Licence Appeal Tribunal File Number: 24-012855/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:
Ameed Al-Masri
Applicant
and
TD General Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Ulana Pahuta
APPEARANCES:
For the Applicant:
Michael Rotondo, Counsel
For the Respondent:
Robert Bowman, Counsel
HEARD:
By way of written submissions
OVERVIEW
1Ameed Al-Masri, the applicant, was involved in a motor vehicle accident on April 30, 2010, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”). The applicant was denied certain benefits by the respondent, TD General Insurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE IN DISPUTE
2The preliminary issue to be decided is:
a) Did the parties reach a valid settlement in October 2013 under Section 9.1 of Ontario Regulation 664?
RESULT
3I find that the Tribunal does not have the jurisdiction to consider this issue because the applicant did not meet the requirements in section 9.1(8) of R.R.O. 1990, Regulation 664 (“Regulation 664"). This application is dismissed for the lack of jurisdiction.
ANALYSIS
Background and Parties’ Positions
4The applicant was involved in an accident on April 30, 2010. On October 4, 2013 the applicant signed a Settlement Disclosure Notice (“SDN”), a Full and Final Release and subsequently received $90,000.00 all inclusive for all past and future benefits under the Schedule. From the evidence it is unclear whether the respondent signed the settlement documents on October 4, 2013 or October 5, 2013. Subsequently, on October 17, 2024 the applicant applied to the Tribunal seeking a catastrophic determination.
5The respondent raises the preliminary issue that the parties had entered into a valid settlement on a full and final basis. It argues that the applicant is precluded by Regulation 664 from applying to the Tribunal. The respondent cites s. 9.1(8) of Regulation 664, to argue that a person cannot apply to the Tribunal with respect to the benefits that were subject to the settlement, unless the person has returned the settlement funds. Since the applicant has not returned the $90,000.00, the respondent submits that the Tribunal does not have jurisdiction to determine whether the settlement was actually valid or invalid. It cites Tribunal caselaw to argue that in similar circumstances, the Tribunal determined that it did not have jurisdiction to hear the matter.
6The respondent further submits that any issues with the SDN were technical and immaterial and involved a discrepancy as to the date. It cites a number of decisions, including the Divisional Court decision Pope v. Pilot Insurance Company, 2024 ONSC 2932 to argue that technical and immaterial defects will not invalidate a notice. As such, the respondent argues that the SDN complied with s. 9.1 of Regulation 664, and that the October 2013 settlement was valid.
7The applicant argues that the defects with the SDN were not technical or immaterial. Rather, key parts of the SDN were left blank when they had been provided to the applicant to sign on October 4, 2013. The applicant submits that the section entitled Insurer’s Offer to Settle Benefits, which itemized the breakdown of benefits, had been left blank. Also, the SDN had not been signed by the respondent before it had been given to the applicant to sign. These portions were then filled out by the respondent after the applicant had signed. As such, the applicant argues that the settlement was invalid or void and that the respondent was in breach of s. 9.1(2) and 9.1(3)1 of the pre-April 2016 version of Regulation 664 which applies to settlements made before April 1, 2016.
8Given that the respondent was in breach of s. 9.1(2) and 9.1(3) of Regulation 664, the applicant argues that he is permitted to apply to the Tribunal, as a result of the remedial provision s. 9.1(10) of Regulation 664. The applicant argues that the pre-April 2016 version of the regulation grants a claimant access to the adjudicative process even if the settlement funds are not returned, since 9.1(10) states that a restriction in applying to the Tribunal would only be void if the insurer had complied with s. 9.1(2) and (3) of Regulation 664. Accordingly, the applicant submits that he is not prohibited from applying to the Tribunal for his catastrophic determination.
Law
9Given that the settlement took place in October 2013, I agree with the applicant that the pre-April 1, 2016 version of Regulation 664 applies to the parties’ settlement agreement. Regulation 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.
10Section 9.1 sets out the requirements for a written disclosure notice. Pursuant to s. 9.1(2) the notice must have been signed by the insurer. Section 9.1(3)1 states that the disclosure notice must contain the insurer’s offer with respect to the settlement.
11Section 9.1(8) of Regulation 664 prescribes that no person may apply to the Tribunal with respect to benefits that were the subject of a settlement or purported settlement unless that person has returned the money that was paid in consideration of that settlement. Section 9.1(9) requires that the insurer hold the returned money in trust while the validity of the purported settlement is determined.
12Under s. 9.1(10) a restriction on an insured person’s right to mediate, litigate, arbitrate, appeal or apply to vary an order under sections 280 to 284 of the Insurance Act is not void under s. 279(2) if,
a) the restriction is contained in a settlement;
b) the settlement was entered into on or after the first anniversary of the day of the accident that gave rise to the claim; and
c) the insurer complied with subsections 9.1(2) and (3).
Is the applicant prohibited from applying to the Tribunal?
13I find that the applicant did not comply with the mandatory requirements of s. 9.1(8) of Regulation 664 and is prohibited from applying to the Tribunal with respect to the benefits subject to the purported settlement. Given the applicant’s non-compliance with s. 9.1(8), the Tribunal does not have jurisdiction to consider the validity of the parties’ settlement.
