Nasr Hospitality Services Inc. v. Intact Insurance

Ontario Reports

Court of Appeal for Ontario

K.N. Feldman, Benotto and D.M. Brown JJ.A.

September 4, 2018

142 O.R. (3d) 561 | 2018 ONCA 725

Case Summary

Limitations — Insurance — Discoverability — Insurer making certain payments under commercial insurance policy and engaging in settlement discussions while continuing to investigate claim — Insurer ultimately denying claim — Insured conceding that it was foreclosed from arguing that insurer's conduct after notification of claim gave rise to promissory estoppel that precluded insurer from relying on Limitations Act — Motion judge finding that insured did not know that proceeding would be "appropriate means" to remedy its loss until insurer formally denied claim — Motion judge erring in using insurer's conduct after notification of claim to displace presumption in Act that insured knew on day after notification of claim that proceeding was appropriate means to remedy its loss — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B.

The insured discovered water damage to its commercial premises on January 31, 2013 and reported the damage to its insurer later that day. The insurer made certain payments to the insured under the policy and engaged in settlement discussions while continuing to investigate the claim. On July 22, 2013, the insurer denied the claim due to policy violations and/or exclusions. The insured commenced an action against the insurer on April 22, 2015. The insurer moved for summary judgment dismissing the action as statute-barred. The motion judge assumed, "without deciding", that the insured's cause of action for breach of the policy arose on February 1, 2013, and that on that date the insured knew or ought to have known the factors enumerated in s. 5(1)(a)(i) to (iii) of the Limitations Act, 2002, namely, that (i) the injury, loss or damage had occurred; (ii) the injury, loss or damage was caused by or contributed to by an act or omission; and (iii) the act or omission was that of the person against whom the claim was made. The insured had conceded that it was foreclosed from arguing that the insurer's conduct after notification of the claim gave rise to a promissory estoppel precluding it from relying on the Act. However, the motion judge concluded that the insured did not know or ought to have known that a proceeding would be an "appropriate means" to seek to remedy its loss until July 22, 2013, when the insurer denied its claim. The motion was dismissed. The insurer appealed.

Held, the appeal should be allowed.

Per D.M. Brown J.A. (Benotto J.A. concurring): Given the specific facts of this case and the insured's concession that it was foreclosed from arguing that the insurer's conduct after notification of the claim gave rise to a promissory estoppel that precluded it from relying on the Act, the motion judge erred in using that same conduct to displace the presumption in the Act that the insured knew a proceeding was an appropriate means to remedy its loss as of February 1, 2013. The "effective means" element in s. 5(1)(a)(iv) of the Act should not be treated as some sort of watered-down promissory estoppel. To treat s. 5(1)(a)(iv) in that manner for ordinary commercial insurance indemnification claims would inject an unacceptable element of uncertainty into the law of limitations. Given the insured's concession that there was no issue of promissory estoppel precluding the insurer from relying on the Act, summary judgment should be granted dismissing the action.

Per K.N. Feldman J.A. (dissenting): As the moving party on the motion for summary judgment, the insurer had the onus to prove all of the elements that founded the basis for its limitation claim, including the date on which the cause of action arose. There was no basis in the record before the court to determine when the insurer became obliged to pay the claim under the policy. If the insurer was relying on the policy, it had not put the policy before the court or referred to it or relied on any provision in it. If it was relying on a statute or principle of law that arose outside the terms of the policy, it had not so stated. By not producing the insurance policy as part of the motion record, the insurer did not provide the court with a record sufficient to determine the relevant components of s. 5 of the Limitations Act, 2002. The motion for summary judgment should be dismissed.

Counsel

W. Colin Empke, for appellant.

Doug LaFramboise, for respondent.

Decision

APPEAL from the order of Perell J., [2017] O.J. No. 3552, 2017 ONSC 4136 (S.C.J.) dismissing a motion for summary judgment.

Reasons for Judgment

D.M. BROWN J.A. (BENOTTO J.A. concurring):

I. Overview

[1] At issue on this appeal is the application of the "appropriate means" element of the discoverability test under s. 5(1)(a)(iv) of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B (the "Act") to a claim for indemnification under a commercial insurance policy.

