50(3)(e) of the Schedule and LAT Rule 19 when considering awarding costs. It further submits that the consensus is that insurance rates be lowered and that people committing fraud contribute to the rise of automobile insurance premiums.
19The applicant argues that the intention of the Schedule was not to exclude from the sphere of benefits the costs that are incurred during claims handling, such as investigation fees. It also submits that inclusion of the insurer examinations expenses under s.50 of the Schedule creates ambiguity regarding the meaning of the word benefit in the Schedule.
20The respondent maintains that he was in a motor vehicle accident and that he should not be liable to repay any of the benefits or expenses associated with the accident.
21Although I agree that insurance fraud can be a contributor to increased auto insurance rates, I find that the Schedule does not provide for the repayment of insurers' examinations or medical documents or the repayment of the insurers' investigative costs.
Costs Under Rule 19
22Under Rule 19 of the LAT Rules where a party believes that another party has acted unreasonably, frivolously, vexatiously, or in bad faith within the proceeding, that party may make a request to the Tribunal for costs. Costs are also discretionary, not mandatory.
23The applicant submits that it is entitled to costs because of the wilful misrepresentation of the staged accident and that the fees were incurred because of having to commence litigation. Further, the applicant submits that if the investigative fees are not seen as a benefit subject to repayment under s. 52 of the Schedule, that they ought to be paid as costs under Rule 19.
24Although I have found that the staging of the accident was a wilful misrepresentation on behalf of the respondent, costs under Rule 19 cannot exceed $1,000.00 per day for the attendance of a scheduled hearing, motion, or case conference. In this context, I must apply Rule 19.5, which states that I must consider all relevant factors including the seriousness of the misconduct, whether the conduct was in breach of a direction or order issued by the Tribunal, whether a party's behaviour interfered with the Tribunal's ability to carry out a fair, efficient, and effective process, prejudice to other parties and the potential impact an order for costs would have on individuals accessing the Tribunal system. The intent of Rule 19 would not be upheld if I were to award costs for the insurer's investigative expenses. As the respondent did attend and participate in both the case conference and the hearing, I decline to order costs under Rule 19 as the respondent did not interfere with the Tribunal's ability to carry out a fair, efficient process on this matter.
25The respondent is not liable for costs associated with the insurer's investigation.
Interest
26Interest applies on the payment of any overdue benefits pursuant to s. 51 of the Schedule. As the benefits are repayable interest is due and to be calculated for the IRB in the amount of $59,592.86 and for medical and rehabilitation benefits in the amount of $33,406.59.
ORDER
i. The applicant is entitled to the repayment of the IRB in the amount of $59,592.86 plus interest.
ii. The applicant is entitled to the repayment of medical and rehabilitation benefits in the amount of $33,406.59.
iii. The applicant is not entitled to the repayment for independent examinations and medical documents in the amount of $22,529.64.
iv. The applicant is not entitled to the repayment of investigation costs in the amount of $23,675.44.
Released: July 10, 2024
John Mazzilli
Adjudicator