421205 Alberta Ltd. operating as Schroeder Transport Plaintiff - v. -, 2011 ABQB 180

Court of Queen ’ s Bench of Alberta Citation: 421205 Alberta Ltd. (Schroeder Transport) v. Lloyd ’ s Underwriters, 2011 ABQB 180 Date: 20110317 Docket: 0803 05715 Registry: Edmonton Between: 421205 Alberta Ltd. operating as Schroeder Transport Plaintiff - and - Lloyd ’ s Underwriters and Lloyd Sadd Insurance Brokers Ltd. operating as Lloyd Sadd Insurance Brokers Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.M. Ross _______________________________________________________ A. Introduction [ 1 ] In this

summary trial, two questions have been stated by Order for determination:

a) Is the Plaintiff’s claim for the disappearance of cargo on one of its tractor trailer units on 1 March 2006 covered by the insurance policy (Policy No. AURO-501-390-3) issued by the Defendant LLOYD’S UNDERWRITERS to the Plaintiff, specifically with respect to the Unattended Truck Endorsement therein?; and

b) Is the Plaintiff’s claim as against the Defendant LLOYD’S UNDERWRITERS in this action statute-barred? B. The Coverage Issue 1.

Agreed Facts [ 2 ] The Defendant issued a motor truck cargo insurance policy to the Plaintiff (the “ Lloyd ’ s Policy ” ). [ 3 ] The general coverage clause of the Lloyd ’ s Policy provided: In consideration of the premium paid hereon . . . the Underwriters hereby agree to indemnify the Insured, named in the schedule, for ALL RISKS OF PHYSICAL LOSS OR DAMAGE FROM AN EXTERNAL CAUSE to lawful cargo in and/or on a truck whilst in the Insured ’ s care, custody or control in the ordinary course of transit, including loading and unloading, within . . . Canada.

THIS INSURANCE BEING SUBJECT TO ALL THE PROVISIONS, EXCLUSIONS,

DEFINITIONS, TERMS AND CONDITIONS CONTAINED IN THE FOLLOWING WORDING. [ 4 ] The Lloyd ’ s Policy contained the following exclusion clause ( “ Exclusion (k) ” ): This insurance does not insure the liability of the Insured for: -

k) Any losses from unattended trucks while in the ordinary course of transit unless:

a) The truck is garaged in a building or parked in a fully enclosed yard which is securely closed and locked, or the truck is under constant surveillance, or on a guarded lot AND

b) The truck has all the openings closed and securely locked and keys removed, in so far as local regulations permit. [ 5 ] “ Truck ” is defined in the Lloyd ’ s Policy as including “ trailers and semi-trailers ” while “ attached to or connected to a covered truck or tractor ” . “ Unattended ” is defined as “ a truck which has been left without a responsible person whose duty is to drive, guard, or attend the truck being either on, in or within ten yards of the truck ” . [ 6 ] The Lloyd ’ s Policy contained an Unattended Truck Endorsement which provided: In consideration of the additional premium charged, it is hereby noted and agreed that, irrespective of exclusion k, this policy is extended to include losses to cargo directly resulting from forcible and/or violent entry to unattended trucks, subject to such trucks having all their openings closed, securely locked and all keys removed, but the limit of liability under this extension shall be the sum set against

paragraph 4 in the optional endorsements

schedule page forming page 2 of this form, any one truck. No coverage is provided hereunder for loss of or damage to cargo in and/or on trailers or semi trailers which are detached from power units, unless such trailers or semi trailers are

i) garaged in a building or ii) parked in a fully enclosed yard which is securely closed and locked, or iii) under constant surveillance, or iv) on a guarded lot AND the trailer or semi trailer has all the openings closed and securely locked with keys removed and the period that the trailer or semi trailer is detached from the power unit does not exceed 72 consecutive hours (Sundays and holidays excluded) from the time of detachment from the covered truck or tractor. [ 7 ] The policy limit provided for in the Lloyd ’ s Policy with respect to unattended truck coverage was $100,000.00. [ 8 ] On March 1, 2006 a truck and two flatbed trailers of the Plaintiff ’ s insured under the Lloyd ’ s Policy were stolen from the parking lot of a truck stop in Bainsville, Ontario.

