Executive Summary: Key Legal and Evidentiary Issues

• Classification of a Caterpillar 930K wheel loader as an “automobile” for the purposes of the Statutory Accident Benefits Schedule (SABS) using the three-part Adams test.
• Scope of the Licence Appeal Tribunal’s authority to decide on a legal issue (the first prong of the Adams test) that both parties had expressly treated as conceded and not in dispute.
• Alleged breach of procedural fairness where the LAT decided the case on a ground not argued by either party and without inviting further submissions.
• Proper application of the “ordinary parlance” analysis, including reliance on purpose, function and indicia of the vehicle drawn from Grummett, when determining whether the wheel loader is an automobile.
• Role of reconsideration at the LAT as a potential cure for procedural defects, and whether the LAT unreasonably refused to recognize and correct its own fairness error.
• Appropriate appellate remedy where procedural fairness is breached: setting aside both the original decision and reconsideration decision and remitting the matter to a different LAT adjudicator on all issues.

Background and facts of the incident
On January 18, 2020, Richard Carpenter was injured when he stepped into the path of a Caterpillar 930K Small Wheel Loader that was travelling along a municipal road on its way to clear snow at a nearby school. At the time of the incident, the front plow blade was raised, and the machine was being driven several kilometres on a public roadway to reach a school parking lot where it would be used to shovel snow. Intact Insurance Company was the automobile insurer of the owner of the wheel loader. On October 2, 2020, Mr. Carpenter applied to Intact for statutory accident benefits under the Statutory Accident Benefits Schedule, O. Reg. 34/10 (SABS). Intact denied the claim on November 26, 2020, taking the position that the wheel loader was not an “automobile” and that the incident therefore did not meet the SABS definition of an “accident.” Mr. Carpenter then brought an application to the Licence Appeal Tribunal (LAT) on October 24, 2022, seeking accident benefits.
The statutory and policy framework

The dispute centred on whether Mr. Carpenter was involved in an “accident” as defined in section 3(1) of the SABS, which turns on whether the vehicle involved is an “automobile” under section 3 of the SABS and the related definition in section 224 of the Insurance Act. The legal test applied is the three-part framework confirmed by the Ontario Court of Appeal in Adams v. Pineland Amusements Ltd. for determining if a vehicle is an automobile: (i) whether it is an automobile in ordinary parlance; (ii) if not, whether it is defined as an automobile in the wording of the insurance policy; and (iii) if not, whether it falls within any enlarged statutory definition. In this case, it was common ground that the second part of the Adams test did not apply because the wheel loader was not listed or defined as an automobile in any insurance policy. The focus was therefore on the “ordinary parlance” assessment and, failing that, on whether the wheel loader could be captured by an enlarged statutory definition under section 224 of the Insurance Act.
 

Positions of the parties before the LAT
Before the LAT, Mr. Carpenter’s counsel explicitly conceded that the Caterpillar 930K wheel loader “would not normally be considered an automobile in ordinary parlance” and argued instead that it was an automobile under the enlarged statutory definition in section 224 of the Insurance Act. His submissions concentrated on the third part of the Adams test and relied on the case of Grummett v. Federation Insurance Co. of Canada. Although Grummett was cited primarily for its treatment of “ordinary parlance,” Mr. Carpenter used it to emphasize the purpose and function of the wheel loader: that it had all the indicia of an automobile, including a driver’s seat, steering wheel, combustion engine, tire-clad wheels, seatbelt, lights, signal lights, speedometer, GPS, enclosed cab, radio and the capacity to travel at highway-like speeds. He also stressed that at the time of the accident, the machine was not pushing snow; it was travelling on a public road over seven kilometres from its yard to the school parking lot. Intact, for its part, accepted that the first part of the Adams test was not in issue, expressly recording that the claimant agreed the wheel loader was not an automobile in ordinary parlance. Intact also agreed that the second part of the test did not apply. Its submissions were therefore directed to the third part of the test and argued that there was no residual “purpose and function” inquiry beyond the three-part framework. In its view, features such as wheels, doors, lights, GPS, and the ability to travel on roads did not transform a wheel loader into an automobile or a vehicle akin to one.
 

The LAT’s original decision on entitlement
In its initial decision, the LAT nonetheless determined that the wheel loader was an automobile in ordinary parlance under the first part of the Adams test. Relying heavily on Grummett, the adjudicator reasoned that when deciding whether something is an automobile in ordinary parlance, it is appropriate to examine the vehicle’s purpose and function. Applying this approach, the LAT emphasized that immediately before the accident, the wheel loader had been driven on a public roadway for approximately seven kilometres with its plow upright, not actively loading materials or plowing snow. The adjudicator further highlighted the product specifications and physical characteristics of the machine: its capacity to reach approximately 40 km/h and its suite of features typically associated with automobiles, including a driver’s seat, tire-clad wheels, steering wheel, braking system, lights, signal lights, speedometer, seatbelt, GPS, enclosed driver compartment, mirrors and radio. Taken together, these factors led the LAT to conclude that at the time of the accident, the purpose and function of the wheel loader was to behave like an automobile. On that basis, the adjudicator held that it was an automobile in ordinary parlance and that Mr. Carpenter was entitled to claim statutory accident benefits. Because the first prong of the Adams test was dispositive on this reasoning, the LAT found it unnecessary to address the policy-definition prong or the enlarged statutory definition.

