Licence Appeal Tribunal File Number: 23-005541/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:
Definity Insurance Company
Applicant
and
Hadi Khalgholimoghaddam
Respondent
AMENDED DECISION
VICE-CHAIR: Robert Maich
APPEARANCES:
For the Applicant: Damien Van Vroenhoven, Counsel
For the Respondent: Adesina C John, Paralegal
HEARD: By way of written submissions
OVERVIEW
1Hadi Khalgholimoghaddam, the respondent, was involved in an automobile accident on September 13, 2019, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The respondent was paid benefits by the applicant, Definity Insurance Company, who applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2This dispute arises from a claim for benefits relating to an accident that occurred on September 6, 2019. The respondent claimed that he was unable to work following the accident and applied for IRBs. Before the accident, the respondent was employed with a temporary employment agency as a server. He also worked as a construction coordinator in the spring of 2019 and at two other positions in 2018.
3The respondent was paid IRBs following receipt of his OCF-1, OCF-2, and OCF-10, at the rate of $141.79 per week from September 9, 2019 to September 15, 2019 and at the rate of $236.32 per week from September 16, 2019 to July 25, 20213. The IRB continued to be paid by the applicant until July 25, 2021 when benefits were suspended due to outstanding productions that were requested by the applicant pursuant to section 33 of the Schedule. The IRBs were calculated and paid based on information and documentation provided by the respondent indicating that he was unable to work following the accident.
ISSUES
4The issues in dispute are:
i. Is the applicant entitled to repayment of $23,064.00 relating to its payment of an income replacement benefit (“IRB”) to the respondent for the period of September 13, 2019 to July 25, 2021?
ii. Is the applicant entitled to interest on the overpayment of benefits?
iii. Is the applicant entitled to costs?
RESULT
5I find the applicant is entitled to repayment of $5,908.00 relating to its payment of an income replacement benefit (“IRB”) to the respondent for the period of February 1, 2021 to July 25, 2021.
6I find the applicant is not entitled to repayment relating to its payment of an income replacement benefit (“IRB”) to the respondent for the period of September 13, 2019 to January 31, 2021.
7I find the applicant is entitled to interest on the overdue repayment of benefits from the period February 1, 2021 to April 18, 2022.
8The application is granted in part, and I find the applicant is not entitled to costs as they are not appropriate in the circumstances.
ANALYSIS
Background
9The respondent submits that as a result of the accident, he sustained multiple physical and psychological injuries that limited or prevented him from functioning in all aspects of his life.
10Upon receipt of Mr. Khalgholimoghaddam’s OCF-1, OCF-2, and OCF-10, the respondent was paid IRBs at the rate of:
i. $141.79 per week from September 9, 2019 to September 15, 2019; and
ii. $236.32 per week from September 16, 2019 to July 25, 2021.
11The IRB continued to be paid until July 25, 2021 when benefits were suspended due to outstanding information that was requested by the applicant under section 33. The IRBs were calculated and paid based on information and documentation provided by the respondent indicating that he was unable to work following the accident.
Statute Law
12Section 52(1) of the Schedule states that an insured person is liable to repay any benefit that is paid to them as a result of an error on the part of the insurer 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. The applicant submits it is entitled to repayment pursuant to this provision based on the grounds of wilful misrepresentation. The respondent denies wilful misrepresentation or fraud.
13Section 52(2)(a) of the Schedule states that the insurer shall give the person notice of the amount that is required to be repaid. Pursuant to section 52(3), repayment for any amounts paid as a result of wilful misrepresentation or fraud would not be limited to the 12-month period preceding the notice. The parties dispute whether proper notice was given under section 52.
Wilful Misrepresentation
14I find that throughout the period between February 1, 2021 and the date of notice of September 3, 2021 is the period wherein the respondent wilfully misrepresented his working status to the applicant.
15The legal test for wilful misrepresentation is found in Unifund Assurance Co. v M.D.C., 2020 CanLII 94799 (ON LAT). In that case, the Tribunal defined wilful 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.” I note that this case is not binding on this matter, but I find it to be persuasive.
16Further, silence can constitute wilful misrepresentation as found in Aviva v. Harkness, 2024 CanLII 23468 (ON LAT), wherein the claimant did not disclose that she was receiving long term disability benefits (LTDs) for over a year while also receiving IRBs. When the receipt of LTDs was eventually disclosed, Aviva claimed that the unexplained delay in reporting the collateral benefit amounted to a wilful misrepresentation.
17The applicant submits in the section 44 physiatrist assessment of Dr. Marchuk that took place on February 5, 2021, the respondent reported that “he attempted a return to work but he was unable to perform his duties”. Further the applicant submits in the section 44 psychological assessment of Dr. Saghatoleslami that took place on February 8, 2021, the respondent reported that “at this point he is not ready to return to work and he is not looking for any jobs”. Again, the applicant submits in the section 44 occupational therapy assessment of Ms. Pui Shan Au that took place on April 30, 2021, the respondent reported that “he has not been able to return back to his job since the motor vehicle accident....he tried to work at a warehouse for only 1 to 2 days last year...he quit. The client has not returned back to the workforce since then”.
