Top court rejects claimant’s bid to re-open 2004 settlement with insurer

Canada’s top court has rejected the final appeal of a person injured in an auto accident who wished to rescind his settlement agreement with his auto insurer 15 years after the settlement, on the basis that he hadn’t signed one section of the settlement disclosure notice (SDN).

Thanh Ho was injured in an auto accident on Dec. 19, 2000, and sought statutory accident benefits from his insurer, Allstate Insurance.

The two sides disagreed about several matters, went through multiple mediation sessions, and then hammered out a binding settlement in 2004.

Counsel for the insurer, Allstate Insurance, wrote the regulator in November 2004 to say, “there was an oversight on his part,” the 2023 ruling of the Licence Appeal Tribunal states. “[Ho] had not been directed to sign the acknowledgment on page 6 of the SDN, and it is alleged that [Allstate] was unable to obtain [Ho’s] signature despite numerous attempts.”

Nevertheless, in February 2005, FSCO (the Financial Services Commission of Ontario, now replaced by the Financial Services Regulatory Authority of Ontario) wrote Ho to tell him the settlement had been finalized, and the regulator would be closing its file on the matter.

Seven years later, in March 2019, Ho’s new counsel notified Allstate he wished to reopen the arbitration hearing and mediate for income replacement benefit and housekeeping benefits. He returned the settlement funds to the insurer.

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Allstate argued Ho shouldn’t be allowed to re-open the settlement, for several reasons. Among them, he didn’t apply to rescind the binding settlement within two business days of it being signed, as required by Insurance Act regulations.

Ho contended the SDN was not compliant because he didn’t sign one section of the settlement notice. The unsigned part of the document states: “I acknowledge that I have received and read the above Settlement Disclosure Notice provided to me by an insurer, and have considered whether or not to obtain legal, financial and medical advice.”

Allstate, on the other hand, told the LAT that Ho did in fact sign the SDN, albeit not above the acknowledgement line at page 6, which confirms acknowledgement of reading the settlement notice and consideration of obtaining legal and/or medical advice.

In fact, Ho and a witness “initialled each page of the SDN including page 6, which triggered the two-day cooling off period to rescind the settlement that had been entered into on May 17, 2004,” as the LAT summarized Allstate’s position.

“In my view, the fact that [Ho] initialled every single page of the SDN suggests that he understood the settlement,” LAT Adjudicator Tavlin Kaur ultimately ruled. “Furthermore, he did not take issue with the settlement for many years.

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“As such, I find [Ho] had two business days to rescind the settlement from the time that he settled his claim on May 17, 2004. I find that he did not rescind the settlement within two business days after signing the SDN and release. Therefore, I find he is bound by the terms of the settlement.”

Ho appealed the decision to the Ontario Divisional Court, the Ontario Court of Appeal, and the Supreme Court of Canada. All declined to hear his appeal, culminating in the Supreme Court’s decision to deny leave to appeal last week.

As is customary, the Supreme Court does not give reasons for denying leave to appeal.

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.