Oliver v. Elite Insurance Company, 2014 NSSC 413

Supreme Court of Nova Scotia Citation: Oliver v. Elite Insurance Company, 2014 NSSC 413 Date: 2014-11-21 Docket: Hfx No. 415765 Registry: Halifax Between: Regan Oliver Plaintiff v. Elite Insurance Company Defendant Library Heading Judge: The Honourable Justice Peter Rosinski Heard: September 11, 2014, in Halifax, Nova Scotia Final Written Submissions: October 14, 2014 Subject: Disallowance of a limitation period defense.

Interpretation of the contractual SEF 44 endorsement found in motor vehicle insurance policies. Consideration of

Section 3 of the Limitation of Actions Act RSNS 1989 C. 258, associated with issues of waiver and estoppel.

Summary: Mr. Oliver was injured in motor vehicle accidents in October 2001, 2005, and 2006. He returned to work following the first accident, but ultimately ceased being employed in October 2004, and received CPP disability benefits thereafter. He had cerebral palsy since birth, and in October 2001 had a pre- existing problem located at disc C5-6. His counsel filed an action against the tortfeasor solely responsible for the 2001 accident on October 14, 2003. Not until a mediation in June 2008 did the plaintiff or his counsel become aware that the tortfeasor’s limits were the minimum allowable $200,000.

His claim exceeded that amount and therefore his counsel notified the SEF 44 insurer [elite insurance] that the excess claim would be made against them. Negotiations between the plaintiff and that insurer occurred sporadically until June 2010, when the assigned claims specialist adjusting the claim retired. Long periods of time thereafter were unaccounted for in the evidence, but there remained some contact between the parties thereafter, and ultimately in May 2013 a statement of claim regarding the SEF 44 matter was filed by the plaintiff’s counsel.

The insurer filed a defense in which it relied upon the expiration of the 12-month contractual limitation period, which commenced “from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims respect to an insured person exceeded the minimum limits for motor vehicle insurance in the jurisdiction in which the accident occurred.” The plaintiff made a motion to the court requesting the court to disallow the limitation of actions defence. Issues:

(1) Is the wording of clause 6(

c) of the SEF 44 endorsement, “ought to have known that the quantum of the claims… exceeded the minimum limits,” ambiguous and therefore should it be interpreted contra proferentum , against the insurer?

(2) When did the contractual 12-month limitation period herein expire?

(3) Should the doctrines of waiver or estoppel affect when contractual 12 month limitation period otherwise would have expired?

(4) If necessary, should the plaintiff nevertheless be permitted relief pursuant to

Section 3 of the Limitation of Actions Act , extending the time to file a statement of claim?

Result:

(1) There are no reported cases in Nova Scotia directly on point. There are two conflicting lines of authority (Alberta and Ontario), regarding how to interpret the clause 6(c). The Ontario approach was endorsed by the court. The words in the clause (“ought to have known…”) were therefore interpreted as meaning, from the point at which the plaintiff has a body of evidence accumulated that would give him a reasonable chance of persuading a judge that his claims would exceed $200,000, with an allowance or “latitude” in relation to plaintiff’s counsel’s assessment thereof.

(2) Not until preparation of the June 2008 mediation brief did the plaintiff or counsel know that the plaintiff’s claims would exceed $200,000. Moreover, given the fluctuating circumstances of the plaintiff’s medical condition, and difficulty in attributing to which accident or pre-existing condition his inability to work related, plaintiff only “ought to have known” that his claims exceeded $200,000 sometime between March and June 2008.

The court found that the June 16, 2008 mediation brief was an appropriate date at which it could be said that the plaintiff “ought to have known” that his claims would exceed $200,000. Therefore, the 12-month contractual limitation period started to run June 16, 2008.

(3) There was no waiver here by the insurer. However the plaintiff established that the insurer had in its conduct and statements created a promissory estoppel regarding when contractual limitation period started to run, and thereby was estopped from relying thereon until at least June 2009, and possibly as late as March 29, 2010.

(4) Even without relying upon promissory estoppel, which would otherwise only permit the 12- month contractual limitation period to run in June 2009 or from March 29, 2010, the court was satisfied that if the contractual limitation period started to run June 16, 2008 until June 16, 2009, a further four years extension was appropriate so that the May 22, 2013 filed a statement of claim was in time.

(5) Therefore, the plaintiff’s motion to disallow the limitation of actions defense, was granted, such that the action may proceed on its merits. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. SUPREME COURT OF Nova Scotia Citation: Oliver v. Elite Insurance Company, 2014 NSSC 413 Date: 2014-11-21 Docket: Hfx No. 415765 Registry: Halifax Between: Regan Oliver Plaintiff v. Elite Insurance Company Defendant Judge: The Honourable Justice Peter P. Rosinski Heard: September 11, 2014, in Halifax, Nova Scotia Final Written Submissions: October 14, 2014

Counsel: John Rafferty, Q.C., and Daniel Roper, counsel for the plaintiff J. Scott Barnett, counsel for the defendant By the Court: Introduction [ 1 ] On October 12, 2001, while driving his parents’ motor vehicle, Regan Sean Oliver was involved in a collision with Joseph Sangster’s vehicle. On October 14, 2003, Duane Rhyno as counsel for Mr. Oliver, commenced an action against Mr. Sangster and two corporate defendants. [ 2 ] At some time later, Mr. Oliver and his counsel became aware that his quantified claim for damages exceeded the $200,000 limit contained in Mr.

Sangster’s insurance policy. [ 3 ] On May 22, 2013, Dale Dunlop as counsel for Mr. Oliver, commenced an action against his parents’ automobile insurer, Elite Insurance Company [hereinafter “Elite”], under the SEF 44 endorsement provisions. Their policy had a $500,000 limit. [ 4 ] Elite filed a Defence on June 4, 2013 which raised inter alia , a limitation of actions defence. The Motion to Disallow a Limitations of Actions Defence [ 5 ] On May 14, 2014, Mr.

Oliver made a motion for an order disallowing Elite’s defence based on a time limitation and permitting this action to proceed. [ 6 ] At the time of the collision in 2001, the minimum amount of liability insurance required by s. 125(1) of the Insurance Act R.S.N.S. 1989, c. 231, was $200,000: Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to the limit of at least $200,000, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or more persons and loss of or damage to property. [ 7 ] This limit was changed to $500,000, as of April 1, 2004 – see ss. 14 and 36(3) of the Automobile Insurance Reform Act , S.N.S. 2003 (2d session), c.1. [ 8 ] The SEF 44 endorsement in this case states in cl. 6(c), under the heading “Procedures”: Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.

No action which is commenced within two years of the date of the accident shall be barred by this provision. [my emphasis] [ 9 ] At issue in this Motion are the following: 1.

Interpretation of clause 6(

c) of the SEF 44 endorsement, and the associated jurisprudence as to when the limitation period begins to run. Is the clause sufficiently ambiguous such that it should be interpreted contra proferentem ? Doing so would arguably permit interpreting the date when a plaintiff “ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits” as either of two fixed dates: the determination of a judgment or of a binding settlement agreement. 2. When did the limitation period expire? 3.

In spite of the expiration of the limitation period, should the doctrines of waiver or estoppel excuse the late filing of the plaintiff’s action herein? 4. If necessary, should the plaintiff nevertheless be permitted relief pursuant to s. 3 of the Limitation of Actions Act , R.S.N.S., 1989, c. 258, as amended?

The Evidence Presented [ 10 ] Firstly, I should point out that pursuant to an order of Justice Murphy dated March 7, 2014, I have the benefit of a “Statement of Admissible Facts.” I also have the exhibits filed herein. [ 11 ] From the plaintiff, I have affidavits and supplemental affidavits of Duane Rhyno and Dale Dunlop, both of whom acted as counsel to Mr. Oliver; as well as an affidavit from Mr. Oliver. From the defendant, I had available to me the affidavit of Cathy Fancy. Each of the affiants was cross-examined. Duane Rhyno [ 12 ] Mr.

Rhyno graduated from Dalhousie Law School in 1997 and articled with Walker Dunlop. Dale Dunlop is a partner and namesake of that firm. After a short stint at the Haynes Group of Lawyers, Mr. Rhyno practiced as a sole practitioner from 1999 onward. He commenced Mr. Oliver’s action against Mr. Sangster on October 14, 2003 (“the Sangster action”). Sometime in 2003, he incorporated his law practice. [ 13 ] On June 1, 2007, Mr. Rhyno was suspended by the Barristers’ Society for one month ( 2007 NSBS 2 ). At that time he handed his legal files over to Walker Dunlop. Brian Church, Q.C., monitored his practice.

