Dundas et al. v. Zurich Canada et al.,

• Jurisdiction: Ontario
• Judge: Blair,Cronk,Strathy
• Neutral Citation: 2012 ONCA 181
• Subject Matter: INSURANCE,EXECUTORS AND ADMINISTRATORS,LIMITATION OF ACTIONS
• Citation: 2012 ONCA 181,(2012), 290 O.A.C. 370 (CA),290 OAC 370,(2012), 290 OAC 370 (CA),290 O.A.C. 370
• Date: 24 January 2012
• Court: Court of Appeal (Ontario)

Dundas v. Zurich Can. (2012), 290 O.A.C. 370 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. MR.017

Joyce Maebell Dundas, Christopher Howard Dundas, Pamela Joyce Cake, Roger Garnet Dundas, Karin Edith Thomas, Lisa Ella Marie Roach, Barbara Elizabeth Dundas, Irene Hickson, Robert Hickson, William Hickson, Geraldine Willan, Joan Gerard, May Hickson, Josephine Hines and Candace Hickson, a Minor, by her Litigation Guardian, William Hickson (plaintiffs/appellants) v. Zurich Canada, Zurich Insurance Company and Zurich Insurance Company of Canada (defendants/respondents)

(C53291; 2012 ONCA 181)

Indexed As: Dundas et al. v. Zurich Canada et al.

Ontario Court of Appeal

Cronk and Blair, JJ.A. and Strathy, J.(ad hoc)

March 22, 2012.

Summary:

Four people died in an automobile accident. The three passengers' families sued the driver's estate (insured) who had $1,000,000 in coverage with the standard automobile policy. The action was settled. The insured sued the insurer alleging that it breached its duty of good faith, exposed the insured to claims in excess of the policy limits, failed to pay the policy limits on a timely basis, and failed to pay the limits into an interest-bearing account. The insured assigned the cause of action to the families of two of the three passengers (the plaintiffs). The insurer sought summary judgment dismissing the action on the basis that the limitation period had expired.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 132, allowed the motion. The plaintiffs appealed.

The Ontario Court of Appeal allowed the appeal. The action was within the applicable limitation period.

Executors and Administrators - Topic 5402

Actions by and against representatives - Limitation of actions - Applicable limitation period - Four people died in an automobile accident - The three passengers' families sued the estate of the driver (Reid) who had $1M in coverage with the standard automobile policy (SAP) - The action was settled - The estate sued the insurer alleging that it breached its duty of good faith, exposed the estate to claims in excess of the policy limits, failed to pay the policy limits on a timely basis, and failed to pay the limits into an interest-bearing account - The estate argued that the action was statute-barred because it was not brought within two years of Reid's death, relying on s. 38(3) of the Trustee Act, which stipulated that all actions brought by an estate be brought within two years of the deceased's death - The Ontario Court of Appeal rejected the argument - This limitation period was concerned with the survival of claims for wrongs done to the deceased in his or her lifetime - Here, the policy of insurance issued by the insurer to Reid passed to his estate on his death - The injury in question was not an injury to Reid, but an injury to his estate - See paragraphs 55 to 60.

Insurance - Topic 1871

The insurance contract - Interpretation of contract - Limitation period - Four people died in an automobile accident - The three passengers' families sued the driver's estate (insured) who had $1M in coverage with the standard automobile policy (SAP) - The action was settled - The insured sued the insurer alleging that it breached its duty of good faith, exposed the insured to claims in excess of the policy limits, failed to pay the policy limits on a timely basis, and failed to pay the limits into an interest-bearing account - A motions judge granted the insurer sought summary judgment dismissing the action on the basis that the one year limitation period in condition 6(3) of the SAP had expired - Condition 6(3) provided that the period to sue for loss or damage to an automobile was one year next after the happening of the loss and not afterwards - The Ontario Court of Appeal stated that the motions judge erred in failing to consider that the claim in question was "in respect of the loss or damage to person or property" and in failing to consider when the cause of action against the insurer "arose" under condition 6(3), in the context of condition 6(2) - Had he done so, he would have concluded that the cause of action arose only once the insured's loss had been ascertained "by a judgment against the insured after trial of the issue or by agreement between the parties with the written consent of the Insurer" within the meaning of condition 6(2) - See paragraphs 33 to 44.

