LAT determined issue despite being subject to arbitration in priority dispute
Upon finding an abuse of process and manifest unfairness to an injured party, the Ontario Divisional Court overturned the Licence Appeal Tribunal’s (LAT) dismissal of his statutory accident benefits claim on the basis that he was not an insured person.
In Abu-Ain v. Security National Insurance Company et al, 2026 ONSC 1494, the accident occurred on Highway 401 on Aug. 2, 2021. A driver lost control of a car, which rolled and hit the guardrail. The appellant, a passenger at the time, had very significant injuries.
The appellant, who did not own a car, had no car insurance. In November 2021, under his aunt’s insurance policy, he applied for accident benefits to the respondent Security National Insurance Company. He said he depended on his aunt and uncle financially.
Security National started paying the appellant benefits. It eventually paid well over $400,000 in statutory accident benefits for his injuries.
Security National brought a priority dispute against the publicly funded Motor Vehicle Accident Insurance Fund. Security National alleged that the Fund was the appropriate benefits provider.
In June 2022, Security National determined that the appellant met the catastrophic impairment criteria. However, Security National denied his application for various benefits, filed in January 2024.
In LAT proceedings convened to determine the appellant’s entitlement to benefits, Security National asked the LAT for a preliminary determination of whether he met the definition of an insured person under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (SABS).
The appellant attempted to adjourn the matter until the outcome of Security National’s and the Fund’s priority arbitration on the issue of which of them was the insurer responsible for paying his benefits.
The LAT refused to adjourn the proceedings. In January 2025, the LAT dismissed the appellant’s benefits claims because it did not consider him an insured person under s. 3(1) of the SABS. A May 2025 reconsideration decision affirmed the LAT’s initial decision.
The appellant appealed and applied for judicial review of the reconsideration decision. He asserted grounds of procedural unfairness/abuse of process, legal errors, and errors of mixed fact and law in applying the dependency test.
The Divisional Court of Ontario allowed the appeal. The court noted that the LAT knew that another forum was arbitrating the issue of whether Security National or the Fund should pay the appellant’s benefits
The court ruled that the LAT’s choice to proceed with the preliminary determination of whether the appellant was an insured person, despite the pending priority dispute revolving around the same issue:
The court held that the LAT failed to:
“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,” wrote Justice Lisa Brownstone for the court.
The court explained that the LAT’s choice to proceed with the preliminary issue determination led to its dismissal of the appellant’s substantive benefits claims on the ground that the appellant was not an insured person under the SABS.
During the appeal hearing, the court learned that the Fund had accepted priority and begun repaying Security National.
The court returned the substantive benefits claim hearing to the LAT, with the Fund to serve as the appropriate responding party, if it disagreed with the appellant over his entitlement and the amounts payable for his claims.
The court ordered Security National to pay the appellant $2,500 in costs, including disbursements and harmonized sales tax.
