



COURT OF APPEAL FOR ONTARIO

CITATION: Nasr Hospitality Services Inc. v. Intact Insurance,
    2018 ONCA 725 DATE: 20180904

DOCKET: C64139

Feldman, Benotto and Brown JJ.A.

BETWEEN

Nasr Hospitality Services Inc.

Plaintiff (Respondent)

and

Intact Insurance

Defendant (Appellant)

W. Colin Empke, for the appellant

Doug LaFramboise, for the respondent

Heard: February 27, 2018

On appeal from the order of Justice
    Paul M. Perell of the Superior Court of Justice, dated July 5, 2017, with
    reasons reported at 2017 ONSC 4136.

Brown J.A.:

I.

OVERVIEW

[1]

At issue on this appeal is the application of the appropriate means
    element of the discoverability test under s. 5(1)(a)(iv) of the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B (the 
Act
), to a claim for
    indemnification under a commercial insurance policy.

[2]

The appellant, Intact Insurance (Intact), moved for summary judgment
    to dismiss the action of the respondent, Nasr Hospitality Services Inc.
    (Nasr), for indemnification under a commercial insurance policy for losses caused
    by a January 31, 2013 flood to its business premises. Intact argued that Nasrs
    action was statute-barred, having been commenced on April 22, 2015 after the
    expiration of the basic two-year limitation period under the
Act
.

[3]

The motion judge dismissed Intacts motion and declared that the
    limitation period did not begin to run until July 2013. Although the motion
    judge assumed Nasr knew on February 1, 2013 that a loss had occurred which was
    caused by an act or omission of Intact, he concluded Nasr did not know that a
    proceeding would be an appropriate means to remedy its loss until July 2013,
    when Intact formally denied its claim.

[4]

Intact appeals.

[5]

I would allow the appeal, set aside the order of the motion judge, and
    grant summary judgment dismissing Nasrs action. Nasr conceded that it was
    foreclosed from arguing that Intacts conduct after notification of the claim
    on January 31, 2013 gave rise to a promissory estoppel that precluded Intact
    from relying on the
Act
. Given that concession and the specific facts
    of this case, the motion judge erred in using that same conduct by Intact to
    displace the
Acts
presumption that Nasr knew on February 1, 2013 that
    a proceeding was an appropriate means to remedy its loss and, instead, extending
    the date to July 2013.


II.

FACTS

[6]

In or around May 2012, Nasr acquired commercial premises at 5550 Stanley
    Avenue, Niagara Falls (the Premises), from which it intended to operate a
    restaurant.

[7]

On or about April 25, 2012, Nasr purchased a commercial insurance policy
    from Intact (the Policy).

[8]

According to the statement of claim, the Policy covered losses caused by
    water damage.

[9]

On the morning of January 31, 2013, the principal of Nasr, Mr. Elsayed
    Nasr, discovered water damage to the Premises caused by a ruptured bathroom
    pipe. That day Mr. Nasr called a broker, Surnet Insurance Group Inc. (Surnet),
    who immediately reported the water damage to Intact.

[10]

The
    record contains conflicting evidence about the use of the Premises at the time
    of the water damage. The statement of claim pleads that light snacks and soft
    drinks were being sold from the premises until the time of the flood, and that Mr.
    Mustapha Taamneh had entered an agreement to rent the Premises, with a
    possession date of March 1, 2013. The water damage rendered the Premises
    unsuitable to carry on business, so Mr. Taamneh advised Nasr that he would no
    longer take possession on March 1, 2013.

[11]

On
    the other hand, in correspondence to the insured Intact advised it had obtained
    information that no business was operating at the Premises at the time of the loss.

[12]

In
    any event, upon learning of the flood Intact assigned a company, Winmar, to
    attend and report on any damage. Mr. Nasr signed a work authorization for
    Winmar to begin emergency repairs.

[13]

From
    the brief affidavits filed by both parties on the summary judgment motion, the
    following picture emerges of the dealings between them in the months immediately
    following the flood.

[14]

On
    February 14, 2013, about two weeks after the discovery of the water damage, an
    Intact claims representative emailed Mr. Nasr, who had submitted a lease
    document and cancellation letter. The representative wrote: There is coverage
    (subject to policy parameters) for the business interruption you have sustained
    as a result of this loss. I have issued $20,000.00 to represent the $10,000 per
    month rental amount loss for 2 months (March and April 2013).

