Wawanesa Mutual Insurance Company et al. v. Her Majesty the Queen in Right of Ontario, represented by the Commissioner of the Ontario Provincial Police et al. [Indexed as: Wawanesa Mutual Insurance Co. v. Ontario Provincial Police (Commissioner)]
54 O.R. (3d) 112
[2001] O.J. No. 1802
Docket No. D-236-00
Ontario Superior Court of Justice
Divisional Court
Greer, Ferguson and LaForme JJ.
May 1, 2001
Insurance--Automobile insurance--Subrogation--Section 267.8(18) of Insurance Act exempting only Ministry of Health from suing for recovery of statutory accident benefits --Insurance Act, R.S.O. 1990, c. I.8, ss. 267(17), 267.8(18)--Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 20.
A subrogated action was brought for the benefit of the insurer to recover statutory accident benefits paid or to be paid by the insurer to the plaintiffs, who were injured in a motor vehicle accident. The defendants brought a motion for summary judgment under Rule 20 of the Rules of Civil Procedure on the ground that the subrogated claim was barred by s. 267.8(17) of the Insurance Act. The motions judge held that the subrogated claim for recovery of the statutory accident benefits was not barred by s. 267.8(17). The defendants appealed.
Held, the appeal should be allowed.
Per Ferguson J. (LaForme J. concurring): The motions judge erred in his interpretation of s. 267.8(18) of the Act. The provisions in question are not ambiguous. Section 267.8(17) addresses two issues: it specifies which persons who made payments of statutory accident benefits are barred from making a claim; it then specifies what persons are protected from such a claim. It specifies that "a person who has made a payment" cannot claim. That would include the insurer and the Ministry of Health. Section 267.8(17) prohibits any claim by the insurer and the Ministry of Health for recovery and also protects the defendants. Section 267.8(18) states that subsection (17) does not apply if "the Ministry of Health has made the payment; and the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario". A literal reading of s. 267.8(18) shows that it makes the prohibition inapplicable to certain situations. It addresses the same two issues as s. 267.8(17). It specifies which persons who made such payments are exempted from the prohibition against claiming recovery. The Ministry is the only person exempted. By using the connector "and", it then specifies what persons are not protected from a claim by the Ministry. It says the prohibition does not apply to a claim by the Ministry of Health. It says that the persons protected do not include a person other than a person insured under a motor vehicle liability policy issued in Ontario. The defendants fell in the class of persons not protected under s. 267.8(18). The insurer is not the Ministry of Health, and therefore the exemption does not apply to a claim by the insurer and the insurer is subject to the prohibition in s. 267.8(17).
Per Greer J. (dissenting): The exception as set out in s. 267.8(18) is in two parts. The two parts are joined by the word "and", with the semicolon appearing after the word "payment". The motions judge did not err in adopting a liberal construction, given the way s. 267.8(18) is worded. If the legislature had intended that only the Ministry of Health had a right of subrogation, it could have clearly said so by only having one part to say just that. By using two parts, the legislature apparently intended persons such as the insurer to retain the right to sue for subrogation.
APPEAL from a decision of Kozak J. (2000), 2000 22335 (ON SC), 47 O.R. (3d) 332 (S.C.J.) dismissing a motion for summary judgment.
Cases referred to Cunningham v. Wheeler, 1994 120 (SCC), [1994] 1 S.C.R. 359, 88 B.C.L.R. (2d) 273, 113 D.L.R. (4th) 1, 164 N.R. 81, [1994] 4 W.W.R. 153 (sub nom. Shanks v. McNee, Cooper v. Miller (No. 1)); Grabowski v. R., 1985 13 (SCC), [1985] 2 S.C.R. 434, 22 D.L.R. (4th) 725, 63 N.R. 32, 22 C.C.C. (3d) 449; MacDonald v. Ontario Hydro (1995), 1995 10628 (ON SC), 26 O.R. (3d) 401 (Div. Ct.); R. v. Cie Immobilière BCN Ltée, 1979 12 (SCC), [1979] 1 S.C.R. 865, 97 D.L.R. (3d) 238, 25 N.R. 361, [1979] C.T.C. 71, 79 D.T.C. 5068 (sub nom. Cie Immobilière BCN Ltée v. Minister of National Revenue); Rutherford v. Niekrawietz (1998), 1998 939 (ON CA), 117 O.A.C. 387 (C.A.); Wight v. Marra (1995), 1995 10680 (ON SC), 22 O.R. (3d) 544, [1995] I.L.R. 1-3168, 13 M.V.R. (3d) 122 (Div. Ct.) Statutes referred to Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21 (Bill 29) Health Insurance Act, R.S.O. 1990, c. H.6 (as am. 1996, c. 21), ss. 30, 30(5) Insurance Act, R.S.O. 1990, c. I.8, ss. 267(4), 274 Insurance Act, R.S.O. 1990, c. I.8 (as am. 1993, c. 10; 1996, c. 21), ss. 14.1, 263(5)(b), 265(8), 267.8, 274, 274(2), 278(1) Rules and regulations referred to Assessment of Health System Costs, O. Reg. 401/96 Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 20, 20.04(4) Authorities referred to Sullivan, R., Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994)
Nancy M. Erickson, for respondents. Stephen R. Moore, for appellants.
