Published In: Insurance Law Newsletter - 10.Apr.18 April 10, 2018

Case Summary: The insurer was added as a defendant to an action after the limitation period running from the date of the motor vehicle accident had expired due to discoverability issues but the insurer was at liberty to plead a limitation defence

Insurance law – Automobile insurance – Unidentified motorist – Limitation of actions – Running of limitation period – Discoverability – Practice – Parties to action – Adding a party

Bhatt v. John Doe, [2018] O.J. No. 759, 2018 ONSC 950, Ontario Superior Court of Justice, February 9, 2018, Master B. McAfee

The plaintiffs were passengers on a bus on June 13, 2014 and were injured when the bus made an abrupt stop. On January 18, 2016, the plaintiffs commenced an action against the bus company and John Doe. On December 12, 2017, the plaintiffs brought an application to add the bus company’s insurer as a defendant on the basis the abrupt stop was caused by a sudden lane change by an unidentified driver in front of the bus. Under s. 265 of the Insurance Act, R.S.O. 1990, c.I.8, the bus insurer was obliged to have insurance that allowed for payment of all sums for bodily injury that a passenger would be entitled to recover from the driver of an unidentified automobile. The plaintiffs claimed that they were unaware of the unidentified driver’s involvement until they received the statement of defence on March 1, 2016. The bus insurer opposed the joinder application on the basis that the limitation period had expired.

The Court relied on the approach set out in Pepper v. Zellers Inc., [2006] O.J. No. 5042 (C.A.) wherein the Court held that the limitation period commences when the plaintiff discovers the underlying material facts or when they ought to have discovered those facts by exercise of reasonable due diligence. When diligence is a question, the Court is required to examine the evidentiary record to determine if there is an issue of fact or credibility as to when the plaintiff discovered or ought to have discovered the claim.  If so, then the proposed defendant should be added with liberty to plead a limitation defence.

In this case, the Court concluded that the plaintiffs had met the low evidentiary threshold required to establish there was a genuine issue with respect to discoverability. The evidentiary record demonstrated that although the plaintiffs had some knowledge at the time of the accident that an unidentified driver may have been involved, it was vague and largely based on second-hand accounts from witnesses. In terms of diligence, the plaintiffs’ lawyer had made a number of requests for information about the accident from the bus company and its insurer prior to receiving the statement of defence. The lawyer’s requests were refused. As issues of fact and credibility remained on the discoverability issue, the bus insurer was added as a defendant with leave to plead a limitation defence.

This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Michael J. Robinson at