Licence Appeal Tribunal File Number: 21-013380/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:
Gore Mutual Insurance Company
Applicant
and
Jeyakumar Kulanthaivadivel
Respondent
DECISION
VICE-CHAIR:
Brett Todd
APPEARANCES:
For the Applicant:
Kathleen F. O’Hara, Counsel
For the Respondent:
No Submissions Filed
HEARD:
By way of written submissions
OVERVIEW
1Jeyakumar Kulanthaivadivel (the “respondent”) was involved in an automobile accident on February 27, 2020 and sought benefits from Gore Mutual Insurance 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. However, the applicant alleges that IRB was paid as the result of material misrepresentation involving the respondent’s claimed home address at the inception of his insurance policy and during the policy period, and as a result of wilful misrepresentation regarding the respondent’s employment status and his failure to disclose and properly report all of his sources of income. It submits that these misrepresentations mean that the respondent was never actually entitled to IRB and warrant an order that he repay the full amount of the IRB paid, plus interest.
3As the respondent did not respond to requests to repay the IRB, the applicant applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
ISSUES
4The issues in dispute are:
i. Is the applicant entitled to a repayment of IRB in the amount of $19,920.54 paid to the respondent from March 4, 2020 to February 17, 2021?
ii. Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
5The respondent shall repay IRB to the applicant in the amount of $19,920.54, due to material and wilful misrepresentation and disqualification from receiving the benefit, in accordance with ss. 31(1)(b), 52(1)(a), and 52(1)(b) of the Schedule. Interest is also applicable, pursuant to ss. 52(5) and 52(6).
ANALYSIS
Proceeding with the Hearing in the Absence of the Respondent
6I find that the Tribunal has met its reasonable notice obligations. Therefore, I am proceeding with this written hearing in the absence of the respondent.
7Proceeding 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.
8A case conference was held on October 20, 2022 with both parties in attendance. This resulted in a Case Conference Report and Order (“CCRO”) dated December 5, 2022 that set the matter down for a written hearing. This CCRO included production orders and deadlines for written submissions and evidence. The applicant’s submissions and evidence were due 30 calendar days prior to the scheduled hearing; the respondent’s submissions and evidence were due 14 calendar days prior to the scheduled hearing; and the applicant’s reply submissions were due seven calendar days prior to the scheduled hearing.
9The Tribunal sent a Notice of Written Hearing (“NoWH”) to both parties on December 29, 2022. This NoWH set August 25, 2023 as the date for the written hearing. The NoWH included the provision that the Tribunal may make a decision without the participation of either or both of the parties and without further notice if submissions were not filed.
10On January 24, 2023, the respondent’s legal representative notified the Tribunal and the applicant of its withdrawal from this matter.
11The applicant filed its written submissions and evidence for the hearing on July 27, 2023, in accordance with the timeline as established by the CCRO and the NoWH. The respondent failed to file any written submissions or evidence for the hearing. A Tribunal attempt to contact the respondent on September 8, 2023 about his overdue hearing submissions was not successful.
12There is no evidence that the respondent’s address changed or was otherwise incorrect in Tribunal records. If the respondent’s address differed from what was originally provided to the Tribunal, he had an obligation under Rule 4.4 of the Tribunal Rules to provide the correct address. Further, there is no indication that the respondent requested to change the hearing from a written format to an oral or electronic format.
13Given the above, I find that the respondent knew of this proceeding and chose not to participate. Although I am prepared to give added consideration to self-represented parties, as in this instance, the respondent had some eight months between the withdrawal of his legal representation and the date of the written hearing. In my view, this was more than sufficient time for the respondent to have sought new representation, requested that the Tribunal provide an extension of the hearing timeline, or prepared to represent himself in this matter.
14As a result, I am satisfied that the Tribunal has met its notice obligations pursuant to s. 7(2) of the Statutory Powers Procedure Act and is in compliance with ss. 6(1) and 6(4) of the SPPA.
IRB Repayment
15I find that the applicant is entitled to the repayment of $19,920.54 in IRB from the respondent due to material and wilful misrepresentation. The applicant is also entitled to interest on this amount.
Notice of repayment request
16I find that the applicant has satisfied the repayment notice requirements as specified in s. 52(2) of the Schedule.
17The applicant is permitted to claim the repayment of IRB in certain situations and subject to certain conditions as established by the Schedule. Section 52 addresses repayments to an insurer, with s. 52(2) providing that an insurer must give an insured person notice of the amount that is required to be repaid.
18In submissions, the applicant provided copies of notice letters requesting the repayment of IRB that were sent to the respondent on April 27, 2021, June 8, 2021, and February 22, 2023. It notes that these letters meet the requirements established in s. 52(2) of the Schedule in that they identify the amount that was overpaid, the payment period for which repayment is being sought, and the exact amount of the overpayment being sought. The applicant further alleges that the respondent did not respond to this correspondence.
