Ontario: the principles of mva “threshold” claims

Dimech v. Osman contains a useful summary of the limitation of claims for non-pecuniary losses arising from a motor vehicle accident:

[14]      Under s. 4(1) of the Limitations Act, 2002 a person loses the right to sue for a claim two years after she “discovers” the claim. Under s. 5(2) of the Limitations Act, 2002 a plaintiff injured in a car accident will be presumed to have discovered her claim on the day of the accident unless she proves that she did not discover the claim that day and that a reasonable person with her abilities and in her circumstances would not have discovered the claim until a later time.

[15]      While one might normally think that being injured in a car accident automatically gives one a claim or the right to sue, that is not necessarily the case. Under s.267.5(5) of the Insurance Act, RSO 1990, c I.8 a person injured in a car accident in Ontario can only sue for non-pecuniary losses if the accident caused her to suffer “permanent serious impairment of an important physical, mental or psychological function.” This is commonly referred to as the “threshold”. If a plaintiff cannot prove that her injuries meet the threshold, her claim for non-pecuniary loss will be dismissed.

[16]      While a plaintiff can sue for pecuniary loss without meeting the threshold, case law provides that for the limitation period to commence in Ontario in relation to a motor vehicle accident lawsuit in which both pecuniary

and non-pecuniary damages are claimed, the plaintiff must have known or ought reasonably to have known that she could likely meet the threshold so as to have the right to sue. In Ioannidis v. Hawkings 1998 CanLII 14822 (ON SC), Justice Langdon held that for the two-year limitation period to start running, there must be,

…a sufficient body of evidence available to be placed before a judge that, in counsel’s opinion, has a reasonable chance of persuading a judge, on the balance of probabilities that the injury qualifies.

[17]      The question of when the limitation period commences is a question of fact. See: Farhat v Monteanu2015 ONSC 2119 (CanLII), at para. 33. It requires a finding of a date when a plaintiff or her lawyer knew or ought reasonably to have known that she had a reasonable chance to prove that she suffered permanent serious impairment of an important physical, mental or psychological function as a result of the car accident.

The decision also provides an example of the consequences of failing to adduce the evidence material to the limitation of these claims:

[18]      There is no evidence from Mr. Bekiaris as to whether he, as the plaintiff’s counsel, had formed an opinion during the 37-day pre-limitation period window that the plaintiff had a reasonable chance of persuading a judge that his injuries would meet the threshold. I offered Mr. Bekiaris an opportunity to consider refraining for acting as counsel on this motion both due to this evidentiary issue and in consideration of the fact that if the defendants succeed in having this action dismissed, Mr. Bekiaris could possibly face a claim for having missed the limitation period. He determined to proceed as counsel.

 [22]      With no evidence from counsel, and no evidence of any contemporaneous prognosis from a doctor, I am left to try to determine by inference whether the plaintiff or his counsel ought reasonably to have known that his injuries reasonably could have met the threshold during the 37-day pre-limitation period window.

 [26]      The defendants argue that with the burden lying on the plaintiff to prove that he could not reasonably have discovered his claim in the 37-day pre-limitation period window, it was incumbent upon him to adduce evidence to show that he or his counsel acted with diligence by asking a doctor for a prognosis. The defendants argue that the plaintiff has failed to prove that he asked any doctor whether his injuries were likely to permanently seriously impair an important function right up to the time that the claim was issued. As such, he cannot meet his burden to show that he acted with diligence as required to rebut the presumption in s. 5(2) of the Limitations Act, 2002.

 [29]      Like the plaintiff, the defendants have adduced no evidence to establish that a reasonable person, in the first 37 days after this type of accident, suffering injuries like those of the plaintiff, would likely know that he or she is likely to meet the threshold. There is no expert prognosis. There is no evidence about whether in the 37-day pre-limitation period window the plaintiff’s counsel ought to have concluded that he had a sufficient body of evidence to provide a reasonable chance of persuading a judge that the plaintiff’s injuries will meet the threshold.

 [31]      In my view, the defendants have not met their evidentiary burden to allow me to fairly and justly adjudicate the limitation period issue summarily. While there may perhaps be cases where a plaintiff’s injuries are so severe that they can confidently be said to meet the threshold from day one, I cannot tell if this is such a case. The defendants have given me the plaintiff’s medical records. But I have nothing to allow me to draw an inference that the plaintiff or his lawyer ought to have concluded in the first 37 days after the accident that the injuries met or were likely to meet the threshold at some time in future.

 [32]      Similarly, while I was able to conclude at first instance in Yasmin that the plaintiff had not diligently pursued a claim on the facts, I have nothing to allow me to reach the same conclusion here and now. I do not know if a reasonable patient 37 days into treatment ought to have been asking his doctors for long term prognoses about serious impairment of important functions. Neither is there any evidence before me to let me weigh or conclude whether a reasonable personal injury lawyer ought to have been seeking reports from the doctors about threshold issues within the 37-day pre-limitation period window.

