Executive Summary: Key Legal and Evidentiary Issues

• Central interpretive issue was whether “employed” under s. 5(1) of the SABS requires payment directly by the employer or simply an employment relationship plus employment-related income
• Tribunal’s reliance on Arab v. Unica Insurance was challenged as an unduly narrow reading that turned on “exchange” of wages rather than the broader concept of receiving income connected to work
• Evidence concerning the WSIB Work Transition Plan, including the requirement to work at Cole & Associates and to attend college as a condition of receiving $651.51 per week, was pivotal in establishing an employment relationship and income loss
• The factual matrix of two separate accidents (workplace accident leading to WSIB wage-loss benefits and later catastrophic auto accident causing paraplegia) framed whether there was an “employment-related economic loss” compensable under the SABS
• Standard of review questions arose from the combined statutory appeal and judicial review, engaging correctness for legal errors and reasonableness for mixed fact and law in the Tribunal’s interpretation
• The Divisional Court ultimately found the Tribunal’s interpretation unreasonable and erroneous in law, set aside both LAT decisions, and remitted the matter while awarding Coban his costs of $16,600

Background and factual chronology
Josef Coban was working as a contractor when he suffered a workplace accident on December 15, 2014. That injury left him unable to continue in his previous contracting work, and he sought compensation under the Workplace Safety and Insurance Act, 1997 (WSIA). A Work Transition Plan (WTP) was developed with the Workplace Safety and Insurance Board (WSIB) to retrain him as an architectural technologist, with the goal of obtaining work in that field. Under the WTP, Coban was required to comply with specified activities in order to receive WSIB wage-loss benefits.
As part of this plan, Coban enrolled in a two-year program at Algonquin College. While he was participating in the WTP, the WSIB paid him $651.51 per week in loss of earnings benefits. These payments were not discretionary assistance. Rather, they were compensation under s. 43(1) of the WSIA for loss of earnings as a result of the workplace injury and were conditional on his compliance with the WTP requirements.
When he completed the initial college program, Coban was offered a work placement with Cole & Associates Architects Inc. (Cole). The WSIB then amended his WTP so that, from July 3, 2018 to August 31, 2018, he would work 37.5 hours per week at Cole. Cole itself did not pay him; he continued receiving $651.51 per week from the WSIB, contingent on compliance with the WTP. The Tribunal later accepted that he was in an employment relationship with Cole during this period.
After this full-time work placement, Coban enrolled in a third year at Algonquin College to obtain an Architectural Technologist Diploma. He also wanted to keep working at Cole on a part-time basis. The WTP was amended again to require him to both attend college and work eight hours per week at Cole during the semester, up to December 21, 2018. As before, Cole did not pay wages directly, but Coban continued to receive $651.51 per week from WSIB so long as he fulfilled his WTP obligations, which now expressly included the eight hours of weekly work at Cole.

The automobile accident and loss of income
On October 6, 2018, Coban was involved in a serious motor vehicle accident. The injuries from this second accident were far more severe: he was rendered a paraplegic. Because of this catastrophic impairment, he could no longer attend Algonquin College and could not continue performing his eight hours per week of work at Cole as required by the WTP.
Shortly afterwards, on October 18, 2018, the WSIB wrote to Coban advising him that if he could not resume participation in his Work Transition Plan by November 5, 2018, he would no longer be entitled to receive $651.51 per week, and his loss of earnings benefits would be reduced. Coban was unable to return to either school or work at Cole due to his paraplegia, and his benefits were accordingly reduced. The motor vehicle accident thus directly disrupted both his employment relationship and his ability to meet WTP conditions, causing a loss of income that had been flowing through the WSIB wage-loss scheme.

The insurance claim and the key statutory language
Following the car accident, Coban sought income replacement benefits from his automobile insurer, Allstate Insurance Company, under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (SABS). Section 5(1) of the SABS provides that an insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if certain conditions are met. The relevant condition is that, at the time of the accident, the insured person “was employed” and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.
The dispute in this case turned entirely on the meaning of “was employed at the time of the accident” in s. 5(1). At the accident date, Coban was working eight hours per week at Cole, under an acknowledged employment relationship, but he received his weekly $651.51 income from the WSIB, not from Cole directly. The question was whether this arrangement—employment relationship with the firm plus income paid via WSIB conditional on fulfilling that work—satisfied the SABS requirement that he be “employed” for purposes of entitlement to income replacement benefits.
Allstate rejected the claim on the basis that Coban was not “employed” within the meaning of s. 5(1) because the money came from WSIB, not Cole, and was said not to be “in exchange” for services to the employer.