[15]

On
    April 17, 2013 another Intact claims representative emailed Mr. Nasr to advise
    that he had requested the issuance of a further cheque for $20,000,
    representing rent for May and June. He continued: As discussed we will cover
    up to the end of June and include May = 2 months at $10,000 per not 3 months as
    we previously discussed.

[16]

Intact
    issued a May 2, 2013 cheque to Nasr for $2,000 in respect of hydro.

[17]

The
    parties engaged in some settlement discussions. A May 13, 2013 email from the
    Intact claims representative to Mr. Nasr reads:

[F]urther to our discussions of May 9, 2013 surrounding a full [and]
    final settlement I have reviewed all material and details pertaining to your
    request of $90,000 and unfortunately we are not going to be able to settle on
    this value.

I would make a one time offer of $65,000 to include all aspects
    of the claim keeping in mind that any and all settlement will include both
    additional loss payees on your policy.



If this is accepted please advise as there is a form I need for
    you to complete before payment can be requested[.]

[18]

Intact
    received a proof of loss from Nasr. By letter dated June 25, 2013 Intact returned
    it to Nasr as it failed to comply with the provisions of the Policy. Intact
    identified the deficiencies in the proof of loss, including the need for Nasr
    to provide documentation that on the date of loss the Premises was being
    operated as a restaurant.

[19]

In
    its letter, Intact emphasized that in rejecting your Proof of loss form we are
    not rejecting or denying your claim. It wrote:

The investigation of this claim remains incomplete and Intact
    Insurance will need additional time to investigate your loss. Intact Insurance
    in rejecting this purported Proof of Loss expressly reserves all of its rights
    and defences under the policy and does not waive compliance with any of the
    terms and conditions of the policy.

[20]

Nasr
    then filed a proof of loss dated June 26, 2013 in which it claimed a total of
    $168,000 under the Policy, consisting of: $80,000 for business interruption;
    $58,000 for property damage; and $30,000 for equipment.

[21]

At
    that point in time, Mr. Alick Voliere began to correspond with Intact on behalf
    of Nasr. The record does not disclose Mr. Volieres occupation. In any event,
    on July 22, 2013 Intact wrote to Mr. Voliere regarding the June 26 proof of loss
    and subsequent communications that had taken place between the parties, which
    included a July 15, 2013 statement provided by Mr. Nasr. Intact advised that
    its investigation revealed possible violations of the insurance policy which
    may lead to Intact Insurance to deny further coverage for any portion of the
    loss. Specifically, on June 20, 2013 it received new information from the
    broker, Surnet, regarding the insured risk and its occupancy.

[22]

In
    its July 22, 2013 letter, Intact went on to inform Nasr that its investigation
    also disclosed that: Nasr never obtained a licence to operate a restaurant at
    the Premises; from September 2012 until the date of loss no business was
    operating at the Premises; nor was there a tenant. Intact rejected the June 26,
    2013 proof of loss and informed Nasr that it was denying any further claims
    for damage as a result of this loss due to policy violations and or exclusions
    contained herein. The letter concluded:

As such, enclosed you will find a blank Proof of Loss form. You
    have two years from the date of loss to finalize your claim.
If it is not finalized within that period and you
    wish to protect your right to make a claim under your policy then you are
    required to begin legal proceedings against Intact Insurance Company before the
    two year period expires
.
Failure to do so may adversely affect your right to claim.
    [Emphasis added.]

[23]

Subsequently,
    Intact received correspondence from and met with Mr. Voliere. In a letter dated
    August 15, 2013 Intact confirmed it was returning and rejecting a July 31, 2013
    proof of loss.

[24]

Nasr
    issued its statement of claim on April 22, 2015 seeking damages in respect of
    the Premises for loss of income, loss of equipment, and cost of repairs to the
    Premises. Nasr also pleads that Intacts failure to pay under the Policy
    resulted in Nasr falling into arrears with its mortgagees and losing the
    Premises under power of sale proceedings. Consequently, Nasr also claims
    damages for loss of equity in the Premises and the costs of defending power of
    sale proceedings.

[25]

In
    its statement of defence, Intact denies Nasrs claim for damages, in part on
    the basis that Nasr failed to comply with a provision of the Policy stating it did
    not insure for loss where, to the knowledge of the insured, the property
    location was vacant, unoccupied or shut down for more than 30 consecutive days.
    Intact also pleads that Nasrs claim is statute-barred. Intact did not
    counter-claim for the return of the $42,000 paid in respect of business
    interruption loss or hydro.

[26]

Intact
    moved for summary judgment dismissing Nasrs action as statute-barred.

III.

