El-Khodr v. Lackie et al.

[Indexed as: El-Khodr v. Lackie]

Ontario Reports

Ontario Superior Court of Justice,

Toscano Roccamo J.

April 29, 2015

126 O.R. (3d) 314 | 2015 ONSC 2824

Case Summary

Insurance — Automobile insurance — Deductions — Benefit of drug coverage available to persons 65 years of age and over under Ontario Drug and Benefit Program ("ODBP") not constituting "payments to which the plaintiff . . . is entitled" for purposes of s. 267.8(12)(a)(v) of Insurance Act and not assignable to defendants — Trial judge declining to instruct jury that plaintiff's potential entitlement to coverage under ODBP was not to be taken into account as contingency in awarding future medication costs — Insurance Act, R.S.O. 1990, c. I.8, s. 267.8(12)(a)(v).

The plaintiff brought an action for damages for catastrophic injuries suffered in a motor vehicle accident. At the pre-charge meeting with counsel, a question arose as to the direction to be provided to the jury on whether, in their assessment of damages, a reduction of the plaintiff's claim for future medication costs [page315] was required in order to account for the drug coverage available to persons aged 65 or older under the Ontario Drug and Benefit Program. The plaintiff did not turn 65 until 2029. The plaintiff argued that the jury should be instructed to disregard his potential coverage under the ODBP, as any benefit he might receive under the program would be assignable to the defendants under s. 267.8(12) (a)(v) of the Insurance Act.

Held, the jury should not be given the instruction urged by the plaintiff.

The benefit of the drug coverage available under the ODBP does not constitute "payments to which the plaintiff . . . is entitled" for the purposes s. 267.8(12)(a)(v) of the Act. No money is paid to an individual covered under the ODBP. Rather, he or she simply pays less at the pharmacy when purchasing prescription drugs. Any benefit the plaintiff might receive under the ODPB was not assignable to the defendants under s. 267.8(12)(a)(v). In awarding future medication costs, the jury was entitled to take into account any risk that the plaintiff's costs would decrease.

Cases referred to

Demers v. B.R. Davidson Mining & Development Ltd. (2012), 111 O.R. (3d) 42, [2012] O.J. No. 2570, 2012 ONCA 384, 98 C.C.P.B. 176, 94 C.C.L.T. (3d) 30, 292 O.A.C. 164, 351 D.L.R. (4th) 64, 11 C.C.L.I. (5th) 38, 35 M.V.R. (6th) 93, 215 A.C.W.S. (3d) 200; Hoang (Litigation guardian of) v. Vicentini, [2013] O.J. No. 321, 2012 ONSC 6644, 19 C.C.L.I. (5th) 120, 225 A.C.W.S. (3d) 221 (S.C.J.); Lurtz v. Duchesne, 2005 (ON CA), [2005] O.J. No. 354, 194 O.A.C. 119, 136 A.C.W.S. (3d) 1055 (C.A.); Meloche v. McKenzie, 2005 (ON SC), [2005] O.J. No. 3761, 27 C.C.L.I. (4th) 134, 144 A.C.W.S. (3d) 944 (S.C.J.); Momand v. Wild Water Kingdom Ltd., [2006] O.J. No. 4336, 152 A.C.W.S. (3d) 841, 2006 (C.A.); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006, D.T.E. 98T-154, 76 A.C.W.S. (3d) 894; Sutherland v. Singh (2011), 106 O.R. (3d) 553, [2011] O.J. No. 2901, 2011 ONCA 470, 282 O.A.C. 120, [2011] I.L.R. I-5163, 338 D.L.R. (4th) 568, 14 M.V.R. (6th) 186, 98 C.C.L.I. (4th) 165, 203 A.C.W.S. (3d) 835

Statutes referred to

Health Insurance Act, R.S.O. 1990, c. H.6, s. 31(1)

Insurance Act, R.S.O. 1990, c. I.8, s. 267.8(9), (9)(1)- (9)(5), (12)(a)(v)

Authorities referred to

Ontario, Legislative Assembly, Legislative Debates (Hansard), 34th Parl., 2nd Sess. (December 5, 1989) (Murry J. Elston), "Automobile "Insurance", online: <http://hansardindex.ontla.on.ca/ hansardeissue/34-2/ l079.htm>)

Osborne, Coulter A., Report of Inquiry into Motor Vehicle Accident Compensation in Ontario, vol. 1 (Toronto: Ontario Ministry of the Attorney General and the Ministry of Financial Institutions, 1988)

RULING on an assignment of future collateral benefits.

Joseph Y. Obagi and Elizabeth A. Quigley, for plaintiff.

Barry A. Percival, Q.C., for defendants.

[1] TOSCANO ROCCAMO J.: — The plaintiff, Kossay El-Khodr, brings an action seeking damages for catastrophic injuries sustained in a motor vehicle accident against Raymond Lackie, [page316] the driver of the vehicle that rear-ended Mr. El-Khodr's vehicle, and John McPhail, the owner of the vehicle driven by Mr. Lackie. The case is being tried by judge and jury. At the pre-charge meeting with counsel on April 23, 2015, after four weeks of trial, a question arose as to the direction to be provided to the jury on whether, in their assessment of damages, a reduction of the plaintiff's claim for future medications costs was required to account for the current drug coverage available to persons aged 65 years or older under the Ontario Drug and Benefit Program ("ODBP"). The plaintiff does not turn 65 until 2029.

