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Insurance (Auto) - Relief from Forfeiture. Botbyl v. Heartland Farm Mutual Inc.
In Botbyl v. Heartland Farm Mutual Inc. (Ont Div Ct, 2025) the Ontario Divisional Court allowed a LAT SABS appeal, here from a LAT reconsideration decision which overturned an initial decision "that granted the Insureds relief from forfeiture of their insurance policy under s. 129 of the Insurance Act".
The central issue here was whether the LAT [under s.280 'Resolution of disputes'] had jurisdiction to grant relief from forfeiture [under IA s.129], even though that provision grants such jurisdiction to the "court":[7] This is an appeal from the Reconsideration Decision. For the reasons that follow, we would allow the appeal, set aside the Reconsideration Decision and restore the underlying Decision of Adjudicator Norris granting the Insureds relief from forfeiture pursuant to s. 129 of the Insurance Act, so they can initiate an accident benefits claim with Heartland. Fundamental to our decision is the fact that the SABS is consumer protection legislation, which must be interpreted in a manner consistent with its objective—to reduce economic dislocation and hardship for victims of motor vehicle accidents.
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[39] For ease of reference, s. 129 is reproduced again:Relief from forfeiture
129. Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just. [40] Where the Decision and the Reconsideration Decision part ways is on the question of whether the LAT has the jurisdiction to apply s. 129. Heartland argues that the Reconsideration Decision was correct in finding that it does not. Heartland also takes the position that even if the LAT does have jurisdiction to apply s. 129, it would not help the Insureds. This is the first submission we will address.
Section 129 does apply.
[41] Heartland alleges that, even if the LAT had jurisdiction to apply s. 129, it is not available to the Insureds. In doing so, it relies on the Court of Appeal’s decision in Williams v. York Fire & Casualty Insurance Company, 2007 ONCA 479, 86 O.R. (3d) 241. ....
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[43] In Williams [SS: Williams v. York Fire & Casualty Insurance Company (Ont CA, 2007)], the insured was not aware at the time of the motor vehicle accident that his driver’s licence had just been suspended. The insurer denied liability as driving without a licence was a breach of the insurer’s policy. The insured applied for relief from forfeiture under s. 129. The trial judge granted that relief, and the Court of Appeal reversed that decision, finding as follows:[31] Section 129 does not give judges a broad discretion to “grant relief from forfeiture” generally where the conditions of an insurance policy are breached. To do so would grant the court the power to alter the terms of a policy or conditions of coverage; this power was never envisioned by s. 129.
[32] It is clear from Falk, as Madam Justice McLachlin stated that “it is only in respect of such statutory conditions as to proof of loss or other matters or things that are required to be done or omitted with respect to the loss that the court has this power.” (emphasis added).
[33] The court’s power under s. 129 is only in relation to things or matters required to be done, in relation to the loss, that is, after a loss has occurred. The discretion a court has under s. 129 is a narrow one pertaining only to those policy conditions – statutory or contractual – that relate to proof of loss. It does not apply to all policy conditions. (emphasis added).
[34] Where there is an issue in relation to coverage or other policy conditions (i.e. conditions other than those that relate to proof of loss), that issue remains to be determined in the usual way in relation to the interpretation of insurance policies. [44] The Insureds in this case did not breach a policy condition in the way that Mr. Williams did. They did nothing before the loss to jeopardize their coverage for the benefits at issue. The actions giving rise to the denial of coverage in this case are actions that occurred after the loss occurred and involved negotiating the technical requirements relating to making a claim for a loss where the insured has two insurance policies — one with enhanced benefits and one without. This is precisely the kind of situation s. 129 is meant to cover.
Does the LAT have jurisdiction to apply s. 129?
[45] Both parties accept that the LAT has exclusive jurisdiction to resolve disputes in relation to an insured’s entitlement to statutory accident benefits. This is clear from s. 280(1) and (3) of the Insurance Act. Thus, if s. 129 is to be applied in this case it is the LAT that must apply it.
[46] The LAT’s jurisdiction is set out in s. 5.1(4) of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G. (the “LAT Act”) which states:Jurisdiction
(4) The Tribunal has jurisdiction to determine all questions of fact or law that arise in the matters before it. [47] Sections 3(1) and (2) of the LAT Act describe the LAT’s powers and duties as follows:Duties and Powers
3(1) The Tribunal shall hold hearings and perform the other duties that are assigned to it by or under any Act or regulation.
