COURT FILE NO.: 2342/12

DATE: 2015-10-14

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SHEHRYAR AYAZ SIDDIQUI, SHEHZOUR SIDDIQUI

and HEBA SIDDIQUI, minors by their Litigation Guardian,

FAYYAZ AHMED SIDDIQUI, Plaintiffs

AND:

SAIMA SIDDIQUI, AYYAZ SIDDIQUI, STEVEN PAPPLE

and FREDERICK ELWGREN, Defendants

BEFORE: Trimble J.

COUNSEL: Sloan H. Mandel & David MacDonald for the Plaintiffs

Kerri Kamra, for Saima Siddiqui and Ayyaz Siddiqui

Daniel I. Reisler, for Steven Papple

HEARD: June 4, 5, and September 11, 2015

ENDORSEMENT

[1] On June 5^th, the jury provided its verdict in this case. I am now to decide whether there should be deduction from the jury’s award of any of the Statutory Accident Benefits (SABs) paid to the Plaintiff, and if so, the amount of that deduction.

Issues:

[2] Deductibility of SABs paid raises the following issues in this case:

1. Who has the onus and what is the burden of proof re deducting SABs from tort awards?

2. What are the terms of the SABs Settlement?

3. Is there the required subject-matter matching between the Jury award and the SABs Settlement?

4. Is there the required temporal matching between the Jury award and the SABs settlement?

5. Does the fact that the SABs Settlement was made on December 18, 2012 prevent temporal matching with the jury’s verdict delivered on June 5, 2015?

6. Is the Defendant’s only claim to future benefit payments in the nature of a trust interest in the payments, when made in the future?

7. If the SABs settlement amount(s) is (are) deducted, is the deduction net of the fees as set in the approval judgment?

Background:

The Accident:

[3] On March 6, 2009, Saimi Siddiqui, driving the family’s Dodge Caravan, turned left from the northbound left turn lane on James Snow Parkway, onto Waldie Ave., in Milton. There was a stop sign for vehicles turning from Waldie onto the Parkway; it was an uncontrolled intersection for vehicles turning onto Waldie from the Parkway. As Mrs. Siddiqui was turning, Steven Papple, driving a Ram pickup, hit Mrs. Siddiqui’s car on the passenger side. The Plaintiff, Shehryar Siddiqui, Saimi Siddiqui’s then 13 year old son, was a front seat passenger in the Caravan. He was injured badly, sustaining a number of injuries the worst of which was his traumatic brain injury.

The Action:

[4] Shehryar sued his mother and father, respectively, as the driver and owner of the car, and Mr. Papple. Another driver was sued, but released from the action before trial. A number of other actions were commenced. By the trial, all but Shehryar’s were settled. The trial focussed on Shehryar’s brain injury and its effects.

[5] Shehryar advanced claims for general damages and future losses in income, attendant care, and medical and rehabilitation care costs. No past losses were claimed. Shehryar’s two siblings claimed damages under the Family Law Act (“FLA”).

The Jury’s Verdict:

[6] On June 5, 2015, the jury returned a verdict finding Mrs. Siddiqui 95 per cent and Mr. Papple five percent liable for Shehryar Siddiqui’s injuries. The jury assessed damages as follows:

General Damages for Shehryar Siddiqui: $ 225,000

FLA Damages, Heba Siddiqui: $ 0

FLA Damages, Shehzour Siddiqui: $ 0

Future Loss of Income/Earning Capacity: $1,050,000

Loss of Future Interdependent Relationship: $ 0

Future Medical and Rehabilitation Costs: $ 425,000

Future Personal/Attendant Care Costs: $ 50,000

Investment Management Fee: $ 87,500

Total: $1,837,500

Statutory Accident Benefits Paid:

[7] In December 18, 2012, Belair Insurance Company Inc. (a division of Intact Financial Services, and Mrs. Siddiqui’s automobile insurer - hereinafter Intact) offered to resolve Shehryar’s SABs claim on a full and final basis, for $1,423,323.49, all inclusive. The insurer signed a Settlement Disclosure Notice (Ex. 83) on December 18, 2012. The parties agreed that I could accept that Shehryar’s guardian accepted the insurer’s offer on December 18. The regulation provides that the insured can resile from the settlement within 48 hours. Shehryar’s guardian did not object to the settlement which became binding on December 20, 2012, subject to Court approval as Shehryar was a minor at the time and declared incompetent to manage his financial affairs.

[8] According to the Insurer’s “Offer to Settle Benefits”, which is part of the statutorily mandated Settlement Disclosure Notice, the total payment comprised:

$392,342.00 “for all past and future non-earner benefits.”

$443,672.00 “for all past and future medical benefits.”

$533,575.00 “for all past and future attendant care benefits.”

$53,733.89 for costs and disbursements.

Infant Settlement Approval:

[9] Fitzpatrick J. issued two Judgments on August 21, 2013. One appointed the Public Guardian and Trustee (“PGT”) as guardian of Shehryar’s property since he was declared incompetent to look after his financial affairs and the other approved the SABs settlement of $1,423,323.49. It also apportioned the settlement funds as follows:

a) $1,075,000, paid into a structured settlement with payments beginning February 9, 2013. The payments are to be made to the Accountant of the Superior Court of Justice until Shehryar turned 18. Because of Fitzpatrick J.’s other order, payments made since Shehryar turned 18 have been made to the Public Guardian Trustee (“PGT”) as well. Payments from the structure are paid at $10,235.85 per month for the first six years of the structure (until Shehryar turns 22) and then at $659.42 per month, increased annually by two per cent for an additional 38 years, or until Shehryar reaches age 76. There is a guarantee in the structure. If Shehryar dies before the 44th anniversary of the structure (in other words, before his 56th birthday), his estate receives the structure payments.

b) The PGT shall pay Mr. and Mrs. Siddiqui $4,000 per month out of the structure for Shehryar’s attendant care needs, until Shehryar reaches age 18.

c) Any further money paid during Shehryar’s minority on account of his injuries, would be paid by fiat to the credit of Shehryar, for his benefit, which include his future rehabilitation support, assisted devices, educational and vocational assessments, counselling, fitness membership and music lessons.

d) $62,444.16 is to be paid to Thomson Rogers, Shehryar’s solicitors, in trust, for payment of medical or rehabilitation expenses incurred from December 1, 2012 (the approximate date of the SABs settlement) to the date of the approval judgment.

e) $35,000 is to be paid to Thomson, Rogers for partial indemnity costs and a further $4,550 for HST on those costs.

f) $205,438.44, paid to Thomson Rogers for the balance of its solicitor and client account, plus $26,707 for HST on those fees.

g) $14,183.89, inclusive of HST, paid to Thomson Rogers for disbursements incurred.

