A 400 year old principle of law that a “promise to pay” is not enforceable has now been changed by the BC Court of Appeal. For ICBC claimants with outstanding accident benefits there is currently a limitation of two years from the last benefit paid. This case may bring a new consideration to the ICBC adjuster’s unfulfilled promised to pay Part 7 injury benefits.
In this ground-breaking case the claimant loaned $600,000 of her lottery winnings to her friend to allow her to buy a home. It was to be repaid without interest in one year’s time. Every year the friend kept saying, “I will pay you next year”. When the claimant finally sued for relief the judge concluded she was out of time to enforce the loan!
The Court of Appeal disagreed finding the agreement to renew each year also began a new limitation period to enforce the contract. When parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns.
As Chief Justice Bauman stated, with agreement by the two other sitting judges,
[183] In my view, that is the case before this Court. When parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns, which would render an otherwise valid term unenforceable. A variation supported by valid consideration may continue to be enforceable for that reason, but a lack of fresh consideration will no longer be determinative…
[185] In the circumstances, I would enforce the modifications as to the payment date made by the parties to this loan transaction as found by the trial judge. The parties agreed to vary the terms of their original loan each time Ms. T told Ms. R, “I will pay you back next year”, and Ms. R agreed to extend the time for repayment. There is no suggestion that the variations to the repayment date were procured under duress, are unconscionable, or are otherwise invalid on the basis of public policy.
[187] … I would therefore allow the appeal and grant judgment for Ms. R in the amount of $600,000 plus prejudgment interest against Ms. T alone. (Rosas v. Toca, 2018 BCCA 191)
No injury claimant should expect their limitation period to be changed because of this case. Injury claimants should however speak to a personal injury lawyer before agreeing that the claim for accident benefits is out of time.
Posted by Mr. Renn A. Holness, B.A. LL.B., personal injury lawyer in BC since 1995