[2] The appellant, Intact Insurance ("Intact"), moved for summary judgment to dismiss the action of the respondent, Nasr Hospitality Services Inc. ("Nasr"), for indemnification under a commercial insurance policy for losses caused by a January 31, 2013 flood to its business premises. Intact argued that Nasr's action was statute-barred, having been commenced on April 22, 2015 after the expiration of the basic two-year limitation period under the Act.

[3] The motion judge dismissed Intact's motion and declared that the limitation period did not begin to run until July 2013. Although the motion judge assumed Nasr knew on February 1, 2013 that a loss had occurred which was caused by an act or omission of Intact, he concluded Nasr did not know that a proceeding would be an "appropriate means" to remedy its loss until July 2013, when Intact formally denied its claim.

[4] Intact appeals.

[5] I would allow the appeal, set aside the order of the motion judge and grant summary judgment dismissing Nasr's action. Nasr conceded that it was foreclosed from arguing that Intact's conduct after notification of the claim on January 31, 2013 gave rise to a promissory estoppel that precluded Intact from relying on the Act. Given that concession and the specific facts of this case, the motion judge erred in using that same conduct by Intact to displace the Act's presumption that Nasr knew on February 1, 2013 that a proceeding was an appropriate means to remedy its loss and, instead, extending the date to July 2013.

II. Facts

[6] In or around May 2012, Nasr acquired commercial premises at 5550 Stanley Avenue, Niagara Falls (the "premises"), from which it intended to operate a restaurant.

[7] On or about April 25, 2012, Nasr purchased a commercial insurance policy from Intact (the "policy").

[8] According to the statement of claim, the policy covered losses caused by water damage.

[9] On the morning of January 31, 2013, the principal of Nasr, Mr. Elsayed Nasr, discovered water damage to the premises caused by a ruptured bathroom pipe. That day, Mr. Nasr called a broker, Surnet Insurance Group Inc. ("Surnet"), who immediately reported the water damage to Intact.

[10] The record contains conflicting evidence about the use of the premises at the time of the water damage. The statement of claim pleads that light snacks and soft drinks were being sold from the premises until the time of the flood, and that Mr. Mustapha Taamneh had entered an agreement to rent the premises, with a possession date of March 1, 2013. The water damage rendered the premises unsuitable to carry on business, so Mr. Taamneh advised Nasr that he would no longer take possession on March 1, 2013.

[11] On the other hand, in correspondence to the insured Intact advised it had obtained information that no business was operating at the premises at the time of the loss.

[12] In any event, upon learning of the flood Intact assigned a company, Winmar, to attend and report on any damage. Mr. Nasr signed a work authorization for Winmar to begin emergency repairs.

[13] From the brief affidavits filed by both parties on the summary judgment motion, the following picture emerges of the dealings between them in the months immediately following the flood.

[14] On February 14, 2013, about two weeks after the discovery of the water damage, an Intact claims representative e-mailed Mr. Nasr, who had submitted a lease document and cancellation letter. The representative wrote: "There is coverage (subject to policy parameters) for the business interruption you have sustained as a result of this loss. I have issued $20,000.00 to represent the $10,000 per month rental amount loss for 2 months (March and April 2013)."

[15] On April 17, 2013 another Intact claims representative e-mailed Mr. Nasr to advise that he had requested the issuance of a further cheque for $20,000, representing rent for May and June. He continued: "As discussed we will cover up to the end of June and include May = 2 months at $10,000 per not 3 months as we previously discussed."

[16] Intact issued a May 2, 2013 cheque to Nasr for $2,000 in respect of "hydro".

[17] The parties engaged in some settlement discussions. A May 13, 2013 e-mail from the Intact claims representative to Mr. Nasr reads:

[F]urther to our discussions of May 9, 2013 surrounding a full [and] final settlement I have reviewed all material and details pertaining to your request of $90,000 and unfortunately we are not going to be able to settle on this value.

I would make a one time offer of $65,000 to include all aspects of the claim keeping in mind that any and all settlement will include both additional loss payees on your policy.

If this is accepted please advise as there is a form I need for you to complete before payment can be requested[.]

