Marchischuk v. Dominion Industrial Supplies Ltd., [1991] 2 S.C.R. 61
Rosina Marchischuk Appellant
v.
Dominion Industrial Supplies Ltd.
and Sidinio Joseph Desousa Respondents
Indexed as: Marchischuk v. Dominion Industrial Supplies Ltd.
File No.: 21743.
1991: February 28; 1991: June 6.
Present: La Forest, L'Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin and Iacobucci JJ.
on appeal from the court of appeal for manitoba
Limitation of actions ‑‑ Promissory estoppel ‑‑ Waiver ‑‑ Insurer admitting liability and entering into settlement negotiations ‑‑ Statement of claim issued after limitation period had expired ‑‑ Whether defendants estopped from relying on limitation period ‑‑ Whether defendants waived limitation period.
Appellant was injured in a motor vehicle accident. Respondents' insurer admitted liability and made an offer of settlement, which was not accepted. A statement of claim was issued against respondents after the limitation period had expired. Appellant argued that because the insurer had admitted liability and continued to negotiate damages, respondents were estopped from relying on, or had waived their right to rely on, the limitation period. The trial judge nevertheless accepted the claim that the action was statute‑barred. The Court of Appeal upheld the judgment. This appeal is to determine whether respondents were estopped from relying on the limitation period, and whether they waived it.
Held: The appeal should be dismissed.
Both the trial judge and the Court of Appeal were satisfied that there was no evidence in this case from which a promise not to rely on the limitation period could be inferred. While in some circumstances an admission of liability might be taken to extend to the limitation period, the trial judge was not prepared to give it that interpretation, and this finding should not be interfered with. For the reasons given by the trial judge, the respondents did not waive the limitation period.
Cases Cited
Applied: Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 000.
Statutes and Regulations Cited
Limitation of Actions Act, R.S.M. 1987, c. L150, C.C.S.M., c. L150.
APPEAL from a judgment of the Manitoba Court of Appeal (1989), 62 Man. R. (2d) 240, affirming a judgment of the Court of Queen's Bench (1989), 58 Man. R. (2d) 56, [1989] 3 W.W.R. 74, 34 C.P.C. (2d) 181, 39 C.C.L.I. 269, dismissing appellant's action. Appeal dismissed.
David G. Hill and Sherri Walsh, for the appellant.
Randolph B. McNicol and Louise A. Lamb, for the respondents.
//Sopinka J.//
The judgment of the Court was delivered by
Sopinka J. -- This appeal was heard concurrently with Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 000. Both appeals raise the issue as to the circumstances in which an admission of liability made to a prospective plaintiff by a prospective defendant amounts to promissory estoppel precluding reliance on a limitation period.
Facts
The appellant was injured in a motor vehicle accident involving the respondent Desousa on February 8, 1984. Desousa was an employee of the respondent Dominion Industrial. The Insurance Corporation of British Columbia ("ICBC") was the appropriate insurer. Negotiations were carried out between the appellant's solicitors and ICBC on the issue of damages, but did not culminate in settlement. A statement of claim was issued on the appellant's behalf on July 3, 1986, but the two-year limitation period had expired on February 8, 1986. The trial of the action was confined to the severed issue of whether the claim was barred by the Limitation of Actions Act, R.S.M. 1987, c. L150. The appellant claimed that by virtue of ICBC's conduct the respondents were estopped from relying upon, or had waived their right to rely upon, the limitation period. Nevertheless, the trial judge accepted the insurer's claim that the action was statute-barred. This decision was upheld by the Court of Appeal.
The nature and extent of negotiations between the parties are of importance in determining whether promissory estoppel or waiver apply in this case, and I summarize these in some detail hereunder.
The appellant retained the law firm Bass & Berg to represent her. Initially, her file was conducted by Aaron Berg. Berg contacted Bob Curry, the insurance adjuster handling the matter for ICBC, who indicated that he was waiting to hear from the insurer as to its position on liability. On August 27, 1984, Curry informed Berg by letter that "liability is not in issue". The letter states:
We have been advised by our principals that liability is not in issue.
We would appreciate receiving up to date medical reports on both Rosina Marchischuk and Jean Marchischuk.
We await your response.
The parties continued to correspond, exchanging medical and other information. On July 22, 1985, Curry sent Berg an offer of settlement from ICBC in the amount of $13,488.58 and enclosed with the offer a final release form to be signed by the appellant. Berg replied that he would be discussing the matter with his client.
The following September, Berg left the law firm and the conduct of the file was assumed by George Bass. Bass testified that after reviewing the file, he made a note of the limitation date (February 8, 1986) on the front inside cover of the file and circled it in red ink. On December 17, 1985, Curry sent Bass a loss draft in the amount of $13,488.58, based on the settlement offer, payable to Bass's firm in trust. Curry sent a follow-up letter to Bass on February 4, 1986, four days prior to the expiration of the statutory limitation period, requesting a response to the settlement offer. The limitation period expired on February 8, 1986 without further developments.
On March 11, 1986, a little more than a month after the limitation period had expired, Curry telephoned Bass requesting that the loss draft be returned. On March 18, 1986, Curry sent a letter to Bass again requesting that the draft be returned, and asking that Bass inform ICBC of the appellant's position. On April 14, 1986, Bass made a counter-offer of settlement which was considerably higher than the original settlement proposal made on behalf of the respondents. In June 1986, the solicitors for ICBC informed Bass that they had been instructed to take the position that the appellant's claim was statute-barred and that liability was therefore denied. On July 3, 1986, Bass issued a statement of claim.
