Executive Summary: Key Legal and Evidentiary Issues

• Lauren Sparks appealed and sought judicial review of a Licence Appeal Tribunal decision that found the insurer's notice of refusal complied with section 54 of the SABS.
   
• Timeliness was central to the dispute, since section 56 of the SABS requires a benefits application to be filed within two years of an insurer's refusal to pay.
   
• Sparks argued the notice should have described every stage of the reconsideration and appeal process, including timelines and contact information for the courts.
   
• A related argument was that the notice was misleading because it stated a hard two-year limit without addressing discoverability under section 7 of the LATA.
   
• Reasonableness, as described in Canada (Minister of Citizenship and Immigration) v. Vavilov, governed the court's review of the Adjudicator's decision.
   
• Ultimately, the panel dismissed the appeal and judicial review application, finding the Adjudicator's conclusion reasonable despite an error in relying on Turner.
   

Facts of the case

On February 6, 2020, Lauren Sparks was involved in a motor vehicle accident. On February 6, 2022, she submitted an OCF-18 Treatment and Assessment Plan in the amount of $17,967.00 to support an OCF-19 Catastrophic Impairment Assessment. By letter dated February 15, 2022, Primmum Insurance Company partially approved the OCF-18 for $14,577.00 and refused to pay the balance. The letter included a form titled "Your Right to Dispute the Insurance Company's Determination of Your Claim for Statutory Benefits," which warned that Sparks had two years from the date of refusal to file an application with the Licence Appeal Tribunal's Automobile Accident Benefits Service, or she would lose the right to dispute the determination. On April 13, 2023, Sparks filed an application disputing the partial denial. On May 1, 2024, at the first hearing before the Tribunal, she unilaterally withdrew that application without preconditions and without any agreement to toll the limitation period. On July 30, 2024—more than two years after receiving the insurer's notice—Sparks submitted a new application disputing the denial of $3,390.00 in benefits. A hearing was held before Adjudicator Ulana Pahuta to determine, as a preliminary issue, whether this application was filed beyond the two-year limitation period mandated by section 56 of the SABS. In a decision dated April 28, 2025, the Adjudicator found that the insurer's notice complied with section 54 of the SABS and that the limitation period had therefore been triggered. Sparks appealed that decision and applied for judicial review to the Divisional Court.

Policy and legislative provisions at issue

Section 54 of the SABS requires that "if an insurer refuses to pay a benefit or reduces the amount of a benefit that a person is receiving, the insurer shall provide the person with a written notice advising the person of his or her right to dispute the refusal or reduction." Section 56 of the SABS requires that an application under section 280(2) of the Insurance Act be commenced within two years after the insurer's refusal to pay the amount claimed. Sparks contended that section 54's notice obligation was broader than its predecessor, section 71 of O. Reg. 776/93, and required the insurer to describe every level of the dispute process, including reconsideration under the Tribunal's Rules, appeal rights under the LATA, and judicial review, appeal, and further appeal rights up to the Supreme Court of Canada, along with applicable timelines and contact information. She further argued that section 7 of the LATA, which addresses extending limitation periods, and the principle of discoverability, should have been referenced in the notice rather than the notice's statement that she "will" lose her right to dispute if she did not apply within two years.

Reasoning and analysis

The court applied the reasonableness standard described in Canada (Minister of Citizenship and Immigration) v. Vavilov, under which a decision is reasonable if it is transparent, internally coherent, and justified in relation to the facts and law that constrain the decision-maker. On the first issue, the court agreed with the Adjudicator that section 54 requires notice of the right to dispute a refusal, not a complete chronology of every subsequent reconsideration, appeal, and judicial review step. The court noted that the only "right to dispute the refusal" is found in section 280(2) of the Insurance Act, which allows an application to the Tribunal; reconsideration, appeal, and judicial review rights arise only after an Adjudicator's or court's decision, not from the insurer's original refusal. On the second issue, the court reviewed Smith v. Co-operators General Insurance Co., in which the Supreme Court of Canada held that a notice under the predecessor provision must, at minimum, describe the dispute resolution process and relevant time limits in clear language directed at an unsophisticated person. The court found that the Adjudicator had erred by relying on Turner v. State Farm Mutual Automobile Insurance Co., a case addressing a different notice obligation under section 24(8) of the SABS as it then existed, rather than the "completely and clearly" standard described in Smith. The court also noted that the discoverability principle applies to SABS limitation periods under section 56, as confirmed in The Personal Insurance Company v. Tagoe, 2024 ONCA 894, and that this principle can, in some circumstances such as worsening injuries, postpone the running of the limitation period, citing Pena v. Allstate Insurance Company of Canada. Despite the Adjudicator's error regarding Turner, the court found that requiring the insurer to explain discoverability and section 7 of the LATA in the notice would add complexity without meeting the consumer protection goal of section 54 more effectively, and could risk misleading claimants into believing the limitation period was more flexible than it is.

Ruling and overall outcome

The court found that although the Adjudicator erred in relying on Turner, it remained reasonable for the Adjudicator to conclude that the insurer's notice complied with section 54 of the SABS. The appeal and application for judicial review brought by Lauren Sparks were dismissed, with the panel finding in favour of Primmum Insurance Company and the Licence Appeal Tribunal. No costs were ordered, as none of the parties sought costs.