Sukhu v. Bascombe, 2018 ONSC 2878 (CanLII)

The limitation for pursuing unidentified motorist coverage does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim.  

Date Heard: May 2, 2018 | Full Decision [PDF]

On May 2, 2018, a motion proceeded before Master Muir in which the Plaintiffs sought to amend their Statement of Claim to add TTC Insurance Company Ltd. as a Defendant to the action.  Ms. Sukhu, one of the Plaintiffs, was a passenger on a TTC bus on November 5, 2011; the bus came to a complete stop, causing Ms. Sukhu to be thrown from her seat, whereupon she was injured.  The TTC claimed that the bus’s sudden stop was an avoidance maneuver in response to a minivan failing to stop at a stop sign.  The Defendant, Toronto Transit Commission, plead this information in its Statement of Defence, which was filed in May 2013.  Moreover, the police file, received by Plaintiffs’ counsel in November 2013, referenced the unidentified minivan.  No steps were taken to add TTC Insurance Company Ltd. as a Defendant at that time; Plaintiffs’ counsel had believed that the Defendants would be found at least 1% liable for the subject accident and so the aforementioned amendment would be unnecessary.  If the Defendants would be found to be 0% at fault for the motor vehicle accident of November 5, 2011, then the Plaintiffs’ only right of recovery would be against the proposed Defendant, TTC Insurance Company Ltd. Pursuant to section 265(1) of the Insurance Act.  When the Plaintiffs changed counsel in the fall of 2017, they sought to amend the Statement of Claim, which was the subject of the aforementioned motion.

The Plaintiffs primary submission was that the two-year limitation period prescribed by the Limitations Act had not yet begun to run because a claim for unidentified motorist coverage [pursuant to section 265(1) of the Insurance Act] first requires a determination that there is no liability as against any other Defendants.  As of the date of the motion, said determination had not taken place.  The proposed Defendant, TTC Insurance Company Ltd., argued that the Plaintiffs knew of the involvement of the unidentified minivan in November 2013, at the latest, when their lawyer received the police file (and potentially in May 2013 when they received the Statement of Defence) and that the claim against TTC Insurance Company Ltd. ought to be statute-barred because the motion was brought more than four years later – the proposed Amended Statement of Claim was provided on February 7, 2018 and the Motion Record was served in March 2018.

The Plaintiffs relied on two recent decisions of the Court of Appeal that the limitation period “does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim”.  In Markel Insurance Company of Canada v. ING Insurance Company of Canada at paragraph 27, the Court of Appeal held that

the limitation period for a loss transfer claim… does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim.

In Schmitz v, Lombard General Insurance Company of Canada at paragraphs 22-26, the Court of Appeal applied the reasoning in Markel and held that

the limitation period does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim.

TTC Insurance Company Ltd. Relied on other conflicting and contradicting decisions of the Court of Appeal, which held that a claim under section 265(1) of the Insurance Act for unidentified motorist coverage begins to run when a Plaintiff knew, or ought to have known, of the involvement and negligence of an unidentified motorist.  However, Master Muir noted that all of the decisions relied upon by the proposed Defendant were released prior to the enactment of the Limitations Act and prior to the Court of Appeal’s decisions in Markel and Schmitz.

Master Muir granted the Plaintiff’s relief sought to amend their Statement of Claim to add TTC Insurance Company Ltd. as a Defendant to the action.

 

Read the full decision [PDF]
Steven Glowinsky
Written by

Steven Arie Glowinsky was called to the Ontario Bar in 2010 and is an associate at Pace Law Firm in Toronto, ON.