Licence Appeal Tribunal File Number: 22-007738/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:
Aliza Slutsky-Zhou
Applicant
and
Security National Insurance Company
Respondent
DECISION
ADJUDICATOR:
Brian Norris
APPEARANCES:
For the Applicant:
Manisa Kafai, Counsel
For the Respondent:
Priyanka Monpara, Counsel
HEARD: By way of written submissions
OVERVIEW
1Aliza Slutsky-Zhou (the “Applicant”) was involved in an automobile accident on June 28, 2022, and sought benefits from Security National Insurance Company (the “Respondent”) pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The Applicant was denied benefits by the Respondent and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2Most of the issues in dispute were resolved or withdrawn after the application was filed, but before this hearing. The only remaining issue is whether the Respondent is entitled to a repayment if income replacement benefits (IRBs).
ISSUES
3The issue in dispute is:
i. Is the Respondent entitled to a repayment of IRBs, pursuant to section 52 of the Schedule?
RESULT
4I find that the Respondent is entitled to a repayment of IRBs in the amount of $19,424.24.
BACKGROUND
5The Applicant was involved in a motor vehicle accident and claimed accident benefits from the Respondent, including IRBs, as a result of accident-related injuries. The Respondent paid benefits, including IRBs, to the Applicant. The Respondent stopped payment of IRBs on September 19, 2022, following insurer’s examinations (“IEs”).
6The Applicant returned to work on a temporary basis while claiming IRBs. She also received Employment Insurance (“EI”) benefits during the time she claimed entitlement to IRBs.
7Both parties commissioned accountant’s reports to calculate the Applicant’s entitlement to IRBs in light of her post-accident earnings. The Applicant’s report by S & T Accounting, dated August 23, 2023 (the “S&T report”), concluded that she was overpaid IRBs in the amount of $1,325.15. The Respondent’s report, by PriceWaterhouseCoopers LLP, dated August 18, 2023, and Supplementary Report, dated October 13, 2023 (“the PwC reports”) concluded that the Applicant was overpaid IRBs in the amount of $19,424.24.
8The parties seek a finding on the amount of overpayment owed by the Applicant.
ANALYSIS
9Section 52(1) of the Schedule permits the Respondent to claim repayment of benefits paid in error or due to wilful misrepresentation. Section 52(2) provides that the Respondent must give notice of the overpayment, and section 52(3) restricts the requests for repayment to a period of no longer than 12 months following the error.
Did the Applicant wilfully misrepresent her attempts to return to work?
10I find that the Applicant’s failure to advise the Respondent that she received employment insurance (“EI”) benefits, or of her attempts to return to work, are acts of wilful misrepresentation.
11The Respondent submits that it paid IRBs to the Applicant as a result of wilful misrepresentation. It submits that the Applicant failed to inform it of her return to work and refused to produce the necessary financial documents to allow it to adjust the Applicant’s claim. The Applicant submits that there was no intention to deceive of defraud the Respondent. Instead, she submits, she was trying to attain a normal standard of living and push herself to regain employment, which she submits diminished due to her injuries and caused her to stop. She submits that the Respondent is trying to incorrectly deduct the Canadian Emergency Response Benefit (“CERB”) and Ontario Works (“OW”) benefits she received while claiming IRBs.
12I find that the Applicant wilfully misrepresented her employment status by failing to disclose her post-accident income to the Respondent, including EI benefits. The Applicant has a positive obligation to advise the Respondent as to whether she returned to work or received other forms of income for which the Respondent is permitted to deduct from the IRBs payable. Here, the Applicant never disclosed any attempts to return to work to the Respondent. She also denied any attempts to return to work during the IEs conducted.
13Further, to-date the Applicant has failed to acknowledge that she received EI regular benefits following the accident for the period from September 27, 2020 to September 11, 2021. A person who receives regular EI benefits must attest that they are ready, willing, and able to work.
14Accordingly, I find that the Applicant’s failure to disclose her attempts to return to work and receipt of EI benefits to be an act of misrepresentation.
What is the overpayment?
15The parties agree that the Applicant’s entitlement to IRBs spans over the period from July 6, 2020 to September 19, 2022. They also agree that the Respondent paid a total of $39,354.63 in IRBs. The Applicant relies on the S&T Report, which finds an overpayment of $1,325.15. The Respondent relies on the PwC reports, which conclude an overpayment of $19,424.24.
16For the following reasons, I find that the PwC repot is more consistent with the Schedule and prefer it over the S&T report.
17The Applicant earned employment income during the period from July 19, 2021 to Aug 7, 2021. The Respondent is permitted to deduct 70% of the gross income received during this period. This is properly reflected in the PwC report. The S&T report states that the Applicant never earned employment income during her period of entitlement, despite the income being declared in the tax returns used to calculate her IRBs.
18The Applicant received EI benefits for the period from September 27, 2020 to September 11, 2021. The Respondent is permitted to deduct the EI benefits paid to the Applicant during this period. This is properly reflected in the PwC report. The S&T report does not account for the EI benefits the Applicant received.
19I find no evidence indicating that the PwC reports considered deductions for CERB or OW. As noted above, the PwC report considered the regular EI benefits received by the Applicant and not any CERB payments. The PwC reports also gave the Applicant the benefit of the doubt and noted that it considered the “other income” reported in 2022 to be a variation of the CERB and never ascribed any deductions for that.
20Accordingly, I prefer the PwC reports and conclude that the Applicant was overpaid IRBs in the amount of $19,424.24.
Has the Applicant received notice of the request for repayment?
21I find that the Applicant received notice of the overpayment request.
22Section 52(2) of the Schedule requires the Respondent to notify the Applicant of the request for repayment, including the amount to be paid.
23The Respondent’s letter dated September 21, 2023 does not comply with section 52(2) of the Schedule. The Respondent failed to unequivocally request a repayment of benefits. It states that an overpayment was made and asks the Applicant to contact it to discuss possible repayment options. This is insufficient because it does not clearly state that it is requesting a repayment.
24However, the Respondent’s letter dated October 26, 2023 is compliant with section 52(2) of the Schedule, engaging the repayment requirement. The October 26, 2023 letter unequivocally requests repayment. Specifically, it states:
“Further to our letter of September 21, 2023 in relation to your Income Replacement Benefit, please be advised that we have determined that you have received an Income Replacement Benefit for the period of July 6-2020 to September 19-2022 in the amount of $39,354.63, resulting in an overpayment for the period of July 6-2020 to September 19-2022 in the amount of $19,424.24.
As such we are requesting payment pursuant to Section 52 of the Statutory Accident Benefits Schedule (SABS) a repayment in the amount of $19,424.24 for the same period.”
25The above is a clear and unequivocal request for repayment which satisfies the requirements of section 52(2) if the Schedule. Accordingly, when considered with the totality of the evidence, I find that the Respondent is entitled to a repayment of IRBs in the amount of $19,424.42.
Interest
26The parties never addressed whether interest is payable and the issue is not outlined in any Tribunal Orders for this hearing. Accordingly, I find that the issue is not before me and decline to opine on the issue.
CONCLUSION AND ORDER
27The Respondent overpaid IRBs to the Applicant in the amount of $19,424.24 during the period from July 6, 2020 to September 19, 2022.
28The Applicant is ordered to repay $19,424.24 to the Respondent.
Released: August 15, 2024
Brian Norris
Adjudicator