Court File and Parties

Citation: Close v. Dominion of Canada General Insurance Company, 2009 ONCA 574

Date: 2009-07-17

Docket: C48327

Court of Appeal for Ontario

Before: Feldman, Simmons and Blair JJ.A.

Between:

Gordon Close

Appellant (Plaintiff)

and

Dominion of Canada General Insurance Company

Respondent (Defendant)

Counsel:

Jasmine T. Akbarali for the appellant

Harold S. Ginn for the respondent

Heard and released orally: July 2, 2009

On appeal from the judgment of Justice Mary E. Marshman of the Superior Court of Justice dated January 10, 2008.

Endorsement

[1] The appellant was injured in a car accident on June 3, 1996. Because he was a self-employed businessman he was entitled under the Bill 164, the Statutory Accident Benefits Schedule – Accidents After December 31, 1993 and Before November 1, 1996 (“SABS”), O.Reg. 776/93 to the Insurance Act, R.S.O. 1990, c.I.8, as amended by the Insurance Statute Law Amendment Act, 1993, S.O. 1993, c.10, to a weekly income replacement benefit (“IRB”), as well as to loss of earning capacity benefits (“LECB”) after 104 weeks. The respondent insurer calculated and paid IRBs. Ultimately, after 104 weeks, it made an offer of $0 in respect of the LECB.

[2] The appellant then commenced an action in 2001 for a declaration that he was entitled to an LECB in an amount calculated in accordance with the Residual Earning Capacity Assessment at a Designated Assessment Centre (“REC-DAC”) report of January 21, 2000. The respondent counterclaimed for a refund in respect of an overpayment of the IRB. Ultimately, the appellant’s counsel engaged an accountant to calculate the IRBs and the LECB. The accountant discovered that the insurer had made an error in its calculation and payment of the IRBs over the entire period by failing to properly take into account and pay the statutory minimum IRB.

[3] The appellant then sought to amend his claim in 2006. At the same time, he also amended the wording of his claim for a declaration regarding the LECB by adding a claim in the prayer for relief for payment of the declared amount of the LECB. The respondent pled that both claims were statute-barred.

[4] The trial judge agreed that the IRB claim was statute-barred. She found that the delivery of the Statement of Defence and Counterclaim constituted a refusal to pay any further benefits to the appellant and thus triggered the two-year limitation period under s. 72(1) of the SABS and s. 281 of the Insurance Act.

[5] The trial judge awarded pre-judgment interest in accordance with s. 68 of the SABS at 2 percent per month compounded monthly, but post-judgment interest under s. 129 of the Courts of Justice Act at a lower rate. She did not address specifically the limitation issue raised by the respondent in respect of the LECB claim.

[6] In our view, the trial judge erred in her conclusion that the appellant’s claim for IRBs was statute-barred. It is common ground that neither the appellant, nor the insured, nor their respective counsel, were aware of the error in calculation of the IRB until 2006 when the appellant’s expert accountant discovered it. It is also common ground that the insurer did not intend its Statement of Defence and Counterclaim to constitute a refusal to pay the minimum IRB component of the IRB claim as it was not aware of the error. In those circumstances, the Statement of Defence and Counterclaim could not constitute a refusal to pay an amount claimed or benefit claimed within the meaning of s. 72(1) of the SABS and s. 281 of the Insurance Act, or to meet the requirements of such a refusal as set out in Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129.

[7] We also agree with the appellant that the trial judge erred by failing to award post-judgment interest in accordance with s. 68 of the SABS. That section is worded in a non-discretionary manner and there is no basis not to apply it to post-judgment as well as to pre-judgment interest. Consequently, s. 129(5) of the Courts of Justice Act makes s. 129 inapplicable, therefore ousting the discretion referred to in s. 130 of the Courts of Justice Act.

[8] We do not accept the cross-appellant’s argument that the original claim for declatory relief in respect of the LECB did not include a claim for monetary recovery. The prayer for relief included a claim for interest and the declaration was for an amount calculated in accordance with the findings of the REC-DAC report dated January 21, 2000. In our view, it was therefore clear that a claim for payment was subsumed in the original claim and is therefore not statute barred: see Harrison v. Antonopoulos (2002), 2002 CanLII 28725 (ON SC), 62 O.R. (3d) 463 (S.C.).

[9] In the result, the appeal is allowed and the cross-appeal is dismissed.

[10] Costs of the appeal are awarded to the appellant in respect of the appeal and cross-appeal in the amount of $20,582.20, inclusive of disbursements and G.S.T., which is on the partial indemnity scale.

[11] Any required adjustments of the costs of the trial based on the result in this court are to be determined by the trial judge, if the parties cannot agree.

Signed: “K. Feldman J.A.”

“Janet Simmons J.A.”

“R. A. Blair J.A.”