Between then and November 14, 2007, when Mr. Dunlop filed a Notice of Change of Counsel designating Mr. Dunlop as Mr. Oliver’s counsel for the Sangster action, Mr. Dunlop took carriage of the Sangster action. [ 14 ] As of May 1, 2008, Mr. Rhyno was suspended by the Barristers’ Society for eight months ( 2008 NSBS 5 ). He was required thereafter to practice with at least one other Barristers’ Society approved lawyer for three years. [ 15 ] While he could have returned to practice law in February 2009. Mr. Rhyno did not return until late April 2009.

When he returned to practise with Walker Dunlop, he took over carriage of Mr. Oliver’s SEF 44 (as yet unfiled) claim against his parents’ insurer. At that point Mr. Dunlop, who had discovered on June 23, 2008 that Mr. Oliver’s claim likely exceeded Mr. Sangster’s insurance limits, advised him that there was an issue regarding the inadequacy of the actual limits of insurance available in Mr. Sangster’s policy. There is no dispute that Mr. Rhyno first became aware of this upon his return to Walker Dunlop. [ 16 ] He continued to be responsible for Mr.

Oliver’s SEF 44 claim at Walker Dunlop until the fall of 2012, when he left the firm. Mr. Rhyno took Mr. Oliver’s SEF 44 file with him. [ 17 ] Ultimately, Mr. Rhyno received instructions from Mr. Oliver in May 2013, that the file be delivered to Mr. Dunlop. Mr. Dunlop filed a Notice of Action on Mr. Oliver’s behalf regarding the SEF 44 claim on May 22, 2013. [ 18 ] Thus, it appears that Mr. Rhyno had responsibility for Mr. Oliver’s Sangster action (which was settled for $200,000 on June 23, 2008) until approximately November 14, 2007 (excluding a June 1 – July 1, 2007 suspension by the Barristers’ Society).

At the time of the settlement of the Sangster action, Mr. Rhyno was serving the 2008 suspension (May 1, 2008 for 8 months). On his return to practice at Walker Dunlop in April 2009, he became aware of the proposed SEF 44 Oliver claim. At this time, Mr. Rhyno was monitored for a period of a year by Brian Church, Q.C. Mr. Church submitted monthly reports to the Barristers’ Society. [ 19 ] In his affidavit and cross-examination, Mr. Rhyno was adamant that he did not quantify, for his own benefit or Mr. Oliver’s benefit, Mr. Oliver’s claim against Mr. Sangster before Mr.

Dunlop settled the Sangster action on June 23, 2008. I accept his evidence in that regard, and the substance of his assertion in a December 1, 2009 email to Cathy Fancy, claims specialist for Elite, that: “it has always been my client’s position that this claim is worth over $500,000.” That amount may have arisen from Mr. Oliver’s belief, but did not arise from any quantification or specific expression of opinion by Mr. Rhyno to Mr. Oliver. [ 20 ] Moreover, I accept that Mr. Rhyno could not recall whether his client, Mr.

Oliver, had always maintained that position from the time of his retainer, or if it was from a specific point in time during the retainer. [ 21 ] Mr.

Rhyno was asked by defendant’s counsel why he did not file a Statement of Claim for the SEF 44 claim after Cathy Fancy had advised him in her May 25, 2010 letter (Exhibit “1” to his affidavit) that the SEF 44 action against Elite Insurance “should have been commenced in June 2009, one year from the date you first became aware the defendant Sangster had liability coverage of $200,000 and that you valued your clients claim in excess of that amount”. [ 22 ] To this he testified, in relation to the delay from November 2010 to November 2011, that: “I was waiting for answers from you Mr.

Barnett… Waiting for responses from Ms. Fancy or you.” This answer was prefaced on an exchange of emails which appear at Exhibit “7” of his affidavit. [ 23 ] I observe here that Mr. Rhyno indicated in his testimony that: “I’m a creature of email – and that’s how I document matters”. [ 24 ] In that same Exhibit “7,” we see that on June 7, 2010, Mr. Rhyno responded to Ms. Fancy’s May 25, 2010, letter. She responded the same day: “The file has been referred to Scott Barnett, and I am forwarding your email along to him for response.” [ 25 ] The next communication appears to be a letter from Mr.

Barnett to Dale Dunlop dated November 4, 2011. On November 7, 2011, Mr. Rhyno wrote to Mr. Barnett advising he was responding on behalf of Mr. Dunlop, and noting that he had not received a substantive reply to his June 6, 2010 (sic; June 7) letter to Ms. Fancy. [ 26 ] On November 7, 2011, Mr. Barnett wrote back: “I am out of the office the next few days but I will look into this and get back

to you as soon as I can. This email should not be taken as waiving or extending any limitation period.” [ 27 ] Though not apparent in this email thread, Mr. Rhyno does acknowledge in his supplemental affidavit (para. 4) that Mr. Barnett sent two further letters, dated November 18, 2011, and December 12 , 2011 (Court Exhibits 2 and 3), in which he took the position that Mr. Oliver’s SEF 44 claim had prescribed, and his concern that the SEF 44 insurer would not be in a position to proceed against Mr. Sangster anymore because his claim was concluded by way of a consent dismissal order and not a discontinuance.

However, Mr. Rhyno testified that he had not seen those two letters at any time before August 2014. There is no evidence to the contrary, and I accept his testimony on that point. [ 28 ] Between May 2009 and the filing of the SEF 44 action on May 22, 2013, Mr. Rhyno had multiple contacts with Ms. Fancy regarding that claim, before her retirement in June 2010.

However, he agreed that, after the failed mediation on March 29, 2010, regarding the Pearson collision and the Sangster SEF 44 claim, in a May 25, 2010 letter, she made clear that: “this was the first time Elite made reference to its communications not constituting a waiver or extension of time limits” (para.18, Duane Rhyno affidavit). [ 29 ] I accept Mr. Rhyno’s evidence that he did not quantify, and did not feel it appropriate to quantify, Mr. Oliver’s claim against Mr.

Sangster while he was involved with the file prior to the claim being settled June 23, 2008, because: “ I could not quantify it – it was a moving target…”. [ 30 ] Mr. Oliver was diagnosed with cerebral palsy early in life. Mr. Oliver was injured in the Sangster collision on October 12, 2001. In 2005, he was confirmed eligible to receive Canada Pension Plan total disability benefits. He was also injured in a July 8, 2005, collision with Robert Pearson, and again in a minor rear-end collision on January 4, 2006. [ 31 ] The materials filed tend to support Mr. Rhyno’s testimony. The exhibits to Mr.

Dunlop’s affidavit show Mr. Oliver’s fluctuating health during the relevant time periods. They also demonstrate that doctors were faced with revised diagnoses and treatment recommendations over time, as well as some differences of opinion as to appropriate treatments and likely outcomes. Dale Dunlop [ 32 ] Mr. Dunlop adopted the contents of his affidavits, and they are generally consistent with the evidence of Mr. Rhyno. He has extensive civil litigation experience, having been admitted to the Bar in 1976. Notably, in his affidavit we find: 1. Paragraph 11 – “Medical reports were still being generated on Mr.

Oliver’s claim until November 2007. The final report by Dr. Sean Christie spoke of further investigations and possible treatment. I waited to quantify Mr. Oliver’s claim until sometime had passed after that report was received to ensure that there were no further physical or treatment changes recommended and until a settlement mechanism was in place.” 2. Paragraph 13 – “ Julia Smart, one of my associates, and I, quantified Mr. Oliver’s claim during our preparation for the mediation [scheduled for June 23, 2008]. This quantification occurred in early June, 2008. Our brief was submitted on June 16, 2008.

Attached as Exhibit “1” is a copy of my brief and its attachments.” 3. Paragraph 14 – “The work done to prepare the mediation brief resulted in the first quantification of Mr. Oliver’s claim done on his behalf.” 4. Paragraphs 15 and 16 – “The first time I advised Mr. Oliver of the probable value of his claim was at the 2008 mediation. I did not discuss the value of his claim with him between November, 2007 and June, 2008, nor did he ask me. Furthermore, based on my review of Mr. Rhyno’s file materials and my conversation with Mr. Rhyno and Mr. Oliver, I believe that Mr.

Oliver was not previously provided an opinion on the probable value of his claim against Mr. Sangster.” 5. Paragraph 18 – “On June 19, 2008, [Cheryl A. Canning counsel at Burchell Hayman Parish] wrote to me and advised that our mediation brief was the first quantification of Mr. Oliver’s claim that the defendant had ever received, and that the claim exceeded Mr. Sangster’s insurance coverage limits. Attached as Exhibit “3” is a copy of this letter.” 6. Paragraphs 19 – 22: “ This was the first time I was made aware of an insurance coverage limits issue in the Sangster action.