[18] Intact received a proof of loss from Nasr. By letter dated June 25, 2013, Intact returned it to Nasr as it failed to comply with the provisions of the policy. Intact identified the deficiencies in the proof of loss, including the need for Nasr to provide documentation that on the date of loss the premises was being operated as a restaurant.

[19] In its letter, Intact emphasized that "in rejecting your Proof of loss form we are not rejecting or denying your claim". It wrote:

The investigation of this claim remains incomplete and Intact Insurance will need additional time to investigate your loss. Intact Insurance in rejecting this purported Proof of Loss expressly reserves all of its rights and defences under the policy and does not waive compliance with any of the terms and conditions of the policy.

[20] Nasr then filed a proof of loss dated June 26, 2013 in which it claimed a total of $168,000 under the policy, consisting of $80,000 for business interruption; $58,000 for property damage; and $30,000 for equipment.

[21] At that point in time, Mr. Alick Voliere began to correspond with Intact on behalf of Nasr. The record does not disclose Mr. Voliere's occupation. In any event, on July 22, 2013 Intact wrote to Mr. Voliere regarding the June 26 proof of loss and subsequent communications that had taken place between the parties, which included a July 15, 2013 statement provided by Mr. Nasr. Intact advised that its investigation "revealed possible violations of the insurance policy which may lead to Intact Insurance to deny further coverage for any portion of the loss". Specifically, on June 20, 2013 it received new information from the broker, Surnet, regarding "the insured risk and its occupancy".

[22] In its July 22, 2013 letter, Intact went on to inform Nasr that its investigation also disclosed that Nasr never obtained a licence to operate a restaurant at the premises; from September 2012 until the date of loss, no business was operating at the premises; nor was there a tenant. Intact rejected the June 26, 2013 proof of loss and informed Nasr that it was denying "any further claims for damage as a result of this loss due to policy violations and or exclusions contained herein". The letter concluded:

As such, enclosed you will find a blank Proof of Loss form. You have two years from the date of loss to finalize your claim. If it is not finalized within that period and you wish to protect your right to make a claim under your policy then you are required to begin legal proceedings against Intact Insurance Company before the two year period expires. Failure to do so may adversely affect your right to claim.

(Emphasis added)

[23] Subsequently, Intact received correspondence from and met with Mr. Voliere. In a letter dated August 15, 2013, Intact confirmed it was returning and rejecting a July 31, 2013 proof of loss.

[24] Nasr issued its statement of claim on April 22, 2015 seeking damages in respect of the premises for loss of income, loss of equipment and cost of repairs to the premises. Nasr also pleads that Intact's failure to pay under the policy resulted in Nasr falling into arrears with its mortgagees and losing the premises under power of sale proceedings. Consequently, Nasr also claims damages for loss of equity in the premises and the costs of defending power of sale proceedings.

[25] In its statement of defence, Intact denies Nasr's claim for damages, in part on the basis that Nasr failed to comply with a provision of the policy stating it did not insure for loss where, to the knowledge of the insured, the property location was vacant, unoccupied or shut down for more than 30 consecutive days. Intact also pleads that Nasr's claim is statute-barred. Intact did not counter-claim for the return of the $42,000 paid in respect of business interruption loss or hydro.

[26] Intact moved for summary judgment dismissing Nasr's action as statute-barred.

III. Decision of the Motion Judge

[27] In conducting his limitation period analysis, the motion judge proceeded on the following basis:

(i) he assumed, "without deciding", that Nasr's cause of action for breach of the policy arose on February 1, 2013;

(ii) he assumed, "without deciding", that on February 1, 2013 Nasr knew or ought to have known the factors enumerated in s. 5(1)(a)(i)-(iii) of the Act, namely, that (i) the injury, loss or damage had occurred; (ii) the injury, loss or damage was caused by or contributed to by an act or omission; and (iii) the act or omission was that of the person against whom the claim was made; and

(iii) there was no issue of a promissory estoppel precluding Intact from relying on the Act, given Nasr's concession of this point.

