The Respondent commenced an Action against his insurer, Northbridge General Insurance Corporation (“Northbridge”) for amounts that exceeded the minimum limits under his motor vehicle liability insurance. Northbridge applied for Summary Dismissal on the basis that the Respondent’s claim was outside the limitation period. Northbridge’s Summary Dismissal application was dismissed by an Applications Judge. Northbridge appealed.

The Respondent filed a tort claim arising out of a motor vehicle accident on July 31, 1998. Following settlement of the tort claim on October 31, 2017, the Respondent commenced the within Action against Northbridge on December 20, 2018.

The Respondent argued that the limitation period began on October 31, 2017, when the underlying tort action was settled, and that the 12-month limitation period in his policy endorsement was invalidated by the Limitations Act, and thus a 2-year limitation period applied.

Justice Kraus held that the Applications Judge correctly determined that the limitation period began on October 31, 2017, when the underlying tort action was settled, as that was when the Respondent knew or ought to have known that his claim exceeded the minimum insurance limits.

Kraus J. considered the Court of Appeal decision in Shaver v Co-operators General Insurance Company, 2011 ABCA 367 (“Shaver”), where the Court found that the contractual limitation period in a policy endorsement only began to run on discovery. That is, when the plaintiff learns of inadequate insurance, or of total claims exceeding minimum insurance limits, or both. The Court of Appeal in Shaver held that it may well take a long time until an injured person can find whether the total claims from the accident exceed the statutory minimum limits for motor vehicle liability insurance in Alberta.

In this matter, Justice Kraus found that the 12-month limitation period in the policy was invalidated by Section 7 of the Limitations Act, which provides that “an agreement that purports to provide for the reduction of a limitation period provided by this Act is not valid”.

The limitation period began to run on October 31, 2017. The Respondent filed his Statement of Claim on December 20, 2018, within the 2-year limitation. Accordingly, Northbridge’s Appeal was dismissed.