SUPREME COURT OF Nova Scotia
Citation: Oliver v. Elite Insurance Company, 2014 NSSC 413
Date: 2014-11-21
Docket: Hfx No. 415765
Registry: Halifax
Between:
Regan Oliver
Plaintiff
v.
Elite Insurance Company
Defendant
|
Judge: |
The Honourable Justice Peter P. Rosinski |
|
Heard: |
September 11, 2014, in Halifax, Nova Scotia |
|
Final Written Submissions: |
October 14, 2014 |
|
|
|
|
Counsel: |
John Rafferty, Q.C., and Daniel Roper, counsel for the plaintiff
J. Scott Barnett, counsel for the defendant |
By the Court:
Introduction
[1] On October 12, 2001, while driving his parents’ motor vehicle, Regan Sean Oliver was involved in a collision with Joseph Sangster’s vehicle. On October 14, 2003, Duane Rhyno as counsel for Mr. Oliver, commenced an action against Mr. Sangster and two corporate defendants.
[2] At some time later, Mr. Oliver and his counsel became aware that his quantified claim for damages exceeded the $200,000 limit contained in Mr. Sangster’s insurance policy.
[3] On May 22, 2013, Dale Dunlop as counsel for Mr. Oliver, commenced an action against his parents’ automobile insurer, Elite Insurance Company [hereinafter “Elite”], under the SEF 44 endorsement provisions. Their policy had a $500,000 limit.
[4] Elite filed a Defence on June 4, 2013 which raised inter alia, a limitation of actions defence.
The Motion to Disallow a Limitations of Actions Defence
[5] On May 14, 2014, Mr. Oliver made a motion for an order disallowing Elite’s defence based on a time limitation and permitting this action to proceed.
[6] At the time of the collision in 2001, the minimum amount of liability insurance required by s. 125(1) of the Insurance Act R.S.N.S. 1989, c. 231, was $200,000:
Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to the limit of at least $200,000, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property.
[7] This limit was changed to $500,000, as of April 1, 2004 – see ss. 14 and 36(3) of the Automobile Insurance Reform Act, S.N.S. 2003 (2d session), c.1.
[8] The SEF 44 endorsement in this case states in cl. 6(c), under the heading “Procedures”:
Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred. No action which is commenced within two years of the date of the accident shall be barred by this provision. [my emphasis]
[9] At issue in this Motion are the following:
1. Interpretation of clause 6(c) of the SEF 44 endorsement, and the associated jurisprudence as to when the limitation period begins to run. Is the clause sufficiently ambiguous such that it should be interpreted contra proferentem? Doing so would arguably permit interpreting the date when a plaintiff “ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits” as either of two fixed dates: the determination of a judgment or of a binding settlement agreement.
2. When did the limitation period expire?
3. In spite of the expiration of the limitation period, should the doctrines of waiver or estoppel excuse the late filing of the plaintiff’s action herein?
4. If necessary, should the plaintiff nevertheless be permitted relief pursuant to s. 3 of the Limitation of Actions Act, R.S.N.S., 1989, c. 258, as amended?
The Evidence Presented
[10] Firstly, I should point out that pursuant to an order of Justice Murphy dated March 7, 2014, I have the benefit of a “Statement of Admissible Facts.” I also have the exhibits filed herein.
[11] From the plaintiff, I have affidavits and supplemental affidavits of Duane Rhyno and Dale Dunlop, both of whom acted as counsel to Mr. Oliver; as well as an affidavit from Mr. Oliver. From the defendant, I had available to me the affidavit of Cathy Fancy. Each of the affiants was cross-examined.
Duane Rhyno
[12] Mr. Rhyno graduated from Dalhousie Law School in 1997 and articled with Walker Dunlop. Dale Dunlop is a partner and namesake of that firm. After a short stint at the Haynes Group of Lawyers, Mr. Rhyno practiced as a sole practitioner from 1999 onward. He commenced Mr. Oliver’s action against Mr. Sangster on October 14, 2003 (“the Sangster action”). Sometime in 2003, he incorporated his law practice.
[13] On June 1, 2007, Mr. Rhyno was suspended by the Barristers’ Society for one month (2007 NSBS 2). At that time he handed his legal files over to Walker Dunlop. Brian Church, Q.C., monitored his practice. Between then and November 14, 2007, when Mr. Dunlop filed a Notice of Change of Counsel designating Mr. Dunlop as Mr. Oliver’s counsel for the Sangster action, Mr. Dunlop took carriage of the Sangster action.
[14] As of May 1, 2008, Mr. Rhyno was suspended by the Barristers’ Society for eight months (2008 NSBS 5). He was required thereafter to practice with at least one other Barristers’ Society approved lawyer for three years.
[15] While he could have returned to practice law in February 2009. Mr. Rhyno did not return until late April 2009. When he returned to practise with Walker Dunlop, he took over carriage of Mr. Oliver’s SEF 44 (as yet unfiled) claim against his parents’ insurer. At that point Mr. Dunlop, who had discovered on June 23, 2008 that Mr. Oliver’s claim likely exceeded Mr. Sangster’s insurance limits, advised him that there was an issue regarding the inadequacy of the actual limits of insurance available in Mr. Sangster’s policy. There is no dispute that Mr. Rhyno first became aware of this upon his return to Walker Dunlop.
[16] He continued to be responsible for Mr. Oliver’s SEF 44 claim at Walker Dunlop until the fall of 2012, when he left the firm. Mr. Rhyno took Mr. Oliver’s SEF 44 file with him.
[17] Ultimately, Mr. Rhyno received instructions from Mr. Oliver in May 2013, that the file be delivered to Mr. Dunlop. Mr. Dunlop filed a Notice of Action on Mr. Oliver’s behalf regarding the SEF 44 claim on May 22, 2013.
[18] Thus, it appears that Mr. Rhyno had responsibility for Mr. Oliver’s Sangster action (which was settled for $200,000 on June 23, 2008) until approximately November 14, 2007 (excluding a June 1 – July 1, 2007 suspension by the Barristers’ Society). At the time of the settlement of the Sangster action, Mr. Rhyno was serving the 2008 suspension (May 1, 2008 for 8 months). On his return to practice at Walker Dunlop in April 2009, he became aware of the proposed SEF 44 Oliver claim. At this time, Mr. Rhyno was monitored for a period of a year by Brian Church, Q.C. Mr. Church submitted monthly reports to the Barristers’ Society.
[19] In his affidavit and cross-examination, Mr. Rhyno was adamant that he did not quantify, for his own benefit or Mr. Oliver’s benefit, Mr. Oliver’s claim against Mr. Sangster before Mr. Dunlop settled the Sangster action on June 23, 2008. I accept his evidence in that regard, and the substance of his assertion in a December 1, 2009 email to Cathy Fancy, claims specialist for Elite, that: “it has always been my client’s position that this claim is worth over $500,000.” That amount may have arisen from Mr. Oliver’s belief, but did not arise from any quantification or specific expression of opinion by Mr. Rhyno to Mr. Oliver.
[20] Moreover, I accept that Mr. Rhyno could not recall whether his client, Mr. Oliver, had always maintained that position from the time of his retainer, or if it was from a specific point in time during the retainer.
[21] Mr. Rhyno was asked by defendant’s counsel why he did not file a Statement of Claim for the SEF 44 claim after Cathy Fancy had advised him in her May 25, 2010 letter (Exhibit “1” to his affidavit) that the SEF 44 action against Elite Insurance “should have been commenced in June 2009, one year from the date you first became aware the defendant Sangster had liability coverage of $200,000 and that you valued your clients claim in excess of that amount”.
[22] To this he testified, in relation to the delay from November 2010 to November 2011, that: “I was waiting for answers from you Mr. Barnett… Waiting for responses from Ms. Fancy or you.” This answer was prefaced on an exchange of emails which appear at Exhibit “7” of his affidavit.
[23] I observe here that Mr. Rhyno indicated in his testimony that: “I’m a creature of email – and that’s how I document matters”.
[24] In that same Exhibit “7,” we see that on June 7, 2010, Mr. Rhyno responded to Ms. Fancy’s May 25, 2010, letter. She responded the same day: “The file has been referred to Scott Barnett, and I am forwarding your email along to him for response.”
[25] The next communication appears to be a letter from Mr. Barnett to Dale Dunlop dated November 4, 2011. On November 7, 2011, Mr. Rhyno wrote to Mr. Barnett advising he was responding on behalf of Mr. Dunlop, and noting that he had not received a substantive reply to his June 6, 2010 (sic; June 7) letter to Ms. Fancy.
[26] On November 7, 2011, Mr. Barnett wrote back: “I am out of the office the next few days but I will look into this and get back to you as soon as I can. This email should not be taken as waiving or extending any limitation period.”
[27] Though not apparent in this email thread, Mr. Rhyno does acknowledge in his supplemental affidavit (para. 4) that Mr. Barnett sent two further letters, dated November 18, 2011, and December 12, 2011 (Court Exhibits 2 and 3), in which he took the position that Mr. Oliver’s SEF 44 claim had prescribed, and his concern that the SEF 44 insurer would not be in a position to proceed against Mr. Sangster anymore because his claim was concluded by way of a consent dismissal order and not a discontinuance. However, Mr. Rhyno testified that he had not seen those two letters at any time before August 2014. There is no evidence to the contrary, and I accept his testimony on that point.
[28] Between May 2009 and the filing of the SEF 44 action on May 22, 2013, Mr. Rhyno had multiple contacts with Ms. Fancy regarding that claim, before her retirement in June 2010. However, he agreed that, after the failed mediation on March 29, 2010, regarding the Pearson collision and the Sangster SEF 44 claim, in a May 25, 2010 letter, she made clear that: “this was the first time Elite made reference to its communications not constituting a waiver or extension of time limits” (para.18, Duane Rhyno affidavit).
[29] I accept Mr. Rhyno’s evidence that he did not quantify, and did not feel it appropriate to quantify, Mr. Oliver’s claim against Mr. Sangster while he was involved with the file prior to the claim being settled June 23, 2008, because: “ I could not quantify it – it was a moving target…”.
[30] Mr. Oliver was diagnosed with cerebral palsy early in life. Mr. Oliver was injured in the Sangster collision on October 12, 2001. In 2005, he was confirmed eligible to receive Canada Pension Plan total disability benefits. He was also injured in a July 8, 2005, collision with Robert Pearson, and again in a minor rear-end collision on January 4, 2006.
[31] The materials filed tend to support Mr. Rhyno’s testimony. The exhibits to Mr. Dunlop’s affidavit show Mr. Oliver’s fluctuating health during the relevant time periods. They also demonstrate that doctors were faced with revised diagnoses and treatment recommendations over time, as well as some differences of opinion as to appropriate treatments and likely outcomes.
Dale Dunlop
[32] Mr. Dunlop adopted the contents of his affidavits, and they are generally consistent with the evidence of Mr. Rhyno. He has extensive civil litigation experience, having been admitted to the Bar in 1976. Notably, in his affidavit we find:
1. Paragraph 11 – “Medical reports were still being generated on Mr. Oliver’s claim until November 2007. The final report by Dr. Sean Christie spoke of further investigations and possible treatment. I waited to quantify Mr. Oliver’s claim until sometime had passed after that report was received to ensure that there were no further physical or treatment changes recommended and until a settlement mechanism was in place.”
2. Paragraph 13 – “ Julia Smart, one of my associates, and I, quantified Mr. Oliver’s claim during our preparation for the mediation [scheduled for June 23, 2008]. This quantification occurred in early June, 2008. Our brief was submitted on June 16, 2008. Attached as Exhibit “1” is a copy of my brief and its attachments.”
3. Paragraph 14 – “The work done to prepare the mediation brief resulted in the first quantification of Mr. Oliver’s claim done on his behalf.”
4. Paragraphs 15 and 16 – “The first time I advised Mr. Oliver of the probable value of his claim was at the 2008 mediation. I did not discuss the value of his claim with him between November, 2007 and June, 2008, nor did he ask me. Furthermore, based on my review of Mr. Rhyno’s file materials and my conversation with Mr. Rhyno and Mr. Oliver, I believe that Mr. Oliver was not previously provided an opinion on the probable value of his claim against Mr. Sangster.”
5. Paragraph 18 – “On June 19, 2008, [Cheryl A. Canning counsel at Burchell Hayman Parish] wrote to me and advised that our mediation brief was the first quantification of Mr. Oliver’s claim that the defendant had ever received, and that the claim exceeded Mr. Sangster’s insurance coverage limits. Attached as Exhibit “3” is a copy of this letter.”
6. Paragraphs 19 – 22: “ This was the first time I was made aware of an insurance coverage limits issue in the Sangster action.
A settlement of the Sangster action was reached at the June 23, 2000 mediation in the amount of $200,000, which did not preclude a claim against Elite. The Release was executed on July 3, 2008. Attached as Exhibit “4” is a copy of a letter from Ms. Canning dated June 30, 2008, which confirms the settlement. Attached as Exhibit “5” is a copy of the Release.
On June 23, 2008, I called Cathy Fancy, an adjuster for Mr. Oliver’s SEF 44 insurer, Elite Insurance Company, which is part of the Aviva group of insurers. In order to put Elite on notice of Mr. Oliver’s claim, I advised Ms. Fancy that his claim was “well north of $200,000”. Attached as Exhibit “6” is a copy of Ms. Fancy’s notes from this conversation, in which she accurately recorded my comment on the claims.
On July 2, 2008, I commenced an action against Robert Pearson on behalf of Mr. Oliver [the “Pearson action”]. Attached as Exhibit “7” is a copy of the Notice of Action and Statement of Claim in the Pearson action [Mr. Oliver had been injured in a second motor vehicle accident on July 8, 2005 when he was a passenger in a stopped vehicle that was rear ended by a vehicle driven by Robert Pearson]”
7. Paragraphs 24 – 27: “On March 29, 2010 a mediation was held for both the Pearson action and the SEF 44 claim for the Sangster accident with Craig Garson, Q.C., acting as mediator. Ms. Fancy participated in the mediation and submitted a brief on behalf of Elite.
The mediation did not achieve a settlement of either the Pearson claim or the SEF 44 claim.
Later on the day of the mediation, I received an email from Ms. Fancy, indicating that she was retiring from Aviva , and requesting that I send a copy of the SEF 44 action to her so that she could refer the matter to her Legal Department.
On May 24, 2011, a Settlement Conference was held relating solely to the Pearson action and a settlement was achieved for the all-inclusive sum of $75,000. Attached as Exhibit “10” is a copy of this settlement agreement.”
8. Paragraphs 31 – 32: “The file relating to Mr. Oliver’s SEF 44 claim was returned to me in early May, 2013[from Mr. Rhyno who had left Walker Dunlop in the fall of 2012].
Upon review of the file, I promptly commenced this action on May 22, 2013.”
[33] In cross-examination, Mr. Dunlop indicated on numerous occasions that he had no independent recollection of certain matters, but that he relied in giving his answers on what would have been his standard practice in relation to the matters in issue. For example, he noted that numerous letters, and reports from doctors (for example Dr. Sean Christie’s report “printed” January 14, 2008, in relation to the November 5, 2007 visit by Mr. Oliver) although bearing their own date of writing or issuance, may not have come to his attention at that time because either he was not dealing with the file then, or the documents were not addressed to Walker Dunlop initially, but came to them through other parties (such as a Family Doctor) or upon later specific request by Walker Dunlop.
[34] Mr. Dunlop confirmed in relation to such letters and documents, that his practice was to review them upon receipt and then take appropriate action in a timely manner. However, he had no independent recollection of when he saw, or became aware of many specific documents. He testified that he would have reviewed them if they were in the Walker Dunlop file while preparing the June 2008 mediation brief, (Exhibit “1” to his initial affidavit).
