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:

  • Section D of the Standard Automobile Policy is an "enactment" to which section 12 of the Act – including its "saving" provisions – can apply. Thus a motions judge can consider whether to disallow a limitations defence based on the Section D limitation period. In this case, the two-year limitation period in the Standard Automobile Policy for Section D claims was applied to bar the claim against the insurer, and ran from the date of the accident.
  • There is no duty on a defendant tortfeasor to advise the claimant of insurance coverage available, which in this case was Section D. A claimant cannot "plead ignorance" to insurance coverages available where that information was readily available.
  • The Court applied the new Act to a cause of action that arose and expired before the Act was effective (September 1, 2015), implying – though not confirming – that claimants might not be entitled to rely on the broader saving provisions under the former limitations regime.
  • In the absence of evidence, a judge cannot presume that an individual will suffer greater hardship than will the insurance company responding to the claim.
  • The claimant bears the burden of adducing enough evidence to invoke the saving provision in Section 12(3) of the Act – and if the claimant does not adduce evidence going to each and every factor in Section 12(5) of the Act, it does so "at its peril".

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:

  • The Standard Automobile Policy is an "Enactment". First, the motions judge erred by holding the Standard Automobile Policy is not an "enactment". For the purpose of Section 12 of the Act, a "limitation period" is either one found in the Act itself, or in any other "enactment". Central to the appeal was therefore whether the Standard Automobile Policy was an enactment to which Section 12 could even apply. The Court held the language of the Standard Automobile Policy, including the two-year limitation period for Section D claims, is incorporated into every contract of insurance by virtue of the Regulations to the Insurance Act. Being statutory in nature, the policy is an "enactment" and accordingly, a motions judge can consider whether to disallow a limitations defence based on the limitation period in Section D.
  • Insurer Receives Equal Treatment. Second, the motions judge erred by holding Ms. Barry and the insurer to different evidentiary standards on their respective degrees of hardship. The Court next criticized the motion judge's analysis with respect to the hardship each party would bear if the court upheld or disallowed the insurer's limitations defence. Since neither party adduced any evidence of hardship at the motion hearing, the Court held it was an error in principle for the motions judge to presume that Ms. Barry would suffer hardship if the limitation defence were upheld. Justice Bourgeois wrote as follows (at para. 75):

    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.
  • The Claimant Bears the Burden. Third, the motions judge erred by failing to consider all the factors relevant to disallowing a limitations defence in her provisional assessment of Section 12(3) of the Act. The Court confirmed that when deciding whether to invoke Section 12(3) to disallow a limitations defence, a motions judge must consider every of the factors in Section 12(5), and that the claimant bears the burden of adducing evidence on each In the words of Justice Bourgeois (at para. 78):

    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:

    • Barry's reasons for missing the limitation period were not compelling.
    • The insurer did not detrimentally influence Ms. Barry to miss the limitation period in any way.
    • In the Regulations establishing Section D coverage, the insurer is entitled to early notice of a potential claim, and the insurer in this case would be negatively impacted if it was denied that right.
    • Barry was not "incapacitated" from bringing her claim.
    • It was not reasonable for Ms. Barry to have expected the Municipality to advise her of a potential Section D claim.
    • The limitation period had already passed by the time Ms. Barry retained counsel, and a further year passed before counsel notified the insurer of a potential claim.
    • Barry provided no evidence on the strength of her case against the insurer to show that she would be "legally entitled to recover" damages from an unidentified motorist.
    • Barry did not provide sufficient medical evidence to advance a "strong case regarding the nature, extent, duration or causation of any injuries being claimed as arising from the incident".

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