DECISION OF THE MOTION JUDGE

[27]

In
    conducting his limitation period analysis, the motion judge proceeded on the
    following basis:

(i)      He
    assumed, without deciding, that Nasrs cause of action for breach of the
    Policy arose on February 1, 2013;

(ii)     He
    assumed, without deciding, that on February 1, 2013 Nasr knew or ought to
    have known the factors enumerated in ss. 5(1)(a)(i)-(iii) of the
Act
:
    namely, that: (i) the injury, loss or damage had occurred; (ii) the injury,
    loss or damage was caused by or contributed to by an act or omission; and (iii)
    the act or omission was that of the person against whom the claim was made; and

(iii)     There
    was no issue of a promissory estoppel precluding Intact from relying on the
Act
,
    given Nasrs concession of this point.

[28]

However,
    the motion judge concluded that Nasr did not know or ought to have known that a
    proceeding would be an appropriate means to seek to remedy the injury, loss or
    damage until between May 2, 2013 and July 22, 2013, when Intact denied its
    claim. The motion judge explained the basis for this conclusion at para. 36 of
    his reasons:

In my opinion, in the particular
    circumstances of the case at bar, it was appropriate for Nasr Hospitality to
    wait before commencing its action against Intact. Although I have assumed,
    without deciding, that the cause of action was ripe as of February 1, 2013,
    having regard to the $42,000 in payments that had been made between February
    and May 2013; i.e. having regard to the nature of the injury, loss or damage
    being suffered, it would not have been appropriate for Nasr Hospitality to
    resort to court proceedings until Intact had clearly repudiated its obligation
    to indemnify under the insurance policy, which did not occur until July 2013.
    It might have been possible for Nasr Hospitality to sue for a declaration or for
    an interpretation of the insurance policy before July 2013, but a claim for
    breach of contract would likely have been premature. The purposes of limitation
    periods are satisfied by commencing the running of the limitation period as of
    July 2013, and in this regard, there is no evidence to suggest that Intact has
    been harmed by loss of evidence or loss of repose from its exposure to honoring
    its insurance policies by an action commenced in April 2015.

[29]

As
    a result, the motion judge dismissed Intacts summary judgment motion and
    declared that the limitation period did not begin to run until July of 2013.


IV.

THE POSITIONS OF THE PARTIES

[30]

Intact
    submits the motion judge correctly assumed that Nasrs cause of action arose on
    February 1, 2013, the day after Nasr notified Intact about the flood. However,
    he then erred in concluding that Nasr did not know or ought to have known a
    proceeding was an appropriate means to remedy its loss until July 2013. Intact
    submits that the on-going settlement negotiations and other attempts to rectify
    the loss did not extend the limitation period.

[31]

Nasr
    submits there is no basis to interfere with the motion judges conclusion that
    in light of Intacts three payments, Nasr did not know a proceeding would be an
    appropriate means to remedy its loss until Intact denied its claim on July 22,
    2013.


V.

ANALYSIS

A.

The
    fact-finding required to determine a limitation period defence on a Rule 20
    summary judgment motion

[32]

Since
    the 2010 amendments to the summary judgment rule and the Supreme Courts strong
    endorsement in
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87, of
    the use of summary judgment as a procedural device by which to secure the final
    adjudication of a civil case on its merits, defendants frequently resort to a
    summary judgment motion to determine whether the plaintiffs action is barred
    by the operation of a limitation period.

[33]

Hryniak
teaches that [t]here will be no genuine issue requiring a trial when a judge
    is able to reach a fair and just determination on the merits of the motion
    because the summary judgment process (1)
allows
    the judge to make the necessary findings of fact
, (2) allows the judge
    to apply the law to the facts, and (3) is a proportionate, more expeditious and
    less expensive means than other devices for reaching a final adjudication on
    the merits to achieve a just result: at para. 49 (emphasis added).

[34]

In
    order for a motion judge to grant summary judgment dismissing a plaintiffs
    action or, as occurred in the present case, to grant a declaration about when
    the limitation period began to run, the judge is required make certain
    necessary findings of fact. Those necessary findings of fact concern one
    presumption and two dates, as set out in ss. 5(1)(a), 5(1)(b) and 5(2) of the
Act
.
    Those provisions state:

5

(1) A claim
    is

discovered

on
    the earlier of,

(a) the day

on

which
    the person with the claim first knew,

(i) that

the

injury,
    loss or damage had occurred,

(ii) that the injury,
    loss or damage was caused by or contributed to by an act or omission,

(iii) that

the

act
    or omission was that of the person against whom the claim is made, and

(iv) that, having regard
    to the nature of the injury, loss or damage, a proceeding would be an
    appropriate means to seek to remedy it; and

(b) the day on which a
    reasonable person with the abilities and in the circumstances of the person
    with the claim first ought to have known of the matters referred to in clause
    (a).

