As a civil litigator it is occasionally my duty to advise potential clients that, while they may have had a viable legal claim at some point in the past, because they waited to contact a lawyer and take action, they are no longer able to bring their claim.

 Popular vernacular has termed this issue the “Statute of Limitations”, a nod to the influence of American legal dramas. In Ontario, we are bound by the Limitations Act. Although there are a few important exceptions, the general limitation set out in sections 4 and 5 of the Limitations Act prevent Ontarians from bringing a claim after the two-year anniversary of the date on which they knew or ought to have known that they suffered a loss and that a legal proceeding was an appropriate remedy.

On January 8, 2020, the Ontario Court of Appeal released its first insurance-related decision of the decade: Clarke v Sun Life Assurance Company of Canada, 2020 ONCA 11. The Court allowed an appeal by an insurer where it had previously lost a motion to dismiss the plaintiff’s case for failing to bring her claim in time. Although the Court overturned the Motion Judge’s decision, it refused to dismiss the case on the sparse record before it.

As with most limitation defence cases, the result is fact-driven and unique to its own particular circumstances.

The primary issue in the case is whether the plaintiff, Ms. Clark, is entitled to long-term disability (LTD) benefits to compensate her for her inability to work. Ms. Clarke was a postal worker and had 12 years of service with Canada Post when she stopped working due to health problems. Following an application to her insurer for LTD benefits, Ms. Clark’s claim was denied. At that time she was advised of three levels of internal appeal that were available to her. Ms. Clark appealed to the insurance company and her claim was approved, but only in part. Her benefits were paid for a limited period of time.

Following a brief conversation with the insurer, Ms. Clark took no action for three-years. After her approximately three-years of inaction, Ms. Clarke submitted additional medical documentation. She was advised by the insurer that her claim was being considered at the first level of internal appeal. A little over one year following receipt of that final letter from the insurer, Ms. Clark brought her court claim appealing the partial denial of LTD benefits.

Ms. Clarke’s insurer, Sun Life, brought a motion to dismiss the proceeding without a trial, alleging that the limitation period had expired. The motion judge made much of the Sun Life’s initial correspondence as being ambiguous, and in particular, never using the word “deny”. The Court of Appeal disagreed with this reasoning finding that the “date of loss” was the date that Ms. Clarke ceased to receive the LTD benefits. This finding is consistent with previous decisions on the issue.

The next issue to decide was when it should have been clear to Ms. Clarke that a proceeding was an appropriate remedy. The Appeal Court was quite critical of the Motion Judge’s analysis as she did not decide when Ms. Clark knew or ought to have known that a proceeding was an appropriate remedy. No examinations for discovery had been completed and a more fulsome record was required to determine the limitation issue.

While Sun Life won the appeal, this was not a total loss for the plaintiff. The case will proceed on towards trial where the limitation issue will be decided on a full evidentiary record. The trial judge will be asked specifically to determine when Ms. Clarke first knew that a proceeding would be an appropriate means to seek to remedy her loss. Her three-year delay in providing supplementary medical information is not a good fact for her case.

This case should serve as a reminder to all Ontarians to diligently seek out legal advice if you suspect that you may have a legal claim. If you do not take action quickly and within the two-year limitation period, you may no longer have a claim.