How much time do I have to sue?
In Ontario, the basic limitation period of 2 years is set out in section 4 of the Limitations Act, 2002. In practical terms, this means that if you want to sue someone to recover your damages you need to do so, usually by filing a Statement of Claim, within 2 years of the date of loss or injury. However, there may be circumstances in which this timeline is shortened, as illustrated by the 2013 Ontario Court of Appeal decision in Boyce v. The Co-Operators General Insurance Company.
The plaintiffs in this case ran a boutique which was covered by business insurance with the Co-Operators. On October 30th, 2010, a foul odour was discovered at the store, resulting in the business being closed for a time, clean-up costs being incurred and inventory being lost. The plaintiffs argued that the skunk smell was the result of Halloween vandalism (a peril covered by their policy) while the insurance company took the position that the damage was caused by a skunk (a peril not covered by the insurance policy). On that basis, the Co-Operators refused to reimburse the plaintiffs under the terms of the policy.
As a result, the plaintiffs filed a proof of loss in December of 2010. However, they did not issue a Statement of Claim until February 17, 2012, more than 1 year after the loss was discovered.
Motion for Summary Judgment
One of the Co-Operators’ arguments at the motion was that there was a provision in the policy limiting coverage to claims made within 1 year of the loss. Since the plaintiffs had not filed their Statement of Claim within 1 year, the argument was that their claim was time barred and should be dismissed. For its part, the plaintiffs argued that it was the usual 2 year limitation period that applied and that their Statement of Claim was issued well within this 2 year time frame.
The Co-Operators were not successful with their argument on their motion for summary judgment. The motions judge found that the relevant limitation period was the 2 years contained in the Limitations Act, 2002. However, on appeal to the Ontario Court of Appeal, the Co-Operators were successful and the matter was dismissed, at least insofar as it was based on a claim made under the insurance policy.
In reaching its decision, the Court of Appeal found that the insurance policy contained a clear and unambiguous one-year limitation on claims and that by virtue of the contract being a business agreement, the parties could, and did, by contact override the 2 year limitation period set out in the Limitations Act, 2002.
What does this mean for you?
Not taking the appropriate steps within the appropriate timelines could leave you or your business without a legal remedy. If you or your business has suffered a loss, call the team at Ferguson Barristers toll free at 800.563.6348 or contact us online. We have the knowledge and experience to ensure your rights are protected.