A cargo of electrical cable on reels was stolen with the truck and trailers. [ 9 ] At the time of the theft, the Plaintiff was under contract to Tenhold Transportation

(2005) Ltd. ( “ Tenhold ” ) to deliver a cargo of electrical cable on reels from Quebec to Alberta. The reels were loaded on flatbed trailers and contract provisions between the Plaintiff and Tenhold provided that “ flatbed trailers must not be left unattended for security reasons ” . [ 10 ] The driver made a temporary stop at a truck stop to have a shower and get something to eat before continuing the trip. The two trailers remained attached to the power unit. The driver locked the doors of the power unit, leaving the keys under the floor mat or on the floor in the cab.

He then went into the truck stop, leaving the truck unattended as defined in the Lloyd ’ s Policy. When he returned after showering and eating, the truck power unit, trailers and cargo were gone. [ 11 ] Tenhold brought an action against the Plaintiff for recovery for loss of the cargo.

The Plaintiff paid $160,000 in satisfaction of the Tenhold claim and now seeks to recover $100,000 of that amount under the Lloyd ’ s Policy. [ 12 ] The Plaintiff ’ s driver ( “ Ray ” ) was interviewed by the Defendant ’ s adjuster ( “ BW ” ) as to why he left the keys in the truck, and answered as follows: BW: And why, why do you leave the keys inside the truck. What, what ’ s the advantage to that? Ray: Well usually you leave the truck running.

BW: Uh hum. Ray: Cause it, that time is was minus 29 out, so it stops it from freezing up. BW: Okay. But if you are not going to leave it running, what’s the advantage of leaving the keys in the truck. Ray: Why I have three other spare keys. . . . BW: And if you did hear this, why did you leave the keys in the truck on this particular incident then? Ray: Because um I wouldn’t have left them in the truck if I’d known that they had two loads stolen before I picked this up but no bodyinformed me of this. Not even Tenhold. BW: Would you have even stopped in that area?

Ray: No, I wouldn’t have stopped (both talking at once) BW: The two loads had been stolen. You would’ve just kept going hey. Ray: Kept going oh yeah . . . [13] Prior to the issuance of the Lloyd’s Policy, the Plaintiff had made a similar claim under a previous insurance policy withidentical wording with respect to a cargo loss on September 29, 2005. On that occasion the driver had locked the door of the truck,leaving a key in the ignition. The Defendant denied the claim because of the presence of the key in the ignition. The Plaintiff sued on theinsurance contract.

The suit was eventually (after the commencement of the within action) settled. There was no admission of liability. 2. Principles of Contract

Interpretation [14] The law in relation to

interpretation of insurance contracts is not in dispute. The Plaintiff relies on the Supreme Court ofCanada decision in Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., (SCC), [1980] 1S.C.R.888, 112 D.L.R. (3d) 49 for two interpretive principles, first, that the

interpretation must be consistent with the intentions of theparties, and second, that, if the phrase is ambiguous, the contra proferentem rule requires that the policy be interpreted against theinsurer. [15] The Court provided guidance regarding the search for an

interpretation consistent with intention, at 58-59 (D.LR.): [L]iteral meaning should not be applied where to do so would bring about an unrealistic result or a result which would not becontemplated in the commercial atmosphere in which the insurance was contracted. Where words may bear two constructions, the morereasonable one, that which produces a fair result, must certainly be taken as the

interpretation which would promote the intention of theparties. Similarly, an

interpretation which defeats the intentions of the parties and their objective in entering into the commercialtransaction in the first place should be discarded in favour of an

interpretation of the policy which promotes a sensible commercial result.It is trite to observe that an

interpretation of an ambiguous contractual provision which would render the endeavour on the part of the

insured to obtain insurance protection nugatory, should be avoided. Said another way, the Courts should be loath to support aconstruction which would either enable the insurer to pocket the premium without risk or the insured to achieve a recovery which couldneither be sensibly sought nor anticipated at the time of the contract. [16] The Defendant refers to “last word” on the law regarding

interpretation of insurance policies as found a recent Supreme Courtof Canada decision, Progressive Homes Ltd. V. Lombard General Insurance Company of Canada, 2010 SCC 33, at paras. 21-24: 21 Principles of insurance policy

