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Insurance (Auto) - Liability Priority (2). Abu-Ain v. Security National Insurance Company et al
In Abu-Ain v. Security National Insurance Company et al (Ont Div Ct, 2026) the Ontario Divisional Court allowed a LAT SABS joint appeal-JR, this brought against a "LAT decision .... which determined that Mr. Abu-Ain was not an “insured person” under s. 3(1) of the Statutory Accident Benefits Schedule – Effective September 1, 2010", where the applicant-appellant was an uninsured passenger in a car.
The court finds that the insurer litigating the appellant's status as an 'insured person' - here prior to the resolution of a priority dispute, was an abuse of process:[38] Mr. Abu-Ain submits that permitting Security National to litigate dependency at the LAT while it was arbitrating priority was an abuse of process. Having triggered the arbitration process, which is designed to ensure continuous benefit payments while insurers sort out responsibility among themselves, it was an abuse of process to proceed at the LAT with the preliminary issue of whether Mr. Abu-Ain was an insured person.
[39] Security National submits that the two regimes are separate, one governing entitlement to benefits and one governing priority. There is nothing prohibiting the LAT from proceeding as it did. The LAT was correct to decide whether Mr. Abu-Ain was an insured of Security National. The LAT did not determine whether any other insurers are available to Mr. Abu-Ain, so it did not improperly interfere with the priority dispute.
[40] I agree with Mr. Abu-Ain that by proceeding to determine whether Mr. Abu-Ain was an insured person while the priority dispute, centred on this very issue, was pending, was an abuse of process as it undermines the statutory scheme for managing priority disputes.
[41] The LAT failed to consider the context in which it was being asked to make its decision. It failed to grapple with the issue of the interplay between the priority dispute and the legal question it was being asked to determine, merely accepting the respondent’s position that they are two entirely separate issues.
[42] The LAT failed to turn its mind to the fact that the consequences of its decision to proceed with the “preliminary issues” determination was exactly the situation the entire statutory accident benefits scheme is designed to avoid – an injured person being without benefits because of a dispute between insurers about priority. Continuity of benefits while the insurers dispute priority is a cornerstone of the entire legislative scheme.
[43] The LAT’s decision to proceed with the preliminary issue determination was compounded by its next decision to dismiss Mr. Abu-Ain’s substantive claims for benefits on the basis that Mr. Abu-Ain was not an insured person. The Tribunal did so while the very issue of whether Security National or the Fund was responsible for these benefits was being arbitrated in another forum. The LAT knew this was the case.
[44] The result of this failure is starkly evident in this case, which involves a catastrophically impaired individual who had received close to $500,000 of statutory accident benefits from the insurer in the first years following the accident. He was clearly in need of benefits. Yet his claim for benefits has been dismissed by the LAT on the basis that he is not an insured person with respect to Security National.
[45] If Security National wished to stop paying Mr. Abu-Ain’s benefits, its proper course of action was to ensure the arbitration proceeded apace. The LAT erred in proceeding with its preliminary issue determination in these circumstances. The LAT has improperly permitted Security National to do an “end run” around the priority dispute process. To do so is an abuse of process. It is manifestly unfair to Mr. Abu-Ain and brings the entire administration of the statutory accident benefits regime into disrepute. . Abu-Ain v. Security National Insurance Company et al
In Abu-Ain v. Security National Insurance Company et al (Ont Div Ct, 2026) the Ontario Divisional Court allowed a LAT SABS joint appeal-JR, this brought against a "LAT decision .... which determined that Mr. Abu-Ain was not an “insured person” under s. 3(1) of the Statutory Accident Benefits Schedule – Effective September 1, 2010", where the applicant-appellant was an uninsured passenger in a car.
Here the court considers the 'priority dispute' regime, and the role of the Motor Vehicle Accident Claims Fund (MVACF):[17] The SABS is one part of the relevant regime. But it does not exist in a vacuum. It is part of an overall legislative regime governing statutory accident benefits in a manner that protects the people who need the benefits. Another part of the benefits regime includes the legislation and regulation that govern which insurer has priority in a dispute and is obligated to pay the benefits to the injured person.
[18] Priority disputes among insurers are not uncommon. Those disputes are governed by s. 268(2) of the Insurance Act and O. Reg. 283/95, the “dispute between insurers” (DBI) regulation.
[19] The Insurance Act sets out the priority between insurers. The Fund is the payor of last resort. The Fund only steps in if no private insurance is available to an injured person.
[20] The DBI regulation provides for how disputes about priority are to be determined. The DBI regulation provides in relevant part as follows:2.1 (1) This section applies in respect of benefits that may be payable as a result of an accident that occurs on or after September 1, 2010.
(2) An insurer shall promptly provide an application and any other appropriate forms in accordance with the Schedule to an applicant who notifies the insurer that he or she wishes to apply for benefits.
(4) The applicant shall use the application provided by the insurer and shall send the completed application to only one insurer.
(5) An insurer that provides an application under subsection (2) to an applicant shall not take any action intended to prevent or stop the applicant from submitting a completed application to the insurer and shall not refuse to accept the completed application or redirect the applicant to another insurer.
(6) The first insurer that receives a completed application for benefits from the applicant shall commence paying the benefits in accordance with the provisions of the Schedule pending the resolution of any dispute as to which insurer is required to pay the benefits.
3. (1) No insurer may dispute its obligation to pay benefits under section 268 of the Act unless it gives written notice within 90 days of receipt of a completed application for benefits to every insurer who it claims is required to pay under that section. [21] The system is clear. It is designed to operate on the basis that an insurer is required to “pay now, dispute later”. An injured person is to provide an application to a single insurer. As long as there is a sufficient nexus between that insurer and the injured person, that insurer is to pay benefits and continue to do so pending the result of any priority dispute. In this way, an injured person is not left without benefits while insurers are disputing which of them is responsible for payment of those benefits.
[22] If an insurer wishes to dispute its priority obligation to pay, it is required to submit the matter to arbitration. The injured person is not a party to the arbitration of the priority dispute.
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