CAA Insurance Co. (Ontario) v. Botsis

82 O.R. (3d) 379

Ontario Superior Court of Justice, Divisional Court,

Loukidelis J.

August 9, 2006

Insurance -- Limitation periods -- Estoppel -- Insurer having no duty to advise insured of limitation period contained in policy -- Insurer making no representations to insured about waiving limitation period -- Insured could not have relied on any such representations as she was unaware of existence of limitation period -- Internal documents in insurer's file which arguably ignored limitation period having no legal effect as they were not known to insured -- Insured bound by limitation period.

The insured did not commence her action against the insurer within the applicable one-year limitation period. The Small Claims Court judge held that the insurer was estopped from relying on the limitation period because the insured was not informed of the limitation period and because the insurer waived the limitation period. The finding of waiver was based on a notation in the claims file indicating that the file remained open after the expiry of the limitation period. The insurer appealed.

Held, the appeal should be allowed.

An insurer has no legal duty to advise an insured of a limitation period contained in the policy. The insurer's failure to do so did not prevent it from relying on the limitation period. The test for promissory estoppel was not met. As the insured was unaware that there was a limitation period, she could not have relied on representations by the insurer or changed her position based on such representations. It was not clear that the insurer ever made any representation which was intended to affect the legal relationship between the parties. Internal documents cannot constitute representations unless they are shared with the other party. Ongoing negotiations do not constitute waiver of a limitation period where they are no more than normal dealings between parties attempting to resolve an insurance claim. The insurer did not continue negotiations beyond the limitation period.

APPEAL from a judgment for the insured.

Cases referred to Gillis v. Bourgard (1983), 1983 1858 (ON CA), 41 O.R. (2d) 107, [1983] O.J. No. 2960, 145 D.L.R. (3d) 570, [1983] I.L.R. Â1-1645 (C.A.); Maddix v. White, [2002] O.J. No. 230 (C.A.); Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, 3 O.R. (3d) 510n, [1991] S.C.J. No. 43, 47 O.A.C. 333, 80 D.L.R. (4th) 652, 125 N.R. 294, [1991] I.L.R. Â1-2728, 50 C.P.C. (2d) 213

Joe Fidilio, for appellant. Respondent unrepresented.

[1] LOUKIDELIS J.: -- CAA Insurance Company ("CAA") appeals from a decision of the Honourable Deputy Judge Winer of the Small Claims Court granting judgment to the respondent in the amount of $8,075. [page380]

Facts

[2] The respondent was involved in a motor vehicle accident on February 27, 2002, and her vehicle was determined to be a "write-off". She was insured under a policy issued by the appellant, and made a claim under that policy. Some negotiations took place between the parties. The appellant's final communication with the respondent was an offer dated May 28, 2002. The respondent commenced her action in Small Claims Court on February 26, 2004.

Positions of the Parties

[3] The appellant submits that the respondent was barred from bringing her action as it was not commenced within the applicable one-year limitation period. The appellant had no obligation to inform the respondent of the limitation period, and the appellant did not waive the limitation period by words or conduct. The respondent's own evidence was that the appellant made no representations regarding the limitation period. The respondent was in fact unaware that one existed, and therefore could not have relied on representations had any been made.

[4] The respondent submits that the appellant should have notified her of the limitation period. The respondent emphasizes the fact that one of the appellant's documents seems to indicate that as of November 3, 2003, the appellant still considered the file to be open. Ongoing negotiations, or at least the invitation for further negotiation, disentitle the appellant to claim that the action was barred by the expiry of the limitation period.

The Small Claims Court Judgment

[5] The Deputy Judge held that the appellant was estopped from relying on the one-year limitation period because the respondent was not informed of the limitation period, and because the appellant waived the limitation period.

[6] The finding of waiver was based on the invitation for further negotiations in the letter dated May 28, 2002 and on the notation in the claims file indicating that the file remained open as of November 3, 2003. The Deputy Judge held that the appellant "treated the limitation period as non- existent until February 4, 2004, when it suddenly relied on it". It was also noted that the appellant retained the respondent's vehicle, through its agent, until January 2004.

Law and Analysis

[7] It is not disputed that there is an applicable one-year limitation period, which, barring waiver, began to run as of the date [page381] of the accident, February 27, 2002. The right to sue under the policy would therefore have expired February 27, 2003.

[8] The Ontario Court of Appeal held in Maddix v. White, [2002] O.J. No. 230 (C.A.) that "there is no legal duty upon an insurer to advise an insured of the limitation period contained in the policy". The appellant was therefore under no legal obligation to inform the respondent of the one-year limitation period, and its failure to do so does not prevent its relying on the limitation period.

[9] The Supreme Court set out the test for promissory estoppel in the context of limitation periods in Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, 3 O.R. (3d) 510n, [1991] S.C.J. No. 43, at para. 13:

The party relying on the doctrine must establish that the other party has, 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.

[10] As the respondent was unaware that there was a limitation period, she could not have relied on representations by the appellant or changed her position based on such representations. In addition, it is not at all clear that the appellant ever made any representation, either by word or deed, which was intended to affect the legal relationship between the parties. Internal documents, such as that relied on by the respondent, cannot constitute representations unless they are shared with the other party. There is no evidence that the respondent saw this document prior to commencing her claim, and therefore it was not a representation and she could not have relied on it.

[11] Courts have held that ongoing negotiations do not constitute waiver of a limitation period where they are "no more than normal dealings between parties attempting to resolve an insurance claim": Gillis v. Bourgard (1983), 1983 1858 (ON CA), 41 O.R. (2d) 107, [1983] O.J. No. 2960 (C.A.). The insurer did not continue negotiations beyond the limitation period, or provide any other reason for the respondent to believe it would not rely on the limitation period.

[12] I cannot agree that the facts here support a claim of promissory estoppel. The judgment cannot stand. The appeal is allowed. The judgment in favour of the respondent is set aside and her action is dismissed. In the circumstances, there will be no order as to costs.

Appeal allowed. [page382]