interpretation have been canvassed by this Court many times and I do not intend to give acomprehensive review here (see, e.g., Gibbens v. Co-operators Life Insurance Co., 2009 SCC 59, [2009] 3 S.C.R. 605 (S.C.C.), atparas. 20-28; Jesuit Fathers [2006 SCC 21], at paras. 27-30; Scalera, at paras. 67-71; Brissette v. Westbury Life Insurance Co., (SCC), [1992] 3 S.C.R. 87 (S.C.C.), at pp. 92-93; Consolidated Bathurst Export Ltd. c. Mutual Boiler & MachineryInsurance Co. (1979), (SCC), [1980] 1 S.C.R. 888 (S.C.C.), at pp. 899-902). However, a brief review of the relevantprinciples may be a useful introduction to the

interpretation of the CGL policies that follows. 22 The primary interpretive principle is that when the language of the policy is unambiguous, the court should give effect to clearlanguage, reading the contract as a whole (Scalera [Non-Marine Underwriters, Lloyd’s of London v. Scalera 2000 SCC 24 ,[2000] 1 S.C.R. 551], at para. 71). 23 Where the language of the insurance policy is ambiguous, the courts rely on general rules of contract construction (ConsolidatedBathurst, at pp. 900-902). For example, courts should prefer

interpretations that are consistent with the reasonable expectations of theparties (Gibbens, at para. 26; Scalera, at para. 71; Consolidated Bathurst, at p. 901), so long as such an

interpretation can be supportedby the text of the policy. Courts should avoid

interpretations that would give rise to an unrealistic result or that would not have been inthe contemplation of the parties at the time the policy was concluded (Scalera, at para. 71; Consolidated-Bathurst, at p. 901). Courtsshould also strive to ensure that similar policies are construed consistently (Gibbens, at para. 27). These rules of construction are appliedto resolve ambiguity.

They do not operate to create ambiguity where there is none in the first place. 24 When these rules of construction fail to resolve the ambiguity, courts will construe the policy contra proferentem - against theinsurer (Gibbens, at para. 25, Scalera, at para. 70; Consolidated-Bathurst, at pp. 899-901). One corollary of the contra proferentem ruleis that coverage provisions are interpreted broadly, and exclusion clauses narrowly (Jesuit Fathers, at para. 28). 3.

Arguments and Analysis [17] The Plaintiff argues that it is entitled to the protection of the Unattended Truck Endorsement and the fact that keys were leftinside the locked truck is immaterial. The intention of the parties is reflected in the language of the Unattended Truck Endorsement,which states that the policy is “extended to include losses to cargo directly resulting from forcible and/or violent entry to unattendedtrucks”.

As all openings to the power unit were closed and securely locked, access to the power unit must have occurred due to forcibleand/or violent entry, squarely within the scope of the intended protection. The requirement to remove all keys, considered in context,must refer to the removal of keys from securely locked openings. If the requirement to remove keys is interpreted as the Defendantwould have it, the result would defeat the intended protection.

Alternatively, the Plaintiff argues, if the phrase “all keys removed” isambiguous, it must be construed against the insurer. [18] The Defendant observes that the contracted for protection in the Unattended Truck Endorsement is specifically made“subject to such trucks having all their openings closed, securely locked and all keys removed”. The Defendant argues that the phrase“all keys removed” is unambiguous, and means that all keys must be removed from the truck.

The Defendant argues that thisinterpretation is supported by the language of the policy and the intention of the parties. [19] As to the language of the policy, the Defendant compares the phrase “all keys removed” with the phrase in Exclusion (

k) inrelation to coverage of garaged or guarded trucks, which requires only “keys removed”. The Defendant argues that “all keys removed”[emphasis added] indicates there is an “increased” key requirement under the Unattended Truck Endorsement. [20] I do not accept this argument by the Defendant. First of all, the distinction between “all keys” and “keys” has nothing to do

with the relevant issue, which is where keys are to be removed from. Secondly, if “all keys” is different from “keys”, that suggests that arequirement that “keys” be removed means that “not all” or only “some” keys need to be removed. That would be a nonsensical readingof the requirement for removal of keys in Exclusion (k). [21] The Defendant argues that the evidence indicates that the fact it had previously denied coverage in similar circumstances,and the Plaintiff had accepted the issuance of the Lloyd’s Policy knowing this, means that the Plaintiff accepted the Defendant’sinterpretation.