The Licence Appeal Tribunal’s contrasting decisions
Coban brought the dispute to the Licence Appeal Tribunal (LAT). In the first LAT decision, Adjudicator Demarce found that he was “employed” at the time of the accident and therefore entitled to income replacement benefits. That initial success did not stand, however. Allstate sought reconsideration, which was granted in November 2023, and a new hearing was ordered before a different adjudicator.
At the second hearing, Adjudicator Levitsky reached the opposite conclusion in a November 28, 2024 decision. She held that Coban was not “employed” within s. 5(1) SABS and thus not eligible for income replacement benefits. A subsequent reconsideration request by Coban was dismissed in April 2025.
In the second decision, the Tribunal took its lead from the Divisional Court’s earlier judgment in Arab v. Unica Insurance. It read Arab as holding that “employed” requires being “connected to income-earning and receiving wages in exchange for services being rendered.” The Tribunal accepted that Coban had an employment relationship with Cole, but focused on the fact that he was not paid by Cole itself. Instead, he received income from the WSIB and, in the Tribunal’s view, would have continued to receive the same amount even if his WTP had not required him to work at Cole so long as he attended school. On this reading, his income was not received “in exchange” for services to Cole, and therefore he was not “employed” for SABS purposes.

Standards of review and procedural posture before the Divisional Court
Coban challenged the LAT outcome through both a statutory appeal and an application for judicial review. Under s. 11(6) of the Licence Appeal Tribunal Act, 1999, decisions made under the Insurance Act can be appealed to the Divisional Court, but only on questions of law. The standard of review on such legal questions is correctness, as articulated in Vavilov.
At the same time, s. 2(1) of the Judicial Review Procedure Act permits judicial review of the LAT’s decisions more broadly. Where an applicant pursues both an appeal and judicial review, the court may examine not only pure questions of law (reviewed for correctness) but also questions of fact and mixed fact and law (reviewed on reasonableness). The Supreme Court of Canada’s decision in Yatar v. TD Insurance Meloche Monnex confirmed this combined approach in the LAT–SABS context. This dual track allowed the Divisional Court to scrutinize both whether the Tribunal interpreted “employed” correctly as a matter of law and whether its overall reasoning was reasonable in light of the statutory context and the evidentiary record.

Text, context and purpose: interpreting “employed” in s. 5(1) SABS
In its analysis, the Divisional Court emphasized that the Tribunal failed to properly apply established principles of statutory interpretation to s. 5(1). Modern interpretation requires that the words of a statute be read in their entire context, in their grammatical and ordinary sense, harmoniously with the scheme of the Act, its object, and the legislature’s intent. The court summarized these principles with reference to leading authorities, stressing that interpretation must look at text, context and purpose together, with the statutory text serving as the “anchor” but not the end of the inquiry.
The SABS functions within Ontario’s no-fault automobile insurance regime, where, subject to defined exceptions, motor vehicle accident victims generally cannot sue in tort for economic loss and must instead look to their own insurer for statutory benefits. The SABS is meant to cover most economic losses on a no-fault basis and is a consumer protection instrument aimed at reducing economic hardship for accident victims. Within that scheme, income replacement benefits under s. 5(1) are specifically intended to replace income that the insured no longer receives because of the accident.
Against that policy backdrop, the court stressed that coverage provisions in insurance law, including in statutory schemes like the SABS, should be construed broadly rather than narrowly. Given that the no-fault scheme effectively displaces traditional tort compensation, an interpretation that denies benefits to someone who has clearly suffered an employment-related income loss risks undermining the compensatory purpose of the legislation.

Why the WSIB-funded work counted as “employment”
Turning to Coban’s particular circumstances, the court noted that he was a “worker” within the meaning of WSIA, a term that includes not only those employed under a contract of service but also students and “learners.” His weekly WSIB payments were not charity or social welfare; they were statutory wage-loss benefits under a public insurance program, funded by premiums and payable only because he had suffered a compensable workplace injury.
Crucially, under s. 43(3) WSIA, the amount of his benefits depended on his compliance with the Work Transition Plan. Compliance at the relevant time included attending Algonquin College and working eight hours per week at Cole. The Tribunal had already accepted that there was an employment relationship with Cole, even though Cole itself did not issue his paycheque. What really mattered, the Divisional Court held, was that Coban was in an employment relationship and was receiving income that was tied to his ability to carry out that work and training.
Following the automobile accident and resulting paraplegia, Coban was no longer able to work at Cole or attend school, and he lost the level of WSIB wage-loss income that had been contingent on those activities. This was a clear employment-related economic loss resulting from the car accident. From the perspective of the SABS scheme and its income-replacement purpose, the source of the income (WSIB versus employer) was not determinative. The combination of an employment relationship and the receipt of employment-related income satisfied the requirement that he be “employed” at the time of the accident.

