Divisional Court Rules that SABS Claimant Can’t Have his Tort(e) and Eat More SABS Benefits Too

July 16, 2025

By Michael Kryworuk

On July 2, 2025, Justice Richard A. Lococo, writing on behalf of a panel of the Ontario Superior Court of Justice Divisional Court, released their decision in Sistermans v. CAA Insurance Co., 2025 ONSC 3809.

This matter concerned an appeal and judicial review of a decision and later reconsideration decision of the License Appeal Tribunal (the “LAT”) concerning the minor claimant, Connor Sistermans (“Connor”) and by his litigation guardian, Annika Sistermans.

Background:

In 2014, the minor claimant was involved in a motor vehicle accident as a passenger. He was 15 years old at the time of the accident.  In August 2014, Connor claimed statutory accident benefits from the respondent CAA Insurance, with his mother, Christina Sistermans, signing the original application as substitute decision maker.[1]

Upon turning 18 in 2016, he signed an agreement with CAA to settle his AB claim on a full and final basis for $20,000.

However, in May 2022, he brought an application before the LAT, seeking to set aside the settlement agreement on the basis that he had lacked the capacity to enter into the original agreement with CAA.

In its original October 2024 decision, the LAT dismissed the claimant’s application, finding that he had not established that he lacked capacity. This decision was upheld at the subsequent reconsideration decision of the LAT in February 2025.[2]

The minor claimant appealed the tribunal decisions to the Divisional Court, arguing that the LAT failed “to apply the governing legal standard to determine capacity” and that the Tribunal had denied him procedural fairness, by “refusing to admit a relevant expert report relating to capacity, and then proceeding to consider and discount its contents without receiving evidence or submissions”.[3]

Procedural History:

The Court began its analysis with an examination of the claimant’s procedural history of his LAT application and his tort claim.

Two years after initiating his accident benefits claim, Connor (by his mother as his Litigation Guardian) initiated a tort action in July 2016 arising from the same 2014 accident.

In September 2016,  the minor claimant made an application to the LAT under s.280 of the Insurance Act to resolve the parties’ dispute over his entitlement to accident benefits. This LAT application was signed by Connor’s mother on his behalf. Connor then turned 18 the following month, in October 2016.

In November 2016, the LAT matter proceeded to a case conference, which Connor did not attend but was represented at by a paralegal from the office of Connor’s counsel. The Case Conference Report following that case conference indicated that the claimant “withdrew his application on a without prejudice basis and may reapply to the Tribunal subject to any limitation issues”.[4]

Later that month, the claimant signed a Settlement Disclosure Notice, indicating he had agreed to a final settlement of his AB Claim for $20,000. According to the claimant, he recalled being provided with the settlement document for his signature by his counsel’s paralegal, and that his mother was present at the time of signature.[5]

In May 2022, the claimant made a further s.280 application to the LAT relating to his entitlement to benefits arising from the 2014 accident. One of the issues in dispute was whether he had sustained a catastrophic impairment as defined in the SABS. CAA’s response disputed the entitlement to the claimed benefits “as the matter settled on a full and final basis with counsel representing [Connor]”.

In October 2022, Connor’s tort action arising from the 2014 accident was settled for a significant monetary payment to Connor (the figure was not disclosed in the judgement). The tort action had been continued without a litigation guardian, pursuant to an Order requisitioned by Connor’s counsel on the basis that he had reached the age of majority in October 2016.[6]

In February 2023, the LAT matter proceeded to a further case conference, which Connor and his counsel attended. The resulting case conference order listed the issue of whether the claimant was barred from advancing substantive issues because of his prior execution of the settlement notice back in November 2016. Of further note was that the claim for catastrophic impairment was not included as a substantive issue in dispute. The matter was ordered to proceed to a four-day virtual hearing set to start in October 2023.[7]

In May 2023, counsel for the claimant was removed from the record, and replaced by new counsel in September 2023.

On the date the hearing was to commence, new counsel for the claimant advised that Connor had met with Dr. Lynn Lightfoot, a capacity assessor, who was preparing a report to indicate that the claimant was mentally incapable of instructing counsel as a result of cognitive limitations arising from a brain injury, but that the report would not be ready within the time set aside from the hearing. The LAT agreed to adjourn the hearing.

