In a recent decision, the Divisional Court ruled that the Appellant, Naomi Kellerman-Bernard, was eligible to make a claim for catastrophic impairment designation, despite not being personally involved in the accident herself.

The Appellant’s child was involved in a bicycle accident and was significantly injured as a result. Though the claimant was not involved in the accident, she sustained psychological and emotional injuries and impairments. Whether she was an “insured person” within the meaning of the SABS was not at issue. The sole issue was whether she was eligible to apply for CAT designation. 

The Appellant initially applied to Unica for a catastrophic impairment designation, but her claim was denied. The matter proceeded to the LAT, which determined she was not entitled to apply for CAT designation as she did not meet the necessary criteria. Her LAT reconsideration request was denied, and she appealed this decision to the Divisional Court.

In determining whether the claimant was eligible to make a claim for CAT designation, the LAT considered the interplay between s.3(1), s.45(1), and s.3(2) of the SABS.

Section 3(1) of the SABS defines who qualifies as an “insured person”. There are two types of “insured persons” under Section 3(1): insureds who are actually involved in the accident and named insureds who are not actually involved in the accident, but who suffer psychological or mental injury as a result of the fact that their family member was involved in the accident. In this case, the Appellant was the second type.

Section 45(1) is the Section of the SABS that sets out an insured’s right to seek a catastrophic impairment designation.

Section 3(2) of the SABS identifies the types of injuries that lead to a catastrophic impairment designation.

The LAT, in its decisions focused on the phrase “caused by an accident” as set out in Section 3(2) and found that the Appellant was not entitled to apply for a CAT designation because she was not directly involved in the accident and thus her impairment was not caused by an accident. Therefore, the LAT concluded that this class of insured persons is not entitled to seek CAT designation.

The Divisional Court then set out the errors of law committed by the LAT. First, the LAT was found to have ignored the plain language of the SABS in its determination that not all types of insured persons could apply for CAT designation. This was held to be contrary to the express language of Section 45(1), which puts no restriction on who can apply for CAT designation. The Divisional Court contrasted the lack of restrictions in Section 45(1) with those set out in Section 28(2), which deals with optional benefits. Section 28(2) expressly makes clear that optional benefits are only applicable to the named insured, the spouse of the named insured, dependants of the named insured and the named insured’s spouse, and those specified as listed drivers of the insured automobile. Because the legislature set out clear exclusions in this section, it demonstrated that when it wishes to restrict benefits to only certain people, it does so through explicit language. Since Section 45(1) does not set out any such restrictions, any “insured person” is entitled to apply for CAT designation.

Second, the Divisional Court found that the LAT failed to consider the words “caused by an accident” in their entire relevant context. Vavilov made clear that statutory interpretation requires reading the language chosen by the legislature in its entire relevant context, which the LAT did not do. The case law the LAT examined to determine whether the injuries were caused by the accident dealt with entitlement by those who were clearly not “insured persons” within the meaning of the SABS. Because the Appellant was an insured person, she was clearly entitled to apply for a CAT impairment.

Lastly, the Divisional Court rejected the interpretation of the SABS by the LAT, and found it ignored its legislative purpose. In Canada (Minister of Citizenship and Immigration) v. Vavilocv, 2019 SCC 65 the Supreme Court reiterated that the words of a stature are to be read in their entire context, and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. Courts have repeatedly recognized that the SABS are remedial and constitute consumer protection legislation and must be read, interpreted, and applied in this way. This was confirmed by the Supreme Court in Smith v. Co-Operator’s General Insurance Co. 2002 SCC 30 (CanLII), [2002] 2 S.C.R. 129. The Divisional Court also referenced Tomec v. Economical, 2019 ONCA 882, where the Ontario Court of Appeal confirmed that “[the] legislature’s definition of ‘catastrophic impairment’ is intended to foster fairness for victims of motor vehicle collisions by ensuring that accident victims with the most health needs have access to expanded medical and rehabilitation benefits. That definition is meant to be remedial and inclusive, not restrictive” and that the goal of the SABS “is to reduce the economic dislocation and hardship of motor vehicle accident victims and as such, assumes an importance which is both pressing and substantial”.  In this case, the LAT took a restrictive approach instead of a remedial and inclusive one, which increased the hardship of those with the most health needs.

This case makes clear that even those who sustain injuries as a result of an accident they are not personally involved in are eligible to make a claim for CAT designation. Furthermore, it also emphasizes the need for the LAT to remember the legislative intent of the SABS, which is to protect consumers, particularly in the context of those claiming a catastrophic impairment.

See Kellerman-Bernard v Unica Insurance Company, 2022 CanLII 35813 (ON LAT).


  • Olivia Duguay

    Olivia is a full-time lawyer and part-time stay-at-home zookeeper to her vast collection of fur babies. When she isn’t vacuuming up copious amounts of pet hair or yelling at one of her three cats to get off the kitchen counter, Olivia is probably cooking elaborate feasts for her family.