[28] However, the motion judge concluded that Nasr did not know or ought to have known that a proceeding would be an appropriate means to seek to remedy the injury, loss or damage until between May 2, 2013 and July 22, 2013, when Intact denied its claim. The motion judge explained the basis for this conclusion, at para. 36 of his reasons:

In my opinion, in the particular circumstances of the case at bar, it was appropriate for Nasr Hospitality to wait before commencing its action against Intact. Although I have assumed, without deciding, that the cause of action was ripe as of February 1, 2013, having regard to the $42,000 in payments that had been made between February and May 2013; i.e. having regard to the nature of the injury, loss or damage being suffered, it would not have been appropriate for Nasr Hospitality to resort to court proceedings until Intact had clearly repudiated its obligation to indemnify under the insurance policy, which did not occur until July 2013. It might have been possible for Nasr Hospitality to sue for a declaration or for an interpretation of the insurance policy before July 2013, but a claim for breach of contract would likely have been premature. The purposes of limitation periods are satisfied by commencing the running of the limitation period as of July 2013, and in this regard, there is no evidence to suggest that Intact has been harmed by loss of evidence or loss of repose from its exposure to honoring its insurance policies by an action commenced in April 2015.

[29] As a result, the motion judge dismissed Intact's summary judgment motion and declared that "the limitation period did not begin to run until July of 2013".

IV. The Positions of the Parties

[30] Intact submits the motion judge correctly assumed that Nasr's cause of action arose on February 1, 2013, the day after Nasr notified Intact about the flood. However, he then erred in concluding that Nasr did not know or ought to have known a proceeding was an appropriate means to remedy its loss until July 2013. Intact submits that the on-going settlement negotiations and other attempts to rectify the loss did not extend the limitation period.

[31] Nasr submits there is no basis to interfere with the motion judge's conclusion that in light of Intact's three payments, Nasr did not know a proceeding would be an appropriate means to remedy its loss until Intact denied its claim on July 22, 2013.

V. Analysis

A. The fact-finding required to determine a limitation period defence on a Rule 20 summary judgment motion

[32] Since the 2010 amendments to the summary judgment rule and the Supreme Court's strong endorsement in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, of the use of summary judgment as a procedural device by which to secure the final adjudication of a civil case on its merits, defendants frequently resort to a summary judgment motion to determine whether the plaintiff's action is barred by the operation of a limitation period.

[33] Hryniak teaches that "[t]here will be no genuine issue requiring a trial when a judge is able to reach a fair and just determination on the merits" of the motion because the summary judgment process "(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means" than other devices for reaching a final adjudication on the merits to achieve a just result: at para. 49 (emphasis added).

[34] In order for a motion judge to grant summary judgment dismissing a plaintiff's action or, as occurred in the present case, to grant a declaration about when the limitation period began to run, the judge is required make certain necessary findings of fact. Those necessary findings of fact concern one presumption and two dates, as set out in s. 5(1)(a), (b) and 5(2) of the Act. Those provisions state:

5(1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[35] Accordingly, a typical summary judgment motion involving the basic limitation period requires the judge to determine whether the record enables making a series of findings of fact, with the certainty required by Hryniak, on the following matters: (i) the date the plaintiff is presumed to know the matters listed in s. 5(1)(a)(i)-(iv) -- namely, the day on which the act or omission on which the claim is based occurred; (ii) the date of actual knowledge under s. 5(1)(a), in the event the evidence proves the contrary of the presumptive date; (iii) the s. 5(1)(b) objective knowledge date, based on the reasonable person with similar abilities and circumstances analysis; and (iv) finally, which of the actual knowledge and objective knowledge dates is earlier, for that will be day on which the plaintiff discovered the claim for purposes of applying the basic limitation period of two years.

[36] In the present case, although the motion judge granted an order declaring that the basic limitation period did not begin to run until July 2013, he failed to make express findings of many of the facts necessary to make such an order. Instead, he proceeded on the basis of two "assumptions": (i) Nasr's cause of action for breach of the policy arose on February 1, 2013; and (ii) that date also was the date on which Nasr knew the matters described in s. 5(1)(a)(i)-(iii). In the case of each assumption, the motion judge stated he was assuming the fact, without deciding it.

[37] Taking the motion judge's reasons literally, if he did not find, as facts, the days on which Nasr knew or ought to have known the matters described in s. 5(1)(a)(i)-(iii), then there was no factual support for his ultimate order that the basic limitation period "did not begin to run until July of 2013".

