Oliver v. Elite Insurance Co., 2014 NSSC 413

• Judge: Rosinski, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: September 11, 2014
• Jurisdiction: Nova Scotia
• Citations: 2014 NSSC 413;(2014), 353 N.S.R.(2d) 232 (SC)

Oliver v. Elite Ins. (2014), 353 N.S.R.(2d) 232 (SC);

    1115 A.P.R. 232

MLB headnote and full text

Temp. Cite: [2014] N.S.R.(2d) TBEd. NO.046

Regan Oliver (plaintiff) v. Elite Insurance Company (defendant)

(Hfx. No. 415765; 2014 NSSC 413)

Indexed As: Oliver v. Elite Insurance Co.

Nova Scotia Supreme Court

Rosinski, J.

November 21, 2014.

Summary:

The plaintiff was injured in an October 2001 motor vehicle accident involving Sangster. The plaintiff initially returned to work, but since October 2004 was incapable of working and in receipt of CPP disability benefits. The plaintiff sued Sangster in October 2003. Mediation in June 2008 resulted in a settlement of the action for the maximum of Sangster's insurance coverage ($200,000). This was the first time that the plaintiff and his counsel were aware that Sangster's insurance coverage was limited to the $200,000 statutory minimum. The plaintiff immediately notified the plaintiff's parents' insurer (Elite) that an excess claim would be made against them under clause 6(c) of the SEF 44 endorsement. Clause 6(c) provided that any claim for such excess coverage had to be commenced within 12 months "from the date upon which the eligible claimant or his legal representative knew or ought to have known" that the plaintiff's claim exceeded the statutory minimum coverage. Calculating the value of the plaintiff's claim was complicated by his pre-existing cerebral palsy and further injuries in 2005 and 2006 motor vehicle accidents. The action against Elite was not commenced until May 2013. Elite's statement of defence raised a limitations of action defence. In May 2014, the plaintiff moved to disallow the limitation period defence. At issue was: (1) whether clause 6(c) was ambiguous and should be interpreted contra proferentem; (2) when the limitation period expired; (3) whether Elite waived the limitation period defence or was estopped from relying on it; and (4) whether the plaintiff should be granted relief under s. 3 of the Limitation of Actions Act.

The Nova Scotia Supreme Court held that clause 6(c) was not ambiguous. The time limitation commenced when the plaintiff had a body of evidence accumulated that would give him a reasonable chance of persuading a judge that his claims would exceed $200,000, with an allowance or "latitude" in relation to the assessment of the claim by the plaintiff's counsel. The plaintiff neither knew nor ought to have known that his claim exceeded $200,000 until the mediation brief was prepared on June 16, 2008. The 12 month limitation period commenced on June 16, 2008. Although Elite had not waived the limitation period, Elite had by its conduct and statements created a promissory estoppel respecting when the limitation period would commence. Accordingly, the limitation period expired June 2009 at the earliest and possibly as late as March 2010 (when mediation with Elite failed and Elite asked for the statement of claim). The court exercised its discretion to grant the plaintiff relief under s. 3 of the Limitation of Actions Act. The four year extension resulted in the plaintiff's action being commenced in time. The motion to disallow the limitation period defence was allowed and the action was permitted to proceed on its merits.

Insurance - Topic 1861

The insurance contract - Interpretation of contract - Contra proferentem rule - Ambiguity construed against insurer - [See Insurance - Topic 4112 ].

Insurance - Topic 3357

Payment of insurance proceeds - Limitation of actions - When limitation period commences - [See Insurance - Topic 4112 ].