FERGUSON J. (LA FORME J. concurring):--
The Issue
1The only issue on this appeal is the interpretation of ss. 267.8(17) and (18) of the Insurance Act, R.S.O. 1990, c. I.8, which were enacted by the Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21 (known as Bill 59).
2The matter arises out of an automobile accident on January 10, 1998. Two of the individual plaintiffs were the driver and passenger of one of the vehicles in a head-on collision on a highway. The other individual plaintiffs are their parents. All the individual plaintiffs are insured under automobile policies issued by Wawanesa.
3The action which is the subject of this appeal is a subrogated action brought by Wawanesa.
4Counsel for all the plaintiffs commenced two actions against Her Majesty and two police officers. In the action not before us, we are told the claims are customary tort claims alleging failure of the Ministry of Transportation to maintain the road and failure of the Ontario Provincial Police to warn of the dangerous road condition. In the action before us, the statement of claim appears to include the same tort claim but counsel agree it is only intended to advance a subrogated claim for the benefit of Wawanesa to recover the statutory accident benefits paid or to be paid by Wawanesa to the injured plaintiffs and to recover the property damage payments paid by Wawanesa to one of the plaintiffs who owned the automobile involved in the accident.
5I should note in passing that it is conceded that Wawanesa should not be named as a party plaintiff because s. 278(1) of the Insurance Act prescribes that if an automobile insurer has a right of subrogation it should bring the action in the name of the insured. This is not a material issue here because the insureds are also named as plaintiffs.
6In this subrogated action the defendants brought a motion for summary judgment under Rule 20 on the ground that the two categories of subrogated claims were barred by s. 267.8(17) and s. 263(5)(b) of the Insurance Act.
7The motion was heard by Kozak J [reported at 2000 22335 (ON SC), 47 O.R. (3d) 332]. He concluded that the subrogated property damage claim was barred by s. 263(5)(b). Wawanesa did not appeal that ruling.
8He also concluded that the subrogated claim for recovery of the statutory accident benefits was not barred by s. 267.8(17).
9There was a further confusing issue raised before Kozak J. and this court. The counsel for the plaintiffs argued that there was an issue of vicarious liability concerning the liability of Her Majesty for the alleged negligence of the O.P.P. Kozak J. found that this was a genuine issue for trial.
10It appears to me that Kozak J. was not aware that there was already another existing action raising the issue of Her Majesty's vicarious liability in tort for negligence of the O.P.P. He describes the other pending actions in his reasons but the tort action against the O.P.P. is not mentioned. I did not appreciate that the O.P.P. was also named in another action either until counsel informed the court of this during the hearing of this appeal. As I mentioned, the statement of claim in this action under appeal is worded as if it includes such a tort claim but counsel advise this was an error.
11The issue of vicarious liability is a red herring. There is no dispute that the individual plaintiffs are entitled to pursue a tort action against the O.P.P. and it is being pursued in another action. It is not a genuine issue requiring a trial in this action.
12The defendants applied for leave to appeal the decision of Kozak J. and this was granted by Stach J. He also noted that the only issue was Wawanesa's right to pursue a subrogated claim for the statutory accident benefits and that there was no doubt that the plaintiffs could pursue the tort claim.
Standard of Review
13As noted by Stach J., and conceded by both sides on this appeal, the issue decided by Kozak J. was an issue of law alone. The standard of review is correctness.
14I should mention that counsel for Wawanesa urged us to allow the issue of law to go to trial so that additional facts could be put before the court to assist in interpreting s. 267.8. She suggested that there might be further evidence adduced, such as a legislative committee report or the testimony of the individual who actually drafted the legislation.
15I do not accept this submission for three reasons.
16First, rule 20.04(4) provides that where the judge hearing the summary judgment motion is satisfied that the only genuine issue is an issue of law, the judge may determine the issue. Kozak J. determined the issue of law with this conclusion [at p. 342 O.R.]:
Subsection 267.8(17) makes it most clear that an insurer that has made a payment described in s-ss. (1), (4), and (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment. On the other hand, s. 267.8(18)(b) also makes it clear that the exception to subrogation created by s. 267.8(17) does not apply if the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
17He decided the issue of law as to the interpretation of s. 267.8(18)(b). The only issues he sent to trial were the factual issues of tort liability and quantum. The appeal before us is from that ruling on an issue of law. If we do not overrule his decision, that ruling will be binding in this action.
18Second, this matter was dealt with as a Rule 20 motion and the plaintiffs were obliged to put their best foot forward before Kozak J. In any event, no evidence in addition to what is before this court has been identified which would assist a court in interpreting the legislation.
19Third, both parties put additional material before this court which was not before Kozak J. There was no objection to this and Wawanesa's counsel could have put additional documentary evidence before us if she wished.
Analysis
20With great respect, I would say at the outset that, in my view, the interpretation of the disputed provisions is fairly straightforward and would not ordinarily warrant any lengthy analysis. However, I think the issue now must be discussed in some detail because of the extensive reasons of both Kozak J. and Stach J. and because of the lengthy and complex submissions made to this court. The ruling under appeal would result in a dramatic change in the insurance industry if it stands.