The Defendant notes that in the within action, the Plaintiff has also sued its brokers for failing to “negotiate the removal ofthe “unattended trucks” exclusion”, which is a further demonstration that it was aware of and accepted the Defendant’s

interpretation. [22] I also do not accept this argument. The

interpretation of the phrase “all keys removed” was a matter of dispute between theparties at the time the Lloyd’s Policy was issued, and when this action was commenced. Awareness of the dispute does not mean that thePlaintiff accepted the Defendant’s

interpretation, any more than it means the Defendant accepted the Plaintiff’s

interpretation. [23] I am also of the view that the language of the Unattended Truck Endorsement in and of itself does not resolve the issue.While the phrase “all keys removed” taken out of context might seem to be unambiguous, it must be read in the context of the otherlanguage of the endorsement, which provides protection against “forcible and/or violent entry” and which requires that unattended truckshave “all their openings closed, securely locked and all keys removed”. In this context, there is ambiguity as to whether keys are intendedto be removed from the locks or from anywhere in the trucks. [24] The first issue, then, is whether this doubt can be resolved by considering which

interpretation provides the more realisticresult that would have been in the contemplation of the parties in the commercial context in which the insurance was contracted. [25] The Unattended Truck Endorsement was clearly added to the Lloyd’s Policy in response to the problem that would resultfrom the application of Exclusion (

k) in the context of the practical realities of long distance trucking. Drivers on long trips must stop toeat and rest, and the locations where they stop will not always or even typically provide parking facilities in an enclosed yard or underconstant surveillance. The Unattended Truck Endorsement provides for coverage in the context of this business reality. [26] In the context of this reality, would the parties have expected that drivers could reasonably leave keys in locked trucks?

TheDefendant argues that security was important to the parties, as evidenced by the provision in the carriage contract between the Plaintiffand Tenhold that the cargo should not be left unattended.

However, notwithstanding this provision in the carriage contract, theUnattended Truck Endorsement was clearly intended to provide protection with respect to the risk of loss of cargo associated with anunattended truck and its attached trailers. [27] The Defendant argues that removing keys from the truck is a basic security precaution, and that leaving a key in the truck,whether in the ignition or not, compromises security. Once a criminal breaks into the truck, it is vulnerable to being driven away,whether the key is left in the ignition or elsewhere in the truck.

The difficulty with this argument is that I have no evidence about what iscommon practice in the business. Do the problems associated with having a truck freeze up mean that unattended trucks are often leftrunning, with the key in the ignition, as the Plaintiff’s driver suggests? Is there a greater risk of forced entry into a truck when a key isleft in it? Does this depend on whether the key is visible or not? Apart from the Plaintiff’s driver’s statement, there is no evidence onthese points. And according to the Plaintiff’s driver, it is common to leave unattended trucks running.

Further, when asked what hisreaction would have been had he been aware of previous thefts, the Plaintiff’s driver said not only that he would not have left the keys inthe truck, but that he would not have stopped in the area at all.

This suggests that the keys were not a significant factor. [28] In light of the lack of evidence in this regard, I cannot say whether, in the commercial context in which the insurance policywas entered into, the parties would or would not have expected that a driver might reasonably leave keys in an unattended truck, whetherin the ignition or elsewhere. [29] The Defendant referred to the following legal authorities: 1. Babineau v. LeBlanc (1985), (NB KB), 62 N.B.R. 428 (N.B.Q.B.): The plaintiff driver left his vehicleunattended to break up a fight on the road in front of him, impeding his travel.

He turned off his car and removed the key from theignition, but left it in the vehicle so that it would not fall out of his pocket in the melee. The defendant gained entry to the vehicle, startedit with the key and ran the plaintiff down. The defendant argued that the plaintiff had been negligent in leaving his key in the vehicle,

relying on a statutory provision which prohibited leaving a vehicle unattended on the road without first stopping the engine, locking the ignition and “ removing the ignition key ” . The court held that he had complied with the statute because he removed “ the key from the ignition ” (emphasis added). The Defendant argues that, because “ keys ” are not specified as “ ignition ” keys in the Unattended Truck Endorsement, this means that they must be removed from the truck, as opposed to the ignition. In my view, the case does not support this inference.

It suggests a requirement to remove keys must be looked at in context. Where ignition key removal was in the context of locking the ignition, it was interpreted as meaning removal from the ignition. Under the Unattended Truck Endorsement, the context is the secure locking of all openings. Similar reasoning would relate removal of keys to their removal from locks. 2.