Dr. Lightfoot, in November 2023, provided an opinion letter indicating that the claimant was incapable of managing his property or instructing counsel and required the assistance of a litigation guardian in the proceedings.[8]

The LAT in a motion order from December 2023 refused the claimant’s request to add Dr. Lightfoot to his witness list for the hearing or issue a summons to witness for them, and denied the claimant’s request to rely upon at the hearing the letter of Dr. Lightfoot regarding capacity. The admissibility of the letter would be left to the hearing adjudicator.

The LAT hearing proceeded before Adjudicator Driesel in January 2024, with Annika Sistermans (Connor’s sister) being recognized as his litigation guardian. Unfortunately, Adjudicator Driesel passed away without having issued a decision. The LAT later ordered that a new adjudicator render a decision based on the existing record.

Original LAT Decision – October 25, 2024

In its Decision, the LAT dismissed the claimant’s application. It found that the settlement agreement reached in November 2016 was not invalidated due to Connor’s alleged incapacity. Therefore, the application was barred from proceeding.

The Tribunal pointed to Connor’s academic records from 2016-2017, showing an ability to complete and do well in high school and post-secondary education. This, combined with cognitive testing of the claimant from 2015 and 2016 completed by medical experts indicating that Connor had no issues with capacity as of November 2016, was sufficient for the adjudicator to find no issues with capacity.

The Tribunal noted that the capacity assessments that the parties had previously obtained and had included in the record were from 2021 and 2023 and had less weight than more contemporaneous accounts of the claimant’s cognitive and functional abilities closer to 2016. At paragraph 28 of the original LAT decision, the Tribunal found that:

[W]hile the applicant may claim Dr. Lightfoot’s findings from her December 2023 report would have shed light on his capacity in November 2016, I find the retrospective nature of the report raises similar issues to those I identified about the capacity assessments above. I do not find that the admission of this report would have likely impacted my findings.[9]

LAT Reconsideration Decision – February 26, 2025

Following further written submissions, the LAT released its reconsideration decision and dismissed the request for reconsideration, rejecting the submission that it had erred in law and denied procedural fairness in the way it had treated the report of Dr. Lightfoot.

Issues on the Appeal:

  1. Capacity (legal error): Did the Tribunal err in law in determining that Connor did not establish that he lacked capacity to enter into the settlement agreement?
  2. Reasonableness: Was the Decision unreasonable because it failed to exhibit the requisite degree of justification, intelligibility and transparency?
  3. Procedural fairness: Did the Tribunal’s evidentiary and procedural rulings deny Connor procedural fairness?

Reasoning:

Issue 1: Capacity

Justice Lococo began his analysis by considering the relevant caselaw. In Bajwa v. Singh, 2022 ONSC 3720, at para. 14, the court stated that because the question was case-specific, there is “no single definitive test to be applied in assessing whether a litigant has the capacity to instruct counsel.” The court then listed important factors to consider in assessing the litigant’s capacity to instruct counsel, including their ability to “understand and appreciate” based on their circumstances.

Those factors included:

  1. Her ability to understand and appreciate:
    • the nature of the proceedings and the ultimate issue in the proceedings;
    • the financial risks and benefits of the lawsuit, including how either a positive or negative outcome for her will affect her financially;
    • the available options, including the option to proceed to judgment or to try to settle;
    • the position taken by her family members about the issues in this proceeding;
    • the factors which may be motivating her family members;
    • the social risks and benefits of this proceeding, including its impact on her relationships with her family members.
  2. Her ability to assess the comparative risk of the available alternatives, and a reasonable range of possible outcomes, both positive and negative.
  3. Her ability to make a reasoned choice regarding this proceeding, the rationality of her choice, and the stability of her choice.[10]

The Ontario Court of Appeal decision of Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, 151 O.R. (3d) 609 also set out a list of non-exhaustive “helpful indictors of capacity” that include:

  1. a person’s ability to know or understand the minimum choices or decisions required to make them;
  2. an appreciation of the consequences and effects of his or her choices or decisions;
  3. an appreciation of the nature of the proceedings;
  4. a person’s ability to choose and keep counsel;
  5. a person’s ability to represent him or herself;
  6. a person’s ability to distinguish between the relevant and irrelevant issues; and,
  7. a person’s mistaken beliefs regarding the law or court procedures.[11]

Justice Lococo was not persuaded that the LAT had made an extricable error of law by failing to articulate any legal test or factors to be considered in determining the claimant’s ability to instruct counsel on settlement in 2016.

