Loss Transfer Limitation Period
In Lloyd’s Underwriters v. Dominion of Canada General Insurance Company, [2008] O.J. No. 877 (ON SCJ), the court was asked to determine the applicable limitation period for a loss transfer indemnity claim concerning accident benefits which were paid prior to the enactment of the Limitations Act, 2002, S.O. 2002, c. 24. Lloyd’s sought to overturn the decision of the Arbitrator who concluded that the applicable limitation period was 6 years. Lloyd’s argued that the applicable period was 2 years, pursuant to s. 206(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, which would have reduced the claim by approximately $185K. The court upheld the Arbitrator’s decision, and stated thaton a plain reading of s. 206, Dominion’s claim was not a claim “for the recovery of damages occasioned by a motor vehicle”. Instead, it was a claim for indemnity based on a purely statutory obligation (s. 275(1) of the Ontario Insurance Act). Dominion’s right to indemnity arose not by virtue of any principle of common law or insurance law, but by virtue of the statutory right of indemnity. A claim for indemnity is not a claim for damages.