[2] In this decision, I address the issue of whether it is correct in law to instruct the jury that the plaintiff's potential entitlement to coverage under the ODBP may be taken into account as a contingency in awarding future medication costs.

[3] The ODBP covers most of the cost of prescription drugs for certain categories of individuals, including those aged 65 or older. Mr. El-Khodr will thus potentially be eligible for the program when he turns 65. The question is, if the jury members make an award for future costs of medication, should they take into account a reduction in the present value of Mr. El-Khodr's future medication costs due to coverage under the ODBP?

[4] The plaintiff argues that the jury should be instructed to disregard Mr. El-Khodr's potential coverage under the ODBP, as any benefit the plaintiff may receive under the program would be assignable to the defendants under s. 267.8(12) (a)(v) of the Insurance Act, R.S.O. 1990, c. I.8 (the "Act").

[5] The defendants argue that any benefit the plaintiff might receive under the ODBP is not caught by s. 267.8(12) (a)(v) of the Act, because no money is paid to an individual covered under the ODBP. Rather, such an individual simply pays less at the pharmacy when purchasing prescriptions. As the defendants would thus not be entitled to the assignment of any benefits the plaintiff may receive under the ODBP, the defendants posit that the jury should be instructed to consider a potential reduction in the award for future medication costs as a result of coverage under the ODBP. In other words, the plaintiff's potential future entitlement to coverage under the ODBP is properly considered by way of a contingency. If the jury believes there is a possibility that the plaintiff will be covered by the ODBP in the future, they should quantify that possibility in the same way they are instructed to consider any negative contingency with respect to a future award of damages and reduce any amount awarded for future medication costs accordingly.

[6] The answer to this issue hinges on the correct interpretation of s. 267.8(12)(a)(v) of the Act, which governs the assignment [page317] of future collateral benefits. That provision provides, in part, as follows:

267.8(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,

(v) under any medical, surgical, dental, hospitalization, rehabilitation or long-term care plan or law[.]

(Emphasis added)

[7] The modern or purposive approach to statutory interpretation is that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament (Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 21).

[8] Whether or not the benefit of coverage under the ODBP comes within the language of s. 267.8(12)(a)(v) depends, in my view, on the interpretation of the term "payments". This term is not defined in the Act.

[9] The Shorter Oxford English Dictionary defines "payment" as ". . . the action, or an act, of paying; a sum of money (or other thing) paid . . . The action, or an act, of rendering to a person anything due, deserved or befitting, or of discharging an obligation . . .".

[10] The Canadian Law Dictionary defines payment as follows: "The transfer of money from one person to another with the assent of both parties. A transfer made without such assent will not constitute payment."

[11] Black's Law Dictionary, 6th ed. (St. Paul, Minn.: West Publishing Co., 1990) also defines "payment", as follows:

In a more restricted legal sense payment is the performance of a duty, promise, or obligation, or discharge of a debt or liability, by the delivery of money or other value by a debtor to a creditor, where the money or other valuable thing is tendered and accepted as extinguishing debt or obligation in whole or in part. Also the money or other things so delivered.

[12] Essential to these definitions is the idea of transfer or delivery -- the recipient receives money or something else of value in satisfaction of an obligation. [page318]

[13] In the case of the ODBP, those eligible for coverage cannot be said to receive a payment under the program. It is not the case that an eligible individual incurs the cost of medication, and then is reimbursed for all or part of the price. Rather, eligible individuals simply pay less for medications. There is, in that sense, no delivery or transfer of anything to such an individual, which could then be assignable to a defendant under s. 267.8(12)(a)(v).

[14] This conclusion -- that a delivery or transfer of something of value is necessary to engage s. 267.8(12) (a)(v) -- is further supported by reading that section in context. In particular, s. 267.8(9)(1)-(5), which are related provisions governing a plaintiff's obligation to hold certain future payments in trust, refer to "[a]ll payments in respect of the incident that the plaintiff receives" (emphasis added).

[15] It could be argued that some portion of the medication constitutes payment -- i.e., the portion of the medication covered under the ODBP is received by the individual, albeit via a pharmacist, in satisfaction of the government's obligation to provide coverage to eligible individuals. However, even if the concept of payment is stretched this far, it is the payment itself that is to be assigned to the defendants or defendants' insurer under s. 267.8(12)(a)(v). Obviously, the medication itself would not be assignable, and the legislature did not include language to the effect that the value of the payment was assignable.

[16] I conclude that the benefit an individual receives from being covered under the ODBP is not captured by s. 267.8(12) (a)(v) of the Act, as any such benefit is not a "payment". Rather, a successful plaintiff's potential eligibility for coverage under the ODBP is properly considered a contingency that should be taken into account in calculating an award for future medication costs.

