Court File and Parties
Court File No.: CV-13-481220 Date: 2017-04-24 Ontario Superior Court of Justice
Between: Arsim Grajqevci, Plaintiff – and – Yasmin Rustaie, Susan Rustaie and The Wawanesa Mutual Insurance Company, Defendants – and – Allstate Insurance Company, added by Order pursuant to s. 258(14) of the Insurance Act, R.S.O 1990, c. I.8, Statutory Third Party
Counsel: Nicole Corriero, for the Plaintiff No one appearing for the Defendants Michael Burgar and Saro Setrakian, for the Statutory Third Party, Allstate Insurance Company
Heard: March 28, 2017
Before: M. D. Faieta J.
Reasons for Decision
INTRODUCTION
[1] The plaintiff, Arsim Grajqevci, suffered personal injuries arising from a motor vehicle accident that occurred on May 28, 2011. The action was defended only by the statutory third party, Allstate Insurance Company. The action and all crossclaims were dismissed against Wawanesa. Allstate is the automobile insurer of the defendants, Yasmin Rustaie and Susan Rustaie (collectively referred to as “Rustaie”). A jury trial was held. On February 1, 2017, the jury awarded the plaintiff $15,000 for pain and suffering and $35,000 for past loss of income.
[2] There are certain deductibles under the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”), that apply to the jury’s award. The parties agree that those deductibles have reduced the amount awarded for pain and suffering to nil, and the amount awarded for past loss of income to $16,876.94.
[3] Allstate makes two submissions on this motion for directions. First, this court is required under s. 267.5(15) of the Act to determine whether the plaintiff’s injuries meet the prescribed threshold for non-pecuniary general damages and health care costs even though the amount awarded for pain and suffering is nil. Second, payments received by the plaintiff from the Government of Ontario under the Ontario Disability Support Program (“ODSP”) and Ontario Works (“OW”) should be deducted from the award for past loss of income.
[4] For the reasons that follow, I have ruled that (1) the Act does not require this court to determine the threshold issue where there has been no award for health care expenses or non-pecuniary loss; and (2) the benefits paid under ODSP and OW should not be deducted from the award for past loss of income.
ISSUE #1: IS A THRESHOLD DETERMINATION REQUIRED WHEN THE PLAINTIFF IS NOT ENTITLED TO AN AWARD FOR HEALTH CARE EXPENSES OR NON-PECUNIARY LOSS?
[5] The relevant subsections under s. 267.5 of the Act are as follows:
Protection from liability; health care expenses
(3) 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 damages for expenses that have been incurred or will be incurred for health care resulting from bodily injury arising directly or indirectly from the use or operation of the automobile unless, as a result of the use or operation of the automobile, the injured person has died or has sustained,
(a) permanent serious disfigurement; or
(b) permanent serious impairment of an important physical, mental or psychological function….
Non-pecuniary loss
(5) 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 damages for non-pecuniary loss, including damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act, from bodily injury or death arising directly or indirectly from the use or operation of the automobile, unless as a result of the use or operation of the automobile the injured person has died or has sustained,
(a) permanent serious disfigurement; or
(b) permanent serious impairment of an important physical, mental or psychological function….
Motion to determine if threshold met; non-pecuniary loss
(12) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, a judge shall, on motion made before trial with the consent of the parties or in accordance with an order of a judge who conducts a pre-trial conference, determine for the purpose of subsections (3) and (5) whether, as a result of the use or operation of the automobile, the injured person has died or has sustained,
(a) permanent serious disfigurement; or
(b) permanent serious impairment of an important physical, mental or psychological function….
Determination at trial; non-pecuniary loss
(15) If no motion is made under subsection (12), the trial judge shall determine for the purpose of subsections (3) and (5) whether, as a result of the use or operation of the automobile, the injured person has died or has sustained,
(a) permanent serious disfigurement; or
(b) permanent serious impairment of an important physical, mental or psychological function. [Emphasis added.]
[6] In Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27, the Supreme Court of Canada endorsed the following approach to statutory interpretation articulated by Elmer Driedger, at para. 21:
Today there is only one principle or approach, namely, 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.