[38] However, the parties have argued the appeal as if the motion judge made actual findings of fact on those matters, and I will treat his reasons in a similar fashion.

[39] I would simply reiterate that granting summary judgment dismissing an action as statute-barred, or declaring when a claim was discovered, requires making specific findings of fact. Assumptions about the matters in s. 5(1) and (2) of the Act are not analytical substitutes for findings of fact. If the record does not enable the summary judgment motion judge to make those findings with the certainty required by Hryniak, then a genuine issue requiring a trial may exist.

B. Section 5(1)(a)(i)-(iii) of the Act

[40] The parties agree that Nasr's cause of action for breach of the insurance contract arose on February 1, 2013. Their agreement constitutes an admission of fact that February 1, 2013 was the day on which Nasr first knew the matters in s. 5(1)(a)(i)-(iii) of the Act.

[41] I would note that this position taken by the parties is consistent with the principles that have emerged in this court's jurisprudence. In Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218 and Schmitz (Litigation guardian of) v. Lombard General Insurance Co. of Canada, 2014 ONCA 88, this court held that for the purposes of s. 5(1)(a)(ii) and (iii) of the Act, a party claiming indemnification under or in respect of a policy of insurance knows there was a loss caused by an omission of the insurer the day after the request or claim for indemnification is made: Markel Insurance, at paras. 26 and 27; Schmitz, at paras. 20 and 26. Once the request or claim for indemnification is made, the insurer is under a legal obligation to satisfy it: Markel Insurance, at para. 26; Schmitz, at para. 20. In the present case, Nasr made a claim for business interruption losses soon after the flood, and Intact issued a cheque for such losses on February 14, 2013.

[42] On the record before us, it was proper for the motion judge to conduct his analysis on the basis that Nasr knew or ought to have known the matters set out in s. 5(1)(a)(i)-(iii) of the Act on February 1, 2013, the day after Nasr had reported the loss to its insurer.

C. Section 5(1)(a)(iv) of the Act

[43] Although the motion judge held that February 1, 2013 was the day on which Nasr knew the matters enumerated in s. 5(1)(a)(i)-(iii) of the Act, he concluded that the day on which Nasr knew or ought to have known that "having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it" was not until July 2013, when Intact denied Nasr's claim.

[44] I conclude that the motion judge erred in so finding. With respect, he ignored the effect of Nasr's concession, set out at para. 14 of his reasons, that there was no issue of a promissory estoppel precluding Intact from relying on the Act. That concession operated, in the circumstances of this case, to make the day on which Nasr knew or ought to have known an action was an appropriate means to remedy the loss the day of the loss -- namely, February 1, 2013, the day after Nasr had sought indemnification for its loss from its insurer.

[45] To explain my conclusion, I will first review briefly the jurisprudence on the appropriate means element in s. 5(1)(a)(iv) of the Act, and then explain how Nasr's concession that it was foreclosed from arguing promissory estoppel precluded the motion judge's finding on the appropriate means element.

The principles concerning s. 5(1)(a)(iv) of the Act: Appropriate means

[46] In commencing his analysis under s. 5(1)(a)(iv) of the Act, the motion judge properly noted the general proposition that the determination of when an action is an appropriate means to seek to remedy an injury, loss or damage depends upon the specific factual or statutory setting of each individual case: 407 ETR Concession Co. v. Day, 2016 ONCA 709, at para. 34; Winmill v. Woodstock (City) Police Services Board, 2017 ONCA 962, at para. 23.

[47] However, as this court has observed, that general proposition is not an unbounded one.

[48] First, in Markel Insurance this court confined the meaning of "appropriate" to "legally appropriate". Writing for the court, Sharpe J.A. stated, at para. 34:

This brings me to the question of when it would be "appropriate" to bring a proceeding within the meaning of s. 5(1)(a)(iv) of the Limitations Act. Here as well, I fully accept that parties should be discouraged from rushing to litigation or arbitration and encouraged to discuss and negotiate claims. In my view, when s. 5(1)(a)(iv) states that a claim is "discovered" only when "having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it", the word "appropriate" must mean legally appropriate. To give "appropriate" an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened and requiring the court to assess to tone and tenor of communications in search of a clear denial would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.

