Basandra v. Sforza

Ontario Reports

Court of Appeal for Ontario,

Strathy C.J.O., Lauwers and Benotto JJ.A.

April 6, 2016

130 O.R. (3d) 466 | 2016 ONCA 251

Case Summary

Damages — Personal injuries — Deductions — Counsel in motor vehicle accident action negotiating jury questions which did not require jury to quantify damages for medical/ rehabilitation, attendant care and housekeeping separately — Plaintiff having received statutory accident benefits for medical/rehabilitation, attendant care and housekeeping which greatly exceeded jury's undifferentiated award — Trial judge not erring in reducing jury's award for medical/rehabilitation, attendant care and housekeeping to nil in absence of clear evidence about quantum of each benefit.

In an action for damages for personal injuries arising out of a motor vehicle accident, the jury questions, as negotiated between counsel, did not require the jury to quantify damages for medical/rehabilitation, attendant care and housekeeping separately. The jury awarded $55,000 for past care, medical/ rehabilitation and housekeeping and $50,000 for future care, medical/rehabilitation and housekeeping. Section 267.8 of the Insurance Act, R.S.O. 1990, c. I.8 provides that pecuniary damages awarded in a tort action shall be reduced by payments that the plaintiff received as collateral benefits, such as statutory accident benefits. An award can only be reduced by a corresponding statutory accident benefit on a benefit-by-benefit basis. The plaintiff had received statutory accident benefits which exceeded the jury's award by about $40,000. The trial judge ruled that the jury's awards for past and future attendant care, medical/rehabilitation and housekeeping costs should be reduced from $105,000 to nil. The plaintiff appealed.

Held, the appeal should be dismissed.

The trial judge did not err by reducing the jury's award for past and future attendant care, medical rehabilitation and housekeeping costs to nil in the absence of clear evidence about the amount of each collateral benefit. For the statutory scheme to operate properly, trial counsel must ensure that jury questions are structured to permit the trial judge to carry out the reductions required by s. 267.8 of the Act on a benefit-by-benefit basis. In this case, counsel failed to do so, but the trial judge was reasonably assured, by comparing the amount of benefits awarded to the plaintiff by the jury with the benefits that he had already received, that the plaintiff had been fully compensated for the applicable heads of damage, even though they were lumped together. It was reasonable for the trial judge to consider that the defendant had met the onus of proof for the reduction of the jury award for pecuniary losses under s. 267.8. She reasonably apprehended that if she did not make the deductions sought by the defence, the plaintiff would be overcompensated.

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.), apld

Other cases referred to

Chisholm v. Liberty Mutual Group (2002), 2002 CanLII 45020 (ON CA), 60 O.R. (3d) 776, [2002] O.J. No. 3135, 217 D.L.R. (4th) 145, 163 O.A.C. 129, 43 C.C.L.I. (3d) 58, 33 M.V.R. (4th) 165, 116 A.C.W.S. (3d) 264 (C.A.); DeBruge v. Arnold, [2014] O.J. No. 5948, 2014 ONSC 7044 (S.C.J.); Gilbert v. South (2015), 127 O.R. (3d) 526, [2015] O.J. No. 5573, 2015 ONCA 712, [2016] I.L.R. I-5817, 342 O.A.C. 7, 259 A.C.W.S. (3d) 670; [page467] Kasap v. MacCallum, 2001 CanLII 7964 (ON CA), [2001] O.J. No. 1719, 144 O.A.C. 369, 28 C.C.L.I. (3d) 18, 12 M.V.R. (4th) 1, 105 A.C.W.S. (3d) 146 (C.A.); Meyer v. Bright (1993), 1993 CanLII 3389 (ON CA), 15 O.R. (3d) 129, [1993] O.J. No. 2446, 110 D.L.R. (4th) 354, 67 O.A.C. 134, 17 C.C.L.I. (2d) 1, 48 M.V.R. (2d) 1, 45 A.C.W.S. (3d) 1136 (C.A.); Schrump v. Koot (1977), 1977 CanLII 1332 (ON CA), 18 O.R. (2d) 337, [1977] O.J. No. 2502, 82 D.L.R. (3d) 553, 4 C.C.L.T. 74, [1978] 1 A.C.W.S. 16 (C.A.)

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, ss. 224(1) [as am.], 267.5(3) [as am.], (5) [as am.], 267.8 [as am.], (1), (4), (6), (7), (9), (10), (11), (12), (13)

Authorities referred to

Firestone, Stephen E., "Deductibility of Collateral Benefits under Ontario's Three Automobile Insurance Schemes" (1999), 21 Adv. Q. 1

APPEAL from the order of Matheson J. of the Superior Court of Justice dated August 10, 2015 in a personal injury action.