Insurance - Topic 4112

Automobile insurance - Uninsured or underinsured motorist coverage - Limitation period - The plaintiff was injured in a 2001 motor vehicle accident caused by Sangster - The plaintiff sued Sangster in 2003 - The matter was mediated and settled in June 2008 for $200,000, being the maximum of Sangster's insurance coverage and the statutory minimum coverage in Nova Scotia at that time - The plaintiff immediately advised his parents' insurer (Elite) that he would be making an excess claim under clause 6(c) of the standard SEF 44 endorsement for underinsured or uninsured coverage - Discussions ensued and settlement negotiations failed - In March 2010 Elite told the plaintiff to file his statement of claim - It was not filed until May 2013 - Clause 6(c) provided that an SEF 44 claim was to be commenced within 12 months "from the date upon which the eligible claimant or his legal representative knew or ought to have known" that the claim exceeded the statutory minimum coverage - Elite pleaded the limitation period defence - The plaintiff moved to disallow the defence, arguing that clause 6(c) was ambiguous and should be interpreted contra proferentem, that Elite waived the limitation period or was estopped from relying on it, and that the plaintiff should be granted relief under s. 3 of the Limitation of Actions Act, which gave the court an equitable discretion to extend the limitation period up to four years - The Nova Scotia Supreme Court held that clause 6(c) was not ambiguous - The limitation period commenced running when the plaintiff had a body of evidence accumulated that would give him a reasonable chance of persuading a judge that his claims would exceed $200,000, with an allowance or "latitude" in relation to the assessment of the claim by the plaintiff's counsel - The plaintiff neither knew nor ought to have known that his claim exceeded $200,000 until the mediation brief was prepared on June 16, 2008 - The 12 month limitation period commenced on June 16, 2008 - Although Elite had not waived the limitation period, it had by its conduct and statements created a promissory estoppel respecting when the limitation period would commence - The limitation period expired June 2009 at the earliest and possibly as late as March 2010 (when Elite asked for the statement of claim) - The court exercised its discretion to grant the plaintiff relief under s. 3 of the Limitation of Actions Act - The four year maximum extension resulted in the plaintiff's action being commenced in time - The motion to disallow the limitation period defence was allowed and the action was permitted to proceed on its merits - See paragraphs 127 to 194.

Insurance - Topic 5194

Automobile insurance - Compulsory government schemes - Uninsured or underinsured motorist coverage - Limitation period - [See Insurance - Topic 4112 ].

Limitation of Actions - Topic 9415

Bars - Disallowance of defence - Application of promissory estoppel - [See Insurance - Topic 4112 ].

Limitation of Actions - Topic 9424

Bars - Disallowance of defence - Considerations - Delay - [See Insurance - Topic 4112 ].

Cases Noticed:

Shaver v. Co-operators General Insurance Co. (2011), 515 A.R. 345; 532 W.A.C. 345; 2011 ABCA 367, disagreed with [para. 92].

Mellon v. Gore Mutual Insurance Co. (1995), 173 A.R. 385 (Q.B.), revd. (1995), 174 A.R. 200; 102 W.A.C. 200; 1995 ABCA 340, disagreed with [para. 92].

Wawanesa Mutual Insurance Co. v. Shoemaker (1993), 9 Alta. L.R.(3d) 214 (T.D.), affd. (1994), 155 A.R. 2; 73 W.A.C. 2 (C.A.), disagreed with [para. 92].

Roque v. Pilot Insurance Co. (2012), 291 O.A.C. 167; 2012 ONCA 311, agreed with [para. 94].

McCook v. Subramaniam, [2008] O.T.C. Uned. N89; 172 A.C.W.S.(3d) 344 (Sup. Ct. Master), agreed with [para. 94].

Caruso v. Guarantee Co. of North America (1996), 95 O.A.C. 174 (C.A.), refd to. [para. 95].

Foster v. Young et al., [2002] O.A.C. Uned. 231 (C.A.), refd to. [para. 96].

Ursich v. Security National Insurance Co., [2005] Yukon Cases (SC) 72; 2005 YKSC 72, refd to. [para. 99].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, refd to. [para. 102].

Binder v. Royal Bank of Canada et al. (2005), 234 N.S.R.(2d) 109; 745 A.P.R. 109; 2005 NSCA 94, refd to. [para. 102].

Marchischuk v. Dominion Industrial Supplies Ltd. et al., [1991] 2 S.C.R. 61; 125 N.R. 306; 73 Man.R.(2d) 271; 3 W.A.C. 271, refd to. [para. 102].

Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50; 125 N.R. 294; 47 O.A.C. 333, refd to. [para. 107].

Anderson v. Co-Operative Fire & Casualty Co. (1983), 58 N.S.R.(2d) 163; 123 A.P.R. 163 (T.D.), refd to. [para. 109].