A settlement of the Sangster action was reached at the June 23, 2000 mediation in the amount of $200,000, which did not preclude a claim against Elite. The Release was executed on July 3, 2008. Attached as Exhibit “4” is a copy of a letter from Ms. Canning dated June 30, 2008, which confirms the settlement. Attached as Exhibit “5” is a copy of the Release. On June 23, 2008, I called Cathy Fancy, an adjuster for Mr. Oliver’s SEF 44 insurer, Elite Insurance Company, which is part of the Aviva group of insurers. In order to put Elite on notice of Mr. Oliver’s claim, I advised Ms.

Fancy that his claim was “well north of $200,000”. Attached as Exhibit “6” is a copy of Ms. Fancy’s notes from this conversation, in which she accurately recorded my comment on the claims. On July 2, 2008, I commenced an action against Robert Pearson on behalf of Mr. Oliver [the “Pearson action”]. Attached as Exhibit “7” is a copy of the Notice of Action and Statement of Claim in the Pearson action [Mr. Oliver had been injured in a second motor vehicle accident on July 8, 2005 when he was a passenger in a stopped vehicle that was rear ended by a vehicle driven by Robert Pearson]” 7.

Paragraphs 24 – 27: “On March 29, 2010 a mediation was held for both the Pearson action and the SEF 44 claim for the Sangster accident with Craig Garson, Q.C., acting as mediator. Ms. Fancy participated in the mediation and submitted a brief on behalf of Elite. The mediation did not achieve a settlement of either the Pearson claim or the SEF 44 claim. Later on the day of the mediation, I received an email from Ms. Fancy, indicating that she was retiring from Aviva , and requesting that I send a copy of the SEF 44 action to her so that she could refer the matter to her Legal Department.

On May 24, 2011, a Settlement Conference was held relating solely to the Pearson action and a settlement was achieved for the all- inclusive sum of $75,000. Attached as Exhibit “10” is a copy of this settlement agreement.” 8. Paragraphs 31 – 32: “The file relating to Mr. Oliver’s SEF 44 claim was returned to me in early May, 2013[from Mr. Rhyno who had left Walker Dunlop in the fall of 2012]. Upon review of the file, I promptly commenced this action on May 22, 2013.” [ 33 ] In cross-examination, Mr.

Dunlop indicated on numerous occasions that he had no independent recollection of certain matters, but that he relied in giving his answers on what would have been his standard practice in relation to the matters in issue. For example, he noted that numerous letters, and reports from doctors (for example Dr. Sean Christie’s report “printed” January 14, 2008, in relation to the November 5, 2007 visit by Mr.

Oliver) although bearing their own date of writing or issuance, may not have come to his attention at that time because either he was not dealing with the file then, or the documents were not addressed to Walker Dunlop initially, but came to them through other parties (such as a Family Doctor) or upon later specific request by Walker Dunlop. [ 34 ] Mr. Dunlop confirmed in relation to such letters and documents, that his practice was to review them upon receipt and then take appropriate action in a timely manner.

However, he had no independent recollection of when he saw, or became aware of many specific documents. He testified that he would have reviewed them if they were in the Walker Dunlop file while preparing the June 2008 mediation brief, (Exhibit “1” to his initial affidavit). [ 35 ] At this juncture, I will indicate that I found Mr. Dunlop credible. He was frank and measured in his testimony.

To the extent that independent evidence might contradict some aspects of his evidence, I find such instances to be inadvertent on his part, and insignificant to the result herein. [ 36 ] Insofar as his standard practices are concerned, Mr. Dunlop testified that: he would usually speak to a client rather than have an associate do so and that he would have undertaken an investigation of Mr. Sangster’s personal means in order to “know your defendant” regarding whether Mr. Oliver’s claim in excess of Mr. Sangster’s insurance coverage could be satisfied by claiming against Mr. Sangster’s personal assets. [ 37 ] Mr.

Dunlop agreed that he advised Mr. Oliver that liability was not in issue in the Sangster action. He was adamant, however, that no valuation of Mr. Oliver’s claim was discussed between November 2007 and June 2008. He did not do so, because, as he testified, he had: “no clear idea when he would plateau [medically]”; additionally there were complex facts, and “my practice is not to give an opinion until we know all the facts”.

He conceded that, although ordinarily he might have an idea of the value of the claim, “but not in this case – I was very leery of ball-parking this claim until it was absolutely necessary.” [ 38 ] In Mr. Dunlop’s view he had to be satisfied of several things before he would quantify such a claim: that the claim was reasonable, the medical condition of the plaintiff had stabilized or plateaued, and that there was a settlement mechanism in place. He opined that some time between March – June 2008 those conditions were met in this case regarding the Sangster claim. [ 39 ] Mr. Dunlop agreed with Mr.

Barnett that quantification of the Sangster claim approached $1 million in his mediation brief, and that he did not turn his mind to whether Mr. Oliver’s quantified claim might exceed Mr. Sangster’s insurance limits, until he was so advised so by the insurer’s counsel Cheryl Canning on June 19, 2008. Her letter indicates she would be out of the office on June 20, 2008, and the mediation was scheduled for Monday, June 23, 2008. [ 40 ] On cross-examination, Mr. Barnett suggested to Mr. Dunlop that based on Mr. Oliver’s mediation brief, even accounting for the Pearson accident and Mr.

Oliver’s pre-existing medical condition he should have been aware that the Sangster claim was “very significant”, and that even if Mr. Sangster had a $500,000 insurance limit, there was a likelihood that the Oliver claim might exceed this amount. [ 41 ] Mr. Dunlop disagreed that this was the case. He noted that in such briefs the plaintiff always puts their “best foot forward… and are claims based on” your best day”, seeking amounts which counsel understand the client ultimately will not likely realize. While he admitted that this was a significant claim, Mr.

Dunlop noted that the loss of income tends to drive up such claims dramatically. He added that the extent to which Mr. Oliver’s not being able to continue to work was attributable to the Sangster motor vehicle collision was unclear, as it was complicated by: his cerebral palsy; the Pearson collision July 8, 2005; and the fact that Mr. Oliver’s health had significantly fluctuated over the years preceding 2008. He elaborated that although, Mr. Oliver “functions well for someone who has cerebral palsy” he doesn’t necessarily function well in relation to the average healthy person.

Therefore, his pre-existing conditions play a significant role in his level of disability associated with the Sangster motor vehicle collision. [ 42 ] Mr. Dunlop conceded that he was well aware in May 2008, that: Mr. Oliver last worked in June 2004; that he had received CPP disability benefits which require impairment effectively preventing a person from working; and that Mr. Oliver could only do four hours of sedentary work per day. He noted however that he did not likely previously see the report generated by Dr. Tom Stanley at the request of Ms. Canning, in which Mr.

Oliver had been subjected to a functional capacity evaluation (Tab 21, Exhibit “2” of his own affidavit – testing date November 29, 2006). [ 43 ] Mr. Dunlop did not advise the SEF 44 insurer on Friday, June 20, 2008, as it was the last business day before the mediation was to commence. He said he considered it was too late to involve the SEF 44 insurer in the mediation and was concerned that to do so “might derail the mediation” as there was no time for the SEF 44 insurer to get up-to-date and be present for the June 23 mediation. [ 44 ] When he became aware of the inadequacy of Mr.

Sangster’s insurance limits on June 23, 2008, Mr. Dunlop immediately contacted the SEF 44 insurer, and advised them that Mr. Oliver would be making a claim thereunder. He agreed that he filed a Statement of Claim in the Pearson matter on July 2, 2008, and that he could have started the SEF 44 action at that time. [ 45 ] As a result of the Barristers’ Society suspension decision on May 1, 2008, Mr. Rhyno’s practice was monitored for 12 months by Brian Church, Q.C. of Walker Dunlop.

[ 46 ] Mr. Dunlop testified that while he had carriage of the matter only until Mr. Rhyno’s return in April 2009, he was still working on the Pearson claim and the SEF 44 (Sangster) claim until March 29, 2010, when that mediation failed. During that period, Mr. Rhyno was also working on the SEF 44 claim. Mr. Dunlop testified that “on a fairly regular basis I would ask him about any progress and the limitation period… I knew Cathy Fancy, and I expected it will get worked out… just a question of crunching the numbers”. He said that Mr.