Gary Mazin and Supriya Sharma, for appellant.

Bruce Chambers, for respondent.

The judgment of the court was delivered by

[1] LAUWERS J.A.: — This action arose out of a motor vehicle accident. The jury questions, as negotiated between trial counsel and accepted by the trial judge, did not oblige the jury to structure its award of damages in a manner that reflected the requirements of s. 267.8 of the Insurance Act, R.S.O. 1990, c. I.8. That section requires the trial judge to reduce jury damages awards for pecuniary losses by the amount of collateral benefits paid to the injured plaintiff. The defendant had the onus of proof regarding both the entitlement to these reductions and their amounts. The appellant submits the trial judge erred by reducing the jury's awards for past and future attendant care, medical/ rehabilitation and housekeeping costs from $105,000 to nil, in the absence of clear evidence on the appropriate quantum of any reduction.[^1]

[2] For the reasons set out below, I would dismiss the appeal.

The Factual and Legal Context

[3] The appellant was injured in a motor vehicle accident. The jury found the respondent liable and, consistent with the jury questions, awarded the following damages to the appellant: [page468]

(1) damages for pain and suffering in the amount of $137,000;

(2) damages for the cost of "past care, medical/rehabilitation and housekeeping" in the amount of $55,000;

(3) damages for the cost of "future care, medical/ rehabilitation and housekeeping" in the amount of $50,000;

(4) damages for past loss of income of $45,000.

[4] Section 267.8 of the Insurance Act provides that pecuniary damages awarded in a tort action "shall be reduced" by payments that the plaintiff received as collateral benefits, such as statutory accident benefits including payments for health care expenses and other pecuniary losses. Since the defendant would benefit, the onus is on the defence to show whether and how the reductions should be made: 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 (C.A.), at para. 74.

[5] An award can only be reduced by a corresponding statutory accident benefit, on a benefit-by-benefit basis, under s. 267.8 of the Insurance Act. This reflects the concept that "apples should be deducted from apples, and oranges from oranges": see Bannon v. McNeely, at paras. 49, 74; Gilbert v. South (2015), 127 O.R. (3d) 526, [2015] O.J. No. 5573, 2015 ONCA 712, at para. 44. For example, an award for housekeeping can be reduced by a housekeeping benefit, but not by a medical rehabilitation benefit.

[6] The jury questions in this case unfortunately lumped together damages for medical/rehabilitation, attendant care and housekeeping. It was impossible for the trial judge to parse the jury's award in order to make the necessary statutory reductions on a benefit-by-benefit basis.

[7] Some time after the jury rendered its verdict, counsel informed the trial judge that they were unable to agree on the impact of collateral benefits on the pecuniary damages award. They moved before the trial judge for an order determining whether and how the lumped-up jury awards of $55,000 for "past loss of care, medical/rehabilitation and housekeeping" and $50,000 for "future care, medical/rehabilitation and housekeeping" should be reduced under the provisions of s. 267.8(4) and (6) of the Insurance Act to account for the statutory accident benefits received by the appellant for health care and housekeeping.

The Trial Judge's Reasons

[8] The trial judge accepted the appellant's evidence that he had received a total of $81,658.67 for medical rehabilitation benefits, $58,271.76 for attendant care benefits and $6,939.84 for [page469] housekeeping benefits. These amounts included a 2009 lump sum settlement that allocated $30,000 for past and future medical rehabilitation and $5,000 for past and future attendant care. The trial judge noted that the 2009 settlement did not set out the respective proportions related to past and future costs.

[9] The trial judge acknowledged that in light of Bannon v. McNeely, "there is no question that it is the defendant that bears the onus of establishing beyond dispute that the deduction should occur". She added: "Using the words of Bannon, I must look at what is feasible. In doing so, I must consider the objective of avoiding double compensation and also the fairness to the plaintiff required by comparing like amounts". She noted that the sheer quantum of the collateral benefits already received under the three heads was "significantly higher than the jury award".

[10] This led the trial judge to the conclusion that the jury's awards for past and future attendant care, medical/ rehabilitation and housekeeping costs should be reduced from $105,000 to nil:

As I look at those actual figures, the evidence about what those actual figures were for and the timing of the settlement vis-à-vis the trial, I conclude that the jury award should be reduced under s. 267.8 by the amount of those collateral benefits in order to avoid what I conclude would be a substantial and indeed complete double recovery by the plaintiff.