(Italics in original; underlining added)

[49] Second, in 407 ETR, Laskin J.A. noted, at para. 47, that the use of the phrase "legally appropriate" in Markel Insurance, "signified that a plaintiff could not claim it was appropriate to delay the start of the limitation period for tactical reasons, or in circumstances that would later require the court to decide when settlement discussions had become fruitless" (emphasis added).

[50] Finally, in Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325, Pardu J.A. observed that the jurisprudence discloses two circumstances in which the issue of appropriate means most often delays the date on which a claim was discovered. First, resorting to legal action might be inappropriate in cases where the plaintiff relied on the superior knowledge and expertise of the defendant, especially where the defendant undertook efforts to ameliorate the loss: at para. 26. Second, a legal action might not be appropriate if an alternative dispute resolution process "offers an adequate alternative remedy and that process has not fully run its course": at para. 29. See, also, paras. 28-48; and Har Jo Management Services Canada Ltd. v. York (Regional Municipality), 2018 ONCA 469, at paras. 21 and 34-35. In this regard, in Winmill this court held that resort to a civil proceeding for a remedy in respect of damage flowing from an incident might not be an appropriate means while criminal proceedings in respect of the incident remain outstanding: at para. 28.

[51] Although Presidential MSH does not purport to offer an exhaustive list of circumstances in which a proceeding might not be an appropriate means, I would observe that neither circumstance identified in Presidential MSH is present in this case. Some other factor would have to displace the s. 5(2) presumption that Nasr knew a proceeding was an appropriate means on February 1, 2013.

Application of the s. 5(1)(a)(iv) principles to the present case

[52] Although the motion judge did not expressly address s. 5(2) of the Act when conducting his appropriate means analysis, he obviously took the view that Nasr had displaced the presumption that February 1, 2013 was the day it knew a proceeding was an appropriate means to remedy its loss. The evidence the motion judge relied upon to prove the contrary of the s. 5(2) presumption consisted of the course of dealings between Intact and Nasr between February and May 2013, including the three payments made by Intact: at para. 36.

[53] The jurisprudence recognizes that some conduct by an insurer after receiving notification of a claim under a policy can affect the operation of a limitation period. In his reasons, the motion judge referred to the two leading cases on the issue of promissory estoppel precluding an insurer from relying on a limitation period -- the companion 1991 decisions of the Supreme Court of Canada in Maracle v. Travellers Indemnity Co. of Canada and Marchischuk v. Dominion Industrial Supplies Ltd..

[54] In Maracle, Sopinka J. stated, at p. 57 S.C.R., that the party relying on the principle of promissory estoppel to prevent an insurer from relying on a limitation period must establish that (i) "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"; and (ii) in reliance on the representation, the representee "acted on it or in some way changed his position". The promise must be unambiguous but can be inferred from the circumstances: Engineered Homes Ltd. v. Mason, at pp. 647-52 S.C.R.

[55] As applied to the conduct of an insurer in response to a claim under a policy, Sopinka J. stated that promissory estoppel could prevent the insurer from relying on a limitation period where there has been a promise not to rely on it. An admission of liability by the insurer is a factor from which a court may infer such a promise, but the conduct of the insured must be assessed in the context of the normal dealings between parties attempting to resolve an insurance claim. He described those normal course dealings as follows, at p. 58 S.C.R.:

An admission of liability is frequently made in the course of settlement negotiations. This is often a preliminary step in order to clear the way to enter into a discussion as to quantum. Indeed, when an offer to pay a stated amount is made by one party to the other, an admission of liability is usually implicit. In this type of situation, the admission of liability is simply an acknowledgment that, for the purpose of settlement discussions, the admitting party is taking no issue that he or she was negligent, liable for breach of contract, etc.

[56] For an admission of liability to extend a limitation period, something more than the admission is required, as Sopinka J. stated, at pp. 58-59 S.C.R.:

The principles of promissory estoppel require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is to be taken as a promise not to rely on the limitation period must be such that the trier of fact can infer from it that it was so intended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled or not, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn is an issue of fact.

