Benefits received under the Statutory Accident Benefit Schedule (SABS) may not be deductible in a slip and fall action.
Background Facts and Procedural History
The plaintiff, Mr. Diep, was seriously injured when he slipped and fell on snow and ice in a parking lot. He had walked towards his car with his key FOB in hand and was reaching for the door handle of his car when he fell. He applied for accident benefits through his own insurer, Wawanesa.
Wawanesa opposed his entitlement to SABS, arguing that the incident was a slip and fall and therefore did not meet the SABS definition of an “accident.” Ultimately, the Licence Appeal Tribunal (LAT) determined that the incident met the two-part “purpose” and “causation” test and found the incident was an “accident” within the definition of the SABS and that he was therefore entitled to those benefits.
As a result of his injuries, Mr. Diep received medical benefits through his SABS insurer as well as medical care and treatment funded by OHIP.
Mr. Diep then sued the owner of the property, as well as the winter maintenance company of the parking lot, alleging failure to keep the property clear of snow and ice. The defendants brought a motion for determination that any tort damages awarded against them could be reduced by any accident benefits received and further moved to strike OHIP’s subrogated claim. They further argued that the plaintiff’s position in the tort action was inconsistent from the position he had taken before the LAT, and his attempt to claim this was a slip and fall for purposes of the tort litigation was therefore an abuse of process. The defendants brought a motion seeking a determination that:
- Under s. 267.8 of the Insurance Act any damages awarded against them must be reduced by the accident benefits Mr. Diep received; and
- s. 30(5) of the Health Insurance Act (HIA) precludes OHIP’s rights of subrogation.
The motion judge noted that both the statement of claim and statements of defence were “framed in occupiers’ liability” and that there is a specific presumption against interfering with the right to bring an action.
She also noted the context of the case before her was very different from the issues before the LAT. Because of the consumer-protection purpose and remedial nature of the SABS legislation, it should be “interpreted broadly and generously” and “giving effect to the desire to compensate accident victims”. However, in this motion, the issues in dispute warranted applying a narrower analysis, as the defendants were looking to apply s. 267.8 of the Insurance Act which would deprive the plaintiff of the common law private insurance exception, and they were also looking apply s. 30(5) of the HIA to preclude OHIP’s right of subrogation provided under s. 30(1). The motion judge held these provisions “should not be construed more widely than necessary.”
Ultimately, the motion judge did not grant the orders requested by the defendants and held the plaintiff’s claim was not an action for loss or damage from bodily injury arising from the use or operation of a motor vehicle within the meaning of s. 267.8 of the Insurance Act. She also determined that the appellants were not insured “under a motor vehicle policy issued in Ontario” as required by s. 30(5) of the HIA and that there was no abuse of process.
The Court of Appeal’s Decision
The defendants appealed, arguing the motion judge made the following errors:
- She failed to follow binding precedent which held that the purpose of s. 267.8 was to codify the common law principle that a plaintiff should not recover twice for the same loss arising from the same incident
- The motion judge failed to consider all of the purposes of s. 267.8 of the Insurance Act by allowing Mr. Diep to receive double recovery
- The motion judge failed to apply the principles of issue estoppel, collateral attack and abuse of process
- The motion judge erred in holding that the appellants are not insured under a motor vehicle liability policy required under s. 30(5) of the HIA
The Court of Appeal observed that the motion judge relied on two decisions from the Supreme Court to guide her analysis: Heredi v. Fensom, 2002 SCC 50, [2002] 2 S.C.R. 741 and Hernandez v. 1206625 Ontario Inc., (2002) 61 O.R. (3d) 584 (C.A.). These cases required the motion judge to take a “substantive approach” to the issues and consider “the essence of the claim being made [to determine] whether a motor vehicle played a merely ancillary role.” Applying Hernandez and Heredi, the motion judge found that “[t]he substance of [Mr. Diep’s] tort claim is for damages and loss caused by the [appellants’] negligence as occupiers of the premises where [Mr. Diep] slipped and fell.”
