Canada: Insurers Seeking Recovery Of Overpayment? Beware Of Notice Requirements

Case Comment: Intact Insurance v. Marianayagam 2016

A decision released on March 1, 2016 by Justice Perell of the Superior Court serves as a useful reminder to insurers of the demanding notice requirements that apply to requests for repayment under Section 47 of the SABS.

The Plaintiff was involved in an accident on May 26, 2004. His accident benefit insurer was Intact Insurance Company. The parties disputed entitlement to an Income Replacement Benefit. Nearly two years passed, and on May 3, 2006 the parties agreed to the terms of a consent Order that required Intact to pay an Income Replacement Benefit from September 27, 2005 on an ongoing basis.

At the time of the agreement Intact understood that it was the only insurer paying benefits.

This proved to be incorrect in the light of subsequent developments.

The Plaintiff had an ongoing lawsuit against Equitable Life for collateral benefits. In April 2007 he was paid benefits by Equitable Life for the period commencing September 2004.

The Plaintiff applied for CPP in September 2007. In September 2008 his CPP disability benefits were approved with retroactive effect to November 2006.

Intact came to learn about the receipt of these benefits. It was then in a position to reduce the Income Replacement Benefit based on the deduction for collateral payments foreseen by Section 7(1) of the SABS.

But Intact was in an awkward position at this point. Although the consent Order foresaw a reduction of benefits based on collaterals, Intact was also bound by Section 287 of the Insurance Act that prevented an insurer from altering an order "unless the person agreed or unless the Director or an arbitrator so orders in a variation..."

Intact sought consent to vary the Order. For whatever reason, the Plaintiff refused that consent.

Intact also applied for arbitration concerning revision of the Order. Since Intact had commenced litigation on the issue, the arbitrator decided to defer the issue to the Court.

In his reasons Justice Perell explained that in support of its claim for repayment, Intact was required to comply with the notice requirements of Section 47(2) of the SABS. This notice must contain:

(a) identification of the type of benefit that was overpaid;
(b) the payment period for which repayment is sought; and
(c) the amount of repayment sought."

In Justice Perell's view "the amount claimed need not be perfectly correct, but it should be substantially correct."

This might sound simple enough, but Justice Perell determined that Intact's two attempts to provide such notice failed to comply with the notice requirements.

In its first request, Intact sought repayment of $69,000 or 170 weeks of Income Replacement Benefits, although the applicable regulation foresaw repayment for only 12 months (i.e. 52 week period). For this reason "the amount requested was not substantially correct; it was grossly incorrect."

In its second repayment request, Intact repeated its legal position and advised that an accountant had been retained to calculate the quantum of the repayment. Justice Perell concluded that this too did not satisfy the notice requirement as the amount of the repayment was left undetermined.

In the peculiar circumstances of this case, Intact's delivery of an accountant's report on March 14, 2008 was deemed to satisfy the notice requirements of Section 47(2), as the report came closest to calculating the correct amount of the overpayment for the 12 month period (calculated by Justice Perell at $11,150 with respect of the Plaintiff's receipt of benefits from Equitable Life, with deductions made for the Plaintiff's legal expenses).

As for the CPP benefits received by the Plaintiff, Justice Perell concluded that although an accountant's report had been served concerning that calculation, no formal notice was issued for repayment of that benefit, and accordingly no order for repayment would be made for those benefits.

Although containing a set of what the Judge called "a freakishly complicated set of facts," the decision provides useful guidance to insurers about what to do in the face of a Plaintiff who resists a request for repayment. Justice Perell explained that:

  • Intact could have pushed promptly for a formal variation of the May 3, 2006 consent Order rather than bring an action before the Court.
  • Intact could have sought repayment on a graduated basis rather than on a lump sum pursuant to section 47(5) of the SABS.

The decision also serves as a useful reminder that in serving a notice for repayment under Section 47 of the SABS, the amount of the repayment should never be "grossly incorrect" but instead "substantially correct." This will ensure that the request for repayment is deemed valid should an order ever be necessary to enforce the request for repayment.

Read the full case decision Intact Insurance v. Marianayagam 2016 from the CanlII site.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions