Pope v. Aviva General Insurance, 2023 CanLII 19910

Citation: Pope v. Aviva General Insurance, 2023 ONLAT 22-003650/AABS - PI

Licence Appeal Tribunal File Number: 22-003650/AABS

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.

Between:

Clementine Pope

Applicant

and

Aviva General Insurance

Respondent

PRELIMINARY ISSUE DECISION AND ORDER

ADJUDICATOR:

Tavlin Kaur

APPEARANCES:

For the Applicant:

Clementine Pope, Applicant

Allen Wynperle, Counsel

For the Respondent:

Pamela Beukeboom, Adjuster

Kevin Griffiths, Counsel

HEARD:

By way of written submissions

OVERVIEW

1Clementine Pope, the applicant, was involved in an automobile accident on December 9, 1995, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Accidents after December 31, 1993, and before November 1, 1996The applicant was denied benefits by the respondent, Aviva General Insurance (“Aviva”), and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

PRELIMINARY ISSUE

2The preliminary issue to be decided is was the settlement release improper at the time of signing in December 2002, thereby providing the applicant with the right to rescind the settlement agreement?

RESULT

3The applicant cannot rescind the settlement because the respondent complied with Regulation 664.

ANALYSIS

Background

4The applicant was involved in an accident on December 9, 1995, in which she sustained multiple injuries. On December 19, 2002, she signed a Settlement Disclosure Notice (“SDN”). She settled the matter on a full and final basis in the amount of $2,500.00 for medical and rehabilitation benefits. Nearly 20 years later, on March 23, 2022, the applicant sent a letter to the respondent advising that she wanted to rescind the settlement and provided a cheque in the amount of $2,500.00 as reimbursement for the settlement monies paid to her in December of 2002.

5The applicant submits that there was never a valid settlement with the respondent. In the alternative, she submits that she is entitled to rescind the settlement because she has complied with section 9.1(7) of Regulation 664 by paying the settlement funds back to the respondent and advising it of her desire to rescind the agreement. Therefore, she should be entitled to claim ongoing medical and rehabilitation benefits under the policy.

6The applicant is relying on Aviva Canada Inc. v. Parveen, FSCO P-12-00023 and P12-00024 (“Parveen”), Smith v. Co-operators General Insurance Co, 2002 SCC 30 (“Smith”), Catania v. Scottish & York Insurance Company, 2001 CanLII 24147 (ON CA) (“Catania”), Apotex Inc. v. Allergan Inc., 2021 FCA 308 (“Allergan”), Igbokwe v. HB Group Insurance Management Ltd., 2001 CanLII 3804 (ON CA) (“Igbokwe”) and Opoku v. Pal, 1999 CanLII 19913 (ON SC) (“Opoku”) in support of her case.

7The respondent submits that the SDN provided the applicant with an adequate explanation of her right to rescind the settlement and satisfied the other requirements of section 9.1(3). In the alternative, it asserts that there was substantial compliance. The respondent submits that any non-compliance was minor, technical and played no role in inducing the applicant to settle or in the applicant’s failure to rescind the settlement within two business days. Therefore, the respondent requests that the Tribunal find that the settlement is binding, and that the applicant has no right to rescind it.

8The respondent relies on Nagarajah v TD Insurance Company, 2022 CanLII 106470 (ON LAT) (“Nagarajah”), Catania and Opoku in support of its case.

Regulation 664

9Regulation 664 provides a framework for agreements that finally dispose of a claim or dispute in respect of a person’s entitlement to statutory accident benefits under the Schedule.

10Sections 9.1(2) and 9.1(3) require that a settlement notice be in writing, signed by the insurer, and prescribes the following content of a notice:

1. The insurer’s offer with respect to settlement;

2. A description of the benefits that may be available to an insured person under the Schedule;

3. A statement that the insured person may rescind the settlement within two business days of the later of signing the disclosure notice and the release, by delivering a written notice to the office of the insurer or its representative and returning any money received by the insured person in the settlement;

4. A description of the consequences of the settlement of the benefits described in paragraph 2 including,

i. a statement of restrictions contained in the settlement on the insured person’s right mediate, litigate, arbitrate, appeal or apply to vary an order under section 280 to 284, and

ii. a statement that the tax implications of the settlement may be different from the tax implications of the benefits described under paragraph 2.

5. A statement advising the insured person to consider seeking independent legal, financial and medical advice before entering into the settlement; and

6. A statement for signature by the insured person acknowledging that he or she has read the settlement disclosure notice and considered seeking the professional advice set out in paragraph 5.

11Section 9.1(4) states that an insured person is permitted to rescind a settlement within two business days after the insured person signs the disclosure notice and the release, whichever is later. However, section 9.1(5) states that this two-business-day period does not apply if the insurer failed to comply with the prescribed requirements in the SDN.

12Section 9.1 (7) states that the insured person can rescind a settlement by delivering a written notice to the office of the insurer or its representative and by returning any money received by the insured as consideration of the settlement.

13Section 9.1(8) states that no person can apply to the Tribunal under section 280(2) of the Insurance Act for any benefits that are subject of a settlement unless the person has returned the money received as consideration for the settlement. Of significance, there is nothing in the regulation which places a time limitation for when an insured can rescind settlement. Therefore, the only question which needs to be answered is whether the respondent complied with its obligation to comply with s. 9.1(2) and 9.1(3) in the SDN. I find that it did.

Onus

14The applicant submits that the onus is on the respondent to prove that there was a settlement. The respondent has not made any submissions in this regard. However, the Tribunal’s decision in Nagarajah is before me and it held at paragraph 23 that the burden of proof is on the applicant because they seek to be excused from being bound from the settlement that they entered into, on the grounds that the settlement is invalid. I find Nagarajah persuasive. I find that the applicant bears the onus to prove that the settlement is invalid due to non-compliance with Regulation 664.

The respondent complied with section 9.1(3)3

15Section 9.1(3)3 requires a statement that the insured person may, within two business days after the later of the day the insured person signs the disclosure notice and the day the insured person signs the release, rescind the settlement by delivering a written notice to the office of the insurer or its representative and returning any money received by the insured person as consideration for the settlement.

16The applicant submits that section 9.1(3)3 requires that the SDN contain a statement the insured person may rescind the settlement by delivering a written notice to the office of the insurer. It is the applicant’s position that the SDN does not contain such a statement. The respondent submits that “a layperson would reasonably interpret the SDN to mean that it is immaterial as to whether notice is given directly to the insurer or to the representative appointed by the insurer”.

15In Opoku, the Court agreed with the principle set out by the Court of Appeal in Abdool v. Somerset Place Developments of Georgetown Ltd. et al., 1992 CanLII 86658 (ON CA) where it was emphasized that agreements should not be rendered unenforceable for technical deficiencies or for immaterial omissions in a disclosure statement. Spiegel J. in Opoku stated, “however, I wish it to be understood that nothing that I have said is intended to preclude an insurer from enforcing a SABs settlement, if the insurer can establish that the defect in the written notice is merely a technical one which could not have reasonably affected the insured's decision to settle.”

17In Catania, the Court of Appeal found that there was not even minimal compliance with the Regulation, and that some degree of compliance is a factor that could be taken into account. I find this commentary to be persuasive and apply it to the facts before me.

18I find that the disclosure notice does not contain a statement that “the insured person may rescind the settlement by delivering a written notice to the office of the insurer”. However, the SDN includes all of the other information required by section 9.1(3)3 of Regulation 664 and as such, I find that there is some degree of compliance. Moreover, I take notice of the fact that the respondent used Form SDN-164, which is the approved form by the Superintendent from the Financial Services Commission of Ontario. Furthermore, from a common-sense perspective, the written notice would be sent to the respondent’s office. I do not find that this defect amounts to such a level that warrants setting aside the settlement.

The respondent complied with section 9.1(3)5

19Section 9.1(3)5 requires a statement advising the insured person to consider seeking independent legal, financial, and medical advice before entering into a settlement.

20The applicant submits that the SDN did not contain the word “independent,” as required. The respondent submits that the omission of the word “independent” is a technical non-compliance that should not render the settlement unenforceable.

21I agree that the word “independent” as required by section 9.1(3)5 is not included in the SDN. However, I find that the statement complies with all of the other requirements listed in section 9.1(3)5. In my view, there is some degree of compliance in the SDN. The omission of the word “independent” is a technical defect. As such, I do not find that this defect amounts to such a level that warrants setting aside the settlement.

The respondent complied with section 9.1(3)2

22Section 9.1(3) requires that the disclosure notice include a description of benefits that may be available to the insured person under the Schedule.

