Correspondence between an insurer and a plaintiff may not postpone a tort limitation period

The defendants in a personal injury action arising out of a motor vehicle accident were successful in obtaining summary dismissal of the plaintiff's claim against them on the ground that the action was barred by the expiration of the two year limitation period and the court found that correspondence from the insurers of the defendants did not postpone the running of time.

Field v. Harvey, [2012] B.C.J. No. 624, March 29, 2012, British Columbia Supreme Court, J.K. Bracken J.

The plaintiff alleged that she sustained injuries when her vehicle was in a collision with a cement truck owned by one of the defendants and operated by the other defendant. She alleged that the collision was caused by the negligence of the defendants. The plaintiff's husband reported the collision to the Insurance Corporation of British Columbia ("ICBC") the same day.

On August 25, 2008, an adjuster with ICBC telephoned the plaintiff to discuss the matter and mailed two ICBC forms to the plaintiff including an insurance claim application. These were signed and forwarded to ICBC on August 27, 2008 and received by ICBC on September 16, 2008. ICBC paid Part 7 benefits to the plaintiff and the last payment was enclosed with a letter indicating the end of benefits dated December 15, 2008. On July 31, 2009, an ICBC adjuster telephoned the plaintiff's home and left a message inquiring about the plaintiff's injury. No response was received. The adjuster at ICBC ultimately closed her file on October 2, 2009.

The plaintiff contacted ICBC on November 24, 2010. On that day, the adjuster advised the plaintiff of the provisions of the Limitation Act and noted that the limitation period had expired. The plaintiff then contacted the adjuster's manager and obtained an internal review but the matter was not resolved and ICBC continued to deny her claim. On June 16, 2011, the plaintiff and her husband met with the adjuster and at that time ICBC presented a without prejudice offer to settle that was open for acceptance until June 30, 2011. That offer was declined by the plaintiff by letter dated June 21, 2011. On June 30, 2011, the plaintiff filed a notice of civil claim. The defendants filed a response alleging that the action was commenced outside the limitation period.

The defendants sought summary dismissal of the action on the basis that it was not commenced within the two year limitation period provided by s. 3(2) of the Limitation Act. The plaintiff argued that the December 15, 2008 letter from the adjuster led her to believe that the claim would eventually be settled and argued that the defendants were estopped from relying upon the Limitation Act defence. The plaintiff relied upon the decision in Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932, where the court stated the essential factors giving rise to estoppel by representation as:

(1)  A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made;

(2)  An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made; and

(3) Detriment to such person as a consequence of the act or omission.

The plaintiff argued that the December 15, 2008 letter, which included a statement by the adjuster as follows: "… all matters herein set out are written without prejudice and for the purpose of negotiating terms for settlement" and suggesting the plaintiff retain the massage therapy bill to be discussed "…at the time of settlement", clearly suggested that ICBC intended to settle the matter at some time in the future. The plaintiff argued that both parties were under a shared assumption that her claim would be settled and that this meant that ICBC was estopped by convention from relying on the Limitation Act defence.

The court found that the relevant case law indicated that insurers do not have a duty to warn an insured that a limitation period has commenced or will soon expire citing Recchia v. Co-operators Life Insurance Co., 2003 BCCA 643. The court further noted that ICBC had abided by the "preferred course of action" by including an express notification in its correspondence with the plaintiff that "nothing herein contained is or shall be construed as either an admission of liability on the part of the insured or a waiver or extension of any applicable limitation period…". A reasonable interpretation of this letter in no way evidenced a representation or a promise, by convention or otherwise, to waive or extend the applicable limitation period. In the result, the court found that the plaintiff's cause of action was dismissed pursuant to s. 9 of the Limitation Act as having been commenced after the expiry of the applicable limitation period.

This case was digested by Jonathan D. Meadows and edited by David W. Pilley of Harper Grey LLP.

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