Moldovan v. Republic Western Insurance Company, 2011 BCCA 418

In Moldovan v. Republic Western Insurance Company, the British Columbia Court of Appeal considered whether s.103 of Part 7 of the Insurance (Vehicle) Regulation, B.C. Regulation 447/83, is inapplicable to a foreign insurer. The court held that the provision applies to anyone who commences an action for Part 7 benefits, whether the insurer is out-of-province or not.

The provision in question provides that “No person shall commence an action in respect of benefits” under Part 7 unless the action is commenced within two years after the date of the accident for which the benefits are claimed or, where benefits have been paid, the date of the last such payment. The plaintiff, due to inadvertence on the part of his solicitors, failed to bring the claim within the two year period. The insurer refused benefits, relying on s.103, and the plaintiff sought to have the insurer added as a defendant in the action pursuant to R. 15(5)(a) of the Supreme Court Rules, which permits the court to add a person as a party when it would be “just and convenient.” The master of the Supreme Court rejected the plaintiff’s application because he failed to bring the action within the limitation provided by s.103. The chambers judge held that s.103 didn’t apply and ordered the insurer to be added as a defendant.

The Court of Appeal upheld the decision, although on different grounds. Newbury, J.A. rejected the plaintiff's argument that foreign insurers' reliance on the "Power of Attorney and Undertaking System," an interprovincial system of contracts between insurers that allows insurers to respond to claims in respect of extra-territorial accidents, operated outside of British Columbia's statutory vehicle insurance regime. Noting that s.103 is not phrased as an obligation of the insurer, nor as a contractual term that must be incorporated by agreement before it will operate, but rather as a regulation applying to "any person who commences an action," Newbury, J.A. reasoned that the provision's application was universal. While s.103 would therefore be available to the insurer in defence of the plaintiff’s claim, the court held that s.4(1)(d) of the Limitation Act effectively removes the limitation defence where the rule is invoked, and dismissed the appeal.

October 27, 2011
Link to Decision

Fidelia Ho
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