Justice Perell's recent decision in Farhat v. Monteanu1 serves to further complicate the current understanding of the impact of the threshold provision in the Ontario Insurance Act on the applicability of the Ontario Limitations Act, 2002 in the context of motor vehicle accident litigation. In particular, his decision appears to create an inconsistency in the law with respect to the commencement of the limitation period in motor vehicle accident litigation involving claims for pecuniary and non-pecuniary damages.
The Motor Vehicle Accident
In the Farhat case the plaintiff was injured when his vehicle was rear-ended by the defendant's vehicle on May 18, 2006. Within a few weeks of the accident, the plaintiff's lawyer put the defendant on notice of the plaintiff's potential claim advising that the plaintiff had sustained "serious injuries" as a result of the accident.
Nine months after the accident, the plaintiff was diagnosed with a non-dermatoromal sensory deficit in his left upper and lower extremities. This diagnosis ultimately formed the basis of a chronic pain claim.
The Action and the Summary Judgment Motion
Two years and 32 days after the accident (on June 19, 2008), the plaintiff commenced a personal injury action against the defendant. The plaintiff's claim was limited to non-pecuniary damages. As in all motor vehicle accident litigation, to recover non-pecuniary damages from the defendant, the plaintiff had to satisfy the pre-conditions of s. 267.5(5) of the Insurance Act.2 Referred to as the "threshold", s. 267.5(5) of the Insurance Act requires demonstration of either a "permanent serious disfigurement" or a "permanent serious impairment of an important physical, mental or psychological function" for non-pecuniary damages.
The defendant moved for summary judgment dismissing the plaintiff's claim as statute-barred since it was brought outside of the applicable limitation period. The plaintiff also sought partial summary judgment in order to defeat the defendant's limitation period defence.
The Court Rejects the Limitations Act Defence
The defendant argued that pursuant to s. 5(2) of the Limitations Act, 20023 there is a presumption that a motor vehicle accident claim is discovered on the date the accident occurred. The defendant suggested that the plaintiff must provide evidence that the issuance of the claim was delayed because of the need to obtain medical confirmation that the plaintiff's serious injury was a permanent injury and thus, met the threshold under s. 267.5(5) of the Insurance Act. The defendant submitted that in failing to put evidence before the court in this respect the presumption raised by the application of s. 5(2) of the Limitations Act was not rebutted by the plaintiff.
Justice Perell confirmed that on such motions the onus is on the plaintiff to persuade the court that: (a) the seriousness of his injury was not discoverable within the applicable limitation period and (b) he acted with due diligence to discover if there was a cause of action. He then went on to cite the decision of the Ontario Court of Appeal in Everding v. Skrijel4 in which it was held that a plaintiff will not have discovered his or her claim before he or she knows they have a substantial chance to succeed in recovering a judgment for damages. Referring to the Ontario Superior Court's decision in Hoffman v. Jekel5, Justice Perell stated "[a] person cannot be expected to commence an action before he or she knows that the necessary elements as set out in the legislation can be established on the evidence." [Emphasis added.]
Significantly, Justice Perell found that s. 267.5(5) of the Insurance Act had the effect of protecting minor personal injury claims from the running of a limitation period for "a period of time commensurate with how long it would take a reasonable person with the abilities and in the circumstances of the plaintiff to have discovered that the threshold for a claim had been surpassed." As stated by Justice Perell:6
Much to the dismay of insurance companies of defendants, almost invariably, it will take several months to determine whether ongoing pain suffered as a result of an accident is a permanent serious impairment. It will typically, almost invariably, be the case that a plaintiff with only a chronic pain claim will not know that the claim surpasses the Insurance Act threshold until sometime after the date of the accident. [Emphasis added.]
Justice Perell found that in the case before him the plaintiff need only show that he could not have discovered his chronic pain claim between the date of the accident and June 18, 2006 (two years before the date the action was commenced). He was satisfied the plaintiff had done so. Ultimately, the defendant's motion for summary judgment was dismissed and the plaintiff's partial summary judgment motion was granted.
Implications of the Decision
Unlike discoverability in most other personal injury actions (i.e. slip and falls), Justice Perell's decision suggests that the discovery of a non-pecuniary claim in connection with a motor vehicle accident is highly dependent on the availability of credible evidence to establish the seriousness of the plaintiff's injuries.
Respectfully, in the authors' view, the precedent created by Justice Perell's decision is likely to create significant inconsistency for two reasons:
- First, the decision may lead to the inconsistent application of the provisions of the Limitations Act, 2002 where a motor vehicle accident claim involves claims for both non-pecuniary and pecuniary damages, as only non-pecuniary damages, and not pecuniary damages, are subject to the threshold provisions described above; and
- Second, the decision appears to create an exception to the rule set out in s. 5(1) of the Limitations Act, 2002. The language of s. 5(1) of the Limitations Act, 2002 states that a claim is discovered on the earlier of the day on which the person with the claim first knew "that the injury, loss or damage occurred". There is no suggestion in the language of this provision that the plaintiff must know the seriousness or extent of their injuries for the limitation period to commence.
To date, no appeal has been filed in respect of Justice Perell's decision. Pending further judicial treatment, Justice Perell's decision could result in defendants remaining potentially exposed to liability for non-pecuniary damages arising out of a motor vehicle accident for extended periods of time, and possibly until the expiry of the 15 year ultimate limitation period set out in the Limitations Act – an illogical and arguably unjust result.
1 Farhat v. Monteanu, 2015 ONSC 2119. [Farhat]
2 Insurance Act, R.S.O. 1990, c. I.8
3 Limitations Act, 2002, SO 2002, c 24, Sch B.
4 Everding v. Skrijel, 2010 ONCA 437
5 Hoffman v. Jekel, 2011 ONSC 1324.
6 Farhat, supra note 1 at para 29.