Rhyno informed him that the limitation period was not an issue, as talks were ongoing. Mr. Dunlop noted that in his experience, he had seen a number of cases where communications between plaintiff’s counsel and defendant’s counsel continued in good faith even after the limitation period had expired, without the filing of a Statement of Claim. [ 47 ] He said he assumed that Mr. Rhyno had an agreement from the insurer’s representative (Ms. Fancy) not to insist on its strict legal rights. He only found out later that on May 25, 2010 Ms. Fancy had requested that Mr.

Rhyno file a Statement of Claim regarding the SEF 44 claim. [ 48 ] I should note here that, there was no direct evidence to the contrary, to that of Ms. Fancy, that she believed until approximately May 21 – 25, 2010, that a Statement of Claim had already been filed. On May 25, 2010, she wrote to Mr. Rhyno: “You indicated the action had not been commenced to date however you would be attending to that shortly” (Exhibit “13” affidavit of Cathy Fancy). [ 49 ] Thus, sometime after May 25, 2010, Mr. Dunlop became aware that there had been a request by the insurer to plaintiff’s counsel to file an SEF 44 action.

There is nothing in the evidence to indicate precisely when Mr. Dunlop was aware of this. However, the evidence suggests his next direct involvement in the SEF 44 claim after May 25, 2010, was as a result of Mr. Barnett’s November 4, 2011 letter (Exhibit “11” to Mr. Dunlop’s affidavit). Mr. Dunlop stated at para. 29 of his affidavit that: “I provided the letter to Mr. Rhyno for response.” Certainly that letter made clear that the insurer was of the view that, as Mr. Oliver did not appear to be pursuing an SEF 44 claim, they would be closing their file in 30 days. [ 50 ] For context, I will note that Mr.

Rhyno was aware of this letter and followed up; see paragraphs 21 – 25 of his affidavit, and his supplemental affidavit. [ 51 ] Mr. Dunlop makes it clear that although Mr. Barnett wrote to him on November 18, 2011, and December 12, 2011 at Walker Dunlop [Court Exhibits 2 and 3] “… I do not recall ever seeing either letter and believe that I would certainly remember reading either of them.” (see his supplemental affidavit). I accept his evidence in that regard. Regan Oliver [ 52 ] Mr. Oliver’s affidavit indicates under the heading “my accidents”: 1.

That he was injured on October 12, 2001 in a motor vehicle accident (for which Joseph Sangster was solely responsible); 2. Mr. Rhyno commenced an action against Mr. Sangster on October 14, 2003; Mr. Oliver was injured as well on July 8, 2005, in a motor vehicle accident (for which Robert Pearson was solely responsible). Mr. Dunlop commenced an action against Mr. Pearson on July 2, 2008; 3.

He noted that he had also been injured January 4, 2006 in a motor vehicle accident which “exacerbated in a minor way my injuries from the Sangster and Pearson accidents as well as my pre-existing conditions.” In April 2006, he slipped and fell at home after his leg gave out, injuring his right knee. [ 53 ] Under “medical condition” Mr. Oliver’s affidavit reveals that he has had cerebral palsy from birth and experienced occasional migraine headaches for all of his adult life. He specifically noted: Following the 2001 Sangster accident a disc herniation at C4 –5 was identified.

I was originally scheduled to have surgery performed by neurosurgeon Dr. Ren Holness to repair this disc. However the symptoms abated one day after I turned my head and felt it pop in my neck. Diagnostic imaging at the time showed that the herniation had resolved. While the extreme neck pain associated with this herniated disc had then lessened, significant symptoms persisted and continue to persist to this day. I experienced flare-ups of my symptoms and underwent physiotherapy until August 2002 and then again from January 2003 to March 2004.

In or about October 2003, I developed numbness in my left hand and arm, along with the neck pain I had been experiencing from the herniated disc. My day-to-day living became incredibly difficult. I was referred to Dr. Sarah Kirby, a neurologist who ordered another MRI. The MRI revealed that the herniated disc at C4 –5 had increased in size and that a broad based herniated disc was present at C5 –6. Following the 2005 Pearson accident, I was diagnosed with another disc herniation at C6 –7. I developed almost constant headaches, numbness in my right arm and pain extending down my left leg.

Since then, I need a cane to help me walk. The medical reports that chronicle my symptoms and treatment are attached to the mediation briefs of Mr. Dunlop and Cheryl Canning, counsel for Mr. Sangster, and are produced as Exhibits “2” and “3” of Mr. Dunlop’s affidavit filed in support of this motion. [ 54 ] Under “employment” Mr. Oliver stated: At the time of the Sangster accident, I was employed at Convergys call center. I returned to work there in April 2002. I also commenced a term position at Parks Canada which began on April 29, 2002.

In September 2002, I had to leave my position at Convergys because of the discomfort I was experiencing in my back and neck. However, I was able to continue with my employment at Parks Canada because my job duties there permitted me to move around freely. My employment at Parks Canada ended in June 2004 when funding for my position was cut. In September 2004, I enrolled in a Library Technician Program at the Nova Scotia Community College to qualify me to do work similar

to what I had been doing with Parks Canada. Unfortunately, my neck pain forced me to leave this program in October 2004, and I remain unemployed. Because of my injuries, I received motor vehicle

Section B weekly indemnity benefits from October 2001 to May 2002 [from his parents’ insurer – Elite Insurance Company], short-term disability insurance benefits from October 22, 2001 to February 8, 2002, and Canada Pension Plan disability benefits from 2005 [retroactive to October 2004] to date. [ 55 ] Under “the value of my claim” Mr. Oliver stated: Mr. Rhyno and I never discussed the amount of my claim, other than it being “substantial.” I do not recall having any discussions with Mr. Dunlop about the value of my claim until June 2008 when I attended a mediation of the Sangster action with Mr. Dunlop.

This was the first time I was advised of the probable value of this claim. [ 56 ] Mr. Oliver was extensively cross-examined. I had a first-hand opportunity to carefully consider his responses. Mr. Oliver was in apparent pain/discomfort, and changed his position noticeably while testifying. At one point he needed to take a break, and requested that of the Court. At another point in time he became testy with defence counsel, who he felt was asking unnecessarily repetitive questions, which prolonged the physical discomfort of his having to remain on the witness stand.

I had no reason to believe that his comportment during his cross-examination was anything other than a legitimate expression of the level of discomfort which he experienced. [ 57 ] Mr. Oliver confirmed that he completed a Bachelor of Arts degree in 1998, and a Bachelor of Education degree in 2000, but did not go on to do the teaching practicum. He entered Dalhousie Law School in 1994, but left before the end of the first term. He returned in September 1995, again as a first-year student, but he did not complete that year. He did not return thereafter.

He acknowledged that his understanding of “damages” was that it involved an attempt, through financial compensation, to put plaintiffs back to the position in which they generally were before a wrong was done to them. [ 58 ] According to Mr. Oliver before his 2001 motor vehicle accident, his cerebral palsy, which had “stabilized since I was five years old,” would not materially have interfered with him taking on any physical activity that a person without cerebral palsy could do. After the 2001 accident, his most significant pain was in his neck.

That pain is still present today and generally has gotten worse over time, but has also fluctuated in severity. Although he was in “constant” pain while working at Parks Canada, he noted that because he was able to move around in that job he didn’t miss as much time as he would have at a more sedentary job, such as at Convergys. After he left Parks Canada, he never worked outside the home again.

Nevertheless, he tried to retrain by attending the Nova Scotia Community College Library Materials Program in 2004, but he had to discontinue his studies because the pain in his neck was “as bad as just after the 2001 accident”. The level of pain he experienced meant he could not sit or lay down for longer periods of time. [ 59 ] Mr. Oliver agreed that he had not felt capable of working at any time since making his February 2005 application for CPP disability benefits. He also agreed that since the 2001 accident his wife did about 98% of the housekeeping and yard work.

He had also received CPP disability benefits for his two young sons born July 1, 2005 and November 12, 2006. He applied for and received forgiveness of his student loans as a result of that disability benefits program in February 2008. [ 60 ] Dr. Tom Stanley did a functional capacity assessment on Mr. Oliver. (dated November 29, 2006, Exhibit “2” at Tab 21 of Mr. Dunlop’s affidavit as excerpted from Cheryl Canning’s mediation brief). He agreed that at that time he had severe neck and lower back pain. He did not recall when he would have first seen Dr.

Stanley’s report, but he seemed unfamiliar with it, which may be because it was requisitioned by Cheryl Canning, as counsel for Mr. Sangster. [ 61 ] Mr. Oliver steadfastly and convincingly testified that he had no discussions with Mr. Rhyno or Mr. Dunlop about the quantification of his claim until around the time of the June 2008 mediation. [ 62 ] When it was put to him that, in Mr. Rhyno’s email to Cathy Fancy dated December 1, 2009 (Exhibit “6” to Cathy Fancy’s affidavit), Mr. Rhyno stated that: “[i]t has always been my client’s position that this claim is worth over $500,000…”, Mr.