19As the respondent did not file submissions for this hearing, he is silent on this matter.
20I accept the submissions of the applicant. The notices sent on the dates noted above meet s. 52(2) of the Schedule. As a result, the applicant may seek repayment of IRB.
Material and wilful misrepresentations
21I find that the respondent made a material misrepresentation that results in his exclusion from receiving IRB, as well as wilful misrepresentations that warrant the repayment of the IRB that was paid to the respondent. The applicant is therefore entitled to a repayment of $19,920.54 in IRB, plus interest, from the respondent for the period during which IRB was paid between March 4, 2020 to February 17, 2021.
22Sections 5(1) and (2) of the Schedule detail the pre-104 week eligibility criteria for IRB for insured persons who are employed and/or self-employed. Sections 4(2) and (3) of the Schedule address the calculation of income if an insured person is both employed and self-employed at the time of an accident. Section 4(5) states that such a calculation shall includes only income reported under the Income Tax Act or other taxation legislation. Essentially, this provision of the Schedule means that no reference is allowable in IRB calculations to income that the insured person failed to report to the Canada Revenue Agency (“CRA”).
23Section 52(1)(a) of the Schedule provides that an insured person is liable to repay an insurer any benefit paid as a result of wilful misrepresentation or fraud. Further, s. 52(1)(b) provides that an insured person is liable to repay an insurer any IRB paid if the insured person was disqualified from receiving IRB.
24In addition, s. 31(1) of the Schedule provides that an insurer is not required to pay IRB “in respect of any person who has made, or who knows of, a material misrepresentation that induced the insurer to enter into the contract of automobile insurance.”
25The applicant submits that the respondent made a number of material and wilful misrepresentations making him ineligible to receive IRB:
i. The respondent listed a home address in Bowmanville, ON at the inception of his auto insurance policy with the applicant even though he actually resided at a home he owns in Brampton, ON. The applicant alleges that this is a material misrepresentation that “induced Gore to enter into the contract of insurance and improperly rate the policy using the Bowmanville address.” The applicant alleges that the Bowmanville address resulted in the respondent’s premiums being set at a rate more than 50 per cent lower than it would have been at the actual home residence in Brampton.
ii. The respondent was employed by GP Maintenance at the time of the accident while also working as a self-employed contractor with his company, Saampava Renovations. Despite these two sources of income, the respondent did not disclose his self-employment when he applied for IRB.
iii. The respondent has not demonstrated that his employment or self-employment income was reported to the CRA. He has failed to provide documentation on either source of income despite requests from the insurer and the production order contained in the Tribunal CCRO that set this matter down for a hearing.
26For the above reasons, the applicant claims that the respondent was never entitled to IRB and that he must repay the entire amount of the benefit, plus interest. Securing an insurance policy using an incorrect home address is a contravention of s. 31(1) of the Schedule. Failing to disclose a source of income during the time period before the accident is wilful misrepresentation and fraud, warranting repayment of IRB in accordance with s. 52(1)(a). The respondent did not establish that he reported income to the CRA, and as a result the quantum of IRB that he is entitled to is nil, in accordance with s. 4(5) of the Schedule.
27The applicant relies on a number of past decisions of both the Financial Services Commission of Ontario and the Tribunal. These include Jack Michalowski v. St. Paul Fire & Marine Insurance Company, 1999 ONFSCDRS 129; 17-000272 v T.T., 2017 CanLII 87539 (ON LAT); Aviva Canada Inc. v. R.R., 2017 CanLII 81569 (ON LAT); Sonnet Insurance Company v. Crooks, 2023 CanLII 4446 (ON LAT); 16-004349 v “Mr. P”, 2017 CanLII 148395 (ON LAT); and Jevco Insurance v. Owusu-Achiaw, 2021 CanLII 18941 (ON LAT).
28As noted above, the respondent did not file submissions. He has provided no argument or evidence on the applicant’s request for IRB repayment.
29In the absence of submissions from the respondent, I accept the position of the applicant.
30First, I find that the respondent committed material misrepresentation regarding the home address he relied upon when securing his auto insurance policy with the applicant. In submissions, the applicant provided comprehensive evidence demonstrating that the respondent lived in Brampton and worked out of that residence (which he owned during the time he held this policy), despite listing the Bowmanville address of a relative for the purposes of obtaining his auto insurance policy. This included surveillance evidence that documented the applicant apparently living and working as a self-employed contractor out of the Brampton home on November 10, 11, 24, and 26, 2020, as well as December 1 and 2, 2020; evidence that other vehicles were leased and purchased using the Brampton address as both residence and mailing address; and a repair estimate for the vehicle involved in the subject accident that listed the respondent’s address in Brampton.