[17] This interpretation of s. 267.8(12)(a)(v) is consistent with the intention of Parliament in enacting the provisions dealing with future collateral benefits in the Insurance Act. According to Patterson J. in Meloche v. McKenzie, 2005 (ON SC), [2005] O.J. No. 3761, 27 C.C.L.I. (4th) 134 (S.C.J.), at para. 11, "[t]he intention of 267.8 was an overt attempt by the Legislature to eliminate double recovery in tort awards arising out of claims for damages on account of injuries sustained in motor vehicle accidents" (emphasis added) (see, also, Sutherland v. Singh (2011), 106 O.R. (3d) 553, [2011] O.J. No. 2901, 2011 ONCA 470, [2011] I.L.R. I-5163, at para. 18; Hoang (Litigation guardian of) v. Vicentini, [2013] O.J. No. 321, 2012 ONSC 6644, 19 C.C.L.I. (5th) 120 (S.C.J.), at paras. 18 and 29). [page319]

[18] To more fully understand the purpose of the collateral benefits provisions, it is important to look at how they modify the common law. Under the common law, the rule against double recovery in tort law allowed for limited exceptions, including an exception applicable to private insurance, known as the collateral benefits rule (Demers v. B.R. Davidson Mining & Development Ltd. (2012), 111 O.R. (3d) 42, [2012] O.J. No. 2570, 2012 ONCA 384, at para. 11). This rule prohibited the deduction of benefits a plaintiff received under a private insurance policy from an award for damages, and thus allowed for double recovery.

[19] In response to recommendations made in Justice Osborne's Report of Inquiry into Motor Vehicle Accident Compensation in Ontario, vol. 1 (Toronto: Ontario Ministry of the Attorney General and the Ministry of Financial Institutions, 1988), the Ontario Government sought to modify the common law collateral benefits rule, and did so initially by enacting Bill 68, the Ontario Motorist Protection Plan. The legislative debates on that bill reveal the legislature's intention to eliminate double recovery. For example, in response to a question on the impact of this modification on the worker's compensation regime, the Honourable Mr. Elston stated ("Automobile insurance" in Ontario, Legislative Assembly, Legislative Debates (Hansard), 34th Parl., 2nd Sess. (December 5, 1989) (Murry J. Elston), online: <http://hansardindex.ontla.on.ca/ hansardeissue/34-2/l079.htm>):

In my view, we have moved to do something which has been requested for some time; that is, clarify the collateral benefit rule and have people being reimbursed only once for lost wages and other things.

We think that overall our system is much fairer[.]

(Emphasis added)

[20] Here, there is no double recovery -- if Mr. El-Khodr is one day eligible for coverage under the ODBP, he will not receive payment from the Government of Ontario for medication that would, in essence, duplicate compensation he already received in an award for damages. Rather, Mr. El-Khodr's costs for medication will be less. The jury may take into account any risk that Mr. El-Khodr's costs for medication will decrease. Taking into account such contingencies reduces the risk that the defendants will be required to overcompensate Mr. El-Khodr -- a risk that is inherent in awarding lump sums in situations in which losses are uncertain.

[21] I also find that the plaintiff's position would give rise to impracticalities. No evidence was lead as to the ability of [page320] a plaintiff to account for the value of coverage under the ODBP -- calculating the value of coverage may not be a straightforward exercise. The difficulty of such an exercise may be exacerbated if the basis of eligibility for the ODBP is changed from age to income; it was the evidence of Michelle Wagenberg, who was called as an expert on the costing of future needs, that she is aware of a movement in the government to undertake such a reform.

[22] The issue in the case at bar is similar to the issue in Momand v. Wild Water Kingdom Ltd., [2006] O.J. No. 4336, 2006 (C.A.). In that case, the Ontario Court of Appeal reduced an award for damages because of an expected decrease in the cost of a particular medication due to generic competition. Just as the risk that medication may become cheaper is properly taken into account as a contingency, so too is the risk that an individual's medication costs will decrease due to government benevolence.

[23] Counsel for the plaintiff submitted case law to the effect that it is not always necessary to discount an award for cost of medication on the basis that a plaintiff might be eligible for government coverage of his or her prescription drugs (Lurtz v. Duchesne, 2005 (ON CA), [2005] O.J. No. 354, 194 O.A.C. 119 (C.A.), at para. 25). In that case, the Court of Appeal held that the trial judge was "entitled to make the award on the theory that the tortfeasors, rather than the government, should be responsible for paying the cost of the medication".

[24] An intention to make the tortfeasor, rather than the government, liable for the costs of medical treatment underlies the subrogation provisions of the Health Insurance Act, R.S.O. 1990, c. H.6, which require, among other things, that a plaintiff who sues for damages for an injury or disability for which insured services are provided must include a claim on behalf of the Ontario Health Insurance Plan for the cost of insured services (s. 31(1)). The language of these provisions is very different from the language of the collateral benefit provisions under the Insurance Act. The legislature did not take steps, in the Insurance Act, to protect its interests through the inclusion of similar subrogation provisions.

[25] As such, I would decline to favour the defendants with an assignment under s. 267.8(12)(a)(v), and would not leave a jury with the instruction urged upon me by the plaintiff.

Order accordingly.

End of Document