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Statutory Interpretation - Consumer Legislation. Hussein v. Intact Insurance Company
In Hussein v. Intact Insurance Company (Ont Divisional Ct, 2025) the Divisional Court allowed a LAT SABS appeal, here on statutory interpretation 'consumer' grounds regarding a claim notice issue:[2] The Appellant, (the “Insured”), was involved in a motor vehicle accident, He notified his insurance company, Intact Insurance (the “Insurer”), one day later that he was in an accident in which his vehicle had sustained heavy damage. The Insured did not file his claim for accident benefits until seventeen months later. His explanation for the delay was that he was not aware that he was entitled to accident benefits until he spoke to a paralegal. The Insurer denied his claim on the basis that he did not give the insurance company notice of his claim for accident benefits within seven days as required by the SABS.
[3] The Insured applied to the LAT for a resolution of his dispute with the Insurer. In its decision dated December 22, 2023 (the “Decision”), the LAT denied his application for benefits on the basis that he failed to notify the Insurer of his claim within seven days and that his explanation for the 17-month delay in making his application was not credible. The Insured requested that the LAT reconsider its Decision. On May 21, 2024, that request was dismissed (the “Reconsideration Decision”).
[4] This is an appeal from both the Decision and the Reconsideration Decision. For the reasons that follow, I would allow the appeal, set aside both decisions and find that the Insured’s notification to the Insurer that he had been in an accident was sufficient notice to satisfy the seven-day deadline for notice under the legislation. Fundamental to my 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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[22] Section 32 of the SABS reads as follows:32 (1) A person who intends to apply for one or more benefits described in the Regulation shall notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day.
(2) The insurer shall promptly provide the person with,
(a) the appropriate application forms;
(b) a written explanation of the benefits available;
(c) information to assist the person in applying for benefits; and
(d) information on the election relating to income replacement, non-earner and caregiver benefits, if applicable. [23] According to the decisions under appeal, the seven-day notice requirement in s. 32(1) required the Insured to notify the Insurer that he intended to apply for accident benefits. It was not sufficient to notify the Insurer that he had been in an accident. However, the Insured submits that the notice requirement under s. 32(1) was satisfied when he notified the Insurer that he had been in an accident.
[24] In Tomec v. Economical Mutual Insurance Co., 2019 ONCA 882, 148 O.R. (3d) 438, the Court of Appeal set out the overriding principles to be applied in interpreting the SABS. In doing so the Court adopted the articulation of those principles set out in Arts (Litigation Guardian of) v. State Farm Insurance Co. (2008), 2008 CanLII 25055 (ON SC), 91 O.R. (3d) 394 (S.C.J.), at para. 16, where the Court states:The SABS are remedial and constitute consumer protection legislation. As such, it is to be read in its entire context and in their ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature. The goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims and, as such, assumes an importance which is both pressing and substantial. [25] Tomec also states that faced with a choice between an interpretation of the statute “that furthers the public policy objectives underlying the SABS and one that undermines it, the only reasonable decision is to side with the former”: para. 45.
[26] The Insured submitted three LAT cases in support of his position as to the correct interpretation of s. 32(1).
[27] In Ilangeswaran v. Sonnet Insurance Company, 2021 CanLII 55200 (Ont. LAT), the insured made a call to the insurer to report her accident within the seven-day period, but the call was disconnected before the insured reported any injuries. The LAT found that the insured had notified the insurer of her claim for accident benefits. If the insurer wanted to clarify with the insured as to whether she had been injured, it should have called her back.
[28] In M.O. v. Jevco Insurance Company, 2020 CanLII 63561 (Ont. LAT), the LAT found that when the insurer received notice of the insured’s tort claim, this was sufficient to constitute notice under the SABS of an accident benefits claim. The Tribunal found that at that point the insurer would have been alive to the potential of an accident benefits claim and should have reached out to the insured’s guardians to advise them of their rights to make a claim. The Tribunal found at para. 12 that “considering the Schedule is consumer-protection legislation, Jevco’s actions are alarming.”
[29] In K.H. v. Northbridge General Insurance Company, 2019 CanLII 101613 (Ont. LAT), the Tribunal articulates the insured’s obligation to give notice under s. 32(1) in the following manner, at para. 7:Section 32(1) of the Schedule requires an insured person to inform an insurer of an accident within seven days, at which point the insurer will provide the insured with the application forms for accident benefits. (emphasis added). [30] The Insurer referred us to two cases that it alleged took a different position than the cases cited by the Insured.
[31] In Abbany v. Pafco Insurance Company, 2012 ONFSCDRS 144, an insured reported a collision to his insurer on the date of the accident, but two days later advised the insurer that he was not injured. The insurer closed its claim. Approximately one year later, the insured advised the insurer that he would be making an accident benefits claim. The Financial Services Commission found that the insurer failed to comply with the notice timeline set out in s. 32 of the SABS and that he did not have a reasonable explanation for the delay.