Powers
(2) Except as limited by this Act, the Tribunal has all the powers that are necessary or expedient for carrying out its duties. [48] Thus, the LAT has very broad jurisdiction and very broad powers to deal with any questions of law or fact that come before it.
Heartland’s Position on the LAT’s jurisdiction to apply s. 129.
[49] Heartland argues that the Reconsideration Decision was correct in finding that the LAT has no jurisdiction to apply s. 129 for a number of reasons:(a) While the SABS are consumer protection legislation, that does not change the limits on its authority to grant relief. The LAT is a creature of statute, and, as such, is limited to the jurisdiction expressly granted to it by its enabling legislation. Its enabling legislation does not grant it the jurisdiction to order equitable remedies. Relief from forfeiture is an equitable remedy. Equitable remedies can only be granted by superior courts having inherent jurisdiction.
(b) The intended effect of s. 96 of the Constitution Act, 1867 would be destroyed if a province could pass legislation conferring on the tribunal the jurisdiction of the superior courts.
(c) The LAT has repeatedly accepted that the use of the word “court” in s. 129 does not include the LAT. This interpretation of the word “court” in s. 129 is correct and consistent with the use of the word “court” in s. 280(3) of the Insurance Act. ....
The word “court” in s. 129 does include the LAT
[63] In this case, interpreting s. 129 in a manner that grants the LAT the authority to grant relief from forfeiture would further the public policy objectives underlying the SABS. This case is a stark illustration of how not doing so would undermine that objective. However, that does not end the interpretative exercise that lies at the heart of this proceeding. It is still necessary to examine whether the wording of s. 129 supports an interpretation that would grant the LAT this jurisdiction.
[64] As Heartland points out, the LAT has repeatedly held that it does not have the jurisdiction to grant relief under s. 129 both because it does not have the power to grant equitable relief (which we have already dealt with) and because s. 129 refers only to the “court” and not to any administrative tribunal.
[65] Part III of the Insurance Act, where s. 129 is contained, does not include a definition for the word “court”. Other parts of the Insurance Act have specifically defined the term. For example, in Part V – Life Insurance, s. 171(1) defines a “court” as meaning “the Superior Court of Justice or judge thereof”. The same definition of “court” is used in Part VII – Accident and Sickness, at s. 290. However, the provisions of Part III do not apply to insurance policies under Parts V and VII.
[66] In Continental Casualty Company v. Chubb Insurance Company of Canada, 2022 ONCA 188, the Court of Appeal considered a priority dispute involving an insured who similarly elected for benefits under the wrong policy. Though decided on other grounds, the arbitrator noted that his findings in favour of the insured were supported by the principles of equity which it had power to invoke under s. 129 of the Insurance Act and s. 31 of the Arbitration Act, 1991. The Court of Appeal reversed the decision, also on other grounds, but noted at para. 108 that “potential unfairness arising from an insured’s errors when applying for SABS may, in some cases, be corrected by invoking relief from forfeiture as happened in this case.” While the question of who had such jurisdiction was not the focus of the discussion in that case, it is worth noting that the decision was written after Stegenga, where the Court of Appeal held that it was the legislature’s intention to provide the LAT with complete jurisdiction to resolve entitlement disputes in relation to the SABS. If the word “court” in s. 129 does not include the LAT then, applying the principles in Stegenga, the insured would not be able to invoke relief from forfeiture to correct the unfairness that can arise from an insured’s errors in applying for SABS.
[67] In R. v. Conway, 2010 SCC 22, the Supreme Court of Canada held that the Ontario Review Board was a specialized tribunal with authority to decide questions of law and a “court of competent jurisdiction” within the meaning of s. 24(1) of the Charter:[79] Over two decades of jurisprudence has confirmed the practical advantages and constitutional basis for allowing Canadians to assert their Charter rights in the most accessible forum available, without the need for bifurcated proceedings between superior courts and administrative tribunals (Douglas College, at pp. 603-4; Weber, at para. 60; Cooper, at para. 70; Martin, at para. 29). The denial of early access to remedies is a denial of an appropriate and just remedy, as Lamer J. pointed out in Mills, at p. 891. And a scheme that favours bifurcating claims is inconsistent with the well-established principle that an administrative tribunal is to decide all matters, including constitutional questions, whose essential factual character falls within the tribunal’s specialized statutory jurisdiction (Weber; Regina Police Assn.; Quebec (Commission des droits de la personne et des droits de la jeunesse); Quebec (Human Rights Tribunal); Vaughan; Okwuobi. See also Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 49.).
