Citation: Pembridge Insurance Company v. Sever, 2026 ONLAT 24-015423/AABS

Licence Appeal Tribunal File Number: 24-015423/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:

Pembridge Insurance Company

Applicant

and

Kadir Sever

Respondent

DECISION

VICE-CHAIR: Robert Maich

APPEARANCES:

For the Applicant: Shelby Chung, Counsel

For the Respondent: Kadir Sever, Self-Represented [Not Present]

HEARD: In Writing

OVERVIEW

1Pembridge Insurance Company (“Pembridge”), the applicant, was the insurer of Kadir Sever (“Insured”), the respondent, who was involved in an automobile accident on December 19, 2022, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The Insured was paid benefits by Pembridge who applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute arising from the payment of benefits.

2On July 30, 2024, the Insured agreed to settlement of his accident benefits claim on a full and final basis in the amount of $34,000.00 all-inclusive and executed a Settlement Disclosure Notice and a Full & Final Release. On August 4, 2024, Pembridge issued payment of the $34,000.00 in settlement funds by cheque #P58336004, made payable to the Insured directly; the cheque was negotiated by the Insured on August 12, 2024.

3On October 16, 2024 Pembridge posted by registered mail a demand letter for repayment of the settlement funds by the Insured pursuant to s. 52(2) of the Schedule alleging the settlement funds had been paid to the Insured in error. On the same date Pembridge subsequently issued a second cheque #P58357158 dated October 16, 2024 in the amount of $34,000.00 payable to “Grillo Law P.C. in Trust” with an undertaking on behalf of Grillo Law P.C. to Pembridge agreeing to hold the Insured’s portion of the settlement funds received in trust until the Insured repaid to Pembridge the full $34,000.00 allegedly paid in error.

ISSUES

4The issues in dispute are:

i. Is Pembridge entitled to a repayment of $34,000.00 relating to its error in payment of settlement funds for the cheque issued on August 4, 2024?

ii. Is Pembridge entitled to interest on any overdue payment of benefits?

RESULT

5Pembridge is not entitled to a repayment of $34,000.00 relating to the payment of settlement funds to the Insured by the cheque issued on August 4, 2024.

ANALYSIS

Is Pembridge entitled to a repayment of $34,000.00 relating to its error in payment of settlement funds for the cheque issued on August 4, 2024?

6I find Pembridge is not entitled to a repayment of $34,000.00 relating to the payment of settlement funds to the Insured for the cheque issued on August 4, 2024. I find the Settlement Disclosure Notice is a document within the Schedule, however, I find the Full & Final Release is not a document within the purview of Reg. 10/34 and consequently not within the jurisdiction of the Tribunal. Further, I find Pembridge fulfilled its obligations contained in the Settlement Disclosure Notice pursuant to the Schedule through payment to the Insured.

7Pembridge submits that the payment to the Insured was made pursuant to the Full & Final Release executed by the parties on July 30, 2024 and a Settlement Disclosure Notice also executed by the parties on the same date. Pembridge submitted the Insured directed that the settlement funds be paid to “Grillo Law Professional Corporation In Trust” pursuant to the executed Full & Final Settlement. Pembridge submits that the amount was paid in error to the Insured as it was not paid in accordance with the direction to “Grillo Law Professional Corporation in Trust” pursuant to the executed Full & Final Settlement.

8I note there is no dispute as to the amount of the payment or its intended purpose for full and final settlement of the Insured’s application before the Tribunal.

9Pembridge has produced the Settlement Disclosure Notice and the Full and Final Release both dated July 30, 2024; I find that both documents were duly signed and executed by the parties as submitted by Pembridge. Pembridge has also produced the cancelled cheque #P58336004, made payable to the Insured directly and negotiated by the Insured; I find cheque #P58336004 is good and sufficient evidence that the funds that are the subject matter of the Settlement Disclosure Notice were received by the Insured.

10Pembridge submits that the funds were paid directly to the Insured in error instead of in trust to the Insured’s legal representative in accordance with a direction within the Full and Final Release. Pembridge subsequently sent a demand letter dated October 11, 2024 via registered mail on October 16, 2024 to the Insured dated using the following language:

“Pembridge Insurance has been advised that you have not returned these funds received in error to Grillo Law as agreed upon based on the settlement agreement you signed on July 30, 2024.

Pursuant to Section 52(2) (a) of the Statutory Accident Benefits Schedule (SABS), this is your notice that you are required to repay the overpayment in the amount of $ 34,000.00 to Pembridge Insurance.”