[32] In Clements v. The Co-operators Group Limited, 2021 CanLII 18911 (Ont. LAT), Mr. Clements was a witness to the aftermath of an accident involving his brother, his partner and his three children. Two years later, Mr. Clements contacted his brother’s insurer to submit a claim for accident benefits. The LAT upheld the insurer’s denial of Mr. Clements’s claim on the basis that he did not file a reasonable explanation for his delay in applying for benefits. It also found:[23] There is no evidence that Jason Clements notified Co-operators at any time that he suffered an injury as a result of the accident, or that he was contemplating making a claim for accident benefits. Consequently, Co-operators is under no obligation to advise Jason Clements of his right to claim benefits. Further, Co-operators is not obligated to provide Jason Clements with forms in order to commence a claim for accident benefits. [33] The LAT essentially found that since the Insured in this case did not advise the Insurer that he suffered injuries in the accident, the Insurer had no obligation to make further inquiries or to advise the Insured of his right to claim accident benefits.
[34] According to the Insurer, the wording of s. 32(1) is clear – the onus is on the Insured to give notice within seven days and that notice requires the Insured to be specific about the fact that the nature of his claim is one for accident benefits.
[35] This interpretation is neither consistent with the Tribunal’s case law, nor consistent with the consumer protection purpose of the SABS. In both Ilangeswaran and M.O v. Jevco, the Tribunal found that once the insurer became aware of an accident, notice had been given of the claim for accident benefits. If the insurer wished to clarify more, it was their obligation to make inquiries. In Abbany, that obligation was not imposed because the insured advised the insurer that he had not suffered any injuries. In Clements, Mr. Clements was making a claim for psychological injuries he incurred because he observed the aftermath of the accident. This is not the type of claim that an insurer would reasonably anticipate once being advised that there had been an accident. Clements was also a case that turned on the issue of reasonable explanation, not on the issue of notice.
[36] In this case, the LAT found (based on the evidentiary record before it) that the Insured told the Insurer that he had been in an accident in which his vehicle has sustained “heavy damage.” The Insurer did not ask if the Insured had been injured in the accident and did not advise him that if he had, he could not only obtain coverage for the damage to his vehicle, but he could also claim accident benefits for his personal injuries. According to the Insurer and the LAT, to read s. 32(1) of the SABS in a way that requires any such action on the part of an insurer would run contrary to the wording of the SABS.
[37] The Insurer also submitted that any consumer protection concerns about the interpretation of s. 32(1) are answered by s. 34 of the SABS, which provides that if an insured has a reasonable explanation for failing to comply with a time limit under the SABS, they will not be disentitled from claiming the benefits provided. The problem with this submission is that, as the Insurer argued and the LAT accepted, the jurisprudence around the interpretation of “reasonable explanation” contains a number of guiding principles, one of which is that the onus is on an insured to establish a reasonable explanation and the other is that “ignorance of the law alone is not a reasonable explanation.” In this case, the Insured’s explanation is that he did not know that he had a legal claim to accident benefits, and he did not know that the law required him to notify his insurance company within seven days of his intention to apply for those accident benefits. Thus, according to the Insurer, even if the LAT had found it credible, the Insured’s explanation could not be a reasonable explanation because ignorance of the law is no excuse.
[38] Consumers who have motor vehicle accidents are in a vulnerable position, particularly in the period immediately following an accident. Seven days is a very short notice period. Insurance contracts are complicated documents that the average consumer is unlikely to read. If they do read the document, they are unlikely to remember its contents if they have an accident, which could be many years later. The entitlement to damages for motor vehicle accidents in Ontario and the role of the SABS in that regime is not something that it is fair to assume the average consumer would be familiar with. Insurance adjusters and agents, on the other hand, can be presumed to know that if one of their insureds has an accident and is injured in that accident, they will want to make a claim for accident benefits. An interpretation of s. 32(1) that recognizes these realities is one that fosters the consumer protection purpose of the SABS. An interpretation that ignores these realities does the opposite.
[39] The interpretation of s. 32(1) in the decisions under appeal ignores these realities. As such, it undermines the consumer protection purpose of the SABS.
[40] In my view the notice requirement under the LAT was met when the Insured advised the Insurer one day after the accident that he had been in an accident. A reasonable insurer would assume that an insured who has been in an accident intends to access all the benefits available to them under their policy. If the insured has been injured in the accident, this will include accident benefits. If the Insurer in this case wished to clarify which specific benefits the Insured intended to access, the Insurer could have asked the Insured whether he sustained any injuries. As the Insurer chose not to ask any more questions, it should have acted on the assumption that the Insured would want to apply for accident benefits. At that point, the Insurer should have complied with its obligations under s. 32(2) of the SABS, which included sending out the necessary application forms and an explanation of the benefits available. This is an interpretation that fosters the consumer protection purpose of the SABS.
[41] I do not accept the Insurer’s submission that this would put an unfair financial burden on insurers and would precipitate an increase in the number of claims, many of which could be illegitimate. First, I do not accept that requiring an insurer to send out paperwork to explain to insureds, who have paid them significant premiums, what benefits they are entitled to claim now that they have had an accident, imposes an unfair financial burden. Furthermore, if the insurer is concerned about the expense of sending out unnecessary forms, its agents or adjusters can simply confirm beforehand that the insured was not, in fact, injured in the accident. Second, I do not accept that if you tell an insured they have the right to claim a benefit this will entice them to make a claim for a benefit they are not entitled to.
