News Update – November 8, 2019

Discoverability Applies to Limitation Period

The Court of Appeal in Tomec v Economical, has set aside a decision by the LAT, upheld both upon Reconsideration and appeal to the Divisional Court, confirming that the limitation periods in both the SABS and the Insurance Act are in fact subject to the rule of discoverability.

This has significant implications to all stakeholders calling into questions any denial before there was an actual entitlement known. Tomec is entitled to proceed with her application for attendant care, housekeeping and home maintenance as the limitation period has not expired…

Original Decision LAT #16-003034 – September 7, 2017:
It was found that a 2010 denial of ACB and Housekeeping benefits at the two year mark served to start the limitation period, as at the time the Applicant, Tomec, was not CAT. Upon being deemed CAT in November 2015, further ACB and housekeeping benefits were sought, however Economical maintained that their 2010 denial and rendered the 2015 request beyond limitation.

Reconsideration – January 31, 2018:
It was found that the doctrine of discoverability did not apply to the limitation period, with the original decision upheld.

Divisional Court Appeal – October 2, 2018:
It was found to be “irrelevant that the insured did not qualify for the benefit at the time of the refusal, or indeed at any time prior to the limitation period’s expiration”. Noting this to be “a harsh result for the appellant”, the Court “inferred that the legislature thought it important to provide for a reasonable period, after which the insurer’s obligation would be discharged, regardless of whether meritorious claims may be discovered later.”

Court of Appeal – November 8, 2019:
The Court noted that “the analysis is not focused on whether a limitation period is tied to a fixed event, as the Divisional Court opined. Rather, the question is whether the limitation period is related to the cause of action or the plaintiff’s knowledge.” Reference was made to the admonition of the Supreme Court in Pioneer v Godfrey indicating “discoverability will apply if it is evident that the operation of a limitation period is, in substance, conditioned upon accrual of a cause of action or knowledge of an injury”.

Analyzing the purposes of the SABS, the Court cited Arts v State Farm that provided a “compelling analysis” of the SABS’ purposes and offered guidance regarding the interpretation of the SABS: “The legislature’s definition of ‘catastrophic impairment’ is intended to foster fairness for victims of motor vehicle collisions by ensuring that accident victims with most health needs have access to expanded medical and rehabilitation benefits. That definition is intended to be remedial and inclusive, not restrictive.” Accordingly, “a hard limitation period prevents the appellant from making a claim for the benefits the SABS are intended to provide. I do not see how such a result could be consistent with consumer protection legislation designed to provide fair compensation and minimize economic disruption in the lives of accident victims.”

The result would be to “thrust the appellant into a Kafkaesque regulatory regime…[that] would bar the appellant from claiming enhanced benefits, before she was even eligible for those benefits”. Further, “the hard limitation period puts the appellant in an impossible situation, where the time for claiming a benefit commences when she is ineligible to make such a claim. This is an absurd result. To choose it, as the LAT did, is unreasonable.”

Conclusion:
Setting aside the orders of the Divisional Court and the LAT, the Court made an order “declaring that the limitation period regarding the appellant’s entitlement to attendant care benefits, and housekeeping and home maintenance benefits has not expired, and that accordingly, the appellant is entitled to proceed with her application for those benefits”, with costs payable to the appellant of $10,000.