In a recently released decision, the Court of Appeal provided further guidance on the meaning of the word “appropriate” with respect to section 5(1)(a)(iv) of the Limitations Act, 2002 (“Act”).

In Pepper v. Sanmina-Sci Systems (Canada) Inc., 2017 ONCA 730, the plaintiff sued the defendant insurer for payment of LTD benefits. The insurer stopped payment of benefits on November 1, 2007. The Statement of Claim was not issued until February 17, 2010. The defendant insurer brought a summary judgment motion on the basis that the limitation period had expired.

The Court below focused its analysis on the language of s.5(1)(a)(iv) which provides as follows:

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

  1. that the injury, loss or damage had occurred,
  2. that the injury, loss or damage was caused by or contributed to by an act or omission,
  3. that the act or omission was that of the person against whom the claim is made, and
  4. that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). [emphasis added]

In denying the motion, the motion judge held as follows:

“In my opinion, on the facts of the immediate case, given the extensive history of providing benefits, denying benefits, considering appeals of the denials, making more denials, inviting further appeals, and progressively and retroactively restoring benefits, there was some objective reason to think that the commencement of the limitation period had been delayed. I, therefore, conclude that Mr. Pepper’s claim is not statute-barred.”

On appeal, the Court of Appeal reversed the decision of the lower court. The Court noted that the plaintiff retained a lawyer in January 2008 to deal with his claim for disability benefits and that this “belies any suggestion of a lack of awareness of the appropriateness of commencing a lawsuit at that point in time.”

The Court of Appeal applied language from its earlier decision of Markel Insurance Co. of Canada v. ING Insurance Co. of Canada and held that by November 1, 2007, the plaintiff had a “fully ripened claim” and that was the “appropriate” time to commence litigation.

As the Court noted in Markel:

…the word “appropriate” must mean legally appropriate. To give “appropriate” an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened… would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.

The word “appropriate” was previously seen as somewhat of a “saving provision” in the Act. However, this most recent decision should make it clear for all parties and their counsel that whether it is “appropriate” to commence an action means "legally appropriate". Tactical and strategic considerations do not come into play.