21In my respectful opinion, Kozak J. erred in law in his interpretation of s. 267.8(18). I should mention that he did not have the benefit of all the arguments and documentation put before this court.
22I shall begin my analysis with an examination of the statutory wording and then discuss the reasons of the courts below and the submissions of counsel on this appeal.
The wording of the statute
23I have included the wording of s. 267.8 in Appendix A.
24The focus on this appeal is on two subsections:
(17) A person who has made a payment described in subsection (1), (4) or (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment.
(18) Subsection (17) does not apply if,
(a) the Ministry of Health made the payment; and
(b) the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
25The payments Wawanesa seeks to recover in this action were payments for statutory accident benefits made under one or more of s-ss. (1), (4) and (6). Subsection (17) prohibits a person who has made such payments from seeking recovery against another person.
26Subsection (17) addresses two issues: it specifies which persons who made such payments are barred from making a claim; it then specifies what persons are protected from such a claim. It specifies that "a person who has made a payment" cannot claim. That would include Wawanesa and the Ministry of Health. It specifies that such a claim cannot be made against "another person". That would include the defendants.
27Subsection (17) prohibits any claim by Wawanesa and the Ministry of Health for recovery and also protects the defendants.
28A literal reading of s-s. (18) shows that it makes the prohibition inapplicable to certain situations. It addresses the same two issues as s-s. (17): it specifies which persons who made such payments are exempted from the prohibition against claiming recovery -- the Ministry is the only person exempted; by using the connector "and", it then specifies what persons are not protected from a claim by the Ministry. It says the prohibition does not apply to a claim by the Ministry of Health. It says that the persons protected do not include a person other than a person insured under a motor vehicle liability policy issued in Ontario.
29It is conceded that the defendants fall in the class of persons who are not protected under s-s. (18).
30Wawanesa is not the Ministry of Health and therefore the exemption does not apply to a claim by Wawanesa and Wawanesa is subject to the prohibition in s-s. (17).
31Subsection (18) exempts only the Ministry of Health from suing for recovery and, in addition, provides that the only persons who are not protected from such a claim by the Ministry are those persons who are not insured under a motor vehicle liability policy in Ontario.
32I do not see any ambiguity in the two subsections on a literal reading.
The reasons of Kozak J.
33Kozak J. reviewed some cases which discussed how to determine the meaning of a statutory provision the court found was ambiguous. He found that the provision barring any subrogated claims to recover property damage claims was not ambiguous and therefore found it barred Wawanesa's claim for property damage payments.
34His conclusions with respect to claims for recovery of statutory accident benefits are summarized in the following excerpts [at pp. 342-44 O.R.]:
Subsection 267.8(17) makes it most clear that an insurer that has made a payment described in s-ss. (1), (4) and (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment. On the other hand, s. 267.8(18)(b) also makes it clear that the exception to subrogation created by s. 267.8(17) does not apply if the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
As unprotected defendants, the defendants in the herein action do not fall within the category of persons against whom there is no right of subrogation by virtue of s. 267.8(18)(b). . . .
It is the view of this court that the interpretation placed upon the application of s. 267.8(17) by counsel for the plaintiffs is the correct one and that the insurer Wawanesa is not precluded from asserting its rights of subrogation against the unprotected defendants in the herein action. The intention of the legislature, bearing in mind the purpose of the legislation, a reading of the legislation in context and the unambiguous language of s. 267.8(18)(b), make it clear that the defendants in this case were not intended to be immunized from subrogation. . . .
35There are some significant omissions from this analysis. Nowhere in this passage or elsewhere in his reasons does he consider the provisions of s. 267.8(18)(a), or the existence of the semicolon followed by "and" at the end of (a), or the crucial issue of whether (a) and (b) are related. He does not consider how s-s. (18) deals with the two issues addressed in s-s. (17).
Factors advanced by Wawanesa as relevant to the interpretation
36I am doubtful whether, in this case, the court should look beyond the section as a whole and beyond the literal meaning, which in my view is not ambiguous and is meaningful in its context. Wawanesa's counsel relies on a passage from Sullivan, Driedger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994) at p. 430, where the author states that the principle of not looking beyond the section for meaning unless the passage is ambiguous is "pointless because, given the plasticity of language and the complexity of law, virtually all legislation is ambiguous in that it is susceptible to more than one reading". The author argues that the court cannot say whether a legislative passage is ambiguous until after the court considers all of the "available evidence of legislative meaning". While I am acutely aware of the difficulty of interpreting legislation and of the point intended by the author, I believe that statement is extravagant exaggeration. If a court had to go through that exercise every time a party disputed the meaning of a statutory provision, the legal process would collapse.
37In any event, I shall consider the extrinsic aids and additional references raised on this appeal, only some of which were raised before Kozak J.
38Counsel for Wawanesa argued that Kozak J. was correct to interpret s. 267.8(18) as having two separate and unrelated provisions: (a) and (b). She says (b) stands alone and permits any person to subrogate against any person who is not insured under a motor vehicle liability policy not issued in Ontario.
