Limitation Periods Revisited – Western Life Assurance Company v. Penttila

Limitation Periods Revisited – Western Life Assurance Company v. Penttila

The Ontario Divisional Court revisited the vexing topic of disability benefits and the applicable limitation period in Western Life Assurance Company v. Penttila[i].  For claimants, the good news is that the principle of “discoverability” is alive and well, which means that the calculation of when the two year limitation period in Limitations Act starts to run depends on the circumstances of the particular case.

Here is a brief chronology of the facts in the Western Life case:

May 16, 2012 – LTD approved

February 19, 2013 – Western advises the claimant that benefits will be cut-off on March 7, 2013

April 8, 2013 – Plaintiff advises Western she wishes to appeal the decision

November 13, 2013 – Western requests medicals from plaintiff – appeal decision pending

October 21, 2014 – Western advises that appeal is denied – position unchanged

May 25, 2015 – Plaintiff requests letter from Western giving reasons

June 18, 2015 – Western advises that they believe she can perform her job

June 6, 2016 – Statement of Claim is issued in the Ontario Superior Court of Justice

Western brought a summary judgment motion to dismiss the case on the basis that the 2-year limitation period expired on February 19, 2015 (2 years from the initial notice letter advising that benefits would be cut-off on March 7, 2013).

Both the motion judge and now the Divisional Court decided that the 2 years started to run from the date when commencing legal action would be appropriate. In this case, that date was determined to be October 21, 2014, and therefore the 2-year limitation period expired on October 21, 2016. The lawsuit was commenced on June 6, 2016, more than 4 months prior to the expiry of the limitation period as determined by both the motion judge and the Divisional Court.

This decision appears to reinforce the decision of the Ontario Court of Appeal in the Kassburg v. Sun Life[ii] case which sets out the “clear and unequivocal” denial test.

For claimants, it is best to seek out legal advice as soon as possible after a claim has been denied to ensure that legal action is taken to avoid having to revisit the ongoing debate regarding the expiry of 2 years from the date benefits are denied. The safer course is to ensure that action is taken to protect the limitation period prior to the earliest possible expiry of the two years. If a claimant is uncertain about whether they are out of time, they shouldn’t necessarily give up hope, but they should not delay consulting an experienced disability insurance lawyer.

[i] 2019 ONSC 14, 144 O.R. (3d) 144.

[ii] 2014 ONCA 922


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