July v. Neal and Home Insurance Co., (1986) 17 O.A.C. 390 (CA)

• Judge: MacKinnon, A.C.J.O., Dubin and Morden, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 21, 1986
• Jurisdiction: Ontario
• Citations: (1986), 17 O.A.C. 390 (CA);1986 CanLII 149 (NS CA);1986 CanLII 149 (ON CA);57 OR (2d) 129;32 DLR (4th) 463;[1986] 5 WWR 504;70 BCLR (2d) 362;19 CCLI 230;[1986] OJ No 1101 (QL);12 CPC (2d) 303;17 OAC 390;[1986] ILR 1;41 RPR 295;44 MVR 1

July v. Neal (1986), 17 O.A.C. 390 (CA)

MLB headnote and full text

Harold M. July and Sandra July (plaintiffs/appellants) v. Floyd Raymond Neal (defendant/respondent) and Home Insurance Company (respondent)

Indexed As: July v. Neal and Home Insurance Co.

Ontario Court of Appeal

MacKinnon, A.C.J.O., Dubin and Morden, JJ.A.

October 30, 1986.

Summary:

On August 30, 1981, the plaintiffs were involved in a motor vehicle accident with a vehicle operated by the defendant, Neal, and an unidentified third vehicle. The identity of the driver of the third vehicle was never ascertained. The plaintiffs commenced an action in August 1983, naming the defendant, Neal, as the only other party. In May 1984, the plaintiffs contacted their insurer, advising the insurer that they would be looking to it for the "loss that may be found caused by the hit and run driver" pursuant to the uninsured motorist provisions in the plaintiffs' insurance policy. The plaintiffs applied to add the insurer as a party defendant to their action against defendant, Neal. A motions judge dismissed their application on the ground that the applicable two year limitation period for joining the insurer had long since past (Insurance Act, regulation 535, s. 8(2)). The plaintiffs appealed.

The Ontario Court of Appeal allowed the appeal and allowed the plaintiffs' application to join the insurer as a party defendant, notwithstanding that the application was made more than two years after the date of the accident.

Insurance - Topic 4105

Automobile - Uninsured or underinsured motorist coverage - Adding insurer as defendant - Limitation period - An insured was involved in an accident with the defendant and an uninsured motorist - The insured sued only the defendant - At discovery the insured learned that the defendant might not be responsible, but rather the uninsured motorist - The insured sought to add the insurer as a party defendant - The insurer argued that the action was not commenced within two years of the date of the accident as required by s. 8(2) of the Insurance Act Regulations - The Ontario Court of Appeal held that in such circumstances the time limitation against the insurer did not necessarily begin to run on the date of the accident, but rather "when the material facts on which the claim is based have been discovered or ought to have been discovered by the plaintiff [the insured] by the exercise of reasonable diligence".

Words and Phrases

Cause of action - The Ontario Court of Appeal discussed the meaning of phrase as used in s. 8(2) of the Ontario Insurance Act Regulations, regulation 535, R.R.O. 1980.

Cases Noticed:

Schmidt v. Janitsch et al. (1984), 45 O.R.(2d) 11, consd. [paras. 4, 10, 11, 12, 14].

Sacchetti et al. v. Kramaric et al. (1983), 43 O.R.(2d) 51, refd to. [para. 10].

Peters et al. v. Fireman's Fund Company of Canada (1984), 45 O.R.(2d) 149, consd. [para. 12].

Central Trust Company v. Rafuse and Cordon (1986), 69 N.R. 321, refd to. [paras. 17, 24].

Stevenson v. Reliance Petroleum Limited, [1956] S.C.R. 936, refd to. [para. 18].

Watts v. Centennial Insurance Co. (1967), 65 D.L.R.(2d) 529, refd to. [para. 18].

Letang v. Cooper, [1965] 1 Q.B. 232, refd to. [para. 25].

Consumers Glass Co. Ltd. v. Foundation Co. of Canada Ltd./Compagnie Foundation du Canada Ltée et al. (1985), 9 O.A.C. 193; 51 O.R.(2d) 385, consd. [paras. 25, 32].

Nielsen v. Kamloops, City of, and Hughes and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 32].

Statutes Noticed:

Insurance Act, R.S.O. 1980, c. 218, sect. 231(1)(a) [para. 5].

Insurance Act Regulations, R.R.O. 1980, Regulation 535, sect. 1 [para. 6]; sect. 2(1)(c), sect. 3(a), sect. 4(1)(c) [paras. 7 et seq.]; sect. 5 [para. 25]; sect. 6(1)(a), sect. 8(1), sect. 8(2) [paras. 7 et seq.].

Counsel:

John Cannings, for the appellants;

P. Samworth, for the respondent, Home Insurance Company.

This appeal was heard on May 21, 1986, before MacKinnon, A.C.J.O., Dubin and Morden, JJ.A., of the Ontario Court of Appeal. The following decision of the Court of Appeal was released on October 30, 1986, including the following opinions:

MacKinnon, A.C.J.O. (Dubin, J.A., concurring) - see paragraphs 1 to 22;

Morden, J.A. - see paragraphs 23 to 34.