39The main argument advanced by counsel for Wawanesa before Kozak J. and before this court was that one of the purposes of Bill 59 was to restrain the cost of automobile insurance and that s-s. (18) should be interpreted in a way which would further that purpose. Her argument was that it would reduce insurance costs if automobile insurers could recover payouts of statutory accident benefits from defendants who were not insured by other automobile insurers. She says if this is not permitted the liability insurers who issue policies other than automobile insurance would get a free ride. She says this would not be in keeping with the purpose of Bill 59. She argued that to make automobile insurers absorb the costs would mean that "insurance rates will not decrease and the intent of the legislation will be defeated".
40In my view this argument is frivolous and invites unbridled judicial law-making. It is not the role of courts to go through a statute and give it other than its literal meaning just because the court believes to do so would further only one of the many policies of the legislation. This legislation is extremely complex and contains many policy compromises.
41Wawanesa's counsel did not put before the court any extrinsic evidence to show that her interpretation of s-s. (18) was the one intended by the legislature. The so-called unfairness she relies on has been a feature of Ontario's automobile insurance law for many years. See, for example, the discussion in Wight v. Marra (1995), 1995 10680 (ON SC), 22 O.R. (3d) 544 at p. 549, 13 M.V.R. (3d) 122 (Div. Ct.); and in Rutherford v. Niekrawietz (1998), 1998 939 (ON CA), 117 O.A.C. 387 (C.A.) at para. 15 ff.
42I would have thought the place to begin a search for the meaning of the provision was not some general policy objective but rather the legislature's intention with respect to this specific provision.
43Counsel for Wawanesa points to other provisions in the Insurance Act which do permit subrogation. She argues that "it does not make sense" that an insurer can subrogate against an uninsured driver to recover payments made under uninsured coverage but cannot subrogate for statutory accident benefits against a person protected under s. 267.8(17) who is not insured under a motor vehicle liability policy issued in Ontario.
44There is a fundamental flaw in this argument. She is relying on her sense of what is good social policy and not on what the statute says. Section 274 is a general provision prescribing that there is a release of a claim to the extent of any statutory benefits paid or available. It is specifically qualified by s. 265(8), which says that the release does not apply to subrogated claims against uninsured drivers. There is no equivalent exception for other defendants who are not insured under motor vehicle liability policies issued in Ontario.
45Counsel for Wawanesa founds another argument on the sentence structure of the Insurance Act. She argues that if s. 267.8(18) were intended to permit only the Ministry of Health to subrogate then the subsection would have been written this way:
Subsection (17) does not apply if the Ministry of Health made the payment and the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
46She is saying that the use of separated provisions under (a) and (b) and the use of a semicolon are not consistent with my interpretation.
47An examination of the statute shows that this submission is wrong. She has not carefully studied the Act. In the very same section in s-s. (22) the draftsman uses separated items under letters and puts an "or" at the end of the penultimate one. That is the structure which would have been used if her interpretation were intended. Counsel for the defendants identified numerous sections using a structure similar to s-s. (18); e.g. 239(1); 241; 251(2); 252(1) and (2); 258(11) and (12); 258.4; 267.2(1); 267.7(1).
48I hasten to point out that I am not suggesting that all those other sections have the same meaning as the one under consideration. That obviously depends on the words of the section. However, those other provisions do demonstrate the custom of dividing a provision in the same way for clarity to show whether several factors are separate or joint considerations.
49Counsel for Wawanesa also contends that s. 278 supports her position. It states:
278(1) An insurer who makes any payment or assumes liability therefore under a contract is subrogated to all rights of recovery, of the insured against any person and may bring action in the name of the insured to enforce those rights.
(Emphasis added)
50She claims this unrestricted right applies to claims by automobile insurers to recover statutory accident benefits. This argument has no merit. What she overlooks is that under s. 274(2) the payment of the statutory accident benefits effects a release by the insured of any claim to the extent of the claim. An insurer can only sue for rights enforceable by the insured and the insured has no right to sue for these claims. A section similar to the current s. 274(2) has been part of the Insurance Act for many years, e.g. see s. 274 of the Insurance Act, R.S.O. 1990, c. I.8. This elimination of the right to subrogate for recovery of payments of statutory accident benefits is now stated a second time in other terms in the new s. 267.8(17) which specifically says there is no right of subrogation for such claims. That provision was also in the Act previously in s. 267(4).
51Counsel for Wawanesa is asking that the new provision in s. 267.8(18) be interpreted in a way inconsistent with the other provisions of the Act which have been part of the automobile insurance scheme for years.
52The bottom line is that the counsel for Wawanesa has not provided any evidence or persuasive reason why the wording of s. 267.8(18) should not be interpreted in a literal way. As Stach J. observed, to interpret the subsection in the manner suggested by Wawanesa would be "counter-intuitive".
Factors advanced by the defendants as relevant to the interpretation
53In contrast, counsel for the defendants identified numerous factors supporting my interpretation of the subsection.
