Volume. 8 Issue. 23 – June 26, 2024
This week we examine an IRB repayment case wherein the Respondent sought repayment of all IRB paid as a result of multiple misrepresentations. Ultimately, the Tribunal allowed only a portion of the repayment sought, determining that only one of the three claims for which repayment was sought was truly confirmed as being the result of wilful misrepresentation.
Multiple Wilful Misrepresentations Claimed but Only One Established
Allstate Entitled to Repayment of $27K of $101K IRB Sought – The Applicant Davis, in Paicente v Allstate (22-007952), Paicente was paid IRB totaling $101,571.44 from July 4, 2016 to June 15, 2018. It was the position of Allstate that they were entitled to a repayment of the entirety of the IRB paid due to wilful misrepresentation on the part of Paicente. They contended that Paicente willfully misrepresented his functional abilities and failed to advise Allstate that he had received both CPP and disability income replacement from RBC. Ultimately, the Tribunal found that Allstate was entitled to a repayment of $27,000 of the IRB paid.
Functional Ability Not Misrepresented
The Tribunal found that Paicente had not willfully misrepresented his functional abilities. Allstate contended that the evidence served to demonstrate that Paicente’s two businesses continued to operate post MVA and surveillance confirmed that he was attending the workplace, and therefore he was in fact never entitled to an IRB. However, the Tribunal found that “on a balance of probabilities, that the IRB was not paid to the applicant as a result of the willful misrepresentation of his functional abilities. It was determined that the available evidence confirmed that Paicente’s “psychological impairment was an ongoing disorder that initially disabled him from working but improved over time. The evidence of the applicant’s psychological impairment does not show, as alleged by the respondent, that the applicant was continuously able to work while he received an IRB.”
Two Business Continued with No Income Earned by Applicant
Allstate further pointed to the fact that both of Paicente’s two businesses continued to operate post MVA, noting that Paicente signed tax forms as the director of both companies while he received an IRB. It was noted that during an EUO in September 2018, Paicente testified that his insurance brokerage continues to operate because his son and two daughters perform the administrative work, and that the restaurant he owns was only open in the summer, and that business was operated by his children, even before the MVA. The Tribunal found “that this testimony provides a reasonable explanation for how these businesses were able to continue operating after the accident without the applicant.”
Surveillance Not Determinative
Allstate relied upon four days of surveillance, that they contend demonstrates the Paicente was seen driving to the building where his business office is located. He is seen using the treadmill in the building’s gym and going into his office. The applicant was also seen going to two different residential addresses…”. As a result, they contended that this demonstrates Paicente exhibiting behaviour that shows that he continued to work post MVA, however the Tribunal did not agree.
It was noted that the report “does not state that the applicant was seen working. Instead, the surveillance report documents that the applicant attended the building where the office of his business is located and being observed using the gym. There are also times when he may have been in the office building, but investigators did not know where he was or what he was doing.” In addition, it was said to be “possible that the applicant was working when he was in his office building, but out of view of investigators. However, this is speculation. Therefore, I give the surveillance evidence little weight because it is not helpful in establishing that the applicant was working in his office while receiving an IRB.
The Tribunal found there to be no evidence of Paicente engaging in the core activities of an insurance broker post MVA. The “mere act of signing tax forms for two businesses is not persuasive evidence that the applicant continued working after the accident because this is a straightforward, administrative task, and because there is no evidence that he engaged in the core duties of an insurance broker.” Further, Paicente’s tax records confirmed there to be no employment income in either 2017 or 2018. The Tribunal gave “more weight to the applicant’s income tax records which are consistent with his account of not being able to work after accident. For these reasons, I find that the IRB was not paid to the applicant as a result of the willful misrepresentation of his functional abilities.”
No Misrepresentation Regarding CPP Benefits
Allstate also contended that Paicente willfully misrepresented his entitlement to Canada Pension Plan (CPP) disability benefits. A letter dated December 20, 2017, confirmed that he had been approved for the CPP Disability Benefit, retroactive to the last three months in 2016. The Tribunal too note that Paicente had on his own initiative confirmed the CPP approval. Additionally, Allstate made “no submissions on the applicant misrepresenting the fact that he had been approved for CPP Disability. For these reasons, I find that the applicant did not receive any IRB as a result of willfully misrepresenting receipt of the CPP Disability Benefit.”
Misrepresentation Regarding Private Disability Benefits Confirmed
Finally, Allstate submitted that Paicente had failed to advise as to his receipt of private disability benefits in a policy of insurance from RBC. It was only at the September 2018 EUO that he confirmed same. The Tribunal concluded that Paicente “failed to inform the respondent of the $43,400.00 in disability income that he received from RBC insurance while also receiving an IRB. In my view, this falls within the parameters of “silence or a failure to report” and constitutes wilful misrepresentation.” Paicente received benefits from RBC for a 27 week period, (July 2016 – January 2017), with Allstate paying $27,000 IRB during the same period. As Allstate would not have paid the $27,000 had they been aware of the RBC benefits, they were entitled to a repayment of same due to the willful misrepresentation.
There was no entitlement to a repayment of the balance of IRB paid, as the repayment notice was more than 12 months after payments were rendered, and there was a finding of no wilful misrepresentation regarding Paicente’s functional impairment levels nor in the receiving of CPP disability benefits.
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