Mikolic v. Tanguay, 2015 ONSC 71

Released January 5, 2015 | Full Decision

The plaintiff was injured in a motor vehicle accident. He commenced a claim for the injuries he sustained as a result of the collision. His matter went to trial and he was awarded $35,000 for general damages, $20,000 for past loss of income, $30,000 for future loss of income and $15,000 for cost of future care. Prior to trial, the plaintiff had settled his accident benefits claims and signed a Settlement Disclosure Notice which allocated $77,500 for past/future income replacement benefits; $37,500 past/future medical benefits: $35,000 for past/future rehabilitation benefits and $25,000 past/future attendant care, for a total settlement of $175,000.00.

The parties agreed that the past loss of income was zero after the deduction of the income replacement benefits. However, the parties did not agree on the future awards made by the jury and what, if any, deductions applied under those two heads of damage. Consequently, the defendant brought a motion to settle the judgment.

At first instance, Justice Arrell refused to deduct the amount the plaintiff received for income replacement benefits and medical benefits from the tort award. Justice Arrell relied on the decision in Bannon v. McNeely for the proposition that in order to deduct any no-fault benefit one must be able to compare apples to apples. He found this was no such case.

Justice Arrell stated there was no evidence as to what amount of the income replacement settlement constituted future payments. Additionally, Justice Arrell noted the lump sum income replacement settlement was a compromise by both parties to resolve the risks and costs of continuing with a law suit. Likewise, Justice Arrell also found there was no evidence as to what portion of the settlement for past and future attendant care, rehabilitation or medical benefits were specifically for the future. He also noted that the jury award did not similarly break down the amount for future care under those same three headings.

The defendant appealed this decision to the Divisional Court. The defendant argued those accident benefits should have been deducted from the tort award based on the Supreme Court of Canada’s decision in Gurniak v. Nordquist, which they submitted overruled Bannon. The Divisional Court determined that it was unnecessary to decide whether Gurniak overruled Bannon, but that it was necessary to examine the wording of ss. 267.8(1) and (4) of the Insurance Act, as this language was different from the language dealt with in Bannon.

The Court noted that subsection 267.8(1) did not differentiate between deductions to be made from tort awards for income loss in respect of statutory accident benefits received for past income replacement benefits and for future income replacement benefits. The Court found Justice Arrell erred in law in holding that the defendant was required to prove what portion of the $77,500 constituted payments for future benefits. Furthermore, the Court did not accept Justice Arrell’s reasoning that the settlement was a compromise in respect of anything other than statutory income replacement benefits, past and future. Thus, the $77,500 for income replacement benefits came within the wording of s. 267.8(1) and was deductible from the tort award.

The Court found that Justice Arrell made similar errors of law in his reasoning with respect to the deductibility of medical, rehabilitation and attendant care benefits. Subsection 267.8(4) provides that any statutory accident benefits that a plaintiff has received for health care shall be deducted from the jury’s award in relation to damages for “expenses that have been incurred or will be incurred for health care.” The jury awarded the plaintiff/respondent the $15,000 for future care in relation to his claim for a pain management program to assist him in dealing with his chronic pain. These were expenses that would be incurred for health care. Therefore, the $37,500 that the plaintiff/respondent received for “all past and future medical benefits” was deductible from the jury award of $15,000 for future care costs.

 

Read the full decision on CanLII

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