Licence Appeal Tribunal
Licence Appeal Tribunal File Number: 24-011758/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:
Miranda Schell
Applicant
And
Security National Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Melanie Malach
APPEARANCES:
For the Applicant:
Meghan Walker, Counsel
For the Respondent:
Benjamin Hutchinson, Counsel
Heard:
By Way of Written Submissions
OVERVIEW
1Miranda Schell, the applicant, was involved in an accident on November 2, 2022, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by Security National Insurance Company, the respondent, and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE IN DISPUTE
2The preliminary issue to be decided is:
i. Whether the respondent entered into a settlement agreement with the applicant on April 15, 2024, under section 9.1 of Reg. 664: Automobile Insurance?
RESULT
3The applicant is barred from proceeding with her application as a settlement agreement was reached between the parties pursuant to s. 9.1 of Reg. 664.
ANALYSIS
Regulation 664
4Section 9.1 of Regulation 664 provides a framework for agreements that finally dispose of a claim or dispute in respect to a person’s entitlement to statutory accident benefits under the Schedule.
5Section 9.1(1) defines “settlement” as an agreement between an insurer and insured person that finally disposed of a claim or dispute in respect of the insured’s person’s entitlement to one or more benefits under the Schedule.
6Sections 9.1(2) and 9.1(3) require that a settlement disclosure notice (“SDN”) be in writing, signed by the insurer, and prescribes the content of the notice.
7Section 9.1(4) states that an insured person is permitted to rescind a settlement within two business days after the insured person signs the SDN and the release, whichever is later.
8Section 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.
9Section 9.1(7) states that the insured person can rescind the 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.
10Section 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 the 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 if the insurer failed to comply with the disclosure notice rules in ss. 9.1(2) and 9.1(3). 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.
Background
11The applicant applied for statutory accident benefits as a result of the accident on November 2, 2022. She then filed an application with the Tribunal (Tribunal file No. 23-012839/AABS) on October 26, 2023, with respect to her entitlement to accident benefits. A Case Conference took place on April 15, 2024, where the parties reached a full and final settlement of the applicant’s accident benefits claim in respect to the accident.
12As part of the full and final settlement, the applicant signed a Full and Final Release and SDN, both signed on April 16, 2024, in exchange for payment of $23,000.00 all-inclusive, with a breakdown as follows: $3,000.00 for Income Replacement Benefits and $20,000.00 for Medical and Rehabilitation Benefits.
13Settlement funds were sent to the applicant’s representative under cover letter dated May 22, 2024.
14On September 19, 2024, the applicant commenced the current application before the Tribunal, claiming entitlement to $2,825.00 for a forensic audit report prepared by ADS Forensics, dated January 18, 2024, costs for filing the application, legal costs, interest and an award. The preliminary issue before me was raised by the respondent.
15The applicant never rescinded the settlement agreement nor returned the settlement funds to the respondent.
Parties’ Positions
16The respondent submits that the settlement agreement is valid, binding and enforceable as there was a mutual intention to create a legally binding contract as evidenced by the fact that it was negotiated in the context of the case conference, all parties were represented, and it was reached with the help of a neutral and experienced LAT adjudicator. The respondent argues that the offer and acceptance requirements were satisfied such that there was a meeting of the minds as contained in the written settlement agreement on all of the essential terms of the settlement as evidenced by an objective reading of the language used by the applicant and the respondent in the executed full and final release and SDN.
17The respondent further submits that the applicant has never rescinded the settlement agreement and is thus bound by it. The applicant never provided notice to the respondent that she was rescinding it, nor has she repaid the settlement funds to the respondent. The respondent therefore submits that the applicant is barred from applying to the Tribunal given that she has not repaid the settlement funds to the respondent. The respondent submits that the current LAT application must be dismissed.
18The applicant acknowledges that a settlement of her accident benefits claim occurred on April 15, 2024. The applicant does not dispute the validity of the release or settlement disclosure notice. However, the applicant submits that the respondent has failed to pay for the cost of the ADS Forensics Report, dated January 18, 2024, pursuant to s. 7(4) of the Schedule. The applicant submits that on January 18, 2024, ADS Forensics sent the respondent an invoice for the IRB report in the amount of $2,825.00 and requested payment within 30 days of receipt by February 18, 2024. Despite numerous emails sent by ADS Forensics to the respondent, no response was received with respect to payment of the invoice. The applicant states that she entered into a settlement with respondent on April 15, 2024 and at no time during the settlement negotiations did the respondent mention that it had yet to pay the invoice. The applicant further submits that it is not reasonable for her to assume that this invoice was not paid at the time she reached her settlement. The applicant submits that it had no knowledge that the respondent had not paid the invoice and it is not reasonable for her to have assumed it was paid, at the time settlement was reached. The applicant has therefore brought her current application to claim entitlement to the unpaid invoice.
