Allstate initially denied Hart’s coverage in a denial letter dated August 22, 2019, citing exclusions related to driving under the influence of alcohol. In this case, the dispute concerned when the limitation period began to run. Allstate argued that the two-year limitation period for filing a claim began on August 15, 2019, when Hart knew that his car had been damaged due to the accident. Allstate also argued that, at the latest, the limitation period began to run when Hart received the denial letter on September 13, 2019.

Allstate brought a motion for summary judgment, arguing that Hart’s action was filed after the prescribed limitation period contained within the Standard Automobile Policy for Nova Scotia and the Automobile Insurance Contract Mandatory Conditions Regulations. Allstate likewise relied on the Limitations Actions Act (LAA). Each provided for a two-year limitation period for alleged breach of a contract of indemnity.

Hart opposed the motion, arguing that there were genuine issues at play which should be heard on their merits at trial. Hart also contended that the two-year limitation period only began to run when Allstate finished its “investigations” of his claim and denied him property damage coverage. Hart said the issue of “discoverability” applied in the circumstances and that he did not “discover” he had a claim until he received an explicit denial of coverage after January 2020.

Claim is statute-barred

The NS Supreme Court was guided by the LAA, which establishes a standard two-year limitation period for actions starting from the day the claim was discovered. However, the court noted that when there is a conflict between the LAA and other enactments, the other enactment prevails.

The court noted that the relevant limitation period outlined in the Standard Automobile Policy applies, which specifies a two-year limitation period for actions related to property damage or personal injury. Allstate argued that Hart’s claim, which stemmed from damages sustained on August 15, 2019, became time-barred on August 16, 2021, as his action was filed on December 17, 2021.