Oliver responded: “Only at the time of the mediation [June 2008] did I know the extent of my claim… I would not have made this statement [before then].” [ 63 ] On the other hand, concerning the statement in his affidavit that: “Mr. Rhyno and I never discussed the amount of my claim, other than it being “substantial”, Mr.

Oliver testified that: “I said something to the effect – ‘it must be substantial’… I simply looked at the time… I did not factor in the little particulars, etc.… I could only assume that the claim would grow in value – that would make it substantial.” He reiterated that he could not recall when he had used the word, or in which context, but did maintain that: “The only time I knew or understood that the value of my claim was larger than I had expected was at the mediation [June 2008].” [ 64 ] In redirect examination, Mr.

Oliver confirmed that, before the 2001 motor vehicle accident, he “could do everything physical.” He had no neck injuries or other pain or problems evident before-hand. [ 65 ] Mr. Oliver acknowledged that the cervical stenosis at C5 –6, which was discovered after the 2001 accident, was an apparently pre-existing condition.

Regarding the disc bulging at C4 –5, he understood this to be the result of the 2001 accident, and that although it resolved after the pop in his neck, it returned to its bulged status, and he said he still has symptoms, as it “bulges from time to time,” and then his pain is “much more severe than I would normally go through… It depends on how long the flare-up lasts.” [ 66 ] Additionally, Mr.

Oliver clarified a response in his CPP Disability Application, Box 21 (Court Exhibit 1 at page 60) to the following question: “If you had to stop other activities (such as hobbies, sports or volunteer work) please explain and give dates activities ceased.” His handwritten response was: “Light housework, lifting, driving shorter periods of time. Has impacted all areas of life”. These words give an unintended impression according to Mr. Oliver.

What he meant to state was that the handwritten items are all things he could do without difficulty before the 2001 accident, and thereafter he still could do, but “less than before.”

[ 67 ] While being referred to the CPP Disability Benefits Application (page 30, Court Exhibit No. 1), Mr. Oliver confirmed that he had not worked outside the home since he was with Parks Canada; however, he added, “I always hoped I might return to work.” [ 68 ] I found Mr. Oliver to be credible. He was polite, measured and candid in his testimony. His evidence was honestly given and reliable. Specifically, I accept that he was the originator of the use of the term “substantial” as referred to in para. 21 of his affidavit, and that there was no quantification of his claim done before June 2008.

He had no basis upon which it could be said that he knew or ought to have known that the quantum of his claims “exceeded the minimum limits for motor vehicle liability insurance” in Nova Scotia (being $200,000 at all relevant times) before June 2008. Cathy Fancy [ 69 ] Ms. Fancy’s direct evidence tendered via her affidavit, and even a large measure of her cross examination, do not materially dispute much of the evidence presented by the plaintiff’s witnesses on this motion. [ 70 ] In her affidavit, Ms. Fancy outlined her 40-year career arc in the insurance industry.

By the time of her involvement in this proceeding, she had risen to become a “claims specialist” which she stated involved the “high end bodily injury claims.” She estimated that in 40% of her cases she was involved in direct contact with plaintiff’s counsel, maintaining carriage of the file until it became necessary for defendant’s counsel to become involved. In later years the company had two staff lawyers, but who did not report to her (Scott Barnett was one of them). Her level of payout authority while handling Mr. Oliver’s claim was $250,000, which was the highest authority in the Halifax office.

Although she had a supervisor and claims manager nominally above her in the Halifax office hierarchy, she said she “handled the most complex claims.” [ 71 ] Ms. Fancy stated that she became involved in the file on June 23, 2008, after Mr. Dunlop left her a voicemail indicating he had just discovered at the mediation that day that Mr. Sangster’s insurance policy only had $200,000 coverage. As the insured’s representative she understood that pursuant to an SEF 44 family protection endorsement with Elite Insurance Company (Mr.

Oliver’s parents’ insurer) there was a policy limit of $500,000. [ 72 ] On June 25, 2008, Ms. Fancy asked Mr. Dunlop to provide her with the June 23, 2008 mediation briefs to her so that she “could begin assessing the SEF 44 claim.” On June 26 she received the Elite Insurance Company

Section B file regarding the Sangster action and reviewed it. On March 31, 2009, she attended the oral discovery of Mr. Oliver regarding the Pearson action. She also acknowledged receipt of a package of materials from Mr. Rhyno, including Mr. Oliver’s CPP disability benefits file. [ 73 ] In a May 26, 2009 letter, Ms. Fancy requested transcripts of the previous discovery and medical information and advised that she would review the material and take a settlement position.

On September 2, 2009, she emailed Duane Rhyno and advised that she would extend an offer, and if it is not resolved, she was prepared to participate in mediation of the SEF 44 claim together with the 2005 (Pearson) MVA claim (see Statement of Admissible Facts, Exhibit “3” to the affidavit of Duane Rhyno). In her affidavit she stated that the “first date upon which I extended an offer of settlement with a monetary figure was on November 4, 2009”. [ 74 ] In Court Exhibit 5, which is a series of email exchanges between Mr. Rhyno and Ms. Fancy between November 3 and 25 th 2009, we find the following: (

a) November 4, 2009 – Ms. Fancy to Mr. Rhyno: I do apologize for my tardiness. I have reviewed this file on a number of occasions and must say, I have had much difficulty attempting to quantify potential damages relating to the 2001 incident. There are, as you know, many variables to consider including but not limited to your clients pre-existing CP condition, the fact that he was able to return to work following the 2001 accident, his failure to mitigate in attempting to seek any form of employment, other falls and injuries, the 2005 MVA, the financial benefit to the family resulting from Mr.

Oliver staying at home with his children versus the expense of day care, and the deductibility provision specific to the SEF 44 endorsement. We are prepared to offer $45,000 in full and final settlement of the SEF 44 claim. (

b) November 25, 2009 – Ms. Fancy to Mr. Rhyno: I note a typographical error in my letter of yesterday’s date. The settlement offer previously extended to your client was $45,000 rather than $40,000. My apologies. Your response is awaited. (

c) In a December 1, 2009 email Mr. Rhyno wrote to Ms. Fancy: Thank you for your email. It has always been my client’s position that this claim is worth over $500,000. The CPP benefits are not totally attributable to my client but have an allowance for his children built in. My client has instructed me to settle his claim for $230,000 of new money. [ 75 ] The Statement of Admissible Facts shows that there were further communications between Mr. Rhyno and Ms. Fancy. On December 3, 2009, Ms. Fancy advised Mr. Rhyno that there would be no further offers until the mediation. She also requested additional documents.

Nevertheless, at para. 18 of her affidavit she stated: “Although I subsequently [after December, 1, 2009] tried to get Mr. Oliver and his legal counsel to reconsider my earlier offer in January 2010, it became clear that a significant gap between the parties remained and as a result, the parties proceeded to mediation.” [ 76 ] As suggested by the Statement of Admissible Facts, as late as January 19, 2010, the parties were still in “settlement

negotiations. On March 23, 2010, mediation briefs were submitted. The mediation on March 29, 2010 was brief and unsuccessful. That same day Ms. Fancy advised Mr. Dunlop by email that she would be retiring on June 28, 2010. She added: “I would ask that you send me a copy of the SEF 44 action you have commenced on behalf of Mr. Oliver. I will then refer the file to Aviva legal services for defence purposes.” [ 77 ] Not having received a response, she followed up with emails to Mr. Rhyno on April 26. He responded on May 5. Ms. Fancy replied on May 7 and May 10. Mr. Rhyno telephoned her on May 25 th 2010. Ms.

Fancy confirmed in her testimony that her notes, taken concurrently (Exhibit “12” to her affidavit), would have been an accurate

summary of the conversation. They read in part: Issuing SOC [statement of claim] shortly. [ 78 ] That same day Ms. Fancy sent a fax to Mr. Rhyno. In it she stated: Further to our telephone conversation, attached is a copy of the SEF 44 family protection endorsement wording as you requested. I do not see anything in the wording pertaining to binding arbitration. You indicated the action had not been commenced to date however you would be attending to that shortly. Please note

section 6, procedures (c ). Action naming Aviva as defendant should have been commenced in June 2009, one year from the date you first became aware the defendant, Sangster, had liability coverage of $200,000, and that you valued your client’s claim in excess of that amount. In the event of payment to your client under the SEF 44 endorsement,

Section 9 and 10 of the wording, confirm the insurer’s right of action in the name of Mr. Oliver against the inadequately insured motorist. Please confirm the action against Mr. Sangster has not been discontinued. Yours truly [signed] Nothing herein contained is or shall be construed as either an admission of liability or a waiver or extension of any notice, claim or limitation period. [ 79 ] In her affidavit and cross examination, Ms. Fancy reiterated that she had assumed that a statement of claim had been filed, but not served.

