Section 22(5) of the Limitations Act, 2002 permits contracting out of the statutory limitation period unless one of the parties to the contract is an individual. The word “parties” in this section does not have only its literal meaning. The Court of Appeal in Kassburg v. Sun Life Assurance Company of Canada instructs us to read it broadly and purposively so that its meaning is consistent with the objective of the section.
The respondent in Kassburg was an insured under a group policy issued by the appellant Sun Life to the North Bay Police Association. The respondent submitted a claim for long-term disability benefits that Sun Life denied.
She commenced an action claiming entitlement to the benefits. Sun Life moved for summary judgment on the basis that her claim was out of time. Among other things, Sun Life relied on a one-year limitation period contained in the insurance contract. It argued that this was a limitation period subject to section 22(5) of the Limitations Act, 2002. Section 22(5) and 22(6) provide as follows:
The following exceptions apply only in respect of business agreements:
Section 22(5)
- A limitation period under this Act, other than one established by section 15, may be varied or excluded by an agreement made on or after October 19, 2006.
- A limitation period established by section 15 may be varied by an agreement made on or after October 19, 2006, except that it may be suspended or extended only in accordance with subsection (4).
Section 22(6)
“business agreement” means an agreement made by parties none of whom is a consumer as defined in the Consumer Protection Act, 2002 (“accord commercial”) [Section 1 of the Consumer Protection Act, 2002 defines “consumer” as “an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes; (“consommateur”)];
“vary” includes extend, shorten and suspend. (“modifier”)
The motion judge held that the insurance policy fit within this business agreement exception. Because the parties to the insurance contract were the Police Association and the appellant, the contract was not entered into by an individual acting for personal, family, or household purposes.
Justice van Rensburg rejected this reasoning. The word “parties” in section 22(5) must be given a broad, purposive reading consistent with the objective of the provision:
[58] The clear wording of s. 22(5) permits contracting out of the statutory limitation period, unless the parties to the contract include an individual, and the contract was for “personal, family or household purposes”. There are therefore two requirements for a business agreement to exist: the parties must not include individuals, and the contract must not have been for personal, family or household purposes.
[59] The literal reading of the “parties” aspect of the section that appears to have been accepted by the motion judge, in my view, is inconsistent with the objective of s. 22 of the Limitations Act, 2002, which is to restrict the circumstances in which the statutory limitation periods under the Act can be altered by contract. In my view, the word “parties” in s. 22(6) should be given a broader, purposive reading to accord with the objective of s. 22.
[60] In this action, the respondent is asserting a personal claim for LTD benefits provided under a group policy. She is entitled to assert the claim directly against the insurer under s. 318 of the Insurance Act, R.S.O. 1990, c. I.8. Although the group insurance contract under which she is making her claim was entered into between the NBPA and the appellant, the appellant relies on a limitation period contained in that contract to exclude her claim. The respondent is in effect deemed to be a party for the purpose of asserting her claim, and for the purpose of the appellant’s limitations defence.
[61] With respect to the “purposes” requirement, the contract is for personal purposes, and accordingly is not a “business agreement” under s. 22(5).