[35] At this juncture, I will indicate that I found Mr. Dunlop credible. He was frank and measured in his testimony. To the extent that independent evidence might contradict some aspects of his evidence, I find such instances to be inadvertent on his part, and insignificant to the result herein.
[36] Insofar as his standard practices are concerned, Mr. Dunlop testified that: he would usually speak to a client rather than have an associate do so and that he would have undertaken an investigation of Mr. Sangster’s personal means in order to “know your defendant” regarding whether Mr. Oliver’s claim in excess of Mr. Sangster’s insurance coverage could be satisfied by claiming against Mr. Sangster’s personal assets.
[37] Mr. Dunlop agreed that he advised Mr. Oliver that liability was not in issue in the Sangster action. He was adamant, however, that no valuation of Mr. Oliver’s claim was discussed between November 2007 and June 2008. He did not do so, because, as he testified, he had: “no clear idea when he would plateau [medically]”; additionally there were complex facts, and “my practice is not to give an opinion until we know all the facts”. He conceded that, although ordinarily he might have an idea of the value of the claim, “but not in this case – I was very leery of ball-parking this claim until it was absolutely necessary.”
[38] In Mr. Dunlop’s view he had to be satisfied of several things before he would quantify such a claim: that the claim was reasonable, the medical condition of the plaintiff had stabilized or plateaued, and that there was a settlement mechanism in place. He opined that some time between March – June 2008 those conditions were met in this case regarding the Sangster claim.
[39] Mr. Dunlop agreed with Mr. Barnett that quantification of the Sangster claim approached $1 million in his mediation brief, and that he did not turn his mind to whether Mr. Oliver’s quantified claim might exceed Mr. Sangster’s insurance limits, until he was so advised so by the insurer’s counsel Cheryl Canning on June 19, 2008. Her letter indicates she would be out of the office on June 20, 2008, and the mediation was scheduled for Monday, June 23, 2008.
[40] On cross-examination, Mr. Barnett suggested to Mr. Dunlop that based on Mr. Oliver’s mediation brief, even accounting for the Pearson accident and Mr. Oliver’s pre-existing medical condition he should have been aware that the Sangster claim was “very significant”, and that even if Mr. Sangster had a $500,000 insurance limit, there was a likelihood that the Oliver claim might exceed this amount.
[41] Mr. Dunlop disagreed that this was the case. He noted that in such briefs the plaintiff always puts their “best foot forward… and are claims based on” your best day”, seeking amounts which counsel understand the client ultimately will not likely realize. While he admitted that this was a significant claim, Mr. Dunlop noted that the loss of income tends to drive up such claims dramatically. He added that the extent to which Mr. Oliver’s not being able to continue to work was attributable to the Sangster motor vehicle collision was unclear, as it was complicated by: his cerebral palsy; the Pearson collision July 8, 2005; and the fact that Mr. Oliver’s health had significantly fluctuated over the years preceding 2008. He elaborated that although, Mr. Oliver “functions well for someone who has cerebral palsy” he doesn’t necessarily function well in relation to the average healthy person. Therefore, his pre-existing conditions play a significant role in his level of disability associated with the Sangster motor vehicle collision.
[42] Mr. Dunlop conceded that he was well aware in May 2008, that: Mr. Oliver last worked in June 2004; that he had received CPP disability benefits which require impairment effectively preventing a person from working; and that Mr. Oliver could only do four hours of sedentary work per day. He noted however that he did not likely previously see the report generated by Dr. Tom Stanley at the request of Ms. Canning, in which Mr. Oliver had been subjected to a functional capacity evaluation (Tab 21, Exhibit “2” of his own affidavit – testing date November 29, 2006).
[43] Mr. Dunlop did not advise the SEF 44 insurer on Friday, June 20, 2008, as it was the last business day before the mediation was to commence. He said he considered it was too late to involve the SEF 44 insurer in the mediation and was concerned that to do so “might derail the mediation” as there was no time for the SEF 44 insurer to get up-to-date and be present for the June 23 mediation.
[44] When he became aware of the inadequacy of Mr. Sangster’s insurance limits on June 23, 2008, Mr. Dunlop immediately contacted the SEF 44 insurer, and advised them that Mr. Oliver would be making a claim thereunder. He agreed that he filed a Statement of Claim in the Pearson matter on July 2, 2008, and that he could have started the SEF 44 action at that time.
[45] As a result of the Barristers’ Society suspension decision on May 1, 2008, Mr. Rhyno’s practice was monitored for 12 months by Brian Church, Q.C. of Walker Dunlop.
[46] Mr. Dunlop testified that while he had carriage of the matter only until Mr. Rhyno’s return in April 2009, he was still working on the Pearson claim and the SEF 44 (Sangster) claim until March 29, 2010, when that mediation failed. During that period, Mr. Rhyno was also working on the SEF 44 claim. Mr. Dunlop testified that “on a fairly regular basis I would ask him about any progress and the limitation period… I knew Cathy Fancy, and I expected it will get worked out… just a question of crunching the numbers”. He said that Mr. Rhyno informed him that the limitation period was not an issue, as talks were ongoing. Mr. Dunlop noted that in his experience, he had seen a number of cases where communications between plaintiff’s counsel and defendant’s counsel continued in good faith even after the limitation period had expired, without the filing of a Statement of Claim.
[47] He said he assumed that Mr. Rhyno had an agreement from the insurer’s representative (Ms. Fancy) not to insist on its strict legal rights. He only found out later that on May 25, 2010 Ms. Fancy had requested that Mr. Rhyno file a Statement of Claim regarding the SEF 44 claim.
[48] I should note here that, there was no direct evidence to the contrary, to that of Ms. Fancy, that she believed until approximately May 21 – 25, 2010, that a Statement of Claim had already been filed. On May 25, 2010, she wrote to Mr. Rhyno: “You indicated the action had not been commenced to date however you would be attending to that shortly” (Exhibit “13” affidavit of Cathy Fancy).
[49] Thus, sometime after May 25, 2010, Mr. Dunlop became aware that there had been a request by the insurer to plaintiff’s counsel to file an SEF 44 action. There is nothing in the evidence to indicate precisely when Mr. Dunlop was aware of this. However, the evidence suggests his next direct involvement in the SEF 44 claim after May 25, 2010, was as a result of Mr. Barnett’s November 4, 2011 letter (Exhibit “11” to Mr. Dunlop’s affidavit). Mr. Dunlop stated at para. 29 of his affidavit that: “I provided the letter to Mr. Rhyno for response.” Certainly that letter made clear that the insurer was of the view that, as Mr. Oliver did not appear to be pursuing an SEF 44 claim, they would be closing their file in 30 days.
[50] For context, I will note that Mr. Rhyno was aware of this letter and followed up; see paragraphs 21 – 25 of his affidavit, and his supplemental affidavit.
[51] Mr. Dunlop makes it clear that although Mr. Barnett wrote to him on November 18, 2011, and December 12, 2011 at Walker Dunlop [Court Exhibits 2 and 3] “… I do not recall ever seeing either letter and believe that I would certainly remember reading either of them.” (see his supplemental affidavit). I accept his evidence in that regard.
Regan Oliver
[52] Mr. Oliver’s affidavit indicates under the heading “my accidents”:
1. That he was injured on October 12, 2001 in a motor vehicle accident (for which Joseph Sangster was solely responsible);
2. Mr. Rhyno commenced an action against Mr. Sangster on October 14, 2003; Mr. Oliver was injured as well on July 8, 2005, in a motor vehicle accident (for which Robert Pearson was solely responsible). Mr. Dunlop commenced an action against Mr. Pearson on July 2, 2008;
3. He noted that he had also been injured January 4, 2006 in a motor vehicle accident which “exacerbated in a minor way my injuries from the Sangster and Pearson accidents as well as my pre-existing conditions.” In April 2006, he slipped and fell at home after his leg gave out, injuring his right knee.
[53] Under “medical condition” Mr. Oliver’s affidavit reveals that he has had cerebral palsy from birth and experienced occasional migraine headaches for all of his adult life. He specifically noted:
Following the 2001 Sangster accident a disc herniation at C4 –5 was identified. I was originally scheduled to have surgery performed by neurosurgeon Dr. Ren Holness to repair this disc. However the symptoms abated one day after I turned my head and felt it pop in my neck. Diagnostic imaging at the time showed that the herniation had resolved. While the extreme neck pain associated with this herniated disc had then lessened, significant symptoms persisted and continue to persist to this day. I experienced flare-ups of my symptoms and underwent physiotherapy until August 2002 and then again from January 2003 to March 2004.
In or about October 2003, I developed numbness in my left hand and arm, along with the neck pain I had been experiencing from the herniated disc. My day-to-day living became incredibly difficult. I was referred to Dr. Sarah Kirby, a neurologist who ordered another MRI. The MRI revealed that the herniated disc at C4 –5 had increased in size and that a broad based herniated disc was present at C5 –6.
Following the 2005 Pearson accident, I was diagnosed with another disc herniation at C6 –7. I developed almost constant headaches, numbness in my right arm and pain extending down my left leg. Since then, I need a cane to help me walk.
The medical reports that chronicle my symptoms and treatment are attached to the mediation briefs of Mr. Dunlop and Cheryl Canning, counsel for Mr. Sangster, and are produced as Exhibits “2” and “3” of Mr. Dunlop’s affidavit filed in support of this motion.
[54] Under “employment” Mr. Oliver stated:
At the time of the Sangster accident, I was employed at Convergys call center. I returned to work there in April 2002. I also commenced a term position at Parks Canada which began on April 29, 2002. In September 2002, I had to leave my position at Convergys because of the discomfort I was experiencing in my back and neck. However, I was able to continue with my employment at Parks Canada because my job duties there permitted me to move around freely. My employment at Parks Canada ended in June 2004 when funding for my position was cut.
In September 2004, I enrolled in a Library Technician Program at the Nova Scotia Community College to qualify me to do work similar to what I had been doing with Parks Canada. Unfortunately, my neck pain forced me to leave this program in October 2004, and I remain unemployed. Because of my injuries, I received motor vehicle Section B weekly indemnity benefits from October 2001 to May 2002 [from his parents’ insurer – Elite Insurance Company], short-term disability insurance benefits from October 22, 2001 to February 8, 2002, and Canada Pension Plan disability benefits from 2005 [retroactive to October 2004] to date.
[55] Under “the value of my claim” Mr. Oliver stated:
Mr. Rhyno and I never discussed the amount of my claim, other than it being “substantial.” I do not recall having any discussions with Mr. Dunlop about the value of my claim until June 2008 when I attended a mediation of the Sangster action with Mr. Dunlop. This was the first time I was advised of the probable value of this claim.
[56] Mr. Oliver was extensively cross-examined. I had a first-hand opportunity to carefully consider his responses. Mr. Oliver was in apparent pain/discomfort, and changed his position noticeably while testifying. At one point he needed to take a break, and requested that of the Court. At another point in time he became testy with defence counsel, who he felt was asking unnecessarily repetitive questions, which prolonged the physical discomfort of his having to remain on the witness stand. I had no reason to believe that his comportment during his cross-examination was anything other than a legitimate expression of the level of discomfort which he experienced.
[57] Mr. Oliver confirmed that he completed a Bachelor of Arts degree in 1998, and a Bachelor of Education degree in 2000, but did not go on to do the teaching practicum. He entered Dalhousie Law School in 1994, but left before the end of the first term. He returned in September 1995, again as a first-year student, but he did not complete that year. He did not return thereafter. He acknowledged that his understanding of “damages” was that it involved an attempt, through financial compensation, to put plaintiffs back to the position in which they generally were before a wrong was done to them.
[58] According to Mr. Oliver before his 2001 motor vehicle accident, his cerebral palsy, which had “stabilized since I was five years old,” would not materially have interfered with him taking on any physical activity that a person without cerebral palsy could do. After the 2001 accident, his most significant pain was in his neck. That pain is still present today and generally has gotten worse over time, but has also fluctuated in severity. Although he was in “constant” pain while working at Parks Canada, he noted that because he was able to move around in that job he didn’t miss as much time as he would have at a more sedentary job, such as at Convergys. After he left Parks Canada, he never worked outside the home again. Nevertheless, he tried to retrain by attending the Nova Scotia Community College Library Materials Program in 2004, but he had to discontinue his studies because the pain in his neck was “as bad as just after the 2001 accident”. The level of pain he experienced meant he could not sit or lay down for longer periods of time.
[59] Mr. Oliver agreed that he had not felt capable of working at any time since making his February 2005 application for CPP disability benefits. He also agreed that since the 2001 accident his wife did about 98% of the housekeeping and yard work. He had also received CPP disability benefits for his two young sons born July 1, 2005 and November 12, 2006. He applied for and received forgiveness of his student loans as a result of that disability benefits program in February 2008.
[60] Dr. Tom Stanley did a functional capacity assessment on Mr. Oliver. (dated November 29, 2006, Exhibit “2” at Tab 21 of Mr. Dunlop’s affidavit as excerpted from Cheryl Canning’s mediation brief). He agreed that at that time he had severe neck and lower back pain. He did not recall when he would have first seen Dr. Stanley’s report, but he seemed unfamiliar with it, which may be because it was requisitioned by Cheryl Canning, as counsel for Mr. Sangster.
[61] Mr. Oliver steadfastly and convincingly testified that he had no discussions with Mr. Rhyno or Mr. Dunlop about the quantification of his claim until around the time of the June 2008 mediation.
[62] When it was put to him that, in Mr. Rhyno’s email to Cathy Fancy dated December 1, 2009 (Exhibit “6” to Cathy Fancy’s affidavit), Mr. Rhyno stated that: “[i]t has always been my client’s position that this claim is worth over $500,000…”, Mr. Oliver responded: “Only at the time of the mediation [June 2008] did I know the extent of my claim… I would not have made this statement [before then].”
[63] On the other hand, concerning the statement in his affidavit that: “Mr. Rhyno and I never discussed the amount of my claim, other than it being “substantial”, Mr. Oliver testified that: “I said something to the effect – ‘it must be substantial’… I simply looked at the time… I did not factor in the little particulars, etc.… I could only assume that the claim would grow in value – that would make it substantial.” He reiterated that he could not recall when he had used the word, or in which context, but did maintain that: “The only time I knew or understood that the value of my claim was larger than I had expected was at the mediation [June 2008].”
[64] In redirect examination, Mr. Oliver confirmed that, before the 2001 motor vehicle accident, he “could do everything physical.” He had no neck injuries or other pain or problems evident before-hand.
[65] Mr. Oliver acknowledged that the cervical stenosis at C5 –6, which was discovered after the 2001 accident, was an apparently pre-existing condition. Regarding the disc bulging at C4 –5, he understood this to be the result of the 2001 accident, and that although it resolved after the pop in his neck, it returned to its bulged status, and he said he still has symptoms, as it “bulges from time to time,” and then his pain is “much more severe than I would normally go through… It depends on how long the flare-up lasts.”
[66] Additionally, Mr. Oliver clarified a response in his CPP Disability Application, Box 21 (Court Exhibit 1 at page 60) to the following question: “If you had to stop other activities (such as hobbies, sports or volunteer work) please explain and give dates activities ceased.” His handwritten response was: “Light housework, lifting, driving shorter periods of time. Has impacted all areas of life”. These words give an unintended impression according to Mr. Oliver. What he meant to state was that the handwritten items are all things he could do without difficulty before the 2001 accident, and thereafter he still could do, but “less than before.”
