The Divisional Court’s decision in Intact Insurance Company v. Carpenter provides important guidance on the scope of procedural fairness in Licence Appeal Tribunal (“LAT”) proceedings. This decision emphasizes the notion that a tribunal cannot decide a case on a basis the parties did not argue without first giving them an opportunity to respond. Although the dispute arose in the context of accident benefits – specifically whether a wheel loader qualifies as an “automobile” under the Statutory Accident Benefits Schedule (the “SABS”) – the Court did not resolve that substantive issue. Instead, it allowed the appeal on procedural fairness grounds after finding that the LAT decided the case on a branch of the governing legal test that both parties had expressly treated as irrelevant. This decision reinforces the principle that adjudicators must ensure that parties have a full and fair opportunity to address the issues that are determinative of the outcome.
The Facts
The case arose from a 2020 incident in which the insured was struck by a Caterpillar wheel loader travelling on a municipal road enroute to a snow-clearing job. The insured applied for statutory accident benefits under the SABS. The insurer denied coverage on the basis that a wheel loader is not an “automobile,” and therefore the incident was not an “accident” under the SABS. At the LAT, the dispute narrowed to a single legal issue: was the wheel loader an “automobile” within the meaning of the SABS?
The Legal Framework: The Adams Test
The governing test comes from Adams v. Pineland Amusements Ltd., 2007 ONCA 884, 88 O.R. (3d) 321, which establishes a three-part test for determining if a vehicle is an automobile:
- Is the vehicle an “automobile” in ordinary parlance?
- If not, then, is the vehicle defined as an “automobile” in the wording of the insurance policy?
- If not, then, does the vehicle fall within any enlarged definition of “automobile” in any relevant statute? (Adams, at para. 7).
Before the LAT, both parties agreed that the first two branches of the Adams test did not apply on the facts, and focused focusing their arguments entirely on the third branch.
The Decision
Despite the parties’ positions, the LAT decided the case on the first branch, finding that the wheel loader was an automobile in ordinary parlance.
It relied heavily on the vehicle’s purpose and function, including that it was travelling on a public road, that it was equipped with standard driving features (steering wheel, lights, seatbelt, etc.), and that it could reach road speeds. As a result, the LAT concluded that the insured was entitled to claim accident benefits.
The Reconsideration Decision
In its request for reconsideration, the Insurer submitted that the LAT had made an error of law or fact that materially affected its decision , and that it had committed a material breach of procedural fairness by determining the issue on the first prong of the Adams test in circumstances where neither party had relied on that part of the test, and had made their submissions solely on the third part of the test. The Insurer submitted that if the LAT was going to proceed in this way, it had an obligation to seek further submissions from the parties. In the reconsideration decision, the LAT recognized that the Insured had stated that the vehicle “would not normally be considered an automobile in ordinary parlance.” However, the LAT then relied on Grummet v. Federation Insurance Co. of Canada, 1999 CanLII 15103 (ON SC), 46 O.R. (3d) 340 (Sup. Ct.), which dealt with the ordinary parlance test. According to the LAT, the Insurer responded to those submissions. Thus, the LAT concluded that both parties had the opportunity to address the first part of the test , and did so.
The LAT then went on to consider the Insurer’s submissions that it had erred in its analysis regarding the first part of the test, and dismissed those arguments on two bases. First, it found that it amounted to a request to re-weigh evidence, which is not the function of reconsideration. Second, the LAT noted that the reconsideration process is not an opportunity to advance new arguments that a party could have but did not make during the original hearing. The LAT dismissed the Insurer’s request for reconsideration.
The Problem: Deciding an Issue on a Basis No One Had Argued
On appeal, the Divisional Court found a clear breach of procedural fairness. The insured had explicitly conceded that the wheel loader was not an automobile in ordinary parlance. The insurer relied on that concession and structured its case accordingly. By then deciding the case on that first prong without inviting further submissions, the LAT deprived the parties of a fair opportunity to be heard. The Court acknowledged that a tribunal may reject a party’s concession, but it cannot do so without giving parties the chance to respond. Failing to do so undermines the fundamental principle set out in Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817,that parties must have a meaningful opportunity to present their case. As such, the Court allowed the appeal, set aside both the original and reconsideration decisions, and remitted the matter back to the LAT to be heard by a new adjudicator.
Key Takeaway
Intact v. Carpenter serves as a reminder that procedural fairness is not a technicality – it is foundational. For insurers and defence counsel, this decision reinforces that fairness arguments remain a powerful tool on appeal, particularly in written LAT proceedings. Where an adjudicator departs from the parties’ agreed framework, that alone may justify setting the decision aside – regardless of the merits.
Elisa Prezzano is the author of this blog. If you have a question about this decision or a similar file, please contact Elisa at [email protected].