Analysis:

The Issues:

[10] I am asked to determine what, if any of the SABs settlement funds paid for Attendant Care benefits or for Medical and Rehabilitation Benefits can be deducted from the jury’s tort award for Future Personal/Attendant Care Costs and Future Medical and Rehabilitation Costs, respectively. The parties agree that Personal/Attendant Care referred to in the jury’s verdict is the same as Future Attendant Care referred to in the SABs settlement.

[11] The parties agree that since the tort claim claimed only future losses, if there is any deduction from the tort award for SABs paid, any deduction awarded must be only for those benefits not yet spent from the SABs settlement proceeds.

The Positions of the Parties:

a) The Defendants:

[12] The Defendants, of the same interest, speak with the same voice, with one exception. They say that they should be able to deduct from the jury’s award of $425,000 for future medical and rehabilitation needs the $443,672 paid by the SABs insurer for past and future medical benefits, and from the jury’s award of $50,000 for personal care needs the $533,575 paid by the SABs insurer for past and future attendant care benefits. Such deductions would result in a recovery of $0 for these heads of damage.

[13] The Defendants say that the evidence leads to the following conclusions:

a) The SABs settlement was for future claims, only.

b) Since, immediately following the approval of the infant settlement, the Siddiqui parents fired all therapists except the educational therapist (Ms Good), the only expenditure of the SABs amounts for which a deduction is claimes is the tutor’s fees. Therefore, the deduction to which the Defendants are entitled is for the full settlement amounts for attendant care benefits and medical benefits, less Ms. Good’s fees, which should be quantifiable.

[14] The Defendants, Siddiqui say that the amount of the SABs deductions from the tort award should not be reduced by the legal fees referred to in the August 21, 2013 Judgment of Fitzpatrick J. approving the minor/incompetent settlement (the approval judgment) since the costs in the SABs settlement were addressed in the settlement with the insurer. The Defendant, Papple, says that costs should be reduced, but should be in the range of $10,000 to $15,000, which is more reflective of the Plaintiffs’ lawyers’ efforts spent in arriving at the settlement with the insurer.

b) The Plaintiffs:

[15] The Plaintiffs say that the Defendants have failed to meet their high onus to prove that the money received by the Plaintiff from the SABs insurer is for the same things as the jury award. They give the following reasons:

i) The settlement that was concluded was that which is contained in the Judgment of Fitzpatrick J., not that which is contained in the Settlement Disclosure Notice.

ii) The settlement and approval judgment are a contract. Therefore, any evidence that seeks to look behind the Judgment violates the parole evidence rule, and must be excluded.

iii) The Defendants must, but fail to establish a temporal match between the jury’s award and the SABs settlement. The settlement total amount included approximately $62,000 for past losses. The jury’s award was for future losses. Further, the SABs settlement was for losses only to that point in time when the insurer’s applicable insurance limit would have been exhausted. Therefore it is impossible to match the jury’s award, temporally, to the SABs paid.

iv) The Defendants must, but fail to establish a subject matter match between the jury’s award and the SABs settlement (apples from apples deduction). The SABs settlement included an amount for medical benefits, but $0 for rehabilitation benefits. The jury awarded a combined total of $425,000 for “future medical and rehabilitation needs”. Therefore it is impossible to match the jury’s award for specific services to the SABs settlement. Further, the monthly payment to the Plaintiff comes from a structured settlement which contains as its capital investment money received from the insurer for medical/rehabilitation benefits and attendant care benefits (both deductible in principle), non-earner benefits (not an issue in this action) and interest (not deductible). Therefore it is impossible to identify what money in the monthly payment Shehryar receives comes from a deductible amount and what comes from a non-deductible amount.

v) If the Defendants are entitled to a deduction from the jury award for SABs benefits paid, it is in the form of a trust imposed by the legislation for future award, since money will not be ‘received’ by the Plaintiff until paid by the structure. The Defendants are not entitled to this trust interest because of their failure to establish a temporal or subject matter match between the heads of damages awarded and the SABs paid through the structure.

vi) The money paid into the structure was net of legal fees agreed to by the clients and approved by the court. Any SABs award deduction, therefore, must be reduced by the costs awarded in the approval judgment. Legal costs as approved should be applied proportionately to the SABS categories in the settlement.

Issue 1) Onus and Standard of Proof Regarding Deductibility of SABS:

Statutory Framework:

[16] In an action arising from the use of an automobile after November 1, 1996, the tortfeasor’s ability to deduct from any award against him those non-income or earning capacity Statutory Accident Benefits payable after trial is set out in s. 267.8(4) to (12) of the Insurance Act, RSO 1990, c.I.8, which read:

Collateral benefits

Health care expenses

(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. 1996, c. 21, s. 29.

[Emphasis added]

Other pecuniary loss

(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. 1996, c. 21, s. 29.

Future collateral benefits

(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:

4. 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.

5. 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. 1996, c. 21, s. 29.

Payments from trust

(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. 1996, c. 21, s. 29.

Assignment of future collateral benefits

(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). 1996, c. 21, s. 29.

[17] Section 224(1) of the Insurance Act defines “health care” to include “…all goods and services for which payment is provided by the medical, rehabilitation and attendant care benefits provided for in the Statutory Accident Benefits Schedule”.

Jurisprudence:

[18] With respect to deduction of SABs or other collateral benefits from a tort award, the following legal principles apply:

1. S. 267.8 of the Insurance Act is an exception to the common law rule relating to collateral source benefits. It prevents double recovery by a plaintiff where the plaintiff has obtained a judgment for damages covering the same losses paid by the collateral benefit payor (see Gilbert v. South et al., 2014 ONSC 3485, at para. 9; Mikolic v. Tanguay et al. 2013 ONSC 7177, at para.s 21-22; Hoang v. Vicentini, 2014 ONSC 5893, at para.s 18 and 29).

2. The Statute must be strictly construed (see Chrappa v. Ohm (1998) 1998 CanLII 893 (ON CA), 38 O.R. (3d) 651 (C.A.) at p. 657; Bannon v. Hagerman Estate (1998) 1998 CanLII 4486 (ON CA), 38 O.R. (3d) 659 (C.A.) at p. 679).

3. The onus is on the Defendant to establish the entitlement to the future benefits. (see Chrappa, supra, at p. 654; Bannon, supra, at p. 673; Hoang, supra, at para. 36).

4. The Defendant’s obligation is “very strict” (see Bannon, supra, at page 673, Hoang, supra, at para. 36).

5. The onus is on the Defendant to prove that it is “beyond dispute” that the future benefit would be paid in a specific amount. Persuasive evidence must demonstrate that it is clear that the Plaintiff qualifies for the future benefits (see Hoang, supra at para.s 28 and 36; Bannon, supra, at p. 673; Chrappa, supra, at p. 655).