[42] The Insurer also relied on a previous version of the notice requirement to support its interpretation of s. 32(1). That version read:32 (1) A person who wants to apply for a benefit under this Regulation shall notify the insurer within 30 days after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable thereafter. [43] According to the Insurer, the “Legislature deliberately changed the wording of s. 32(1) in 2003 to place an onus on the claimant to notify the insurer of their specific intention to bring a claim, rather than imply that they must only report that an accident occurred.” I disagree. While the precise words used in s. 32(1) may have changed, the changes make no substantive difference to the meaning of the section, except to reduce the notice period from thirty days to seven days.
[44] The Insurer’s argument is, in effect, that in 2003 the Legislature changed the wording of s. 32(1) not only to facilitate an insurer’s ability to investigate and assess the circumstances of a claim expeditiously by shortening the period of notice, but also to increase the requirements for notice so that it would be harder for an insured to give proper notice. Implied in this argument is that the Legislature wanted to make it easier for insurance companies to deny claims and harder for insureds to make claims. In the absence of any evidence that this was the case or any rationale as to why this would be the case, I am not prepared to find that this was the Legislature’s intention.
[45] The Insured also made a submission that the LAT erred in law in its analysis on the reasonable explanation issue. In view of my finding that the Insured did give the required notice under s. 32(1) there is no need to deal with this issue. . Morrissey v. Wawanesa Insurance Company
In Morrissey v. Wawanesa Insurance Company (Ont CA, 2024) the Ontario Court of Appeal allowed a LAT SABS appeal, here where a long-term catastrophically-injured auto insurance claimant sought additional 'attendent care benefits'.
Here the court notes the 'consumer protection' nature of auto insurance:[36] I will attend to the legislative text later. In this appeal the context and purpose of the legislation play important roles that I will summarize briefly. First, automobile insurance is well understood to be a form of consumer protection: Abarca v. Vargas, 2015 ONCA 4, 123 O.R. (3d) 561, at para. 36, citing Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, at para. 11. . Davis v. Aviva General Insurance Co.
In Davis v. Aviva General Insurance Co. (Div Court, 2024) the Divisional Court allowed an insured's LAT SABS appeal, here where the insurer paid several years of claims but then successfully denied coverage on the basis that there was no 'accident'.
Here the court notes that the auto SABS legislation is consumer legislation, here for purposes of statutory interpretation:[71] The view that the SABS should be considered as consumer legislation and therefore applied for the benefit of the consumer is as prevalent now as it was when Smith v. Co-operators was decided in 2002. It has been held consistently that the SABS must be interpreted generously as legislation that is remedial in nature. ... . Wu v. Suevilia Development Corporation
In Wu v. Suevilia Development Corporation (Ont CA, 2023) the Court of Appeal considered an appeal from two dismissed summary judgment claims, one for a breached APS (and forfeiture of the deposit) by the vendor, and a counter-claim for return of the deposit by the purchaser. The case was heavily-influenced by the 'pre-construction sales' provisions of the New Home Warranties Plan Act.
Here, the court considers the statutory interpretation status of the ONHWPA, being consumer legislation:[46] I agree with Mr. Wu that the Ontario New Home Warranties Plan Act and its regulations are remedial, consumer protection legislation requiring a broad and liberal interpretation in light of their object and purpose: Ontario New Home Warranty Program v. Lukenda (1991), 1991 CanLII 7167 (ON CA), 2 O.R. (3d) 675 (C.A.), at para. 7. Such objects and purposes have been recognized to include protecting purchasers from vendors who do not proceed expeditiously with completion of a house, or who seek to use the fact of noncompletion to extricate themselves from an agreement in a rising market; and also, to better clarify and prescribe the conditions under which agreements of purchase and sale can be terminated: Wong v. Greyrock (Saddlebrook) Building Corp. (1993), 34 R.P.R. (2d) 215 (Ont. Gen. Div.), at para. 18; Reddy, at para. 23.
[47] Nonetheless, as noted in Reddy [SS: Reddy v. 1945086 Ontario Inc., 2019 ONSC 2554], the Special Committee that conducted the review that led to the reforms that brought about O. Reg. 165/08 acknowledged that the imposition of regulatory warranties should not unduly favour purchasers in a manner that is onerous for builders or that fails to recognize the inevitability of certain delays in new home construction: Final Report of the Special Committee on Delayed Closing, released February 2007, at p. 19. . Co-Operators Insurance Company v. Bennett
In Co-Operators Insurance Company v. Bennett (Div Court, 2023) the Divisional Court cites authority for auto insurance law being a form of consumer legislation:[29] Moreover, the LAT’s interpretation is consistent with the consumer protection objective of insurance legislation: Smith v. Co-operators General Insurance Co. 2002 SCC 30 at para. 11.
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