The applicant, Mehrab Hasan (“Mr. Hasan”) was injured in a motor vehicle accident which occurred on November 20, 2020. He sought and was paid accident benefits by Allstate Insurance Company (“Allstate”). Mr. Hasan settled his accident benefits claim on a full and final basis for $13,000 on July 30, 2022, and he executed a full and final release to this effect. Subsequent to the settlement (and his receipt of the $13,000), Mr. Hasan tried to obtain payment of further rehabilitation benefits by Allstate as a result of his alleged accident-related post-traumatic stress disorder. Allstate denied the claim given the full and final settlement.
By LAT decision dated November 6, 2023, confirmed on reconsideration (November 21, 2023), the LAT relied on section 9.1(8) of Regulation 664 and held that in order to pursue benefits and proceed with the dispute, Mr. Hasan had to return the settlement funds to Allstate.
On March 6, 2025, Mr. Hasan went before the Divisional Court (“Court”) (Hasan v Allstate Insurance Co., 2025 ONSC 1562 (CanLII)) seeking rescission of his settlement without repaying the settlement funds he had received. Mr. Hasan argued that he was entitled to this remedy as $0 had been allocated toward rehabilitation benefits, and additionally on the basis that he could not repay the settlement funds. Instead, the Court upheld the full and final settlement with Allstate in relation to all claims arising from the subject accident. The Court noted that Mr. Hasan’s argument of impecuniosity had not been raised before the LAT, and as such, this argument could not be raised on appeal. Mr. Hasan’s appeal was therefore dismissed.
Takeaway
Legislation is law and must be complied with, no matter one’s financial state. As stated by the Divisional Court at paragraph 8, “Section 9.1(8) of Regulation 664 is mandatory and does not contain an exemption from the repayment requirement based upon impecuniosity. There is no factual foundation in the Record to ground an argument for relief from the mandatory repayment requirement.” Settlement of an accident benefits claim is final (and ensures finality in claims). Failure to comply with the executed release and the requirements of the statue can result in costs being awarded to the opposing party (as it did in this case with Mr. Hasan who was ordered to pay $1,000.00 to Allstate).
Tiziana Serpa is an associate at the firm and the author of this blog. If you have a question about this decision or a similar file, please contact Tiziana at [email protected] or 416-777-5209