6. If the value of, or entitlement to the future benefit is uncertain, or if it is unclear the extent to which the benefits received cover the same losses as the damages awarded, it is not “beyond dispute” that the Plaintiff would receive a certain sum, and therefore, no deduction can be made (Moore v. Cote, [2008] O.J. No. 3541 (Ont. S.C.), at para. 9).

7. The deduction of SABs must be from an “akin” head of tort damages, or “apples from apples” deduction (Bannon, supra, at po. 678-79; Hoang, supra, at para. 34).

8. Where the jury specifies a separate amount for past and future benefits, the SABS must also state a separate amount for past and future benefits (Mikolic, supra; Gilbert, supra).

[19] These legal principles apply to this case.

[20] There is one notable difference, however, between this case and those cases from which I have extracted the legal principles stated above. The cases to date, with the exception of Mikolic, have dealt with the tort defendant’s ability to deduct from the tort award collateral benefits awarded to date and future collateral benefits to which the plaintiff might be entitled in the future, but had not received at the time of the jury’s award. In this case, the Plaintiff claimed only for, and the jury awarded damages only for future losses. In this case, the insurer had settled its entire liability to the Plaintiff.

Issue 2) What Were the Terms of the SABS Settlement?

When was the settlement concluded?

[21] The Settlement Disclosure Notice dated December 18, 2012, accepted December 18, 2012, provided that Shehryar and Intact settled Intact’s SABs obligation on a full and final basis for $1,423,323.49, which was to be paid to Henderson Structured Settlements. That money was paid, and after August 21, 2013, disbursed according to Fitzpatrick J.’s approval judgment. That Judgment required paying a little over $1 million into a structure which pays out money according to the schedule incorporated into Fitzpatrick J.’s Judgment.

[22] When was the settlement concluded: on December 20, 2012 (two days after it was signed on December 18 to allow for the statutory “cooling off period”, or on August 21, 2013 when Fitzpatrick J. approved the settlement? The Plaintiff says the latter.

[23] Shehryar’s entitlement to all SABs in the future was settled in its entirety on December 20, 2012 subject to Court approval. If I am incorrect, then the settlement came into effect on August 21, 2013. Regardless of the date, the fact that Shehryar does not receive the money in his hand until he is paid by the structure is of no effect to the question of when the settlement was concluded. It is true that under the regulations, a structure is required where the settlement is for greater than $100,000 and/or the action involves an incompetent. Court approval of the settlement is also required. The approval judgment, however, after it approves the settlement, specifies how the settlement is paid to the Plaintiff, in his best interest, as a person not able to make decisions for himself. Those terms were not part of the bargain with Intact.

What are the terms of the settlement?

[24] As D.A. Wilson J. pointed out in Hoang, at para. 33, “The Sections in the Act which deal with deductions for future benefits seem to me to envisage the situation where an injured Plaintiff has settled his entitlement to SABs on a full and final basis so that the amounts of the settlement under the specific categories of benefit can be readily ascertained.” Shehryar’s case is just this sort of case. The question is whether the deductions claimed can be made.

[25] The Defendant submits that the nature of the settlement is divined from the evidence regarding its negotiation, as well as the Settlement Disclosure Notice. The Plaintiff says that the SABs settlement is a contract, is clear on its face, and that the Parole Evidence Rule prevents the Court from admitting any evidence in determining the nature of the settlement. The nature of the settlement is to be determined from its terms alone.

[26] In my view, the terms of the settlement are not the Judgment approving settlement, but are divined from the Settlement Disclosure Notice and the negotiations leading up to it.

[27] Fitzpatrick J.’s approval judgment does not lay out the terms of the SABs settlement. It does two separate things. First, in the main body of paragraph 1, Fitzpatrick J. approves the settlement with the SABS insurer. Second, in the sub-paragraphs to paragraph 1, Fitzpatrick J. directs what is to be done with the SABs settlement proceeds in order to optimize the benefit for Shehryar. In other words, the payment terms in the approval judgment have nothing to do with the settlement with the insurer. The Judgment approves the settlement with the insurer, then sets investment and payment provisions designed to optimize the value of the settlement for Shehryar’s benefit.

[28] I reject the Plaintiff’s argument for the following reasons:

a) The Plaintiff made contradictory submissions as to what document contains the settlement. At one point, he argued it was Fitzpatrick J.’s Judgment of August 21, 2013; at another, the Settlement Disclosure Notice of December 18, 2012.

b) I agree that settlements and consent judgments entered into as a term of the settlement are contracts. A SABs settlement, however, is not a contract in the normal sense. Rather, it represents the resolution of a claim for collateral benefits where the entitlement to, payment of, and settlement of the claim are controlled by statute and regulation. Settlements must be documented on forms mandated by regulation, and in a process defined by regulation. The parties cannot depart from the mandated forms or processes.

c) In any event, even if the SABs settlement is a contract, Sattva v. Capital Corp. [2014] S.C.C. 53, permits evidence to be adduced to determine the nature of the settlement. As Rothstein, J. said, one looks at the contract’s words using their ordinary, general meaning, consistent with the circumstances surrounding the formation of the contract (at para. 47). The world before Sattva, where one could resort to extrinsic or parole evidence only if there was an ambiguity in the contract (see Eli Lilly 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129; Progressive Homes Ltd v. Lombard Gen. Ins. Co. of Canada 2010 SCC 33, [2010] 2 S.C.R. 245), has changed. Rothstein, J. limits the use of evidence outside the contract. He says that the extraneous evidence cannot overwhelm the wording of the agreement or create a new agreement (at para. 57). It must show the objective intentions of the parties on entering the contract, not their subjective intentions (at para. 59). Rothstein, J. did not see that this approach ran afoul of the Parole Evidence Rule. Because the evidence of the circumstances leading up to the contract addresses the objective intentions of the parties, it is consistent with the goals of finality and certainty as the evidence is merely an interpretive aid to determine the meaning of the words used (at para. 60).

[29] The SABs settlement reached in December, 2012 was for $1,423,323.49. The Settlement Disclosure Notice provided for the settlement of all future accident benefits claims totalling $1,369,589, plus $53,733.49 for costs, HST and disbursements.

[30] What were the objective intentions of the parties to the SABs settlement as it concerned medical, rehabilitation and attendant care benefits?

[31] In the main, the evidence regarding deductibility came from David Wilcox, from Intact. He negotiated the settlement with David MacDonald, Shehryar’s trial counsel.