(2) A person with a claim shall be presumed to have
    known of the matters referred to in clause (1) (a) on the day the act or
    omission on which the claim is based took place, unless the contrary is proved.

[35]

Accordingly,
    a typical summary judgment motion involving the basic limitation period
    requires the judge to determine whether the record enables making a series of findings
    of fact, with the certainty required by
Hryniak
, on the following
    matters: (i) the date the plaintiff is presumed to know the matters listed in ss.
    5(1)(a)(i)-(iv)  namely, the day on which the act or omission on which the
    claim is based occurred; (ii) the date of actual knowledge under s. 5(1)(a), in
    the event the evidence proves the contrary of the presumptive date; (iii) the
    s. 5(1)(b) objective knowledge date, based on the reasonable person with
    similar abilities and circumstances analysis; and (iv) finally, which of the
    actual knowledge and objective knowledge dates is earlier, for that will be day
    on which the plaintiff discovered the claim for purposes of applying the basic
    limitation period of two years.

[36]

In
    the present case, although the motion judge granted an order declaring that the
    basic limitation period did not begin to run until July 2013, he failed to make
    express findings of many of the facts necessary to make such an order. Instead,
    he proceeded on the basis of two assumptions: (i) Nasrs cause of action for
    breach of the Policy arose on February 1, 2013; and (ii) that date also was the
    date on which Nasr knew the matters described in ss. 5(1)(a)(i)-(iii). In the
    case of each assumption, the motion judge stated he was assuming the fact,
    without deciding it.

[37]

Taking
    the motion judges reasons literally, if he did not find, as facts, the days on
    which Nasr knew or ought to have known the matters described in ss.
    5(1)(a)(i)-(iii), then there was no factual support for his ultimate order that
    the basic limitation period did not begin to run until July of 2013.

[38]

However,
    the parties have argued the appeal as if the motion judge made actual findings
    of fact on those matters, and I will treat his reasons in a similar fashion.

[39]

I
    would simply reiterate that granting summary judgment dismissing an action as
    statute-barred, or declaring when a claim was discovered, requires making
    specific findings of fact. Assumptions about the matters in ss. 5(1) and (2) of
    the
Act
are not analytical substitutes for findings of fact. If the
    record does not enable the summary judgment motion judge to make those findings
    with the certainty required by
Hryniak
, then a genuine issue requiring
    a trial may exist.

B.

Sections 5(1)(a)(i)-(iii)
    of the
Act

[40]

The
    parties agree that Nasrs cause of action for breach of the insurance contract
    arose on February 1, 2013.
[1]
Their agreement constitutes an admission of fact that February 1, 2013 was the
    day on which Nasr first knew the matters in ss. 5(1)(a)(i)-(iii) of the
Act
.

[41]

I
    would note that this position taken by the parties is consistent with the principles
    that have emerged in this courts jurisprudence. In
Markel Insurance Company
    of Canada v. ING Insurance Company of Canada
, 2012 ONCA 218, 109 O.R. (3d)
    652 and
Schmitz v. Lombard General Insurance Company of Canad
a, 2014
    ONCA 88, 118 O.R. (3d) 694, leave to appeal refused, [2014] S.C.C.A. No. 143, this
    court held that for the purposes of s. 5(1)(a)(ii) and (iii) of the Act, a
    party claiming indemnification under or in respect of a policy of insurance
    knows there was a loss caused by an omission of the insurer the day after the
    request or claim for indemnification is made:
Markel Insurance
, at
    paras. 26 and 27;
Schmitz
, at paras. 20 and 26. Once the request or
    claim for indemnification is made, the insurer is under a legal obligation to
    satisfy it:
Markel Insurance
, at para. 26;
Schmitz
, at para.
    20. In the present case, Nasr made a claim for business interruption losses

soon after the flood, and Intact issued a cheque for
    such losses on February 14, 2013.

[42]

On
    the record before us, it was proper for the motion judge to conduct his
    analysis on the basis that Nasr knew or ought to have known the matters set out
    in ss. 5(1)(a)(i)-(iii) of the Act on February 1, 2013, the day after Nasr had
    reported the loss to its insurer.

C.