The Positions of the Parties

[11] The appellant argues that the defence had the onus to prove how the jury award should be reduced. In the absence of clear guidance from the jury, the trial judge erred by reducing the jury's awards for past and future attendant care medical/ rehabilitation and housekeeping costs from $105,000 to nil. The appellant's position throughout was that the respondent, "having agreed to the jury questions, can now not seek the benefit from a lack of specific information needed to implement the s. 267.8 deductions on an apples and apples basis".

[12] The respondent argues that the lack of clarity in the jury questions is the fault of the appellant who ". . . was content to ask the jury to make a combined award for all expenses related to his health care, medical rehabilitation and housekeeping needs", and who "should not now be permitted to separate the various heads of expenses so as to frustrate the application of s. 267". The respondent submits that the amounts received by the appellant by way of accident benefits roughly match the categories of damages awarded by the jury so that the mandatory reductions under s. 267.8 of the Insurance Act can be made "without any risk that doing so might deny the appellant full compensation". [page470]

The Issue

[13] There is a single issue in this case: did the trial judge err by reducing the jury's awards for past and future attendant care, medical/rehabilitation and housekeeping costs from $105,000 to nil in the absence of clear evidence about the quantum of each collateral benefit?

Analysis

The governing principles

[14] I begin by setting the broader context within which this issue is placed.

[15] The system of compensation for injuries suffered in motor vehicle accidents in Ontario is a hybrid of no-fault insurance coverage and traditional tort law. While the ability to sue for injuries is limited, injured parties have access to no-fault benefits. This court laid out the competing policy objectives of Ontario's system in Meyer v. Bright (1993), 1993 CanLII 3389 (ON CA), 15 O.R. (3d) 129, [1993] O.J. No. 2446 (C.A.), at p. 134 O.R., at para. 6:

In our view, the Ontario legislature enacted s. 266 and other related amendments to the Act for the purpose of significantly limiting the right of the victim of a motor vehicle accident to maintain a tort action against the tortfeasor. The scheme of compensation provides for an exchange of rights wherein the accident victim loses the right to sue unless coming within the statutory exemptions, but receives more generous first-party benefits, regardless of fault, from his or her own insurer.

See, also, Chisholm v. Liberty Mutual Group (2002), 2002 CanLII 45020 (ON CA), 60 O.R. (3d) 776, [2002] O.J. No. 3135, 217 D.L.R. (4th) 145 (C.A.), at para. 7.

The threshold

[16] The restriction or limitation on an injured party's right to sue the at-fault party for personal injury of a motor vehicle accident is described as the "threshold". Under s. 267.5(3) and (5) of the Insurance Act, the right to sue is removed unless the injured person has died or has sustained "permanent serious disfigurement" or "permanent serious impairment of an important physical, mental or psychological function".

The reduction of no-fault benefits from damage awards

[17] The statutory scheme aims at full compensation for the injured party whose injuries exceed the threshold. It also aims to prevent double compensation. This was explained by Finlayson J.A. in Bannon v. McNeely, at para. 51. If the plaintiff's injuries meet the threshold, [page471]

. . . the injured party receives the first-party no-fault benefits and can still maintain an action in tort to the full extent of the law against the tortfeasor subject (as any tort action always has been) to the principle of recovery in tort, i.e. that the injured party is to be compensated for the full amount of his or her loss but no more, as encapsulated in s. 267(1).

However, Finlayson J.A. went on to state, at para. 51, that "[o]nce a statutory exemption to the limitation on the right to sue is established, the no-fault benefits do not replace the tort award, but rather they are deducted from any tort award to the extent required to prevent double recovery".

[18] The purpose of s. 267.8 of the Insurance Act is to prevent double recovery by the plaintiff, which would amount to unjust enrichment. As Stephen E. Firestone observed, at p. 20 of his article "Deductibility of Collateral Benefits under Ontario's Three Automobile Insurance Schemes" (1999), 21 Adv. Q. 1, s. 267.8 of the Insurance Act is essentially a "codification of the principles" of this court's decision in Bannon v. McNeely.

The division of labour between the trial judge and the jury

[19] The statutory regime creates a division of labour between the trial judge and the jury. The trial judge has sole responsibility for determining whether the plaintiff's injuries meet the threshold under s. 267.5(3) and (5) of the Insurance Act. The trial judge does this without the intervention of the jury and may dismiss the case even where the jury makes an award of damages to the plaintiff: see Kasap v. MacCallum, 2001 CanLII 7964 (ON CA), [2001] O.J. No. 1719, 144 O.A.C. 369 (C.A.); DeBruge v. Arnold, [2014] O.J. No. 5948, 2014 ONSC 7044 (S.C.J.).

[20] The trial judge also has the sole responsibility to reduce the jury's award to account for the plaintiff's receipt of collateral benefits, as required by s. 267.8 of the Insurance Act. This task is performed after the jury's verdict has been rendered.