[7] The requirement under s. 267.5(15) for a judge to determine whether the plaintiff has met the statutory impairment threshold is only for purposes of ss. 267.5(3) and (5). If, after the application of the mandated deductibles, the plaintiff is not entitled to an award of damages, then it serves no purpose in relation to subsections (3) and (5) for a judge to determine whether the statutory impairment threshold has been satisfied. Accordingly, I find that the Act does not require a judge to make a threshold determination under s. 267.5(15) when the plaintiff is not entitled to an award of damages after the application of the deductibles required by the Act.
[8] In any event, I agree with Justice Myers’ view that the determination of the threshold issue is moot, and need not be decided, when that determination will have no practical effect between the parties: Mandel v. Fakhim, 2016 ONSC 6538, para. 7.
ISSUE #2: SHOULD PAYMENTS THAT THE PLAINTIFF RECEIVED UNDER OW AND ODSP BE DEDUCTED FROM THE AWARD FOR PAST LOSS OF INCOME?
[9] It is agreed that the plaintiff received from the Government of Ontario:
(1) the sum of $3,353.39 pursuant to the OW program from March 12, 2015 to November 30, 2015; and
(2) the sum of $14,888.00 pursuant to ODSP from November 30, 2015 until January 31, 2017.
[10] Allstate submits that such payments should be deducted from the jury’s award for past loss of income based on s. 267.8(1) 2 of the Act. Section 267.8(1) provides:
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:
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.
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.
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. [Emphasis added.]
[11] Allstate must establish (1) that OW and ODSP payments are “for income loss or loss of earning capacity”; and (2) that the OW and ODSP payments were “in respect of incident”.
Are OW and ODSP payments “for income loss or loss of earning capacity”?
[12] In a negligence action, a plaintiff is entitled to full and fair compensation but not double recovery. In Cunningham v. Wheeler, [1994] 1 S.C.R. 359, McLachlin J., as she then was, stated at para. 5:
The fundamental principle is that the plaintiff in an action for negligence is entitled to a sum of damages which will return the plaintiff to the position the plaintiff would have been in had the accident not occurred, in so far as money is capable of doing this. This goal was expressed in the early cases by the maxim restitutio in integrum. The plaintiff is entitled to full compensation and is not to be denied recovery of losses which he has sustained.…The ideal of compensation which is at the same time full and fair is met by awarding damages for all the plaintiff's actual losses, and no more. The watchword is restoration; what is required to restore the plaintiff to his or her pre-accident position. Double recovery is not permitted.
[13] The common law has recognized two exceptions to the rule against double recovery where the payment results from (1) private insurance or (2) charity.
[14] In Boarelli v. Flannigan, [1973] 3 O.R. 69 (ONCA), at pp. 73-74, the Ontario Court of Appeal stated:
In addressing myself as to whether welfare payments received by an injured party while unemployed as a result of an accident or other injury under such statutes as the General Welfare Assistance Act, R.S.O. 1970, c. 192, or Family Benefits Act, R.S.O. 1970, c. 157, I view these payments as benefits provided to persons in need, independent of any cause of action such person may have or assert, and as a benefit provided to him not in diminution of any claim the injured person may have for damages. Answering the query of Lord Reid, I do not think that the Legislature intended them to be for the benefit of the wrongdoer.
… It is helpful, I think, to recall that the plaintiff's right of action is complete at the time when his injuries are sustained. It is apparent that, if a person were to have been recompensed immediately upon the suffering of his injury, there would have been no need for him having to obtain any assistance, pursuant to our present social welfare statutes. Merely because such damages cannot be determined at that time should not affect the result. I do not think that there is any difference in principle between benefits received under our present social welfare legislation and those received by way of private or public benevolence. In such case it may be said that the injured party has received a reward as a result of the injury. If that is so, in my view, it is no concern of the defendant and such matters should be dealt with by the appropriate legislative authority. In many statutes a right of subrogation for moneys received from an unsuccessful defendant is established. In this way the loss is borne by the tortfeasor and the question of overlapping compensation is thereby avoided. However, in my opinion, it is for the appropriate legislative authority to determine whether the right of subrogation should be included in those statutes which are now silent in this respect.