Section 5(1)(a)(iv) of the
Act

[43]

Although
    the motion judge held that February 1, 2013 was the day on which Nasr knew the
    matters enumerated in ss. 5(1)(a)(i)-(iii) of the
Act
, he concluded
    that the day on which Nasr knew or ought to have known that having regard to
    the nature of the injury, loss or damage, a proceeding would be an appropriate
    means to seek to remedy it was not until July 2013, when Intact denied Nasrs
    claim.

[44]

I
    conclude that the motion judge erred in so finding. With respect, he ignored
    the effect of Nasrs concession, set out at para. 14 of his reasons, that there
    was no issue of a promissory estoppel precluding Intact from relying on the
Act
.
    That concession operated, in the circumstances of this case, to make the day on
    which Nasr knew or ought to have known an action was an appropriate means to
    remedy the loss the day of the loss  namely, February 1, 2013, the day after
    Nasr had sought indemnification for its loss from its insurer.

[45]

To
    explain my conclusion, I will first review briefly the jurisprudence on the
    appropriate means element in s. 5(1)(a)(iv) of the
Act
, and then explain
    how Nasrs concession that it was foreclosed from arguing promissory estoppel
    precluded the motion judges finding on the appropriate means element.

The principles concerning s. 5(1)(a)(iv) of the
Act
:
    appropriate means

[46]

In
    commencing his analysis under s. 5(1)(a)(iv) of the
Act
, the motion
    judge properly noted the general proposition that the determination of when an
    action is an appropriate means to seek to remedy an injury, loss or damage depends
    upon the specific factual or statutory setting of each individual case:
407
    ETR Concession Company Limited v. Day
, 2016 ONCA 709, 133 O.R. (3d) 762, leave
    to appeal refused, [2016] S.C.C.A. No. 509, at para. 34;
Winmill v.
    Woodstock (Police Services Board)
, 2017 ONCA 962, 138 O.R. (3d) 641, leave
    to appeal to SCC requested, at para. 23.

[47]

However,
    as this court has observed, that general proposition is not an unbounded one.

[48]

First,
    in
Markel Insurance
this court confined the meaning of appropriate
    to legally appropriate. Writing for the court, Sharpe J.A. stated, at para.
    34:

This brings me to the question of when it would be appropriate
    to bring a proceeding within the meaning of s. 5(1)(a)(iv) of the

Limitations Act
. Here as well, I
    fully accept that parties should be discouraged from rushing to litigation or
    arbitration and encouraged to discuss and negotiate claims. In my view, when s.
    5(1)(a)(iv) states that a claim is discovered only when having regard to the
    nature of the injury, loss or damage, a proceeding would be an appropriate
    means to seek to remedy it, the word appropriate must mean
legally
    appropriate
.

To give

appropriate

an
    evaluative gloss, allowing a party to delay the commencement of proceedings for
    some tactical or other reason beyond two years from the date the claim is fully
    ripened and requiring the court to assess to tone and tenor of communications
    in search of a clear denial would, in my opinion, inject an unacceptable
    element of uncertainty into the law of limitation of actions
. [Italics
    in original; underlining added.]

[49]

Second,
    in
407 ETR
, Laskin J.A. noted, at para. 47, that the use of the phrase
    legally appropriate in
Markel Insurance
, signified that a plaintiff
    could not claim it was appropriate to delay the start of the limitation period
    for tactical reasons, or
in circumstances
    that would later require the court to decide when settlement discussions had become
    fruitless
 (emphasis added).

[50]

Finally,
    in
Presidential MSH Corporation v. Marr Foster & Co. LLP
, 2017
    ONCA 325, 135 O.R. (3d) 321, Pardu J.A. observed that the jurisprudence
    discloses two circumstances in which the issue of appropriate means most often
    delays the date on which a claim was discovered. First, resorting to legal
    action might be inappropriate in cases where the plaintiff relied on the
    superior knowledge and expertise of the defendant, especially where the
    defendant undertook efforts to ameliorate the loss: at para. 26. Second, a
    legal action might not be appropriate if an alternative dispute resolution
    process offers an adequate alternative remedy and that process has not fully
    run its course: at para. 29. See also paras. 28-48; and
Har Jo Management
    Services Canada Ltd. v. York (Regional Municipality)
, 2018 ONCA 469, at
    paras. 21 and 34-35. In this regard, in
Winmill
this court held that resort
    to a civil proceeding for a remedy in respect of damage flowing from an incident
    might not be an appropriate means while criminal proceedings in respect of the incident
    remain outstanding: at para. 28.