54He points out that the French version clearly supports my interpretation. It states:
(18) Le paragraphe (17) ne s'applique pas si les conditions suivantes sont réunies:
a) le ministère de la Santé a fait le paiement;
b) le droit de recouvrement est à l'encontre d'une personne autre qu'une personne assurée aux termes d'une police de responsabilité automobile établie en Ontario.
55The lengthy Explanatory Note to Bill 59 tabled in the legislature when Bill 59 was introduced includes an explanation of each subsection of s. 267.8. The relevant part reads:
Limitation on Subrogation
A new subsection 267.8(17) is added to the Act to state that a person who has paid a benefit as a result of an automobile accident has no right to sue an at-fault party to recover the losses paid.
However, subsection 267.8(18) authorizes the Ministry of Health to recover from at-fault parties not covered by an Ontario automobile insurance policy. These at-fault parties could include municipalities, repair shops or out-of-province insureds.
56That Explanatory Note makes it clear that the exemption only applies to claims by the Ministry of Health. Elsewhere the Explanatory Note describes how this meshes with s. 267.8(5) and related amendments to the Health Insurance Act, R.S.O. 1990, c. H.6.
57Counsel for the defendants also points out that s. 267.8(17) does not introduce a new concept. As I have noted, a similar provision was in s. 267(4) of the Insurance Act, R.S.O. 1990, c. I.8.
58Counsel for the defendants points out another complementary provision which not only shows that the statutory accident benefits must be deducted from any tort damages but also that this benefit extends to unprotected defendants like the O.P.P.: s. 267.8(3). This provision would also prevent subrogation by an automobile insurer for recovery of statutory accident benefits.
59Counsel for the defendants argues that a special exemption is specified for the Ministry of Health in s. 267.8(5) which states that payments for health care are not deducted from the tort damages recoverable if the Ministry brings a claim to recover them. The reason for this exemption is simple: insurers who issue motor vehicle liability policies pay a levy to the Ministry of Health pursuant to s. 14.1 of the Insurance Act and Assessment of Health System Costs, O. Reg. 401/96. This meshes perfectly with the amendment to s. 30 of the Health Insurance Act enacted simultaneously with the disputed section of the Insurance Act. As explained in the legislature's Explanatory Note, the amendment clarifies that the Ministry's right of subrogation is restricted to persons who are not insured under motor vehicle liability policies issued in Ontario. The disputed provisions of s. 267.8(18) of the Insurance Act say the same thing.
60Finally, from the reverse perspective, counsel for the defendants points out that Wawanesa's interpretation of s. 267.8(18) conflicts with other statutory provisions. Wawanesa's interpretation that (a) and (b) are separate unrelated provisions means that (a) is an isolated general exception to all claims by the Ministry and would permit the Ministry to subrogate against anyone, including a person insured under a motor vehicle liability policy issued in Ontario. That interpretation would conflict with the provisions of s. 30(5) of the Health Insurance Act, which specifically states that the Ministry is not subrogated to any claim against a person insured under a motor vehicle liability policy issued in Ontario. That provision was enacted by Bill 59 at the same time as s. 267.8(18) of the Insurance Act.
Conclusion
61The stated intention of the legislature as set out in its Explanatory Note, the simultaneous amendments to the Health Insurance Act, the historical sequence of rules concerning the lack of subrogation rights of automobile insurers for recovery of statutory accident benefits, and the literal meaning of the provisions in both official languages, all indicate that s. 267.8(18) is a provision applicable only to subrogated claims by the Ministry.
62I conclude that Kozak J. erred in law in his interpretation of the provision. I would allow the appeal, set aside the order of Kozak J. and grant summary judgment dismissing the action because the claims it is intended to advance are barred by legislation and there is no genuine issue for trial.
Costs
63I would award the appellants (defendants) their costs throughout.
64On the motion before Kozak J., he awarded only partial costs because of divided success. He stated that if either party had been wholly successful he would have awarded that party $10,000 plus GST. I would award the appellants that amount.
65I would award the appellants costs of the application for leave to appeal before Stach J., which I would fix at $2,500 on a party and party scale.
66On the appeal before us, I would award the Appellants costs fixed at $5,000 on a party and party scale. In my view this is not a matter where costs should be reduced because of the novelty of the issue because there was no merit to the position of Wawanesa.
67The remainder of the costs of the action shall be assessed.
APPENDIX A
Section 267.8 of the Insurance Act
267.8(1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:
All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of the income loss and loss of earning capacity.
All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.
All payments in respect of the incident that the plaintiff has received before the trial of the action under a sick leave plan arising by reason of the plaintiff's occupation or employment.
(2) No reduction shall be made under subsection (1) for payments in respect of income loss if the payments are in respect of income loss suffered in the seven days after the incident.
(3) If persons other than protected defendants are liable for damages for income loss or loss of earning capacity, the reduction required by subsection (1) shall first be applied to the damages for which the protected defendants and the other persons are jointly and severally liable under subclause 267.7(1)(a)(i), and any excess shall be applied to the amount for which the other persons are solely liable under subclause 267.7(1)(a)(ii).
(4) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for expenses that have been incurred or will be incurred for health care shall be reduced by the following amounts:
All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of the expenses for health care.
