SUPERIOR COURT OF JUSTICE- ONTARIO
RE: The Co-operators General Insurance Company, Plaintiff
AND:
Bagwandat (Ron) Doobay, Defendant
BEFORE: The Honourable Justice J.W. Sloan
COUNSEL: Jonathon Kahane-Rapport, Counsel for the Plaintiffs Georgiana Masgras, Counsel for the Defendant
HEARD: September 28, 2017
ENDORSEMENT
[1) In this motion before the court, the plaintiff seeks to enforce a settlement which was achieved on March 11, 2016, after 4 days of FSCO Arbitration.
[2) On the same date after signing settlement documentation and orally agreeing to the settlement the defendant sent correspondence attempting to resile from the settlement pursuant to Section 9.1(4) of Ontario Regulation 664 which states:
The insured person may rescind the settlement within 2 business days after the later of the day the insured person signs the disclosure notice and the day the insured person signs the release.
[3) By way of brief background, the plaintiff was involved in a motor vehicle accident on April 27, 2009 and between then and October 4, 2012, he received approximately
$92,000 worth of benefits under the SABS.
[4) After receiving surveillance, the plaintiff on October 4, 2012, denied further benefits to the defendant on the basis that he had falsified his claims.
5In July 2014, the defendant retained his third and current lawyer and applied for arbitration through FSCO.
6The arbitration commenced on March 8, 2016, and continued through to March 11, 2016, when a settlement was reached by the parties and therefore the arbitration ended.
7Later on the same day when all parties had left the arbitration, the defendant sent correspondence seeking to resile from the settlement.
8The plaintiff seeks judgment in accordance with the terms of the March 11, 2016, accepted offer or in the alternative an order to continue the proceeding as if there had been no accepted offer, plus costs of this motion.
9The defendant seeks to have the plaintiff's motion dismissed on the basis that the defendant rescinded the settlement in accordance with section 9.1 of Ontario Regulation 664 and in accordance with the terms of the release.
The Plaintiffs Position
10It is the plaintiff's position that the settlement encompassed three separate and distinct matters which were:
there would be no further payments by the plaintiff to the defendant under the SABS,
the arbitration proceeding would be dismissed, and
this court action would be dismissed.
11In addition to the above the plaintiff was to pay to the defendant $50,000 in full and final satisfaction of all of the defendant's claims against it.
12The plaintiff submits the following:
A. Regulation 664 and in particular section 9.1 is consumer protection legislation.
B. Regulation 664 allows for a 48 hour cooling off period in an effort to balance the "playing field" between an insurer who in all cases would likely be very experienced with respect to the SABS, negotiations, settlements and the finality of settlements and the unrepresented insured person who in the vast majority of cases would have very little if any experience with respect to any of these matters.
C. In this case, there was an oral Rule 49 offer and an acceptance and therefore, the Regulation dealing with the SABS does not apply. He relies on the case of lgbokwe et.al. v. HB Group Insurance Management Ltd. et.al. O.R. (3'd) 313 where the Ontario Court of Appeal stated:
It cannot be that the legislation was to apply in the situation before me, in which the parties are in an adversarial process represented by competent counsel, in the course of which, the insured plaintiff instructs his counsel to put forward an offer to settle his claim.
It is apparent to me that section 9.1 and Rule 49 cannot work in tandem. I do not accept the submission to the contrary
made by Mr. Shields. To permit an offer to be made under Rule 49, which can be withdrawn two days after acceptance if Section 9.1(2) information is provided with the offer, or if it is not, two days after the date on which the information is provided, is to make a mockery of the Rule 49 procedure.
D. Once an insured has counsel and there is an adversarial process in progress, whether it is mediation, arbitration or a court action will the cooling off period does not apply.
E. The form of the release which is titled "Accident Benefit Full and Final Release", the somewhat all-encompassing release wording which ends with the words "which were the subject of mediation and/or arbitration under Financial Services Commission of Ontario", and in the "Notice and Caution" on the second page of the release which reads "you have two business days from the day of the last document you signed ... To change your mind and rescind the settlement" do not apply in this case because there was an oral Rule 49 settlement that was achieved.
Here the plaintiff relies in part on the case of Chauvette vs. Massey,
2013 ONSC 4146 where the court stated at paragraph 12:
The most important factor to consider is the purpose of section
9.1 and the settlement disclosure notice. As the Court of Appeal stated in lgbokwe, the notice is designed to protect self represented parties, not parties who have counsel. A party who
has counsel, such as the plaintiff in this matter, does not require a two day cooling off period in which he or she can rescind acceptance of an offer. The plaintiff accepted the offer on the advice of counsel. Although the defendant sent the notice along with the settlement documents, it was not necessary. While the Court in Phillips determined that once the notice was sent, the defendant was "stuck with it", the Court of Appeals reasoning in lgbokwe prevails. Accordingly, the defendant's motion is allowed.
The Defendant's Position
The defendant's position is as follows:
A. Both parties were represented by counsel.
B. The proposed settlement was only with respect to the issues that were being addressed in the arbitration, which is clearly set out on the first page of the settlement documentation, which were, the defendant's rights under the SASS.
C. If the plaintiff did not want the defendant to have a two day cooling off period it would have taken only seconds to strike it out of the documentation.
D. The proposed settlement did not come about as a result of Rule 49 since it was not in writing, and did not address a court action, but rather income replacement, housekeeping and other benefits under the SASS.
E. The plaintiff accepted the defendant's rescission of the proposed settlement since on March 15, 2016 he wrote to the arbitrator stating; "We write to advise that Mr. Doobay has rescinded the settlement reached on Friday, March 11, 2016 and that it will be necessary to reschedule further dates for the arbitration to continue."
F. The plaintiff submits, that while all cases the court was referred to deal with similar principles, the cases are all fact specific.
G. While the plaintiff relies on the case of Melson v. Farmer Mutua/Insurance Company, 2010-03-31 ONSC 1951, the defendant submits that the case would have been decided differently, if the cooling off period had been provided for on the record at the examination for discovery, while here, the cooling off period is specifically provided for in writing, within the proposed
settlement document and therefore the rationale of Melson does not apply. In addition the Melson case dealt with a court action not an arbitration.
Findings
13The court can only assume that both counsel and particularly plaintiff's counsel would like to redraft the subject release.
14The release was drafted by the plaintiff's counsel and agreed to by the defendant after speaking with his counsel.
15The plaintiff now wishes through parol evidence, to amend the wording of the written release.
16This is not a case of sending out the prescribed settlement disclosure notice which includes a two day cooling off period, after a settlement had been achieved.
17In this case the clause containing the two day cooling off period was attached to and formed part of the proposed settlement documentation read by and signed by the defendant.
18Although it may be unfortunate, given the unfortunate journey this case is taken through the legal system, I dismiss the plaintiff's motion with costs.
19The parties are therefore free, if so advised, to continue with the arbitration and court action.
20If the parties are unable to agree on costs, Ms. Masgras shall forward her brief submissions on costs to me by October 6, 2017. Mr. Kahane-Rapport shall forward his brief response to me by October 13, 2017. Ms. Masgras shall then forward her reply, if any, to me by October 18, 2017. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca
Date: September 29, 2017
J.W. Sloan,J.