Security National Insurance Co v. Thomas, 2024 CanLII 2673 (ON LAT)

Full Decision

In Security National Insurance Co v. Thomas, the insurer paid income replacement benefits to the insured, Aklilu Thomas, following a collision that occurred on June 1, 2018.  Partial repayment of benefits was subsequently sought by the insurer and the dispute went to the Licence Appeal Tribunal (the “LAT”).

At the time of the collision, the insured worked as a product verifier/order picker at Bite Beauty, through a contract with Ranstad Interim Inc. Income Replacement Benefits (“IRBs”) were paid by the insurer, in the amount of $356.22 per week, from June 7, 2018 to April 27, 2021. The total sum of income replacement benefits paid was $52,798.14 over a period of about 35 months.

Repayment was sought by the insurer, for the period of June 14, 2018 to April 27, 2021, in the amount of $10,847.17. A settlement agreement was reached between the parties, which required the insured to repay $6,000 to the insurer, in installments of $500 over a period of 12 months.  The insured subsequently defaulted in making said payments and the insurer reopened the dispute before the LAT. A one-day oral hearing occurred on October 12, 2023, followed by written submissions made by both parties.

The issues in dispute before the LAT included:

  • whether the insurer was entitled to repayment in the amount of $10,847.17 for the period of June 14, 2018 to April 27, 2021;
  • whether interest should be paid on overdue amounts; and the applicant insurer sought costs in the amount of $500.

The LAT ultimately determined that the insurer is entitled to repayment in the amount of $10,847.17, and that interest is also payable.

The LAT found that the applicant insured misrepresented his work and income status, while receiving IRBs from June 14, 2018 to April 27, 2021. The insurer was thus entitled to a partial repayment of IRBs.  In reaching this decision, the LAT notes that when calculating eligibility to receive IRBs, the insurer may deduct 70 percent of any self-employment income earned during the period of eligibility – pursuant to section 7(3)(b) of the Statutory Accident Benefits Schedule (“SABS”). Moreover, an individual is liable to repay to the insurer any benefit described that is paid as a result of wilful misrepresentation or fraud.

The applicant stated on his OCF-1 Application for Accident Benefits, dated June 29, 2018, that he was previously employed at Bite Beauty. No other employment activities were indicated. Subsequent OCF-3 Disability Certificates were submitted, which indicated that he was not working. The last day of work indicated on said Disability Certificates was June 14, 2018.  However, the insured attended an insurer’s examination on April 27, 2021 and he told the assessor that he was working as a food delivery driver with Uber and SkipTheDishes. He claimed that he was working for about 8 hours per week. IRB payment were subsequently stopped.

The applicant provided the defendant with his 2019 Uber Tax Summary, and his 2018 – 2021 SkipTheDishes earnings summaries. He also provided his CRA Income Tax Returns and Notices of Assessment, from 2017 – 2020. The insurer engaged accounting firm PricewaterhouseCoopers (“PwC”) to calculate the amount of overpayment in IRBs. The PwC report indicated an overpayment of $11,347.17 for the period of June 14, 2018 to April 27, 2021.  The amount of repayment sought by the applicant insurer was $11,347.17, minus a repayment of $500 made by the applicant.

The insurer submitted that the LAT has previously held that “silence or a failure to report” can constitute wilful misrepresentation.  The insurer submitted that the insured misrepresented his work status by filing misleading OCF-3s while he was receiving IRBs. The insurer further claimed that the applicant failed to notify the insurer that he had returned to work as a self-employed driver while collecting IRBs. This would have reduced the quantum of IRBs that Mr. Thomas was entitled to receive, under section 7(3) of the SABS.

In oral submissions, the applicant stated that his income as a part-time driver was far less than the amount indicated in the insurer’s PwC report, because he had to pay for fuel, vehicle maintenance and insurance.  The applicant also indicated that he did not know he had to declare the self-employed income, related to Uber, as the amounts were quite small.

As for the repayment of benefits, the applicant stated that financial hardship made it impossible for him to satisfy the terms of the settlement agreement previously reached. The applicant stated that the LAT should not make an order against him due to financial hardship and impecuniosity.

The LAT determined the applicant must repay $10,847.17 in IRBs, in accordance with sections 7(3) and 52(1) of the SABS. In rendering this decision, the LAT agreed that the applicant misrepresented his income status while receiving IRBs. Regarding the quantum of repayment, the LAT found the calculations provided by the insurer’s PwC report to be persuasive, noting that assumptions were made for “fixed and variable operating expenses in calculating the applicant’s net earnings from delivery activities.”  Although the applicant referenced operating costs in his submissions, no evidence was presented to the LAT to refute the net earning calculations provided by the insurer. The LAT also remarked that impecuniosity is not a valid reason to dismiss the application, referencing Myers v. Metropolitan Toronto Chief of Police.

The insurer also sought for interest to be paid on outstanding repayment amounts. Section 52(5) of the SABS references interest, which the insurer may charge regarding repayment of benefits. The LAT determined that the insurer is entitled to interest on overdue amounts, in accordance with section 52 of the SABS.

The insurer also argued applicant’s breach of the Motion Order of March 21, 2023, and the applicant’s failure to honour the settlement agreement supported an award for costs.  However, the LAT determined that the applicant’s conduct did not rise to the requisite standard to justify a costs award and no cost award was made.  

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