The Courts Below
Manitoba Court of Queen's Bench (1989), 58 Man. R. (2d) 56
Kennedy J. stated that the appellant relied on promissory estoppel and in the alternative, waiver, to answer the limitation period defence. He then instructed himself as to the applicable law. With respect to estoppel, he stated (at p. 57):
These issues [estoppel and waiver] are not to be confused and are two separate and distinct matters. The first, equitable estoppel, finds its origin in the early case of Central London Property Trust Limited v. High Trees House Limited, [1947] K.B. 130, which determined essentially that where a representation is made by one party and relied upon by another to that person's detriment, the party making the representation will be estopped from following a contrary course of action. This concept has been modified to mean a basic sense of fairness and equity. One should not be able to say one thing, have it acted upon, and then behave differently than first represented. [Emphasis in original.]
Kennedy J. reviewed the facts and concluded that while there may be circumstances from which it can be inferred that a claim need not be filed, the facts in this case did not support that conclusion.
With respect to waiver, Kennedy J. said (at pp. 58-59):
The second issue of waiver comes into effect when a party knowingly acts in a manner where he waives or foregoes reliance upon some known right or defect. It is important that the right or defect, as the case may be, be known, since one should not be able to waive rights of which he was not fully aware or apprised.
In determining whether waiver applies, the defendant must take steps in the proceedings knowingly and to its prejudice, which amount to foregoing a reliance upon some right or defect. In order to waive a right it must be a known right. In this case, even if the defendant's conduct subsequent to the limitation date, amounted to taking steps in the proceedings, I do not believe the defendant ever addressed the issue of whether or not a statement of claim had been filed, and the evidence certainly supports the fact that it was never discussed directly between plaintiff's counsel and the insurance adjuster.
The conduct of the defendant in asking for the plaintiff's position four days before the limitation date, and again in early March by telephone, along with a letter of March 18th, clearly do not amount to steps being taken in the furtherance of negotiations aimed at settling, so as to amount to a waiver of the plaintiff's obligation to file a claim. For all the insurance adjuster knew a claim had been filed.
The plaintiff argues that it was only when the insurance company was informed of the amount of her claim, which was apparently in excess of its reserve, that it relied upon the plaintiff's failure to file a claim. I do not accept this position. . . . Alternatively, had the evidence shown that the defendant knew of the absence of the statement of claim and continued to negotiate, a waiver may have resulted, as it might have, had the defendant responded with some counteroffer to the plaintiff's demand of April 14, 1986. Nothing in the defendant's conduct, however, subsequent to February 8, 1986, could amount to circumstances that could be construed as a waiver of the plaintiff's obligation to file a claim.
Manitoba Court of Appeal (1989), 62 Man. R. (2d) 240
The Court of Appeal was satisfied that the trial judge had dealt properly with the facts and law, and that he had committed no error. Accordingly, it dismissed the appeal without additional reasons.
Issues
The appellant raises the following issues:
Whether an admission of liability and an implied promise not to rely on the limitation period are alternate conditions, either of which will suffice to invoke the doctrine of promissory estoppel, as an effective answer to a limitation defence or whether a plaintiff must successfully establish both conditions in order to rely on that doctrine. [Emphasis in original.]
Whether the defendants in this case are precluded from relying on the limitation period as a complete defence solely by virtue of their having expressly admitted liability.
In the alternative, whether the defendants in this case are precluded from relying on the limitation period because of an implied promise on their part not to rely on that as a defence, in addition to their express admission of liability.
In the further alternative, whether the defendants have waived their right to rely on the limitation period as a complete defence to the [appellant's] action.
I prefer to consolidate these four issues into two:
Estoppel: Were the respondents estopped from relying on the limitation period?
Waiver: Did the respondents waive the limitation period?
Promissory Estoppel
I have reviewed the principles relating to promissory estoppel in my reasons in Maracle v. Travellers Indemnity Co. of Canada, which was heard together with this appeal.
Application to this Appeal
In this case, both the trial judge and the Court of Appeal were satisfied that there was no evidence from which a promise not to rely on the limitation period could be inferred. This finding should not be interfered with unless there is some basis for concluding that the trial judge clearly misapprehended the evidence. The claim that promissory estoppel is established is substantially based on an admission of liability. It is submitted that the admission of liability was a "with prejudice" admission because it was made in correspondence and maintained throughout the period of negotiations. While in some circumstances such an admission might be taken to extend to the limitation period, the trial judge was not prepared to give it that interpretation. It was open to the trial judge to conclude that the admission was intended to facilitate settlement and was not intended to operate to preclude reliance by the respondents on legal defences available to them should the case go to trial. The appellant has not brought herself within the criteria for appellate review of this finding. The finding was confirmed by the Court of Appeal and I see no reason to interfere. Indeed, I am convinced that it was the correct finding in all the circumstances.
Waiver
For the reasons given by the trial judge, I would not give effect to this ground of appeal.
Conclusion
For the foregoing reasons and those expressed in Maracle v. Travellers Indemnity Co. of Canada, the appeal is dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Hill & Abra, Winnipeg.
Solicitors for the respondents: Fillmore & Riley, Winnipeg.