[67] While being referred to the CPP Disability Benefits Application (page 30, Court Exhibit No. 1), Mr. Oliver confirmed that he had not worked outside the home since he was with Parks Canada; however, he added, “I always hoped I might return to work.”
[68] I found Mr. Oliver to be credible. He was polite, measured and candid in his testimony. His evidence was honestly given and reliable. Specifically, I accept that he was the originator of the use of the term “substantial” as referred to in para. 21 of his affidavit, and that there was no quantification of his claim done before June 2008. He had no basis upon which it could be said that he knew or ought to have known that the quantum of his claims “exceeded the minimum limits for motor vehicle liability insurance” in Nova Scotia (being $200,000 at all relevant times) before June 2008.
Cathy Fancy
[69] Ms. Fancy’s direct evidence tendered via her affidavit, and even a large measure of her cross examination, do not materially dispute much of the evidence presented by the plaintiff’s witnesses on this motion.
[70] In her affidavit, Ms. Fancy outlined her 40-year career arc in the insurance industry. By the time of her involvement in this proceeding, she had risen to become a “claims specialist” which she stated involved the “high end bodily injury claims.” She estimated that in 40% of her cases she was involved in direct contact with plaintiff’s counsel, maintaining carriage of the file until it became necessary for defendant’s counsel to become involved. In later years the company had two staff lawyers, but who did not report to her (Scott Barnett was one of them). Her level of payout authority while handling Mr. Oliver’s claim was $250,000, which was the highest authority in the Halifax office. Although she had a supervisor and claims manager nominally above her in the Halifax office hierarchy, she said she “handled the most complex claims.”
[71] Ms. Fancy stated that she became involved in the file on June 23, 2008, after Mr. Dunlop left her a voicemail indicating he had just discovered at the mediation that day that Mr. Sangster’s insurance policy only had $200,000 coverage. As the insured’s representative she understood that pursuant to an SEF 44 family protection endorsement with Elite Insurance Company (Mr. Oliver’s parents’ insurer) there was a policy limit of $500,000.
[72] On June 25, 2008, Ms. Fancy asked Mr. Dunlop to provide her with the June 23, 2008 mediation briefs to her so that she “could begin assessing the SEF 44 claim.” On June 26 she received the Elite Insurance Company Section B file regarding the Sangster action and reviewed it. On March 31, 2009, she attended the oral discovery of Mr. Oliver regarding the Pearson action. She also acknowledged receipt of a package of materials from Mr. Rhyno, including Mr. Oliver’s CPP disability benefits file.
[73] In a May 26, 2009 letter, Ms. Fancy requested transcripts of the previous discovery and medical information and advised that she would review the material and take a settlement position. On September 2, 2009, she emailed Duane Rhyno and advised that she would extend an offer, and if it is not resolved, she was prepared to participate in mediation of the SEF 44 claim together with the 2005 (Pearson) MVA claim (see Statement of Admissible Facts, Exhibit “3” to the affidavit of Duane Rhyno). In her affidavit she stated that the “first date upon which I extended an offer of settlement with a monetary figure was on November 4, 2009”.
[74] In Court Exhibit 5, which is a series of email exchanges between Mr. Rhyno and Ms. Fancy between November 3 and 25th 2009, we find the following:
(a) November 4, 2009 – Ms. Fancy to Mr. Rhyno:
I do apologize for my tardiness. I have reviewed this file on a number of occasions and must say, I have had much difficulty attempting to quantify potential damages relating to the 2001 incident. There are, as you know, many variables to consider including but not limited to your clients pre-existing CP condition, the fact that he was able to return to work following the 2001 accident, his failure to mitigate in attempting to seek any form of employment, other falls and injuries, the 2005 MVA, the financial benefit to the family resulting from Mr. Oliver staying at home with his children versus the expense of day care, and the deductibility provision specific to the SEF 44 endorsement. We are prepared to offer $45,000 in full and final settlement of the SEF 44 claim.
(b) November 25, 2009 – Ms. Fancy to Mr. Rhyno:
I note a typographical error in my letter of yesterday’s date. The settlement offer previously extended to your client was $45,000 rather than $40,000. My apologies. Your response is awaited.
(c) In a December 1, 2009 email Mr. Rhyno wrote to Ms. Fancy:
Thank you for your email. It has always been my client’s position that this claim is worth over $500,000. The CPP benefits are not totally attributable to my client but have an allowance for his children built in. My client has instructed me to settle his claim for $230,000 of new money.
[75] The Statement of Admissible Facts shows that there were further communications between Mr. Rhyno and Ms. Fancy. On December 3, 2009, Ms. Fancy advised Mr. Rhyno that there would be no further offers until the mediation. She also requested additional documents. Nevertheless, at para. 18 of her affidavit she stated: “Although I subsequently [after December, 1, 2009] tried to get Mr. Oliver and his legal counsel to reconsider my earlier offer in January 2010, it became clear that a significant gap between the parties remained and as a result, the parties proceeded to mediation.”
[76] As suggested by the Statement of Admissible Facts, as late as January 19, 2010, the parties were still in “settlement negotiations. On March 23, 2010, mediation briefs were submitted. The mediation on March 29, 2010 was brief and unsuccessful. That same day Ms. Fancy advised Mr. Dunlop by email that she would be retiring on June 28, 2010. She added: “I would ask that you send me a copy of the SEF 44 action you have commenced on behalf of Mr. Oliver. I will then refer the file to Aviva legal services for defence purposes.”
[77] Not having received a response, she followed up with emails to Mr. Rhyno on April 26. He responded on May 5. Ms. Fancy replied on May 7 and May 10. Mr. Rhyno telephoned her on May 25th 2010. Ms. Fancy confirmed in her testimony that her notes, taken concurrently (Exhibit “12” to her affidavit), would have been an accurate summary of the conversation. They read in part:
Issuing SOC [statement of claim] shortly.
[78] That same day Ms. Fancy sent a fax to Mr. Rhyno. In it she stated:
Further to our telephone conversation, attached is a copy of the SEF 44 family protection endorsement wording as you requested. I do not see anything in the wording pertaining to binding arbitration. You indicated the action had not been commenced to date however you would be attending to that shortly. Please note section 6, procedures (c ). Action naming Aviva as defendant should have been commenced in June 2009, one year from the date you first became aware the defendant, Sangster, had liability coverage of $200,000, and that you valued your client’s claim in excess of that amount.
In the event of payment to your client under the SEF 44 endorsement, Section 9 and 10 of the wording, confirm the insurer’s right of action in the name of Mr. Oliver against the inadequately insured motorist. Please confirm the action against Mr. Sangster has not been discontinued.
Yours truly [signed]
Nothing herein contained is or shall be construed as either an admission of liability or a waiver or extension of any notice, claim or limitation period.
[79] In her affidavit and cross examination, Ms. Fancy reiterated that she had assumed that a statement of claim had been filed, but not served. She also confirmed that she believed, then and now, that the 12 month limitation period expired in June 2009, and that her March 29, 2010 email to Mr. Dunlop was the first time she requested that the SEF 44 statement of claim be provided to her. She conceded that regardless of whether statement of claim had been issued, her actions would have been the same insofar as negotiating a settlement to the potential claim.
[80] In her cross examination, Ms. Fancy confirmed that her continued involvement in the case to assist Elite Insurance was possible since she lived in Halifax, and was now retired.
[81] Based on her direct evidence and cross-examination, it appears that Ms. Fancy knew practically everything about Mr. Oliver’s claim that his own counsel knew by November 4 2009. In an email on that date she stated: “I have reviewed this file on a number of occasions and must say, I have had much difficulty attempting to quantify potential damages relating to the 2001 incident.”
[82] Generally, I noted a tendency to defensive answers during her cross examination. For example, when discussing her actions between the assignment of the file to her June 23, 2008 up to the point of the mediation in March 2010, she was reluctant to use the word “negotiating” in her exchanges with plaintiff’s present counsel. Her testimony suggested that she had received no responses from plaintiff’s previous counsel before March 2010. She seemed to be referencing her offer to the plaintiff in her November 25, 2009 email. However, on December 1, 2009 plaintiff’s counsel did respond with a counter offer. Moreover, while there were gaps at times, for example from June 26, 2008 until March 31, 2009 in the Statement of Admissible Facts and her own affidavit (paras. 12 and 13), there is no clear indication to whom, if anyone, the responsibility for inaction can be attributed. Similarly, a gap exists in that manner between Mr. Rhyno’s June 7, 2010 email to Ms. Fancy and Mr. Barnett’s letter of November 4, 2011 to Walker Dunlop.
[83] Ms. Fancy was defensive about her knowledge of the test for receipt of CPP disability benefits. She had, however, been in possession of Mr. Oliver’s CPP disability benefits file, when she was the “claims specialist,” and that file was attached as Exhibit 5 to her own affidavit sworn August 29, 2014.
[84] Similarly, Ms. Fancy resisted the suggestion by plaintiff’s counsel that “the more medical and other information you have, the more reliable your assessment [of the value of the claim]?” She answered “not necessarily”; but she then went on to agree that typically that would be the case. When asked again in the context of this case whether having medical reports up until the time of her offer in November 2009, would that give her a more reliable assessment of damages than an assessment done in 2005, she initially answered “no.” She reiterated when asked again, “I can’t agree with that.” She relented however, and agreed that “possibly” more information could help in her assessment.
[85] The issue was revisited, when Ms. Fancy was asked whether she would expect to make different assessments of the value of the claim throughout the period between 2001 and the 2010 mediation. It was drawn to her attention that Mr. Oliver had neck pain immediately after the 2001 accident, then something popped in his neck and it appeared to be resolved. While she agreed with that specific example, she did not wish to agree to the general proposition being put to her. That is to be contrasted with her own recognition that claims adjusting is “an inexact science,” and that the claim in this case could be worth more (“absolutely yes”) or less (“yes”). As she put it in her testimony, “I was doing my best to quantify it.” Moreover, she agreed that in her opinion it was accurate, based on the information that she had, to characterize Mr. Oliver as having had “fluctuations in the regularity and severity of his symptoms.”
[86] Ms. Fancy also acknowledged that in none of the documentation she had was there any evidence that Mr. Oliver would ever return to work after he began receiving CPP disability benefits. She also confirmed that in November 2009, she felt able to quantify the claim. Furthermore, when asked about Mr. Dunlop’s abilities as a plaintiff’s counsel, she lauded him, saying: “He’d be right up there.”
[87] While perhaps a couple of “defensive” (seeking to be favorable to the defendant) answers might be a coincidence, I found that the number of Ms. Fancy’s answers which tended to be “defensive” and not direct or specific answers to the questions, generally lead me to conclude that, although retired, her many years as an advocate for her employer, and perhaps her loyalty to her previous employer, affected her impartiality in answering questions put to her. Thus, I conclude that the manner of her answering, and the content of her answers, tended to diminish her credibility.
ISSUES
1. What is the time limitation for commencing SEF 44 actions?
2. When did the time limitation expire in the circumstances of the plaintiff’s SEF 44 claim?
3. Is the defendant insurer estopped from asserting its limitation defence?
4. Should relief be provided to the plaintiff pursuant to Section 3 of the Limitation of Actions Act?
The Parties’ Positions
Position of the plaintiff
[88] Clause 6(c) of the SEF 44 endorsement herein includes the key words:
Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred. No action which is commenced within two years of the date of the accident shall be barred by this provision.
[89] At the time of the 2001 accident, the Insurance Act, R.S.N.S. 1989, c. 231, as amended, contained parallel language in Section 125:
Minimum liability under policy
125 (1) Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to the limit of at least two hundred thousand dollars, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property.
[90] The plaintiff submits that there are no Nova Scotia cases which address the meaning of the SEF 44 clause in the circumstances of the case at bar.
[91] Specifically the plaintiff notes that there are conflicting lines of authority between the courts of appeal in Alberta and Ontario as to when the limitation period should start to run.
[92] According to the plaintiff, the Alberta approach interprets clause 6(c) as being ambiguous, and therefore it is construed as against the insurer pursuant to the contra proferentum doctrine: Shaver v. Cooperators General Insurance Company 2011 ABCA 367 at paras. 18 and 43; Mellon v. Gore Mutual Insurance [1995] A.J. No. 502(Q.B.) reversed by 1995 ABCA 340 at para. 4; Shoemaker v. Wawanesa Mutual Insurance Company [1993] A.J. No.289(Q.B.) affirmed at [1994] A.J. No. 126 (C.A.) at paras. 3 and 8.
[93] The upshot is that the Alberta courts have taken the view that the phrase “knew or ought to have known that the quantum of the claims exceeded the minimum limits” should be interpreted so that “the limitation runs from the final judgment or settlement… Or some other final determination” (Wawanesa, supra, at para. 3).
[94] In contrast, the plaintiff submits the Ontario approach is summarized by the Ontario Court of Appeal in Roque v. Pilot Insurance Company, 2012 ONCA 311. The Court endorsed the approach taken by Master Dash in McCook v. Subramaniam [2008] O.J. No. 4583, (2008) 172 A.C.W.S. (3d) 344(Sup. Ct.) at para. 5, where he stated:
The plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that his claims would exceed $200,000. The plaintiff should be given a “degree of latitude… in making this very individual and complicated determination” but “that is not to say that the plaintiff is entitled to wait until he… has an overwhelming case”.
[95] In an earlier decision, Caruso v. Guarantee Company of North America [1996] O.J. No. 4072, the Ontario Court of Appeal concluded at para 24:
Like the courts in both the [Wimbush v. Progressive Casualty Insurance Company (1995) 17 CCLI (2d) 69 (Ont. Div. Ct.) and Wawanesa v. Shoemaker (1994) 16 Alta. L.R. (3d) 210 (CA)] cases, I find the language ambiguous. In these circumstances, I think it ill advised to embark upon an analysis of whether the significant event is the determination of the quantum of damages. I will content myself with accepting the finding of the motions judge that it is difficult to conclude in this case that the appellant solicitor knew that her injuries would exceed the minimum limit more than 12 months before the action against the respondent was commenced.
[96] Caruso was cited by the Ontario Court of Appeal in Foster v. Young [2002] O.J. No. 3225, per Abella, JA (as she then was) for herself and Moldaver and Feldman, JJA, at para. 2:
Denial of coverage before an action is commenced against the insurer is not a denial which triggers the commencement of the limitation period against the insurer, referred to by Finlayson JA in Caruso…
[97] Regardless whether the Alberta or Ontario approach is used, the plaintiff argues that the result should be the same in the case at bar. A settlement was reached June 23, 2008 with Mr. Sangster for $200,000 all-inclusive. Allowing for the “latitude” that should be given to counsel in their estimations of when they “ought to have known that the quantum of claims… exceeded the minimum limits [i.e. $200,000]…” the Ontario approach as described in McCook, supra, could arguably also lead to the conclusion that plaintiff’s counsel did not have a body of evidence accumulated that would give him a reasonable chance of persuading a judge that his claims would exceed $200,000, until June 2008.
[98] In support of his position that the Alberta approach should be followed the plaintiff states at para. 69 of his brief:
Applying the contra proferentum rule provides the most favorable interpretation to the insured. It avoids the difficulties inherent in changing quantifications as the evidence develops and becomes known to the parties, or in uncertain quantifications that depend on how the evidence is interpreted. The Alberta approach also prevents the necessity of plaintiffs bringing SEF 44 actions routinely and unnecessarily in cases where the defendant has coverage equal to or greater than the plaintiff or when the defendant’s coverage is adequate, regardless of the amount of the plaintiffs coverage.
[99] The plaintiff points out that the latter concern has been cited in the case law: see for example, Ursich v. Security National Insurance Company 2005 YKSC 72.
