Citation: Sonnet Insurance Company v. Aden, 2025 ONLAT 23-005344/AABS

Licence Appeal Tribunal File Number: 23-005344/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

Fadumo Aden

Respondent

DECISION

ADJUDICATOR: Tanjoyt Deol

APPEARANCES:

For the Applicant: Pina Carusone, Counsel

For the Respondent: Fadumo Aden, Respondent, No submissions provided

HEARD: By way of written submissions

OVERVIEW

1Fadumo Aden (the “respondent”) alleges that she was involved in an automobile accident on October 28, 2020, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). Sonnet Insurance Company (“the applicant”) has applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”), as it takes the position that the respondent was not involved in an accident. It also asserts that the respondent wilfully misrepresented material facts, and it seeks a repayment, interest, and costs.

ISSUES

2The issues in dispute are:

I. Was the respondent involved in an “accident” as defined in section 3(1) of the Schedule?

II. Is the applicant entitled to terminate the payment of benefits because the respondent wilfully misrepresented material facts with respect to the “accident” and her application for benefits under s. 53 of the Schedule?

III. Is the applicant entitled to a repayment of $200.00 relating to its payment for the completion of an OCF-3 submitted on November 16, 2020?

IV. Is the applicant entitled to a repayment of $35.00 relating to its payment for clinical notes and records submitted on November 16, 2020?

V. Is the applicant entitled to interest on any overdue payment of benefits?

VI. Is the respondent liable to pay costs, pursuant to Rule 19 of the Licence Appeal Tribunal Rules, 2023 (the “Rules”)?

3I note that both in the Case Conference Report and Order (“CCRO”) released on January 8, 2024, and in the applicant’s written submissions, it submits that one of the issues in dispute is whether the respondent is barred from proceeding to a hearing because she made fraudulent and/or wilful misrepresentations to the applicant and received accident benefits payments because of these misrepresentations. Confusingly, the applicant refers to section 52 of the Schedule when seeking this relief. However, as acknowledged by the applicant in its submissions, section 52 pertains to repayments by insured persons to insurers in certain circumstances, but it does not allow the Tribunal to bar the respondent from proceeding to a hearing. In a similar vein, the applicant seeks relief under section 53 of the Schedule that it was entitled to terminate the payment of benefits to the respondent because she made wilful misrepresentations. Therefore, in my view, it seems that the applicant is not seeking an order that the respondent be barred from proceeding to a hearing, but rather seeks repayment under s. 52 and a termination of benefits under s. 53. As such, these issues have been reflected above.

4In the event that the applicant is seeking an Order that the respondent be barred from proceeding to a hearing, I find that it has not met its onus because it has not referred me to any section of the Schedule that supports such a relief. Notably, section 55 of the Schedule outlines the three circumstances where the Tribunal can bar an insured person from proceeding; however, making fraudulent and/or wilful misrepresentations is not listed as one of the circumstances. Therefore, I cannot grant a remedy that does not exist in the Schedule.

RESULT

5For the reasons outlined below, I find that:

I. The respondent has not established that she was involved in an “accident”, pursuant to s. 3(1) of the Schedule.

II. The applicant is entitled to terminate the payment of benefits to the respondent, pursuant to s. 53 of the Schedule.

III. Pursuant to s. 52(1)(a), the applicant is entitled to a repayment in the amount of $200.00 relating to the payment for a completion of the OCF-3, plus interest, in accordance with s. 52(5) of the Schedule.

IV. The applicant is not entitled to a repayment in the amount of $35.00 for medical records.

V. The respondent is not liable to pay costs.

ANALYSIS

Can the Tribunal Proceed in Absence of the Respondent’s Submissions?

6The respondent did not provide written submissions for this hearing. Accordingly, to proceed with the written hearing, I must be satisfied that the respondent received notice, under s. 7(2) of the Statutory Powers Procedure Act (“SPPA”) R.S.O. 1990, c. S.22.

7Section 7(2) of the SPPA allows this Tribunal to proceed with a scheduled written hearing in the absence of a party, if it is satisfied that the absent party was given proper notice of the written hearing. In reviewing the Tribunal’s file, I find that the Tribunal issued notice of the written hearing to the respondent by email. Therefore, in accordance with s. 7(2) of the SPPA, I may proceed in her absence.

Was the respondent involved in an “accident”?

8I find that the respondent has not met her onus to prove that she was involved in an “accident”, pursuant to s. 3(1) of the Schedule.

9Section 3(1) of the Schedule defines an “accident” as “an incident in which the use or operation of an automobile directly causes an impairment.”

