ING Insurance Company of Canada v. Miracle (Mohawk Imperial Sales and Mohawk Liquidate), 2011 ONCA 321

The insured, Mohawk Imperial Sales and Mohawk Liquidate (Mohawk), owned a gas bar covered by a CGL policy with ING which contained an exclusion for pollution liability. Mohawk was sued by the Attorney General of Canada after gasoline was found to have leaked from its property onto another property. ING applied for a declaration that it had no duty to defend or indemnify Mohawk due to the exclusion.

The application judge found ING had a duty to defend, as Mohawk was not an “industrial polluter” and it was alleged that the pollution was a result of negligence. The Court also held that a reasonable insured would expect the exclusion to apply to industrial pollution and not to a gas leak. ING appealed.

The appeal was allowed. Mohawk was engaged in an activity with a known risk of pollution. The exclusion clearly extended to activities that carry a known risk of pollution and environmental harm. Liability insurance was intended to cover risks, not outcomes which are certain or inevitable. The exclusion was neither ambiguous nor contrary to the parties’ reasonable expectations.

In conclusion, the claim against Mohawk fell squarely within the exclusion and ING was therefore not required to defend or indemnify it against the claim brought by the Attorney General.

Moein-Ziaie v. Axa Insurance Inc., 2011 ONSC 4623

The plaintiff suffered severe injuries, including a fractured neck, as a result of a motor vehicle accident in the State of Kentucky in 2007. He was found unconscious by the police and taken to the hospital. He alleged that the tractor-trailer he was driving was cut off by an unidentified motor vehicle.

An investigating detective attended at the accident scene and made a report determining that this was a single vehicle accident caused by the plaintiff being inattentive or asleep while driving.

The plaintiff’s claim was pursuant to the Family Protection Coverage Endorsement found in his standard automobile insurance policy. The endorsement included unidentified motorist coverage, which was available if the claimant’s own evidence of an unidentified automobile was corroborated by other material evidence, defined as independent witness evidence or physical evidence. The issue therefore was whether there was any other material evidence to corroborate the plaintiff’s evidence.

In the result, the motion was granted. There was no independent witness. There was no contact between the plaintiff’s vehicle and any other vehicle. There was no physical evidence indicating the involvement of an unidentified vehicle. In addition, the detective saw no sign of braking or skid marks.

The motions judge was unable to identify other material evidence that corroborated the plaintiff’s evidence. Thus in the view of the motions judge, there was no genuine issue for trial.

Limitation of Actions Act

As a reminder, April 30, 2012 is the end of the 2-year transition period under the new Limitation of Actions Act.

When the new Limitation of Actions Act came into force on May 1, 2010, the limitation period for many types of claims were reduced. To address potential problems, the Act provides a two year transition period allowing claims lapsed under the new Act to survive, if those claims would have survived under the previous Act.

What this means is that if an incident occurred prior to May 1st, 2010 and a claim arising from that incident would be statute barred under the new Limitation of Actions Act, an inquiry must then be made as to whether the claim would be barred under the previous Act. If the claim would not have lapsed under the previous Act, an action could be filed until the day it would lapse under that Act, but all such claims will expire on April 30, 2012 at the latest.

As an example, John Smith suffered a slip and fall at a local restaurant on January 1, 2009. Under the Limitation of Actions Act, Mr. Smith’s claim would lapse two years from the date of the incident on January 1, 2011. However, due to the transition period, we look at whether the claim lapsed under the previous Act. In this case, the prior applicable limitation period would be six years, so the claim would lapse on January 1, 2015. Due to the transition period , the claim now lapses on April 30, 2012.

In addition to the standard two year transition period, claims by the crown are provided with a six year transition period.

The practical effect of this transition period is that there will be a substantial number of claims expiring on April 30, 2012 and could lead to a large number of actions filed in April 2012.

In addition to the transition period, it should be noted that the new Act provides that certain actions “restart the clock” on limitation periods. This can occur in two different circumstances, upon acknowledging, in writing, liability or an obligation towards the claim or when making a partial payment on a claim.

If an acknowledgment of liability or a partial payment is made on a claim, a new limitation period starts from the date of the acknowledgment or payment. In order to avoid the commencement of a new limitation period, correspondence admitting liability or providing part payment must be made on a without prejudice basis or must state that you are reserving the right to rely on the limitation period as a defence to the claim.

Upon making a partial payment or admitting liability, ensure that you reserve your right to rely on the limitation period or you will provide claimants with a longer period to file an action.