[100] The plaintiff observes that if the June 23, 2008 start date is used and the 12-month extension permitted by clause 6(c) is added, and if the court is satisfied that a full four-year extension should be granted to the plaintiff pursuant to s. 3 of the Limitation of Actions Act, the statement of claim filed May 22, 2013 would have been filed within time – i.e. before June 23, 2013.
[101] To achieve this result, the plaintiff argues that the insurer should be legally estopped from insisting on its strict legal rights. Specifically, the plaintiff suggests that it was not until May 25, 2010 that the insurer’s representative, Cathy Fancy, insisted on a statement of claim being filed and served. While Ms. Fancy apparently assumed a statement of claim had been filed, she confirmed that her actions in attempting to negotiate a settlement would not have been affected if that were not the case. Between June 23, 2008 and May 25, 2010, the parties were still negotiating. In respect of that period of time, the insurer should not now be permitted to insist on its strict legal rights to have had filed an SEF 44 endorsement-based statement of claim.
[102] At the hearing, plaintiff’s counsel understandably stated they were not relying on the doctrine of “waiver” (see Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Company [1994] 2 SCR 490 at paras. 18-20; Binder v. Royal Bank of Canada 2005 NSCA 94, per Cromwell, JA (as he then was); s. 35 of the Insurance Act; Marchischuk v. Dominion Industrial Supplies Ltd., [1991] 2 SCR 61). To the extent that they could do so in respect of the period after March 29, 2010, or May 25, 2010, they did not seriously argue the point, preferring to rely on the doctrines of estoppel by representation and promissory estoppel.
[103] At para. 113 of his brief, the plaintiff states:
Ms. Fancy’s March 29, 2010 communications with Mr. Rhyno following the failed mediation, or her May 25, 2010 letter to him ought to be taken as the revocation of the insurer’s assurance upon which Mr. Oliver had relied upon. Thus, the start of the time limit is pushed back to either March 29 or May 25th 2010, regardless of whether the plaintiff ought to have known his claim exceeded $200,000 before May 22, 2008.
[104] At para. 52 of the defendant’s brief, it states:
At all events, the estoppel argument fails because there is no evidence that Ms. Fancy made any specific representations about whether or not Elite Insurance Company would refrain from invoking a limitation defense, there is no evidence that the plaintiff or his legal representatives relied on any representations, and there is no evidence that the plaintiff or his legal representatives altered their position as a result of any representations.
[105] The plaintiff cites the following discussion of the doctrine of estoppel by representation as found in Brown and Donnelly’s Insurance Law in Canada at p. 12-3:
The doctrine of estoppel by representation has been defined as follows:
Where one person [the representor] has made a representation to another person [the representee] in words or by acts and conduct, or [being under a duty to the representee to speak or act] by silence or inaction with the intention [actual or presumptive], and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with its former representation, if the representee at the proper time, and in the proper manner, objects thereto… The first requirement then is there must have been a representation (for present purposes by the insurer) to the person seeking to rely on it. By definition a representation in this context is a representation of an existing fact. This distinguishes estoppel by representation from promissory estoppel which is founded on an assurance of future conduct.’ "
[106] At this juncture, I will point out that in its brief and oral submissions Elite has convincingly argued that the evidence does not disclose that any representative of the insurer made a representation of an existing fact to Mr. Oliver upon which he now seeks to rely.
[107] As to promissory estoppel, which pertains to an assurance of future conduct, the plaintiff relies on the Supreme Court of Canada decision in Maracle v. Travelers Indemnity Company of Canada, [1991] 2 SCR 50 . Therein, Justice Sopinka stated:
1 This appeal was heard concurrently with Marchischuk v. Dominion Industrial Supplies Ltd., [1991] 2 S.C.R. 61. Both appeals raise the issue as to the circumstances in which an admission of liability made to a prospective plaintiff by a prospective defendant amounts to promissory estoppel precluding reliance on a limitation period.
……
13 The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position. In John Burrows Ltd. v. Subsurface Surveys Ltd., [1968] S.C.R. 607, Ritchie J. stated, at p. 615:
It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended that the legal relations created by the contract would be altered as a result of the negotiations.
This passage was cited with approval by McIntyre J. in Engineered Homes Ltd. v. Mason, [1983] 1 S.C.R. 641, at p. 647. McIntyre J. stated that the promise must be unambiguous but could be inferred from circumstances.
14 In Collavino Inc. v. Employers Mutual Liability, supra, Holland J., in applying these principles to a case in which an admission of liability had been made, stated (at p. 101):
Promissory estoppel can prevent the insurer from relying on a limitation period where there has been either (1) an admission of liability of [sic: "or"] (2) a promise not to rely on the limitation period relied on by the insured ....
Before the principle applies there must be some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced.
15 This passage would imply that an admission of liability per se is an alternative basis on which promissory estoppel can be based. In my view, while an admission of liability is clearly one of the factors from which a court may infer as a finding of fact that a promise was made not to rely on the limitation period, it is not an alternate basis of promissory estoppel. In Gillis v. Bourgard, supra, the Ontario Court of Appeal, per Brooke J.A., dealt with a case in which an admission of liability was the basis for a claim of promissory estoppel. In concluding that the necessary ingredients for promissory estoppel had not been established, Brooke J.A. stated, at p. 109:
It seems to us that what occurred here was, at best, no more than normal dealings between parties attempting to resolve an insurance claim. To hold that it could or did give rise to any admission of liability or a promise not to rely upon a condition of the contract, the limitation period, is completely unwarranted and puts in jeopardy the benefit of such dealings to litigants.
16 An admission of liability is frequently made in the course of settlement negotiations. This is often a preliminary step in order to clear the way to enter into a discussion as to quantum. Indeed, when an offer to pay a stated amount is made by one party to the other, an admission of liability is usually implicit. In this type of situation, the admission of liability is simply an acknowledgment that, for the purpose of settlement discussions, the admitting party is taking no issue that he or she was negligent, liable for breach of contract, etc. There must be something more for an admission of liability to extend to a limitation period. The principles of promissory estoppel require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is to be taken as a promise not to rely on the limitation period must be such that the trier of fact can infer from it that it was so intended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled or not, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn is an issue of fact. If this finding is in favour of the plaintiff and the effect of the admission in the circumstances led the plaintiff to miss the limitation period, the elements of promissory estoppel have been established.
….
Not only is there no evidence to suggest that the admission was intended to have this effect, but the letter of February 23, 1983 was made "without prejudice" to the liability of the insurer. The use of this expression is commonly understood to mean that if there is no settlement, the party making the offer is free to assert all its rights, unaffected by anything stated or done in the negotiations. In my opinion, therefore, the trial judge, having found that there was no promise relating to the limitation period, was correct in concluding that promissory estoppel had not been made out.
[my emphasis added]
[108] Ultimately, the plaintiff argues at paras. 108 and 112-113 of his brief that:
In this matter, the written representation by Ms. Fancy that the limitation [period] expired in June 2009 should estop the insurer from alleging that it expired any earlier… The communications and negotiations by Elite following the expiration of the limitation period in June 2009, constitute an assurance that Elite would not rely on the limitation period. By continuing to negotiate in good faith with Elite and not filing an action before the expiration of the limitation period, Mr. Oliver relied upon this assurance to his detriment…
[Only upon Ms. Fancy’s either March 29 or May 25th 2000 communications with Mr. Rhyno should the insurer be permitted to be seen as having revoked that assurance] thus, the start of the time limit is pushed back to either March 29 or may 25th 2010, regardless of whether the plaintiff ought to have known his claim exceeded $200,000 before May 22, 2008.
[109] In relation to the application of s. 3 of the Limitation of Actions Act, which would permit the court to extend the limitation period for up to four years, the plaintiff’s position is that the balance of prejudices strongly favours Mr. Oliver. He submits that the matter would not be heard on its merits and Mr. Oliver would have no chance to succeed if the limitation period is not extended, whereas the insurer would not materially be prejudiced because it has all the documentation arising to date, plus the benefit of Ms. Fancy’s continued involvement, and no discernible evidentiary disadvantage otherwise. The only prejudice to the insurer would be the loss of the Limitation of Actions Act defence which, the plaintiff notes, courts have said should not by itself be given much weight in the analysis: see Anderson v. Co-operative Fire & Casualty (1983) 58 N.S.R. (2d) 163 (S.C.) per Hallett, J., at paras. 18 and 25; and Justice Hamilton’s reasons in Chapin Estate v. Drumhead Estates Ltd., 2011 NSCA 93 at para. 12. Moreover, generally the mere additional passage of time by itself will also not be given much weight in the analysis: see MacCulloch v. McInnis Cooper and Robertson (1995) 140 N.S.R. (2d) 220, per Justice Matthews at paras. 61 – 62.
[110] The plaintiff also relies on Justice Hallett’s comment in Anderson v. Co-operative Fire and Casualty Company, supra, at paras. 17 and 25:
It is to be noted that there is no mention in the specific matters the court is to consider as enumerated in subsection 4, that the court is to consider what claim the plaintiff may have against a third party. In many cases the claim would be, as it is here, against the plaintiff solicitor for failure to carry out his duty to his client to commence the action within the time period required by the relevant statute. Counsel for the defendant urged the court to consider this in determining the respective degrees prejudice to the plaintiffs and the defendant. The fact that a plaintiff whose action is out of time may have a cause of action against a solicitor is a matter the court should possibly consider in assessing the degree of prejudice to the parties, but it must be remembered that the plaintiff might not be successful. In my opinion, the fact that the solicitor may be potentially liable to the plaintiff should not be given much weight by the court in assessing the degree of prejudice to the parties as required on these applications.…
[my emphasis added]
The purpose of time limitations within which to bring actions is to see that matters are brought on expeditiously within reasonable time frames considering the nature of the claim. The purpose is not to defeat bona fide he claims through a technical failure to have commenced action within a specific time.. In this case… the fact that the lawyer involved may collaterally benefit from the granting of the relief requested is not a reason to refuse the application.
[111] After the hearing in this matter, the Court received a letter from plaintiff’s counsel, on October 9, 2014, which read, in part:
During the defendant’s submissions, solicitor Barnett presented the court with a copy of the English Limitation Act (1980) and an excerpt from the Law of Limitations (2nd edition) in support of the proposition that the court, when considering whether to exercise its equitable discretion pursuant to s. 3(4) of the Limitations Act, ought to take into consideration a possible negligence action against the plaintiff’s solicitor.
After these documents were submitted, the Court asked solicitor Barnett whether he had jurisprudence to support this suggestion. Mr. Barnett indicated that the English jurisprudence cited in the secondary source was all that he had.
The introduction of these documents was the first time the plaintiff was presented with this argument. I am prepared to provide Justice Rosinski with Nova Scotia case citations and the relevant paragraph numbers if permitted to do so.
[112] I permitted the plaintiff to file those materials. The references are to:
1. Morris v. Royal Bank of Canada, 2007 NSSC 73, at paras. 66 – 70;
2. Hiscock v. Pasher, 2008 NSCA 101, at paras. 22, 23 and 27;
3. Economical Insurance Group v. Master Forestry Ltd., 2012 NSSC 353, at paras. 36 – 40;
4. Smith v. Lord, 2013 NSCA 34, at paras. 50 – 51; and
5. Palmer Estate v. MacInnis, 2013 NSSC 391, at paras. 40, 67 – 68.
[113] Notably, in the most recent Court of Appeal decision, Justice Farrar stated in Smith, supra, at para. 52:
With respect to the potential alternative remedy against his former counsel, whatever action Mr. Lord may have against his former counsel and its potential success is mere speculation. In my view, it was appropriate for the motions judge to give it little weight in his deliberations.
Position of the defendant
[114] plaintiff’s counsel knew on June 23, 2008, that “the quantum of the claims exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction”. The defendant argues that plaintiff’s counsel ought to have known this long before that, for several reasons:
i. The case is not factually complex: there is no evidence that Mr. Oliver’s cerebral palsy was exacerbated by the 2001 or 2005/2006 motor vehicle accidents, thus it is effectively a neutral factor in determining “the quantum of the claims” herein. Although Mr. Oliver was diagnosed with a pre-existing cervical stenosis at C5 –6, that too is a neutral factor, according to the defendant. Mr. Oliver’s disk problems at C4-5 are associated with the 2001 Sangster motor vehicle accident and are the primary source of his inability to work. While following the 2005 Pearson accident he was diagnosed with another consequent disc herniation at C6 –7, Mr. Oliver had already ceased working in 2004, and similarly had to curtail his Community College program in October 2004. Thus, the defendant submits, the effect of that accident was not material to his inability to work after 2004. Moreover, he was granted CPP total disability benefits retroactive to October 2004.
ii. Mr. Dunlop is a very experienced lawyer in this area, and, since loss of income is the key driver of the damages claim in this case, it was wholly predictable well before June 2008 that Mr. Oliver’s claim – commencing with his disability in his early thirties from continuing to work at jobs that had generated income of $30-$40,000 per year – would easily outstrip the minimum insurance limits in Nova Scotia at the time of the 2001 motor vehicle accident (i.e. $200,000).
[115] The defendant says the tenor of clause 6 of the SEF 44 endorsement is “one of urgency.” The clause requires prompt notice (6(a)(i)), provision of copies of any statements of claim 6(b); and imposes a short (12 month) limitation period, with allowance for a total two-year limitation period. These provisions are all intended to have the SEF 44 insurer involved as early as possible.
[116] Defendant’s counsel submits that having the limitation period start in June 2008 is the best case for the plaintiff, because it was known at that point that Mr. Oliver would have to have resort to the SEF 44 endorsement of his parents’ motor vehicle insurance policy.
[117] The defendant suggests that the Ontario cases should be followed rather than those from Alberta, because effectively the Alberta cases have read out of the SEF 44 endorsement the words “ought to have known” by concluding that only a settlement or judgment’s quantification is sufficient to trigger the running of the limitation period as against an SEF 44 insurer. He suggests those words are not ambiguous on their face, although (as evidenced by the Ontario approach) plaintiff’s counsel are entitled to “some latitude” regarding when they “ought to have known” that the plaintiff will require recourse to the SEF 44 insurer.
[118] As to whether the Court should abridge the limitation period pursuant to the Limitation of Actions Act, the defendant argues in its brief, at para. 9:
In summary, the SEF 44 action in issue was commenced:
a-More than 11 ½ years after the accident;
b– Almost 9 years after the plaintiff last worked outside the home;
c-Around eight years after the plaintiff applied for and began receiving Canada Pension Plan disability benefits;
d-Almost 4 years and 11 months after the plaintiff’s legal counsel knew, without doubt, the defendant Sangster’s automobile insurance limits;
e- Almost 3 years after Cathy Fancy told the plaintiff’s legal counsel that the limitation for an SEF 44 action had expired; and
f-Roughly a year and a half after the defendant’s legal counsel told the plaintiff’s legal counsel that the limitation for an SEF 44 action had expired.
[119] The defendant also submits, at paras. 31 – 32 of its brief:
…[I]n order for the court to be able to even consider exercising its discretion, the plaintiff must show that the time limitation did not expire before May 21, 2008. If the time limitation expired on or before May 21, 2008, the one year time limitation in s.6(c ) of the SEF 44 would have expired and the court would not have any discretion to permit the action, filed on May 22, 2013, to continue.
The defendant’s position is simple. The plaintiff and/or his legal representatives knew or ought to have known that the value of his claims arising from the 2001 motor vehicle accident surpassed the minimum limits of $200,000 well before May 21, 2008.
