The Boyces owned a retail clothing business called the Portside Boutique.  On October 30, 2012, something soiled their inventory; they claimed it was vandalism.  Their insurers, The Co-Operators said that the soiled inventory was caused by a skunk and the damage was not covered under their policy.  The Co-Operators denied the claim and the Boyces sued in February 2012.  The insurance contract stated that the statutory conditions applied to all of the insured perils and that this included statutory condition 14 which stated that any actions commenced with respect to a property loss had to be commenced within 1 year of the date of the loss.

The Co-Operators brought a motion to dismiss the claim because it was commenced beyond the one year mark.  The Boyces claimed that it was a two year limitation period pursuant to the Limitations Act, 2002.  The Motion Court dismissed the motion stating that the proper limitation period is 2 years because insurance contracts cannot be business agreements.  Under the Limitations Act, business agreements can vary limitation periods.

The Court of Appeal (ONCA 298) reversed the decision stating that commercial insurance policies are business agreements and therefore they can vary the limitation period.  The plaintiff’s action based on the contract was dismissed.  The Co-Operators were represented by Mitch Kitagawa of Kelly Santini LLP.