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[81] Building on the jurisprudence, therefore, when a remedy is sought from an administrative tribunal under s. 24(1), the proper initial inquiry is whether the tribunal can grant Charter remedies generally. To make this determination, the first question is whether the administrative tribunal has jurisdiction, explicit or implied, to decide questions of law. If it does, and unless it is clearly demonstrated that the legislature intended to exclude the Charter from the tribunal’s jurisdiction, the tribunal is a court of competent jurisdiction and can consider and apply the Charter — and Charter remedies — when resolving the matters properly before it. [68] Thus, in Conway, because the tribunal at issue was found to have the jurisdiction to decide all questions of law, it was a “court of competent jurisdiction” under s. 24(1) of the Charter. As already noted, the legislature has specifically granted the LAT the jurisdiction “to determine all questions of fact or law that arise in the matters before it.”
[69] The majority in Conway considered Mooring v. Canada (National Parole Board), [1996] 1. S.C.R. 75, where it previously declined to hold that the National Parole Board was a court of competent jurisdiction for the purposes of the Charter. Notably, in his dissenting reasons at para. 66, Major J. provided the following definition of “court”:[66] The English word "court" is also capable of a broad interpretation even on a plain and literal reading of that word. For instance, the Chambers English Dictionary (7th ed. 1988) defines a "court" as "any body of persons assembled to decide causes" and the Concise Oxford Dictionary (8th ed. 1990) defines it as an "assembly of judges or other persons acting as a tribunal". Thus a "court" in its ordinary sense is broad enough to encompass a tribunal. It is notable that the Charter does not limit the word court by some phrase such as "court of law", "court of justice" or "superior court". Rather, the Charter uses the broad and expansive term "court of competent jurisdiction". As Chrumka J. noted in the United Nurses of Alberta case at p. 167, "[t]he phrase `court of competent jurisdiction' is not unknown to the law and is to be given a broad construction". As early as 1907, Collins M.R. in Garrett rejected a narrow approach to the phrase "court of competent jurisdiction" and held at p. 886:... the expression "Court of competent jurisdiction" seems to me to be only a compendious expression covering every possible Court which by enactment is made competent to entertain a claim ... [70] While s. 129 of the Insurance Act does not use the phrase “court of competent jurisdiction”, the legislature has expressly declared that the LAT is competent to decide all the factual and legal issues relating to the claims before it and Part III of the Insurance Act (unlike other parts of the Act) has not defined the word “court” in a manner that narrows its meaning.
[71] The Supreme Court considered the meaning of the word “court” recently in Poonian v. British Columbia (Securities Commission), 2024 SCC 28. At issue was whether administrative monetary penalties imposed by the BC Securities Commission survived bankruptcy under s. 178(1)(a) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3, which states that a bankrupt cannot be discharged from “any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail”. Writing for the majority, Côté J. relied on Black’s Law Dictionary to hold that penalties imposed by an administrative tribunal are not “imposed by a court”:[46] However, the word “court” in s. 178(1)(a) does not capture administrative tribunals or regulatory bodies. The term “court” implies that a dispute will be adjudicated by a judge or judges (Black’s Law Dictionary (11th ed. 2019), at p. 444). By comparison, an “administrative tribunal” is “[a] court‑like decision‑making authority that resolves disputes [or] an administrative agency exercising a quasi‑judicial function” (p. 1814). A “regulatory agency” can be defined as “[a]n official body, esp. within the government, with the authority to implement and administer particular legislation” (pp. 77‑78 and 1538). “Court” refers to the judiciary, whereas administrative bodies are hybrid entities “falling between the judiciary and government departments created to perform as separate bodies functions transferred from both” (L. Sossin, Practice and Procedure Before Administrative Tribunals (loose‑leaf), at § 2:1). [72] Poonian does not reference R. v. Conway, which does establish that the word court can include an administrative tribunal. However, in our view, key to understanding the Supreme Court’s more narrow interpretation of the word “court” in Poonian is its acceptance of previous Supreme Court jurisprudence that “[t]he exceptions in s. 178(1)(a) through (h) must be interpreted narrowly and applied only in clear cases”: Poonian, at para. 26 (citations omitted).