18The applicant submits that by way of email from respondent’s counsel on September 3, 2021, the applicant was advised that the respondent had returned to work on May 10, 202l. Upon request from the respondent, the applicant submitted the Declaration of Post-Accident form (OCF-13) received on September 13, 2021, which indicated that the applicant had in fact returned to employment February 1, 2021, at 3Z Dental Supply and then transitioned to employment at Haddad Geotechnical Inc beginning May 10, 2021.
19The respondent submits that the reports of Dr. Marchuk, Dr. Saghatoleslami and Ms. Shan all consist of misinterpretation of what the insurer’s assessors noted as well as inaccurate paraphrasing by the assessors of what Mr. Khalgholimoghaddam stated to them.
20I am unpersuaded by the respondent’s assertion that all three of the insurer’s assessors misinterpreted or misquoted his statements to them. I find that the respondent clearly communicated on the dates of each assessment that he was not working.
21The respondent admits that he received $6,501.58 gross income through employment with 3Z Dental Supply from February 1, 2021 to April 30, 2021.
22I find that the respondent wilfully misrepresented to the applicant his employment status for the period of February 1, 2021 to April 30, 2021. I further find that the 12-month limitation period prescribed in section 52 does not apply to the period of February 1, 2021 to April 30, 2021 due to my finding of willful misrepresentation as applied in Unifund Assurance Co. v M.D.C., 2020 CanLII 94799 (ON LAT).
23I find that the respondent advised the applicant on September 3, 2021 that he was working effective May 10, 2021 through July 25, 2021. I find that the respondent failed to advise the applicant for this period that he was working, and find the respondent’s silence and failure to report his work until after the fact also constitutes wilful misrepresentation as applied in Aviva v. Harkness, 2024 CanLII 23468 (ON LAT).
24In short, I find that from February 1, 2021 to September 3, 2021, the respondent wilfully misrepresented his working status to the applicant. I note that the 10-day period between April 30, 2021 and May 10, 2021 wherein the respondent was not working to be included in this period as it is bookended by two periods of wilful misrepresentation and cannot be deemed a period that the respondent was unable to work due to his injuries sustained in the accident of September 6, 2019.
25The applicant submits that due to the wilful misrepresentation found in the period February 1, 2021 through September 3, 2021, that it should be entitled to repayment for the entire IRB period commencing September 9, 2019. I find none of the authorities cited by the applicant stated for this proposition and do not find it’s submissions persuasive because the authorities do not address similar circumstances wherein the claimant was properly entitled to the benefit for most of the claimed period.
26Conversely, the respondent submits that because the IRB was properly and validly commenced September 9, 2021 the subsequent period of wilful misrepresentation between February 1, 2021 and September 3 , 2021 is not subject to repayment pursuant under sections 52 and 53. I find the respondent’s submissions to be an interpretation of the Schedule that cannot withstand scrutiny and is not persuasive because it would have the punitive affect of negating the valid portion of the benefit in violation of the contract of insurance and against public policy in respect to the purpose of the benefit.
27In respect to the CERB/CRB receipts, I find there is no evidence to support the proposition that the purported wilful misrepresentation was to the insurer applicant. There is no evidence submitted that the representation made to the insurer applicant was the false representation. I find there is no evidence that the respondent made a wilful misrepresentation to the applicant insurer from April 7, 2020 to January 31, 2021. The evidence of the respondent and the insurer assessors and examiners confirm that he was unable to work.
Notice
28I find that this Tribunal is bound by Intact v. Marianyagam, 2016 ONSC 1479, establishing the standard that the notice under section 52 of the Schedule need only be “substantially correct.” Further, I find that the notice of February 28, 2022 was substantially correct and fulfilled the requirements of section 52 of the Schedule.
29Section 52(2)(a) of the Schedule states that the insurer shall give the person notice of the amount that is required to be repaid.
30The applicant submits that the notice given was sufficient and relies upon TD General Insurance Company v. A.B., 2016 CanLII 96094 LAT at paras. 28, 30 and 38, wherein the insurer brought a claim for overpayment of income replacement benefits and provided a notice of the repayment which included a reference to section 52 of the Schedule: an identification of the type of benefit that the notice was in regard to, a total amount of the overpayment, and specified that the overpayment stemmed from the fact that the insured had returned to work on a specific day. The Tribunal held these were sufficient elements for valid notice pursuant to the Schedule. The applicant further relies upon Randall v. ING Insurance Co. of Canada 2007 CarswellOnt 3897 FSCO at pages 6-7, it was found that the notice provided by the insurer advising the insured that the insurer was seeking a lump sum amount for income replacement benefits during a specific timeframe was proper notice and ordered the insured to repay income replacement benefits that had been paid in error.
