The calculation of periods of time specified in statutes, rules and contracts is a continuing source of anxiety for lawyers. Filing a document one day late can have dire consequences. But figuring out just what is one day late is not always that easy to do.
In Barzo v. Lanari, 2012 ONSC 2327 (CanLII), RSJ Hackland had to interpret statutory condition 11, prescribed for automobile insurance policies by s. 234 of the Insurance Act. I initially wrote a post in which I said that I disagreed with Justice Hackland’s calculation of the notice provisions set out in that section. However, since writing that post, I was contacted by Allison Klymyshyn, one of the lawyers for the insurer. Allison has persuaded me that I was wrong and that RSJ Hackland (as well as Mitch Kitagawa and Allison Klymyshyn) were correct in their interpretation.
Statutory condition 11 deals with the termination of a contract of insurance by the insurer for the reason of non-payment of the whole or any part of the premium. The relevant part of statutory condition 11 reads as follows:
(1.2) Subject to subcondition (1.7), if the insurer gives a notice of termination under subcondition (1) for the reason of non-payment of the whole or any part of the premium due under the contract or of any charge under any agreement ancillary to the contract, the notice of termination shall comply with subcondition (1.3) and shall specify a day for the termination of the contract that is no earlier than, (a) the 30th day after the insurer gives the notice, if the insurer gives the notice by registered mail.
Statutory condition 11(5) deems the effective date of notice, given under the preceding section, to be the day after the day of mailing:
(5) For the purpose of clause (a) of subconditions (1.1) and (1.2), the day on which the insurer gives the notice by registered mail shall be deemed to be the day after the day of mailing.
In this case, Perth Insurance Company had sent notice of termination, by registered mail. Non-payment of premium was the reason for termination. The date of the letter was apparently July 5, 2007 and it specified 12:01 a.m. on August 4, 2007 as the effective time of termination. (The date of the letter does not actually appear in the reasons, but I infer that it was July 5, 2007.)
It was argued on behalf of the insured that Perth’s notice failed to comply with statutory condition 11. However, RSJ Hackland accepted Perth’s argument as to how the 30-day period should be calculated and found that notice had been given in time. In doing so, he adopted the following passage from the factum filed by Perth’s counsel:
40. It is Perth’s position that it gave the requisite 30 days notice as specified in the regulation. The date of notice is deemed to be the day after the day of mailing. That day commences at 12:00 a.m. on July 6th. Therefore notice was deemed to be given to Lanari at 12:00 a.m. on July 6.
41. The date of termination is to be no earlier than the 30th day after notice is given. The 30th day from 12:00 midnight on July 6th (the date of notice), commences at 12:00 midnight on August 4th. Therefore, the date of notice can be no earlier than August 4th at 12:00 midnight and this is the reason the cancellation letter lists the date of cancellation as August 4th 12:01 am.
42. The letter of termination to Lanari indicated that 12:01 on August 4th was the date and time the insurance policy would terminate. This date and time falls within the 30th day after notice of termination was given to Lanari on July 6th, 2007. Therefore, the termination provisions in the regulation were followed and cancellation of the policy was valid. A chart setting out the manner of calculation is attached at Tab 9 of the Responding Party’s Book of Authorities.
It originally seemed to me that this calculation was wrong, on the basis that the date specified for termination was August 4, 2007 and that this was the 30th day following the effective date of the notice.
However, as Allison pointed out to me, the statutory condition allows the effective date of the termination to be on the 30th day following notice. As she noted in her email to me, “If you wait until August 5th, you actually require that the insurer complete the 30th day. Not necessary. Only necessary that the policy terminate ‘no earlier than’ the 30th day after notice.” So, in other words, termination on the 30th day after the notice is in time. Thanks for straightening me out Allison!
In addition, as an alternative ground for his decision, RSJ Hackland relied upon the Court of Appeal’s 1932 decision in Clapp v. Travelers Indemnity Co.,  O.R. 116 (C.A.), where it was held that a notice of termination delivered less than the required 15 days before the effective date of the termination had “ripened” into an effective notice upon the expiration of 15 days from the date of delivery. So, in the present case, Perth’s notice was found to have “ripened” into an effective one on August 5, 2007. Since the accident that gave rise to the litigation occurred more than a month after August 4th, 2007, RSJ Hackland found that it had become effective by then, with the result that the contract of insurance had been properly terminated by the date of the accident.
It is noteworthy that the statutory condition that was considered by the Court of Appeal in Clapp read as follows:
13(1) This policy may be cancelled at any time at the request of the insured and the insurer shall, upon surrender of the policy, refund the excess of said premiums above the customary short rate premium for the time the policy has been in force.
(2) This policy may be cancelled at any time by the insurer giving to the insured 15 days’ notice in writing of cancellation by registered mail or 5 days of cancellation personally delivered and refunding the excess of said premium beyond the pro rata premium for the expired term. Repayment of excess premiums may be made by money, post-office order, postal note or cheque. Such repayment shall accompany the notice, and in such case the 15 days above mentioned shall commence to run from the day following the receipt of the registered letter at the post-office to which it is addressed.
This version of the statutory condition did not require that the insurer specify a date and time on which the termination would be effective, as the present version does. It merely required “15 days’ notice in writing of cancellation”. Thus, one could argue that the old version of the statutory condition was in the nature of a “rolling” notice period that would take effect whenever 15 days had elapsed, and that the “ripening” argument cannot rehabilitate a defective notice under the current version of statutory condition 11, given that the insurer must now specify a date and time on which cancellation will take effect.