[73] In this case, as in R. v. Conway, reading the term “court” narrowly will lead to the “denial of an appropriate and just remedy”: see R. v. Conway, at para. 79. Tomec tells us that the SABS is consumer protection legislation that is to be interpreted broadly in order to achieve its purpose, which is to reduce the hardship faced by the victims of motor vehicle accidents. The Insureds were very seriously injured in the accident. They did their best to notify their insurers and to make the claims in the way that would produce the most benefits. It is because of the difficulty that insureds can face in understanding which insurer to apply to if they have two policies, one with enhanced benefits and one without, that OPCF 47 was put in place. The Insureds sought help from the applicable insurance companies with processing their claims. One company gave them the wrong information; the other gave them no assistance whatsoever. There is no suggestion that the Insureds wish to be doubly compensated. Section 129 existed to provide relief in precisely this kind of situation before the LAT was given exclusive jurisdiction over the SABS. There is nothing in the Insurance Act that suggests that the legislature, when they gave the LAT exclusive jurisdiction over the SABS, wished to increase the hardships faced by the victims of motor vehicle accidents by denying them the right to seek relief from forfeiture if they made an innocent mistake in processing their claims.
[74] While not advanced in its factum, Heartland argued in its oral submissions that the presumption of consistent expression precludes an interpretation of “court” in s. 129 that includes the LAT. The word “court” is not defined in Part VI - Automobile Insurance of the Insurance Act. However, the word is used in s. 280(3) of that Part, which reads:No person may bring a proceeding in any court with respect to a dispute described in subsection (1) [ disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect to the amount of statutory benefits to which an insured person is entitled], other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review. ....
[82] We find that the Vice-Chair erred in the Reconsideration Decision when he found that the word “court” in s. 129 did not include the LAT. . Botbyl v. Heartland Farm Mutual Inc.
In Botbyl v. Heartland Farm Mutual Inc. (Ont Div Ct, 2025) the Ontario Divisional Court allowed a LAT SABS appeal, here from a LAT reconsideration decision which overturned an initial decision "that granted the Insureds relief from forfeiture of their insurance policy under s. 129 of the Insurance Act". The central issue here was whether the LAT [under s.280 'Resolution of disputes'] had jurisdiction to grant relief from forfeiture [under IA s.129], even though that provision grants such jurisdiction to the "court".
Here the court considers the argument that interpreting 'court' in this fashion violates Constitution Act, 1867, s.96 ['Appointment of Judges']:Allowing the LAT to apply s. 129 does not violate s. 96 of the Constitution Act, 1867
[52] Akinyimide does not deal with the argument that Heartland advanced before us, namely that to allow an administrative tribunal to grant what is essentially equitable relief like relief from forfeiture would destroy the intended effect of s. 96 of the Constitution Act, 1867. According to Heartland, under s. 96 of the Constitution Act, 1867, the Governor General has the sole power to appoint judges of the Superior, District and County Courts in each province. That power would be destroyed if a province could pass legislation creating a tribunal and then confer on those tribunal members the jurisdiction to grant equitable remedies, which is a s. 96 judicial power.
[53] This is another argument that was not raised before the LAT.
[54] The main case cited by Heartland to support its position on this issue is Re Residential Tenancies Act, 1979, 1981 CanLII 24 (SCC), [1981] 1 S.C.R. 714, where the Supreme Court was asked to determine the constitutional validity of a section conferring on the Residential Tenancy Commission the power to evict tenants and requiring landlords and tenants to comply with obligations under the Act. The Court applied a three-part test which was focused on the remedial power conferred on the Commission to make eviction orders and order compliance:1. Does the power conferred “broadly conform” to a power or jurisdiction exercised by a superior, district or county court at the time of Confederation?
2. If so, is it a judicial power?
3. If so, is the power either subsidiary or ancillary to a predominantly administrative function or necessarily incidental to that function? [55] At the first stage of the inquiry, the Supreme Court held that both powers at issue were analogous to the traditional powers of superior court judges both before and after confederation. At the second step, the Court determined that in substance the tribunal was exercising those powers in roughly the same way as they are exercised by the courts. With respect to the third step, the Court found that the primary purpose of the legislation at issue was to transfer jurisdiction over a large and important body of law whose primary role was not to administer policy or carry out an administrative function but to adjudicate. Therefore, it was not within the legislative competence of the provinces to empower a residential tenancy commission to make orders of eviction or compliance.
