Sutherland v. Singh et al. [Indexed as: Sutherland v. Singh]

106 O.R. (3d) 553

2011 ONCA 470

Court of Appeal for Ontario,

Moldaver, Gillese and Karakatsanis JJ.A.

June 22, 2011

Insurance -- Automobile insurance -- Statutory accident benefits -- Plaintiff required to elect to receive either caregiver benefits or income replacement benefits -- Plaintiff electing to receive caregiver benefits -- Income replacement benefits not "available" to him within meaning of s. 267.8(1) of Insurance Act -- Insurance Act, R.S.O. 1990, c. I.8, s. 267.8(1). [page554]

The plaintiff was injured when his vehicle was rear-ended by one of the defendants. He was temporarily unable to return to work. When he applied for statutory accident benefits, he was required to elect to receive either caregiver benefits ("CGB") or income replacement benefits ("IRB"). He elected to receive CGBs. He subsequently sued the defendants and claimed damages for past income loss. Section 267.8(1) of the Insurance Act provides that in an action for loss or damage arising from the use or operation of an automobile, the damages to which a plaintiff is entitled shall be reduced by payments for statutory accident benefits that the plaintiff has received or that were "available". The defendants sought to deduct the value of the IRBs from the plaintiff's past income loss. The plaintiff brought a motion to determine whether the IRBs were "available" to him within the meaning of s. 267.8(1). The motion judge held that they were. The plaintiff appealed.

Held, the appeal should be allowed.

Section 36(1) of the Statutory Accident Benefits Schedule -- Accidents on or After November 1, 1996, O. Reg. 403/96 stipulates that only one of IRBs, CGBs or non-earner benefits (which were irrelevant in this case) may be paid to a person. Accordingly, once the plaintiff elected to receive CGBs, IRBs were no longer available to him. It would not be fair to allow the defendants to reduce the damages they ought to pay by an amount that the plaintiff never received and, once he elected to receive CGBs, could not receive.

APPEAL from the judgment of Whitaker J., [2011] O.J. No. 180, 2011 ONSC 391 on a motion for determination of a question of law.

Cases referred to Bannon v. McNeely (1998), 1998 CanLII 4486 (ON CA), 38 O.R. (3d) 659, [1998] O.J. No. 1673, 159 D.L.R. (4th) 223, 109 O.A.C. 339, 34 M.V.R. (3d) 189, 79 A.C.W.S. (3d) 291 (C.A.)

Statutes referred to Insurance Act, R.S.O. 1990, c. I.8, ss. 267.8 [as am.], (1), (6), 268(1)

Rules and regulations referred to Statutory Accident Benefits Schedule -- Accidents on or After November 1, 1996, O. Reg. 403/96 [as am.], ss. 4 [as am.], (1), 13, (1), 36(1) [as am.]

Paul J. Pape, for appellant. Stephen G. Ross and Brian G. Sunohara, for respondent.

The judgment of the court was delivered by

GILLESE J.A.: --

Overview

[1] Section 267.8(1) of the Insurance Act, R.S.O. 1990, c. I.8 provides that in an action for loss or damage from bodily injury arising from the use or operation of an automobile, the damages to which a plaintiff is entitled shall be reduced by payments for [page555] statutory accident benefits that the plaintiff has received or that were "available".

[2] In the present case, for the purposes of the motion that gives rise to this appeal, it was agreed that the plaintiff was entitled to two types of statutory accident benefits: income replacement benefits and caregiver benefits. He was required to elect which of the two he would receive from his insurer. He elected to receive caregiver benefits. Were the income replacement benefits "available" to him within the meaning of s. 267.8(1)? As I will explain, in my view, the answer to that question is "no".

Background

[3] On April 23, 2006, Derrick Sutherland, the plaintiff, was rear-ended by Gurmeet Singh, one of the defendants.

[4] Mr. Sutherland has a wife and three children. At the time of the accident, he was employed full-time as a machine operator at Winpack. He claims that because of the injuries he sustained in the accident, he was temporarily unable to return to work and unable to perform his pre-accident caregiving duties for his three children.

[5] Under the terms of his motor vehicle liability policy and s. 268(1) of the Insurance Act, Mr. Sutherland was entitled to the statutory accident benefits ("SABS") set out in the Statutory Accident Benefits Schedule -- Accidents on or After November 1, 1996, O. Reg. 403/96 (the "Regulation").

