Executive Summary: Key Legal and Evidentiary Issues

• Central issue was whether the 90-day notice to other insurers under s. 3 of O. Reg. 283/95 is a “limitation period” automatically suspended by Ontario’s COVID-19 emergency regulation or merely a procedural step in a proceeding.
• The court had to determine the proper statutory interpretation of “limitation period” and “step in a proceeding” in O. Reg. 73/20, including the remedial, purposive scope of the COVID-19 suspension of time limits.
• A key evidentiary concern was the absence of proof that COVID-19 actually impeded Echelon’s priority investigation, which the arbitrator relied on when refusing to extend the notice period on a discretionary basis.
• The appeal turned on whether functional characteristics of the 90-day accident benefits notice requirement (operating as a bar to a claim) aligned it more closely with a limitation period than with a procedural filing deadline.
• The court considered prior case law on priority disputes, municipal notice provisions, and the interplay between notice and limitation regimes to assess how strictly the 90-day rule should operate in a pandemic context.
• Ultimately, the judge held that, for the temporary COVID-19 regime, the 90-day priority notice operated as a limitation period and was automatically suspended, thereby preserving Echelon’s ability to pursue its priority dispute against Zenith.

Facts of the accident and claim for benefits

The case arose from a motor vehicle accident on July 9, 2020, in which the claimant, Ms. Opeloyeru, was injured while a passenger in a vehicle insured by Echelon Insurance Company. She submitted an application for statutory accident benefits (OCF-1) to Echelon on August 18, 2020, and then a further OCF-1 on September 2, 2020, after Echelon’s adjuster requested additional information. In her materials she indicated that she was a 19-year-old college student who had not been employed in the 52 weeks before the accident. These details immediately raised the question of whether she might be financially dependent on a parent, triggering a possible priority dispute under section 268 of the Insurance Act and the Disputes Between Insurers regulation (O. Reg. 283/95). Echelon, through its adjusting firm Crawford & Company, did not initially obtain a signed statement or detailed financial information from the claimant or her lawyer that would clarify dependency. However, by September 21, 2020, Crawford advised Echelon that the claimant appeared dependent on a parent or guardian and sought authority to conduct an examination under oath, which Echelon granted on October 16, 2020.

Investigation into dependency and identification of the priority insurer

On December 3, 2020, the claimant attended an examination under oath. In that examination she confirmed that she was financially dependent on her mother. Her lawyer also provided insurance particulars for her mother. To verify coverage, Crawford requested an Autoplus Gold report, which was received the following day and confirmed that the claimant’s mother held an automobile policy with an insurer identified in the decision as Zurich. On December 8, 2020, Crawford, acting for Echelon, delivered a Notice of Priority Dispute to Zenith Insurance Company by fax. In that notice, Echelon asserted that the claimant was not employed, had no automobile policy of her own, was in school, and was primarily dependent on her mother, who was insured with Zenith. Echelon therefore claimed that Zenith had priority to pay the claimant’s statutory accident benefits. The 90-day statutory period to give written notice under s. 3(1) of O. Reg. 283/95 expired, depending on which OCF-1 date was treated as “completed application,” either on November 15, 2020 (if counting from August 18), or on December 1, 2020 (if counting from September 2). On either calculation, the December 8 notice was outside the strict 90-day window. Zenith took the position that Echelon was out of time under the regulation and that the priority dispute could not proceed.

