SUPERIOR COURT OF JUSTICE
COURT FILE NO: CV-07-32005
DATE: 2015-11-16
B E T W E E N:
RITA MAZZUCCO and PETER NETO and NICOLAS NETO and EMILY NETO
Plaintiffs
- and –
ELAINE R. HERER and WEE SHIAN S. CHAN and RICHARD I. AVIV and PATRICK J. SKALENDA and WOMEN'S COLLEGE HOSPITAL and ILAN SHELEF and M. BERNARDINI
Defendants
RULING ON
LONG TERM DISABILITY
BEFORE THE HONOURABLE JUSTICE A. SKARICA
And a Jury November 9, 2015 at HAMILTON, Ontario
APPEARANCES:
J. Scarfone Counsel for the Plaintiffs
L. Grimaldi
T. Curry Counsel for Defendants
R. Jones
B. Glaspell Counsel for Women's College Hospital
SUPERIOR COURT OF JUSTICE
T A B L E O F C O N T E N T S
RULING ON LONG TERM DISABILITY Page 1
Transcript Ordered: ..........................November 9, 2015
Transcript Completed: ........................November 12, 2015
Ordering Party Notified: .....................November 12, 2015
MONDAY, NOVEMBER 9, 2015:
RULING ON
LONG TERM DISABILITY
SKARICA, J (Orally):
This is a ruling on the deductibility of CPP and LTD benefits from past and future income loss.
Facts:
Rita Mazzucco is the plaintiff in these proceedings. She has brought a medical malpractice action against Women's College Hospital and several doctors.
Rita gave birth to her second child, Emily, on June 18th, 2005. She felt ill due to a severe headache and hypertension and was admitted to Women's College Hospital on June 24th, 2005. On June 25th, 2005, she was discharged from hospital at about 6:00 p.m. At 2:00 a.m. on June 27th, 2005, she suffered a stroke at her home.
Rita was in hospital for two months afterward due to the stroke. Her family doctor in 2006 filed a medical report to CPP that Rita was unable to work. A similar report was sent to Sunlife, her LTD provider.
As a result, Rita has not returned to work and has received CPP/LTD benefits for almost 10 years. Dr. Hussain and Rita claim that Rita will never be able to return to work.
Hence, Rita in this action, has brought claims for both past and future income loss.
Issue:
Should Rita's CPP/LTD payments be deducted from any award made by the jury for past, future income loss?
Law:
Both parties are agreed that, for now, the law is settled, that CPP benefits are not to be deducted from any past or future income awards made by the jury.
My review of the cases regarding LTD loss suggests that the law regarding the deductibility of LTD payments is shifting.
The principals regarding my decision are as follows:
The general principal is that negligence damages are measured by actual loss; double recovery is not awarded, subject to exceptions. See Cunningham v. Wheeler 1994 120 (SCC), [1994] 1 S.C.R. 359 at paragraphs 9 through 18, and Ratych v. Bloomer 1990 97 (SCC), [1990] 1 S.C.R. 940 at paragraphs 44, 45, 49 and 94.
One of the exceptions is the "private insurance" exception. See Cunningham v. Wheeler at paragraphs 22 through 28.
The private insurance exception provides that if the plaintiff establishes that the indemnity benefits were paid by him/her as part of their wage package the disability benefits should not be deducted in calculating the amount payable by the defendants for the wage loss suffered by the plaintiff as a result of his/her injuries. See Cunningham v. Wheeler at paragraphs 33 through 41.
Otherwise, an injured person is to be compensated only for actual loss suffered and no more.
As such, wages earned during a period of disability are generally deducted from a claim for lost wages. See Ratych v. Bloomer at paragraphs 99 and 100.
In Cunningham v. Wheeler 1994 120 (SCC), [1994] 1 S.C.R. 359, Justice Cory indicated at paragraph 30:
In my view Ratych v. Bloomer, supra, simply placed an evidentiary burden upon plaintiffs to establish that they had paid for the provision of disability benefits. I think the manner of payment may be found, for example, in evidence pertaining to the provisions of a collective bargaining agreement just as clearly as in a direct payroll deduction.
- This area of law was recently reviewed by the Supreme Court of Canada in IBM Canada Limited v. Waterman [2013] S.C.C. 70. Justice Cromwell concluded at paragraph 76:
From this review of the authorities, I reach these conclusions:
(a) There is no single marker to sort which benefits fall within the private insurance exception.