10In Greenhalgh v. ING Halifax Insurance Co., 2004 CanLII 21045 (ON CA) (“Greenhalgh”), the Court of Appeal for Ontario reviewed the caselaw and determined that, in order to satisfy the definition of an “accident” under the Schedule, an insured person must meet the purpose test as set out in Amos v. Insurance Corp. of British Columbia, 1995 CanLII 66 (SCC), as well as the causation test as set out in Chisholm v. Liberty Mutual Group, 2002 CanLII 45020 (ON CA). This test was adopted and amended to meet the Schedule’s current and more narrow definition, requiring an insured person to satisfy the following tests:

I. Purpose test: Did the incident arise out of the use or operation of an automobile?

II. Causation test: Did the use or operation of an automobile directly cause the impairment?

11The causation test then requires the adjudicator to determine if these “ordinary and well-known activities” were the direct cause of the insured person’s impairments by focusing on the following considerations in sequential order:

I. The “but for” consideration;

II. The “intervening act” consideration, which may be used to determine if some other event took place that cannot be said to be part of the ordinary course of use or operation of the vehicle; and,

III. When faced with a number of possible causes, the “dominant feature” consideration focuses on whether the ordinary and well-known activity is what “most directly caused the injury”.

12The applicant argues that the respondent was not involved in an “accident” as defined within the meaning of s. 3(1) of the Schedule. In essence, the applicant’s position is that the alleged accident did not occur as alleged by the respondent.

13The applicant notes that the respondent testified at an Examination under Oath (“EUO”) on March 12, 2021 that her 2004 Nissan Truck Murano (“Nissan”) was rear-ended, causing it to spin and be struck again on the driver’s side by an unidentified vehicle. The applicant submits that Mr. Harrison Griffiths, engineer, in his Engineering Assessment Report, dated April 26, 2021, opined that the rear-end damage to the Nissan was inconsistent with vehicle-to-vehicle contact, that the damage to the left side of the Nissan was more consistent with impacts from a square metal tubing, and the damage to the driver’s side door was consistent with low-speed sideswipe with the edge of an open front door or with a vehicle that may have been stationary.

The Purpose Test

14Neither the applicant nor respondent made submissions on whether the purpose test was met. However, as Greenhalgh instructs me, the insured person bears the onus of meeting the purpose test.

15The purpose test is a determination of whether the incident resulted from “the ordinary and well-known activities to which automobiles are put”: see Greenhalgh. Put another way, for what “purpose” was the vehicle being used at the time of the incident?

16As noted in the loss report, the respondent reported to the applicant that the accident occurred while she was travelling in the middle lane on Highway 427 near Dixon Road, when another car came into her lane, struck her vehicle on the driver’s side, which caused the vehicle to spin. The respondent further reported that the other vehicle fled the scene of the accident. At her EUO, the respondent largely described the accident in the same fashion, but provided further details that her Nissan had been struck at the rear before spinning and being struck on the driver’s side.

17The applicant disagrees that an accident occurred as reported by the respondent. It relies upon the report of Mr. Griffiths, who concluded that the rear end damage to the Nissan was inconsistent with vehicle-to-vehicle contact and instead could be attributed to multiple separate impacts from the end of a square metal tubing, and that there was no mechanism to induce the loss of control or spin reported. Mr. Griffiths also opined that the various impact and set of damage to the left side of the Nissan could be attributed to various causes, such as impacts from square metal tubing and/or separate impacts from a narrow rigid object, door-opening impacts from the front and rear doors of an unidentified vehicle. Furthermore, the damage to the driver’s door was consistent with a low-speed sideswipe engagement with either the edge of an open front door or a vehicle that may have been stationary. With respect to the right front corner damage, Mr. Griffiths concluded that the damage was inconsistent with the reported vehicle motions, and it was more characteristic of an impact with a short, rigid, abrasive object.

18To summarize, Mr. Griffiths concluded that there was no damage to the Nissan to support that it was rear-ended by another vehicle, or that the left side driver’s door was impacted by a moving vehicle at a highway speed, as reported by the respondent.

19In order to support his proposition, Mr. Griffiths inspected the Nissan, he purchased metal tubing and conducted impact testing on a test vehicle that was of a similar model and year to the Nissan, took photographs of both the damage to the Nissan and test vehicle, reviewed a documented real-world collision between a 2003 Nissan Murano that was rear ended by a 2005 Lincoln Continental, and conducted door ding contact testing and contact with an open front door edge testing on the test vehicle.

20I find that the respondent has not met her onus to establish that the accident occurred as she described. If the accident occurred as she described, I would have been satisfied, on a balance of probabilities, that the purpose test was met, because the accident would have occurred with the use of a vehicle on a highway on the way to get food from a restaurant, as testified by the respondent at her EUO, which is an ordinary and well-known activity for which automobiles are put.