She also confirmed that she believed, then and now, that the 12 month limitation period expired in June 2009, and that her March 29, 2010 email to Mr. Dunlop was the first time she requested that the SEF 44 statement of claim be provided to her. She conceded that regardless of whether statement of claim had been issued, her actions would have been the same insofar as negotiating a settlement to the potential claim. [ 80 ] In her cross examination, Ms.

Fancy confirmed that her continued involvement in the case to assist Elite Insurance was possible since she lived in Halifax, and was now retired. [ 81 ] Based on her direct evidence and cross-examination, it appears that Ms. Fancy knew practically everything about Mr. Oliver’s claim that his own counsel knew by November 4 2009.

In an email on that date she stated: “I have reviewed this file on a number of occasions and must say, I have had much difficulty attempting to quantify potential damages relating to the 2001 incident.” [ 82 ] Generally, I noted a tendency to defensive answers during her cross examination. For example, when discussing her actions between the assignment of the file to her June 23, 2008 up to the point of the mediation in March 2010, she was reluctant to use the word “negotiating” in her exchanges with plaintiff’s present counsel.

Her testimony suggested that she had received no responses from plaintiff’s previous counsel before March 2010. She seemed to be referencing her offer to the plaintiff in her November 25, 2009 email. However, on December 1, 2009 plaintiff’s counsel did respond with a counter offer. Moreover, while there were gaps at times, for example from June 26, 2008 until March 31, 2009 in the Statement of Admissible Facts and her own affidavit (paras. 12 and 13), there is no clear indication to whom, if anyone, the responsibility for inaction can be attributed. Similarly, a gap exists in that manner between Mr.

Rhyno’s June 7, 2010 email to Ms. Fancy and Mr. Barnett’s letter of November 4, 2011 to Walker Dunlop. [ 83 ] Ms. Fancy was defensive about her knowledge of the test for receipt of CPP disability benefits. She had, however, been in possession of Mr. Oliver’s CPP disability benefits file, when she was the “claims specialist,” and that file was attached as Exhibit 5 to her own affidavit sworn August 29, 2014. [ 84 ] Similarly, Ms.

Fancy resisted the suggestion by plaintiff’s counsel that “the more medical and other information you have, the more reliable your assessment [of the value of the claim]?” She answered “not necessarily”; but she then went on to agree that typically that would be the case.

When asked again in the context of this case whether having medical reports up until the time of her offer in November 2009, would that give her a more reliable assessment of damages than an assessment done in 2005, she initially answered “no.” She reiterated when asked again, “I can’t agree with that.” She relented however, and agreed that “possibly” more information could help in her assessment. [ 85 ] The issue was revisited, when Ms. Fancy was asked whether she would expect to make different assessments of the value of the claim throughout the period between 2001 and the 2010 mediation.

It was drawn to her attention that Mr. Oliver had neck pain immediately after the 2001 accident, then something popped in his neck and it appeared to be resolved. While she agreed with that specific example, she did not wish to agree to the general proposition being put to her. That is to be contrasted with her own recognition that claims adjusting is “an inexact science,” and that the claim in this case could be worth more (“absolutely yes”) or less (“yes”).

As she put it in her testimony, “I was doing my best to quantify it.” Moreover, she agreed that in her opinion it was accurate, based on the information that she had, to characterize Mr. Oliver as having had “fluctuations in the regularity and severity of his symptoms.”

[86] Ms. Fancy also acknowledged that in none of the documentation she had was there any evidence that Mr. Oliver would everreturn to work after he began receiving CPP disability benefits. She also confirmed that in November 2009, she felt able to quantify theclaim. Furthermore, when asked about Mr. Dunlop’s abilities as a plaintiff’s counsel, she lauded him, saying: “He’d be right up there.” [87] While perhaps a couple of “defensive” (seeking to be favorable to the defendant) answers might be a coincidence, I found thatthe number of Ms.

Fancy’s answers which tended to be “defensive” and not direct or specific answers to the questions, generally leadme to conclude that, although retired, her many years as an advocate for her employer, and perhaps her loyalty to her previous employer,affected her impartiality in answering questions put to her. Thus, I conclude that the manner of her answering, and the content of heranswers, tended to diminish her credibility. ISSUES 1. What is the time limitation for commencing SEF 44 actions? 2. When did the time limitation expire in the circumstances of the plaintiff’s SEF 44 claim? 3.

Is the defendant insurer estopped from asserting its limitation defence? 4. Should relief be provided to the plaintiff pursuant to

Section 3 of the Limitation of Actions Act? The Parties’ Positions Position of the plaintiff [88] Clause 6(

c) of the SEF 44 endorsement herein includes the key words: Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the dateupon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect toan insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred.No action which is commenced within two years of the date of the accident shall be barred by this provision. [89] At the time of the 2001 accident, the Insurance Act, R.S.N.S. 1989, c. 231, as amended, contained parallel language in Section125: Minimum liability under policy 125

(1) Every contract evidenced by a motor vehicle liability policy insures, in respect of any one accident, to the limit of at least twohundred thousand dollars, exclusive of interest and costs, against liability resulting from bodily injury to or the death of one or morepersons and loss of or damage to property. [90] The plaintiff submits that there are no Nova Scotia cases which address the meaning of the SEF 44 clause in the circumstancesof the case at bar. [91] Specifically the plaintiff notes that there are conflicting lines of authority between the courts of appeal in Alberta and Ontarioas to when the limitation period should start to run. [92] According to the plaintiff, the Alberta approach interprets clause 6(

c) as being ambiguous, and therefore it is construed asagainst the insurer pursuant to the contra proferentum doctrine: Shaver v. Cooperators General Insurance Company 2011 ABCA 367 atparas. 18 and 43; Mellon v. Gore Mutual Insurance [1995] A.J. No. 502(Q.B.) reversed by 1995 ABCA 340 at para. 4; Shoemaker v.Wawanesa Mutual Insurance Company [1993] A.J. No.289(Q.B.) affirmed at [1994] A.J.

No. 126 (C.A.) at paras. 3 and 8. [93] The upshot is that the Alberta courts have taken the view that the phrase “knew or ought to have known that the quantum of theclaims exceeded the minimum limits” should be interpreted so that “the limitation runs from the final judgment or settlement… Or someother final determination” (Wawanesa, supra, at para. 3). [94] In contrast, the plaintiff submits the Ontario approach is summarized by the Ontario Court of Appeal in Roque v. PilotInsurance Company, 2012 ONCA 311. The Court endorsed the approach taken by Master Dash in McCook v. Subramaniam (ON SC), [2008] O.J.

No. 4583, (2008) 172 A.C.W.S. (3d) 344(Sup. Ct.) at para. 5, where he stated: The plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading ajudge that his claims would exceed $200,000. The plaintiff should be given a “degree of latitude… in making this very individual andcomplicated determination” but “that is not to say that the plaintiff is entitled to wait until he… has an overwhelming case”. [95] In an earlier decision, Caruso v. Guarantee Company of North America (ON CA), [1996] O.J.

No. 4072, theOntario Court of Appeal concluded at para 24: Like the courts in both the [Wimbush v. Progressive Casualty Insurance Company (1995) 17 CCLI (2d) 69 (Ont. Div. Ct.) andWawanesa v. Shoemaker (1994) 1994 ABCA 87 , 16 Alta. L.R. (3d) 210 (CA)] cases, I find the language ambiguous. In thesecircumstances, I think it ill advised to embark upon an analysis of whether the significant event is the determination of the quantum of

damages. I will content myself with accepting the finding of the motions judge that it is difficult to conclude in this case that theappellant solicitor knew that her injuries would exceed the minimum limit more than 12 months before the action against the respondentwas commenced. [96] Caruso was cited by the Ontario Court of Appeal in Foster v. Young [2002] O.J.

No. 3225, per Abella, JA (as she then was) forherself and Moldaver and Feldman, JJA, at para. 2: Denial of coverage before an action is commenced against the insurer is not a denial which triggers the commencement of the limitationperiod against the insurer, referred to by Finlayson JA in Caruso… [97] Regardless whether the Alberta or Ontario approach is used, the plaintiff argues that the result should be the same in the case atbar. A settlement was reached June 23, 2008 with Mr. Sangster for $200,000 all-inclusive.