[120] Using the Ontario test for when counsel “ought to have known,” the defendant states, at para. 43 of its brief:
There are other points in time prior to May 21, 2008 at which one could probably say that the body of evidence available to the plaintiff could reasonably have supported a quantum of claims in excess of $200,000, but the CPP disability application is simply the most blatant point in time when the time limitation on any SEF 44 action began.
[121] Regarding the plaintiff’s original position that there had been “waiver” by the defendant, the defendant says s. 35 of the Insurance Act is a complete defence, particularly since Ms. Fancy had assumed until May 25, 2010 that an action had been started. Additionally, the defendant cites Mew’s Law of Limitations, 2d ed (2004), for the principle that “settlement negotiations should not generally give rise to an inference that a defendant has waived a limitation defence.”
[122] As to the plaintiff’s claim that there was promissory estoppel, the defendant argues that there is no evidence of any specific representation that Elite would not make a limitations defence, nor is there evidence of reliance by the plaintiff on any such representations, or that they altered their position as a result.
[123] Further, in relation to the weighing of “prejudice” in respect of proposed extension of the limitation period, the defendant says the plaintiff and his counsel have not been diligent in advancing the SEF 44 claim. Long periods of inactivity after June 2008 are apparent in the evidence without explanation.
[124] Moreover, the defendant submits that the Court may properly consider that the plaintiff may have recourse against his legal counsel in a negligence claim if the court does not permit the limitation period to be extended sufficiently to allow his claim to proceed against the SEF 44 insurer.
[125] The defendant goes on to submit that prejudice arises to the insurer by virtue of Mr. Oliver having settled the Sangster action by way of notice of dismissal rather than discontinuance. Defendant’s counsel argues that the insurer is now precluded from pursuing Mr. Sangster’s personal assets for a contribution to the amounts the SEF 44 insurer may have to pay to Mr. Oliver if the limitation period is extended to allow his claim to proceed.
[126] The defendant disagrees with the plaintiff’s interpretation of the Supreme Court of Canada decision in Somersall v. Friedman, 2002 SCC 59, [2002] S.C.J. No. 60, regarding the insurer’s subrogation rights. While the Supreme Court of Canada has indicated that in such cases subrogation rights are not terribly significant generally; the defendant submits that when faced with a full four-year limitation period extension, beyond the one-year extension in the SEF 44 endorsement, the insurer’s prejudice is heightened.
Analysis of the issues
i. What is the time limitation for commencing an SEF 44 action?
[127] The interpretation of clause 6(c) of the SEF 44 endorsement is directly in issue, and specifically the words, “[t]he date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.”
[128] The plaintiff argues that this language is ambiguous, as found by courts in Alberta, and that therefore the doctrine of contra proferentum applies. The defendant disagrees, as do courts in Ontario. There are no reported Nova Scotia cases at this point. The Nova Scotia Court of Appeal has, however, spoken to the principles of interpretation applicable to SEF 44 endorsements, in Campbell-MacIsaac v. Deveaux 2004 NSCA 87, per Saunders, J.A., at paras. 43 – 62.
[129] Since the plaintiff’s argument ultimately relies on the doctrine of contra proferentum (interpreting a document against the interests of the proffering party), an examination of that doctrine is appropriate.
[130] As Justice Binnie stated for the Court in Cooperators Life Insurance Co. v. Gibbens, 2009 SCC 59, at paras. 25 – 27:
The Words of an Insurance Contract, When Ambiguous, Should Be Construed Against the Drafter (i.e. the Insurer) (Contra Proferentem)
25 Whoever holds the pen creates the ambiguity and must live with the consequences. In Brissette Estate v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87, at p. 114, Cory J. wrote:
It is right and just to interpret the ambiguities in favour of the insured. It is the insurance company which draws up a contract of insurance. It is the company which determines the clauses which will go into a standard form of contract. It is that standard form of contract which is offered to the people in all walks of life on a take-it-or-leave-it basis.
(See also Consolidated-Bathurst, at p. 899.)
This doctrine is complemented by other rules of contractual interpretation which can assist courts where ambiguity is present. None is relevant here.
…
Where a Policy is Ambiguous, Effect Should Be Given to the Reasonable Expectations of the Parties
26 In Consolidated-Bathurst, Estey J. wrote at pp. 901-2 that
[t]he courts should be loath to support a construction which would either enable the insurer to pocket the premium without risk or the insured to achieve a recovery which could neither be sensibly sought nor anticipated at the time of the contract.
Similarly, in Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252, McLachlin J. urged "[t]he desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectations of the parties (p. 269).
…
Continuity of Interpretation
27 As Newbury J.A. pointed out in the court below, "courts will normally be reluctant to depart from [authoritative] judicial precedent interpreting the policy in a particular way" (para. 30) where the issue arises subsequently in a similar context, and where the policies are similarly framed. Certainty and predictability are in the interest of both the insurance industry and their customers….
[131] It is important as well not to lose sight of the reality that this contract is a contract of adhesion. That concept was discussed by Justice Bastarache, in dissent with Justices Lebel and Fish, in Dell Computer Corp. v. Union des Consommateurs, 2007 SCC 34, at para. 227:
The notion of a contract of adhesion is only meant to describe the contract in which the essential stipulations were imposed or drawn up by one of the parties and were not negotiable… This does not mean that the adhering party cannot give a true consent to it and be bound by each one of its clauses, subject to the possibility that some might be void or without effect pursuant to some other provisions of the law…
[132] While insured persons can consent to the terms of a contract of adhesion, such contracts are particularly susceptible to the doctrine of contra proferentum: Somersall, supra, at paras. 47 – 48, per Iacobucci, J.
[133] In the case at bar, the alleged ambiguity relates to a procedural aspect: at what point does the running of the limitation period commence? In that respect, this case differs from cases where substantive aspects were at issue, such as insurability or the scope of the insurance coverage; see, for example, Scott v. Wawanesa Mutual Insurance Company, [1989] 1 SCR 1445 and Canadian National Railway Co. v. Royal and Sun Alliance insurance Co. of Canada, 2008 SCC 66.
[134] Rather than determining a discrete matter such as insurability, or the scope of the insurance coverage, the case at bar necessarily involves consideration of a complex factual matrix of circumstances that only takes form after the contract is signed, and which will be unique in each individual case.
[135] At the time the contract is entered into there is no way for the insured to be aware of precisely when its obligation to commence an SEF 44 claim arises. This is as a result of a level of factual uncertainty that necessarily exists at the time of execution of the contract. Such uncertainty is inherent in the use of “discoverability” standards arising from contractual and statutory limitation periods. However, that uncertainty is not to be confused with consideration of whether the words used in the clause are “ambiguous”.
[136] The ability of an insured to assess the impact of clause 6(c) of the SEF 44 endorsement is premised on making an assessment at some point in the future. Such assessment (presuming fault can be proved), will culminate with a potential range of quantifications for “the quantum of the claims” that the insured could reasonably have as against the tortfeasor(s), and ultimately an assessment of how likely it is that such quantifications could reasonably exceed $200,000 (the minimum insurance limits in place at the time of the 2001 motor vehicle accident).
[137] In Shaver v. Cooperators General Insurance Co. 2011 ABCA 367, Justice Côté stated for the Court:
D. The Contractual Time Limit
10 But in the alternative, the plaintiff argues that he can rely upon the contractual limitation period in cl 6(c). Its one year is shorter than the two years or 10 years mentioned by the two statutory periods, so his argument sounds surprising at first. However, this contractual period (in the endorsement) expressly only begins to run on discovery. And discovery here appears to have occurred, if at all, within a year before suit. Specifically, time starts to run under cl 6(c) from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.
Maybe ordinary limitation periods do not require evaluating the claim; but this one expressly does. Cf. Peixeiro v Haberman [1997] 3 SCR 549, 217 NR 371 (para 44).
11 To start this contractual time running, what had to be discovered or discoverable?
12 One might assume that the minimum liability insurance coverage is fixed by law, so that no uncertainty about discoverability can arise from that. In form, that is true, but in substance it is not. The endorsement defines the claim payable to the insured as being net of a number of possible payments, including "an unsatisfied judgment fund". (The fund is described in Part C above.) That point is critical here. One could look at that as quantum of this plaintiff's claim, or as funds available to pay it. Either way, it involves actions by and information from other entities, and indeed from other injured people.
13 In cl 6(c), the phrase "quantum of the claims" is plural, so it must refer to the total of all the claims arising from the accident in question. As noted, that is the way that unsatisfied judgment funds operate, and doubtless many insurance policies or insurance schemes may do the same.
14 For the sake of simplicity, I will speak only of personal injuries. (The unsatisfied judgment fund does not pay property claims). If a plaintiff's own injuries are more than slight, it may take many months until his or her medical advisers can even tentatively assess the future, and before his or her counsel can suggest what those injury claims are worth. It is very common that the treating physician or surgeon initially hopes for a more or less full recovery; only the elapse of significant time shows that that is too optimistic in the case at hand. The evidence here is that whether this plaintiff's injury will continue to impair his ability to earn income, is still unclear.
15 After seeking that clarity for one victim's injury claim, the same process must be followed with respect to all other claimants injured in the same accident. That may not be easy or quick. An injured person (or his or her solicitor) can ask his or her own medical advisers for such information. But he or she has no right to demand such information from other persons injured in the accident; and statutory or other confidentiality obligations may well prevent their advisers or agents from revealing that. If the two injured people owed each other no duty of care, or the other victim was plainly not negligent, or plainly did not cause the injuries, that other victim cannot be sued. So no discovery is available to compel such information.
16 Therefore it may well take a long time until one injured person can find whether the total claims from the accident exceed the compulsory minimum statutory liability insurance limits (or exceed any other relevant ceiling or sum). If a number of vehicles and passengers are involved, it could be a long time indeed.
17 The affidavit by the respondent plaintiff's lawyer shows in detail how slow and undecided the unsatisfied judgment fund here was, and the complexities involved. There is no contrary evidence or cross-examination in the Court of Appeal record.
18 Indeed, discoverability may come still later. The above description assumes that a plaintiff and his or her lawyer have to make their own decision about the worth of the claims of the plaintiff and of the other persons injured in the accident. That may well be wrong; the time under cl 6(c) may start to run only when a judgment or binding settlement legally fixes the amount of those claims. A trial judge held that that was usually the rule, in Shoemaker v Wawanesa Mut Ins Co (1993) 9 Alta LR (3d) 214, 223-24 (paras 23-29). The Court of Appeal dismissed an appeal from that, saying that the trial judge's interpretation was "compelling": (1994) 155 AR 2 (CA). (But the Court of Appeal did not positively decide the point.) That interpretation is also supported by the brief decision of the Court of Appeal in Mellon v Gore Mut Ins Co, 1995 ABCA 340, 174 AR 200 (para 4).
19 Once again, the affidavit of the respondent plaintiff's lawyer shows how for a long time both the respondent plaintiff and the unsatisfied judgment fund were waiting for court decisions.
E. Is the Contractual Time Limit Valid?
20 This wording of the SEF 44 endorsement appears to be older than the current Limitations Act. Is the endorsement's time limit (cl 6(c)) valid? The chambers judge did not expressly answer that question, though it was argued before her. But she seems to have thought that it was invalid.
21 Though the contractual limitations period put into the standard auto policy by its statutory conditions does not apply to underinsured motorist coverage (Insurance Act s 615(1)), another section in the Insurance Act does apply. Section 647 says that a suit under such coverage "must be commenced within the limitation period specified in the contract ...". (There is an exception, but it is irrelevant here.)
22 On its face, s. 647 ratifies and permits the contractual limitation period, cl. 6(c) of the SEF 44 endorsement.
[my emphasis added]
[138] In Roque v. Pilot Insurance Co., 2012 ONCA 311, Justice Juriansz stated the position of the Ontario Court of Appeal on this issue:
3 The appellant submits that s. 17 of OPCF 44 should be interpreted to mean that the limitation period begins to run when the plaintiff's damages have been quantified by settlement or judgment. Only then can it be said that the plaintiff "knows" for certain that the available insurance under the defendant's policy is less than that available under his own coverage.
4 This interpretation was adopted by Gordon J. in Hampton v. Traders General Insurance Company (1996), 27 O.R. (3d) 285 (Gen. Div.). Gordon J. explains why it is difficult to apply the limitation period from the date the plaintiff knew or ought to have known that the quantum of the claim exceeded the minimum limits in the jurisdiction, at p. 288:
The application, in my view, would be difficult indeed. The progression of a personal injury action produces not unusually a series of crests and troughs on quantum and liability as evidence becomes known and medical reports unfold. It may be quite elusive, vague and blurred as to what point on this sine curve a reasonably competent civil litigator objectively or subjectively fixes as probably that where minimum limits are attracted. Nor can the complications introduced by subsequent highs and lows be disregarded.
5 On this reasoning, Gordon J. found, at p. 288, that "[t]he discoverability application in all but catastrophic cases of clear liability must, in my view, be the date of the judicial determination of award as against the primary tortfeasor."
6 While applying discoverability in this way has some advantages, it is inconsistent with the text of the provision. If the limitation period begins when the plaintiff knows the quantum of the claim with certainty, the phrase "or ought to have known" in the provision is left without meaning.
7 In his factum, the appellant advances a different argument. That argument is the limitation period does not begin to run until the plaintiff knows that the quantum of the claim is greater than the tortfeasor's insurance coverage. This interpretation would avoid creating a multiplicity of proceedings, as it would reduce the need for injured parties to sue their own insurers.
8 I do not accept either of the plaintiff's submissions. The words of the provision are clear. The motion judge was correct to find that that proper approach was expressed by Master Dash in McCook v. Subramaniam (2008), 172 A.C.W.S. (3d) 344 (S.C.) at para. 5:
The plaintiff's case runs from when he has a body of evidence accumulated that would give him a "reasonable chance" of persuading a judge that his claims would exceed $200,000.
9 In this case, the appellant does not take issue with the motion judge's finding that more than two years had passed since he knew or ought to have known that the quantum of his claims exceeded $200,000, the minimum coverage allowed in Ontario. The motion judge noted that the appellant had medical reports, a DAC assessment report and an economic loss report going back to June 1998. Unfortunately, the plaintiff's solicitors did not learn until April or May of 2002 that the defendant had only $200,000 of coverage. The appellant commenced an action against the respondent on March 28, 2002.
10 The inevitable conclusion is that the plaintiff's action against the respondent was not brought in time and was properly dismissed.
11 In my view, the appellant overstates the concern that applying the limitation period in s. 17 of OPCF 44 according to its ordinary grammatical meaning will lead to a multiplicity of proceedings. Section 258.4 of the Insurance Act, R.S.O. 1990, c. I.8 obligates an insurer who receives a notice under s. 258.3(1)(b) to promptly inform the plaintiff whether there is a motor vehicle liability policy issued by the insurer to the defendant and, if so, the liability limits under the policy, as well as whether the insurer will respond under the policy to the claim. Section 258.4 is intended to avoid the situation that arose in this case, where the defendant's insurer did not comply with s. 258.4. Where a defendant's insurer fails to comply with its obligations under s. 258.4, it would be prudent for plaintiffs' counsel to commence an action against their own insurer and discontinue it later if necessary.
[my emphasis added]
[139] What each of these cases demonstrates, is not only the position of the courts of appeal in those provinces in relation to the interpretation of the SEF 44 endorsement equivalents in those provinces, but also that the legislative context in each of those provinces differs in significant respects. Thus, those authorities, while not binding on me in any event, are of limited assistance. Nevertheless, the underlying concerns and reasoning are helpful.