[56] However, there has been an important development in the Supreme Court’s jurisprudence since Re Residential Tenancies Act. At the first stage of the test, instead of focusing on the remedies granted to the provincial body at issue, the court now focuses on the type of dispute or its subject matter. In other words, instead of asking whether the remedy was within the exclusive jurisdiction of the superior court at confederation, the question is whether the subject matter of the dispute was within the exclusive jurisdiction of the superior court at confederation.
[57] This reframing first arose in Sobeys Stores Ltd. v. Yeomans and Labour Standards Tribunal (N.S.), 1989 CanLII 116 (SCC), [1989] 1 S.C.R. 238, which involved a s. 96 challenge to a provincial legislative scheme that granted the Director of Labour Standards for Nova Scotia the power to order reinstatement of an employee who had been dismissed without just cause. The issue was initially characterized as whether the province had jurisdiction to empower a provincial tribunal to grant the equitable remedy of specific performance of employment contracts. Writing for the majority, Wilson J. eschewed this approach as a “technical analysis of remedies” and found that it is “the type of dispute that must guide us and not the particular remedy sought.” Thus, the power at issue in that case went from the “jurisdiction to order reinstatement” to the “jurisdiction over unjust dismissal”.
[58] As Professors Hogg and Wright point out, this is important because for a tribunal’s power to be held to be a s. 96 power at confederation, it is clear that the impugned power must have been within the exclusive jurisdiction of s. 96 courts at confederation. Thus, if the power or function is characterized more broadly, it is less likely to run afoul of s. 96 as both inferior and superior courts are more likely to have shared concurrent jurisdiction at confederation. In other words, while a tribunal’s remedial powers may have been within the exclusive jurisdiction of the s. 96 courts at confederation, its subject-matter jurisdiction was not: see Peter W. Hogg & Wade Wright, Constitutional Law of Canada, 5th ed. (Toronto: Thomson Reuters Canada, 2020), at § 7:19.
[59] This broadening is partly a response to the concern expressed by Wilson J. in Sobeys: “The courts have recognized that s. 96 should not stand in the way of new institutional approaches to social or political problems”: at p. 253.
[60] Following Sobeys, the Supreme Court similarly held in Reference re Amendments to the Residential Tenancies Act (N.S.), 1996 CanLII 259 (SCC), [1996] 1 S.C.R. 186:[34] Two characterizations of the jurisdiction of the Director and Residential Tenancies Board have been advanced by the parties. The appellant along with the Attorneys General of British Columbia, Manitoba, Ontario and Quebec argue that the jurisdiction should be characterized as “jurisdiction over residential tenancies; disputes between residential landlords and tenants”. On the other hand, the respondent argues that the jurisdiction should be characterized as determining “residential tenancies disputes, including the power to make orders for compliance, repair, compensation, termination and possession and related matters.”
[35] The problem with the characterization advanced by the respondent and the majority of the court below is that it runs afoul of the principles set out in Sobeys Stores. It limits the historical inquiry to remedies over which the superior court exercised jurisdiction at Confederation and ignores the purpose and subject matter of the legislation. Consequently, I agree with the appellant that the proper characterization of the unproclaimed provisions is “jurisdiction over residential tenancies; disputes between residential landlords and tenants.” This characterization captures the “raison d'être of the legislation. The Residential Tenancies Act of Nova Scotia is not meant to be a replica of landlord and tenant law. It sets up a complete and comprehensive code independent of landlord and tenant law which is specifically designed for governing the residential tenancy relationship. [61] The subject matter of the jurisdiction at issue in this case is “the resolution of disputes in respect of an insured person’s entitlement to SABs or in respect of the amount of SABs to which an insured person is entitled”: Stegenza v. Economical Mutual Insurance Company, 2019 ONCA 615, 147 O.R. (3d) 65, at para. 37. Statutory accident benefits are a provincially created entitlement to solve a social problem that did not exist at the time of confederation. Therefore, they could not have been within the exclusive jurisdiction of the superior court at that time. Thus, granting the LAT the power to order relief from forfeiture would not run afoul of s. 96.
[62] Our view on this question is reinforced by the fact that many provincial statutes provide administrative tribunals with the power to grant remedies that are equivalent to equitable remedies. The Arbitration Acts of Alberta, British Columbia, Manitoba, New Brunswick, Ontario and Saskatchewan expressly entitle arbitral tribunals to decide a dispute in accordance with law, including equity, and to order specific performance, injunctions and other equitable remedies.
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