31The applicant submits proper repayment notices for the full amount in dispute were provided on April 18, 2022, September 9, 2022 and July 12, 2023. The notices were sent to the respondent and his legal representative. The applicant further submits the notices satisfy section 52 (2) (a) of the Schedule in that it states the amount that is required to be repaid; $23,064.00. The notices further state the type of benefit that is to be repaid, income replacement benefits. A reference is made to section 52 of the Schedule and the applicant is requested to repay the amount of the overpayment. The July 12, 2023 notice in particular outlines the precise time period constituting the repayment amount being claimed. The time periods, and weekly amounts, were also reiterated in counsel’s correspondence of January 22, 2024.
32Further the applicant submits there is nothing in the Schedule prohibiting multiple notices for repayment under section 52 as more information is provided. The respondent’s notices were clear and provided the basic information necessary of putting the insured on notice of the repayment and the information contained in the notices are similar to the information contained in the notices reviewed in the previously referenced case law. The applicant further relies upon Intact v. Marianyagam, 2016 ONSC 1479 that the amount to be stated in a notice does not need to be correct but “substantially correct” and that an insurer is not to be held to a standard of perfection.
33The respondent submits that the notices were defective and relies upon State Farm Mutual Automobile Insurance Company v. Kumuthakumary Kulaveerasingam, 2018 ONFSCDRS 110, with respect to basic information that should be contained in a repayment notice:
a) the name of the specific benefit(s) the insurer claims it has overpaid;
b) a statement of the appropriate weekly/monthly or lump sum amount sought;
c) the payment date or applicable time span of the specific benefit(s) it has paid and seeks repaid; and
d) calculation of the total repayment claim.
34The respondent submits that the first notice, dated September 14, 2021, requested repayment in the amount of $10,634.40 for the 52 weeks of IRB paid on the basis that he returned to work full time. He submits this letter is invalid because it does not include basic information as to how Definity arrived at the amount for which they requested repayment.
35The respondent further submits the letter should have included (a) the periods the overpayments relate to, (b) the weekly amount considered, and (c) the calculation of how the repayment amount was determined. The respondent submits his entitlement to IRB was ongoing, and he did not work and/or receive post-accident income that was subject to deduction from his IRB entitlement for the periods from September 13, 2019 to August 18, 2020, and from August 29, 2020 to January 31, 2021.
36The respondent submits the second notice dated February 28, 2022, summarized the previous notice and indicated: “Based on the information that we have received, it has been determined that an overpayment of $5908.00 exists on this file for the Income Replacement Benefit as we understand that you returned to work February 1, 2021.” The respondent submits this notice is also invalid for the same reasons as the first notice, and the same defect applies to the four subsequent notices.
37I find that this Tribunal is bound by Intact v. Marianyagam, 2016 ONSC 1479, establishing the standard that the notice under section 52 of the Schedule need only be “substantially correct.” Further, I find that the notice of February 28, 2022 was substantially correct.
38I note the six notices were a source of confusion for the respondent. I find only the notice of February 28, 2022 requiring a repayment of IRB in the amount of $5,908.00 to be substantially correct and met the requirements of section 52 of the Schedule.
39I find the subsequent notice of April 18, 2022 requiring an IRB of $23,064.00 to incorrect and difficult for the respondent to understand the required quantum of IRB repayment. I find the notice of April 18, 2022 and all subsequent notices to be substantially incorrect as each notice stated the incorrect quantum of the required IRB repayment to the respondent.
40Further I find the appellant did not meet his burden of proof for the notice of April 18, 2022 and subsequent notices as no evidence was offered to support a misrepresentation prior to February 1, 2021. However, the subsequent invalidate notices from April 18, 2022 onwards did not invalidate the notice of February 28, 2022 ab initio.
Interest
41Interest applies to the payment of $5,908.00 from February 1, 2021 for overdue IRB repayment benefits pursuant to s. 52(5) of the Schedule.
Costs
42The applicant sought an award for costs pursuant to Rule 19.1 of the Licence Appeal Tribunal Rules, 2023, that provides costs may be available if a party has acted unreasonably, frivolously, vexatiously, or in bad faith. The Tribunal may grant an award of up to $1,000.00 per day for each day of attendance at a motion, case conference or hearing pursuant to Rule 19.6. In considering whether to award costs under Rule 19.5, the Tribunal shall 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 or not 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.”
ORDER
43I order as follows:
i. The applicant is entitled to repayment of $5,908.00 relating to its payment of an income replacement benefit (“IRB”) to the respondent for the period of February 1, 2021 to July 25, 2021.
ii. The applicant is entitled to interest on the overdue repayment of benefits from the February 21, 2021 in accordance with section 52(5) of the Schedule.
iii. The applicant is not entitled to costs as they are not appropriate in the circumstances.
Released: May 2, 2025
Robert Maich
Vice-Chair