Wilful Misrepresentation Creates Overpayment of Income Replacement Benefits (IRBs)

In the recent Licence Appeal Tribunal decision, Ababio v. TD Insurance Meloche Monnex, 2021 (20-001415/AABS) Adjudicator Farlam concludes that the respondent is entitled to repayment from the applicant for IRBs in the amount of $1,619.99 plus interest as a result of the applicant’s wilful misrepresentation of his return to work status.

At the time of the August 27, 2018 accident, the applicant was employed at Citymark Construction & Drywall Ltd. (“Citymark”) and claimed to have been unable to return to work as a result of the injuries he sustained in the accident.

However, per the applicant’s file from International Union of Painters and Allied Trades, he was paid for 219 hours post-accident from September to November 2018.  The applicant advised that these hours related to “banked hours” for work performed at Citymark prior to accident but were paid once he stopped working.  The applicant submitted these hours to the union in September, October and November 2018. During this period and up to March 12, 2019, the applicant received IRBs.

The respondent submits that the applicant continued to work for Citymark subsequent to the accident while collecting IRBs and that he stopped working later because of a work shortage, not accident-related injuries.  The respondent claimed repayment of $1,619.99 by letter dated September 5, 2019.

Adjudicator Farlam found the applicant not eligible for IRBs based on a lack of medical evidence establishing that he suffered a substantial inability to complete the essential tasks of his pre-accident employment.

Specifically, Adjudicator Farlam advised that “The applicant had a clear duty to advise the respondent that he had returned to work and made no attempt to do so at any time and continued to give the impression he was not working.”

Adjudicator Farlam references the following sections of the Statutory Accident Benefits Schedule:

“Section 52(1) of the Schedule provides that an insured is liable to repay benefits paid by an insurer as a result of error, wilful misrepresentation or fraud.   Section 52(1)(a) of the Schedule provides that 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.”;

“Section 52(2)(a) provides that the insurer shall give person notice of the amount required to be repaid.   Section 52(3) provides for a 12 month limitation unless the amount was originally paid as a result of wilful misrepresentation or fraud.  Interest is provided for in s. 52(5).”; and

“Section 53 permits an insurer to terminate the payment of benefits to or on behalf of an insured if the insured person has wilfully misrepresented material facts relating to the application for benefits provided notice is given which sets out the reason for termination.”

Misrepresentation was defined by the Tribunal 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 or a silence or failure to report facts.”

Considering the above, Adjudicator Farlam concluded, “I find that the respondent has met its burden to prove on a balance of probabilities that it overpaid IRB to the applicant in the amount of $1,619.99 in error as a result of the applicant’s wilful misrepresentation of his return to work status.”

Read the decision in full detail here: https://www.canlii.org/en/on/onlat/doc/2021/2021canlii97247/2021canlii97247.html