By: Michael Blinick, Partner & Blake Parker, Summer Student
OVERVIEW
Can the Licence Appeal Tribunal (the LAT) grant relief from forfeiture and other equitable relief? In the recent decision of Botbyl v. Heartland Farm Mutual Inc., (2025 ONSC 3349), the Ontario Superior Court determined that the LAT’s jurisdictional scope includes relief from forfeiture under section 129 of the Insurance Act. Such a finding ensures that technical errors by claimants ought to not impede access to statutory accident benefits.
SUMMARY OF DECISON
In Botbyl v. Heartland Farm Mutual Inc., (2025 ONSC 3349), two insured individuals were involved in a motorcycle accident and sustained serious injuries. The insureds had two automobile policies at the time of the incident. The motorcycle was insured under a standard policy with Economical and their other vehicles were insured under a policy with optional benefits issued by Heartland Farm Mutual (“Heartland”). As enhanced benefits had been purchased, Heartland’s policy provided for significantly greater coverage and thus would be better suited to address the insureds’ injuries and future care needs.
By innocent mistake and in reliance on the representations made by a representative for Heartland, the insureds submitted their application for accident benefits to Economical. Heartland was aware of the accident and the insureds’ intention to claim accident benefits under their policy but did not advise the insureds that they had to apply for benefits with them and not with any other insurer, otherwise they would forfeit their potential access to the optional benefits that had been purchased. After the insureds submitted their application to Economical, Heartland denied coverage, relying on the policy’s provision that prohibited access to optional benefits where a claim had already been made to another insurer.
Following the receipt of Heartland’s denial, the insureds subsequently brought an Application seeking relief from forfeiture – a remedy that allows parties to avoid a harsh or unjust loss of rights due to technical non-compliance with their insurance policy. Initially, the Superior Court declined jurisdiction, directing the insured to the LAT. While the LAT initially granted the relief, a Reconsideration decision reversed the initial determination, prompting the subject appeal to the Divisional Court.
The Divisional Court reinstated the LAT’s original decision, confirming that the LAT has jurisdiction to grant relief from forfeiture under section 129 of the Insurance Act. The Court held that as a matter of statutory interpretation, the LAT falls within the meaning of “court” as used in section 129 of the Insurance Act. The Court stressed that the LAT is empowered by statute to determine all questions of law and fact that arise in matters relating to the entitlement to statutory accident benefits. As such, though the LAT does not possess inherent jurisdiction, it may exercise equitable remedies when authorized by legislation.
Since the LAT has exclusive jurisdiction over SABS disputes, not enabling the Tribunal to order equitable remedies would inevitably lead to unfair outcomes for insureds. Moreover, excluding the LAT from the definition of “court” under section 129 of the Insurance Act would undermine the consumer protection objectives of the Statutory Accident Benefits Schedule (SABS). As the SABS is a remedial and consumer-focused piece of legislation aimed at reducing economic hardship for accident victims, a narrow reading of s. 129 would clearly conflict with that legislative intent.
IMPLICATIONS
Assuming that this decision is not overturned on appeal, it carries significant implications for both insureds and insurers. It affirms that the LAT is not merely a forum for resolving technical or procedural disputes through hard and fast rules, but a fully empowered adjudicative body capable of granting meaningful and equitable relief in complex accident benefits matters. This recognition aligns the LAT’s jurisdiction with the practical realities of insurance disputes and the consumer protection principles of the SABS.
Additionally, the ruling reinforces that technical missteps, particularly those made in good faith, should not bar an insured from accessing benefits. Where an insured has made an innocent mistake, taken reasonable steps to correct an innocent error, or has been misled by an insurance professional, it would be plainly inequitable to deny coverage based on a strict reading of policy language alone.
Ultimately, this decision serves as a critical reminder that the LAT has the jurisdiction to grant equitable remedies, including relief from forfeiture, even in the face of a clear breach of policy terms. Insurers should stray away from exclusively relying on the technical language of the policy when denying or disputing claims. Rather, insurers must conduct themselves with fairness, transparency, and good faith throughout the entire claims process. Insurers would be well-advised to carefully assess their exposure with a full understanding of the LAT’s ability to draw upon equitable remedies, and to incorporate an appreciation for these potential outcomes into their strategic decision-making when responding to claims and when appearing before the LAT.