Security National Insurance Company v. Bailey, 2025 CanLII 3784

Citation: Security National Insurance Company v. Bailey, 2025 ONLAT 23-003411/AABS

Licence Appeal Tribunal File Number: 23-003411/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:

Security National Insurance Company

Applicant

and

Natalie Bailey

Respondent

DECISION

VICE-CHAIR: Brett Todd

APPEARANCES:

For the Applicant: Sophia Souffront, Counsel

For the Respondent: No Submissions Filed

HEARD: By way of written submissions

OVERVIEW

1Natalie Bailey (“respondent”) was involved in an automobile accident on December 5, 2020 and sought benefits from Security National Insurance Company (“applicant”) pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (“Schedule”).

2The applicant initially paid income replacement benefits (“IRB”) to the respondent as a result of the subject accident, but did not deduct the respondent’s collateral benefits, allegedly, due to both an error that was made by the insurer and the wilful misrepresentation of the respondent. The applicant alleges that this resulted in an overpayment of $4,150.90.

3As a result, the applicant filed an appeal with the Tribunal seeking repayment. This application was assigned Tribunal File Number 22-003263/AABS. At a case conference held regarding this matter on January 4, 2023, the parties reached a settlement. This Tribunal application is noted to have been closed due to this settlement in the Case Conference Report and Order (“CCRO”) that was issued to the parties on January 19, 2023.

4The applicant filed this second application with the Tribunal on March 27, 2023, alleging that the respondent did not make any payments relating to the IRB overpayment as was agreed to in the settlement agreement. A case conference was held on November 3, 2023, which resulted in this matter being set down for a written hearing in a CCRO released to the parties on November 15, 2023.

ISSUES

5The issues in dispute are:

1. Is the applicant (“insurer”) entitled to a repayment of $4,150.90 relating to its payment of IRB to the respondent during the period of December 13, 2020 to March 19, 2021?
2. Is the applicant entitled to interest on any overdue payment of benefits?
3. Is the applicant entitled to costs?

6I have added the costs request above to the list of issues in dispute. This was introduced by the applicant in its written submissions for this hearing. Rule 19.2 of the Licence Appeal Tribunal Rules, 2023 (“LAT Rules”) allows for a costs request to be made in writing or orally at a case conference or hearing at any time before a decision or order is released.

RESULT

7The respondent is ordered to repay $4,150.90 in IRB to the applicant due to wilful misrepresentation, pursuant to s. 52(1)(a) of the Schedule. Interest is applicable, in accordance with ss. 52(5) and (6) of the Schedule.

8The applicant is not entitled to costs.

ANALYSIS AND REASONS

Proceeding with the Hearing

9I find that the Tribunal has met its reasonable notice obligations. Therefore, I am proceeding with this hearing in the absence of the respondent, who has not filed written submissions.

10Proceeding 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.

11There is every indication that the respondent is aware of these proceedings. While the respondent did not attend the case conference held with regard to this application on November 3, 2023, her legal representative at that time did attend.

12On November 23, 2023, the Tribunal emailed a Notice of Written Hearing to the parties that set a written hearing date of June 28, 2024. The November 15, 2023 CCRO set deadlines for productions requested by the applicant and established a timeline that, in accordance with the written hearing date, required the applicant’s submissions to be filed by May 29, 2024 and the respondent’s submissions to be filed by June 14, 2024. Applicant reply submissions, if any, were due by June 21, 2024.

13The applicant filed its submissions by the deadline noted above, and advised the Tribunal that it would not be filing reply submissions on June 21, 2024. The respondent did not file any submissions. Nor did the respondent file productions as ordered in the CCRO.

14Tribunal records indicate that the Tribunal contacted the respondent and her legal representative regarding these missing submissions on June 17, 2024. No response was received.

15In addition, the respondent and her legal representative at that time did attend the case conference held on January 4, 2023 with regard to the first Tribunal application in this matter (under Tribunal File Number 22-003263/AABS), which was for the same issue of IRB repayment and which resulted in a settlement agreement between the parties.

16Tribunal records also do not indicate any request from the respondent to change the format from a written hearing.

