Malfara v. Vukojevic, 2015 ONSC 67

COURT FILE NO.: CV-08-358750

DATE: 20150108

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GIUSEPPE MALFARA, Plaintiff

AND:

NIKOLA VUKOJEVIC and RANKO VUKOJEVIC, Defendants

BEFORE: Mr. Justice Stephen Firestone

COUNSEL: Andrew Suboch, for the Plaintiff

Blair Nitchke and Rabeena Mussalin, for the Defendants

HEARD: By written and oral submissions

collateral benefit ENDORSEMENT

[1] On October 7, 2014 following my final charge, the jury returned their verdict and awarded general damages of $7,500, past loss of income of $1,326 and nil dollars for future loss of income, including loss of competitive advantage.

[2] The application of section 267.8(1) of the Insurance Act, R.S.O. 1990, c I.8. (“the Act”) regarding the deductibility of collateral benefits is a matter of law and as such is to be dealt with by the trial judge following the jury’s verdict.

[3] Under section 267.5(1)1 of the Act, the defendant is not liable in an action for damages for income loss suffered in the seven days after the incident. In addition, under section 267.5(1)2.i. of the Act, the defendant is not liable for damages for income loss suffered more than seven days after the incident before the trial of the action in excess of 80 per cent of the net income loss during that period. These sections are reproduced below:

267.5 (1) PROTECTION FROM LIABILITY; INCOME LOSS AND LOSS OF EARNING CAPACITY.

Despite any other Act and subject to subsections (6) and (6.1), the owner of an automobile, the occupants of an automobile and any person present at the incident are not liable in an action in Ontario for the following damages for income loss and loss of earning capacity from bodily injury or death arising directly or indirectly from the use or operation of the automobile:

1. Damages for income loss suffered in the seven days after the incident.

2. Damages for income loss suffered more than seven days after the incident and before the trial of the action in excess of,

i. 80 per cent of the net income loss during that period, as determined in accordance with the regulations, if the incident occurred before September 1, 2010, or […]

[4] The jury in question three was asked to calculate the past loss of income for the period September 20, 2006 to October 31, 2006 (“the relevant time period”).This time period was to accord with section 267.5(1)1 of the Act whereby no award for income loss is to be made for the first seven days after the incident. In my charge, the jury was instructed to calculate the past loss of income on a gross basis with no deduction for collateral benefits. The wording of question three was agreed to by counsel prior to distribution of the jury questions to the jury and the subsequent delivery of my charge to them. Following the delivery of my jury charge neither counsel requested that any further instruction or clarification be given regarding past loss of income.

[5] Following the return of the jury’s verdict and after hearing submissions from counsel, it was ordered that the parties were to provide their submissions on the deductibility of collateral benefits in email format by November 12, 2014. After receipt of those written submissions, for the reasons set forth in my endorsement dated November 13, 2014, the parties were given an equal opportunity to adduce any viva voce evidence they deemed necessary regarding collateral benefits so that just and proper determination regarding their deductibility could be made.

[6] At the return of the oral hearing on December 11, 2014 counsel confirmed that they had now, following discussion between them, agreed to both the amount of collateral benefits received by the plaintiff during the relevant time period as well as the correct 80 per cent of net calculation of the jury’s gross past loss of income award. The parties advised they did not intend to call any oral evidence on the issue. Specifically counsel agreed that:

1. For the relevant time period the plaintiff received collateral benefits consisting of income replacement benefits (“IRBs”) from his statutory accident benefit insurer in the sum of $1,544.00.

2. The 80 per cent of net calculation of the jury’s gross past income loss award in the sum of $1,326 is $848.64.

[7] I have considered the parties’ written and oral submissions regarding the deductibility of collateral benefits from the past loss of income awarded by the jury.

[8] The first step in the collateral benefit analysis is to determine what 80 per cent of net of the jury’s gross income loss award is in accordance with section 267.5 (1)2.i of the Act. It is that 80 per cent of net figure which constitutes the plaintiff’s past loss of income award to which the plaintiff is “entitled” subject to the deduction of collateral benefits in accordance with section 267.8(1) of the Act. The parties agree that in accordance with section 265.5(1)2.i. of the Act, 80 per cent of the plaintiff’s net income loss is $848.64.

