IRBs Denied due to Wilful Misrepresentation of Insured’s Testimony

January 26, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Aviva Canada v S. A

Aviva Canada v S. A

Date of Decision: December 19, 2016
Heard Before: Adjudicator J. H. Bass

Overview:

S.A. was injured in a car accident on October 29, 2013 and sought benefits pursuant to the Schedule.  Aviva paid IRBs for the period November 6, 2013 to June 2, 2014 totalling $12,000. Aviva now seeks repayment of the IRB’s in the amount of $11,942.86 on the basis that they were paid due to material misrepresentations by S.A..

The issues in dispute are as follows:

1. Was S.A. entitled to receive income replacement benefits at the rate of $400.00 per week for the period November 6, 2013 to June 2, 2014?
2. If not, is S.A. liable to repay Aviva in the amount of $11,942.86 for the Statutory Accident Benefits received from them?

S.A. applied for IRBs in November 25, 2013.  The application for benefits was confusing, since he checked the box indicating that he had worked for 26 of the 52 weeks prior, but did not list 26 weeks of work. S.A. did not check the box indicating that he was on Employment Insurance (EI).

Aviva paid IRBs for the period from November 6, 2013 to June 2, 2014.  Aviva paid the IRBs based on the S.A.’s signed statement of December 5, 2013 indicating that he was on EI at the time of the accident – the Arbitrator found that this was a misrepresentation on the part of S.A.

On June 3, 2014, S.A. advised Aviva that he had returned to work on June 2. However, an examination of the applicant’s pay stubs indicated that he in fact returned 5 weeks prior to this date. This led to an investigation of the entire file. On October 30, 2014 Aviva sought repayment of those 5 weeks of benefits and now seeks repayment of all IRBs paid.

Issue No 1 - was S.A. entitled to IRBs?

The criteria for the receipt of income replacement benefits can be summarized as follows:

1. being employed at the time of the accident;
2. having been employed for 26 of the 52 weeks preceding the accident (in this case October 30, 2012 to October 29, 2013) or
3. being in receipt of Employment Insurance Benefits at the time of the accident.

The Insurance company alleges that none of the above criteria apply to S.A..

The Arbitrator reviewed the evidence and noted the following:

• With regard to being employed, S.A. indicated on the application for benefits that he was not employed at the time of the accident.
•  With regard to having been employed in the last 52 weeks, in the application for benefits S.A. listed his only employment in the previous 52 weeks as 18 weeks and one day, although he did check the box indicating that he had been employed for 26 of the preceding 52 weeks.
• On December 5, 2013 S.A. provided Aviva with the signed statement noted above, stating that he was or would be in receipt of EI, as follows:

“prior to the accident I was on EI and had been since the end of September. . . .I have not received any payment at all from EI. I should be receiving a cheque shortly.”

The Arbitrator noted that taken together these statements are confusing, but give the impression that S.A. was asserting that he had been approved for EI benefits and was awaiting his first cheque.

Aviva takes the position that the sole reason S.A. was found to be entitled to benefits was that he was on EI as per his signed statement of December 5, 2013, although Aviva did not explicitly state this at the time. Aviva commenced paying benefits to S.A. on February 11, 2014, retroactive to November 6th 2013.

S.A. now concedes that he was neither employed nor on EI benefits at the time of the accident. In fact, he had applied for EI benefits on October 19, 2013, but his application was rejected on December 11, on the basis that he did not have enough insurable hours.

The Arbitrator reviewed the evidence and the law and concluded S.A. had not been employed for 26 or the last 52 weeks prior to his accident, nor had he been in receipt of EI.  As S.A. was not employed for 26 of the 52 weeks prior to the accident, and accordingly was not entitled to the Statutory Accident Benefits.

Issue No 2 - Repayment

Aviva seeks repayment of all the $12,000 paid to S.A., with the exception of the $57.14 already repaid for the day of June 2, 2014 by cheque received on October 30, 2014. The provisions governing repayments are found in section 52 of the Schedule. It provides that a person is liable to repay benefits paid in error, but notice of the error must be given within 12 months unless the benefits were originally paid to the person because of wilful misrepresentation or fraud.

The Arbitrator noted the request for repayment of IRB benefits came more than 12 months after payment and therefore, S.A. is not liable to repay this amount “unless it was originally paid . . . as a result of wilful misrepresentation or fraud” as provided in subsection 52 (3) of the Schedule.

The Arbitrator then examined the issue of whether Aviva had satisfied the onus of proving on a balance of probabilities that S.A.’s actions represent “wilful misrepresentation or fraud”. Upon review of all of the evidence provided the Arbitrator did not find S.A.’s version of the above facts to be credible.  Taking S.A.’s shifting version of the facts as a whole, the Arbitrator found that they show a persistent attempt to receive benefits to which he was not entitled and amount to wilful misrepresentations.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.