21However, I find that, based on the evidence before me, I am unable to conclude that the accident occurred as reported, and I instead find, on a balance of probabilities, that the damage occurred as a result of separate multiple impacts with metal tubing, a low-speed sideswipe engagement with either the edge of an open front door or a vehicle that may have been stationary. This is because the respondent’s statement to the applicant as noted in the loss report and her EUO evidence are at odds with Mr. Griffiths’ opinion. As noted above, the respondent maintains that she was driving her vehicle on a highway, when she was rear-ended, her vehicle spun, and then the vehicle was struck by the same vehicle on the driver’s side door, and that the other vehicle fled the scene. Meanwhile, Mr. Griffiths concluded that the damage to the rear of the Nissan was not caused by another vehicle, but rather multiple separate impacts from the end of a square metal tubing and the damage to the driver’s door was consistent with a low-speed sideswipe engagement with either the edge of an open front door or a vehicle that may have been stationary.

22I prefer the opinion of Mr. Griffiths over the statement provided in the loss report and the EUO testimony of the respondent, because Mr. Griffiths is a professional engineer who has investigation expertise with respect to motor vehicle collisions and accident reconstruction. Further, his opinion is supported by corroborating evidence, such as impact testing and a review of a real-world collision with similar vehicles. Moreover, Mr. Griffiths enclosed several photographs of the test vehicle after the testing was completed which showed similar damage to the one seen on the Nissan.

23Meanwhile, the respondent has not produced corroborating evidence to support her version of events, such as an expert engineer report, a property damage file, a motor vehicle accident report, or independent witness statements. Nor did the respondent provide any submissions or tender evidence to try and discount the findings of Mr. Griffiths. Therefore, I find that it is more likely that the damage to the Nissan occurred as opined by Mr. Griffiths, and not the way the respondent reported it.

24I also find that if the accident occurred as concluded by Mr. Griffiths, it would not meet the purpose test. This is based on the fact the respondent has provided no evidence or submissions on what purpose the vehicle was being used at the time of each impact between the Nissan and the end of a square metal tubing. Thus, I am unable to make a factual finding that the vehicle was being used for the ordinary and well-known activities to which automobiles are put.

25In a similar vein, Mr. Griffiths concluded that the damage to the driver’s side door was consistent with a low-speed sideswipe engagement with either the edge of an open front door or a vehicle that may have been stationary. However, once again, I do not have evidence from the respondent what purpose the vehicle was being used for at the time of a engagement with the edge of an open front door or a vehicle that may have been stationary. Without evidence or submissions from the respondent, I am unable to determine whether the vehicle was being used for the ordinary and well-known activities to which automobiles are put.

26In conclusion, I find that the respondent has not met her onus to establish that she was involved in an accident as described, which would have met the purpose test. Instead, I find that the damage to the Nissan occurred as opined by Mr. Griffiths, which the respondent has not established meets the purpose test. As such, on a balance of probabilities, I find that the respondent has not met her onus in proving that she was involved in an “accident” pursuant to s. 3(1).

The Direct Causation Test

27As I have determined that the purpose test has not been met, I do not need to engage whether the direct causation test would be met.

Did the respondent commit wilful misrepresentation and fraud?

28Under s. 52(1)(a), a person is liable to repay to the insurer any benefit paid 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.

29Section 53 of the Schedule allows an insurer to terminate the payment of benefits if the insured person has wilfully misrepresented material facts with respect to the application for the benefit, and if the insurer provides the insured person with a notice setting out the reasons for the termination.

30The applicant submits that the respondent wilfully misrepresented the material facts of how the accident occurred, and therefore the applicant was entitled to terminate her benefits on May 26, 2021.

31Further, the applicant argues that the respondent should be required to repay $235.00 for the benefits that were paid to her, as well as applicable interest. The $235.00 encompasses: $200.00 for the completion of an OCF-3, and $35.00 for clinical notes and records. The applicant also argues that it provided proper and sufficient notice under s. 52, and therefore is owed the repayment by the respondent.

32In the case of s. 53 and s. 52(1)(a), the onus of proof rests with the applicant on a balance of probabilities.

33I find that the applicant was entitled to terminate the benefits on May 26, 2021 under s. 53, as the respondent committed wilful misrepresentation because I find the respondent’s reported version of events is not supported by evidence presented to me. The discrepancies between her evidence and Mr. Griffiths’ opinion of how the collision occurred were significant and have not been adequately explained. On a balance of probabilities, I find that the applicant has proven that the respondent misrepresented critical facts regarding the collision. This misrepresentation was material, as it allowed the respondent to receive accident benefits from the applicant. The misrepresentation was also wilful, as the respondent described an inaccurate version of the collision to the applicant during the EUO.

