Just last week, the Divisional Court issued a ruling that the LAT has authority to grant relief from forfeiture pursuant to s. 129 of the Insurance Act ("the Act").
Previously, in disputes where an equitable remedy was pled, the LAT typically found it did not have the power to grant them by virtue of being a Tribunal and not a court. An oft cited reference in these decisions was section 98 of the Courts of Justice Act, which specifically states that "a court" may grant relief against penalties and forfeitures.
The Divisional Court cleared this hurdle in Botbyl v. Heartland by finding that the LAT is a court.
In its earlier (2023) decision of Akinyimide v. Economical, the Divisional Court concluded that while the LAT has no inherent jurisdiction to grant equitable remedies, it could do so if that jurisdiction was granted to it by statute. The Court noted that s. 131 of the Act codifies the equitable doctrines of estoppel and waiver in statute. And since s. 280 of the Act does not prohibit the LAT's jurisdiction to apply other sections of the Act, the LAT therefore had the power to apply these two doctrines in SABS disputes.
Applying a similar rationale in Botbyl, the Divisional Court found that (i) s. 129 of the Act codifies the doctrine of relief from forfeiture; (ii) this section is found in Part III of the Act, which does not include a specific definition for the word "court"; and, (iii) s. 122 of the Act states that Part III of the Act applies to every contract of insurance in Ontario, subject to three exceptions, none of which are auto insurance policies. The Divisional Court concluded the LAT therefore has jurisdiction to apply s. 129 of the Act and grant the equitable remedy of relief from forfeiture.
The Divisional Court referenced R v. Conway, a 2010 decision, where the Supreme Court of Canada found another specialized tribunal was a "court of competent jurisdiction" because it had the jurisdiction to decide all questions of law. The Divisional Court noted that, since the Court of Appeal's ruling in Stegenga v. Economical found that the LAT had complete jurisdiction to resolve SABS entitlement disputes, the word "court" in s. 129 of the Act must include the LAT.
Interestingly, the Divisional Court rejected Heartland's argument that the presumption of consistent expression precludes the LAT from being considered a "court", given that s. 280(3) of the Act specifically identifies that SABS disputes can only be brought before the LAT and not before a court. The Divisional Court stated that they preferred "to give weight to the presumption in favour of fostering a primary goal of the SABS [relieving hardship to the victims of motor vehicle accidents] than to the presumption of consistent expression." The Divisional Court stressed that their findings complied with the underlying purposes of both the SABS and the OPCF-47, which respectively, were consumer protection and enhancing an insured's ability to access optional benefits coverage.
The facts in Botbyl involved a unique situation, with insureds who had two auto insurance policies, with only one including optional benefits.It therefore remains to be seen whether relief from forfeiture would be applicable in any of the typical SABS disputes before the LAT.
Leave to appeal will be sought. Botbyl therefore may be a tale, to be continued...
See Botbyl v Heartland Farm Mutual Inc., 2025 ONSC 3349 (CanLII) https://canlii.ca/t/kdjwk
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