An Ontario tribunal has capped Certas Home and Auto Insurance Company's benefit overpayment recovery at 12 months after finding no wilful misrepresentation by a claimant.
The dispute followed a car accident on March 20, 2019, after which Certas paid income replacement benefits (IRBs) to the claimant. The insurer later sought repayment covering the entire period since the accident, arguing the claimant had misrepresented her ownership of a machining business she co-owned with her husband.
Certas said the claimant continued to receive bimonthly payments from the business after the accident despite doing no work for it, and that this income offset the IRBs paid to her. In total, Certas sought recovery of more than $63,700. To Certas, the failure to disclose the business and its ongoing payments amounted to wilful misrepresentation, which under the Schedule would remove the usual 12-month limit on an insurer's repayment claim.
The claimant did not dispute that an overpayment had occurred. She argued the error was honest, not fraudulent, and that recovery should be restricted to the 12 months preceding Certas' repayment notice.
Vice-Chair Brian Norris found the claimant and her husband, who managed the couple's dealings with Certas, credible witnesses. The claimant testified that she suffered cognitive effects from the accident, including difficulty using her phone and navigating her own city, and needed help from her therapist and employer to complete benefit forms. Norris accepted this evidence as supporting an honest, rather than deliberate, omission.
The couple, Norris found, mistakenly believed the IRB calculation was tied solely to the claimant's part-time job at a public library, and that the machining company's income was unrelated to the benefit. The claimant's ownership of the business surfaced only after her husband mentioned it while discussing a separate disability application, which Norris said undercut any suggestion of active concealment.
Norris rejected Certas' comparison to prior tribunal decisions involving claimants who had returned to active work or repeatedly denied earning outside income, noting the claimant never returned to any employment and never denied her ownership stake. He also disagreed with Certas' characterization of the couple as "sophisticated business owners with an above average knowledge" who withheld information for financial gain, pointing out they could have shifted her salary to her husband but did not.
On a separate procedural issue, Norris found Certas filed its application within the two-year limitation period, ruling that the clock started when the insurer issued its repayment notice rather than when it first discovered the overpayment.
Certas was ultimately awarded a repayment of $14,668.86, covering IRBs paid over the 12 months preceding its May 10, 2023 notice, plus interest under section 52(5) of the Schedule.