[6] An insured person injured in a motor vehicle accident may qualify for a weekly income replacement benefit ("IRB"), a non-earner benefit or a weekly caregiver benefit ("CGB"). Because Mr. Sutherland was employed at the time of the accident, he was not eligible for a non-earner benefit.

[7] Mr. Sutherland's insurer notified him that he might qualify for the SABS benefits. Along with the notice, the insurer included an OCF-10 election form, which it asked Mr. Sutherland to complete. The form required him to elect which of the benefits he wished to receive. It made clear that he could receive only one type of the SABS benefits.

[8] Mr. Sutherland elected to receive CGBs. His insurer paid him CGBs for the period during which he remained unable to provide care for his children.

[9] In 2008, Mr. Sutherland issued a statement of claim in which he claimed for, among other things, past income loss.

[10] The defendants sought to deduct, from Mr. Sutherland's past income loss, the value of the IRBs that were available to him but which he never received because he had elected to receive CGBs. They maintained that prior to his election, [page556] Mr. Sutherland could have chosen IRBs and, therefore, those payments were "available" within the meaning of s. 267.8(1) of the Insurance Act.

[11] Mr. Sutherland brought a motion to have the matter determined as a question of law. [^1]

[12] The motion judge agreed with the defendants and dismissed the motion. He noted that s. 267.8(1) entitles the defendants to deduct benefits that were available to Mr. Sutherland and that the purpose of the provision, as acknowledged by the parties, is to prevent double recovery. Nonetheless, at para. 13 of his reasons for decision, he concluded that:

In my view, the term available must be given its usual plain language meaning in the context of section 267.8(1). Where at the point of making his election for SAB benefits, the plaintiff can choose to receive income benefits but chooses not to as in this case, such benefits must be understood to have been "available" to the plaintiff at the point of the election. If available, then according to the provisions of 267.8(1), such benefits may be deducted from the damages to which the plaintiff is entitled.

[13] Mr. Sutherland appealed to this court.

[14] After the oral hearing of the appeal, the court advised the parties that the appeal would be allowed, with reasons to follow. These are the promised reasons.

Issue

[15] This appeal raised a single issue: were IRBs "available" to Mr. Sutherland within the meaning of s. 267.8(1) of the Insurance Act, given that he properly elected to receive CGBs?

The Relevant Statutory Provisions

[16] Sections 267.8(1) and 268(1) of the Insurance Act are referred to throughout the reasons. They read as follows:

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 the plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:

1. 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. [page557] . . . . .

(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 to 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. . . . . .

268(1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule, c. 10, s. 26 (1). (Emphasis added)

[17] Sections 4(1), 13(1) and 36(1) of the Regulation are relevant to this appeal. They read as follows:

4(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:

1. The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.
2. The insured person, i. was not employed at the time of the accident, ii. was employed for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident, iii. was 16 years of age or more or was excused from attendance at school under the Education Act at the time of the accident, and iv. as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment in which the insured person spent the most time during the 52 weeks before the accident.
3. The insured person, i. was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and that is evidenced in writing, and ii. as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment he or she was entitled to start under the contract. . . . . . [page558]

13(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a caregiver benefit if the insured person meets all of the following qualifications:

1. At the time of the accident, i. the insured person was residing with a person in need of care, and ii. the insured person was the primary caregiver for the person in need of care and did not receive any remuneration for engaging in caregiving activities.
2. As a result of and within 104 weeks after the accident, the insured person suffers a substantial inability to engage in the caregiving activities in which he or she engaged at the time of the accident.

(2) The caregiver benefit shall pay for reasonable and necessary expenses incurred as a result of the accident in caring for a person in need of care.

(3) The amount of the caregiver benefit shall not exceed, (a) for the first person in need of care, (i) $250 per week, or (ii) if the optional caregiver and dependant care benefit referred to in section 27 has been purchased and is applicable to the insured person, the amount fixed by the optional benefit; and (b) for each additional person in need of care, (i) $50 per week, or (ii) if the optional caregiver and dependant care benefit referred to in section 27 has been purchased and is applicable to the insured person, the amount fixed by the optional benefit.

(4) The insurer is not required to pay a caregiver benefit for any period longer than 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to carry on a normal life. . . . . .

