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ACTIONS - By insured against insurer - Limitation periods

Friday, February 21, 2020 @ 8:15 AM  


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Appeal by the defendant insurer from a decision dismissing its motion for summary judgment dismissing the respondent’s action as statute barred. The respondent made a claim for long-term disability benefits after she stopped working due to health problems in 2011.  In March 2012, the appellant denied her claim, stating that it was unable to establish her total disability from returning to her own occupational duties. The respondent appealed. The appellant then approved disability benefits in 2014 for the respondent’s own occupation which benefits terminated as of April 2013 and indicated that the medical information she provided did not support her claim for any occupation total disability benefits. It was not until March 2017 that the respondent provided further medical information for her any occupation claim. The appellant maintained its position that the current information on file was not sufficient to overturn the prior decision to denying benefits for any occupation. In 2018, the respondent issued her statement of claim seeking the payment of arrears of long-term disability benefits from the cessation of payments in April 2013. The motion judge held the limitation period for the action commenced in June 2017 with the denial of  any occupation benefits being communicated to the respondent, notwithstanding that that letter also did not use language of denial.

HELD: Appeal allowed in part. The remaining issues related to the limitation period defence were to be determined through some form of trial. The respondent had a cause of action for breach of contract against her insurer when the insurer stopped paying long-term disability benefits in April 2013. In its February 2014 letter, the appellant informed her that her disability benefits terminated as of April 2013. A loss, injury or damage occurred in February 2014 that would have been known to a reasonable person with the abilities and in the circumstances of the respondent. The motion judge failed to conduct the analysis required to determine when the respondent knew or ought to have known that a proceeding would be an appropriate means to remedy the loss, injury or damage. Read as a whole, her reasons disclosed that she was not able to determine when the respondent first knew that a proceeding would be an appropriate means to seek to remedy her injury. The motion judge did not deal with the s. 5(2) presumption of the Limitation Act or the related obligation of the insured to act with due diligence.

Clarke v. Sun Life Assurance Co. of Canada, [2020] O.J. No. 71, Ontario Court of Appeal, D.M. Brown, G. Huscroft and G.T. Trotter JJ.A., January 8, 2020. Digest No. TLD-February172020009