Ontario: the limitation of claims for unidentified motorist coverage

The decision in Sukhu v. Bascombe holds that the limitation period for a claim for the unidentified motorist coverage in OPCF 44R does not run until the responding insurer refuses to satisfy a demand to indemnify.

[17]      In Schmitz v. Lombard General Insurance Company of Canada2014 ONCA 88 (CanLII); leave to appeal refused, [2014] SCCA No. 143, the Court of Appeal was dealing with the question of when the limitation period began to run for an indemnity claim under the underinsured motorist coverage provided by OPCF 44R optional endorsement to the standard form automobile insurance policy in Ontario. The Court of Appeal applied the reasoning in Markel and concluded that the limitation period does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim. See Schmitz at paragraphs 22 to 26.

[18]      The reasoning behind Markel and Schmitz was applied in the decision of Justice Lofchik in Chahine v. Grybas2014 ONSC 4698 (CanLII). Justice Lofchik was faced with a motion involving facts very similar to the facts before the court on this motion. The plaintiff was involved in an accident and sued the other driver. After the claim was issued, the defendant’s lawyer advised the plaintiff’s lawyer that there was an unidentified motorist involved who may have been responsible for the accident. The plaintiff later confirmed this by obtaining a complete copy of the police report.

[19]      The plaintiff then brought a motion to add his own insurer pursuant to the unidentified motorist coverage in OPCF 44R of his policy. Justice Lofchik considered the provisions of the Limitations Act and the decisions of the Court of Appeal in Markel and Schmitz. He concluded that the same reasoning applied to unidentified motorist coverage. The limitation period for unidentified motorist coverage does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim. See Chahine at paragraphs 36 to 39.

[20]      The plaintiffs also rely on the decision of Justice Leitch in Platero v. Pollock2015 ONSC 2922 (CanLII) which followed the decision in Chahine and also relied on the analysis of the Court of Appeal in Markel and Schmitz. See Platero at paragraphs 33 to 35.

[21]      TTC Insurance relies primarily on four decisions of the Court of Appeal. Those decisions are July v. Neal1986 CanLII 149 (ON CA)[1986] OJ No. 1101 (CA)Johnson v. Wunderlich1986 CanLII 2618 (ON CA)[1986] OJ No. 1251 (CA)Hier v. Allstate Insurance Co. of Canada1988 CanLII 4741 (ON CA)[1988] OJ No. 657 (CA) and Chambo v. Musseau1993 CanLII 8680 (ON CA)[1993] OJ No. 2140 (CA). Those decisions stand for the proposition that the limitation period for a claim under the unidentified motorist coverage of a policy of insurance begins to run when a plaintiff knew or ought to have discovered the accident involved the negligence of an unidentified motorist. TTC Insurance argues that these cases are binding authority and have represented the law of Ontario for decades.

[22]      The difficulty I have with the argument of TTC Insurance is that all of the Court of Appeal cases it relies upon were decided prior to the enactment of the current Limitations Act. They were also obviously decided before the decisions of the Court of Appeal in Markel and Schmitz.

[23]      The decisions in Chahine and Platero considered specific provisions and language of the current Limitations Act within the context of the Markel and Schmitz decisions. Both judges came to the conclusion that the limitation period for unidentified motorist coverage indemnity claims does not begin to run until a demand to indemnify has been made and the responding insurer has failed to satisfy the claim. I am unable to distinguish those decisions from the case before the court on this motion. They appear to be binding on this court.

[24]      TTC Insurance cited the contrary decision of Justice Sosna in Wilkinson v. Braithwaite2011 ONSC 2356 (CanLII) which held that the limitation period began to run when the plaintiff knew or ought to have discovered that the accident involved the negligence of an unidentified motorist. Although that decision involved the application of the current Limitations Act, it was decided before the Court of Appeal made its decisions in Markel and Schmitz. For this reason, the decisions in Chahine and Platero are to be preferred.

[25]      TTC Insurance also relies on the decision of Master McAfee in Bhatt v. Doe2018 ONSC 950 (CanLII)2018 ONSC 950 (Master) in which she applied the July decision. The decisions in Chahine and Platero are not mentioned by Master McAfee and nor are the Markel and Schmitz Court of Appeal rulings. I do not know whether those cases were considered by her. In any event, the decision of another master is of persuasive value only. I am not bound to follow it, especially in the face of contrary decisions of a judge.

[26]      Counsel for TTC Insurance also suggested that the Chahine and Platero decisions were simply incorrect. TTC Insurance submits that the judges hearing those motions did not have the benefit of the earlier Court of Appeal decisions cited by TTC Insurance on this motion. If they had those decisions, those cases might have been decided differently. That may or may not be the case. I do not know. However, it is not the role of this court to question those decisions or the basis on which they were decided. Justices Lofchik and Leitch decided precisely the same issue as the one before me, having regard to specific provisions of the current Limitations Act and within the context of Markel and Schmitz. Decisions of a judge are binding on a master. In my view, I am bound to follow the decisions of Justices Lofchik and Leitch.