36(1) Only one of the following benefits may be paid to a person in respect of a period of time:

1. An income replacement benefit.
2. A non-earner benefit.
3. A caregiver benefit.

(2) If a person's application indicates that he or she may qualify for more than one of the benefits referred to in subsection (1), the insurer shall notify the person that he or she must elect within 30 days after receiving the notice which benefit he or she wishes to receive.

(3) The insurer shall deliver the notice under subsection (2) within 10 business days after receiving the person's application. [page559]

Analysis

[18] Section 267.8 entitles a defendant tortfeasor to deduct from the damages it must pay a plaintiff, among other things, any sum the plaintiff has received under SABS or could have received under SABS because it was available for IRBs (s. 267.8(1)) or pecuniary loss, such as CGBs (s. 267.8(6)). The parties accept, and I agree, that the purpose of s. 267.8 of the Insurance Act is to prevent double recovery: see Bannon v. McNeely (1998), 1998 CanLII 4486 (ON CA), 38 O.R. (3d) 659, [1998] O.J. No. 1673 (C.A.), at para. 58.

[19] For the purposes of the motion, the parties agreed that Mr. Sutherland was eligible for both IRBs (s. 4 of the Regulation) and CGBs (s. 13 of the Regulation).

[20] Section 36(1) of the Regulation stipulates that only one of the IRBs, CGBs or a non-earner benefit may be paid to a person. As mentioned earlier, non-earner benefits are not relevant in this case. Given that s. 36(1) stipulates that a person may only receive one type of benefit, once Mr. Sutherland elected to receive CGBs, in my view IRBs were no longer available to him. It would not be fair to allow the defendants, who are the tortfeasors, to reduce the damages they ought to pay by an amount that Mr. Sutherland never received and, once he elected to receive CGBs, he could not receive.

[21] The defendants say that Mr. Sutherland chose to not apply for income replacement benefits, despite the fact that they were available to him, and that he must bear the consequences of his decision.

[22] This argument ignores two things. First, it ignores the fact that Mr. Sutherland had to make an election. Section 36(1) of the Regulation says he may be paid only one of the SABS benefits. Therefore, he had to make an election. Once he elected to receive CGBs, he could not be paid IRBs. In that sense, the IRBs were not available to him.

[23] Second, this argument ignores the underlying purpose of s. 267.8, which is to prevent plaintiffs from double recovery for their losses. If the defendants' argument is correct, they will be entitled to credit for both CGBs, which Mr. Sutherland received, and IRBs, which he never received. This would lead to a situation in which Mr. Sutherland is undercompensated and the defendants would receive a windfall. This would not be a fair result and it cannot have been intended. The purpose of s. 267.8 is to ensure that plaintiffs do not receive double compensation -- not to create a windfall for tortfeasors. [page560]

[24] A final comment is in order. While counsel for the defendants on appeal (not the same as counsel below) submitted that the decision below was correct and should be upheld, he also argued that there were certain factual matters in dispute that made it inappropriate to have this issue decided as a question of law. For example, he queried whether Mr. Sutherland was properly entitled to claim CGBs.

[25] This position is logically inconsistent. The court could not ratify the decision below if that decision was made on a fundamentally flawed procedural basis. In any event, it is not available given the way in which this matter unfolded. The motion judge dealt with this matter on the basis that "[t]he significant facts are not in dispute" (para. 2 of the reasons for decision). At the oral hearing of the appeal, counsel for the defendants below confirmed (through counsel for the defendants on appeal) that he had, for the purposes of the motion, conceded that Mr. Sutherland was entitled to CGBs and properly made his election for the same. Neither this court nor the court below made those findings. Both courts simply acted on the facts as agreed to by the parties. Thus, there were no factual questions that precluded the motion judge or this court from deciding the question of law in issue.

Disposition

[26] Accordingly, the appeal is allowed, the decision below set aside and the motion is granted. The plaintiff is entitled to his costs here and below, fixed at $15,000 and $4,900, respectively. Both sums are all inclusive.

Appeal allowed.

[^1]: Although Mr. Sutherland asked the motion judge to decide three questions of law, the respondents say that they never disputed two of those questions. Thus, the only question decided by the motion judge was whether IRBs were available to Mr. Sutherland and therefore could be deducted from his past income loss.