Procedural history before the arbitrator

On July 21, 2021, Echelon served a Notice to Participate and Demand for Arbitration under the priority dispute regime, naming Zurich/Zenith and invoking s. 268 of the Insurance Act and O. Reg. 283/95. Arbitrator Bialkowski was appointed on January 27, 2023. Zenith moved to dismiss the arbitration, arguing that: (1) Echelon had failed to provide the required 90-day notice under s. 3(1), and (2) the arbitration had not been completed within two years of commencement as contemplated by s. 8(2) of the regulation. Echelon answered that, because of the COVID-19 emergency, the Ontario government had suspended limitation periods by O. Reg. 73/20 as of March 16, 2020, and that this suspension was still in effect when the claimant’s benefits application was received. On Echelon’s theory, the 90-day period under s. 3(1) did not begin to run until the COVID suspension was lifted on September 14, 2020, so that it had until December 14, 2020 to serve a Notice of Priority Dispute. The notice served on December 8, 2020 would therefore be in time if the 90-day rule were characterized as a “limitation period” subject to the automatic suspension in s. 1 of O. Reg. 73/20. Arbitrator Bialkowski dismissed this argument. He found that the 90-day requirement was not a “limitation period” but rather a step in a proceeding and therefore fell under s. 2 of O. Reg. 73/20, which allows decision-makers to decide whether deadlines for procedural steps should be considered suspended. He also observed that s. 3(2) of O. Reg. 283/95 is a statutory saving provision that can extend the notice period where 90 days is not enough to identify a higher-priority insurer and reasonable investigations were conducted within that period. Drawing on his earlier decision in Echelon v. Pafco Insurance Company and on the reasoning of other arbitrators and judges in priority disputes, he concluded that the 90-day notice requirement had consistently been treated as a strict notice regime meant to encourage expeditious investigation and resolution between sophisticated insurers rather than as a classical limitation period. Having treated the 90-day requirement as a procedural step, the arbitrator then turned to s. 2 of O. Reg. 73/20 and asked whether, in his discretion, the step should be deemed suspended by COVID-19. He found there was no evidence that the pandemic had impeded Echelon’s ability to investigate priority or give timely notice. In his view, Echelon could and should have moved faster to obtain dependency information within 90 days. On that basis, he refused to extend the time and dismissed Echelon’s priority dispute. He rejected Zenith’s separate argument that the arbitration should also be dismissed for failure to complete it within two years, and that aspect of his ruling was not appealed.

The legal framework on priority disputes and COVID-19 time suspensions

The decision sits at the intersection of the statutory accident benefits priority dispute scheme and the temporary COVID-19 suspension of legal time limits. Under O. Reg. 283/95, an insurer that receives a completed accident benefits application must pay benefits immediately even if it believes another insurer has higher priority; any priority dispute is resolved by arbitration. Section 3(1) prohibits an insurer from disputing its obligation to pay unless it provides written notice to any alleged higher-priority insurer “within 90 days of receipt of a completed application for benefits.” Section 3(2) allows late notice if 90 days was not enough to determine which insurer is liable under s. 268 and if the insurer conducted reasonable investigations during that period. When insurers cannot agree, s. 7(3) requires arbitration to be commenced within one year of the notice. The Court of Appeal has previously stressed that this regulation is highly structured and demands strict compliance, recognizing insurers as sophisticated parties who routinely litigate such disputes and require certainty in planning investigations and reserves. At the same time, in March 2020, the Ontario government enacted O. Reg. 73/20 under emergency legislation in response to the global pandemic. Section 1 of that regulation mandated the suspension of any statutory “limitation period” for the duration of the declared emergency, retroactive to March 16, 2020. Section 2 separately addressed “any period of time within which any step must be taken in any proceeding,” including intended proceedings, and provided for suspension of those timelines, but subject to the discretion of the relevant court, tribunal, or decision-maker. Neither “limitation period” nor “step in a proceeding” was defined. The core interpretive dispute in this case was whether the 90-day notice under s. 3(1) should be treated, for the purposes of O. Reg. 73/20, as a limitation period falling within s. 1 (and thus automatically suspended), or as a procedural step falling within s. 2 (and thus subject to discretionary suspension only).

Standard of review on appeal from arbitration

On appeal to the Superior Court of Justice, the parties agreed that their arbitration agreement permitted an appeal on questions of law and mixed fact and law. The court therefore had to identify the nature of the issues on appeal to set the standard of review. The judge held that whether the 90-day notice requirement is a “limitation period” within the meaning of O. Reg. 73/20 is a pure question of law, turning on statutory interpretation, and thus subject to a correctness standard. In contrast, the arbitrator’s decision about whether to exercise his discretion under s. 2 of O. Reg. 73/20, and his assessment of Echelon’s conduct within the 90-day window, were questions of mixed fact and law and discretionary judgment. Those aspects attracted a more deferential standard of palpable and overriding error, with additional deference owed to the arbitrator’s procedural and discretionary choices in a private arbitration context.

