Smith v. Co-operators General Insurance Co., 2002 SCC 30

• Judge: McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ.
• Court: Supreme Court (Canada)
• Case Date: March 28, 2002
• Jurisdiction: Canada (Federal)
• Citations: 2002 SCC 30;(2002), 158 O.A.C. 1 (SCC);[2002] SCJ No 34 (QL);210 DLR (4th) 443;286 NR 178;[2002] 2 SCR 129;36 CCLI (3d) 1;JE 2002-663;112 ACWS (3d) 950;158 OAC 1

Smith v. Co-op General (2002), 158 O.A.C. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

....................

Temp. Cite: [2002] O.A.C. TBEd. MR.054

Bernadette Smith (appellant) v. Co-operators General Insurance Company (respondent)

(27875; 2002 SCC 30)

Indexed As: Smith v. Co-operators General Insurance Co.

Supreme Court of Canada

McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ.

March 28, 2002.

Summary:

The plaintiff received statutory accident benefits from her insurer following a motor vehicle accident. The insurer ceased paying no-fault income replacement benefits and gave written notice of its intention to stop all further payments. Mediation of the statutory accident benefits claim failed. The plaintiff commenced an action against the insurer more than two years after the insurer's written denial of benefits, seeking income replacement benefits and loss of earning capacity benefits. The latter benefits claim was not mediated. The insurer moved to dismiss the action as being barred by the two year limitation period in s. 281(5) of the Insurance Act.

The Ontario Superior Court allowed the insurer's motion. The action was barred by the limitation period and the insurer complied with the notice requirements of s. 71 of the Statutory Accident Benefits Schedule. The limitation period commenced when benefits were refused, not when an insurer advised an applicant of his/her rights to mediation and of the existence of the time limit. The loss of income capacity claim failed because the plaintiff did not request mediation for these benefits, which failed to provide a resolution. The plaintiff appealed.

The Ontario Court of Appeal, Borins, J.A., dissenting, in a judgment reported 130 O.A.C. 122, dismissed the appeal. The plaintiff appealed.

The Supreme Court of Canada, Bastarache, J., dissenting, allowed the appeal and remitted the matter for trial. The Court of Appeal erred in failing to find that the insurer had not fulfilled its notice obligations under s. 71. There was no proper refusal of benefits, the limitation period had not commenced to run and the action was not statute-barred.

Insurance - Topic 5076

Automobile insurance - Compulsory government schemes - Bodily injury and death benefits - Limitation period - A plaintiff commenced a civil action against her insurer more than two years after the insurer's written refusal to pay further statutory accident benefits - Section 71 of the Statutory Accident Benefits Schedule required an insurer to inform an insured "of the procedure for resolving disputes relating to benefits under sections 279 to 283 of the Insurance Act" - The written notice advised only of the right to mediation - The trial judge held that the insurer complied with s. 71 - The plaintiff appealed, claiming that s. 71 required that she be advised that s. 281(5) of the Insurance Act gave her two years after a written refusal to commence a civil action - The Supreme Court of Canada stated that "at a minimum, [s. 71 required notification of] a description of the most important points of the process, such as the right to seek mediation, the right to arbitrate or litigate if mediation fails, that mediation must be attempted before resorting to arbitration or litigation and the relevant time limits that govern the entire process. Without this basic information, it cannot be said that a valid refusal has been given. ... Since a proper refusal was not given [advised only of right to mediation], and since the limitation period under s. 281(5) of the Insurance Act only begins to run upon a refusal, that limitation period was not triggered by the notice sent ..." - The fact that the notice form used was a standard form used in the industry was irrelevant to whether the insurer met the obligations of s. 71 - See paragraphs 14 to 15.

Insurance - Topic 5077

Automobile insurance - Compulsory government schemes - Bodily injury and death benefits - Notice of termination of income benefits - Content of - [See Insurance - Topic 5076 ].

Cases Noticed:

Kirkham v. State Farm Mutual Automobile Insurance Co., 1998 CarswellOnt 2811 (Ont. Div. Ct.), refd to. [para. 25].

Statutes Noticed:

Insurance Act, R.S.O. 1980, c. I-8, sect. 281(1)(a), sect. 281(5) [para. 5].

Insurance Act Regulations (Ont.), Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996, Reg. 776/93, sect. 62(7), sect. 62(8), sect. 71, sect. 94(10), sect. 94(11) [para. 5].

Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996 - see Insurance Act Regulations (Ont.).

Authors and Works Noticed:

Brown, Craig, Insurance Law in Canada (1999) (loose-leaf ed.), vol. 1, p. 1-5 [para. 11].

Counsel:

Andrew R. Kerr and M. Steven Rastin, for the appellant;

Bruce Keay, for the respondent.

Solicitors of Record:

Ferguson Barristers, Midland, Ontario, for the appellant;

Malach & Fidler, Richmond Hill, Ontario, for the respondent.

This appeal was heard on November 6, 2001, before McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada.

On March 28, 2002, the judgment of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

Gonthier, J. (McLachlin, C.J.C., Iacobucci, Binnie, Arbour and LeBel, JJ., concurring) - see paragraphs 1 to 21;

Bastarache, J., dissenting - see paragraphs 22 to 32.