Mills et al. v. Drum Head Estates Ltd. et al. (2011), 309 N.S.R.(2d) 69; 979 A.P.R. 69; 2011 NSCA 93, refd to. [para. 109].

MacCulloch v. McInnes, Cooper & Robertson (1995), 140 N.S.R.(2d) 220; 399 A.P.R. 220 (C.A.), refd to. [para. 109].

Morris v. Royal Bank of Canada (2007), 254 N.S.R.(2d) 134; 810 A.P.R. 134; 2007 NSSC 73, refd to. [para. 112].

Hiscock v. Pasher (2008), 270 N.S.R.(2d) 169; 865 A.P.R. 169; 2008 NSCA 101, refd to. [para. 112].

Economical Insurance Group v. Master Forestry Ltd. (2012), 321 N.S.R.(2d) 379; 1018 A.P.R. 379; 2012 NSSC 353, refd to. [para. 112].

Lord v. Smith (2013), 328 N.S.R.(2d) 189; 1039 A.P.R. 189; 2013 NSCA 34, refd to. [para. 112].

Palmer Estate v. MacInnis et al. (2013), 337 N.S.R.(2d) 382; 1067 A.P.R. 382; 2013 NSSC 391, refd to. [para. 112].

Somersall v. Friedman et al. (2002), 292 N.R. 1; 163 O.A.C. 201; 2002 SCC 59, refd to. [para. 126].

Campbell-MacIsaac et al. v. Deveaux et al. (2004), 224 N.S.R.(2d) 315; 708 A.P.R. 315; 2004 NSCA 87, refd to. [para. 128].

Gibbens v. Co-operators Life Insurance Co. (2009), 396 N.R. 165; 278 B.C.A.C. 283; 471 W.A.C. 283; 2009 SCC 59, refd to. [para. 130].

Dell Computer Corp. v. Union des consommateurs et al. (2007), 366 N.R. 1; 2007 SCC 34, refd to. [para. 131].

Scott v. Wawanesa Mutual Insurance Co., [1989] 1 S.C.R. 1445; 94 N.R. 261, refd to. [para. 133].

Canadian National Railway Co. et al. v. Royal & Sun Alliance Insurance Co. of Canada et al., [2008] 3 S.C.R. 453; 381 N.R. 332; 243 O.A.C. 340; 2008 SCC 66, refd to. [para. 133].

Burton v. Cochrane (1995), 85 O.A.C. 391 (Div. Ct.), refd to. [para. 141].

Hampton v. Traders General Insurance Co., [1996] O.J. No. 41 (Gen. Div.), refd to. [para. 141].

Sabean et al. v. Portage LaPrairie Mutual Insurance Co. (2013), 338 N.S.R.(2d) 14; 1071 A.P.R. 14; 2013 NSSC 306, refd to. [para. 153].

Gillis v. Bourgard (1983), 41 O.R.(2d) 107 (C.A.), refd to. [para. 170].

Industrial Alliance Insurance and Financial Services Inc. v. Brine (2014), 346 N.S.R.(2d) 315; 1095 A.P.R. 315; 2014 NSSC 219, refd to. [para. 177].

Bhasin v. Hrynew et al. (2014), 464 N.R. 254; 584 A.R. 6; 623 W.A.C. 6; 2014 SCC 71, refd to. [para. 177].

Butler et al. v. Southam Inc. et al. (2001), 197 N.S.R.(2d) 97; 616 A.P.R. 97; 2001 NSCA 121, refd to. [para. 190].

Statutes Noticed:

Limitation of Actions Act, R.S.N.S. 1989, c. 258, sect. 3 [para. 188].

Authors and Works Noticed:

Brown, Craig, and Donnelly, Thomas, Insurance Law in Canada, p. 12-3 [para. 105].

Counsel:

John Rafferty, Q.C., and Daniel Roper, for the plaintiff;

J. Scott Barnett, for the defendant.

This motion was heard on September 11, 2014, at Halifax, N.S., before Rosinski, J., of the Nova Scotia Supreme Court, who delivered the following judgment on November 21, 2014.