Issue: In what circumstances will the one year limitation period be extended or be considered to have run not from the date of loss but at a later date?
Answer: In this case, one example of the limitation period starting at a later date is where the insurer has asked its insured/the car owner for an Examination Under Oath under the provisions of the Insurance Act, as well as a request for documentation, in the form of undertakings, arising from that examination under oath.
In L'Esperance, the insurer brought a summary judgment motion seeking dismissal of the action against the tort adjuster, personally, who adjusted this file, as well as the insurer Economical.
The insurer's primary argument was the expiration of the limitation period. The car was stolen on June 3, 2011 and the lawsuit was not commenced until August, 2012.
The facts, however, seemed to indicate that Economical continued to adjust the claim even when the one year limitation period had passed, which was an important consideration with the reasoning of Mr. Justice Phillips:
- car stolen on June 3, 2011 and reported to insurer;
- June 4, 2011 - police recovered vehicle, damaged to the point of having to be written off
- Aug 18, 2011 - Proof of Loss submitted;
- Aug 21, 2011 - insurer requested an Examination Under Oath;
- April 2012 - examination under oath conducted. Dispute as to who was to blame for this delay, Mr. Justice Phillips found that the issue of blame was unclear
- July 2012 - insurer asked, on two separate occasions, for undertakings productions arising from the April/2012 examination under oath;
- Aug 15, 2012 - insurer advised, for the first time, that the claim was denied and that the limitation period had expired; and
- late Aug, 2012 - insured commenced an action against Economical.
The critical point here for the Judge was that the insurer continued to engage the insured actively past the limitation period and that the insured was also prohibited, pursuant to the Insurance Act, from commencing an action unless he had complied with the insurer's request for an examination under oath.
A second rationale is that the insured/plaintiff here specifically plead bad faith as an independent tort within the Statement of Claim, which would not be caught by the one year limitation period.
Gregory Chang
Toronto Personal Injury and Insurance Lawyer