Insurance - Topic 1871

The insurance contract - Interpretation of contract - Limitation period - Four people died in an automobile accident - The three passengers' families sued the driver's estate (insured) who had $1M in coverage with the standard automobile policy (SAP) - The action was settled - The insured sued the insurer alleging that it breached its duty of good faith, exposed the insured to claims in excess of the policy limits, failed to pay the policy limits on a timely basis, and failed to pay the limits into an interest-bearing account - A motions judge granted the insurer sought summary judgment dismissing the action on the basis that the one year limitation period in condition 6(3) of the SAP had expired - Condition 6(3) provided that the period to sue for loss or damage to an automobile was one year next after the happening of the loss and not afterwards - The Ontario Court of Appeal held that this action was not a proceeding under the insurance contract respecting the loss or damage to person or property within the meaning of condition 6(3) - It was not a claim for indemnity under the contract - The limitation period in statutory conditions 6(2) and 6(3) did not apply - Rather, the action contained a claim for breach of the insurer's independent duty of utmost good faith and was subject to the general six-year limitation period contained in the Limitations Act - See paragraphs 46 to 54.

Insurance - Topic 3357

Payment of insurance proceeds - Limitation of actions - When limitation period commences - [See both Insurance - Topic 1871 ].

Insurance - Topic 5130

Automobile insurance - Compulsory government schemes - Proceedings against insurer - Limitations - [See both Insurance - Topic 1871 ].

Limitation of Actions - Topic 2324

Actions in contract - Insurance contracts - When time begins to run - [See both Insurance - Topic 1871 ].

Cases Noticed:

McNaughton Automotive Ltd. v. Co-Operators General Insurance Co. - see Polowin (David) Real Estate Ltd. v. Dominion of Canada General Insurance Co.

Polowin (David) Real Estate Ltd. v. Dominion of Canada General Insurance Co., [2003] O.T.C. 757; 66 O.R.(3d) 112 (Sup. Ct.), revd. in part (2005), 199 O.A.C. 266; 76 O.R.(3d) 161 (C.A.), refd to. [para. 20].

Jeffery v. Guarantee Co. of North America (1985), 50 O.R.(2d) 494 (H.C.), refd to. [para. 27].

Terroco Industries Ltd. v. Sovereign General Insurance Co. (2007), 404 A.R. 252; 394 W.A.C. 252; 2007 ABCA 149, refd to. [para. 28].

Raymond v. Canadian Surety Co., [1995] A.J. No. 1561 (Q.B.), refd to. [para. 28].

Burnett v. Palatine Insurance Co. (1965), 54 D.L.R.(2d) 378 (N.B.C.A.), refd to. [para. 28].

Roth v. Weston Estate et al. (1997), 104 O.A.C. 316; 36 O.R.(3d) 513 (C.A.), refd to. [para. 31].

Berardinelli v. Ontario Housing Corp. et al., [1979] 1 S.C.R. 275; 23 N.R. 298, refd to. [para. 40].

Arsenault v. Dumfries Mutual Insurance Co. (2002), 152 O.A.C. 224; 57 O.R.(3d) 625 (C.A.), refd to. [para. 48].

Nowegijick v. Minister of National Revenue et al., [1983] 1 S.C.R. 29; 46 N.R. 41, refd to. [para. 48].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201, refd to. [para. 50].

Ferme Gérald Laplante & Fils ltée v. Grenville Patron Mutual Fire Insurance Co. (2002), 164 O.A.C. 1; 61 O.R.(3d) 481 (C.A.), leave to appeal refused (2003), 320 N.R. 395; 191 O.A.C. 397 (S.C.C.), refd to. [para. 50].

702535 Ontario Inc. et al. v. Non-Marine Underwriters, Lloyd's, London et al. (2000), 130 O.A.C. 373; 184 D.L.R.(4th) 687 (C.A.), leave to appeal refused (2000), 264 N.R. 400; 145 O.A.C. 400 (S.C.C.), refd to. [para. 51].

Waschkowski v. Hopkinson Estate (2000), 129 O.A.C. 287; 47 O.R.(3d) 370 (C.A.), refd to. [para. 57].

Lafrance Estate et al. v. Canada (Attorney General) et al. (2003), 169 O.A.C. 376; 64 O.R.(3d) 1 (C.A.), refd to. [para. 58].

English Estate v. Tregal Holdings Ltd. et al., [2004] O.T.C. 574 (Sup. Ct.), refd to. [para. 59].

Authors and Works Noticed:

Brown, Craig, and Donnelly, Thomas, Insurance Law in Canada (1999 Looseleaf Ed.), vol. 1, p. 10-22 [para. 42].

Counsel:

Glenn A. Smith and Dena N. Varah, for the appellants;

David F. Murray and Dylan Crosby, for the respondents.

This appeal was heard on January 24, 2012, by Cronk and Blair, JJ.A. and Strathy, J.(ad hoc), of the Ontario Court of Appeal. On March 22, 2012, Strathy, J.(ad hoc), delivered the following judgment for the court.