Allowing for the “latitude” that should begiven to counsel in their estimations of when they “ought to have known that the quantum of claims… exceeded the minimum limits [i.e.$200,000]…” the Ontario approach as described in McCook, supra, could arguably also lead to the conclusion that plaintiff’s counsel didnot have a body of evidence accumulated that would give him a reasonable chance of persuading a judge that his claims would exceed$200,000, until June 2008. [98] In support of his position that the Alberta approach should be followed the plaintiff states at para. 69 of his brief: Applying the contra proferentum rule provides the most favorable

interpretation to the insured. It avoids the difficulties inherent inchanging quantifications as the evidence develops and becomes known to the parties, or in uncertain quantifications that depend on howthe evidence is interpreted.

The Alberta approach also prevents the necessity of plaintiffs bringing SEF 44 actions routinely andunnecessarily in cases where the defendant has coverage equal to or greater than the plaintiff or when the defendant’s coverage isadequate, regardless of the amount of the plaintiffs coverage. [99] The plaintiff points out that the latter concern has been cited in the case law: see for example, Ursich v. Security NationalInsurance Company 2005 YKSC 72. [100] The plaintiff observes that if the June 23, 2008 start date is used and the 12-month extension permitted by clause 6(

c) is added,and if the court is satisfied that a full four-year extension should be granted to the plaintiff pursuant to s. 3 of the Limitation of ActionsAct, the statement of claim filed May 22, 2013 would have been filed within time – i.e. before June 23, 2013. [101] To achieve this result, the plaintiff argues that the insurer should be legally estopped from insisting on its strict legal rights. Specifically, the plaintiff suggests that it was not until May 25, 2010 that the insurer’s representative, Cathy Fancy, insisted on astatement of claim being filed and served. While Ms.

Fancy apparently assumed a statement of claim had been filed, she confirmed thather actions in attempting to negotiate a settlement would not have been affected if that were not the case. Between June 23, 2008 andMay 25, 2010, the parties were still negotiating. In respect of that period of time, the insurer should not now be permitted to insist on itsstrict legal rights to have had filed an SEF 44 endorsement-based statement of claim. [102] At the hearing, plaintiff’s counsel understandably stated they were not relying on the doctrine of “waiver” (see SaskatchewanRiver Bungalows Ltd. v.

Maritime Life Assurance Company (SCC), [1994] 2 SCR 490 at paras. 18-20; Binder v. RoyalBank of Canada 2005 NSCA 94, per Cromwell, JA (as he then was); s. 35 of the Insurance Act; Marchischuk v. Dominion IndustrialSupplies Ltd., (SCC), [1991] 2 SCR 61). To the extent that they could do so in respect of the period after March 29,2010, or May 25, 2010, they did not seriously argue the point, preferring to rely on the doctrines of estoppel by representation andpromissory estoppel. [103] At para. 113 of his brief, the plaintiff states: Ms. Fancy’s March 29, 2010 communications with Mr.

Rhyno following the failed mediation, or her May 25, 2010 letter to him ought tobe taken as the revocation of the insurer’s assurance upon which Mr. Oliver had relied upon. Thus, the start of the time limit is pushed back to either March 29 or May 25th 2010, regardless of whether the plaintiff ought to have known his claim exceeded $200,000 beforeMay 22, 2008. [104] At para. 52 of the defendant’s brief, it states: At all events, the estoppel argument fails because there is no evidence that Ms.

Fancy made any specific representations about whetheror not Elite Insurance Company would refrain from invoking a limitation defense, there is no evidence that the plaintiff or his legalrepresentatives relied on any representations, and there is no evidence that the plaintiff or his legal representatives altered their positionas a result of any representations. [105] The plaintiff cites the following discussion of the doctrine of estoppel by representation as found in Brown and Donnelly’sInsurance Law in Canada at p. 12-3: The doctrine of estoppel by representation has been defined as follows:

Where one person [the representor] has made a representation to another person [the representee] in words or by acts and conduct, or[being under a duty to the representee to speak or act] by silence or inaction with the intention [actual or presumptive], and with theresult, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in anylitigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, orattempting to establish by evidence, any averment substantially at variance with its former representation, if the representee at the propertime, and in the proper manner, objects thereto… The first requirement then is there must have been a representation (for presentpurposes by the insurer) to the person seeking to rely on it.

By definition a representation in this context is a representation of an existingfact. This distinguishes estoppel by representation from promissory estoppel which is founded on an assurance of future conduct.’ " [106] At this juncture, I will point out that in its brief and oral submissions Elite has convincingly argued that the evidence does notdisclose that any representative of the insurer made a representation of an existing fact to Mr.

Oliver upon which he now seeks to rely. [107] As to promissory estoppel, which pertains to an assurance of future conduct, the plaintiff relies on the Supreme Court of Canadadecision in Maracle v. Travelers Indemnity Company of Canada, (SCC), [1991] 2 SCR 50 . Therein, Justice Sopinkastated: 1 This appeal was heard concurrently with Marchischuk v. Dominion Industrial Supplies Ltd., (SCC), [1991] 2 S.C.R.61.

Both appeals raise the issue as to the circumstances in which an admission of liability made to a prospective plaintiff by aprospective defendant amounts to promissory estoppel precluding reliance on a limitation period. …… 13 The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other partyhas, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on.Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.

InJohn Burrows Ltd. v. Subsurface Surveys Ltd., (SCC), [1968] S.C.R. 607, Ritchie J. stated, at p. 615: It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the partiesentered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contractwould not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first partyintended that the legal relations created by the contract would be altered as a result of the negotiations.

This passage was cited with approval by McIntyre J. in Engineered Homes Ltd. v. Mason, (SCC), [1983] 1 S.C.R. 641,at p. 647. McIntyre J. stated that the promise must be unambiguous but could be inferred from circumstances. 14 In Collavino Inc. v.

Employers Mutual Liability, supra, Holland J., in applying these principles to a case in which an admission ofliability had been made, stated (at p. 101): Promissory estoppel can prevent the insurer from relying on a limitation period where there has been either (1) an admission ofliability of [sic: "or"] (2) a promise not to rely on the limitation period relied on by the insured ....

Before the principle applies there must be some evidence that one of the parties entered into a course of negotiation which had the effectof leading the other to suppose that the strict rights under the contract would not be enforced. 15 This passage would imply that an admission of liability per se is an alternative basis on which promissory estoppel can be based. Inmy view, while an admission of liability is clearly one of the factors from which a court may infer as a finding of fact that apromise was made not to rely on the limitation period, it is not an alternate basis of promissory estoppel. In Gillis v.

Bourgard,supra, the Ontario Court of Appeal, per Brooke J.A., dealt with a case in which an admission of liability was the basis for a claim ofpromissory estoppel. In concluding that the necessary ingredients for promissory estoppel had not been established, Brooke J.A. stated, atp. 109: It seems to us that what occurred here was, at best, no more than normal dealings between parties attempting to resolve an insuranceclaim.

To hold that it could or did give rise to any admission of liability or a promise not to rely upon a condition of the contract, thelimitation period, is completely unwarranted and puts in jeopardy the benefit of such dealings to litigants. 16 An admission of liability is frequently made in the course of settlement negotiations. This is often a preliminary step in order toclear the way to enter into a discussion as to quantum. Indeed, when an offer to pay a stated amount is made by one party to the other, anadmission of liability is usually implicit.

In this type of situation, the admission of liability is simply an acknowledgment that, for thepurpose of settlement discussions, the admitting party is taking no issue that he or she was negligent, liable for breach of contract, etc.There must be something more for an admission of liability to extend to a limitation period. The principles of promissory estoppel

require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is tobe taken as a promise not to rely on the limitation period must be such that the trier of fact can infer from it that it was sointended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled ornot, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn isan issue of fact.

If this finding is in favour of the plaintiff and the effect of the admission in the circumstances led the plaintiff to miss thelimitation period, the elements of promissory estoppel have been established. …. Not only is there no evidence to suggest that the admission was intended to have this effect, but the letter of February 23, 1983 was made"without prejudice" to the liability of the insurer. The use of this expression is commonly understood to mean that if there is nosettlement, the party making the offer is free to assert all its rights, unaffected by anything stated or done in the negotiations.

In myopinion, therefore, the trial judge, having found that there was no promise relating to the limitation period, was correct in concluding thatpromissory estoppel had not been made out. [my emphasis added] [108] Ultimately, the plaintiff argues at paras. 108 and 112-113 of his brief that: In this matter, the written representation by Ms.

