Released January 5, 2016 | Full Decision
At the end of trial on an action arising from a motor vehicle accident, the jury awarded the Plaintiff the following:
General damages: $35,000
Past loss of income: $20,000
Future loss of income: $30,000
Cost of Future Care: $15,000
The Plaintiff had been paid income replacement benefits (“IRBs”) totalling $158,496, which included $77,500 in settlement of past and future IRBs, and medical and rehabilitation benefits (“Med/Rehab”) totalling $89,365.15, which included $37,500 in settlement of past and future Med/Rehab. The parties agreed that the past loss of income was zero after the deduction of IRBs paid, but disagreed on the deductibility of the settlements against the award for future losses. Arrell J. refused to deduct the accident benefits settlements because the payments were a compromise to settle the disputes and there was no evidence as to how the settlements were apportioned between past and future benefits. The Defendant appealed.
The Divisional Court noted that the onus is always on the Defendant to prove that the payment clearly falls within the statutory definition and that the deductibility will not result in under-compensation for the Plaintiff. The Court viewed the settlement disclosure document as setting out more than a “notional” allocation of payments. In reliance on the Court of Appeal’s decision in Cummings (Litigation Guardian of) v. Douglas, the Divisional Court concluded that Arrell J. erred in law in holding that the Defendant was required to prove what portion of the $77,500 constituted payments for future IRBs. As the Plaintiff accepted the settlement offer of $77,500 for past and future IRBs, the full amount was deductible from the global income loss award. Applying the same analysis to the Med/Rehab settlement, the Divisional Court held that the entire $37,500 was deductible against the $15,000 cost of future care award. The appeal was allowed and the judgment was varied.
