In Pope v. Aviva General Insurance, 2023 ONLAT 22-003650/AABS, the applicant was involved in a motor vehicle accident on December 9, 1995, and sought benefits from Aviva General Insurance (“Aviva”) pursuant to the Statutory Accident Benefits Schedule as a result of injuries sustained.
On December 19, 2002, the applicant settled her claims on a full and final basis in exchange for $2,500 for medical and rehabilitation benefits. She signed an SDN and a release on the same day. Nearly 20 years later, on March 23, 2022, the applicant sent a letter to the respondent advising that she wanted to rescind the settlement and provided a cheque in the amount of $2,500.00 as reimbursement for the settlement monies paid to her in December of 2002.
At the preliminary issue hearing before the LAT, the applicant argued that there was never a valid settlement. In particular, the applicant argued that the respondent failed to comply with:
- Section 9.1(3)3 of Regulation 664 (the “Settlement Regulation”). Per this section, an SDN must include a statement that the insured person may, within two business days after the later of the day the insured person signs the disclosure notice and the day the insured person signs the release, rescind the settlement by delivering a written notice to the office of the insurer or its representative and returning any money received by the insured person as consideration for the settlement;
- Section 9.1(3)5. Per this section, an SDN must include a statement advising the insured person to consider seeking independent legal, financial, and medical advice before entering into a settlement; and
- Section 9.1(3). Per this section, an SDN must include a description of benefits that may be available to the insured person.
Adjudicator Kaur rejected the applicant’s arguments and concluded that the respondent complied with Regulation 664. As a result, the applicant could not rescind the settlement.
On the issue of section 9.1(3)3, it was accepted that the SDN at issue did not contain a statement that “the insured person may rescind the settlement by delivering a written notice to the office of the insurer”. However, the SDN included all of the other information required by section 9.1(3)3 and as such, Adjudicator Kaur found that there was some degree of compliance. The applicant argued that the language used by Aviva in this SDN in this case was identical to that which had been used in the case of Aviva Canada Inc. v. Parveen FSCO P-12-00023 and P-12-00024 (“Parveen”). In that case, FSCO Director’s Delegate Lawrence Blackman had found the language of the SDN not to be compliant with the Settlement Regulation. Adjudicator Kaur rejected this submission, finding that the decision in Kaur was not binding upon her, and was distinguishable in any event. In this case, the applicant had signed the Release and the SDN on the same day and therefore there could have been no confusion as to when the two day rescission period had begun to run.
On the issue of section 9.1(3)5, it was accepted that the SDN did not contain the word “independent”. However, this was a technical defect which does not amount to such a level that warrants setting aside the settlement.
Lastly, on the issue of section 9.1(3), the applicant argued that the SDN was deficient because the amounts for the maximum medical and rehabilitation and specified benefits were not listed. However, Adjudicator Kaur found that section 9.1(3) does not require that the amounts for each of the benefits be specified. It was sufficient that the descriptions note that the benefits have a lifetime maximum, and that the applicant is entitled to the reasonable costs of an examination.
The key takeaway from this decision is that, technical deficiencies in an SDN may not be sufficient to set aside a prior settlement where it is found that the provisions of the Settlement Regulation have been substantially complied with. This may reflect a meaningful departure by the LAT from cases that were decided before the Financial Services Commission of Ontario. If the applicant has not been deprived of important information related to the agreement, the SDN may be upheld even in the presence of technical noncompliance on the part of the insurer. In all likelihood, the deciding factor in this case was that the applicant had signed both the Release and the SDN at the same time. Another likely factor contributing to Adjudicator Kaur’s decision was the fact that the applicant’s attempt at rescission was made some 20 years after the parties agreed to settle the claim.
Juny Kim is the author of this blog and is also an articling student at ZTGH. If you have a question about this decision or a similar file, please contact Juny at 416-777-5304.