The decision also underscores the futility of relying on s. 16(1)(a) to avoid a limitations defence.  This is not an especially clever argument, has been made many times, and I’m pretty sure never succesfully:

 [12]           I do not accept the plaintiffs’ first argument involving section 16 of the Limitations Act. Section 16(1)(a) states that there is no limitation period in respect of a proceeding for a declaration if no consequential relief is sought. This is not the situation on this motion. The proposed pleading states that TTC Insurance must pay Ms. Sukhu’s damages in the event they are found to have been caused by the negligence of the unidentified motorist. This is obviously consequential relief, namely the payment of damages. See Tapak v. Non-Marine Underwriters, Lloyd’s of London2018 ONCA 168 (CanLII) at paragraph 14. The Court of Appeal has also emphasized that declaratory relief must be read narrowly so that section 16(1)(a) is not used as a means to circumvent a limitation period. See Alguire v. Manufacturers Life Insurance Company (Manulife Financial)2018 ONCA 202 (CanLII) at paragraph 28.

Ontario: MVA litigation, lawyer’s letters, and the threshold

A lawyer’s letter stating that her plaintiff client has sustained permanent injuries is not, in the context of motor vehicle accident litigation, determinative of whether the plaintiff has discovered her claim within the meaning of the Limitations Act.

The plaintiff in Schaefer v. Ayeneababa suffered injuries in a motor vehicle accident.  The defendant moved for summary judgment dismissing the action as statute-barred by an expired limitation period.

The limitation period for a claim of permanent injury and impairment under section 276.5(5) of the Insurance Act doesn’t run until there’s a sufficient body evidence:

[4]              Both sides agree, as do I, that the limitations issue that is before me can be summarily adjudicated. Both sides also agree with the proposition set out in Ioannidis[2] – that in claims of permanent injury and impairment under s. 267.5(5) of the Insurance Act,[3] the court should grant “a degree of latitude to the plaintiff before declaring that the limitation period has begun to run.” A limitation period should not begin to run with regard to a serious and permanent impairment claim:

… until there is a sufficient body of evidence  available to be placed before a judge that, in counsel’s opinion, has a reasonable chance of persuading a judge on a balance of probabilities that the injury qualifies [as a serious permanent impairment].When such a body of material has been accumulated then and only then should the limitation begin to run.[4]

The defendant took the position that the plaintiff’s lawyer, by words and actions, “made clear to the insurer that the plaintiff’s injuries were permanent and that the limitation period would expire two years after the accident”.  The defendant relied on a letter from the lawyer to the insurer:

[11]         The defendant, however, points to a letter dated May 24, 2011 from the plaintiff’s lawyer to the insurer. The lawyer advises the insurer that as a result of the accident, the plaintiff suffered injuries to her neck, shoulders, back and hips and that the physical and psychological symptoms from these injuries (such as dizziness, headaches and acute depression) “are continuing up to the present.” The lawyer also notes that the limitation date is “fast approaching” and attaches a draft statement of claim. The draft statement of claim specifically pleads “permanent and serious impairments.” The lawyer then tries to file the claim by mail but the mailed-in claim is rejected by the court. The action is properly commenced on December 2, 2011.

The defendant argued that the letter was essentially an acknowledgement that the plaintiff’s injuries were permanent on the date of the accident.

Justice Belobaba correctly rejected this argument:

[12]         The defendant says that by these words and actions the plaintiff’s lawyer in essence acknowledged that his client’s injuries were indeed permanent and that he only had until June 24, 2011 (two years after the accident) to commence the action.

[13]         I do not agree. The fact that the plaintiff’s injuries were described as “continuing” is not, in and of itself, an acknowledgement of permanency. Nor is the fact that the lawyer attaches a draft statement of claim that pleads “permanent and serious impairments.” This claim is made in almost every motor vehicle accident that results in significant injury. And, in any event, pleadings are not evidence.

[14]          The fact that the lawyer noted in his letter that the two-year limitation period is “fast approaching” says as much about his desire to file the claim within the presumptive two-year period just to be on the safe side, as it does about an admission that his client knew she sustained permanent soft-tissue injuries at the date of the accident – which is generally an impossibility and is here rebutted by the medical documentation that the lawyer reviewed.

[15]         In his affidavit, the lawyer lists the various clinical and psychological reports that he had reviewed (none of which describe the impairments as permanent) and explains that when he sent the May 24, 2011 letter to the insurer, he “did not have the necessary medical reports and records to prove [that the impairments were permanent].” It was only after requesting a medical opinion from Dr. Sequeira on October 20, 2011 and receiving the doctor’s report a month later that he “formed the opinion that the plaintiff had sustained an injury that met the requirements of s. 267.5(5) of the Insurance Act.” The lawyer commenced the action less than a month later on December 2, 2011.