Treasures of the Nile Imports Ltd. v. Crawford Global Technical Services

[2010] B.C.J. No. 1319

2010 BCSC 932

British Columbia Supreme Court

B.M. Greyell J.

June 30, 2010

The action, arising from two water damage claims, was brought by the insured to recover damages under its insurance policy with the insurer. The insurer brought an application for dismissal of the claim against it on the basis that the action was not brought within the time limitation in section 22(1) of the Insurance Act.

The Court held that section 22(1) does not require objective certainty. The beginning of the running of the limitation period is the date upon which the insurer receives a reasonable amount of information permitting it to carry out an assessment of liability in good faith.

In this matter, the insurer had difficulty verifying the amount of both losses due to the insured’s poor system of accounting and record keeping. With respect to the first loss, the adjuster ultimately estimated the value of the loss and recommended an interim payment to the insured. However, the adjuster outlined various concerns in his report regarding the documentation provided to substantiate the claim. The insurer paid a portion of the recommended amount and later paid a further amount. The Court concluded that at that time, the insurer had been provided with sufficient information to enable it to assess the claim. The insurer had given the insured many opportunities to provide the information it sought to verify the claim. The documentation provided was deficient and the insurer had acted to assess its liability under the claim on the documents available.

The second claim occurred one year later at a different location. The insured and the insurer had significant disagreement over the extent of the merchandise damaged in the loss. Subsequent discussions did not resolve the disagreement. The insurer wrote to the insured confirming the position taken by the insurer with regard to content and business interruption losses arising from the claim. The insurer then wrote to put the insured on notice of the commencement of the one-year limitation period.

The Court found that with respect to both claims, the insurer had sufficient information to determine its liability under the claim on the dates specified. Further, the insurer put the insured on notice of the limitation period. The insured lost the ability to bring a claim when he sought to continue to negotiate his claim beyond the limitation date. As a result, the Court dismissed the insured’s claim because it was not commenced within the relevant period.