Court Delivers Clear Ruling on Renewal, Amendment and Disability Plan Limitation Periods in Thornton v. RBC General Insurance Company
August 13, 2014
By Michelle Awad, QC, at McInnes Cooper
Recently, the NS Supreme Court decided to dismiss three motions by an insured – and grant the insurer’s Motion for Summary Judgment – offering a helpful review of both the NS Civil Procedure Rules for amending and renewing actions, and limitation periods applicable to disability plans:
- Renewal of Notice of Action and Statement of Claim. When the filing of a Statement of Defence doesn’t extinguish a defendant’s ability to challenge the court’s jurisdiction, what Rules apply when they’ve changed mid-stream, whether the Court can infer inadvertence and what time frame is relevant to assess prejudice.
- Amending Notice of Action and Statement of Claim. The difference between “misnaming” a defendant – and “adding” one.
- Disability Policy Limitation Periods. Not all periodic payments result in rolling limitation periods– and how to tell the difference.
McInnes Cooper’s Michelle Awad, QC represented the successful insurer, RBC General Insurance Company.
On April 15, 1997 Mr. Thornton was injured in an MVA. He sued the third party and in 2005 settled that claim. He also sought disability benefits pursuant to a group policy issued to his employer, Volvo; at the time, Unum Canada provided Volvo’s employees with LTD coverage. In 1998, Unum confirmed to Mr. Thornton that he was “not eligible for benefits”. Effective May 1, 2004, RBC Life Insurance Company assumed certain of Unum’s obligations, including this claim. In January 2008, Mr. Thornton filed a lawsuit against – but never served – Unum. In July 2012, he filed an amended pleading to substitute RBC General Insurance Company for Unum, and in August 2012, he served RBC General with the amended pleading. Mr. Thornton did not renew the Notice of Action and Statement of Claim at any point after he filed it in 2008. RBC General defended on the basis that RBC Life – not RBC General – was the proper defendant and in any event the Court had no jurisdiction to hear the action because the limitation period had expired. In January 2014 Mr. Thornton filed another motion to replace RBC General with RBC Life.
Mr. Thornton brought three Motions to address the issues in his lawsuit; RBC General brought one for Summary Judgment. On July 2, 2014, the NS Supreme Court dismissed all three of Mr. Thornton’s motions – and granted Summary Judgment in favour of RBC General:
No Renewal of Notice of Action and Statement of Claim. The Court first dismissed Mr. Thornton’s motion to renew his Notice of Action and Statement of Claim:
- Defence Expressly Challenged Jurisdiction. The Defendant’s ability to challenge the Court’s jurisdiction wasn’t extinguished by filing a Statement of Defence because the Defence included an express challenge to the Court’s jurisdiction.
- “New” Civil Procedure Rules Apply. The “new” NS Civil Procedure Rules applied. The “old” Rules were in effect when Mr. Thornton first filed his Notice of Action and Statement of Claim – and when it should have been renewed. But the “new” Rules came into effect in 2009 – before Mr. Thornton brought his motion to renew the Notice of Action and Statement of Claim.
- Court Can’t Infer Inadvertence. To renew, Mr. Thornton had the burden of proving that the Notice of Action and Statement of Claim expired because of inadvertence – and the Court can’t infer it. Mr. Thornton didn’t explain why the expiry occurred or provide any evidence to substantiate inadvertence.
- Relevant Time for Prejudice Assessment. The time after the expiry of the Notice of Action and Statement of Claim is most relevant to assessing whether Mr. Thornton proved that RBC General would suffer prejudice that couldn’t be compensated in costs. Mr. Thornton could have presented evidence that medical records and relevant witnesses respecting his health and ability to perform his job since 1997 were still available – but he didn’t.
No Amendment for New – Not Misnamed – Party. Mr. Thornton’s motion to amend to replace RBC General with RBC Life effectively added a new party – it didn’t correct a “misnamed” party. NS Civil Procedure Rule 35.08 (“Judge Joining Party”) and not Rule 35.06 (“Error in Joining Party”) therefore applied, but in either case the expiration of the limitation period justified refusal of the amendment.
Limitation Period Isn’t Rolling – But is Expired. Not all periodic payments result in rolling limitation periods; the Court must analyze the specific language of the disability policy to determine the type of limitation period. The limitation period isn’t rolling when it runs from a specific event rather than from when a cause of action arises. The date of the event that starts the clock on the limitation period can move if the insurer has investigated the claim and/or paid benefits for a time; in those cases, the insurer’s unequivocal denial of entitlement starts the clock on the limitation period. The Unum policy didn’t create a rolling limitation period: it began to run when the proof of claim was required, not when the cause of action arose – and it was expired.
Summary Judgment For Insurer. The Court granted RBC General’s Motion for Summary Judgment: Mr. Thornton named the wrong Defendant, the pleadings expired without renewal before being served and the limitation period for the claims against the “new” Defendant, RBC Life, had expired before he commenced his action against it.
Read the NSSC’s decision in Thornton v. RBC General Insurance Company, 2014 NSSC 215.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Insurance Defence Team to discuss this topic or any other legal issue.
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