Couch on Insurance, Third Edition , described by the Defendant as the American “ Bible ” of insurance law, provides at para. 95.40 that “ a requirement that an automobile be left locked when unattended is not satisfied when the automobile is locked, but the key is left in the automobile ” . The authority cited is Doerr v. National Fire Insurance Company (215 Mo. App. 372; 253 S.W. 39; 1923 Mo. App. LEXIS 186. The case dealt with the issue of waiver, but the denial of coverage was based on the admitted fact by the insured that, although he had locked his car, he had left the key in the lock.

The case does not stand for the proposition for which it is cited. It supports only the proposition that the key must be removed from the lock. 3. Source Logistics, Inc. v. Certain Underwriters at Lloyd ’ s of London Subscribing Policy No. NA041790U , 2010 Ark.App. 239 (Ark.C.A.). This case interpreted the identical Unattended Truck Endorsement. The insured sued the insurer with respect to cargo in a stolen trailer. The case did not involve the loss of a power unit. The insurer denied the claim because the trailer door was secured by use of a metal strip and not with locks and keys.

The court held that the phrase “ securely locked with keys removed ” was unambiguous in the context where “ neither locks nor keys were used to secure the loaded trailers ” .

The case thus turned on the failure to use either locks or keys and has nothing to do with whether there is ambiguity in the circumstances of this case. [ 30 ] In conclusion, I do not find any of these legal authorities to be of assistance. [ 31 ] In my view, there is ambiguity as to whether the requirement in the Unattended Truck Endorsement that unattended trucks have “ all their openings closed, securely locked and all keys removed ” requires that keys be removed from the locks or from inside the locked truck. Further, the general rules of contract construction do not resolve the ambiguity in this case.

The evidence regarding the commercial context and the parties ’ dealings does not clarify the reasonable expectations of the parties. Case law does not provide a consistent, or indeed, any construction of the policy in similar circumstances. This is, therefore, one of the cases where it is appropriate to resort to the contra proferentem doctrine, with the result that the policy must be interpreted against the insurer. C. The Limitations Issue 1. Agreed Facts [ 32 ] The loss giving rise to the Plaintiff ’ s insurance claim occurred on March 1, 2006.

The loss was reported as a claim under the Lloyd ’ s Policy by no later than March 2, 2006. [ 33 ] By letter dated April 28, 2006, the Defendant LLOYD ’ S UNDERWRITERS denied the claim. [ 34 ] General Condition 20 of the Lloyd ’ s Policy provided: CANADA . . .

No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the same be commenced within twenty four (24) months next after discovery by the Insured of the occurrence which gives rise to the loss provided however, that if by laws of the State or Province within which this Policy is issued such limitation is invalid, then any such claim shall be void unless such suit or proceeding be commenced within the shortest limit of time permitted by the laws of such State or Province.

[35] The Statement of Claim was filed on April 25, 2008, more than two years after the date of loss but less than two years afterthe denial of coverage. [36] The Defendant LLOYD’S UNDERWRITERS pleaded a limitations defence based on General Condition 20 in its Statementof Defence. The Defendant also specifically pleaded the Limitations Act, R.S.A. 2000, c. L-12. 2. Statutory Provisions [37] The relevant provisions of the Limitations Act are: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding . . . the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. 7(2) An agreement that purports to provide for the reduction of a limitation period provided by this Act is not valid. 3. Arguments and Analysis (

i) Commencement of the Statutory Limitation Period [38] The Plaintiff argues that its claim was brought within the limitation period under s. 3(1) of the Limitations Act, as the “injuryfor which the claimant seeks a remedial order” and “the injury . . . attributable to conduct of the defendant” is this insurer’s denial ofcoverage. [39] The Plaintiff relies on a comment in Johnson v. Wunderlich (1986), (ON CA), 45 M.V.R. 184, 18 O.A.C. 89, [1987] I.L.R. 1-2155, 57 O.R. (2d) 600, 34 D.L.R. (4th) 120, 21 C.C.L.I. 248.

Finlayson J.A. observed, at para. 49: While the matter is not free from doubt, it is my opinion that an action against the insurer is an action for breach of contract and thecause of action arises from the date of the breach. This breach occurs when the insurer denies liability or the insured knows or ought toknow that his claim will not be honoured.