34I also find that the applicant provided compliant notice under s. 53, on May 26, 2021, as it advised the respondent that it was terminating her benefits because of her inconsistent evidence which was not supported by the report of Mr. Griffiths.

35With respect to repayment, I find that the applicant is not entitled to $35.00 for the cost of obtaining the respondent’s clinical notes and records. This is because a plain reading of s. 52(1) shows that repayments are for any benefit under the Schedule, any income replacement benefit or non-earner benefit that was paid while the insured was disqualified by Part VII of the Schedule, or any IRB, NEB or caregiver benefit or any expense outlined in Part IV of the Schedule to the extent of their prescribed deductibility. The cost of obtaining medical records does not fall within the scope of s. 52(1), as it is not a benefit. Significantly, the applicant has provided no justification on how the cost of obtaining clinical notes and records constitutes a benefit under the Schedule.

36I find that the applicant is entitled to a repayment of $200.00 which it paid the respondent for the completion of the OCF-3 under s. 52(1)(a), as it is a benefit and the respondent wilfully misrepresented material facts to the applicant. I find that the cost of an OCF-3 fits in the definition of a benefit under s. 52(1) as in order for the respondent to receive certain benefits under the Schedule, a prerequisite is submitting an OCF-3. Also s. 25(1)1 of the Schedule is clear that insurers have to pay the reasonable fees charged for preparing an OCF-3 as required under ss. 21, 36 and 37. In my opinion, it would lead to absurd results if an insurer were required to pay the costs of an OCF-3 under the Schedule, but then cannot claim a repayment on same if there is wilful misrepresentation.

37Taken together, the May 26, 2021 letter is compliant with the repayment notice provisions provided in s. 52 of the Schedule, because it outlined the amount to be paid. The 12-month limitation provision of s. 52(3) does not apply, as I have also found above that the respondent has committed wilful misrepresentation. Therefore, the applicant is entitled to repayment from the respondent in the amount of $200.00, plus interest.

Interest

38Section 52(5) and 52(6) of the Schedule provide guidance on when an insurer may recover interest when seeking repayment. The insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after the notice is given and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice is given.

39Having found that the applicant is entitled to repayment in the amount of $200.00, it follows that it is also entitled to interest on the amounts to be repaid under s. 52(5) of the Schedule.

The respondent is not liable to pay costs

40I find that the respondent is not liable to pay costs to the applicant.

41According to the provisions of Rule 19 of the Rules, 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. Such a request for costs may be made to the Tribunal in writing or orally at a case conference or hearing at any time before a decision or order is released. It is the burden of the party that raises a request for costs to support their allegations of misconduct.

42The applicant seeks $1,000.00 in costs, because it was not able to obtain consent from the respondent for its motion to combine this file with four related files. The applicant argues that, since it was unable to obtain consent, the Tribunal denied its motion at the case conference to combine the files. It argues that, as a result, it had to submit separate submissions which increased its legal costs. The applicant further argues that the Tribunal in its CCRO noted that the respondent delayed the proceeding by eight months. Thus, it argues costs are warranted in these circumstances.

43I find that the applicant has not established costs are warranted under these circumstances. While it argues that it was impossible to obtain consent from the respondent with respect to its motion because she has been evasive, it has not referred me to any evidence to support that it took any steps to obtain consent prior to the case conference. It is well-settled that submissions are not evidence. Likewise, the purpose of Rule 19 is to award costs when it has been established that the party has behaved unreasonably, frivolously, vexatiously, or in bad faith, not to award parties their costs for the proceedings. Finally, contrary to the applicant’s position, the Tribunal in the CCRO did not make a finding that the respondent delayed the proceeding by eight months, rather the Vice Chair noted that the application was filed eight months ago, and this was her basis for proceeding with the case conference without the respondent’s participation.

ORDER

44For the reasons outlined above, I find that:

A. The respondent has not established that she was involved in an “accident”, pursuant to s. 3(1) of the Schedule.

B. The applicant is entitled to terminate the payment of benefits to the respondent, pursuant to s. 53 of the Schedule.

C. Pursuant to s. 52(1)(a), the applicant is entitled to a repayment in the amount of $200.00 relating to the payment for a completion of the OCF-3, plus interest, in accordance with s. 52(5) of the Schedule.

D. The applicant is not entitled to a repayment in the amount of $35.00 for medical records.

E. The respondent is not liable to pay costs.