14The applicant does not dispute that he did not return the $90,000.00 in settlement funds prior to applying to the Tribunal. The respondent has cited Tribunal decisions Meherab v Allstate Canada, 2023 CanLII 103815 (ON LAT) and Ko v Wawanesa Mutual Insurance Company, 2023 CanLII 62938 (ON LAT), which I find persuasive. In these decisions, the Tribunal found in similar circumstances that the return of settlement funds required by s. 9.1(8) was mandatory before the Tribunal could adjudicate whether the settlement was valid.
15The applicant appears to be arguing that his case is distinguishable from Meherab and Ko, because the pre-April 1, 2016 version of Regulation 664 had a different version of s. 9.1(10) and that this previous version permits him to apply to the Tribunal despite not returning the settlement funds. He submits that the pre-April 1, 2016 version of s. 9.1(10) holds that any restriction on a claimant’s right to apply to the Tribunal is void, if the insurer was non-compliant with s. 9.1(2) and (3). I am not persuaded by the applicant’s argument.
16I agree with the applicant that s. 9.1(10) holds that a restriction on applying to the Tribunal is “not void” under subsection 279(2) of the Insurance Act, if the insurer complied with subsections 9.1(2) and (3). However, from my review of the section, the “restriction” specified in s. 9.1(10) clearly refers to a restriction contained in a settlement, not the legislative prohibition against applying to the Tribunal if the settlement funds are not returned, specified in s. 9.1(8). I do not agree with the applicant that s. 9.1(8) is no longer mandatory, due to the respondent’s purported non-compliance with subsections 9.1(2) and (3).
17While I agree with the applicant that s. 9.1(10) begins with the general language that a “restriction” on a party’s right to apply to the Tribunal is not void in certain circumstances, subsection 9.1(10)(a) narrows this “restriction” and states that one of the necessary criteria is that “the restriction is contained in a settlement”. In my view, when the section is read as a whole, it clearly contemplates a restriction agreed to by the parties in a settlement and does not apply to the distinct, mandatory requirements of s. 9.1(8).
18Section 9.1(8) clearly states that no person may apply to the Tribunal with respect to benefits that were the subject of a settlement or purported settlement unless that person has returned the settlement funds. The use of the term “purported settlement” in my view, shows that the legislative intent was that the settlement funds were to be returned (and placed in trust by the insurer pursuant to s. 9.1(9)), even in situations such as this, where the settlement itself was being challenged as invalid or void.
19I further am not persuaded by the decision cited by the applicant in support of his position, Opoku v. Pal, 1999 CanLII 19913 (ONSC). The applicant cites Opoku as standing for the principle that Regulation 664 was intended to prevent an insurer from taking any enforcement remedy restricting a person’s access to the adjudicative process, where the insurer has not complied with the settlement regulation. However, I agree with the respondent that in Opoku, the version of Regulation 664 in effect did not contain a provision comparable to s. 9.1(8). As such, Opoku is distinguishable since in that case, there was no mandatory requirement to return the settlement funds before applying to the Tribunal.
20I find that the legislation is clear that s. 9.1(8) is mandatory and that the settlement funds must be returned before applying to the Tribunal. Given that the applicant has not returned the funds, I find that the Tribunal cannot adjudicate this dispute until the applicant meets the requirements of s. 9.1(8) of Regulation 664.
21I further decline to make a finding on whether the respondent was in breach of section 9.1(2) and 9.1(3) of Regulation 664, and whether the parties entered into a valid settlement, as the Tribunal does not have the jurisdiction to adjudicate this matter.
Applicant’s Motion re: respondent’s reply submissions
22After the parties provided their submissions for this preliminary issue hearing, the applicant filed a Notice of Motion requesting that the Tribunal strike paragraphs 3-7 of the respondent’s reply submissions, along with the Mediation Brief of the Defendant submitted by the respondent with its reply. The applicant argues that these paragraphs are a breach of procedural fairness, raise issues that should have been submitted in its initial submissions and amount to “case splitting”. In the alternative, the applicant requests that he be permitted to provide a sur-reply to respond to these new issues.
23Upon review of the paragraphs referenced by the applicant, I note that paragraphs 3-7 relate to the applicant’s submission into evidence of a statement dated February 2, 2025 and arguments relating to the signing of the SDN and whether the applicant had received an executed copy of the SDN. These paragraphs and the Mediation Brief of the Defendant are relevant to the issue of whether the respondent was compliant with s. 9.1(2) and (3) of Regulation 664 and whether the parties had entered into a valid settlement agreement. However, they do not relate to the issue of s. 9.1(8) and whether the applicant had returned the settlement funds prior to filing his application with the Tribunal.
24Given my findings above and the fact that I will not be addressing the validity of the settlement in this hearing, I find that it is not necessary for me to make a ruling on the applicant’s motion.
CONCLUSION AND ORDER
25I find that the application is dismissed for lack of jurisdiction. The Tribunal will vacate the hearing date for the substantive issues.
Released: April 9, 2025
Ulana Pahuta
Adjudicator```