23The applicant submits that there are deficiencies found on pages 5 and 6 of the SDN. Specifically, the amounts for the maximum medical and rehabilitation and specified benefits are not listed. Nor does it say that these benefits are available for the insured’s lifetime. The SDN does not mention that the insurer has the obligation to pay for medical assessments on behalf of the insured (and GST/HST). This information would be essential to any insured considering whether to enter a full and final settlement of their accident benefit claim.

24The respondent submits that the descriptions provided complied with section 9.1(3) as it notes that the medical and rehabilitation benefits have a lifetime maximum. The SDN also explains that the applicant is entitled to compensation for other pecuniary losses including the reasonable costs of examinations. With respect to the GST/HST, there is nothing in the SDN that would lead the applicant to believe that she is responsible for paying tax for assessments or medical/rehabilitation expenses. As for the failure to list the maximum as $1,002,000 as opposed to $1,000,000 subject to indexing, the non-compliance was technical and should not render the settlement unenforceable.

25I find that the descriptions note that the medical and rehabilitation benefits have a lifetime maximum, and that the applicant is entitled to the reasonable costs of an examination. In terms of the amounts not being specified for each of the benefits, section 9.1(3) does not require that as part of the description.

26As for the insurer’s obligation to pay for medical assessments on behalf of the insured (and GST/HST), the SDN does provide a description under the subheading of “Compensation for Other Pecuniary Losses” where it mentions that this benefit covers the reasonable cost of examinations obtained for the purposes of the Schedule. Section 9.1(3) does not require a statement about the respondent’s obligation to pay GST/HST.

27In terms of the maximum amount for medical and rehabilitation benefits, the SDN states the following, “There is a lifetime maximum limit of $1,000.000 for supplementary and rehabilitation benefits combined. This limit is indexed yearly. The maximum benefit will depend on the year of the accident.” The maximum amount has been specified with the caveat that it is indexed yearly and will depend on the year of the accident. Section 9.1(3) does not require that the amount be listed. However, the respondent did provide some information regarding the maximum amount.

28As noted in Smith, it is an insurer’s obligation to provide information to an insured in straight-forward and clear language directed towards an unsophisticated person. I find that the descriptions were straight-forward and written in a clear manner. In Igbokwe, the Court found that the purpose of section 9.1 is to provide a claimant with adequate information prior to the commencement of an action, in order to avoid a quick and uninformed decision as to the benefits the claimant is entitled to receive from the insurer. I agree with the Court and find that the SDN provided the applicant with adequate information.

29For the reasons noted above, I find that the descriptions complied with section 9.1(3).

There is no confusion regarding when the period of rescission started

30The applicant submits that the SDN is identical to the one that was in dispute in Parveen, and inserted excerpts from the decision of Director Delegate Blackman in relation to the signing of the release. However, the applicant did not provide submissions regarding how those defects apply to the facts before me.

31I find Parveen to be distinguishable from the facts before me. Moreover, it is not binding on me. While the language in the SDN is similar, the SDN and release were signed on different days in Parveen. Here, the SDN and release were signed on the same day. This is more similar to Nagarajah, as the insured in that case signed the release and SDN on the same day. In my view, there is no confusion as to when the two-business day period to rescind the settlement started.

32The applicant’s submissions, or lack thereof, fail to articulate how Parveen applies to her case. Merely stating that the SDN is similar and not providing an analysis on how Parveen applies to this case does not assist the Tribunal. As such, I do not find the applicant’s submissions on this point to be persuasive.

Disclosure and acknowledgement statement

33The applicant submits that on page 7 of the SDN, there is an insurer’s disclosure and acknowledgement statement. The space where the insurer’s representative is to date their statement is left blank. The applicant asserts that this is not in compliance with the legislation or the form upon which the respondent relied upon.

34The respondent submits that section 9.1 does not require that the insurer date the SDN.

35Subsections (2) and (3) of section 9.1 do not make any references to dating the SDN. Subsection (2) requires that the SDN to be signed by the insurer. But it does not state that it has to be dated. The applicant’s submissions are vague and do not point me to the specific provisions in the legislation that supports her position. As such, I do not find the applicant’s submissions on this point to be persuasive.

ORDER

36I find that the SDN is not defective. The deficiencies are technical and there has been some compliance with the requirements set out in section 9.1. I do not find these to be defects to be singularly or cumulatively sufficient to set aside the settlement. In my view, the applicant has not been deprived of important information in relation to the settlement.

37The application is dismissed.