[9] The second step is to then apply the provisions of section 267.8(1) of the Act to the plaintiff’s net past income loss award determined under section 267.5(1)2.i. of the Act. The relevant subsections of section 267.8(1) of the Act, (the collateral benefit deductibility section) are as follows:

267.8(1) COLLATERAL BENEFITS; INCOME LOSS AND LOSS OF EARNING CAPACITY.

In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:

1. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of the income loss and loss of earning capacity.

2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.

3. All payments in respect of the incident that the plaintiff has received before the trial of the action under a sick leave plan arising by reason of the plaintiff’s occupation or employment.

(2) Exception. No reduction shall be made under subsection (1) for payments in respect of income loss if the payments are in respect of income loss suffered in the seven days after the incident.

[10] Section 5(2)(a) of the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, O. Reg. 403/96 (“the Schedule”) provides that the insurer is not required to pay an income replacement benefit for the first week of disability. This is the same corresponding time period referred to in section 267.5(1)1 of the Act.

[11] Section 267.8(1)1 of the Act states that the plaintiff’s income loss damage award to which the plaintiff is “entitled” shall be reduced by all payments that the plaintiff has received for statutory accident benefits.

[12] In this case, the past loss of income the plaintiff is “entitled” to prior to the deduction of any collateral benefits is $848.64 in accordance with section 267.5(1)2.i. of the Act. The amount the plaintiff has received for IRBs for the relevant time period is $1,544.00.

[13] Section 267.8(1) provides that all payments or the total amount of SABSs received is to be deducted from the damages for income loss the plaintiff is entitled to for such income loss. No other qualifying language is used which would indicate that anything other than the total amounts received during the relevant time period is to be used in the calculation. The section does not state that the calculation is to be done on an amount received per week as opposed to total basis.

[14] In this case the jury was asked to calculate the total past income loss for an agreed to limited time period and a lump sum amount was awarded by them for that agreed to defined time period. The jury did not – nor were they required to in the agreed-to jury question – break down their award on a weekly basis. The jury was asked and did provide a total lump sum amount for the specified time period in question. There is no basis to speculate and interpret the jury’s award beyond that in order to infer what their precise calculations were in arriving at the total amount awarded. As stated by the Court in Shepstone v. Cook, 2013 ONSC 4149, at para. 15 “It would be wrong and improper for this court to engage in a speculative exercise as to what the jury intended…”

[15] For the relevant time period the plaintiff received $1,544.00 in income replacement benefits from his statutory accident benefit insurer. This amount is to be deducted from the damages to which the plaintiff is entitled for past income loss which is $848.64.

[16] In Mikolic v. Tanguay, 2013 ONSC 7177, the court, in considering the application of section 267.8(1) of the Act cites Finlayson J. in Bannon v. McNeely (1998), O.R. (3d) 659 (C.A.) at para. 49 for the principle that “where possible, any no-fault benefit deducted from a tort award under s. 267(1)(a) must be deducted from a head of damage or type of loss akin to that for which the no-fault benefits were intended to compensate. In other words, and employing the comparison of Morden J. in Cox, supra, if at all possible, apples should be deducted from apples, and oranges from oranges.” In this case it is clear that the income replacement benefits paid by the statutory accident benefit insurer were intended to compensate for the plaintiffs past loss of income during the relevant time period specified in jury question three.

[17] The facts of this case are distinguishable from those in Gilbert v. South, 2014 ONSC 3485, 120 O.R. (3d) 703. In that case the court was dealing with sections 267.8(9), (10) and (12) of the Act which concern the trust, payment and assignment provisions as they apply to future collateral benefits and the uncertainties regarding the nature and extent of the statutory accident benefits the plaintiff would receive in the future. The plaintiff in that case had not applied for nor received income replacement benefits.

[18] The sum of $1,544.00 received for IRBs is to be deducted from the sum of $848.64 representing the past loss of income award to which the plaintiff is entitled. Both amounts were paid during the relevant time period. After deduction of these collateral benefits the plaintiff is entitled to nil dollars for past loss of income.

Firestone J.

Date: January 8, 2015