In the matter of Rooplal v Fodor, 2021 ONCA 357, Justice Thorburn, writing for a unanimous three judge panel of the Ontario Court of Appeal which included Justices Rouleau and Benotto, considered when limitation periods begin to run when suing insurers for unindentified motorist coverage, as provided for in section 265 of the Insurance Act.
The Respondent (the Plaintiff), had been injured while riding a Toronto Transit Commission (“TTC”) bus that had been cut off by an unidentified driver. In a timely manner, the Plaintiff brought a claim against the unidentified tortfeasor, TTC, the bus driver, and her own insurer pursuant to the OPCF-44R, but not until 5 years after the accident did she bring a motion to add the Toronto Transit Commission Insurance Company (“TTC Insurance”) as a Defendant pursuant to s. 265 of the Insurance Act. The Applicant (TTC Insurance), argued that the limitation period has expired to bring a claim against it.
Justice Thorburn began by reviewing the recent history of the limitation period and emphasized that the Limitations Act, governed and had superseded previous legislation. Pursuant to the Limitations Act there is a two-year limitation period within which a claim must be brought. The limitation period begins to run when the claim is “discovered”. Discoverability is defined in section 5 of the Limitations Act, which, in summary, states that a claim is discovered when the plaintiff knows or ought to know: (i) she has suffered an injury, loss or damage, (ii) by an act or omission (iii) that the act or omission was that of the person against whom the claim is made, and (iv) it is appropriate to commence a legal proceeding.
Justice Thorburn paid particular attention to s. 5(1)(a)(iii) and emphasized that there is a distinction between knowledge of the act or omission of the unidentified motorist and knowledge of the act or omission of the insurer for which indemnification pursuant to the insurance policy is sought. The Plaintiff’s claim on this motion was not against the unidentified tortfeasor, but against TTC Insurance.
Justice Thorburn followed established case law that a loss did not occur until a demand for indemnification had been made of the unidentified motorist insurer and was not satisfied. Justice Thorburn found that there was no evidence the Plaintiff had yet made a demand for indemnification from TTC Insurance and thus that the limitation period against TTC Insurance had not expired (or even started).
Justice Thorburn also addressed arguments that this produced absurdity, would allow a Plaintiff to “lie in wait indefinitely” before bringing a claim which might lead to a situation of a multiplicity of proceedings, and was against public policy. Justice Thornburn found the ordinary sense meaning of the Limitations Act clear and that it provided no exceptions to the s. 5 discovery rules, which did not allow the court to deviate from the Limitations Act simply because it might reflect poor policy. Justice Thornburn also found that there were safeguards against the above issues raised by the Applicant. First, the Plaintiff is still required to comply with the requirements set out in the Schedule of Regulation 676: Uninsured Automobile Coverage, which include (a) a statement setting out the details of the accident including whether it was caused by an unidentified motorist and what damages were suffered within 30 days of the accident or as soon as practicable (s. 3); (b) written notice of the claim against the insurer and the circumstances thereof within 30 days of the accident or as soon as practicable (s. 6). Second, an insurer could take control over the limitation period by refusing to indemnify an unidentified motorist claimant after receipt of such notice, and even before the issuance of a statement of claim, thus starting the limitation period.
It was noted that the record was not clear on whether the Plaintiff fulfilled her notice obligations in this matter, but that this issue wasn’t before the court.
In light of this decision, where reasonable, insurers should consider refusing indemnification as soon as becoming aware of a possible unidentified motorist claim, so as to start the limitation period immediately. And, if the Plaintiff hasn’t provided proper and timely notice to the insurer of a potential unidentified motorist claim in compliance with the Schedule of Regulation 676: Uninsured Automobile Coverage, this may be an interesting angle to argue in a potential limitation period issue.