The appellants submitted that the Court of Appeal’s decision in El-Khodr and Georgiou clarified that s. 267.8 of the Insurance Act codifies the common law principle that a plaintiff should not recover twice for the same kind of loss arising from the same incident in any related tort litigation. They further submitted that, if the appellants are insured under a motor vehicle policy and the plaintiff’s injuries arose directly or indirectly from the use or operation of an automobile, then whether or not the defendants are sued as owners/operators of an automobile or as occupiers is irrelevant.
The Court of Appeal did not accept these submissions. The court reasoned that paragraph 33 of El-Khodr did not include the phrase “in any related tort litigation” and did not address the propositions relied on by the motion judge that at common law there is an exception (the private insurance exception) to the rule preventing double recovery and that restrictions on plaintiffs’ rights to advance their full claim (i.e. s. 267.8) should be narrowly construed.
Unlike this case, El-Khodr only dealt with how SABS were to be deducted, not whether they would be deducted. Similarly, in Georgiou, the court was not faced with the question of whether the plaintiff’s loss or damage arose from the use or operation of a motor vehicle. Therefore, in Georgiou, the court did not have to rely on Heredi and look to the essence of the claim being advanced by the plaintiff.
The Court of Appeal noted that the Supreme Court’s decision in Heredi mandated a focus on “the true nature [of] the claim.” The Court of Appeal saw no error in the motion judge’s rationale for concluding that s. 267.8 of the Insurance Act and s. 30(5) of the HIA did not apply because the plaintiff’s action “cannot be properly characterized as arising from the use or operation of an automobile” and her finding that “[t]he dominant cause as pleaded in the action and as responded to was the failure of the occupier(s) to remove ice and snow from the parking lot.”
With respect to the appellants’ abuse of process argument, the appellant argued that that these issues required factual determinations that had already been decided by the LAT. The Court of Appeal did not accept these submissions, held that the questions were not about making findings of fact and saw no error in the motion judge’s reasoning that the context of the LAT proceeding and the motion before her were “very different.” The question before the LAT adjudicator was whether Mr. Diep was entitled to SABS and had to be interpreted, “broadly and generously […] giving effect to the desire to compensate accident victims.”
The questions before the motion judge were:
1) Whether s. 267.8 deprived Mr. Diep of a common law exception to the rule against double recovery.
2) Whether OHIP’s right of subrogation was barred by s. 30(5) of the HIA.
These questions required a narrow approach to interpreting s. 267.8 and s. 30(5).
Although issue estoppel was not raised before the motion judge, nor was it “pressed in oral submissions” on appeal, the court addressed the submissions of the appellants by noting the application of issue estoppel required the following three elements:
- The issue must be the same as the one decided in the prior decision;
- The prior judicial decision must have been final; and
- The parties to both proceedings must be the same or their privies.
The first and third requirements were not met because the issues before the LAT and the motion judge arose under different contexts and required the application of different analytical frameworks. The parties were also not the same and were not privies. OHIP and the appellants were not parties before the LAT, and although the Appellants and Mr. Diep would have both wanted Mr. Diep to receive accident benefits, the appellants only shared this interest so they could reduce their own exposure in the tort action.
The Takeaway for the Plaintiff Bar
The private insurance exception to the rule against double recovery is very much alive and well. In tort, s. 267.8 of the Insurance Act and s. 30(5) of the HIA are to be interpreted narrowly and therefore will not apply to every action simply because a motor vehicle collision is present at the time of the loss. Especially when the action is pleaded on the grounds of some other form of negligence such as occupier’s liability, medical malpractice or a manufacturer’s negligence, for example. OHIP’s subrogated claim must always be advanced and protected in such circumstances.
At the same time, when a motor vehicle is involved but is not the focus of the action in tort, plaintiff lawyers would be wise to ensure the plaintiff has applied for accident benefits, as the LAT is to apply a broad and generous interpretation when considering whether an applicant will be able to access to those benefits.