The responsibilities of counsel

[21] Section 267.8 of the Insurance Act creates several categories of statutory accident benefits to be taken into account as possible reductions in a jury award: income loss and loss of earning capacity (s. 267.8(1)); health care expenses, which includes attendant care costs by definition under s. 224(1) of the Act (s. 267.8(4)); and other pecuniary losses such as housekeeping costs (s. 267.8(6)). In view of the benefit-by-benefit basis of the reductions, these categories must be taken as silos.

[22] For the statutory scheme to operate properly, counsel must ensure that any settlement of a statutory accident benefit [page472] claim allocates the settlement funds among the heads of collateral benefits applicable in the instant case.

[23] Similarly, counsel must ensure that jury questions are structured to permit the trial judge to carry out the reductions on a benefit-by-benefit basis, as required by s. 267.8 of the Insurance Act, where that is an issue in the action. In this case, the jury questions were negotiated between counsel for the appellant and the respondent and were provided to, and accepted, by the trial judge. She noted that neither side raised an issue "about the compounded nature of these jury questions".

[24] Jury questions in motor vehicle actions related to pecuniary losses typically refer to past losses and to future losses. I make two observations about this distinction. First, separate jury questions for past and future losses are necessary because the plaintiff bears different burdens of proof for each. With respect to past losses, the burden of proof is on the balance of probabilities. For future losses, the burden is somewhat relaxed and can be proven on the basis of "substantial possibilities based on such expert or cogent evidence": Schrump v. Koot (1977), 1977 CanLII 1332 (ON CA), 18 O.R. (2d) 337, [1977] O.J. No. 2502 (C.A.), at p. 340 O.R., at para. 11. The distinction between past and future losses is also necessary since prejudgment interest is granted only for past losses.

[25] Second, the division of jury questions into past and future is relevant to the reduction of collateral benefits for each category of benefits listed in s. 267.8 of the Insurance Act. At issue in this case are health care benefits under s. 267.8(4) of the Insurance Act:

267.8(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:

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 expenses for health care.

2. 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.

(Emphasis added)

[26] Section 267.8(4) of the Insurance Act recognizes that an award may include damages "for expenses that have been incurred [past] or will be incurred [future] for health care". It provides that the sum of those awards must be reduced by the [page473] amount of payments "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". The plaintiff's entitlement to future, that is, post-trial, collateral benefits for health care is addressed in s. 267.8(9)-(13) of the Insurance Act.

[27] Under s. 267.8(4) of the Insurance Act, the total amount of any statutory accidents benefits settlement for past losses or for future expenses is to be combined for the purpose of the reducing the jury's awards in respect of those benefits. There was accordingly no need for the trial judge to consider separately the effect of the "5-6 year period during which one might fairly say there were future amounts on the settlement, but past amounts as at the trial".

[28] To summarize, trial counsel must ensure that jury questions are structured to permit the trial judge to carry out the reductions required by s. 267.8 of the Insurance Act, where that is an issue in the action. There should be a separate jury question for each past and future award in respect of each of the collateral benefits listed in s. 267.8 of the Insurance Act that may arise in the case. Anything less would impair the trial judge's ability to discharge her responsibilities under the section. I note that the trial judge has the authority to turn back inadequate jury questions and must approve the final version.

The principles applied

[29] The trial judge was faced with a mandatory statutory direction to deduct collateral benefits under s. 267.8 of the Insurance Act. She was reasonably assured, by comparing the quantum of benefits awarded to the appellant by the jury with the benefits that he had already received, that the appellant had been fully compensated for the applicable heads of damage, even though they were lumped up. The appellant had received about $40,000 more than the jury awarded.

[30] It was reasonable for the trial judge to consider that the defendant had met the onus of proof for the reduction of the jury award for pecuniary losses under both s. 267.8 of the Insurance Act and under Bannon v. McNeely. As the trial judge noted, it would have been preferable for the jury questions to have reflected the statutory scheme. However, in the context of this case, she committed no error in proceeding as she did. She reasonably gave effect to one policy objective in the statutory scheme -- full compensation -- while respecting another policy objective -- no overcompensation. The trial judge reasonably apprehended that if she did not make the reductions sought by the defence, the appellant would have been overcompensated. [page474]

[31] I would dismiss the appeal with costs to the respondent in the amount of $7,500, all inclusive, as agreed.

Appeal dismissed.

Notes

[^1]: Note that general damages for pain and suffering are called "non-pecuniary losses" by s. 267.8(7) of the Insurance Act, and are not subject to such reductions.

End of Document