[51]

Although
Presidential MSH
does not purport to offer an exhaustive list of
    circumstances in which a proceeding might not be an appropriate means, I would
    observe that neither circumstance identified in
Presidential MSH
is
    present in this case. Some other factor would have to displace the s. 5(2)
    presumption that Nasr knew a proceeding was an appropriate means on February 1,
    2013.

Application of the s. 5(1)(a)(iv) principles to the present
    case

[52]

Although
    the motion judge did not expressly address s. 5(2) of the
Act
when
    conducting his appropriate means analysis, he obviously took the view that Nasr
    had displaced the presumption that February 1, 2013 was the day it knew a
    proceeding was an appropriate means to remedy its loss. The evidence the motion
    judge relied upon to prove the contrary of the s. 5(2) presumption consisted of
    the course of dealings between Intact and Nasr between February and May 2013,
    including the three payments made by Intact: at para. 36.

[53]

The
    jurisprudence recognizes that some conduct by an insurer after receiving notification
    of a claim under a policy can affect the operation of a limitation period. In
    his reasons the motion judge referred to the two leading cases on the issue of
    promissory estoppel precluding an insurer from relying on a limitation period 
    the companion 1991 decisions of the Supreme Court of Canada in
Maracle v.
    Travellers Indemnity Co. of Canada
, [1991] 2 S.C.R. 50, and
Marchischuk
    v. Dominion Industrial Supplies Ltd.,
[1991] 2 S.C.R. 61.

[54]

In
Maracle
, Sopinka J. stated, at p. 57, that the party relying on the
    principle of promissory estoppel to prevent an insurer from relying on a limitation
    period must establish that: (i) the other party has, by words or conduct, made
    a promise or assurance which was intended to affect their legal relationship
    and to be acted on; and (ii) in reliance on the representation, the
    representee acted on it or in some way changed his position. The promise
    must be unambiguous but can be inferred from the circumstances:
Engineered
    Homes Ltd. v. Mason
, [1983] 1 S.C.R. 641, at pp. 647-52.

[55]

As
    applied to the conduct of an insurer in response to a claim under a policy,
    Sopinka J. stated that promissory estoppel could prevent the insurer from
    relying on a limitation period where there has been a promise not to rely on it.
    An admission of liability by the insurer is a factor from which a court may
    infer such a promise, but the conduct of the insured must be assessed in the
    context of the normal dealings between parties attempting to resolve an
    insurance claim. He described those normal course dealings as follows, at
    p. 58:

An admission of liability is frequently made in the course of
    settlement negotiations. This is often a preliminary step in order to clear the
    way to enter into a discussion as to quantum. Indeed, when an offer to pay
    a stated amount is made by one party to the other, an admission of liability is
    usually implicit. In this type of situation, the admission of liability is
    simply an acknowledgment that, for the purpose of settlement discussions, the
    admitting party is taking no issue that he or she was negligent, liable for
    breach of contract, etc.

[56]

For
    an admission of liability to extend a limitation period something more than the
    admission is required, as Sopinka J. stated at pp. 58-59:

The principles of promissory
    estoppel require that the promissor, by words or conduct, intend to affect
    legal relations. Accordingly, an admission of liability which is to be
    taken as a promise not to rely on the limitation period must be such that the
    trier of fact can infer from it that it was so intended. There must be
    words or conduct from which it can be inferred that the admission was to apply
    whether the case was settled or not, and that the only issue between the
    parties, should litigation ensue, is the issue of quantum
. Whether
    this inference can be drawn is an issue of fact.  [Emphasis added.]

[57]

There
    are similarities between the circumstances in
Maracle
and those in the
    present case. In both, the nature of the injury, loss or damage was the same
     indemnification under a commercial policy of insurance. The claims of both
    insureds were for more than trivial amounts. As well, the conduct of the insurer
    at issue in
Maracle
bears similarities to that of Intact: engaging in
    settlement discussions with the insured and paying part of the claim. In the
    specific circumstances of
Maracle
, the insurers conduct did not give
    rise to a promissory estoppel that the insurer would not rely on the limitation
    period.

[58]

In
    the present case, the motion judge acknowledged, at the start of his analysis,
    that Nasr had conceded a promissory estoppel argument was foreclosed to it by
    reason of the decisions in
Maracle
and
Marchischuk
: at para.
    14. I can only read that portion of the motion judges reasons as recording a
    concession by Nasr that Intacts conduct after receiving Nasrs notification of
    the flood did not estop Intact from relying on the operation of the limitation
    period. In light of that concession, it was not open to the motion judge to
    rely on the same conduct to displace the s. 5(2) presumption that Nasr knew a
    proceeding was an appropriate means to remedy its loss as of February 1, 2013.

