Kinectrics V. FCL Fisker Et Al.: Novel Limitation Period Arguments For Subrogation Insurers

• Published date: 06 January 2021
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: WeirFoulds LLP
• Author: Mr Raj Datt and Marie-Pier Nadeau

WeirFoulds' subrogation team successfully opposed a motion for summary judgment recently, reported at Kinectrics Inc. v. FCL Fisker Customs & Logistics Inc., 2020 ONSC 6748. In that decision, Justice Sanfilippo recognized that different limitation periods can apply to different causes of action, such that a negligence claim can be advanced in relation to a cargo loss, in which case the discoverability principle may apply. Justice Sanfilippo also suggested a novel limitation period argument which could benefit subrogated insurers.

Factual Overview:

In August 2016, the Plaintiff Kinectrics Inc. ("Kinectrics") hired the defendant FCL Fisker Logistics ("FCL") to transport an AC Resonant Test System Unit (the "RTS Unit"), mounted on its specialized trailer (the "Trailer"). FCL subcontracted the transport of the RTS Unit and Trailer to the defendant Don Anderson Haulage Limited ("Anderson").

Anderson took possession of the RTS Unit and Trailer from Kinectrics in Etobicoke, Ontario, and drove it to its destination in Churchill Falls, Newfoundland, arriving on or about August 30, 2016. Kinectrics used the RTS Unit on a project in Churchill Falls, and then asked for the RTS Unit to be brought back to Etobicoke. On September 9, 2016, while being hauled by Anderson from Newfoundland back to Ontario, the RTS Unit and the Trailer were damaged when a fire broke out during highway travel (the "Fire").

On September 15, 2016, Kinectrics sent letters to both FCL and Anderson, notifying them that Kinectrics was holding them responsible for the damages caused by the Fire.

On June 15, 2018, Kinectrics sued FCL and Anderson in a first action, claiming property damages to the RTS Unit and Trailer in the amount of $1,067,527.77 (the "First Action"). The First Action was a subrogated claim commenced by Kinectrics' cargo insurer.

On December 6, 2018, Kinectrics commenced a second action, this time claiming damages in the amount of $580,000 for business interruption loss (the "Second Action"). The Second Action was a subrogated claim commenced by Kinectrics' property insurer.

Both actions arose from the same factual matrix and were in substance symmetrical, except mostly that they plead different damage claims, covered by two different insurers. The First Action claimed property damage and the Second Action claimed business interruption loss.

Anderson brought a motion for summary judgment in the Second Action, arguing that it was statute barred, as it was issued after the second...