31While the respondent attempted to explain the apparent address discrepancy in an examination under oath (“EUO”) on January 26, 2021, his answers were not, in my view, entirely forthcoming. He claimed to have moved to the Bowmanville home of his cousin and his family with his wife due to his employment with the cousin’s GP Maintenance cleaning company and an easier commute to a mall that the company serviced. However, the respondent was not able to explain how he and his wife did this while their three school-aged children remained at the Brampton residence. The respondent also claimed not to recall other factors that I view to be relevant, most notably his prior use of Stoney Creek and Courtice addresses on policies with other insurers during the time he owned the house in Brampton, as also documented in the applicant’s hearing submissions.
32In all, the applicant has proven, on a balance of probabilities, that the respondent committed an act of material misrepresentation through providing the applicant with an incorrect home address for his auto insurance policy that resulted in him receiving a lower premium rate.
33Second, I find that the respondent committed wilful misrepresentation in that he did not properly disclose all of his sources of income when applying for IRB. In the EUO, the respondent admitted to being self-employed as a contractor in the operation of Saampava Renovations from 2015 or 2016 until the time of the accident. The applicant failed to explain why he listed GP Maintenance as his only employer in the Disability Certificate/OCF-3 dated March 17, 2020, or why only GP Maintenance was noted as his place of employment in the Employer’s Confirmation Form/OCF-2 dated March 30, 2020, or why he did not disclose the existence of this other source of income until direct questioning at the EUO.
34Here, again, the applicant has met its onus. The applicant has demonstrated that the respondent failed to report all of his income to the insurer at the time of his IRB application. By the applicant’s own admission, he did not report Saampava Renovations, a company he had operated for between four and five years at the time of the accident, when he applied for IRB.
35Third, I find that the respondent has not substantiated any of his pre-accident income, with either his employer or his self-employment. The proper amount of IRB quantum is nil. In the EUO, the respondent admitted that his cousin, the owner of GP Maintenance, printed pay stubs for him when the respondent asked for them as a result of his application for IRB; pay stubs were not provided before this request. The respondent further noted that his cousin typically paid him by cash or cheque, and that he deposited all cheques from this source of income into his wife’s bank account. None of this testimony indicates that the respondent was forthcoming regarding his sources of income when he applied for IRB.
36Further, the respondent did not provide documentation to verify what he was earning from both sources of income and that he was reporting this income to CRA. He failed to respond to the applicant’s request in correspondence dated February 2, 2021 for bank statements, cancelled cheques from GP Maintenance and/or the owner of the company, income statements from GP Maintenance, and personal and business CRA tax returns and notices of assessment from 2019-2021. These documents were also listed in the production order of the CCRO dated December 5, 2022 that set this matter down for a hearing.
37Given the above, the applicant has demonstrated that the respondent was never entitled to IRB. In light of the information revealed in the EUO, as well as because of the respondent’s refusal to provide documentation regarding his income and the reporting of such income to CRA, the IRB quantum is nil.
38In addition, I agree that the applicant’s references to past FSCO and Tribunal decisions that clarify the meaning of “wilful misrepresentation” in the absence of a definition in the Schedule, and IRB repayment orders related to contraventions of s. 31 that involve material misrepresentations, are relevant here. Although I am not bound by decisions of FSCO or this Tribunal, I find the details and the circumstances of Michalowski and Jevco of particular relevance to this matter, and concur with the reasoning of the adjudicators involving the meaning of wilful misrepresentation and that providing an incorrect home address to an insurer is a material misrepresentation that contravenes the Schedule.
39In summation, the applicant has satisfied me that the respondent committed a material misrepresentation regarding his automobile insurance policy pursuant to s. 31(1)(b). The insurer is therefore not required to pay IRB as a result. The applicant has also satisfied me that the respondent committed an act of wilful misrepresentation in that he did not disclose his self-employment income, nor did he document either his employment or self-employment income via requested (and Tribunal ordered) financial records and tax returns. The respondent also failed to establish that he reported his income as required to warrant entitlement to IRB in accordance with s. 4(5) of the Schedule.
40As a result, I find that the IRB entitlement quantum was nil, and that the applicant is entitled to a repayment of the $19,920.54 IRB paid to the respondent, in accordance with ss. 52(1)(a) and 52(1)(b). Interest is also applicable on the full amount of the IRB repayment, pursuant to ss. 52(5) and (6) of the Schedule.
ORDER
41The respondent is ordered to repay IRB to the applicant in the amount of $19,920.54 due to material and wilful misrepresentation, pursuant to ss. 52(1)(a) and 52(1)(b) of the Schedule. Interest is also applicable, pursuant to ss. 52(5) and 52(6) of the Schedule.
Released: January 9, 2024
Brett Todd
Vice-Chair