11Pembridge submits the demand letter pursuant to s.52 of the Schedule dated October 11, 2024 and sent via registered mail on October 16, 2024 was received by the Insured on October 21, 2024; I find the Insured received the demand letter as described by Pembridge.

12Pembridge submits it issued a second cheque #P58357158 dated October 16, 2024 in the amount of $34,000.00 payable to “Grillo Law P.C. in Trust” with an undertaking on behalf of Grillo Law P.C. to Pembridge agreeing to hold the Insured’s portion of the settlement funds received in trust until the Insured repaid the full $34,000.00 allegedly paid in error to Pembridge. I find the terms and purpose of this arrangement are outside the operation of the Schedule and not within the jurisdiction of the Tribunal.

13Pembridge submits it gave notice to the Insured in accordance with s.52 of the Schedule as to the amount to be repaid to Pembridge by the Insured. Pembridge submits s.52(1)(a) of the Schedule provides that an insured is liable to repay to the insurer a payment made in error by the insurer.

14Pembridge submits section 52 of the Schedule applies because the settlement amount of $34,000.00 was detailed as being for accident benefits as described by the Schedule in the Settlement Disclosure Notice executed by the parties on July 30, 2024.

15Pembridge submits that regardless of the source of error an insured is liable to the insurer for an amount paid in error; Pembridge relies upon Aviva General Insurance v. E.R., 2021 CanLII 19479 (ON LAT). I find this non-binding authority refers to errors within the Tribunal’s jurisdiction.

16The Insured made no submissions.

17I have reviewed the Settlement Disclosure Notice and find that there is no reference to Grillo Law P.C. or “Grillo Law P.C. in Trust” within the Settlement Disclosure Notice. I have reviewed the Full and Final Settlement dated July 30, 2024 and find this document is not related to the Schedule; accordingly, I find the Full and Final Settlement dated July 30, 2024 is not a document within the jurisdiction of the Tribunal.

18I find the Settlement Disclosure Notice dated July 30, 2024 between the parties was executed pursuant to the Schedule and is properly before and within the jurisdiction of the Tribunal.

19I previously found that the Full and Final Release dated July 30, 2024 is not a document executed pursuant to the Schedule, but the Settlement Disclosure Notice executed by the parties on July 30, 2024 was executed pursuant to the Schedule and lies within the jurisdiction of the Tribunal. Therefore, I find the terms and conditions of the Full and Final Release are matters outside the jurisdiction of the Tribunal and are not subject to adjudication by the Tribunal. I also find that a Full and Final Release is not within the scope of Regulation 34/10, but may fall within the scope of Regulation 664 in other circumstances not presently before the Tribunal.

20Further, although I have found the Full and Final Release currently before the Tribunal it is not a matter that is within the jurisdiction of the Tribunal through Reg. 34/10, I find it is incumbent upon the Tribunal to address Pembridge’s submissions. Pembridge submits that a payment error occurred pursuant to a direction within the Full and Final Settlement and payment should have been made to the Insured’s law firm Grillo Law PC. I find this is a contractual solicitor/client issue between the Insured and Grillo Law PC that is not a matter within the jurisdiction of the Tribunal.

21I also find Pembridge fulfilled its obligation under the Schedule through its payment to the Insured as provided in the Settlement Disclosure Notice and had no obligation under the Schedule to make a payment to Grillo Law PC. Further, I find Pembridge may not bring a solicitor/client contractual issue within the jurisdiction of the Tribunal through its decision to make a voluntary payment to Grillo Law PC not required pursuant to the Schedule.

22I find the Settlement Disclosure Notice executed by the parties on July 30, 2024 settles the matters in dispute before the Tribunal of the subject application. I find once the Settlement Disclosure Notice was served upon the Tribunal, its jurisdiction became functus and any issues between the parties arising thereafter are no longer within the jurisdiction of the Tribunal.

23I find the Tribunal has no jurisdiction to enforce agreements made outside the Schedule and such agreements and matters arising from it cannot be the subject matter of this proceeding. Further, I find the Schedule is consumer protection legislation that cannot be interpreted in a manner as to offend its purpose.

24I find Pembridge is not entitled to a repayment of $34,000.00 relating to the payment of settlement funds to Pembridge for the cheque issued on August 4, 2024.

ORDER

25The Tribunal’s final Order:

i. Pembridge is not entitled to a repayment of $34,000.00 relating to the payment of settlement funds to the Insured for the cheque issued on August 4, 2024, or interest.