All payments in respect of the incident that the plaintiff has received before the trial of the action under any medical, surgical, dental, hospitalization, rehabilitation or long-term care plan or law.
(5) Paragraph 2 of subsection (4) does not apply to a payment made by the Ministry of Health if the action is brought under section 30 of the Health Insurance Act.
(6) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for pecuniary loss, other than the damages for income loss or loss of earning capacity and the damages for expenses that have been incurred or will be incurred for health care, shall be reduced by all payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of pecuniary loss, other than income loss, loss of earning capacity and expenses for health care.
(7) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages in respect of non- pecuniary loss to which a plaintiff is entitled shall not be reduced because of any payments or benefits that the plaintiff has received or is entitled to receive.
(8) The reductions required by subsections (1), (4) and (6) shall be made after any apportionment of damages required by section 3 of the Negligence Act.
(9) A plaintiff who recovers damages for income loss, loss of earning capacity, expenses that have been or will be incurred for health care, or other pecuniary loss in an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile shall hold the following amounts in trust:
All payments in respect of the incident that the plaintiff receives after the trial of the action for statutory accident benefits in respect of income loss or loss of earning capacity.
All payments in respect of the incident that the plaintiff receives after the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.
All payments in respect of the incident that the plaintiff receives after the trial of the action under a sick leave plan arising by reason of the plaintiff's occupation or employment.
All payments in respect of the incident that the plaintiff receives after the trial of the action for statutory accident benefits in respect of expenses for health care.
All payments in respect of the incident that the plaintiff receives after the trial of the action under any medical, surgical, dental, hospitalization, rehabilitation or long-term care plan or law.
All payments in respect of the incident that the plaintiff receives after the trial of the action for statutory accident benefits in respect of pecuniary loss, other than income loss, loss of earning capacity and expenses for health care.
(10) A plaintiff who holds money in trust under subsection (9) shall pay the money to the persons from whom damages were recovered in the action, in the proportions that those persons paid the damages.
(11) Any dispute concerning a plaintiff's liability to make payments under subsection (10) shall, on the request of a person who claims to be entitled to a payment under that subsection, be submitted to arbitration in accordance with the Arbitration Act, 1991.
(12) The court that heard and determined the action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of the automobile, on motion, may order that, subject to any conditions the court considers just,
(a) the plaintiff who recovered damages in the action assign to the defendants or the defendants' insurers all rights in respect of all payments to which the plaintiff who recovered damages is entitled in respect of the incident after the trial of the action,
(i) for statutory accident benefits in respect of income loss or loss of earning capacity,
(ii) for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan,
(iii) under a sick leave plan arising by reason of the plaintiff's occupation or employment,
(iv) for statutory accident benefits in respect of expenses for health care,
(v) under any medical, surgical, dental, hospitalization, rehabilitation or long-term care plan or law, and
(vi) for statutory accident benefits in respect of pecuniary loss, other than income loss, loss of earning capacity and expenses for health care; and
(b) the plaintiff who recovered damages in the action co-operate with the defendants or the defendants' insurers in any claim or proceeding brought by the defendants or the defendants' insurers in respect of a payment assigned pursuant to clause (a).
(13) Subsection (9) no longer applies if an order is made under subsection (12).
(14) Subsections (9) to (13) prevail over sections 65, 66 and 67 of the Pension Benefits Act in the event of a conflict.
(15) Payments or benefits received or that were, are or may become available to a person under the Workers' Compensation Act shall not be applied under subsection (1), (4) or (6) to reduce the damages awarded.
(16) A reduction made under subsection (1), (4) or (6) does not apply for the purpose of determining a person's entitlement to compensation under subsection 10(2) of the Workers' Compensation Act.
(17) A person who has made a payment described in subsection (1), (4) or (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment.
(18) Subsection (17) does not apply if,
(a) the Ministry of Health made the payment; and
(b) the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
(19) The Workers' Compensation Board is not subrogated to a right of recovery of the insured against another person in respect of a payment or benefit paid by the Workers' Compensation Board to the insured or in respect of a liability to make such payment or benefit.
(20) For the purposes of subsections (1), (3), (4) and (6), the damages payable by a person who is a party to the action shall be determined as though all persons wholly or partly responsible for the damages were parties to the action even though any of those persons is not actually a party.
(21) For the purpose of subsection (1), (4) or (6), a payment shall be deemed not to be available to a plaintiff if the plaintiff made an application for the payment and the application was denied.
(22) Subsection (21) does not apply if the court is satisfied that the plaintiff impaired his or her entitlement to the payment by,
(a) failing to give any notice required by law of the application for the payment;
(b) failing to make himself or herself reasonably available for any examination that was requested by the person to whom the application was made and that was required by law; or
(c) settling in bad faith his or her entitlement to the payment to the detriment of a person found liable for damages in the action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of the automobile.