[140] The Alberta approach seems premised on a concern not to deprive an insured of the opportunity to have a trial on the merits vis à vis his/her own insurer, and avoidance of unnecessary SEF 44 claims being filed. The Ontario approach seems premised on the view that that the Alberta approach “is inconsistent with the text of the provision. If the limitation period begins when the plaintiff knows the quantum of the claim with certainty, the phrase “or ought to have known” in the provision is left without meaning… The words of the provision are clear.”
[141] In contrast to the Nova Scotia and Alberta schemes, s. 258.4 of the Ontario Insurance Act obligates insurers to inform plaintiffs, upon request, how much insurance coverage is available, if any, and whether the insurer will respond to the claim. Thus, in Ontario, the concern about unnecessary SEF 44 claims proceeding is a non-issue, which may explain the more restrictive approach adopted by the courts of that province. Section 258.4 of the Ontario Act came into force on November 1, 1996: O. Gaz. 1996, p. 2441 pursuant to S.O. 1996, c. 21, s. 22. A link to the Ontario Legislature Explanatory Note to Bill 59 (the Automobile Insurance Rate Stability Act, 1996) is informative. Moreover, the amendments may have been prompted by Justice Rosenberg’s decision (as he then was) in Burton v. Cochrane [1995] O.J.No. 1147 (Div. Ct.) which appeal was apparently never heard (see also the reference at para. 7 in Hampton v. Traders General Insurance Co. [1996] O.J. No. 41).
[142] While I accept that the Alberta approach has definite advantages for plaintiffs, in the legislative context of Nova Scotia, I believe the Ontario approach is appropriate, and will not result in the inequities that the Alberta courts were concerned with for the following reasons:
1. The interpretation of the phrase “knew or ought to have known” is arguably both a question of mixed fact and law and ambiguous. However, the alleged ambiguity is more properly characterized as a fact-driven uncertainty which will fluctuate according to the parameters of the factual matrix in each individual case. The point in time at which a plaintiff “ought to have known” will be less precise in some cases than in others. The Ontario approach, by which “the plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that his claims would exceed the statutory minimum determined with a healthy degree of “latitude” regarding counsel’s assessment and quantification of his claims, is a proper starting point. It leaves the onus on the plaintiff to manage his claim; it respects the contractual wording, yet still recognizes that “latitude” is required in allowing counsel to make their subjective expert assessment regarding the expected value of the claim.
2. In addition to the 12-month period arising from clause 6(c) in the SEF 44 endorsement, section 3 of the Limitation of Actions Act provides the possibility of an extension of up to four years to that limitation period, on a consideration of the equities in the case. Thus, effectively a plaintiff has the protection of an additonal five-year period within which to start an action against their own insurer pursuant to the SEF 44 endorsement.
3. It is not appropriate to read out the words “ought to have known”, which exist not only in the Nova Scotia SEF 44 endorsement context, but across the country.
[143] Thus, I conclude that, with allowance for a healthy “latitude” noted above, the limitation period for SEF 44 claims in Nova Scotia runs from the point at which an insured plaintiff has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that the quantum of his claims would exceed the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.
ii-When did the time limitation expire in the circumstances of this case?
[144] Clause 6(c) in the SEF 44 endorsement reads:
Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred. No action which is commenced within two years of the date of the accident shall be barred by this provision.
[145] Subsection 125(1) of the Insurance Act, R.S.N.S. 1989, c. 231 sets that limit as $200,000 on October 12, 2001, when Mr. Sangster collided with Mr. Oliver’s vehicle. The subsection then provided:
Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to the limit of at least $200,000, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property.
[146] The words in clause 6(c), “the quantum of the claims with respect to an insured person”, are not expressly defined in the endorsement.
[147] However, among the definitions in cl. 1 of the endorsement we find:
(c): The term “eligible claimant” means:
i-the insured person sustaining bodily injury;
ii-any other person who, in the jurisdiction in which the accident occurred, is entitled to maintain an action against the inadequately insured motorist for damages because of the death of an insured person or because of bodily injury to an insured person.
(f): the words “insured person” mean:
i-the named insured and his or her spouse if residing in the same dwelling premises and any dependent relative of either, while
1-an occupant of the described automobile, a newly acquired automobile or a temporary substitute automobile as defined in the general provisions, definitions and exclusions of the policy,
2-an occupant of any other automobile, but excluding the person who leases such other automobile for a period in excess of 30 days or who owns such other automobile unless under-insured motorist insurance is in force in respect of such other automobile, or
3-not an occupant of an automobile was struck by an automobile;
… Provided that where the policy has been endorsed to grant permission to rent or lease described automobile for a period in excess of 30 days, any reference to the named insured shall be construed as a reference to the lessee specified in that endorsement.”
[148] Under the heading “Limit of Coverage Under This Endorsement” at clause 3 one finds:
(a) The insurer’s maximum liability under this endorsement regardless of the number of eligible claimants, or number of insured persons injured or killed, or number of automobiles insured under the policy shall be the amount by which the limit of Family Protection Coverage exceeds the total of all limits of motor vehicle liability insurance, or bonds, or cash deposits, or other financial guarantees as required by law in lieu of such insurance, of the inadequately insured motorist and of any person jointly liable there with.
(b) Where this endorsement applies as excess, the insurer’s maximum liability under this endorsement is the amount determined in accordance with paragraph 3(a) less the amounts available to eligible claimants under any first loss insurance as referred to in paragraph 7 of this endorsement.
[149] Under the heading “Amount Payable Per Eligible Claimant” at clause 4, one finds:
(a) The amount payable under this endorsement to any eligible claimant shall be ascertained by determining the amount of damages the eligible claimant is legally entitled to recover from the inadequately insured motorist and deducting from that amount the aggregate of the amounts referred to in paragraph 4(b), but in no event shall the insurer be obliged to pay any amount in excess of the limit of coverage as determined under paragraph 3 of this endorsement.
(b) The amount payable under this endorsement to any eligible claimant is excess to any amount actually recovered by the eligible claimant from any source (other than money payable on death under a policy of insurance) and is excess to any amounts the eligible claimant is entitled to recover (whether such entitlement is pursued or not) from
(i) the insurers of the inadequately insured motorist, and from bonds, cash deposits or other financial guarantees given on behalf of the inadequately insured motorist;
(ii) the insurers of any person jointly liable with the inadequately insured motorist for the damages sustained by an insured person;
(iii) the Société de l’ assurance automobile du Québec;
(iv)-an unsatisfied judgment fund or similar plan or which would have been payable by such fund or plan had this endorsement not been in effect;
(v) the uninsured motorist coverage of a motor vehicle liability policy;
(vi) any automobile accident benefits plan applicable in the jurisdiction in which the accident occurred;
(vii) any policy of insurance providing disability benefits or loss of income benefits or medical expense or rehabilitation benefits;
(viii) any Workers’ Compensation Act or similar law of the jurisdiction applicable to the injury or death sustained;
(ix) any Family Protection Coverage of a motor vehicle liability policy;
(c) In the event that the insurer is presented with claims by more than one eligible claimant and the total of the amounts payable to the eligible claimants exceeds the limit of the insurer’s liability under the endorsement as set out in paragraph 3, the insurer may pay to each eligible claimant a pro rata portion of the amount otherwise payable to each eligible claimant. In the event that payments are made to eligible claimants under this endorsement prior to the receipt of actual notice of any additional claim, then the limits of this endorsement as referred to in paragraph 3 of this endorsement shall be the amount determined in paragraph 3 less than the amounts paid to the prior eligible claimants.
[150] Under the heading “Determination Of The Amount An Eligible Claimant Is Legally Entitled To Recover” at clause 5,one finds:
(a) The amount that an eligible claimant is legally entitled to recover shall be determined in accordance with the procedures set forth for determination of the issues of quantum and liability by the uninsured motorist coverage provisions of the policy.
(b) In determining the amount an eligible claimant is legally entitled to recover from the inadequately insured motorist, issues of quantum shall be decided in accordance with the law of the province governing the policy, and issues of liability shall be decided in accordance with the law of the place where the accident occurred.
(c) In determining any amounts an eligible claimant is legally entitled to recover, no amount shall be included with respect to prejudgment interest accumulating prior to notice as required by this endorsement.
(d) In determining any amounts an eligible claimant is legally entitled to recover, no amount shall be included with respect to punitive, exemplary, aggravated or other damages the award of which is based in whole or in part on the conduct of the inadequately insured motorist or person jointly liable therewith to the extent that such damages are not for the purpose of compensating the eligible claimant for actually incurred losses.
(e) In determining any amount an eligible claimant is legally entitled to recover from an inadequately insured motorist as defined in paragraph 1(e)(i), no amount shall be included with respect to costs.
(f) No findings of a court with respect to issues of quantum or liability are binding on the insurer unless the insurer was provided with a reasonable opportunity to participate in those proceedings as a party.”
[151] The insurance industry’s agents, who no doubt very carefully considered how the endorsement should best be drafted to protect its own interests, sought to specifically and precisely limit their obligations. The drafters did not seek to expressly define “the quantum of the claims with respect to an insured person”.
[152] Under clause 3,“limit of coverage under this endorsement” they did provide that deduction should be made for “the total of all limits of motor vehicle liability insurance, or bonds, or cash deposits, or other financial guarantees as required by law in lieu of such insurance, of the inadequately insured motorist and of any person jointly liable therewith.”
[153] Additionally, under clause 4, “amount payable per eligible claimant” the endorsement provides for a host of deductions that might apply in any particular case, and which should be deducted from “the amount of damages the eligible claimant is legally entitled to recover from the inadequately insured motorist”. Notably, the law is unsettled as to whether the future value of CPP disability benefits of a plaintiff should be deducted under clause 4: see Sabean v. Porage La Prairie Ins. Co., 2013 NSSC 306 per Murray, J. CPP benefits paid to date of trial were considered as properly deductible in the case. This issue was not addressed by counsel before me.
[154] The defendant’s brief equated “the quantum of the claims” with “special damages for past losses, coupled with general, non-pecuniary damages and anticipated future losses, including income loss” [at para. 35].
[155] The parties in the case at bar both have treated “the quantum of the claims” as including only those items cited by the defendant. There is arguably good reason to distinguish “the quantum of the claims,” and “the amount payable” under the contract, which appears in clause 4(a), in contrast to the “the amount of damages the eligible claimant is legally entitled to recover”. The defendant argued, and the plaintiff did not dispute, that “the quantum of the claims” does not however include prejudgment interest or costs.
[156] Thus, for present purposes I will proceed on the basis that the reference in clause 6(c) to “the quantum of the claims with respect to an insured” merely refers to the “damages” the eligible claimant could seek as against the tortfeasor.
[157] Therefore, the question becomes: When did Mr. Oliver’s counsel know, or ought they have been satisfied, that they had a body of evidence accumulated which would give them a reasonable chance of persuading a judge that “the quantum of [Mr. Oliver’s] claims” vis-à-vis Elite, would exceed $200,000?
[158] As I stated earlier, I accept the evidence of Messrs. Rhyno, Dunlop and Oliver that there was no quantification of his claims before the June 23, 2008 mediation brief was created. Therefore they did not know before that time that the quantum of his claims exceeded $200,000.
[159] Once Mr. Oliver’s counsel agreed, on June 2008, to settle the Sangster action for $200,000 (the maximum insurance coverage available from his insurer and the statutory minimum), they knew by then that any remaining damages claim would have to be made against the SEF 44 insurer, and therefore that insurer was entitled to be notified as soon as reasonably possible. Dale Dunlop informed Cathy Fancy, representative for the SEF 44 insurer on Monday, June 23, 2008.
[160] Respectfully, I disagree with the defendant’s argument that Mr. Oliver’s counsel ought to have known “well before May 21st 2008”. I say this while according an allowance for a healthy latitude to Mr. Oliver’s counsel in their assessment of the quantum of his claims.
[161] I am satisfied that the opinion of Mr. Dunlop should be accorded great deference, given his considerable experience in such matters, and his personal involvement in Mr. Oliver’s claim. He reasonably concluded that until Mr. Oliver’s medical condition had stabilized or plateaued, it was not appropriate to quantify his claim, and that this was accordingly not possible until sometime in the late spring of 2008. Moreover, Mr. Dunlop testified that in his opinion Mr. Oliver’s claim was complicated by a number of factors such that he was “very leery of ball parking this claim until it was absolutely necessary”. He outlined those factors, and I accept that he reasonably concluded that the claim was complicated by those considerations, which made it difficult for the claim to be quantified earlier than June 2008.
[162] I am comforted in this conclusion by the assessment of claims specialist Cathy Fancy, who stated in her November 4, 2009, email to Mr. Rhyno:
I have reviewed this file on a number of occasions and must say, I have had much difficulty attempting to quantify potential damages relating to the 2001 incident. There are, as you know, many variables to consider including but not limited to your client’s pre-existing CP condition, the fact that he was able to return to work following the 2001 accident, his failure to mitigate in attempting to seek any form of employment, other falls and injuries, the 2005 MVA, the financial benefit to the family resulting from Mr. Oliver staying at home with his children versus the expensive day care, and the deductibility provision specific to the SEF 44 endorsement. We are prepared to offer $45,000 in full and final settlement of the SEF 44 claim.
[my emphasis added]
[163] Thus, the insurer’s own specialist adjuster clearly had “much difficulty attempting to quantify potential damages.”
[164] Moreover, Ms. Fancy was only prepared to offer $45,000 in full and final settlement of the SEF 44 claim. While this may not have necessarily been her final offer, it is noteworthy that she did not increase that offer at any time before she retired in late June 2010. She must have been satisfied that this was a reasonable settlement offer, bearing in mind she was dealing with Mr. Dunlop, a very experienced plaintiff’s counsel.
[165] Mr. Dunlop had advised her on June 23, 2008 that Mr. Oliver’s claim was “well north of $200,000”. I understood that to be Mr. Dunlop effectively setting a starting offer of $200,000 new money. In November 2009, Ms. Fancy rejected Mr. Rhyno’s offer of $230,000 new money. She noted at paragraph 18 of her affidavit:
Although I subsequently [after December 1, 2009] tried to get Mr. Oliver and his legal counsel to reconsider my earlier offer in January 2010, it became clear that a significant gap between the parties remained and as a result the parties proceeded to mediation.
[166] I conclude that Mr. Oliver’s counsel could fairly be said to not have had a body of evidence accumulated which would give them a reasonable chance of persuading a judge that the quantum of his claims would exceed $200,000 until shortly before the mediation hearing on June 23, 2008. Put differently, I find that plaintiff’s counsel only ought to have known, that Mr. Oliver’s quantum of claims as against Mr. Sangster would exceed $200,000, concomitantly with the preparation of their mediation brief in June 2008.
3 - The effect of the doctrines of waiver and promissory estoppel
[167] In his brief the plaintiff submits that Elite knew by July 2009 that it had a limitation defence but still participated in negotiations. He says the fax from Ms. Fancy of May 25, 2010, was a representation that the limitation period expired in June 2009, and should estop the insurer from claiming that it expired earlier. In the May 25, 2010, fax to plaintiff’s counsel, Ms. Fancy stated:
Action naming Aviva as defendant should have been commenced in June 2009, one year from the date you first became aware the [tortfeasor] had liability coverage of $200,000 and that you valued your clients claim in excess of that amount.
[168] The fax also included, after her signature, the following notation:
Nothing herein contained is or shall be construed as either an admission of liability or a waiver or extension of any notice, claim or limitation period.
[169] As such, the plaintiff says Elite is estopped from having the benefit of the 12-month limitation period in cl. 6(c) beginning to run in June 2008, arguing rather that it be deferred from running until at least June 2009.