Reframing the limitation versus procedural step debate

In reassessing the arbitrator’s classification of the 90-day rule, the judge applied the modern principle of statutory interpretation: the words of a statute must be read in their entire context, in their grammatical and ordinary sense, harmoniously with the scheme and object of the Act and the intention of the legislature. While the arbitrator focused heavily on the ordinary, technical meaning of “limitation period” as the time within which an action must be commenced, the judge held that this was incomplete without taking full account of the remedial purpose and context of the COVID-19 emergency regulation. The court reviewed the reality in March 2020: courts effectively closed to all but urgent matters, law offices and businesses shut down or severely limited their operations, and the justice system had not yet begun its large-scale transition to virtual hearings and electronic processes. The purpose of O. Reg. 73/20 was to prevent litigants from losing substantive rights because public health measures had made timely litigation practically impossible. Against that backdrop, the judge reasoned that the regulation intentionally treated two types of time limits differently. Substantive time limits that bar claims—limitation periods—were automatically suspended, with no residual discretion, because they went to fundamental access to justice. Procedural deadlines within ongoing or intended proceedings—such as deadlines to deliver affidavits of documents, file defences, perfect appeals, or seek internal tribunal reviews—were grouped under s. 2 and made subject to discretionary relief, as illustrated by cases like Elson v. Polyethics Industries Inc., Bock v. Madani, Jonas v. Elliot, Grabba Pizza, and Bandhu. Those decisions all involved procedural steps within ongoing litigation, not substantive gates to commencing a claim. The judge concluded that, functionally, statutory notice requirements that operate as mandatory preconditions to commencing or sustaining a claim are much closer to limitation periods than to routine procedural deadlines. Failure to meet such a notice requirement can permanently bar an otherwise valid claim, just as missing a limitation period can. In this sense, statutory notice rules share “functional characteristics” with limitation periods.

Use of municipal notice jurisprudence to characterize the 90-day rule

The court then turned to municipal liability cases to illuminate the nature of statutory notice provisions. In Bannon v. Thunder Bay (City), the Court of Appeal had held that a seven-day written notice requirement in the Municipal Act, coupled with a three-month limitation period to sue, should be read together as constituting the applicable limitation regime. Although the notice requirement was “not, strictly speaking, a limitation period,” it was “akin to a limitation period,” promoted the same policy interests (prompt pursuit of claims, timely investigation, and certainty for defendants), and was aptly described as “a limitation period within a limitation period.” Later cases like Crinson v. Toronto (City) and Delahaye v. City of Toronto continued to treat such municipal notice rules as tightly linked to limitation principles. While other decisions have emphasized that municipal notice requirements are not limitation periods in a technical sense, the judge in this case found the functional analysis in Bannon persuasive. That analysis underscored that notice provisions which operate as prerequisites to bringing or maintaining a claim effectively impose a limitation on the period within which the action can be commenced. Nordheimer J.’s earlier comment in State Farm v. Ontario (Minister of Finance) that the 90-day priority notice rule was better described as a notice period than a limitation period was viewed as obiter and as not fully engaging with the functional approach articulated in Bannon. In the insurance priority context, the 90-day notice rule similarly bars the dispute if not complied with, subject only to a narrow saving clause in s. 3(2). The judge therefore concluded that, for the purposes of O. Reg. 73/20, the 90-day notice requirement must be treated as a limitation-like provision whose non-compliance bars the proceeding and whose suspension during the emergency is necessary to protect substantive rights.