(Emphasis added)

[57] There are similarities between the circumstances in Maracle and those in the present case. In both, the "nature of the injury, loss or damage" was the same -- indemnification under a commercial policy of insurance. The claims of both insureds were for more than trivial amounts. As well, the conduct of the insurer at issue in Maracle bears similarities to that of Intact: engaging in settlement discussions with the insured and paying part of the claim. In the specific circumstances of Maracle, the insurer's conduct did not give rise to a promissory estoppel that the insurer would not rely on the limitation period.

[58] In the present case, the motion judge acknowledged, at the start of his analysis, that Nasr had conceded a promissory estoppel argument was foreclosed to it by reason of the decisions in Maracle and Marchischuk: at para. 14. I can only read that portion of the motion judge's reasons as recording a concession by Nasr that Intact's conduct after receiving Nasr's notification of the flood did not estop Intact from relying on the operation of the limitation period. In light of that concession, it was not open to the motion judge to rely on the same conduct to displace the s. 5(2) presumption that Nasr knew a proceeding was an appropriate means to remedy its loss as of February 1, 2013.

[59] Nasr has not pointed to any cases involving ordinary claims for indemnification under a commercial policy of insurance that have treated the appropriate means element in s. 5(1)(a)(iv) as some form of watered-down promissory estoppel. To treat s. 5(1)(a)(iv) in that manner for ordinary commercial insurance indemnification claims -- as the motion judge effectively did -- would risk ignoring the caution voiced by Sharpe J.A. in Markel Insurance, at para. 34 -- and echoed by Laskin J.A. in 407 ETR, at para. 47 -- that

[t]o give "appropriate" an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened and requiring the court to assess to tone and tenor of communications in search of a clear denial would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.

(Emphasis added)

[60] The motion judge did not find that Intact had promised, expressly or impliedly, not to rely on the limitation period. Accordingly, it was not open to the motion judge to recast, for purposes of the appropriate means analysis, the conduct by Intact that Nasr conceded could not support a finding of promissory estoppel that the insurer would not rely on the limitation period. With respect, the motion judge erred in doing so.

[61] Accordingly, I would allow Intact's appeal.

VI. Disposition

[62] For the reasons set out above, I would allow the appeal and set aside the order of the motion judge. Given Nasr's concession that there is no issue of promissory estoppel precluding Intact from relying on the Act, I would grant summary judgment dismissing Nasr's action.

[63] Based on counsel's agreement regarding the costs of the appeal, I would award Intact costs fixed at $7,500, inclusive of disbursements and applicable taxes.

Dissenting Opinion

[64] K.N. FELDMAN J.A. (dissenting): -- I have had the benefit of reading the draft reasons of my colleague and, with respect, find myself in disagreement with the result. In my view, the appellant insurer has not proved that the action is statute-barred and is therefore not entitled to have the insured's action against it dismissed on summary judgment.

[65] In a nutshell, the appellant insurer asked the court to dismiss the insured's action on the flood insurance policy on the basis that its claim is statute-barred, the claim having been brought more than two years after the flood, referred to as the loss. The problem is that this is not an action against the person who caused the flood. It is an action against the insurer for breach of the insurance policy. Therefore, the triggering event for the discoverability analysis and for the two-year limitation to begin running is the date the insurer breached its obligation under the policy to indemnify the insured for the loss it suffered in the flood.

[66] As the moving party on the motion for summary judgment, the insurer had the onus to prove all of the elements that found the basis for its limitation claim, including the date when the cause of action arose, i.e., the date when the act or omission by the insurer caused the injury to the insured: see the definition of "claim" in s. 1 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, and ss. 4 and 5.

[67] Because the action is based on the enforcement of an insurance policy, one would expect that the date when the insurer is obliged to pay the insured its claim would be set out in the policy. The only other way that date might be known is if it is a matter of statutory or common law. In any of these events, the onus is on the moving party to prove all elements.

[68] On this motion, the insurer did not produce the policy of insurance as part of the record. The policy would state the obligations of the insured and of the insurer, and in particular, when the insurer is obliged to pay the claim, and therefore when the insurer is in breach of that obligation.

[69] The motion was fought by the respondent insured on the issue of whether the actions of the insurer in making payments under the policy postponed the commencement of the limitation period. In his affidavit, the insured states, at para. 20: "The limitation may have been at the time of loss if no payments on the policy were made. This clearly was not the case here" (emphasis added).

