Commencement of Limitation Periods in Threshold Claims

October 31, 2016 | James B. Prior

Recently, the Ontario Superior Court of Justice considered when limitation periods begin to run in tort actions arising out of motor vehicle accidents in Schaefer v. Ayeneababa, 2016 ONSC 3673.

The Plaintiff was involved in an accident on June 24, 2009 in which she sustained significant soft tissue injuries and required hospitalization. She subsequently retained a lawyer in August, 2010 and commenced an action on December 2, 2011.

Since the Plaintiff did not commence her action until over two years after the accident, the Defendant moved for summary judgment dismissing the action on the basis that it was time-barred by virtue of ss. 4 and 5 of the Limitations Act, 2002. The Defendant argued that the Plaintiff’s lawyer, through words and actions, made it clear to the Defendant’s insurer that the Plaintiff’s injuries were permanent and that the limitation period would expire two years after the accident (i.e. June 24, 2011).

In considering the issue, the Court relied on the proposition from Ioannidis v. Hawkings (1998), 38 O.R. 3(d) 427 (Gen. Div.), aff’d [2001] O.J. No. 3788 (C.A.) that in threshold claims under s. 267.5(5) of the Insurance Act, the Court should grant “a degree of latitude to the plaintiff before declaring that the limitation period has begun to run”. It was specifically affirmed that a limitation period should not begin to run in such claims:

…until there is a sufficient body of evidence available to be placed before a judge that, in counsel’s opinion, has a reasonable chance of persuading a judge on a balance of probabilities that the injury qualifies [as a serious permanent impairment]. When such a body of material has been accumulated then and only then should the limitation begin to run.

Applying that proposition, the Court relied on the Plaintiff’s uncontested evidence, which was supported by medical documentation, that during the period between the date of the accident and two years prior to the commencement of the action, she reasonably believed she was recovering and did not know that her injuries and impairments were permanent. The Plaintiff’s evidence was that during that span of time, she “always understood that with time and proper treatment my injuries would resolve and I would be able to return to my pre-accident activities”. The Court therefore held that the Plaintiff did not know on the date of the accident that her injuries were permanent and had successfully rebutted the presumption in s. 5(2) of the Limitations Act, 2002. The Court specifically noted that the earliest she would have known that her injuries and impairments were or could be permanent was when she retained counsel in August 2010. The Plaintiff’s lawyer, in turn, gave evidence that he did not form an opinion that the Plaintiff had sustained an injury that met the threshold until he received a medical-legal opinion to that effect on November 30, 2011. Since the action was commenced less than a month later, it was not time-barred.

Despite the foregoing, the Defendant relied on a May 24, 2011 letter from the Plaintiff’s lawyer to the Defendant’s insurer in which the lawyer advised that the Plaintiff’s injuries were “continuing”. He further noted that the limitation date was “fast approaching” and enclosed a draft Statement of Claim that specifically pleaded that the Plaintiff’s impairments were “permanent and serious”. The Defendant argued that by this letter and draft Statement of Claim, the Plaintiff’s lawyer essentially acknowledged that the Plaintiff’s injuries were permanent and that he only had until June 24, 2011 (two years after the accident) to commence an action. Somewhat surprisingly, the Court disagreed, holding that the fact the Plaintiff’s injuries were described as “continuing” was not an acknowledgment of permanency, nor was the draft Statement of Claim that pleaded “permanent and serious impairments”, as such allegations are made in almost every motor vehicle accident claim.

Ultimately, the Court concluded that whether the Plaintiff discovered her impairments were permanent when she retained her lawyer in August 2010 or when she received the medical-legal opinion in November 2011, it was less than two years prior to the date the action was ultimately commenced on December 2, 2011. As such, the action was not time-barred and the Defendant’s summary judgment motion was dismissed.

The decision in Schaefer v. Ayeneababa reminds us that when determining whether to maintain a limitation defence in motor vehicle accident cases, regard must be had to the information and evidence the Plaintiff was, or reasonably ought to have been, aware of between the date of loss and the date an action is ultimately commenced.


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