[59]

Nasr
    has not pointed to any cases involving ordinary claims for indemnification
    under a commercial policy of insurance that have treated the appropriate means
    element in s. 5(1)(a)(iv) as some form of watered-down promissory estoppel. To
    treat s. 5(1)(a)(iv) in that manner for ordinary commercial insurance
    indemnification claims  as the motion judge effectively did  would risk
    ignoring the caution voiced by Sharpe J.A. in
Markel Insurance
, at
    para. 34  and echoed by Laskin J.A. in
407 ETR
, at para. 47


    that:

To give appropriate an evaluative gloss, allowing a party to
    delay the commencement of proceedings for some tactical or other reason beyond
    two years from the date the claim is fully ripened

and requiring the court to assess to tone and tenor
    of communications in search of a clear denial would, in my opinion, inject an
    unacceptable element of uncertainty into the law of limitation of actions
.
[Emphasis added.]

[60]

The
    motion judge did not find that Intact had promised, expressly or impliedly, not
    to rely on the limitation period. Accordingly, it was not open to the motion
    judge to recast, for purposes of the appropriate means analysis, the conduct by
    Intact that Nasr conceded could not support a finding of promissory estoppel that
    the insurer would not rely on the limitation period.  With respect, the motion
    judge erred in doing so.

[61]

Accordingly,
    I would allow Intacts appeal.


VI.

DISPOSITION

[62]

For
    the reasons set out above, I would allow the appeal and set aside the order of
    the motion judge. Given Nasrs concession that there is no issue of promissory
    estoppel precluding Intact from relying on the
Act
, I would grant
    summary judgment dismissing Nasrs action.

[63]

Based
    on counsels agreement regarding the costs of the appeal, I would award Intact
    costs fixed at $7,500, inclusive of disbursements and applicable taxes.

David
    Brown J.A.
I agree. M.L. Benotto J.A.


Feldman
    J.A. (Dissenting):


[64]

I
    have had the benefit of reading the draft reasons of my colleague and, with
    respect, find myself in disagreement with the result. In my view, the appellant
    insurer has not proved that the action is statute-barred and is therefore not
    entitled to have the insureds action against it dismissed on summary judgment.

[65]

In
    a nutshell, the appellant insurer asked the court to dismiss the insureds
    action on the flood insurance policy on the basis that its claim is statute-barred,
    the claim having been brought more than two years after the flood, referred to
    as the loss. The problem is that this is not an action against the person who
    caused the flood. It is an action against the insurer for breach of the
    insurance policy. Therefore, the triggering event for the discoverability
    analysis and for the two-year limitation to begin running is the date the
    insurer breached its obligation under the policy to indemnify the insured for
    the loss it suffered in the flood.

[66]

As the moving party on the motion for summary judgment, the
    insurer had the onus to prove all of the elements that found the basis for its
    limitation claim, including the date when the cause of action arose, i.e. the
    date when the act or omission by the insurer caused the injury to the insured:
    see the definition of claim in s. 1 of the
Limitations Act, 2002
,
    S.O. 2002, c. 24, Sched. B, and ss. 4 and 5
.

[67]

Because
    the action is based on the enforcement of an insurance policy, one would expect
    that the date when the insurer is obliged to pay the insured its claim would be
    set out in the policy. The only other way that date might be known is if it is
    a matter of statutory or common law. In any of these events, the onus is on the
    moving party to prove all elements.

[68]

On
    this motion, the insurer did not produce the policy of insurance as part of the
    record. The policy would state the obligations of the insured and of the
    insurer, and in particular, when the insurer is obliged to pay the claim, and
    therefore when the insurer is in breach of that obligation.

[69]

The
    motion was fought by the respondent insured on the issue of whether the actions
    of the insurer in making payments under the policy postponed the commencement
    of the limitation period. In his affidavit, the insured states at para. 20:
    The limitation
may have been
at the time of loss
    if no payments on the policy were made. This clearly was not the case here
    (emphasis added).

[70]

The
    motion judge accepted the argument that the insurers conduct postponed the
    commencement of the limitation period. In his reasons for dismissing the motion
    for summary judgment, the motion judge stated that he was assuming without
    deciding that the cause of action for breach of the insurance contract arose
    on February 1, 2013. He did not need to decide the issue because he was not
    granting summary judgment.