[170] The law relating to promissory estoppel is well settled. In Maracle v. Travelers Indemnity Company of Canada, [1991] 2 SCR 50, Justice Sopinka cited with approval the Ontario Court of Appeal decision Gillis v. Bourgard (1983), 41 O.R. (2d) 107. He noted at para. 15 that Gillis was a case “in which an admission of liability was the basis for a claim of promissory estoppel.” He went on to state:
16 An admission of liability is frequently made in the course of settlement negotiations. This is often a preliminary step in order to clear the way to enter into a discussion as to quantum. Indeed, when an offer to pay a stated amount is made by one party to the other, an admission of liability is usually implicit. In this type of situation, the admission of liability is simply an acknowledgment that, for the purpose of settlement discussions, the admitting party is taking no issue that he or she was negligent, liable for breach of contract, etc. There must be something more for an admission of liability to extend to a limitation period. The principles of promissory estoppel require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is to be taken as a promise not to rely on the limitation period must be such that the trier of fact can infer from it that it was so intended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled or not, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn is an issue of fact. If this finding is in favour of the plaintiff and the effect of the admission in the circumstances led the plaintiff to miss the limitation period, the elements of promissory estoppel have been established.
[my emphasis added]
[171] In the case at bar, the liability of Mr. Sangster was never in issue. Thus, it may be said that the SEF 44 insurer here had made an admission of liability to that extent. The more contentious issue is whether that admission of liability, individually, or taken together with the other circumstances, can be said to permit the court to find the preconditions of promissory estoppel as argued by the plaintiff.
[172] Were there words or conduct from which it can be inferred that the admission of liability was intended to apply to extend the limitation period to June 2009?
[173] Ms. Fancy swore in her affidavit, at paras. 5 and 6, that:
In that voicemail [June 23, 2008] Mr. Dunlop indicated that he had just found out at the mediation that the defendant Joseph Sangster’s automobile insurance policy had policy limits of $200,000 only and that, in his opinion, his client Regan Oliver was an eligible claimant pursuant to a Standard Endorsement Form No.44 [Family Protection Endorsement] attached to an automobile insurance policy with a policy limit of $500,000 issued by Elite Insurance Company to Mr. Oliver’s parents, Perley and Marie Oliver ;
I’m advised by J Scott Barnett and do verily believe that on June 23, 2008, he received a detailed voicemail message from Dale Dunlop concerning the same subject matter as that in the voicemail message left for me…
[174] On June 23, 2008, both the responsible claims adjuster and counsel for Elite were aware that Mr. Oliver had settled with Mr. Sangster for $200,000; that Mr. Oliver considered his claim to be in excess of $200,000; and therefore would be making a claim against Elite Insurance Company, as the SEF 44 insurer. Neither Ms. Fancy nor Mr. Barnett requested a copy of a statement of claim at that time. I conclude that Ms. Fancy would have been aware very shortly thereafter, that the accident occurred on October 12, 2001. She would have known that there is a 12-month limitation period within clause 6(c) of the endorsement. I further conclude that Ms. Fancy, was content to proceed to adjust the claim without seeing a copy of a statement of claim. As she testified, she would not have had regard to the statement of claim in her negotiations in any event.
[175] From Mr. Oliver’s counsel’s perspective, on June 23, 2008 they had alerted the SEF 44 insurer about Mr. Oliver’s SEF 44 claim. They knew they had not yet filed a statement of claim regarding the SEF 44 claim. It was not until March 29, 2010, that Ms. Fancy requested a copy of the statement of claim from Mr. Dunlop. The plaintiff’s counsel could be forgiven for believing that a copy of the statement of claim was not significant to Ms. Fancy in her attempts to settle the matter. plaintiff’s counsel proceeded on that basis. They relied on the fact that the defendant’s representatives had not requested a copy of a statement of claim.
[176] I keep in mind that Ms. Fancy suggested, in cross-examination, that until approximately March 29, 2010, she mistakenly believed that a statement of claim had been issued, but not served on the SEF 44 insurer. In her affidavit, she stated:
Up until May 25, 2010,… I had assumed that such an action had previously been filed quite some time beforehand.
[177] There is no evidence that the SEF 44 insurer is disputing that Mr. Sangster was solely responsible for the October 12, 2001, motor vehicle collision with Mr. Oliver’s vehicle. Therefore, the quantum of any associated damages amount above the $200,000 paid by Mr. Sangster’s insurer was the only issue to which settlement negotiations between Mr. Oliver and Elite were directed. Certainly that was the clear impression that the words and conduct of Ms. Fancy left on plaintiff’s counsel. Moreover, though no fiduciary duty exists in such circumstances, a mutual obligation to act in “utmost good faith” does prevail; see: Industrial Alliance Insurance v. Brine 2014 NSSC 219 at para 190 per Bourgeois, J. (as she then was). Most recently, see Justice Cromwell’s similar comments while discussing the “duty of honest performance” arising in the contractual context at paras. 55, 65, and 86: Bhasin v. Hrynew 2014 SCC 71.
[178] In his testimony, Mr. Dunlop noted that after Mr. Rhyno’s return in April 2009, “on a fairly regular basis I would ask about any progress and the limitation period… I knew Cathy Fancy, and I expected it will get worked out… Just a question of crunching the numbers.” He went on to state that during his substantial experience he had seen a number of cases where communications between plaintiff’s counsel and defendant’s counsel/agents, went on in good faith even after the limitation period had expired without the filing of a statement of claim, in an effort to settle obviously meritorious claims.
[179] Ms. Fancy testified that in 40% of the claims she adjusted in the latter part of her career, she would handle the file on behalf of the insurer instead of counsel, and would deal directly with plaintiff’s counsel until the negotiations broke down. She testified that she “handled the most complex claims.” She had the highest signing authority in the Halifax office, $250,000. It is reasonable to conclude that she spoke and acted authoritatively on behalf of Elite in her communications with plaintiff’s counsel, and that plaintiff’s counsel reasonably relied on her continued communications as inferentially agreeing not to insist on the filing of a statement of claim until at least June 2009. I conclude this in spite of the disclaimer in her May 25, 2010 fax:
Nothing herein contained is or shall be construed as either an admission of liability or a waiver or extension of any notice, claim, or limitation period.
[180] On June 25, 2008, Ms. Fancy requested that Dale Dunlop provide her both his brief and that of Cheryl Canning, submitted for the June 23, 2008, Sangster mediation. By June 26, 2008, she had retrieved the Elite Section B file relevant to Mr. Oliver’s claim against Mr. Sangster. On March 31, 2009, she attended the oral discovery of Mr. Oliver regarding the Pearson action. She requested and received a package of materials from Mr. Rhyno, including Mr. Oliver’s CPP disability benefits file. In her May 26, 2009, letter she requested transcripts of the previous discovery and medical information, and advised that she would review those materials and take a settlement position. On September 2, 2009, in an email to Mr. Rhyno, she advised that she would extend an offer, and if the matter was not resolved, that she was prepared to participate in a mediation of the SEF 44 claim together with the 2005 Pearson action. She then extended her first offer on November 4, 2009, which she confirmed in a letter November 25, 2009. In his December 1, 2009, email Mr. Rhyno counter-offered. The two continued to have communications up to and including the March 23, 2010, mediation briefs. The March 29, 2010, mediation did not result in a settlement. Only on that day did Ms. Fancy request that plaintiff’s counsel provide “a copy of the SEF 44 action you have commenced on behalf of Mr. Oliver.”
Can it be said that the plaintiff’s counsel relied thereon?
[181] There was no evidence that directly suggested that Mr. Rhyno was unaware of the 12-month limitation period. I have found that this limitation period was triggered in June 2008. Between May 2008 and April 2009, Mr. Rhyno was suspended and was not involved in Mr. Oliver’s case. At some point after his return in April 2009, Mr. Dunlop apprised Mr. Rhyno that Mr. Oliver would have to pursue his own insurer pursuant to the SEF 44 endorsement for any claims beyond the $200,000 settlement with Mr. Sangster. By June 23, 2009, the 12-month limitation period had expired. Although there is no direct evidence thereof, from the circumstances as they are apparent in the evidence, I find as a fact that plaintiff’s counsel did not file the SEF 44 action before June 23, 2009, because they relied upon the words and conduct of Ms. Fancy that suggested Elite was genuinely interested in resolving the claim without litigation.
[182] Therefore, I conclude that in the circumstances, it was reasonable for the plaintiff’s counsel to have relied, as a result of the conduct and words of Cathy Fancy, upon the inference that the insurer would not strictly insist on the 12 month limitation period in clause 6(c), and that Elite had intended such reliance, until at least June 2009.
[183] Plaintiff’s counsel clearly relied thereon to the detriment of Mr. Oliver. By June 23, 2009, the opportunity to file a statement of claim in relation to the SEF 44 claim within the contractual limitation period had passed. Nevertheless, counsel and Ms. Fancy continued to communicate in an effort to resolve the SEF 44 claim. The continuation of those discussions, without Elite indicating that it intended to rely on the 12-month limitation period, suggests that the parties were making good faith efforts at resolving the claim, regardless of strict legal considerations. Ms. Fancy acknowledged her position about the limitation period having expired in her May 25, 2010 fax to Mr. Rhyno, wherein she stated: “Action naming Aviva [Elite] as defendant should have been commenced in June 2009, one year from the date you first became aware the defendant, Sangster had liability coverage of $200,000 and you valued your client’s claim in excess of that amount.” Elite should be estopped from relying on its strict legal rights as contained in clause 6(c) insofar as the 12-month limitation period is concerned, until March 29, 2010, when Ms. Fancy realized that no statement of claim had been filed, and then insisted thereon.
[184] As I will shortly explain, even without reliance on the doctrine of estoppel beyond June 2009, I conclude that it is equitable to extend the running of the limitation period to June 16, 2013, as that is five years beyond the date Mr. Dunlop had finalized the Sangster action mediation brief.
4-Should relief be provided to the plaintiff pursuant to s. 3 of the Limitation of Actions Act?
[185] A summary of my factual findings to this point may be helpful:
1. The 12 month limitation period referred to in clause 6(c) of the SEF 44 endorsement would otherwise have begun to run on June 16, 2008; however,
2. Elite is estopped from relying upon that 12-month limitation period until June 2009 (and arguably until March 29, 2010).
[186] Despite this conclusion, I will also examine the available relief under s. 3 of the Limitation of Actions Act, as if the 12-month limitation period began to run on June 16, 2008.
[187] The insurer points out that on May 25, 2010 plaintiff’s counsel were put on notice that they should file a statement of claim. They did not do so until May 22, 2013. Elite argues that such lack of diligence should not be rewarded. Elite says that it has been prejudiced by the plaintiff’s delay in filing the statement of claim, in the following respects:
1. That it suffers a disadvantage as a result of its not having been involved earlier, when it might have had the opportunity to marshal evidence in its favour for an eventual trial (although no specifics were provided by counsel);
2. That by virtue of Mr. Oliver having settled with Mr. Sangster by way of a general release and a consent dismissal order rather than a discontinuance, Elite is precluded from seeking recovery against the personal assets of Joseph Sangster, for any amounts it may have to pay to Mr. Oliver;
3. That the court should consider that Mr. Oliver may have recourse against his legal counsel for professional negligence, if the Court does not permit the limitation period to be extended sufficiently to allow his claim to proceed against Elite.
[188] Section 3 of the Limitation of Actions Act states:
Disallowance or invocation of time limitation
3 (1) In this Section,
(a) "action" means an action of a type mentioned in subsection (1) of Section 2;
(b) "notice" means a notice which is required before the commencement of an action;
(c) "time limitation" means a limitation for either commencing an action or giving a notice pursuant to
(i) the provisions of Section 2,
(ii) the provisions of any enactment other than this Act,
(iii) the provisions of an agreement or contract.
(2) Where an action is commenced without regard to a time limitation, and an order has not been made pursuant to subsection (3), the court in which it is brought, upon application, may disallow a defence based on the time limitation and allow the action to proceed if it appears to the court to be equitable having regard to the degree to which
(a) the time limitation prejudices the plaintiff or any person whom he represents; and
(b) any decision of the court under this Section would prejudice the defendant or any person whom he represents, or any other person.
(3) Where a time limitation has expired, a party who wishes to invoke the time limitation, on giving at least thirty days notice to any person who may have a cause of action, may apply to the court for an order terminating the right of the person to whom such notice was given from commencing the action and the court may issue such order or may authorize the commencement of an action only if it is commenced on or before a day determined by the court.
(4) In making a determination pursuant to subsection (2), the court shall have regard to all the circumstances of the case and in particular to
(a) the length of and the reasons for the delay on the part of the plaintiff;
(b) any information or notice given by the defendant to the plaintiff respecting the time limitation;
(c) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought or notice had been given within the time limitation;
(d) the conduct of the defendant after the cause of action arose, including the extent if any to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff's cause of action against the defendant;
(e) the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action;
(f) the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;
(g) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.
(5) The provisions of this Section shall have effect in relation to causes of action arising
(a) before the twenty-sixth day of June, 1982, if the time limitation has not expired before that date;
(b) on or after the twenty-sixth day of June, 1982.
(6) A court shall not exercise the jurisdiction conferred by this Section where the action is commenced or notice given more than four years after the time limitation therefor expired.
(7) This Section does not apply to an action where
(a) the time limitation is ten years or more; or
(b) the time limitation is contained in the Mechanics' Lien Act. R.S., c. 258, s. 3.
[189] The plaintiff’s motion is specifically based on s. 3(2). The plaintiff argues that the relief sought is appropriate because it is “equitable,” based on the factors the court should consider in that section. The court can disallow a defendant from relying on the limitation period for up to four years: s. 3(6).
[190] The law regarding a court’s exercise of its discretion under this section was described by Cromwell, J.A., (as he then was) in Butler v Southam Inc. 2001 NSCA 121, (2001) 197 N.S.R. (2d) 97, at paras. 137-143:
(ii) The purposes of s. 3 of the Limitation of Actions Act:
137 Limitation and notice provisions are blunt instruments. They defeat a plaintiff's claim no matter how meritorious the case, no matter how diligent the plaintiff and no matter how little the defendant in fact has been prejudiced. Section 3 of the Limitation of Actions Act provides for a measure of judicial discretion to be used on equitable grounds to prevent unduly harsh results from the strict application of limitation and notice provisions. Underlying this grant of discretion is recognition by the Legislature that limitation and notice provisions may lead to harsh and unjust results by barring actions where, in the particular case, there is little reason to do so. In other words, the Legislature's decision to permit the court to disallow limitation defences recognizes that such defences may result in prejudice to the plaintiff which is disproportionate to the importance, in a particular case, of the achievement of the purposes for which the limitation period exists.
138 The crucial assessment under s. 3 is the one required by ss. 3(2): the determination of what is equitable having regard to the degree which the decision will prejudice the plaintiff and the defendant. It may be convenient to speak of this as a comparison of the relative degrees of prejudice (see, for example, MacCulloch v. McInnes Cooper and Robertson, supra at para. 48 - 55). However, as Goodfellow, J. pointed out in Smith v. Clayton, (1994), 133 N.S.R. (2d) 157; [1994] N.S.J. No. 328 (Quicklaw) (S.C.) at para. 42 - 44, the decision about what is equitable cannot be based solely on the relative degrees of prejudice. This is because, in one sense, the prejudice to either party is total whichever decision the Court makes. If the limitation period is disallowed, the defendant is totally prejudiced in the sense that he or she is deprived of a complete defence to the action: see, Hallett, J. (now J.A.) in Anderson v. Co-operative Fire and Casualty Co. (1983), 58 N.S.R. (2d) 163 at para. 18; aff'd (1983), 62 N.S.R. (2d) 378 (S.C.A.D.). Conversely, if the limitation defence is not disallowed, the prejudice to the plaintiff is absolute in the sense that the cause of action is lost: see Anderson per Hallett, J. at para. 16; Smith at para. 42 - 44.