Impact of the saving provision and discoverability concepts

The arbitrator had also relied on the presence of a saving provision in s. 3(2) of O. Reg. 283/95 as support for classifying the 90-day notice as something other than a limitation period. The judge rejected that analytical move. Limitation statutes themselves often include saving mechanisms, such as the doctrine of discoverability, which can shift the start of a limitation period to the time when the cause of action was discovered or ought to have been discovered. The existence of a saving rule, therefore, does not disqualify a time limit from being a limitation period or its functional equivalent. In this case, the saving clause simply allows late notice if 90 days is insufficient and reasonable investigations were undertaken; it does not change the fact that missing the combined 90-day-plus-savings regime can bar a priority claim entirely. From a purposive perspective, the court held that the COVID limitation regulation should be interpreted fairly, largely, and liberally, consistent with its remedial purpose. Recognizing the 90-day notice requirement as subject to automatic suspension during the emergency would not upend limitation doctrine in general, because the finding was confined to the temporary and exceptional operation of O. Reg. 73/20 between March 16 and September 14, 2020.

Conclusion on the nature of the 90-day notice requirement

On the central legal issue, the judge concluded that the arbitrator had erred in law. By adopting a narrow, technical view of “limitation period” and not giving sufficient weight to the purpose and context of the COVID-19 emergency regulation, the arbitrator mischaracterized the 90-day rule. Properly understood, the 90-day notice requirement functions as a limitation period for the purposes of O. Reg. 73/20 and therefore was automatically suspended between March 16 and September 14, 2020. As a result, the clock for Echelon’s 90-day notice obligation could not begin to run until the emergency suspension was lifted. On that basis, Echelon’s December 8, 2020 notice fell within the effectively extended period and was timely. Accordingly, applying a correctness standard, the court allowed the appeal, holding that the arbitrator’s conclusion that Echelon was out of time could not stand.

Findings on discretion, deference, and the alternative outcome

For completeness, the judge went on to consider the scenario where the arbitrator’s classification of the notice rule as a procedural step were correct. In that hypothetical, Echelon would have been required to show that the arbitrator committed a palpable and overriding error in refusing to exercise his discretion under s. 2 of O. Reg. 73/20 to suspend the 90-day step. The court found no such error. The arbitrator had acknowledged the strict enforcement of the 90-day rule in prior decisions and carefully reviewed the steps Echelon took or failed to take within the 90-day window. He noted that Echelon recognized the dependency issue from the outset yet did not aggressively pursue the necessary information or schedule the examination under oath within 90 days. Unlike other COVID-related timing cases where counsel presented concrete evidence of pandemic-related obstacles, Echelon presented no specific evidence that COVID-19 actually delayed its investigation or prevented timely notice. Moreover, arbitrators enjoy broad discretion in managing procedures under the Arbitration Act, and courts are to intervene sparingly, out of respect for the parties’ choice of a private forum. On this alternative analysis, the judge stated that, even if the 90-day notice were only a procedural step, the arbitrator’s refusal to deem it suspended and his decision to dismiss the priority dispute would have been entitled to deference and left in place.

Overall outcome and successful party

In the actual disposition, the judge held that, in the special context of the COVID-19 emergency legislation, the 90-day notice requirement under s. 3(1) of O. Reg. 283/95 should be treated as a limitation-type provision captured by s. 1 of O. Reg. 73/20. Consequently, the limitation was automatically suspended from March 16 to September 14, 2020, and Echelon’s December 8, 2020 Notice of Priority Dispute was not out of time. The appeal from Arbitrator Bialkowski’s preliminary dismissal of the priority dispute was therefore granted, and Echelon Insurance Company, as the appellant, emerged as the successful party. The reasons focus entirely on the legal characterization of the 90-day rule and the validity of the arbitrator’s dismissal; they do not fix or quantify any statutory accident benefits, damages, indemnity, or costs in a specific dollar amount. On the face of this decision, there is no stated total monetary award, damages figure, or quantified costs order in favour of Echelon or Zenith, and any ultimate financial impact would flow later from the continuation and resolution of the underlying priority dispute rather than from this appeal judgment itself.