[15] The view that social assistance benefits “are not deductible from an award of damages on the basis of the ‘charitable gifts’ exception to the rule against double recovery” was reflected in the British Columbia Court of Appeal’s decision in M.B. v. British Columbia, 2002 BCCA 142, 211 D.L.R. (4th) 295, at para. 73 which adopted some of the arguments advanced in Boarelli. However, that view was subsequently reversed in M.B. v. British Columbia, [2003] 2 S.C.R. 477. McLachlin C.J. stated, at paras. 26- 27, that:
It is true that social assistance benefits are intended to relieve poverty, and that need is the relevant criterion. However, as Smith J.A. pointed out in his dissenting judgment in the Court of Appeal in the case at bar, this does not mean that they are not intended as wage replacement. On the contrary, it suggests that they are intended to replace that part of employment income that would normally be spent on meeting basic needs (para. 162). Most people who require welfare require it because they lack sufficient income to meet their basic needs, and the normal source of sufficient income is employment of one sort or another. Social assistance therefore replaces income that most people would have obtained through employment. It does not purport to replace all of the income they would have obtained if they had a job. It only replaces enough to satisfy basic needs. But it is no less “wage replacement”, simply because it only replaces a portion of the income a person might otherwise have had.
The arguments to the contrary do not, with respect, withstand scrutiny. Prowse J.A. argued that neither the Guaranteed Available Income For Need Act, R.S.B.C. 1979, c. 158 (“GAIN Act”), nor the BC Benefits (Income Assistance) Act, R.S.B.C. 1996, c. 27 — the legislation under which M.B. received social assistance — describes social assistance as “wage replacement” or “income replacement”. However, that is not determinative. Prowse J.A. also argued that past employment and future employability are not prerequisites for obtaining social assistance under this legislation. This too does not seem determinative, since part of the legislature’s intent may be to provide a substitute income for those who are unable to work. Prowse J.A.’s third argument, that the legislation nowhere contemplates repayment of social assistance from the proceeds of a future tort award, again says nothing on the issue of whether social assistance is partial income replacement. Mackenzie J.A. argued that social assistance benefits do not duplicate damages received for a tort because “[t]hey are independent of any loss”, such as a loss caused by a tort (para. 104). However, an inability to earn an income through employment is a loss. It is not a loss that is invariably caused by a tort, to be sure. But the test for whether a certain category of collateral benefit “duplicates” a certain head of damages is not whether the benefit was intended as compensation for a loss caused by a tort but simply whether the benefit was of the same type as the particular head of damages in tort law — i.e., in this case, wage replacement. Mackenzie J.A.’s second argument was that the social assistance benefits received by M.B. could not possibly duplicate her entire tort award, because the tort award was made for a much longer period. But an award for loss of earning capacity is really compensation for the loss of the use of that capacity over time. It does not matter, for this purpose, for how much of this period M.B. was on social assistance. [Underlining in original. Bold emphasis added.]
Ontario Works
[16] The OW Program is established under Ontario Works Act, 1997, S.O. 1997, c. 25, Sched. A (“OWA”). Section 7 of the OWA provides that “[i]ncome assistance shall be provided […] to persons who satisfy all conditions of eligibility under this Act and the regulations”. Income assistance is defined to mean “assistance provided for purposes of basic needs and shelter”: see s. 2, OWA.
[17] Given the view expressed by the Supreme Court of Canada in M.B. v. British Columbia, I find that the payment of income assistance under OW is a payment “… for income loss or loss of earning capacity under the laws of any jurisdiction…”
Ontario Disability Support Program
[18] The ODSP is established under the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sched. B (“ODSPA”). Section 3 of the ODSPA provides that “income support shall be provided to a person with a disability, as determined under section 4, and to a person of a prescribed class”. Income support is defined to mean “assistance for the provision of basic needs, shelter, costs related to a person’s disability and other prescribed needs, and includes benefits”: see s. 2, ODSPA. Entitlement to ODSP is limited to those persons who are resident in Ontario, are at least 18 years old, are persons with a disability, and meet the prescribed financial limits: see ss. 4 and 5, ODSPA; s. 3 of O. Reg. 222/98 (“General”).
