In 1997, the Supreme Court of Canada, in Peixeiro v. Haberman,  3 S.C.R. 549, held that the discoverability principle applied to the "threshold" contained in the Insurance Act.
At that time, persons injured in a motor vehicle accident were only able to sue for general damages, and the claim could only be maintained if the injured person met the threshold which required a "serious disfigurement" or a "serious impairment of an important physical, mental or psychological function."
With the application of the discoverability principle, a cause of action in negligence under s. 266 of the Insurance Act only arose once the plaintiff knew or ought to have known of the damages, being the serious impairment.
Under the present Bill 59, a plaintiff must still meet the "threshold" in order to maintain an action for general damages, but is entitled to sue for any pecuniary loss arising as a result of the motor vehicle accident.
A number of counsel have been faced with situations in which a client has an immediate pecuniary loss which is often modest in nature, but the success of a potential general damages claim remains unknown because of uncertainty about whether the client has sustained a permanent, serious impairment. How, if at all, does the discoverability principle apply?
With no judicial guidance, plaintiffs' counsel were faced with a difficult decision. One approach was to commence the action within the two-year limitation period contained in the Highway Traffic Act, and hope that all damages, including potential general damages arising as a result of a permanent, serious impairment arising from the accident, were clearly known at the date of trail or settlement.
The alternative was to delay the proceeding until the plaintiff knew or ought to have known that the threshold had been met, and hope that the discoverability principle applied to all damages arising out of the one cause of action, including the previously known pecuniary claim.
Neither approach was ideal, and both had risks.
The recent decision of Justice Gloria Epstein in Fuller v. McCartney,  O.J. No. 545, provides some assistance. In Fuller, the plaintiff had been injured in a motor vehicle accident on Aug. 9, 1997. Shortly thereafter he retained a solicitor to commence an action on his behalf.
The statement of claim was not issued until Sept. 17, 1999, and was served on June 18, 2000. The defendants brought a motion to have the statement of claim struck on the basis that it was issued outside of the two-year limitation period. In the alternative, it was argued that since the pecuniary claims were not affected by the discoverability rule, that cause of action started to run on the date of the accident and should be statute-barred. Justice Epstein disagreed.
Based on the medical evidence, Justice Epstein was unable to find that the plaintiff knew or ought to have known, by Sept. 17, 1997, that his injuries would meet the threshold. Therefore, she was not prepared to find that the two-year limitation period had started to run at that date, and the action for general damages was allowed to proceed.
With respect to the pecuniary claim, Justice Epstein relied on Cahoon v. Franks,  S.C.R. 455, which held that there was only one cause of action for a single wrongful or negligent act, and that the damages resulting from the single tort must be assessed in the one proceeding.
Justice Epstein held that if the claims for non-pecuniary damages were ultimately found to have been advanced within the limitation period, as determined after application of the discoverability principle, then the plaintiff would be entitled to add pecuniary claims.
She noted that to allow different limitation periods for different claims arising out of the same wrongful act "would not advance the purposes of certainty, evidentiary and diligence that lie behind the limitation provisions."
Note that Fuller was a motion for summary judgment, and the defendants therefore had to show that there was no genuine issue for trial. Consequently, there is still the possibility that a different conclusion could be reached at trial. However, it is respectfully submitted that Justice Epstein's analysis and reasoning are correct with respect to the application of one limitation period to both non-pecuniary and pecuniary claims.
Susan Bromley practises insurance law with Nelligan O'Brien Payne LLP in Ottawa.
[This article was originally published in the April 4, 2003 issue of The Lawyers Weekly with permission. Author: Susan Bromley]