139 In considering what is equitable, a fundamental consideration is whether the harsh result to the plaintiff of the loss of a cause of action is disproportionate to the purposes served by giving effect to the limitation provision in issue in the particular case. For example, if the primary purpose served by the relevant limitation period is finality, furtherance of this objective at the cost of the loss of the plaintiff's cause of action may often be regarded as disproportionate, particularly where the delay in relation to the limitation period is short. This is implied by the fact that the Legislature has addressed the issue of finality by restricting the length of time by which a limitation period may be extended: see ss. 3(6) and 3(7) and by providing a mechanism for a potential defendant to apply to terminate a right of action: see ss. 3(3). The situation may well be different when other purposes of the limitation period are in issue in the particular case. For example, there may be concerns that the plaintiff's delay has prejudiced the defendants in their defence. The limitation period's objective of preserving the cogency of evidence must be carefully considered both generally, and in relation to the specific prejudice to the defendants in the particular case.
140 Where, as here, the limitation provision in issue has purposes in addition to those of finality and preservation of the cogency of evidence, the extent to which these other purposes are defeated by the disallowance of the limitation period should be considered as an aspect of assessing the relative degrees of prejudice to the plaintiff and the defendant.
141 The prejudice to the plaintiff flowing from the loss of the cause of action cannot generally be controlling on its own; if it were, disallowance of the limitation defence would be virtually automatic because such prejudice is absolute: see Smith at para. 44. The specific matters to be considered which are set out by the Legislature in ss. 3(4)(a) - (g) make it clear that the diligence of the plaintiff, broadly defined, in pursuing his or her rights is an important factor in exercising the discretion to disallow a limitation defence. For example, s. 3(4)(a) refers to the length and the reasons for the plaintiff's delay, s. 3(4)(e) to any disability of the plaintiff after the date of the accrual of the cause of action; s. 3(4)(f) to the extent to which the plaintiff acted promptly and reasonably once he or she knew the defendants' acts might be capable of giving rise to an action and s. 3(4)(g) to the steps taken by the plaintiff to obtain expert advice and the nature of that advice. All of these factors, in my view, relate to aspects of the plaintiff's diligence in pursuing the claim. Such diligence is, therefore, an important aspect of the assessment of the prejudice to the plaintiff resulting from the limitation defence.
142 This concern with the plaintiff's diligence reflects both an underlying purpose of limitation periods and a widely accepted principle of fairness. The idea that plaintiffs should act with diligence underlies statutory limitation periods generally: see, for example, J.S. Williams, Limitation of Actions in Canada (2d, 1980) at 5. Moreover, concern with the plaintiff's diligence is consistent with s. 3(2)'s focus on what is equitable. It will generally be less equitable for a limitation defence to defeat the claim of a diligent plaintiff than of one who has sat on his or her rights. This reflects the old equitable maxim that delay resulting from lack of diligence defeats equity: vigilantibus, non dormientibus, jura subveniunt: see Sir Robert Megarry and P.V. Baker, Snell's Principles of Equity (27th, 1973) at 33.
143 In assessing the prejudice to the defendant it is important to focus on prejudice attributable to delay after the expiry of the limitation period. This is made clear, for example, in s. 3(4)(c) which requires consideration of the impact of delay on the cogency of evidence compared to what it would have been had the action been started within the time limit. The cases have consistently recognized this: see, for example, Bollivar v. Hirtle's Estate(1990), 97 N.S.R. (2d) 247 (S.C.A.D.) at para. 11; Fern v. Christie's Estate (1986), 76 N.S.R. (2d) 271 (T.D.) at p. 275; Vickery v. Murphy and Yarmouth Regional Hospital (1986), 73 N.S.R. (2d) 429 (S.C.) at para. 23.
[my emphasis added]
[191] As Justice Cromwell iterated: “it may be convenient to speak of this as a comparison of the relative degrees of prejudice… however, the decision cannot be based solely on the relative degrees of prejudice”.
[192] Plaintiff’s counsel cites the loss of the opportunity to litigate the matter on its merits as the potential prejudice to Mr. Oliver. This is said to be a vastly disproportionate prejudice to that which would be suffered by Elite if the court disallowed the limitation period defence.
[193] Without taking into account any issue of estoppel (as I dealt with above), I am satisfied that it is equitable to permit the plaintiff’s motion to disallow the defendant Elite from relying upon the limitation period for almost the full four years available. I conclude this for the following reasons:
1. While the plaintiff’s counsel could arguably be criticized for being less than diligent at times, as I noted earlier, it is not entirely clear to what extent the plaintiff’s counsel or defendant’s agents are responsible for the periods of inactivity, particularly after June 16, 2008.
2. Until March 29, 2010, Ms. Fancy, in her words and conduct, gave plaintiff’s counsel continued good reason to believe that since liability was not in issue, Elite was not insisting on its strict legal rights to have a statement of claim filed, within 12 months from when the plaintiff or his counsel “knew or ought to have known that the quantum of his claims” exceeded the statutory minimum insurance limit of $200,000.
3. There is no direct evidence or inference available that the defendant Elite has been materially prejudiced by any delay (including specifically, the period after March 25, 2010), in its ability to defend its interests should the matter go to trial.
4. Mr. Oliver and his father signed a release in favour of Joseph Sangster which contained the words:
And for the said consideration it is further agreed not to make any claim or take proceedings against any other person or Corporation who might claim contribution or indemnity under the provisions of any statute or otherwise… It is hereby declared that the terms of the settlement are fully understood; that the amount stated herein is the sole consideration for this release and that the said sum is accepted voluntarily for the purpose of making a full and final compromise, adjustment and settlement of all claims for loss and damages resulting or to result from the said incident at all matters ancillary thereto.
(a) Mr. Dunlop as counsel for Mr. Oliver agreed with the statement in Cheryl Canning’s June 30, 2008, letter that “the release is not intended to preclude Regan Oliver from claiming against Aviva under the SEF 44 endorsement, including any subrogation issues that may potentially arise as a result of that claim.”
(b) The order in the Sangster action (S.H. No. 208777), issued July 7, 2008, reads, in part:
And upon it appearing that the within action has been settled upon terms;
Now upon motion;
It is ordered that the within action be and the same is hereby dismissed without costs to either party.
(c) The claim by the defendant that it will suffer prejudice presumes that if Mr. Oliver’s claim is permitted to proceed, and ultimately succeeds against Elite, that Elite would be unable to exercise its right of subrogation as against Mr. Sangster due to the settlement thereof by Mr. Oliver and his father. Firstly, even if Mr. Oliver’s claim is successful against Elite, there is no evidence to confirm whether Mr. Sangster (or his estate if he is deceased) has assets available to satisfy a subrogation claim by the defendant Elite. I do not discount that, even without direct evidence, the Court should properly consider the reasonable possibility or probability that there may thereby be some prejudice to Elite, but that that factor cannot be accorded much weight.
(d) Secondly, s. 149(6) of the Insurance Act appears to confirm that the release herein is not effective as against Elite, as it provides that “a settlement or release given before or after action is brought does not bar the rights of the insured or the insurer, as the case may be, unless they have concurred therein”. The order in SH No. 208777, would not bar the right of Elite to make a subrogated claim as against Mr. Sangster.
(e) Thirdly, although Iacobucci, J., stated in Somersall v. Friedman, “equitable insurance principles of subrogation… may be altered by the terms of the contract between the parties” (para. 56), he went on to comment about clause 9 of the SEF 44 endorsement in that case (which was identical to the one in the case at bar), at paras. 56 – 65:
57… This clause sets out, in the first place, the relationship between the insurer’s rights and the claimant’s right as identical upon the making of a claim. In the second place, it permits the insurer to maintain whatever action exists at law as a result of this identity of rights between the insurer and insured. What it does not appear to do is impose any obligation upon the insured to himself maintain or preserve the viability of that action. In fact, nowhere in clause 9 is there language that could reasonably appear to impose any obligation upon the insured at all. The subject of the entire clause is the insurer…
59…The situation is no different in respect of reaching a settlement such as the limits agreement. So long as the insured acts in the good faith equity requires of him, the insurer cannot complain of the insured’s own diligence in speedily and successfully resolving the underlying dispue
61 The only obligation that is clearly placed upon the insured in either of these clauses [9 and 10] is the requirement that the insured “cooperate with the insurer, except in a pecuniary way”, in the pursuit of the action. I am again not persuaded that this can be regarded as requiring the insured to maintain the action’s viability. In the first place, the insured is not required to cooperate until a payment has been made. Since, in this case, no payment has yet been made, the insured is not bound by this provision at all. To view this breach of this obligation as creating a bar to payment when the payment is in itself a condition precedent to the obligation arising makes no sense.
62 Secondly, once a payment has been made, it seems to me that the actions of the insured prior to that payment being made cannot conflict with her undertaking to cooperate from the time of the payment forward. If no action remains to be pursued, obviously the cooperation of the insured will, in practical terms, mean very little. But that is simply the nature of the undertaking set out by the parties to this contract.
63 Thirdly, if this requirement were to be interpreted so as to allow the insurer to refuse payment because of non-cooperation simply on the basis that the action is no longer available, the insurer could avoid payment merely by refusing to make a payment until the action against the tortfeasor expired by prescription. It seems to me that such a change in the relationship between insurer and insured ought to be accomplished with the participation of the Superintendent of Insurance.
64 Finally, even if there is an ambiguity in the content of the obligation to “cooperate”, the accepted principle of interpretation contra proferentum would, as discussed above, demand that we resolve it in favour of the insured. Cooperation in pursuit of the action, especially in light of the proviso that the insured need not cooperate “in a pecuniary way”, appears to be intended primarily to ensure that the insured will provide testimony in a subrogated action. Although I do not wish to be conclusive with respect to what exactly might be required, I would restrict the content of “cooperation” to the reasonable intent of the parties in light of the contra proferentum interpretation, and find that little more than actual participation as a witness in the assigned action is required by this clause.
65 Therefore, it is my view that the plain language of the contract does not support a finding that the limits agreement interfered with a contractual right of the appellant. Any lingering doubt over this should be dispelled by bearing in mind the principle contra proferentum.” – Paras. 56 – 65.
5. I note the following comments of Cromwell, JA, in Butler, supra:
… The Legislature’s decision to permit the court to disallow limitation defences recognizes that such defences may result in prejudice to the plaintiff which is disproportionate to the importance, in a particular case, of the achievement of the purposes for which the limitation period exists…in considering what is equitable, a fundamental consideration is whether the harsh result to the plaintiff of the loss of a cause of action is disproportionate to the purposes served by giving effect to the limitation provision in issue in the particular case”
(a) Some of the purposes of limitation periods are: to promote certainty in the law where the limitation period arises in a contractual context; to promote finality of litigation; to ensure the preservation of the cogency of evidence; to encourage diligence in having matters proceed expeditiously;
(b) Disallowing the defendant from relying on the contractual limitation period avoids a disproportionate prejudice to the plaintiff and does no disservice to the various purposes of limitation periods.
(c) In the case at bar, Ms. Fancy testified as a general statement, that the fact of the statement of claim not having been filed did not affect how she handled or processed Mr. Oliver’s SEF 44 claim. As I earlier explained, there has been no loss of material evidence as a result of any delay, especially since the limitation period started to run in June 2008. Both the plaintiff and defendant were content to continue communications about the possible settlement of Mr. Oliver’s claim until at least May 25, 2010, without a statement of claim being filed.
6. (a) After Ms. Fancy’s retirement in June 2010, there was no response by Elite to Mr. Rhyno’s June 7, 2010, email to her until Mr. Barnett’s response of November 4, 2011. Mr. Rhyno was cross-examined about the reasons for that delay, and indicated that he was waiting for a response from Mr. Barnett. Mr. Rhyno was not diligent in following up his June 7, 201, email. Elite’s representatives were similarly not diligent in responding to his email. From this I conclude that the agents of both Mr. Oliver and Elite were content with a status quo during that period of delay;
(b) I found as a fact that neither Mr. Rhyno, nor Mr. Dunlop, personally received and saw a copy of Mr. Barnett’s November 18 and December 12, 2011, faxed letters. Nevertheless, it is undisputed that Mr. Barnett sent the letters to the offices of Walker Dunlop. In relation to a professional/commercial office, once it is demonstrated that the sender has confirmation that the documents were faxed to the proper fax number for that office, subject to evidence to the contrary, there is an inference that they did arrive. I accept that the documents did arrive at Walker Dunlop, but were not brought to the attention of either Mr. Rhyno or Mr. Dunlop. Notably, Mr. Dunlop did receive Mr. Barnett’s November 4, 2011, faxed letter to similar effect which he provided to Mr. Rhyno for response.
(c) Between May 25, 2010, and May 2013, Mr. Rhyno, while at Walker Dunlop until the fall of 2012, and thereafter as a sole practitioner, had carriage of Mr. Oliver’s SEF 44 claim. On November 7, 2011, Mr. Rhyno did respond to Mr. Barnett’s November 4, 2011 email. The last email from Mr. Barnett, of which which both Mr. Dunlop and Mr. Rhyno were aware, was Mr. Barnett’s “without prejudice” November 7, 2011, email which read: “I’m out of the office the next few days but I will look into this and get back to you as soon as I can. This email should not be taken as waiving or extending any limitation period.” Mr. Rhyno did not follow up at any time thereafter. Neither did Mr. Dunlop. They did not hear back from Mr. Barnett. However, as noted above, he had faxed letters of November 18 and December 12, 2011 (Court Exhibit 2 and 3) addressed to Mr. Dunlop, which letter read: “Further to my letter of November 18, Aviva has closed its file as we have heard no further word from you or Duane Rhyno. Mr. Oliver’s SEF 44 claim has prescribed.”
(d) Mr. Rhyno was not diligent in following up what he believed was Mr. Barnett’s last email, that of November 7, 2011. He made no inquiries and there is no evidence that he was actively involved in moving Mr. Oliver’s SEF 44 claim forward between December 2011 and May 2013. He was not asked by either counsel in this motion to account for this delay.
(e) In spite of that significant delay, in the context of my analysis regarding s.3 of the Limitation of Actions Act, the impact of that delay is not material in the circumstances of this case. Neither the plaintiff nor defendant argued any specific prejudice arising out of that period of delay. I observe here that pursuant to section 41(k) of the Judicature Act, R.S.N.S. 1989, c.240, if the matter goes to trial, the plaintiff may suffer the disadvantage of a reduced period of pre-judgment interest. That provision reads:
The court in its discretion may decline to award interest under clause(i) or may reduce the rate of interest or the period for which it is awarded if…
(iii)-The claimant has been responsible for undue delay in the litigation.
7. The defendant suggested that the prejudice to the plaintiff would be less significant than otherwise if his motion to have the limitation period extended is unsuccessful, because Mr. Oliver may have recourse against his legal counsel for professional negligence. In response, I note that in a similar situation, Justice Farrar commented in Lord v. Smith 2013 NSCA 34 at para. 52:
“With respect to the potential alternative remedy against his former counsel, whatever action Mr. Lord may have against his former counsel and its potential success is mere speculation. In my view, it was appropriate for the motions judge to give it little weight in his deliberations.”
Conclusion
[194] The plaintiff has satisfied me on the facts herein and the applicable law, that he should be entitled to an order disallowing his insurer’s time limitation defense, so that his action may proceed on its merits.
Rosinski, J.