19In reply, the respondent submits that the applicant has brought the current application due to her failure to do her due diligence prior to settling her accident benefits claim. The respondent submits that the applicant failed to ascertain the status of all outstanding accounts/debs, specifically from ADS Forensics who she retained to provide a report. The respondent submits that it was the responsibility of the applicant to ascertain the amounts owing for any past outstanding accounts and to factor such amounts into her negotiations.
The Settlement is Governed by Regulation 664
20I find that the parties entered into a full and final settlement of the applicant’s accident benefits. I agree with the respondent that the applicant has not disputed the validity of the release or SDN. I find that the applicant has not sought to rescind the settlement agreement or to return the settlement funds. Therefore, she has not complied with subsections 9.1(5) and 9.1(7) of Regulation 664. I find that the applicant is barred from applying to the Tribunal for the cost of the ADS Forensics report given that she failed to provide notice to the respondent that she was rescinding the settlement and failed to repay the settlement funds to the respondent.
21I do not find the applicant’s argument, that an invoice had been submitted prior to the settlement discussions, to be a persuasive reason to find that the outstanding account is removed from the settlement. The notice specified that the settlement encompassed all approved and incurred services. While the ADS Forensics report was incurred by the applicant, I do not find the evidence supports that the report was approved by the respondent. I further do not find that the fact that services were also invoiced, changes the applicability of this section of the notice.
22The applicant argues that there is no way that she could have known whether the invoice for the report had been paid by the respondent prior to settlement. She further submits that she had every right to assume that the respondent had paid the account, unless otherwise advised. However, the applicant does not cite any case law in support of her argument that the respondent had the onus to advise the applicant, as part of the settlement discussions, whether it would be paying the outstanding invoice. Rather, I find that this was a point to be clarified between the parties, which the applicant could have raised prior to, or during settlement discussions. The lack of clarification on the issue does not detract from the clear language in the notice that the settlement amount included all approved and incurred services.
23With respect to the applicant’s argument that the invoice should have been paid pursuant to section 7(4) of the Schedule, the applicant has not provided any evidence to support that 7(4)3 of the Schedule has been met. Specifically, that the expense is reasonable and necessary for the purpose of determining the insured person’s entitlement to an income replacement benefit. I find that simply submitting an invoice to the respondent, is not evidence that respondent was required to pay the invoice pursuant to s. 7(4) of the Schedule. There is no evidence to support that the respondent approved this invoice or agreed to pay for the invoice. I find that given the language of the SDN as being “incurred as previously approved”, the applicant’s argument that the ADS Forensics report was payable fails to pass muster because the evidence does not support that the ADS Forensic report was “previously approved”.
24As such, I find that as the parties reached a full and final settlement of the applicant’s accident benefits claim, no further benefits are payable by the respondent.
Costs
25Turning to the costs request, I do not find the respondent has met the high threshold necessary for ordering costs against the applicant.
26Rule 19.1 states that the Tribunal may award costs when “another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith”. Rule 19.5 provides a list of factors the Tribunal shall consider when determining whether to order costs (and, if so, how much).
27The respondent in its submissions is claiming $500.00 in costs involved in defending the subject proceeding. I note that this issue was not raised at the Case Conference and is not listed as an issue in dispute in the Case Conference Report and Order. The respondent supports its request by submitting that the applicant brought this application with the expectation that no costs will be awarded notwithstanding the meritless nature of her claim. The respondent further submits that the applicant has wasted the Tribunal’s time, money and energy as well as that of the respondent. The respondent argues that the improper LAT proceeding clearly rises to the level of being unreasonable, frivolous and vexatious.
28I find the respondent has not established that the applicant’s behaviour merits a costs order. Though I recognize that the applicant has been unsuccessful in her application, I conclude that this has been remedied through the present decision.
ORDER
29I find that the applicant is barred from proceeding with her application as a settlement agreement was reached between the parties pursuant to s. 9.1 of Reg. 664.
30The applicant’s application is dismissed.
Released: May 29, 2025
___________________________
Melanie Malach
Adjudicator