1GREER J. (dissenting):-- I have read the reasons of my colleague, Mr. Justice Ferguson, and concur with his description of the issue before us and the general history of the proceeding, as well as the standard of review. I do, however, disagree with the conclusion reached by Mr. Justice Ferguson that Mr. Justice Kozak, whose decision is being appealed from, erred in the conclusion he came to. Kozak J. held that the subrogated claim by the plaintiffs (respondents on the appeal) for recovery of the statutory accident benefits ("SABS") was not barred by s. 267.8(17) of the Insurance Act, R.S.O. 1990, c. I.8 as enacted by the Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21 (known as Bill 59 or AIRS) and that the issue should proceed to trial.
2The defendants brought on a motion for summary judgment under Rule 20 before Kozak J. on the ground that the two categories of subrogated claims were barred by s. 267.8(17) and s. 263(5)(b) of Bill 59. In his reasons, Kozak J. concluded that the subrogated property damage claim was barred by s. 267.8(17) of Bill 59 but concluded that the subrogated claim for recovery of the statutory accident benefits was not barred by s. 267.8(17). Kozak J. held the following [at p. 342 O.R.]:
Section 267.8(17) makes it most clear that an insurer that has made payment described in s-ss. (1), (4), and (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment. On the other hand, s. 267.8(18)(b) also makes it clear that the exception to subrogation created by s. 267.8(17) does not apply if the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
He then went on to dismiss the defendants' motion for summary judgment with respect to the SABS payments, in that he found that the plaintiff had a good cause of action that presents a genuine issue for trial.
3Kozak J. held that the unprotected defendants in the action before him do not fall within the category of persons against whom there is no right of subrogation by virtue of s. 267.8(18)(b). He states in para. 37 of his reasons [at pp. 343-44 O.R.]:
It is the view of this court that the interpretation placed upon the application of s. 267.8(17) by counsel for the plaintiffs is the correct one and that the insurer Wawanesa is not precluded from asserting its rights of subrogation against the unprotected defendants in the herein action. The intention of the legislature, bearing in mind the purpose of the legislation, a reading of the legislation in context and the unambiguous language of s. 267.8(18)(b), make it clear that the defendants in this case were not intended to be immunized from subrogation. . . .
4The SABS are being paid by Wawanesa to Christopher Zoreses and Antonio Arvonio, two of the parties who were seriously injured in the accident. The third person in the truck which was involved in the collision was Ronald Morson, who was killed. The collision took place on January 10, 1998. The plaintiffs in this case, who are the respondents on the appeal, take the position that there was an extremely dangerous condition existing on the highway for vehicles travelling east on it. They say that the road was snow-covered and slippery, that road markings were not visible, and that asphalt had broken away from the edge of the pavement. This trench, say the respondents, was approximately 87.6 metres long and about 20 to 30 centimetres wide and 4 centimetres deep. When the truck in which all three victims were riding came in contact with this broken pavement, the driver lost control and collided head-on with a tractor-trailer transport truck travelling in the opposite direction. None of the appellants, there fore, was involved as a driver, nor were any of them present on the scene as road-crew or directing traffic, when the collision occurred. This collision was not the only accident which occurred in the vicinity of that area within a 30-hour period.
5The respondents point out that the intent of Bill 59 was to restore the right of innocent accident victims to sue for loss of income and loss of earning capacity in excess of the no-fault benefit. With this restoration of tort rights, the Honourable Ernie L. Eves, then Deputy Premier, Minister of Finance and Government House leader, stated when he introduced the Bill that ". . . fairness is brought back into the auto insurance system". See: Ontario Hansard -- Tuesday. June 4, 1996. This is the intention of the legislature referred to by Kozak J. The respondents therefore take the position that a decision regarding Wawanesa's entitlement to claim against the appellants should be reached only after all relevant evidence has been heard by the court. They rely on Ruth Sullivan, Driedger on the Construction of Statutes, 3d ed. (Toronto: Butterworths, 1994) c. 18, at p. 430, wherein it is pointed out that courts should look at extrinsic materials, unless the legislation in question is neit her ambiguous nor unclear. Driedger states at p. 340:
The constraint is pointless because, given the plasticity of language and the complexity of law, virtually all legislation is ambiguous in that it is susceptible to more than one reading.
There is little point in a test that virtually all legislation meets. The constraint also is misleading in that it perpetuates the empty rhetoric of the plain meaning rule. Under current judicial practice, to say that a provision is not ambiguous, that its meaning is clear [or] "plain", is a conclusion reached at the end of interpretation, not a threshold test. It is a judgment that can appropriately be made only in light of all the available evidence of legislative meaning.
The respondents therefore take the position that the wording of s. 276.8(18) must be looked at carefully in light of this proposition and given the intent of the legislature. See also: MacDonald v. Ontario Hydro (1995), 1995 10628 (ON SC), 26 O.R. (3d) 401 (Div. Ct.).
6The respondents also note that O. Reg. 401/96 [Assessment of Health System Costs] describes the formula by which the premiums of automobile insurers will be calculated. These insurers pay to the Ministry the amount of $80,000,000 annually to prevent the Ministry of Health from having any right of subrogation against automobile insurers that have issued motor vehicle liability policies in Ontario. No other class of insurers must make such a contribution. The Ministry, has, however, retained the right of subrogation against those insurers who do not contribute to this pool of funds. Wawanesa therefore claims that automobile insurers also have regained that same right and for the same reason. They maintain that if they are not given that right, the insurance rates will go up, and that the intent of the legislature will be defeated. There is logic to this argument.