17Given the above, I am satisfied that the Tribunal has met its notice obligations pursuant to s. 7(2) of the SPPA and is in compliance with ss. 6(1) and 6(4) of the SPPA. The respondent was aware of this hearing and chose not to participate. Accordingly, I shall proceed with this hearing.

IRB Repayment

Notice of repayment request

18I find that the applicant has satisfied the repayment notice requirements as specified in ss. 52(2) and 52(3) of the Schedule.

19An insurer is permitted to claim the repayment of IRB in certain situations and subject to certain conditions as established by the Schedule. Section 52(2) provides that an insurer must give an insured person notice of the amount that is required to be repaid. Section 52(3) mandates that such notice be provided within 12 months of the payment of the amount that is to be repaid, unless the amount was originally paid because of wilful misrepresentation or fraud.

20The applicant submits that correspondence sent by the insurer to the respondent on April 12, 2021 (with a revision made on May 10, 2021) meets the notice requirements of s. 52, as this was provided within the 12-month period. This letter identified the amount of IRB being sought for repayment and the reason that repayment was being sought (it became aware that the respondent was in receipt of post-accident collateral benefits). In addition, the applicant details that it sent reminder notices regarding this request for repayment on some five occasions between June and December 2021.

21The applicant further submits that the IRB repayment period should not be limited to 12 months due to the respondent’s wilful “misrepresentation of facts by failing to advise [the insurer] that she was in receipt of sick benefits” from her employer. The applicant notes that it informed the respondent in correspondence dated March 17, 2021 that collateral benefits or income received from employment post-accident were deductible, and that it reserved the right to seek repayment based on error.

22The applicant relies on Tribunal decision Unifund Assurance Co. v M.D.C., 2020 CanLII 94799 (ON LAT), which in turn relied on 17-000272 v T.T., 2017 CanLII 87539 (ON LAT), a prior Tribunal decision that determined silence or a failure to report can constitute wilful misrepresentation.

23I agree with the applicant. The April 12, 2021/May 10, 2021 letters are compliant with the repayment notice provisions provided in s. 52 of the Schedule. The 12-month limitation provision of s. 52(3) also does not apply, as I find that the respondent has committed wilful misrepresentation regarding not informing her insurer about receiving collateral benefits.

24As a result, the applicant may seek repayment of IRB.

Wilful misrepresentation and IRB repayment

25I find that the applicant is entitled to the repayment of of $4,150.90 relating to its payment of IRB to the respondent during the period of December 13, 2020 to March 19, 2021, as a result of the respondent’s wilful misrepresentation regarding her receipt of collateral benefits during this time. The applicant is also entitled to interest on this amount.

26Section 52(1)(a) of the Schedule establishes that an insured person is liable to repay the insurer any benefit “paid as the 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.”

27Here, the applicant submits that IRB was paid to the respondent following the subject accident due to its error and the respondent’s wilful misrepresentation. The applicant initiated IRB payments and set the quantum at the maximum rate of $400.00 per week based on information in an Application for Benefits (OCF-1) and an Employer’s Confirmation Form (OCF-2) indicating that the respondent’s sole employer at the time of the accident was Trillium Healthcare Providers.

28However, the respondent was also employed by West Park Healthcare Centre. In correspondence dated March 17, 2021, the applicant advised the respondent that IRB quantum had been based solely on information provided in the OCF-2 from Trillium and that it had made an error not requesting an OCF-2 from the respondent’s other employer at West Park. The applicant requested that this OCF-2 be filed within 10 business days and advised the respondent that collateral benefits or income from employment received following the accident were deductible, and that the respondent may be required to repay any benefit paid to her in error.

29On April 8, 2021, the respondent filed this OCF-2 from West Park along with copies of post-accident paystubs from this employer. This resulted in the applicant recalculating the IRB quantum at $107.66 per week during the time period between December 13, 2020 and March 19, 2021, due to deductions applied for collateral benefits received by the applicant, well below the $400.00 per week that had been paid. While the applicant paid a total of $5,542.86 in IRB during this time period, the actual payable amount should have been $1,491.96.