[32] Shortly before November 18, 2012, Messrs. Wilcox and MacDonald began settlement discussions. Mr. Wilcox provided to Henderson Structured Settlements the amounts paid to date for each of Non Earner, Medical/Rehab and Attendant Care Benefits, the monthly payment rate (the “burn rate”), the policy limit for each Benefit, and the total remaining amount under each limit. He asked Henderson to assume the current burn rate indexed at two per cent per annum and provide the cost of an annuity to generate that annual payment until exhaustion of the limit.

[33] In its report dated November 18, 2012 (Ex. 88), with respect to the SABs for which a deduction is claimed in this action, Henderson reported that for Medical/Rehab Benefits, assuming a burn rate of $71,000 per annum indexed at two per cent, payable until exhaustion of the $586,820.51 remaining of the $1 million limit, the cost of the annuity was $554,589.82. Henderson predicted that, but for the annuity, the limit would have been exhausted in seven years, eight months. For Attendant Care, assuming a burn rate of $6,000 per month, not indexed, the cost of the annuity to generate $6,000 per month until the remaining limit of $733,327.91 of $1 million was exhausted was $666,968.88. Henderson predicted that, but for the annuity, the limit would have been exhausted in ten years, two months.

[34] In order to achieve a settlement, the insurer applied a 20 per cent reduction for contingencies, a standard reduction applied to settlements.

[35] Mr. Wilcox sent the Henderson letter to Mr. MacDonald. On December 3, Mr. MacDonald emailed Mr. Wilcox saying that he was seeking instructions to resolve all claims on the basis that past benefits would be paid, and all future benefits would be settled for $1,423,322.89, paid to Henderson, in trust. This amount included $1,369,589.60 for all benefits, and $53,733.89 for costs and disbursements in the SABs dispute. The applicant would obtain approval of the settlement. Henderson was to pay an amount to Mr. MacDonald’s firm, in trust, and another amount for costs (both of which were yet to be determined), Henderson was to place the structure which Belair could either hold or assign, paying the assignment fee.

[36] Eventually, the matter settled and Mr. Wilcox instructed Ms. Villeneuve to issue the funds as set out in his email of December 18, 2012. That email set out that the settlement was to be paid as follows:

Medical & Rehab Benefits $443,672.00

Attendant Care Benefits $533,575.00

Costs & Disbursements $ 53,733.89

[37] There is no evidence that Mr. MacDonald objected to the allocation in the email or in the Settlement Disclosure Notice.

[38] Mr. Wilcox admitted that he knew some of the funds would have to be structured. A structure is often required in order to obtain approval of an infant or incompetent’s settlement. Neither Mr. Wilcox nor Intact had any input into the amount of the structure or how the funds were to be apportioned for the purposes of approval. Neither he nor Intact instructed Henderson to separate the total paid for each benefit into a separate structure. He conceded that the monthly amounts paid out of the structure were “co-mingled” amounts representing some of each of the benefit totals paid, plus interest.

[39] I pause to note that whether one looks at the Full and Final Release and Settlement Disclosure Notice, or the email exchange between Wilcox and MacDonald in December, 2012, the numbers set out (subject to an unaccounted for 40 cent difference) are identical to the final settlement for future benefits. If one reduces the amounts set out in Henderson Structured Settlements quotes of November 18, 2012 (Ex 88) by 20 per cent, those totals are the same as the amounts offered to settle the non-earner, medical/rehabilitation and attendant care benefits contained on page 2 of the Insurer’s offer to Settle Benefits (Ex. 83). These are identical to the offer made by Mr. MacDonald for settling all future benefits as set out in his email of December 3, 2012 (Ex. 84).

[40] Mr. Wilcox explained why there is no amount on the insurers offer in the Settlement Disclosure Notice (Ex. 83) for Rehabilitation Benefits. The total for Medical and Rehabilitation benefits discussed in the settlement discussion as a joint amount, was placed under the heading “Medical Benefits” in Exhibit 83. Mr. Wilcox agreed in cross-examination that there was no number placed under the heading “Rehabilitation Benefits” in the Settlement Disclosure Notice. He agreed that under the Regulations the insurer could not pay money under one benefit but account for it under another. He explained, however, that the insurer combined the Medical benefit and Rehabilitation benefit amounts into one total and placed it under “Medical Benefits” on Ex. 83 because those two benefits, while dealt with under separate sections of the Regulation, are subject to the same combined limit of $1 million. He agreed, however, that to the extent that the insurer’s offer did not contain an amount for Rehabilitation Benefits, it is inaccurate. The insurer’s attribution of amounts paid however, is accurate on the insurer’s books.

[41] In his examination in-chief, Mr. Wilcox said that he did not think that there were any outstanding claims in dispute at the time the settlement was completed. He admitted, when presented with Exhibit 85, that in November, 2011, the Plaintiff demanded arbitration for past attendant care benefits, and when presented with Exhibit 86, that in May, 2012 the Plaintiff requested mediation for past housekeeping and home maintenance expenses. He was not sure if these were paid or were still outstanding at the time of the settlement. He also admitted that the total benefit settlement amounts contained in the insurer’s offer was for future benefits under the three headings.

[42] Notwithstanding the Settlement Disclosure notice, I find that Shehryar’s representatives knew in December, 2012 that the amount paid for “Medical Benefits” in the Settlement Disclosure Notice,in fact, was a combined amount for medical and rehabilitation benefits discussed as one payment in the settlement discussions. I find that the settlement as recorded in the Settlement Disclosure Notice was for future benefits only (as at December, 2012).

Issue 3) Is there the required subject-matter matching between the Jury award and the SABS Settlement?

[43] The caselaw speaks of “apples to apples and oranges to oranges” deductions. This means, in the main, that if the SABs settlement is greater than the jury’s award, if the jury’s award for any head of damage has been eliminated by deducting the SABs benefit, the unused SABs benefit cannot be applied to reduce any other head of damage in the Jury’s award.

[44] The Plaintiff, relying on Mikolic, says that, at minimum, there must be subject matter matching for there to be a deduction from the jury’s award of any SABS benefits. The Plaintiff admits that there is such a matching with respect to Attendant Care/Future personal care needs.

[45] With respect to the jury’s award for “future medical and rehabilitation needs” of $425,000, the Plaintiff says there is no subject matter matching with the SABs settlement which makes a payment for ‘all past and future medical benefits’.

To what extent must there be subject matter matching?

[46] The Plaintiff submits that, at minimum, the subject matching must be category to category between the SABs settlement and the jury’s verdict and must be exactly matched. In this case, the jury question asks the jury to set damages for the Plaintiff’s “future medical and rehabilitation needs”. The Plaintiff says that the Settlement Disclosure Notice (Ex. 83) does not match the jury question as the insurer offers money only for settling all past and future medical benefits. The Insurer offers “$0” for Rehabilitation benefits.