[40] The Defendant argues that under Alberta law the limitation period begins to run from the date that the loss in incurred and theinsured’s right to indemnity is triggered. [41] In Dowhaniuk v. Western Union Insurance Co, (AB KB), [1977] 1 W.W.R. 553, [1977] I.L.R. 1-846(Alta. Dist. Ct.), Stevenson D.C.J. (as he then was), citing Bilan v.

Western Union Insurance Co., unreported, Alta.C.A., held that “acause of action under an insurance contract arises when the insured is entitled to payment, assuming that he has duly complied with allconditions precedent as to notice and proof of loss”. [42] The limitation period under s. 3(1) of the Limitations Act is not expressed to run from the date the cause of action arose, butfrom the date the claimant knew or ought to have known of the three elements set out in subsection (a).

The Alberta Law ReformInstitute, in Final Report No. 90, Limitations Act: Standardizing Limitation Periods for Actions on Insurance Contracts (August 2003),expressed the firm view that this limitation period runs from the denial of coverage: [73] Under the present Limitations Act, it is inconceivable that the limitation period for an action against an insurer would commenceon the date of the loss. As the defendant is the insurer, it cannot be said that the conduct of the insurer caused the injury which theclaimant suffered as a result of the peril (pursuant to s. 3(1)(a)(ii) of the Limitations Act).

The insurer (presumably) had nothing to dowith causing the peril itself. The only conduct of the insurer which causes injury that warrants bringing a proceeding is the failure tohonour the terms of the policy. Therefore, the cause of action which a claimant has against the insurer arises on the date upon which theinsurer denies the claim. [43] In my view, Dowhaniuk and Bilan no longer govern, given the change in approach to the commencement of limitationperiods under the Limitations Act. The

interpretation of the Plaintiff and the Alberta Law Reform Institute best reflects the language of s.3(1), and means that the limitation period runs from the date that the insured knew or ought to have known that coverage was denied.That date is agreed for purposes of this

summary trial to be the date of the denial of coverage letter, April 28, 2006.

The Plaintiff’s claimwas brought within two years of that date. (ii) Invalidation of the Policy Limitation Period [44] It is common ground that the action was not started within two years of the discovery of the occurrence giving rise to the lossas required by General Condition 20 of the Lloyd’s Policy. [45] The Plaintiff argues that s. 7(2) of the Limitations Act renders General Condition 20 invalid. [46] The Defendant argues that s. 7(2) is inapplicable because it came into effect on April 1, 2006, after the March 1, 2006 lossinvolved in this case.

It was enacted by the Justice Statutes Amendment Act, 2002, S.A. 2002, c. 17, ss. 4(4) - (5) to come into effect onproclamation which was on April 1, 2006. The Defendant further argues that s. 7(2) should not be applied retroactively so as to deprivethe Defendant of a limitations defence. Statutes are presumed not to have retroactive effect with respect to substantive changes to the lawand limitations provisions are substantive. [47] While s. 7(2) was not in force when the loss occurred, it was in force when the Defendant denied coverage and when thePlaintiff’s action was commenced.

Further, the Limitations Act provides in s. 2(1) that the “Act applies where a claimant seeks a remedialorder in a proceeding commenced on or after March 1, 1999 whether the claim arises before, on or after March 1, 1999" (the date the Actwas proclaimed in effect). The Plaintiff argues that, as s. 7(2) was in force when the Plaintiff’s action was commenced, and as s. 2(1)provides that the Limitations Act has retroactive effect in respect of claims arising before it was enacted, s. 7(2) is applicable. [48] There is no specific provision in the Limitations Act regarding applicability of s. 7(2).

In contrast, s. 5.1, which was alsoadded to the Act by amendment, contains ss.(16):

(16) This

section applies where a claimant seeks a remedial order in a proceeding commenced after this

section comes into force,regardless of when the claim arises, except that a defendant who would have had immunity from liability for a claim if the proceedinghad been commenced immediately before this

section came into force continues to have immunity from liability for that claim.

