The defendant insurer brought a motion to amend its statement of defence in a long-term disability action and sought production of documents relating to the plaintiff’s prior tort settlement arising from the same motor vehicle accident.
The proposed amendments pleaded rights of subrogation and set-off based on the plaintiff’s recovery for income loss from the tort action.
The court held that s. 267.8(17) of the Insurance Act eliminates an insurer’s right of subrogation in respect of payments for income loss under an income continuation benefit plan arising from a motor vehicle accident.
The proposed pleadings asserting subrogation and set-off were therefore legally untenable and had no realistic prospect of success.
As a result, those amendments were refused and the related document production request was dismissed, although other unrelated amendments were permitted.
