Case information

Limitation of actions — Insurance — Disability insurance — Denial of coverage — Whether it is legally appropriate for a plaintiff to commence court proceedings while reasonably pursuing an informal appeal process in which he was invited to participate by the defendant?

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On February 17, 2010, Mr. Pepper sued The Standard Life Assurance Company of Canada for payment of long-term disability benefits. Standard Life brought a summary judgment motion to have the action as against it dismissed as statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. Mr. Pepper made a cross-motion for a declaration that his action against Standard Life is not statute-barred and for a judgment dismissing the limitation period defence.

Mr. Pepper was injured on March 13, 2005. He had short- and long-term disability benefits from Standard Life. The insurance policy provided no right to appeal or an appeal process for claimants who are denied benefits, but Standard Life provided Mr. Pepper with repeated opportunities to appeal its refusals of short- and long-term benefits. Mr. Pepper successfully appealed the refusal of short-term benefits, but had no success appealing the refusal of long-term benefits. Transitional benefits were paid until October 31, 2007. In early January 2008, before receiving a decision on his final appeal, Mr. Pepper retained counsel. On February 25, 2008, Standard Life denied that appeal, again inviting Mr. Pepper to provide additional information. Mr. Pepper believed that his benefits had not been finally terminated. Evidence from a representative of Standard Life indicated that Mr. Pepper’s long-term disability claim had not been finally denied. From then until the commencement of the claim in February 2010, counsel requested and received the payment summary on the claim, but there was no other activity on it.

The motions judge found that discoverability concerns meant that the limitation period did not begin to run until on or about March 1, 2009. He dismissed Standard Life’s motion and granted Mr. Pepper’s cross-motion. The Court of Appeal allowed the appeal and issued an order dismissing the action, holding that Mr. Pepper should have been aware that he had a cause of action against the insurer when it stopped paying his long-term disability benefits on November 1, 2007. No claim of estoppel was available against the insurer.