30As a result, the applicant sought repayment of the overpayment of $4,150.90, pursuant to s. 52 of the Schedule, in the first Tribunal application under File Number 22-003263/AABS. As noted above, this resulted in a settlement. The respondent agreed to repay the full amount of the overpayment on a monthly payment schedule that ran from February 2023 to June 2024. This agreement was signed by the respondent on February 1, 2023—although the respondent left out page two, which covered the requirement to make payments through a series of post-dated cheques.

31Through her legal representative in an email sent on February 1, 2023, the respondent requested the ability to make monthly payments as required via online money transfer instead of by post-dated cheques, as specified in the agreement. This request was denied by the applicant’s legal counsel, who asked for the full signed agreement to be returned, and advised in a series of emails sent in February and March 2023 that her client only accepted cheques and this was part of the agreed-upon settlement terms. The applicant’s counsel also advised the respondent that another Tribunal application would be filed seeking payment in full if the monthly payments were not made in accordance with the agreement. The applicant then filed the current application with the Tribunal on March 27, 2023.

32As has been already detailed above, the respondent did not provide productions ordered in the November 15, 2023 CCRO or file submissions for this hearing.

33I agree with the applicant. It has substantiated its claims that the respondent committed wilful misrepresentation in not disclosing collateral benefits paid by her second employer, West Park. Although the applicant made an error by paying the IRB without seeking an OCF-2 from West Park, it did so in good faith. This behaviour was not mirrored by the respondent, who remained silent on collateral benefits that were being paid and which reduced the amount of IRB to which she was entitled.

34Moreover, the settlement reached on Tribunal File Number 22-003263/AABS (which is essentially the same application as the one before me here) and the emails filed by the applicant with its submissions confirm that the respondent agreed to repay the IRB overpayment by post-dated cheques, but did not follow through on the terms of this agreement.

35For the above reasons, the applicant is entitled to the repayment of $4,150.90 relating to its payment of IRB to the respondent during the period of December 13, 2020 to March 19, 2021. The applicant is also entitled to interest on this amount.

Costs

36I find that the applicant is not entitled to costs.

37Rule 19 of the LAT Rules establishes that a party may make a request to the Tribunal for costs if it believes that the other party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith.

38In submissions, the applicant alleges that the respondent meets the requirements detailed above for a number of reasons. The applicant holds that the respondent purposefully omitted a page from the settlement to remove the requirement to pay via post-dated cheques and that the respondent further contravened the agreement by not providing any of the agreed-upon payments. According to the applicant, these breaches demonstrate bad faith and resulted in the applicant being forced to file this second Tribunal application.

39Lastly, the applicant alleges that the respondent continued this behaviour in this second application by continuously not complying with procedural requirements of the Tribunal. The applicant notes that the respondent did not deliver a response to this application, file a case conference summary, attend the case conference, comply with Tribunal production orders, and provide submissions for this hearing.

40As a result, the applicant requests a costs award for the “costs of this hearing.”

41I disagree that the respondent’s conduct here rises to the level of a costs order.

42The bad faith allegations largely involve the respondent’s conduct regarding a settlement agreement that the parties apparently negotiated and signed outside of the Tribunal. I have not been directed to evidence demonstrating that the respondent’s conduct interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process, a factor listed under Rule 19.6 of the LAT Rules that the Tribunal must consider when assessing costs claims.

43A failure to file submissions is insufficient to establish that a party is acting in bad faith or is being unreasonable. Ordering costs as a result would also have a potentially negative impact on individuals accessing the Tribunal system, which is another one of the criteria that I am obligated to consider when making costs determinations in accordance with Rule 19.6.

44Lastly, the applicant has not submitted the amount of costs being requested. This is in contravention of Rule 19.3, which establishes that all costs requests “shall set out the amount being requested.”

45Correspondingly, the applicant is not entitled to costs.

ORDER

46The respondent is ordered to repay $4,150.90 in IRB to the applicant due to wilful misrepresentation, pursuant to s. 52(1)(a) of the Schedule. Interest is applicable, in accordance with ss. 52(5) and (6) of the Schedule.

47The applicant is not entitled to costs.