[47] The Plaintiff goes further, however. He says that the subject matching must be as specific as possible in order to obtain a deduction. In other words, the Defendant claiming the deduction would have to establish an item to item, expense by expense matching between the SABs settlement and the jury’s award before the defendant could obtain the deduction. Otherwise itwould not be ‘beyond doubt’ that the money the jury awarded is for the same things covered in the SABs settlement. If there is not such detailed matching there is the risk that the Plaintiff would be under-compensated.

[48] By way of example, in response to a question from me, the Plaintiff submitted that in order to obtain a deduction of the future SABs settlement amount, the Defendant would have to prove that the jury award and the SABs settlement both addressed the same specific expenses claimed (for example a new wheel chair every five years). Otherwise, there could be no specific sufficient subject matter matching. It is not beyond dispute that a payment in the SABs settlement is for the same specific item in the jury award.

[49] The Plaintiff suggested that the jury ought to have been given a chart of losses and time periods over which they might be incurred and make specific findings in respect of each. In this case, the chart that the Plaintiff suggested was several pages long. It did not meet the level of subject matching detail that the Plaintiff submitted was required before the Defendant could get a deduction. It did not include a service by service, item by item, and time by time description of costs incurred or to be incurred.

[50] The Plaintiffs say that the Defendants did not meet their burden. They did not ask the proper questions on discovery or obtain the proper documentary discovery, in order to make the detailed subject matching of SABs benefit to jury award required of them based on the high onus applicable.

[51] I reject the Plaintiff’s argument about such detailed matching for several reasons:

1. The caselaw does not support it, generally. The caselaw, in the main supports only subject matter matching by category.

2. Specificity in subject matching must be approached on a practical basis, more so in a jury case. The level of specificity in subject matching required by the Plaintiff before the Defendant can deduct SABs is impractical and impracticable. It would lengthen the trial enormously as the parties delved into what formed part of the SABs settlement. It would create an overly complex and unworkable set of jury instructions and questions. In this case, the jury would have to make specific findings for each and every expense listed on the future care report, and make an equally detailed determination of the services and items paid for in the SABs award. In my view, the only reasonable, practical and workable subject matter matching is matching by category.

3. Such detailed matching is impossible as the SABs settlement in this case is not broken down in the same way. It is rare that SABs settlements are ever broken down in this way. In this context, requiring the level of subject matching required by the Plaintiff would make the right to deduct SABs under s. 267.8 of the Insurance Act illusory.

4. Such detailed matching would be contrary to the standard instruction to the jury (as was given in this case) that awards of any future losses need not be mathematically precise but should be based on due consideration of the evidence (or absence of it) and be a fair and proper amount.

5. The Defendants were not parties to the SABS Settlement approval motion. Indeed, Fitzpatrick J.’s judgment, at para. 7, precludes disclosure of the material filed in support of the approval motion, until after the judgment in the tort claims is rendered.

Does the law require matching on a category by category basis?

[54] I agree that there must be general subject matter matching between the SABs settlement and the jury’s award. However, the central question is whether the Defendants have proved that the jury’s award and the SABs settlement were for the same loss.

[52] The jury was asked to make an award for all future medical and rehabilitation needs of the Plaintiff and did so. In my view, based on the evidence, the SABs settlement for medical benefits is for the same subject matter as the jury’s award (future medical and rehabilitation needs), and the deduction should be allowed.

[52] The Plaintiff says that based on Mikolic, at a minimum, the matching between the SABs Settlement and jury award must match exactly as to benefit category; that is the SABs award for Income Replacement benefit can only be deducted from the jury’s award for loss of income, the SABs settlement for medical benefits can only be deducted from the jury’s award for medical benefits, the SABs settlement for rehabilitation benefits should match the jury’s award for rehabilitation needs, and so on.

[53] The Defendants say that the deduction from a tort award is for SABs paid that are “akin to that for which the no-fault benefits are intended to compensate”, not exactly what the SABs were intended to compensate.

[54] Mikolic does not stand for the proposition cited by the Plaintiff. In that case, Arrell J. denied the tortfeasors the deduction because evidence was lacking with respect to what part of each of the Income Replacement and Attendant Care SABS settlement was for past or future benefits (see paras. 16 and 17). The matching that was missing was temporal matching between broad categories of ‘past’ and ‘future’ benefits.

[55] Second, s. 267.8(4), itself, allows deductibility of “health care” benefits from the jury award. Health care benefits are defined to include “all goods and services for which payment is provided by the medical, rehabilitation and attendant care benefits provided for in the Statutory Accident Benefits Schedule”. The section, itself, does not require heading to heading matching. I am mindful, however, that the statute must be strictly construed.

[56] The caselaw does not require exact matching of SABS benefit to the jury award. It is sufficient that the SABS benefit paid be “akin” to the jury’s award.

[57] The leading case on matching is Bannon, supra. In that case, the main issue was whether the Defendant could obtain a deduction for SABs not yet paid to the Plaintiff. To that extent, it is distinguishable from this case. In addition, there was the question of whether any excess of a specific SABs benefit amount left over after eliminating the specific matching tort award, could be used reduce other heads of damage.

[58] Of relevance to this case, Bannon set out the principle of ‘apples to apples’ deductions. In other words, SABs paid for loss of income left after the tort award for loss of income was eliminated, could not be applied to another head of damage. Bannnon also set the standard that the defendant must meet. The Defendant must show that it was beyond dispute that the Plaintiff would receive the future, unpaid benefits, before the deduction could be made from the tort award. The SABs payment and tort award, however, do not have to be for identical things. The defendant is entitled to the deduction if the “… head of damage or type of loss [awarded in the tort case] was akin to that for which the no fault benefit were intended to compensate.” (see page 679).

What is the Evidence Relevant to Subject Matter matching?

[59] With respect to the Jury’s award of $50,000 for future personal care costs, the Plaintiff concedes that there is subject matching.

[60] With respect to the Jury’s award of $425,000 for future medical and rehabilitation needs, in my view the Defendants have proved that it is beyond dispute that the Jury’s award for medical and rehabilitation benefits is “akin” to the SABs settlement for medical benefits (to use the Court of Appeal’s language in Bannon) or that the SABs and tort awards are both for “health care” costs (to use the language of the statute).

[61] Further, and more important, the question on the jury form refers to medical and rehabilitation benefits. The settlement amount referred to in the Settlement Disclosure Notice under “Medical Benefits” was intended by the parties to be for future medical and rehabilitation benefits. Therefore, there is subject matter matching, based on the evidence before me.