7The issue of subrogation, in the context of the Insurance Act, is a complex one. Section 278(1) of that Act reads:
278(1) An insurer who makes any payment or assumes liability therefor under a contract is subrogated to all right of recovery of the insured against any person and may bring action in the name of the insured to enforce those rights.
See also: s. 278(6) of the Act dealing with concurrence in settlement or release, and s. 265(6), which deals with uninsured automobile coverage, and where the insurer is subrogated to the rights of the person to whom such amount is paid. In the case at bar, and in the proposition put forth by the respondents, Wawanesa's right to subrogate is preserved against a person other than a person insured under a motor vehicle liability policy issued in Ontario. None of the appellants [is] a person insured under a motor vehicle liability policy for purposes of this action. Further, the Act protects OHIP's right of subrogation against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
8An examination of the legislation in question shows that s. 267.8(18) is an exception to the general limitation on subrogation as set out in s. 267.8(17), which reads:
267.8(17) A person who has made a payment described in subsection (1), (4) or (6) is not subrogated to a right of recovery of the insured against another person in respect of that payment.
Subsections (1), (4) and (6) deal with collateral benefits. Subsection (1) covers income loss and loss of earning capacity, s-s. (4) health care expenses; and s-s. (6) other pecuniary loss. The exception as set out in s-s. (18) is in two parts. It does not say that only OHIP has a right of subrogation against a person other than a person insured under a motor vehicle liability policy issued in Ontario. It sets out two separate subsections, namely:
267.8(18) Subsection (17) does not apply if,
(a) the Ministry of Health has made the payment; and
(b) the right of recovery is against a person other than a person insured under a motor vehicle liability policy issued in Ontario.
9The two subsections are joined by the word "and", with the semicolon appearing after the word "payment". The word "and" can be read subjunctively and well as conjunctively. In my view, Kozak J. did not err in adopting a liberal and broader construction, given the way the subsection is worded. If the legislature had intended that only OHIP had a right of subrogation, it could have clearly said so by only having one subsection to say just that. By having two subsections, it appears that the legislature intended persons such as Wawanesa to retain the right to sue for subrogation under the new legislation in the circumstances of this action. Driedger, supra, at p. 555, also points out that in drafting legislation, excessive subdivision into clauses, subclauses and paragraphs should be avoided to prevent confusion. Further, it states that sentences should be as short as clarity and precision will allow. Had the legislature intended only the Ministry to have a right of subrogation under the circumstances of this case, it could have used that simple wording.
10The appellants say that [the] word "and" must be read conjunctively, and that both conditions must be met for the exception to apply. Since the payments made by Wawanesa were to the individual respondents and were not made by the Ministry of Health, the appellants say that the exception does not apply to Wawanesa. On the other hand, the respondents rely on Grabowski v. R., 1985 13 (SCC), [1985] 2 S.C.R. 434, 22 D.L.R. (4th) 725, where at p. 444 S.C.R. an authorization was drafted in similar fashion to s. 267.8(18) with the semi-colon after the last word in (a), followed by the disjunctive "and". The court, at p. 447 S.C.R., states that the effect of this punctuation was to make the two paragraphs two separate authorizations, which did not contain the limitations as to place in (a) and as to persons in (b). Therefore, Kozak J. did not err when he found that the legislature created two situations, not one, when it worded the legislation as it did.
11In Cunningham v. Wheeler, 1994 120 (SCC), [1994] 1 S.C.R. 359, 88 B.C.L.R. (2d) 273, the issue of subrogation is examined by the court. The appellants say that all SABS benefits received by the plaintiffs so entitled, are deductible from any judgment received by that plaintiff, pursuant to ss. 267.8(1), (4) and (6). They further point out that at common law, where an insurer is entitled to subrogate, the defendant loses any right it may have had to deduct those collateral benefits, which are referable to the subrogated claim. They say that s. 267.8(5) specifically provides that a defendant cannot deduct OHIP payments in situations where OHIP is permitted to subrogate. They say if collateral benefits are deductible, then any right of subrogation with respect to those benefits is illusory. The wording of s. 267.8(5) says that it does not apply if the action [is] brought under s. 30 of the Health Insurance Act. On the other hand, the legislation is specifically worded to give a right of recovery again st a "person other than a person insured under a motor vehicle liability policy", and it separates the Ministry from the second right set in s. 267.8(18)(b).
12The appellants also argue that the French language version of the legislation must also be examined. In this case, it says that the French language confirms the English language version. On the other hand, there are cases, which say that this is not the definitive test. See: R. v. Cie Immobilière BCN Ltée, 1979 12 (SCC), [1979] 1 S.C.R. 865, 97 D.L.R. (3d) 238. The shared meaning must therefore be tested against other indicators of meaning.
13As the appellants did not appeal on the issue of vicarious liability, which Kozak J. found should go to trial, I make no comment on that aspect of his decision. I do not find that Kozak J. erred at law in refusing that part of the summary judgment now being appealed from. I therefore dismiss the appeal accordingly.
Appeal allowed.