The reconsideration request at the LAT
Intact sought reconsideration, arguing that the LAT had committed both legal and procedural errors. It submitted that the LAT had breached procedural fairness by deciding the case on the first prong of the Adams test after both parties had treated that prong as resolved by concession. In Intact’s view, the LAT should have invited further submissions before rejecting that concession and re-framing the central issue. Intact also asserted that the LAT had erred in its application of the Adams test to the facts. In the reconsideration decision, the LAT rejected the procedural fairness complaint. While it acknowledged that the claimant had stated the vehicle would not normally be considered an automobile in ordinary parlance, it reasoned that the claimant had nonetheless advanced arguments about the wheel loader’s purpose and function and that Intact had responded to those submissions. On that basis, the LAT concluded that both parties had an opportunity to address the first part of the test. The adjudicator then treated Intact’s substantive complaints about the ordinary-parlance analysis as an impermissible attempt to reweigh evidence or advance new arguments on reconsideration. Finding that reconsideration was not a vehicle for such submissions, the LAT dismissed Intact’s request and left the original decision intact.

Procedural history before the Divisional Court and standards of review
Intact brought a statutory appeal and a concurrent application for judicial review to the Divisional Court. Under section 11(3) of the Licence Appeal Tribunal Act, 1999, appeals from the LAT to the Divisional Court lie on questions of law alone, to be reviewed on a correctness standard. Following the Supreme Court of Canada’s decision in Yatar v. TD Insurance Meloche Monnex, the Divisional Court also retained discretion to hear a parallel judicial review for issues not covered by the statutory appeal. In this case, the central question raised on appeal was whether Mr. Carpenter and Intact had been afforded procedural fairness at the LAT and on reconsideration—an issue characterized as a question of law reviewed for correctness. Questions of fact or mixed fact and law, to the extent they might arise on judicial review, would attract a reasonableness standard, but the court ultimately resolved the matter on the procedural fairness ground alone.

The Divisional Court’s analysis of procedural fairness
Applying the factors from Baker v. Canada (Minister of Citizenship and Immigration), the Divisional Court assessed the content of the duty of fairness owed in this context. It recognized that the LAT enjoys considerable discretion in choosing procedures, but it must still ensure that parties have a real opportunity to present their case fully and fairly, particularly where the decision is determinative of an important right such as access to statutory accident benefits. The court focused on the clear written concession by Mr. Carpenter that the wheel loader “would not normally be considered to be an automobile in ordinary parlance.” This concession meant that all parties and the tribunal had been proceeding on the basis that the first part of the Adams test was not at issue. The Divisional Court held that the LAT acted unreasonably in treating the claimant’s subsequent references to purpose and function—made in the context of the third prong of the test—as if they implicitly revived the first prong. In the court’s view, absent an explicit withdrawal of the concession and a clear indication that the ordinary-parlance issue was back in play, the LAT could not reasonably reinterpret the submissions as engaging the first prong. The court also accepted Intact’s assertion that it had shaped its submissions in reliance on the concession. Because it understood the first prong to be off the table, Intact deliberately chose not to make fulsome ordinary-parlance submissions, limiting itself instead to a brief observation that indicia such as wheels, doors, and GPS do not turn a wheel loader into an automobile. The more extensive analysis Intact later provided on reconsideration demonstrated what it would have advanced had it known that the LAT intended to decide the case under the first prong of Adams. The Divisional Court held that while a tribunal is not bound to accept a party’s legal concession, procedural fairness requires that, before rejecting such a concession and deciding the case on that newly live issue, the tribunal must give the parties an opportunity to address it. In this case, fairness would have required the LAT to notify the parties that it was questioning their shared position on the first prong and to invite submissions on whether the wheel loader should be regarded as an automobile in ordinary parlance. By failing to do so, the LAT denied both parties the chance to present full argument on the decisive issue.

Failure to cure the defect on reconsideration and appropriate remedy
The Divisional Court also considered whether the LAT’s reconsideration process had cured the breach of procedural fairness. In principle, the statutory reconsideration mechanism can correct earlier procedural errors by allowing the tribunal to receive full submissions on issues that were previously mishandled. In this case, on reconsideration the LAT had the benefit of more detailed submissions from Intact on the ordinary-parlance question. However, instead of recognizing that the initial decision had been reached on a basis that had never been properly argued, the LAT found there was no procedural error and declined to meaningfully engage with the new arguments. It characterized them either as impermissible reweighing of evidence or as new arguments that could have been raised earlier, thereby refusing to consider them on the merits. The Divisional Court found this approach flawed. Reconsideration could have been used to remedy the fairness problem by fully revisiting the ordinary-parlance analysis in light of complete submissions from both parties. Instead, the LAT doubled down on its initial process and declined to correct the error. Given this ongoing unfairness, the court held that the appropriate remedy was to allow the appeal, set aside both the original LAT decision and the reconsideration decision, and remit the matter to a different adjudicator at the LAT to determine all issues afresh after giving both parties a fair opportunity to be heard.

Outcome, successful party and monetary consequences
In the result, the Divisional Court allowed Intact Insurance Company’s statutory appeal on the ground of procedural fairness, without finding it necessary to address the substantive interpretation of the Adams test or to exercise its discretion on the judicial review application. The original LAT decision in favour of Mr. Carpenter and the LAT’s reconsideration decision were both set aside, and the case was remitted to a different LAT adjudicator for a new determination on all issues, including whether the wheel loader is an “automobile” and whether Mr. Carpenter is entitled to accident benefits. Intact is therefore the successful party in this Divisional Court proceeding. However, the court made no decision on entitlement to or quantum of statutory accident benefits, and it expressly ordered that there would be no costs because none were requested. As a result, no specific monetary award, damages, or costs were granted or ordered in favour of any party in this decision, and the total amount, if any, that might ultimately be awarded to Mr. Carpenter or payable by Intact will depend on the outcome of the rehearing at the LAT and cannot be determined from this judgment.