In Tucker v. Unknown Person, the Court of Appeal held that in a claim for breach of indemnity pursuant to an insurance contract, the limitation period begins on the date of the insured’s loss of the right to be indemnified. This loss occurs when the insurer refuses to pay. Refusal occurs on the earlier of an express refusal or the day after the insured demands indemnification and does not receive it.
In arriving at its decision, the Court followed the Ontario Court of Appeal decisions in Markel and Schmitz. It’s notable that Ontario jurisprudence is influencing the direction of Newfoundland and Labrador’s limitations law because they have fundamentally different limitations regimes. Ontario is one of the “reformed” jurisdictions. Broadly speaking, these are jurisdictions with one general and ultimate limitation period and codified discovery rules. In Newfoundland and Labrador, it remains necessary to classify the action to determine the applicable limitation period and, where appropriate, to apply the common law principle of discoverability. Nevertheless, the Court’s adoption of Ontario limitation law indicates that reform, if only de facto, is at work.