Reassessing Arab v. Unica and related case law
The Divisional Court then turned to Arab v. Unica Insurance, the decision on which the Tribunal had heavily relied. In Arab, the insured had a job but stopped attending work months before the accident, was not being paid, and remained on the payroll only in a formal sense until his employment was later terminated. At the time of the accident, he was neither attending work nor receiving income. Both the LAT and the Divisional Court concluded he was not “employed” for s. 5(1) purposes.
In Arab, the court had said that s. 5(1) is not just about the existence of a formal employment relationship, but is concerned with eligibility for income replacement benefits “with reference to the exchange of wages, salary, or other remuneration for services.” The Tribunal in Coban seized on the word “exchange,” reasoning that there must be a direct quid pro quo between employer and worker: wages must flow from the employer itself in exchange for services rendered. Because Coban’s monies came from WSIB and he likely would have received the same amount if his plan had required only school attendance, the Tribunal held that there was no such exchange.
The Divisional Court in Coban rejected this restrictive reading. It explained that the result in Arab did not turn on a technical requirement that income be “exchanged” by the employer; rather, Arab hinged on the fact that the claimant there was not receiving any employment income at all at the time of the accident. The same logic underpinned a LAT decision in T.M. v. Aviva General Insurance, later endorsed in Arab, where the applicant was on unpaid leave and had no earnings or Employment Insurance benefits. In those cases, treating such persons as “employed” would have yielded an absurd result—being technically employed but entitled to a calculated IRB of zero because no income existed to replace.
Similarly, in Nouracham v. Aviva General Insurance Co., the court upheld a finding that the applicant was not “employed” because the accident did not occur during a period when the applicant was receiving remuneration for services. The common thread is the receipt of income, not its precise legal source. In Coban’s situation, unlike Arab, T.M. and Nouracham, there clearly was income being received—weekly WSIB wage-loss benefits—linked to his ongoing participation in work and training.

Limiting over-reliance on judicial phrasing and hypothetical income
The Divisional Court characterized the “exchange” language in Arab as obiter, meaning it was not essential to the result and should not be treated as if it were statutory text. It cited authority cautioning against reading every phrase in a judgment as if it were enacted legislation, noting that the common law develops by experience and fact-specific application.
The court also rejected the Tribunal’s focus on what Coban would have received if the WSIB had structured his WTP differently—for example, by requiring only school attendance and no work at Cole. For s. 5(1) SABS, the question is what actually existed at the time of the accident, not a counterfactual benefits structure that might have been adopted. In reality, Coban was in an employment relationship and receiving income conditional on performing that work and training. Hypothetical family support or alternative WSIB configurations do not negate actual employment and income for the purposes of income-replacement coverage.

Confirming a broader and purposive definition of “employed”
Drawing the strands together, the Divisional Court held that an appropriate interpretation of “employed” in s. 5(1) requires two things: the existence of an employment relationship and the receipt of employment-related income at the time of the accident. This reading, the court found, is plausible on the statutory text, promotes the legislative intent of compensating accident-related income loss, and is acceptable in that it yields a result that is reasonable and just.
In support of this, the court noted that the Employment Standards Act definition of “employee” includes someone who receives training from an employer in a skill used by the employer’s employees. Although the ESA and SABS are not strictly in pari materia, cross-statute comparison is a recognized interpretive tool. That broader statutory treatment of trainees and learners reinforces the view that an individual like Coban, working at Cole while being trained and supported through WSIB wage-loss benefits, should be seen as “employed” for purposes of income-replacement insurance coverage.
From an equity standpoint, the court stressed that it would be neither reasonable nor just to deny benefits essentially because Coban had the misfortune of suffering both a workplace accident and a subsequent automobile accident. He was receiving WSIB benefits involuntarily due to the first accident; had that not occurred, he likely would have been conventionally employed and plainly eligible for income replacement benefits under the SABS after the car crash. Using the interaction of the two accidents to strip him of entitlement under a consumer-protection scheme ran counter to both legislative purpose and basic fairness.

Final outcome and monetary consequences
On the basis of these conclusions, the Divisional Court held that the LAT had erred in law and that its decision was also unreasonable. It allowed Coban’s appeal and granted his application for judicial review, setting aside both the November 28, 2024 LAT decision and the April 23, 2025 reconsideration decision. The matter was remitted to the Tribunal for a fresh hearing before a different adjudicator, with directions that the issue of entitlement be addressed in accordance with the court’s interpretation—that Coban was “employed” within the meaning of s. 5(1) SABS at the time of the accident. The amount of any income replacement benefits owed to him remains undetermined and will be calculated by the Tribunal upon rehearing.
In terms of financial orders made by the court itself, the Divisional Court awarded costs in favour of Josef Coban as the successful party. Allstate Insurance Company was ordered to pay him a total of $16,600, inclusive of disbursements and GST. No other specific damages or benefit amounts were fixed in this decision; any additional monetary recovery through SABS income replacement benefits will depend on the Tribunal’s determination at the rehearing, and those amounts cannot yet be ascertained from this judgment.