In the Licence Appeal Tribunal decision of Ko v Wawanesa Mutual Insurance Company, 2023 ONLAT 21-015392/AABS-PI, Adjudicator Kaur addressed the issue of jurisdiction as it pertained to finality with respect to a full and final settlement.
Ontario Regulation 664
Section 9.1(8) of Ontario Regulation 664 to the Insurance Act stipulates that no person may apply to the LAT with respect to benefits that were subject of a settlement, unless the person returned the money received as consideration for such settlement. The legislation provides a framework for finality to full and final settlements. It is mandatory that a person return the settlement funds.
Does that LAT have equitable jurisdiction?
In Ko, the Applicant was involved in an accident in August 2015 and was represented by the late Brad Duby. In or around December 2019 the Applicant agreed to settle her accident benefits claim and a Release and Settlement Disclosure Notice were provided on January 9, 2020. The settlement funds were issued to Mr. Duby, in trust, and cashed on January 23, 2020. Mr. Duby passed on January 28, 2021. The Applicant alleged she never received correspondence with respect to the settlement or release of funds, and only learned of same in February 2021, after appointing new counsel. She alleged that she did not execute the settlement documentation.
The Applicant filed an Application to set aside the settlement based on its equitable jurisdiction; she sought to be excused from section 9.1(8) of O/Reg 664 as she alleges to have never received the settlement funds from Mr. Duby. The Respondent took the position that LAT does not have equitable jurisdiction to address this matter, and in any event, the settlement was binding as Mr. Duby, Applicant’s counsel, had authority to affect a binding settlement on behalf of his client.
While Adjudicator Kaur found that as the statutory requirements were not met and the settlement was not legally binding, there was no evidentiary basis to support the Applicant’s allegation that she had not received the settlement funds. The Applicant filed an affidavit that was silent on the payment of settlement funds. It was determined the Applicant did not successfully rescind the settlement in accordance with section 9.1(8) of O/Reg 664.
Adjudicator Kaur found the LAT has not been conferred the power to grant equitable remedies. The LAT hass exclusive jurisdiction over accident benefits claims (Stegenga v Economical Mutual Insurance Company, 2019 ONVA 615), and it cannot obtain jurisdiction that is contrary to the legislative intent. It was found, therefore, that the Application was not properly before the Tribunal. On a without prejudice basis, Adjudicator Kaur indicated that the Applicant may be able to renew the attempt to be excused from section 9.1(8) of O/Reg 664 so long as she meets the mandatory language and requirements of the legislation.
Takeaway
Repayment of settlement funds is not something the LAT has any jurisdiction to grant relief from. Thus, even if the claimant could prove (through adducing evidence) that she never received the settlement funds, and that her deceased lawyer may have absconded with said funds, the only remedy would appear to be to pursue recovery from the Law Society Compensation Fund.
If you have a question about this issue, please contact the author, Tiziana Serpa ([email protected]).
