October 12, 2018
On October 11, 2018, the Nova Scotia Court of Appeal released its first decision considering the saving provision in Section 12 of Nova Scotia’s new Limitations of Actions Act. In Barry v. Halifax (Regional Municipality) the Court offers insurers significant insights into how N.S. courts will interpret and apply the saving provision of Section 12 of the new Act:
The Motion. Ms. Barry alleged she was injured on a transit bus in March 2013 when the driver unexpectedly slammed on the brakes after an unidentified motorist cut it off. In 2015, Ms. Barry brought an action for personal injury damages against the Municipality. In November 2016, Ms. Barry brought a motion in the N.S. Supreme Court to add the Municipality’s automobile insurer as a defendant to the action based on Section D of the N.S. Standard Automobile Policy. Section D enables a claimant to claim damages from an insurer that they would otherwise be “legally entitled to recover” from an at-fault unidentified or uninsured motorist. The insurer argued that Ms. Barry had missed the two-year limitation period set out in the Standard Automobile Policy for such claims, and the court should deny her motion.
The Motion Decision. The motions judge, relying on Civil Procedure Rules 35.08 and 83.04, concluded a party could not be joined to an action once pleadings were closed if the limitation period had expired. The motions judge also concluded that the court must consider the insurer’s limitations defence in its evaluation under Rule 35.08. An analysis of the limitation defence was necessary to determine if it was expired in the first place, including an assessment of the saving provisions under Section 12 of the Act. Section 12(3) of the Act allows a court to disregard an otherwise valid limitations defence based on hardship, but only in situations where the claimant seeks to recover damages “in respect of personal injuries”. However, the motions judge found these “saving provisions” under Section 12 of the Act did not apply in this case because the Standard Automobile Policy was not an “enactment”.
The Appeal Decision. The Court of Appeal held the motions judge was correct to conduct a limitations analysis, based on Rule 35.08 – but that she committed three reversible errors in her analysis:
Given the outcome, the motions judge must have concluded that the degree of hardship advanced by each party favoured Ms. Barry. However, as noted earlier, there was no evidence adduced by her on this point, nor did the motions judge address how she concluded Ms. Barry would suffer any hardship at all. It would appear the motions judge was prepared to presume hardship in the absence of evidence from Ms. Barry, yet refused to do so for [the insurer]. This constitutes an error in principle justifying appellate intervention.
It is incumbent on a claimant to adduce evidence which addresses the factors contained in s. 12(5), in order to inform the s. 12(3) assessment. Although s. 12(5) mandates a judge to “have regard to all the circumstances of the case”, those who fail to provide an evidentiary foundation do so at their peril. Similarly in response, a defendant (or proposed defendant) is well-advised to provide a sufficient foundation to permit a comprehensive consideration of the factors in s. 12(5) in order to better inform the hardship assessment. I turn now to consider the factors.
Since the motions judge failed to consider two of the factors listed in Section 12(5), the Court intervened and applied its own analysis to all the factors based on the motion record that was before the motions judge. Based on its review of the motion record and the following factors, the Court held that the insurer would suffer greater hardship if its limitations defence were disallowed, concluded that the insurer’s limitations defence should be allowed and refused to add it as a defendant, and awarded it costs:
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