Fancy that the limitation [period] expired in June 2009 should estop the insurer fromalleging that it expired any earlier… The communications and negotiations by Elite following the expiration of the limitation period inJune 2009, constitute an assurance that Elite would not rely on the limitation period. By continuing to negotiate in good faith with Eliteand not filing an action before the expiration of the limitation period, Mr. Oliver relied upon this assurance to his detriment… [Only upon Ms. Fancy’s either March 29 or May 25th 2000 communications with Mr.

Rhyno should the insurer be permitted to be seen as having revoked that assurance] thus, the start of the time limit is pushed back to either March 29 or may 25th 2010, regardless ofwhether the plaintiff ought to have known his claim exceeded $200,000 before May 22, 2008. [109] In relation to the application of s. 3 of the Limitation of Actions Act, which would permit the court to extend the limitation periodfor up to four years, the plaintiff’s position is that the balance of prejudices strongly favours Mr. Oliver. He submits that the matterwould not be heard on its merits and Mr.

Oliver would have no chance to succeed if the limitation period is not extended, whereas theinsurer would not materially be prejudiced because it has all the documentation arising to date, plus the benefit of Ms. Fancy’s continuedinvolvement, and no discernible evidentiary disadvantage otherwise. The only prejudice to the insurer would be the loss of theLimitation of Actions Act defence which, the plaintiff notes, courts have said should not by itself be given much weight in the analysis:see Anderson v.

Co-operative Fire & Casualty (1983) (NS SC), 58 N.S.R. (2d) 163 (S.C.) per Hallett, J., at paras. 18and 25; and Justice Hamilton’s reasons in Chapin Estate v. Drumhead Estates Ltd., 2011 NSCA 93 at para. 12. Moreover, generally themere additional passage of time by itself will also not be given much weight in the analysis: see MacCulloch v. McInnis Cooper andRobertson (1995) 1995 NSCA 81 , 140 N.S.R. (2d) 220, per Justice Matthews at paras. 61 – 62. [110] The plaintiff also relies on Justice Hallett’s comment in Anderson v.

Co-operative Fire and Casualty Company, supra, at paras.17 and 25: It is to be noted that there is no mention in the specific matters the court is to consider as enumerated in subsection 4, that the court is toconsider what claim the plaintiff may have against a third party. In many cases the claim would be, as it is here, against the plaintiffsolicitor for failure to carry out his duty to his client to commence the action within the time period required by the relevant statute.

Counsel for the defendant urged the court to consider this in determining the respective degrees prejudice to the plaintiffs and thedefendant.

The fact that a plaintiff whose action is out of time may have a cause of action against a solicitor is a matter the court shouldpossibly consider in assessing the degree of prejudice to the parties, but it must be remembered that the plaintiff might not be successful.In my opinion, the fact that the solicitor may be potentially liable to the plaintiff should not be given much weight by the court inassessing the degree of prejudice to the parties as required on these applications.… [my emphasis added] The purpose of time limitations within which to bring actions is to see that matters are brought on expeditiously within reasonable timeframes considering the nature of the claim.

The purpose is not to defeat bona fide he claims through a technical failure to havecommenced action within a specific time..

In this case… the fact that the lawyer involved may collaterally benefit from the grantingof the relief requested is not a reason to refuse the application. [111] After the hearing in this matter, the Court received a letter from plaintiff’s counsel, on October 9, 2014, which read, in part: During the defendant’s submissions, solicitor Barnett presented the court with a copy of the English Limitation Act (1980) and an excerpt from the Law of Limitations (2nd edition) in support of the proposition that the court, when considering whether to exercise its equitablediscretion pursuant to s. 3(4) of the Limitations Act, ought to take into consideration a possible negligence action against the plaintiff’ssolicitor.

After these documents were submitted, the Court asked solicitor Barnett whether he had jurisprudence to support this suggestion. Mr.Barnett indicated that the English jurisprudence cited in the secondary source was all that he had. The introduction of these documents was the first time the plaintiff was presented with this argument. I am prepared to provide JusticeRosinski with Nova Scotia case citations and the relevant paragraph numbers if permitted to do so.

[ 112 ] I permitted the plaintiff to file those materials. The references are to: 1. Morris v. Royal Bank of Canada, 2007 NSSC 73 , at paras. 66 – 70 ; 2. Hiscock v. Pasher, 2008 NSCA 101 , at paras. 22 , 23 and 27; 3. Economical Insurance Group v. Master Forestry Ltd ., 2012 NSSC 353 , at paras. 36 – 40 ; 4. Smith v. Lord, 2013 NSCA 34 , at paras. 50 – 51 ; and 5. Palmer Estate v.

MacInnis , 2013 NSSC 391 , at paras. 40 , 67 – 68. [ 113 ] Notably, in the most recent Court of Appeal decision, Justice Farrar stated in Smith , supra , at para. 52: With respect to the potential alternative remedy against his former counsel, whatever action Mr. Lord may have against his former counsel and its potential success is mere speculation. In my view, it was appropriate for the motions judge to give it little weight in his deliberations.

Position of the defendant [ 114 ] plaintiff’s counsel knew on June 23, 2008, that “the quantum of the claims exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction”. The defendant argues that plaintiff’s counsel ought to have known this long before that, for several reasons: i. The case is not factually complex: there is no evidence that Mr. Oliver’s cerebral palsy was exacerbated by the 2001 or 2005/2006 motor vehicle accidents, thus it is effectively a neutral factor in determining “the quantum of the claims” herein. Although Mr.

Oliver was diagnosed with a pre-existing cervical stenosis at C5 –6, that too is a neutral factor, according to the defendant. Mr. Oliver’s disk problems at C4-5 are associated with the 2001 Sangster motor vehicle accident and are the primary source of his inability to work. While following the 2005 Pearson accident he was diagnosed with another consequent disc herniation at C6 –7, Mr. Oliver had already ceased working in 2004, and similarly had to curtail his Community College program in October 2004. Thus, the defendant submits, the effect of that accident was not material to his inability to work after 2004.

Moreover, he was granted CPP total disability benefits retroactive to October 2004. ii. Mr. Dunlop is a very experienced lawyer in this area, and, since loss of income is the key driver of the damages claim in this case, it was wholly predictable well before June 2008 that Mr.

Oliver’s claim – commencing with his disability in his early thirties from continuing to work at jobs that had generated income of $30-$40,000 per year – would easily outstrip the minimum insurance limits in Nova Scotia at the time of the 2001 motor vehicle accident (i.e. $200,000). [ 115 ] The defendant says the tenor of clause 6 of the SEF 44 endorsement is “one of urgency.” The clause requires prompt notice (6(a) (i)), provision of copies of any statements of claim 6(b); and imposes a short (12 month) limitation period, with allowance for a total two- year limitation period.

These provisions are all intended to have the SEF 44 insurer involved as early as possible. [ 116 ] Defendant’s counsel submits that having the limitation period start in June 2008 is the best case for the plaintiff, because it was known at that point that Mr.

Oliver would have to have resort to the SEF 44 endorsement of his parents’ motor vehicle insurance policy. [ 117 ] The defendant suggests that the Ontario cases should be followed rather than those from Alberta, because effectively the Alberta cases have read out of the SEF 44 endorsement the words “ought to have known” by concluding that only a settlement or judgment’s quantification is sufficient to trigger the running of the limitation period as against an SEF 44 insurer.

He suggests those words are not ambiguous on their face, although (as evidenced by the Ontario approach) plaintiff’s counsel are entitled to “some latitude” regarding when they “ought to have known” that the plaintiff will require recourse to the SEF 44 insurer. [ 118 ] As to whether the Court should abridge the limitation period pursuant to the Limitation of Actions Act , the defendant argues in its brief, at para. 9: In

summary, the SEF 44 action in issue was commenced: a-More than 11 ½ years after the accident; b– Almost 9 years after the plaintiff last worked outside the home; c-Around eight years after the plaintiff applied for and began receiving Canada Pension Plan disability benefits; d-Almost 4 years and 11 months after the plaintiff’s legal counsel knew, without doubt, the defendant Sangster’s automobile insurance limits; e- Almost 3 years after Cathy Fancy told the plaintiff’s legal counsel that the limitation for an SEF 44 action had expired; and f-Roughly a year and a half after the defendant’s legal counsel told the plaintiff’s legal counsel that the limitation for an SEF 44 action had expired.

[119] The defendant also submits, at paras. 31 – 32 of its brief: …[I]n order for the court to be able to even consider exercising its discretion, the plaintiff must show that the time limitation did notexpire before May 21, 2008. If the time limitation expired on or before May 21, 2008, the one year time limitation in s.6(

c) of the SEF44 would have expired and

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