Nearly six years after the outset of the COVID-19 pandemic, Echelon Insurance v. Zenith Insurance Company serves as a reminder that the pandemic continues to influence the interpretation of legislation enacted in response to those unprecedented circumstances.
In this recent Ontario Superior Court of Justice case, Justice Shaw considers whether Ontario’s emergency six-month suspension of limitation periods during lockdown applies to the 90-day notice period for insurers to submit a Notice of Priority Dispute. In doing so, Her Honour adopts a large, liberal and purposive interpretation of the legislation due to the unique circumstances surrounding the pandemic and its impact on access to justice. Using this approach, Justice Shaw held that the suspension automatically applied, notwithstanding the regulatory context and accompanying norm of strict notice periods.
Background
Ms. Opeloyeru was injured in a motor vehicle accident. On August 18, 2020, she submitted a claim to her insurer, Echelon Insurance. In the application, she indicated she was 19 years of age, attending college and had not been employed in the 52 weeks prior to the accident. Echelon delivered a Notice of Priority Dispute to Zenith, advising them that Ms. Opeloyeru appeared dependent on her mother, who had an automobile insurance policy with Zenith. Echelon’s position was that Zenith had priority to pay accident benefits. [i]
Disputes Between Insurers, O. Reg. 283/05, made under s. 268 of the Insurance Act, R.S.O. 1990 c. I.8 (the Priority Dispute Regulation) provides that insurers have 90 days from receiving a completed application to notify another insurer of a priority dispute arising from said application.[ii] Accordingly, when Echelon’s Notice of Dispute was served on December 8, 2020, the notice period had expired, however, during the COVID-19 pandemic Ontario suspended limitation periods for six months, spanning the period March 16 – September 14, 2020 (the COVID-19 Limitation Regulation).[iii] Echelon argued that the notice period was a limitation period, which was automatically suspended by the COVID-19 Limitation Regulation. Zenith took the position that the notice period was merely a step in the proceeding, and only suspended at a decision-maker’s discretion.[iv]
Zenith won at arbitration. Arbitrator Bialkowski decided that the 90-day notice period is not a limitation period based on previous arbitral decisions and after interpreting the statute. In doing so, the Arbitrator declined to give the COVID-19 Limitation Regulation a “large and liberal interpretation,” and instead favoured a textual approach.[v]
Echelon appealed to the Ontario Superior Court of Justice for a determination of the following issue: whether the 90-day notice period under the Priority Dispute Regulation is a limitation period, or merely a procedural step subject to a decision-maker’s discretion?
The decision
Justice Shaw rejected Zenith’s argument that this was a question of fact, instead endorsing Echelon’s position that it was a question of law because the Arbitrator interpreted a statute. As a result, the standard of review was correctness.[vi] Moreover, Justice Shaw interpreted the COVID-19 Limitation Regulation in a remedial and purposive manner, instead of the narrow and textual approach the Arbitrator applied to the regulation.[vii]
Justice Shaw overturned the Arbitrator’s textual interpretation of the COVID-19 Limitation Regulation, holding that the “purpose of the [COVID-19 Limitation Regulation] was to prevent parties from losing substantive rights as the impact of COVID-19 made timely litigation impractical if not impossible.”[viii] Her Honour recalled the “permanent and significant changes made to all aspects of the justice system as a result of COVID-19,” and particularly the rapid, necessity-driven adoption of virtual technology in litigation.[ix] In light of these considerations, Justice Shaw distinguished between “procedural” and “substantive” steps. The former, she reasoned, do not impact a litigant’s ability to seek a remedy, whereas the latter do. Ultimately, she concluded that the COVID-19 Limitation Regulation targeted substantive steps, not procedural ones.[x]
Applying the procedural/substantive distinction to the facts at bar, Justice Shaw held that the 90-day notice period in the Priority Dispute Regulation is substantive, not procedural, because of the practical realities of investigating insurance disputes during the pandemic lockdown.[xi] Effectively, the 90-day notice period prevented litigating rights in that context. While she acknowledged the Arbitrator’s concerns about preserving strict 90-day notice provisions, she reasoned that “the historical impact of COVID-19 was a basis to carve out such an exception…[S]trict enforcement of the 90-day notice provision… presumes…a functioning system including the ability to timely investigate claims. The impact of the word-wide [sic] pandemic and the shuttering of almost every aspect of our society at the time prevented such a functioning system.”[xii]
Conclusion and key takeaways
Strictly speaking, this case only decided whether the COVID-19 Limitation Regulation automatically suspended one specific notice period. More broadly, however, Justice Shaw’s reasoning suggests that courts will interpret regulations from the pandemic (and possibly similar such events in the future that precipitate ongoing emergencies) in a large, liberal and purposive manner because of the unique and lasting effects of the pandemic.
This decision provides several practical reminders for insurers and counsel:
- Pandemic legislation will continue to be interpreted purposively. Courts remain prepared to consider the unique circumstances surrounding COVID-19 when interpreting legislation enacted during that period rather than adopting a strictly textual approach.
- Not every statutory deadline is merely procedural. Where missing a deadline effectively extinguishes a party’s legal rights, a court may characterize the requirement as substantive, even if it appears procedural on its face.
- Priority disputes remain highly technical. Although this decision provides relief in the context of the COVID-19 suspension regulation, insurers should continue to treat the 90-day notice requirement as a strict deadline. Outside the unique circumstances of the pandemic, courts and arbitrators are likely to continue enforcing the notice period rigorously.
- Context matters. The Court’s analysis illustrates that statutory interpretation cannot occur in a vacuum. Legislative purpose, historical context and practical realities may all influence how courts interpret remedial legislation.
For more information on this topic, please reach out to Douglas Stewart and Leo Rebello.
The authors would like to thank Jordan Picheniuk, summer law student, for his contributions to this insight.
[i] Echelon Insurance v. Zenith Insurance Company, 2026 ONSC 1214, at paras. 6-11.
[ii] Ibid at paras. 19-22.
[iii] Ibid at paras. 16, 24-25.
[iv] Ibid at paras. 17-18.
[v] Ibid at paras. 32-38.
[vi] Ibid at paras. 42-44.
[vii] Ibid at paras. 50-51.
[viii] Ibid at para. 53.
[ix] Ibid at paras. 56-58.
[x] Ibid at paras. 60-70.
[xi] Ibid at para. 74.
[xii] Ibid at para. 76.