[70] The motion judge accepted the argument that the insurer's conduct postponed the commencement of the limitation period. In his reasons for dismissing the motion for summary judgment, the motion judge stated that he was "assuming without deciding" that the cause of action for breach of the insurance contract arose on February 1, 2013. He did not need to decide the issue because he was not granting summary judgment.

[71] The appeal was fought on the same issue as the motion. In his factum, respondent's counsel states: "There is also no issue as to the cause of action for breach of insurance contract arose on February 1, 2013", referring to the motion judge's statement that he would assume, without deciding, that the cause of action arose on that date. While counsel could have been clearer in his drafting, on my reading, this statement was based on the insured's position that the commencement date was postponed, so that the date the cause of action arose was not an issue.

[72] However, on appeal, the insurer again asks the court to reject the respondent's argument, overturn the decision of the motion judge and grant summary judgment. To grant summary judgment this court must then decide when the cause of action against the insurer for breach of the insurance contract arose, in order to determine when the limitation period commenced to run.

[73] That is a question of mixed fact and law. The legal part requires the court to determine when the insurer became legally obligated to pay under the policy. The factual part is the determination of when the insurer did not pay in accordance with that obligation. Parties cannot bind the court on legal issues by agreement or concession. For example, in Ontario English Catholic Teachers' Assn. v. Toronto Catholic District School Board, Lane J. stated, at para. 13:

The fourth difficulty is that the agreement asserted is an agreement not as to the facts, but as to the law. Whether the doctrine of culminating event applies only where the alleged culminating act is culpable is a question of law. Parties cannot agree on the law so as to bind a court or tribunal to their view; the law is the law and it is always open to the tribunal to determine what it is.

[74] The insurer has presented no basis in the record to determine when its obligation to pay arose.

[75] My colleague says that gap is filled because the parties agree that the cause of action arose on February 1, 2013 and that that agreement constitutes an admission of fact. I do not agree.

[76] First, as stated above, the date the cause of action arose is not a matter of fact alone. It is a matter of mixed fact and law: it depends on when the defendant's legal obligation to the plaintiff arose and when it was breached. What an agreement says or what occurred at a point in time may be factual matters, but whether they constitute a legal obligation or a breach are matters that include legal determinations -- the province of the court.

[77] My colleague also states that the admission is consistent with principles that have emerged in jurisprudence of this court in two cases, Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218 and Schmitz (Litigation guardian of) v. Lombard General Insurance Co. of Canada, 2014 ONCA 88. However, in both those cases, the legal obligation of the insurer was governed by statutory provisions and not by principles of law.

[78] Markel Insurance involved a transfer claim for indemnification by a first party insurer against a second party insurer in the motor vehicle accident context. The claim was governed by the Insurance Act, R.S.O. 1990, c. I.8, its regulations and procedures set out by the Financial Services Commission of Ontario. The court had all the information before it that it required to determine when the second insurer's obligation to indemnify arose and was breached.

[79] Similarly, in Schmitz, the claim for indemnity at issue was brought within and was governed by the underinsured motorist coverage provided by the OPCF 44R, an optional endorsement to Ontario's standard form automobile insurance policy.

[80] Unlike in those cases, there is no basis in the record before this court to determine when the insurer became obliged to pay the claim under the policy. If the insurer is relying on the policy, it has not put that policy before the court or referred to or relied on any provision of the policy. If it is relying on a statute or principle of law that arises outside the terms of the policy, it has not so stated.

[81] By not producing the insurance policy as part of the motion record, in my view, the appellant did not provide the court with a record sufficient to determine the relevant components of s. 5 of the Limitations Act. As a result, the motion for summary judgment should be dismissed and the action sent on for trial with the issue of the limitation period left open for trial, if the insurer wishes to continue to raise it there.

[82] I would therefore dismiss the appeal with costs to the respondent.

Disposition

Appeal allowed.

Footnote

1 Nasr, in para. 19 of its factum, states: "There is no issue as to the cause of action for breach of insurance contract arose on February 1, 2013." In his affidavit, at para. 20, Mr. Nasr deposed: "The limitations may have been at the time of loss if no payments on the policy were made. This clearly was not the case here."