[62] It is clear from the evidence of Mr. Wilcox, the correspondence, and the Settlement Disclosure Notice, and I find, that the parties intended that the SABs settlement was for future benefits, alone, and that the settlement in the Statutory Disclosure Notice for “medical benefits” was in fact for medical & rehabilitation benefits, together. I say this notwithstanding differences in the correspondence and the Settlement Disclosure Notice. The Settlement Disclosure Notice includes the phrase ‘past and future’. This form, however, is a prescribed form and cannot be altered without approval of the regulator.

Issue 4: Is there the required temporal matching between the Jury’s Award and the SABS Settlement?

[63] I find that there is temporal matching, as contemplated by the caselaw.

[64] The Plaintiff argues that there must be temporal matching between the Jury’s award and the SABs settlement, and that the Defendant must show this matching, beyond dispute.

[65] I agree that there must be a temporal matching between the SABs settlement and the jury’s verdict between past and future benefits and award and that the requisite temporal matching has been achieved.

[66] The Plaintiff, however, goes further. He also argues that there must be specific temporal matching expense to expense. In other words, before the Defendant can have a deduction for any SABs paid, it must show that the Jury’s award included an award for a specific service or item delivered on a specific date in the past (or the future), and that the specific service or item provided on a specific date was paid for by the SABs insurer. To hold otherwise would mean that the Plaintiff was under compensated.

[67] The Plaintiff says that the Defendants have not proved temporal matching in this case because:

a) The SABs settlement was paid in December 2012, and the Jury’s award was made in June, 2015. Since payments have been made under the settlement in the intervening 2.5 year, there is no information about what sums remain to be deducted.

b) Since the funds were pooled in the settlement, it is unclear from which specific settlement categories the funds were paid since December 2012. Therefore, there is no information about what sums in any given category remain to be deducted.

c) Since the negotiations for settling the SABs claim included a claim for past SABs, it is not clear what portions of each head of SABs settled was on account of past benefit claims.

[68] These arguments are addressed by my findings concerning when the SABS settlement was made and what its terms were, and that the SABs settlement addressed only future SABs entitlement.

[69] I agree that there must be temporal matching between the SABs settlement and the jury’s award, but only between past and future benefits and award. I reject the Plaintiff’s argument that there should be more specific matching, for the same reasons given for rejecting their similar argument with respect to subject matter matching.

[70] Further, the caselaw does not support the Plaintiff’s position on specific item or service at a specific time matching. The Plaintiffs rely on Gilbert, supra. In that case, the issue Leach J. addressed was whether, and to what extent, the SABs settlement of medical and rehabilitation benefits paid could be used to offset the Jury’s award for future care costs. The parties agreed that the only benefit to which the insurer might be exposed in the future was med/rehab. In refusing the deduction, Leach J. listed a number of uncertainties, including:

a) The request for the deductions was uncertain (at para. 11)

b) There was no attempt to quantify, precisely, the amount of the claimed deduction (at para. 12).

c) There was no certainty about the total amount of SABs that the Plaintiff would receive. There was no settlement of future benefits. (at para. 13).

d) There was no temporal matching in terms of any SABs future entitlement and the Jury award (at para. 15 to 18). The medical and rehabilitation benefits available to Mr. Gilbert were subject to a $100,000 limit, and a 10 year time limit. The question to the jury was regarding “all” future care costs from the jury award onward. There was no indication in the question of relating the jury award to the $100,000 and 10 year limits. Therefore, there was no certainty as to overlap between the jury award and any future SABs entitlement.

e) The jury was not asked to allocate between any one or particular categories of future care expenditures in coming to its lump sum award (at para. 19).

[71] Leach J. held that “…there is simply no way of making an accurate determination of the extent to which the award of damages was intended to cover aspects of future treatment in respect of which Mr. Gilbert would not be entitled to medical and rehabilitation benefits. A deduction from his damages of all such benefits, without any such qualitative distinctions … would run the risk of Mr. Gilbert receiving less than the full compensation to which he is entitled. … Of course such uncertainties might have been avoided and/or resolved by the posing of more specific questions to the jury.” (at para.s 19 – 20). Leach J. goes on to say “In the result, there is no effective mechanism or ability, at this point, to achieve the level of certainty required by the authorities to make the effective deductions requested by York Fire in relation to the plaintiff’s future care cost damage award.” (at para.22).

[72] I am indebted to Leach J. for his review of the law and his review of the facts in Gilbert. He clearly articulates the high test the Defendant has to meet. While I have found his analysis clear and useful, the facts in Gilbert make it distinguishable from Shehryar’s case. In Gilbert, there was entitlement to only future care costs. Uncertainty remained as to what specific future needs Mr. Gilbert had, and whether those needs would fall within (or outside) the one SABs category that might be open to Mr. Gilbert in the future. In Shehryar’s case, the amount and nature of future benefits is known, and matched the questions the jury was asked to answer.

[73] I must also differ from Leach J. in one aspect. My reading of the caselaw does not support the temporal or subject matter matching in the detail the Plaintiff suggests.

[74] The question of matching arose first in Bannon, supra, in which the Court of Appeal said that there should be ‘apples to apples’ deduction of SABs benefits from tort awards. In other words, collateral benefits should be deducted from “… a head of damage for type of loss akin to that for which the no fault benefits were intended to compensate.” (at p. 28). Factually, Bannon is distinguishable. Further, in that case the SABs for medical and rehabilitation benefits were subject to a ten year limit and the claim advanced at trial (and addressed in the judge’s verdict) were for medical and rehab expenses after the tenth anniversary of the accident.

[75] The apples to apples matching principle of tort damages akin to SABS payments was adopted in Chrappa, supra (at pp. 657 and 658), Cowles, supra (at para. 129) and Hoang, supra (at para.s 25, 32 to 33). In those cases the benefits for which an offset or deduction was sought, had not yet been paid. Aside from Gilbert, these cases do not require a temporal matching as detailed as suggested by the Plaintiff.

[76] In this case, the SABs settlement was for all future benefits under the respective categories. No party pointed to any other limitation in recovery against the insurer for any specific benefit other than the monetary limit in the policy or regulation for the particular benefit. The settlement was concluded on the basis that Shehryar would be entitled to the full future benefit (subject to a reduction for contingencies). There is no uncertainty as to what was paid. The fact that there was a reduction for contingencies is of no moment since the reduction for contingencies simply reduces the amount to be deducted. No evidence was let with respect to whether there were insurance limits issues which limited the Plaintiff’s recovery against the Defendants, or if there were such limits issues, that the Defendants were impecunious and therefore unable to satisfy any judgment.