(b) One widely accepted factor relates to the nature and purpose of the benefit. The more closely the benefit is, in nature and purpose, an indemnity against the type of loss caused by the defendant’s breach, the stronger the case for deduction. The converse is also true.
(c) Whether the plaintiff has contributed to the benefit remains a relevant consideration, although the basis for this is debatable.
(d) In general, a benefit will not be deducted if it is not an indemnity for the loss caused by the breach and the plaintiff has contributed in order to obtain entitlement to it.
(e) There is room in the analysis of the deduction issue for broader policy considerations such as the desirability of equal treatment of those in similar situations, the possibility of providing incentives for socially desirable conduct, and the need for clear rules that are easy to apply.
The defendants, in their factum, indicate that the IBM case has not yet been considered in a similar issue in Ontario. However, courts in other provinces have interpreted IBM Canada Limited v. Waterman suggesting that the importance or weight to be placed on whether an employee has contributed to the benefit may require reconsideration.
The cites for that are Morris v. ACL Services Limited [2014] BCSC 1580, at paragraphs 126 to 127, and Schulz v. Lethbridge Industries Limited [2015] ABQB 32, at paragraphs 31 through 33.
Applicability Of The Law To These Facts
At trial the plaintiffs did not lead initially any evidence that they gave consideration for their disability benefits. In a letter addressed to Ms. Mazzucco on March 11th, 2005, the employer, Dufferin-Peel Catholic School Board, indicated that it paid 100 percent of the premium costs for her LTD coverage.
The collective agreement, which was filed this morning after the trial evidence had been completed, was filed on consent in order for me to properly assess this important area of law. The collective agreement at page 6 provides, "The Board shall pay 100 percent of the cost of the LTD", and that would apply to Ms. Mazzucco.
Prior to the IBM Canada Limited v. Waterman case, this would have satisfied the requirements of the private insurance exception per Cunningham v. Wheeler.
The plaintiff indicates that the IBM Canada Limited v. Waterman case is a contract case and is not applicable to tort cases. My reading of that case does not give itself to such a narrow restriction. From the plain reading of paragraph 76, the Supreme Court of Canada has signalled that a new era has begun regarding the private insurance exception.
The factor in favour of the plaintiff is that it is a benefit provided to her in the collective agreement. However, that factor is no longer determinative per IBM Canada Limited v. Waterman and the recent cases that I have referred to, albeit they are not Ontario cases.
Factors weighing in favour of the defendant are the nature and purpose of the benefit. The LTD benefit she has received is an indemnity, in my opinion, caused by the defendant's breach, and per IBM Canada Limited v. Waterman makes a strong case for deduction.
The Supreme Court of Canada in IBM Canada Limited v. Waterman at paragraph 76 also indicates there is room in the analysis for the deduction for broader policy considerations.
The broader policy consideration here is that Ms. Mazzucco is being paid LTD pursuant to a policy of insurance paid for by the Dufferin-Peel School Board, which is funded by the Ontario taxpayer. The defendants as well are paid directly or indirectly by the Ministry of Health, as well funded by the Ontario taxpayer. The Ontario taxpayer, in effect, is indirectly paying for the LTD by way of funding the Dufferin-Peel School Board, who pays 100 percent the cost of the LTD plan for all teachers employed by that board, and any wage loss claims recovered by the defendants.
The result is that Ms. Mazzucco is in reality getting double recovery from agencies funded by the Ontario taxpayer. It is reasonable for Ms. Mazzucco to be compensated for her wage loss. For her to receive double recovery from the public purse, which in many respects is already overburdened, is not.
The jury will be instructed to deduct from any wage losses the LTD payments provided to her, both in the past and future.
FORM 2
Certificate of Transcript (Subsection 5(2))
Evidence Act
I, Leanne Osborne, certify that this document is a true and accurate transcript of the recording of the proceedings in Mazzucco et al. v. Herer et al., in the Superior Court of Justice held at 45 Main Street East, Hamilton, Ontario, taken from Recording No. 4799_606_20151109_093104__10_SKARICT which has been certified in Form 1.
_November 12, 2015 ____________________________________
(Date) (Authorized Court Transcriptionist)