[49] The Plaintiff and Defendant draw different inferences from this. The Plaintiff argues that this is the only

section of the Actwhich provides a defendant relief from retroactivity, and that the absence of such a provision means that other sections of the Act applyto proceedings commenced after the

section comes into force, regardless of when the claim arose. The Defendant argues that, as s. 7unlike s. 5.1 does not expressly address the issue of retroactive application, the common law presumption applies. [50] The Supreme Court of Canada considered immediate and retroactive application of legislation in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, 44 C.P.C (6th) 205, 366 N.R. 1, 34 B.L.R. (4th) 155, 284 D.L.R. (4th) 577, [2007] 2 S.C.R.801. Justice Deschamps J., for the majority, stated at paras. 113-114: Professor P.-A. Côté writes in The

Interpretation of Legislation in Canada (3rd ed. 2000), at p. 169, that “retroactive operation of astatute is highly exceptional, whereas prospective operation is the rule”. He adds that “[a] statute has immediate effect when it applies toa legal situation that is ongoing at the moment of its commencement: the new statute governs the future developments of this situation”(p. 152). A legal situation is ongoing if the facts or effects are occurring at the time the law is being modified (p. 153).

A statute ofimmediate effect can therefore modify the future effects of a fact that occurred before the statute came into force without affecting theprior legal situation of that fact. To make it clear what is meant by an ongoing situation and one whose facts and effects have occurred in their entirety, it will be helpfulto consider the example of the obligation to warrant against latent defects . . . This obligation comes into existence upon the conclusionof the sale, but the warranty clause does not produce tangible effects unless a problem arises with the property sold.

The warranty comesinto play either when the vendor is put in default or when a claim is made. Once all the effects of the warranty have occurred, thesituation is no longer ongoing and the new legislation will not apply to the situation unless it is retroactive. [51] As to whether a law has retroactive effect, this is a matter of statutory

interpretation: Dell Computer, para. 157, perBastarache, LeBel JJ., dissenting on other grounds.“[S]tatutes should not be given retrospective operation in the absence of an intentionto do so that is either expressed in, or is necessarily implied by the statute”: Sun Alliance Insurance Co. v. Angus (1988), (SCC), 9 M.V.R. (2d) 245, 47 C.C.L.T. 237, 87 N.R. 200, 52 D.L.R. (4th) 193, [1988] I.L.R. 1-2370, [1988] 2 S.C.R. 256. [52] In Stuffco v. Stuffco, 2006 ABCA 317, 34 C.P.C. (6th) 95, 44 C.C.L.T. (3d) 28, 68 Alta.

L.R. (4th) 91, 397 A.R. 111, at paras.28-29, the Alberta Court of Appeal concluded that the Limitations Act was intended to affect rights that have arisen in the past, andtherefore the presumption against retroactive effect does not apply. [53] I conclude that s. 7(2) of the Limitations Act does apply, for two reasons. First, while s. 7(2) was not in force when the lossoccurred, it was in force when the Defendant denied coverage.

Thus, the legal situation was ongoing at the time the Limitations Act wasbeing modified, so that this is not a situation of retroactive effect, but immediate effect as described in Dell Computer. [54] Alternatively, as held in Stuffco v. Stuffco, the Limitations Act as a whole was intended to have retroactive effect in regard topre-existing claims. I can see no reason why this general purpose would not apply to s. 7(2).

I agree with the Plaintiff that, in the absenceof an explicit provision dealing with retroactivity of a particular section, all sections of the Act should be interpreted as applying toproceedings commenced after the

section is in force, regardless of when the claim arose. [55] As s. 7(2) of the Limitations Act applies, General Condition 20 of the Lloyd’s Policy is rendered invalid. D. Conclusion [56] The questions for determination are answered as follows:

a) The Plaintiff ’ s claim for the disappearance of cargo on one of its tractor trailer units on 1 March 2006 is covered under the Unattended Truck Endorsement of the insurance policy (Policy No. AURO-501-390-3) issued by the Defendant LLOYD ’ S UNDERWRITERS to the Plaintiff.

b) The Plaintiff ’ s claim as against the Defendant LLOYD ’ S UNDERWRITERS is not statute-barred. [ 57 ] The parties may speak to me regarding costs if they are unable to agree. Heard on the 1 st day of December, 2010. Dated at the City of Edmonton, Alberta this 17 th day of March, 2011. J.M. Ross J.C.Q.B.A. Appearances: Mr. David R. Syme, Q.C. Cleall Barristers Solicitors for the Plaintiff Mr. Brian A. Vail Field LLP for the Defendants