His Honour noted that, in essence, the claimant was advancing arguments that a failure to address and name specific “helpful indicators” referred to previous cases amounted to the level of reversible error on appeal. His Honour was of the opinion that the claimant’s submissions on this were akin to a “line-by-line treasure hunt for error” that was cautioned against in the jurisdprudence.[12]

Lococo J was ultimately satisfied that in coming to its conclusion that the claimant had not rebutted the presumption of capacity, the Tribunal weighed the evidence of the claimant and his family members, the capacity reports of the assessors, and the opinions of treating mental health practitioners.[13]

Issue 2: Reasonableness:

Under this ground of appeal, the claimant submitted that even if there was no reversible error of law relating to capacity, the LAT Decision and Reconsideration were unreasonable because they did not have the requisite degree of justification, intelligibility and transparency as set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65. The claimant argued that from the Decision as it was written, the LAT “fundamentally misunderstood the task at hand” and reflected a “result-selective reasoning that ignores or illogically dismisses evidence related to Connor’s capacity to understand or appreciate the consequences of closing his accident benefit file for $20,000”.[14].

However, His Honour was similarly not convinced and found that the claimant’s “submission on reasonableness amounts to an invitation to do what Vavilov directs a reviewing court not to do,” which was to “reweigh and assess the evidence before the Tribunal and come to a different conclusion”.[15]

Issue 3: Procedural Fairness:

The claimant also argued that there had been a number of instances of his being denied procedural fairness, the most serious of which was said to be the exclusion of Dr. Lightfoot’s December 2023 report regarding Connor’s capacity and then the alleged consideration by the Adjudicator of Dr. Lightfoot’s’ opinion and report without receiving evidence or submission on the opinion from the parties.

However, Justice Lococo saw no merit to any claims that the claimant was denied procedural fairness.  He pointed to the fact that the evidentiary record already contained capacity assessment reports from each of the parties from 2021 and 2023.

Furthermore, His Honour pointed to the sections of the Decisions and Reconsideration Decision whereby the Adjudicator found that the retrospective nature of the 2021 and 2023 capacity limited their weight in assessing the claimant’s capacity 5 and 8 years prior.[16]

In summary, the finding to exclude the report of Dr. Lightfoot was found to be “well within the scope of the Tribunal’s procedural authority” and there were “cogent reasons” for same.[17]

Disposition:

In summary, the Divisional Court Panel dismissed the appeal and judicial review application with nominal costs to be paid to CAA.

Conclusion and Takeaways:

This decision provided further clarity and guidance on the court’s approach to the consideration of capacity. The court reaffirmed earlier precedents that the analysis is case-specific and that previously established “helpful factors” are not meant to be rigid requirements or items to be ticked off a list.

Another takeaway is that when it comes to determining issues of capacity, contemporaneous records and observations by parties will bear more significant weight than formal expert opinions prepared retrospectively and many years after the case.

[1] Sistermans v. CAA Insurance Co., 2025 ONSC 3809 at paras 1-2

[2] Ibid. at para 3.

[3] Ibid. at para 4.

[4] Ibid, at para 10

[5] Ibid.,  at para 11.

[6] Ibid., at para 13.

[7] Ibid.,  at para 14.

[8] Ibid. at para 17.

[9] Ibid., at para 30.

[10] Bajwa v. Singh, 2022 ONSC 3720 (CanLII), at para 14.

[11] Carmichael v. GlaxoSmithKline Inc., 2020 ONCA 447, at para 94.

[12] Sistermans, at paras 58 and 60.

[13] Ibid., at para 60.

[14] Ibid., at para 66.

[15] Ibid., at para 70.

[16] Ibid, at para 80.

[17] Ibid, at paras 81-82.