August 25, 2014

SABS Update- Dismissal of an IRB Claim: Setting a High Threshold

Howell v Chartis Insurance Company of Canada, FSCO A12-000029, Arbitrator Jessica Kowalski

MVC October 1, 2009. The Applicant, Mr. Howell, applied for weekly income replacement benefits from Chartis Insurance Company in the amount of $362.05 per week from October 8, 2009, to the date of the Arbitration, and ongoing.

At issue at the Arbitration was whether or not Mr. Howell’s claim for income replacement benefits should be dismissed.

Chartis argued that the IRB claim was without merit largely due to the conduct of Mr. Howell, and sought an Order dismissing the claim on the basis that it was statute barred, frivolous, vexatious and an abuse of process.

Mr. Howell had failed to file income tax returns or to declare his income knowing full well that proof of income was required to receive the benefit. He had been paid in cash. He gave evidence during his examination under oath that he had not filed any income tax returns since 2008 (the period from which Chartis requested production), did not believe in filing them, and felt that he did not owe the government anything. As a result, he was non-compliant with section 33 requirements for documentation to verify and determine potential entitlement to the benefit.

Mr. Howell also failed to clarify defects in his materials to verify his income, and did not respond to requests to clarify the nature of his employment. He signed his own Employer’s Confirmation form, which claimed that he was employed at Julia’s Fine Cuisine as a manager/cook, and stated that he earned $30,000 gross in the 52 weeks prior to the accident. This was contradicted by the information received from the employer.

Further, Mr. Howell failed to attend any insurer’s examinations, and his former counsel had previously withdrawn the claim for the benefit. The withdrawal was confirmed on the record during his examination under oath, and then subsequently by a letter. Although Mr. Howell then mediated the claim, he did not take any steps to substantiate it, and continued with no involvement. There was no evidence that the withdrawal was without prejudice, or that Mr. Howell later advised Chartis that he had changed his mind. As a result of this withdrawal, Chartis was further prejudiced by an inability to collect and assess Mr. Howell’s employment information.

Mr. Howell submitted that the withdrawal of his claim did not represent his true intentions, and that his failure to declare income was largely due to efforts by his pre-accident employer to avoid paying taxes. He pledged to file his income tax returns forthwith.

The Arbitrator was not persuaded that Mr. Howell intended to make a good faith effort to declare his income. She found that Mr. Howell’s failure to file any documents to support the IRB claim, his failure to clarify defects in his application for benefits and employment information, his failure to attend any insurer examination for the purpose of assessing work-related disability, together with his attempt to arbitrate a claim he purported to withdraw, had prejudiced Chartis’ ability to assess him and to defend the IRB claim. Mr. Howell’s conduct as a whole constituted an abuse of process, such that the IRB claim was dismissed.



The Arbitrator considered Mr. Howell’s conduct as a whole when determining whether his claim for income replacement benefits should have been dismissed. She explicitly stated that his failure to file income tax returns or to declare income was not itself grounds to dismiss the claim, but one factor to be considered. The Arbitrator then went on to consider the other above-mentioned factors, which were evidently not favourable to Mr. Howell’s position.

This decision demonstrates that all of the relevant circumstances must be assessed before dismissing a claim for benefits. Although similar cases will likely be fact specific and decided on a case-by-case basis, this decision suggests that the threshold for dismissing a claim for income replacement benefits appears to be quite high.


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