Significance of policy language shown in Ont. Super. Ct. decision finding action not limitation-barred

In Kassburg v. Sun Life Assurance Company of Canada, Ontario Superior Court Justice Ellies dismissed the LTD insurer’s motion for an order that the plaintiff’s action is limitation-barred.

The defendant insurer asserted that there was a one-year limitation under the contract but if that did not apply, then the two-year Limitations Act, 2002 period applied, and ran from the date of the letter denying benefits.

The Court held, per the Ont. C.A.’s Boyce v. Co-operators decision, that while this may be a business agreement because it was a group insurance policy, the requirements for validly contracting out of the statutory limitation were not met as the language used was ambiguous, (as there were differences between the policy wording and a booklet, the latter of which was incorporated by reference into the policy), and therefore a one-year limitation did not apply, and that the two-year limitation period ran from the date the plaintiff’s final “appeal” to the insurer was rejected so that the action was instituted in time, and His Honour made such a declaration even though the plaintiff had not brought a motion requesting it.

His Honour’s view of the matter is summarized in his conclusion:

[42] In its written and oral submissions, the defendant highlighted the importance of limitation periods to society in general, and to the parties in particular. I agree that limitation periods are very important. For that reason, it is difficult to understand why the defendant… never once throughout its correspondence with the plaintiff and her representatives set out its position with respect to the date the limitation period commenced and the date it would end. Certainly, the defendant could not have been afraid to make a mistake and inadvertently prejudice either the plaintiff or itself with respect to the limitation date, given its position that that date was crystal clear from the terms of the insurance contract.