After a delay in proceedings due to the Covid-19 pandemic and a further delay to allow the LAT to submit its’ position as an intervening party, the Ontario Divisional Court has finally released its decision clarifying that the LAT does indeed have jurisdiction to extend the two-year limitation period set out in S. 56 of the (SABS).  Reasons for the decision were authored by Justice Lederer on behalf of a unanimous panel which also included Justice Penny and Justice Sheard.

The decision was made in the context of three separate concurrent appeals, with the hearing adjudicators adopting different interpretations regarding the powers of LAT Adjudicators to extend the two year limitation period following a denial of benefits as set out in S.56 of the SABS. The decision clarifies much ambiguity surrounding S.7 and its relation to the SABS which has existed since the LAT assumed jurisdiction over Accident Benefit disputes in 2016.

Section 56 of the SABS states:

56. An application under subsection 280 (2) of the Act in respect of a benefit shall be commenced within two years after the insurer’s refusal to pay the amount claimed. O. Reg. 44/16, s. 6.

Section 7 of the LAT Act states:

7 Despite any limitation of time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal or an appeal from a decision or order of the Tribunal under section 11 or any other Act, if the Tribunal is satisfied that there are reasonable grounds for applying for the extension and for granting relief, it may,

(a)  Extend the time for giving the notice either before or after the expiration of the limitation of time so limited; and

(b)  Give the directions that it considers proper as a result of extending the time.  1999, c. 12, Sched. G, s. 7.

In deciding how s.7 ultimately impacts s. 56, or if it had any application at all to it, the Divisional Court looked at answering two distinct issues brought before them. These were:

  1. Whether s.7 has no application to disputes concerning the denial of benefits under the SABS because the limitation period is fixed under a regulation and not “by or under any Act” within the meaning of s.7; and;
  2. Whether s.7 does not apply because an application to the LAT for the resolution of a dispute under the SABS is not a “notice requiring a hearing” within the meaning of s.7.

In addressing Issue number 1 the Court reviewed several different submissions made by the Insurers. However, the most prominent was whether the language of s. 7 stating “by or under any Act” applied to not just Acts but also Regulations, such as the SABS. The court ultimately found that as the SABS are a Regulation made under the Insurance Act, and thus falls under the umbrella of s.7’s language. Further the Court held that, had the Legislative Assembly meant to exclude s.56 from the operation of s.7, it would have likely done so expressly, as it had done under s.6 and s.3 of the LAT Act.

In addressing Issue number 2, the Court found that the LAT treats the filing of an Application to dispute a denial of benefits as the commencement of a proceeding, akin to the filing of a Statement of Claim in litigation. As in a matter before the courts, which despite the possibility of early resolution or withdrawal, is ultimately destined to be heard before a trier of fact, the Court found that the chance of a accident benefits dispute being settled or withdrawn prior to a hearing does not undermine the fact that an Application under s.56 is ultimately to have a hearing before a LAT adjudicator. Therefore an Application to dispute a denial of benefits can be defined as a notice requiring a hearing.

While the Divisional Court has now settled the long standing ambiguity in regards to s.7’s impact on the time limits prescribed by s.56 of the SABS, there remain questions about how individual adjudicators may seek to apply s.7 in the future, and how much predictability there is likely to be in the cases going forward.

In one of the three cases at issue in this Appeal, North Blenheim, the Vice-Chair departed from the four part test of extending the limitation period found in Manuel and utilized, her own fact finding paradigm which was similar although not identical to the prevailing authority. As the Divisional Court noted, an adjudicator’s approach in engaging a fact finding paradigm is a question of fact, or perhaps mixed fact and law, leaving little room for subsequent appellate review where the Divisional Court has jurisdiction to review errors of law alone.

Needless to say, it remains to be seen where this new distinction will take Accident Benefit disputes in the future and how Adjudicators of the LAT will apply the facts of a matter when considering whether to extending the two-year limitation to initiate dispute resolution.  Where a similar tool was never utilized by arbitrators at FSCO, and a bright line boundary was in place for cases heard in that forum, it is conceivable that the government will be asked to amend the LAT Act to re-establish what had been a clear cut limitation. 

Grant Black is the author of this blog and member of the LAT practice group. If you have a question about this decision or a similar file, please contact Grant at 416-777-7384