[77] If there is uncertainty, it is illusory. Based on the evidence at trial, there were only two expenditures that continued after the SABs settlement: 1) payments to Mr. and Mrs. Siddiqui for attendant care and 2) to the educational therapist. Therefore, the unexpended amount of the SABs settlement for medical and rehabilitation benefits and for attendant care benefits is quantifiable.

[78] With respect to medical and rehabilitation benefits, Shehryar’s litigation guardian, his Uncle Fayyaz, testified that Shehryar received accident benefits from Intact and that the SABs file was settled in December, 2012, for over $1 million. On August 21, 2012, the Public Guardian and Trustee was appointed as Shehryar’s guardian of property after an assessor declared Shehryar incompetent to manage his property under the test set out in s. 6 of the Substitute Decisions Act. Two assessments were done, one before Shehryar turned 18, and one after. Both times the assessor came to the conclusion that Shehryar was not capable to manage his property.

[79] A number of therapists and others who provided services to Shehryar confirmed that they were retained, originally, by Shehryar`s lawyers and that their retainers ended in December, 2012 when the SABs claim was resolved. Dr. Rumney, too, admitted that aside from his seeing Shehryar for annual assessments, treatment and services stopped in December, 2012.

[80] Fayyaz Siddiqui confirmed that with the exception of Ms. Good, the Educational Therapist, all other therapists’ retainers (e.g. rehabilitation, speech pathology and occupation therapists) were ended by the end of 2012. According to Fayyaz Siddiqui, the parents elected to concentrate their efforts (and money) on tutoring for Shehryar.

[81] While I cannot quantify the amount spent on the educational therapist, the parties are aware of that amount. It can be quantified. The Statutory Accident Benefits Schedule, O.Reg. 34/10, s. 15(2) and (6), provides that the educational therapist’s fees are rehabilitation benefits within s. 15. The SABs settlement amount for medical benefits should be reduced by educational therapist’s fees incurred between December 18, 2012 and June 5, 2015. The net amount after that reduction for the educational therapist’s fees is available for deduction from the jury award for medical and rehabilitation benefits.

[82] With respect to the attendant or personal care award, paragraph 4 of the approval judgment provides that Shehryar’s parents were to be paid $4,000 per month for attendant care so long as he was under 18 and in their care. I cannot quantify the amount paid to the Siddiquis for attendant care benefits after December 18, 2012. It, too, can be quantified. The SABs settlement amount for attendant care should be reduced for the attendant care payments Shehryar’s parents received between December 2012 and January 31, 2014 (when Shehryar reached 18). The net amount after this reduction is available for deduction from the jury award for attendant care.

[83] The approval judgment provides in paragraph 1b for a payment to Shehryar’s lawyer’s firm of $62,444.16 for various expenses “…incurred or that will be incurred by Shehryar Ayaz Siddiqui from December 2, 2012 to the date of this Judgment in relation to attendant care, medical rehabilitation and other expense for Shehryar Ayaz Siddiqui, with any balance remaining to be paid to the Accountant of the Superior Court of Justice to the credit of Shehryar Ayaz Siddiqui….”

[84] To the extent that the educational therapist’s fees and, paid between December, 2012 and August 21, 2013 are included in the $62, 444.16 the SABs settlement amount of $443,672 for medical benefits available for deduction from the jury’s award shall not be reduced. Similarly, to the extent that Shehryar’s parents received payments under paragraph 4 of the approval judgment between December, 2012 and August 21, 2013, the SABs settlement amount of $533,575.00 for attendant care available for deduction from the jury’s award shall not be reduced.

Issue 6: Is the Defendant’s only claim to future benefits payments in the nature of a trust interest in the payments, when made in the future?

[85] In light of my findings above, this question is moot.

Issue 7: Is the amount available to the Defendants for deduction reduced by the legal fees as set out in the approval judgment?

[86] On the facts of this case, SABs benefits should be reduced by the legal fees paid by the insurer, as set out in the approval judgment, and as detailed below.

[87] The Plaintiff says any amounts available for deduction should be net of the legal costs that Shehryar paid to his counsel to obtain complete resolution and approval of the SABs claim. Deducting the legal costs from the SABs settlement is the only fair way of ensuring that there is no double recovery or shortfall between the SABs and jury award. To do otherwise would mean that the Plaintiff is not compensated to the extent that the amounts set out in the Settlement Disclosure notice is greater than the amount the Plaintiff actually received.

[88] The Plaintiffs concede that the legal fees awarded by Fitzpatrick J. should be pro-rated among the SABs amounts in the Settlement.

[89] The total costs, HST and disbursements awarded in paragraphs 1(c) to (e) of the approval judgment is $285,879.33. The costs already paid by Intact as part of the SABs settlement is $53,733.89. Therefore, the gap between what Shehryar received from the settlement and the settlement total itself, which is to be pro-rated across the headings in the SABs settlement is $232,285.44. The medical benefits portion of the overall SABs settlement is 31 per cent of the total SABs settlement, and the attendant care portion, 37 per cent. Therefore, if the SABs benefits are to be deducted from the jury award, the SABs settlement amounts for medical benefit and attendant care benefit available for deduction from the jury award should be reduced by $71,965.09 and $85,908.61, respectively (31% and 37% of $232,285.44).

[90] The Defendants, Siddiqui say that the costs provided for in the settlement are those in the Settlement Disclosure Notice. No further reduction of SABs benefits available for deduction should be allowed because:

a) It is contrary to the settlement.

b) The costs awarded in the approval judgment reflect a private agreement between the Plaintiff and his counsel, to which the Defendants were not a party.

c) Reducing the deduction amount by the legal fees in the SABs settlement means that the tort defendants are paying the legal fees attendant on the SABs settlement. They were not parties to the settlement and were not involved in its negotiation.

[91] The legislation and regulations do not address the issue of a) who should pay the costs of the Plaintiff incurred in pursing the SABs insurer or b) whether the Plaintiff has a right to claim in the tort claim the costs incurred in pursuing the SABs insurer. If the Defendant is able to deduct the whole of the SABs benefit, the Plaintiff bears the cost of pursuing the SABs benefits. If the Defendant is able to deduct only the SABs benefits less legal fees, the Defendant pays for the costs of the Plaintiff’s pursuit of the SABs insurer.

[92] This issue was canvassed in Anand v. Belanger, 2010 ONSC 5356. In that case, the Plaintiff settled both its claim for income replacement benefits from her SABs auto insurer and Long Term Disability benefits from her disability insurer. The money she received was less than the “all in” settlements because of legal fees. Stinson J. began her analysis with the statute, s. 267.8(1)(a)1, which allowed deduction of money “the plaintiff has received or were available before trial…” She held that the statute should be read as allowing deduction for SABs or LTD benefits actually received by the plaintiff after deducting legal fees (para. 27). She did this for two reasons: first, it prevents double recovery, and second, it prevents the tortfeasor from reaping the benefit of the risks, cost and expense incurred by the Plaintiff in obtaining benefits the receipt of which were made necessary by the tortfeasor’s conduct.