[71]

The
    appeal was fought on the same issue as the motion. In his factum, respondents
    counsel states: There is also no issue as to the cause of action for breach of
    insurance contract arose on February 1, 2013, referring to the motion judges
    statement that he would assume, without deciding, that the cause of action
    arose on that date. While counsel could have been clearer in his drafting, on
    my reading, this statement was based on the insureds position that the
    commencement date was postponed, so that the date the cause of action arose was
    not an issue.

[72]

However,
    on appeal, the insurer again asks the court to reject the respondents
    argument, overturn the decision of the motion judge, and grant summary
    judgment. To grant summary judgment this court must then decide when the cause
    of action against the insurer for breach of the insurance contract arose, in
    order to determine when the limitation period commenced to run.

[73]

That
    is a question of mixed fact and law. The legal part requires the court to
    determine when the insurer became legally obligated to pay under the policy.
    The factual part is the determination of when the insurer did not pay in
    accordance with that obligation. Parties cannot bind the court on legal issues
    by agreement or concession. For example, in
OECTA v. Toronto Catholic
    District School Board
(2007), 222 O.A.C. 23 (Div. Ct.), Lane J. stated at
    para. 13:

The fourth difficulty is that the agreement asserted is an
    agreement not as to the facts, but as to the law. Whether the doctrine of
    culminating event applies only where the alleged culminating act is culpable is
    a question of law. Parties cannot agree on the law so as to bind a court or
    tribunal to their view; the law is the law and it is always open to the tribunal
    to determine what it is.

[74]

The
    insurer has presented no basis in the record to determine when its obligation
    to pay arose.

[75]

My
    colleague says that gap is filled because the parties agree that the cause of
    action arose on February 1, 2013 and that that agreement constitutes an
    admission of fact. I do not agree.

[76]

First,
    as stated above, the date the cause of action arose is not a matter of fact
    alone. It is a matter of mixed fact and law: it depends on when the defendants
    legal obligation to the plaintiff arose and when it was breached. What an
    agreement says or what occurred at a point in time may be factual matters, but
    whether they constitute a legal obligation or a breach are matters that include
    legal determinations  the province of the court.

[77]

My
    colleague also states that the admission is consistent with principles that
    have emerged in jurisprudence of this court in two cases,
Markel Insurance
    Company of Canada v. ING Insurance Company of Canada
, 2012 ONCA 218, 109
    O.R. (3d) 652, and
Schmitz v. Lombard General Insurance Company of Canada,
2014 ONCA 88, 118 O.R. (3d) 694, leave to appeal refused, [2014] S.C.C.A. No.
    143. However, in both those cases, the legal obligation of the insurer was
    governed by statutory provisions and not by principles of law.

[78]

Markel
    Insurance
involved a transfer claim for indemnification by a first party
    insurer against a second party insurer in the motor vehicle accident context.
    The claim was governed by the
Insurance Act
, R.S.O. 1990, c. I.8, its
    regulations, and procedures set out by the Financial Services Commission of
    Ontario. The court had all the information before it that it required to
    determine when the second insurers obligation to indemnify arose and was
    breached.

[79]

Similarly,
    in
Schmitz
, the claim for indemnity at issue was brought within and
    was governed by the underinsured motorist coverage provided by the OPCF 44R, an
    optional endorsement to Ontarios standard form automobile insurance policy.

[80]

Unlike
    in those cases, there is no basis in the record before this court to determine
    when the insurer became obliged to pay the claim under the policy. If the
    insurer is relying on the policy, it has not put that policy before the court
    or referred to or relied on any provision of the policy. If it is relying on a statute
    or principle of law that arises outside the terms of the policy, it has not so
    stated.

[81]

By
    not producing the insurance policy as part of the motion record, in my view,
    the appellant did not provide the court with a record sufficient to determine
    the relevant components of s. 5 of the
Limitations Act.
As a result,
    the motion for summary judgment should be dismissed and the action sent on for
    trial with the issue of the limitation period left open for trial, if the
    insurer wishes to continue to raise it there.

[82]

I
    would therefore dismiss the appeal with costs to the respondent.

Released: DB Sep 4 2018

K. Feldman J.A.





[1]
Nasr, in para. 19 of its factum states: There is no issue as to the cause of
    action for breach of insurance contract arose on February 1, 2013.  In his
    affidavit at para. 20 Mr. Nasr deposed: The limitations may have been at the
    time of loss if no payments on the policy were made. This clearly was not the
    case here.