[93] In coming to her decision, Stinson J. distinguished Green v. State Farm Mutual Automobile Ins. Co., 2009 CanLII 33049 (ON SC), [2009] O.J. No. 2713 on a number of bases, including that the case involved an OPCF 44R, and because Boswell J. said that the insured has a “mechanism to deal with the dispute” regarding fees. On the latter point, Stinson J. said that Boswell J. gave no authority. This is true. However, the reason Boswell J. gave for his statement concerning a “mechanism” to deal with costs of pursuing the underinsured motorist is that the costs associated with that pursuit may be claimed against the OPCF 44R carrier as special damages.

[94] The Defendants rely on Green. Green involved a claim by an insured against its OPCF44R uninsured/underinsured carrier. The insured received $200,000 from the tortfeasor’s insurer, but netted only $120,000 after legal fees. The issue was whether the OPCF 44R carrier’s liability to the Plaintiff began at $120,000 or $200,000. Boswell J. held that it was the latter because the costs incurred in pursuing the underinsured tortfeasor were made necessary by the OPCF 44R policy, and were recoverable from the insurer as special damages (at para. 19). In addition, he found:

1. The language of the policy is clear – ALL of the money the Plaintiff received from the underinsured motorist is deductible. No allowance is made in the policy about deducting costs amounts from the settlement with the underinsured motorist (at para. 21).

2. The Insurer has no control over how the settlement is reached or how settlement money is disbursed. The OPCF 44R carrier cannot determine whether funds were reasonably incurred in recovering from the underinsured motorist.

[95] I prefer the reasoning in Anand. Anand, however, does not stand for the proposition that, as a matter of principle, the deduction against the tort award should be the net amount after deducting legal fees, in all cases (see Ryan v. Rayner, 2015 ONSC 3310, at para. 19). Whether costs should be deducted from the SABs recovery (hence making the tortfeasor pay some or all of the Plaintiff’s costs associated with the SABs settlement) is fact driven, dependent on the circumstances of the case (see. Hoang, supra, at para. 65 to 69). Grace J., in RBC Life Ins. Co. v. Janson, 2013 ONSC 3154, when dealing with the issue of deductibility of CPP and WSIB benefits from LTD benefits by the LTD carrier, agreed with these propositions. Based on the contract at issue, Grace J. held that the deduction was the gross WSIB and CPP benefits.

[96] In this case, the onus is on the Defendant to prove that the legal fees ought not to be deducted, or ought not to be deducted in the full amount. The Defendants, Siddiqui, say that the deduction, if any, should be of the gross benefits paid, in keeping with Green, Ryan and RBC. The Defendant, Papple, says that legal fees should be deducted from the SABs amounts available for deduction by the tortfeasors, but that the amount should be a reasonable amount. He suggested between $10,000 and $15,000. In effect, Papple invites me to do a rough assessment of the Plaintiffs’ lawyer’s fees, as D.A. Wilson J. did in Ryan, when she reduced fees and disbursements by only modest amounts. I note that in Ryan, the Court was fixing costs. In doing so the court had before it the Bill of Costs, dockets and other supporting documents, and was able to see if there was overlap between the costs incurred in SABs claim and the Tort claim.

[97] The facts mitigating against deducting fees are:

a) Fees in the SABs settlement were set out in the Settlement Disclosure Notice.

b) The Plaintiffs’ lawyers’ calculation of partial indemnity costs contained in the approval judgment appears to be purely an exercise in arithmetic. They appear simply to have deducted from the costs award in the SABs settlement ($53,733.89) the amount for disbursements set out by the Plaintiff in settlement discussions (see Ex 83, email MacDonald to Wilcox - $14,183.89) to reach the claim for partial indemnity costs in the approval judgment para. 1(c) ($39,550.00).

c) The Plaintiffs and their solicitors attempted to prevent the Defendants from obtaining any information about the settlement, thereby frustrating any attempt to obtain evidence to bring before the Court in respect of the settlement, including the costs aspects. The Defendants were not served with the settlement material before approval, nor invited to the hearing before Fitzpatrick J. The Plaintiffs placed paragraph 7 in the approval judgment, which, in effect, sealed the file until after the tort action was completed. (The approval judgment refers to sealing the SABs file until the tort claim bearing court file 7029/12 was completed. That court file number is the number of the SABs approval application. Reasonable interpretation of Fitzpatrick J.’s order is that it sealed the SABs application file until the tort actions were completed).

d) It is unclear how the total solicitor and client account of $285,879.33 was arrived at. No dockets, Bill of Costs, or other material was provided.

[98] The facts mitigating in favour of deducting fees are:

a) The Defendants did not move before Fitzpatrick J. to set aside paragraph 7 of the approval judgment. I offered the Defendants the opportunity to move before Fitzpatrick J. and told them he was offering times in the fall of 2015. That would have meant a delay of several months in the middle of the jury trial, an option the Defendants were not prepared to take. I was not made aware when the SABs settlement was disclosed to the Defendants. The Defendants did not attempt to bring a motion before Fitzpatrick J. before trial.

b) Likewise, there was no evidence before me that the Defendants attempted to obtain the dockets or supporting documents from the Plaintiff regarding the costs amounts set out in the judgment.

c) Shehryar will suffer a significant shortfall in his recovery if the deduction is allowed.

d) Shehryar incurred these legal fees in order to obtain benefits to which he was forced to resort by the Defendants’ conduct, as found by the jury.

[99] Reducing the SABs settlement amount available for deduction by the Defendants by the amount of legal fees incurred to obtain the SABs settlement is a factual determination.

[100] In this case, it is appropriate that the amount of the SABs settlement to be deducted from the jury award for each of the two categories in question should be reduced by a pro-rata share of the legal fees incurred in obtaining the SABs settlement, as outlined above.

[101] In light of paragraph 7 of Fitzpatrick J.’s decision, had the Defendant taken any steps to obtain from the Plaintiffs or their lawyers the documentation regarding SABs settlement, I might have found in their favour. On the evidence before me, however, the Defendants have not discharged their onus. The SABs settlement amounts available for deduction from the tort award, reached following reductions set out in my reasons under Issue 5, shall be subject to a further reduction for legal fees, namely a further reduction of $71,965.09 from the net med/rehab benefit, and $85,908.61 from the attendant care benefit.

[102] If the parties have any dispute as to how the reductions from the SABs settlement amounts are to be calculated, I may be spoken to.

Trimble J.

Date: October 14, 2015