[19] In Demers v. B.R. Davidson Mining & Development Ltd., 2012 ONCA 384, 111 O.R. (3d) 42, the Ontario Court of Appeal ruled that disability benefits under the Canada Pension Plan (“CPP”) were not deductible under s. 267.8(1) 2 of the Act, as such benefits were determined to be in the nature of private insurance because entitlement depended upon the applicant having (1) “valid earnings and contributions” for four of the last six calendar years; and (2) suffered a “severe and prolonged mental or physical disability”. However, such payments are now deductible pursuant to s. 5.2 of Court Proceedings for Automobile Accidents that Occur on or after November 1, 1996, O. Reg. 461/96.
[20] In my view, Demers is distinguishable on this point as payments under the ODSPA are not dependent upon the applicant having worked for a period of time or having made contributions to the plan, unlike CPP benefits. Once again, in light of the view expressed by the Supreme Court of Canada in M.B. v. British Columbia, I find that the payment of income assistance under the ODSPA is a payment “… for income loss or loss of earning capacity under the laws of any jurisdiction…”
Were the OW and ODSP payments “in respect of the incident”?
[21] The plaintiff began receiving OW payments from the City of Toronto on March 12, 2015. Given that the OW application was made more than four years after the 2011 automobile accident, I am not satisfied that the payment of OW benefits was in respect of the 2011 automobile accident. Other health problems existed. The plaintiff had been diagnosed with HIV. On February 27, 2015, he was admitted to a hospital for tuberculosis affecting his lungs and other parts of his body. He was not discharged until April 16, 2015.
[22] The plaintiff began receiving ODSP benefits on November 30, 2015. He had submitted an application for benefits under the ODSPA on May 14, 2015. A “Health Status Report” was provided by Dr. Susan John dated April 29, 2015. Her report lists the following three conditions and associated impairments:
- Chronic HIV: weakness
- Disseminated tuberculosis: cough, SOB, abdo pain, wt loss
- Chronic back pain from MVA: back pain
[23] The plaintiff’s ODSP application was approved by letter dated May 27, 2015. The letter from the Disability Adjudication Unit states:
CONDITIONS:
The Disability Adjudication Unit has concluded that there is a substantial impairment related to the following condition(s):
- Chronic HIV
Ongoing treatment for HIV.
DECISION:
This applicant has been determined to be a person with a disability within the meaning of the Ontario Disability Support Program Act.
No review is recommended. [Underlining and bold in original. Italics added.]
[24] Given the above correspondence, I find that the Government of Ontario made payments under the ODSPA only in respect of the plaintiff’s HIV condition rather than in respect of the 2011 automobile accident. I adopt the analysis of the Ontario Court of Appeal in Demers, at para. 44, that the payment of disability benefits is not “in respect of the incident” but rather in respect of the plaintiff’s disability. Accordingly, the payments made under the ODSPA to the plaintiff are not deductible pursuant to s. 267.8(1) 2 of the Act.
[25] Allstate submits:
It is anticipated that the plaintiff will argue there should be no deduction because social assistance income support was not received until April 2015 after the plaintiff’s HIV condition compelled him to seek assistance from OW and ODSP. This post-verdict position is completely at odds with what the plaintiff put to the jury. In closing argument, the plaintiff made no concession on the subject of income loss for the period from April 2015 to the date of trial. There was a concession that income loss was not sustained in respect of the accident during the two months of hospitalization in February to April 2015.
Allstate submits that the plaintiff should not be permitted to reframe and contradict his theory of income loss post-verdict to avoid deductions. The award of $35,000 for past income loss must be understood in context with the timeframe and calculations submitted to the jury. The jury, through a process which will never be revealed, arrived at a compromise figure that cannot be parsed or split into a pre- or post-March 2015 timeframe. The award can only be understood as related to or be [sic] being “in respect of” the timeframe from May 2011 to February 2017 and should be subject to the deductions received in that same timeframe.
[26] Allstate’s proposed approach would render the phrase “in respect of” redundant. Allstate has been unable to discharge its onus of establishing that the OW and ODSP payments have any connection to the 2011 automobile accident. It is clear that the decision to grant ODSP benefits to the plaintiff was only due to the plaintiff’s HIV condition. Even though the OW application and decision to grant benefits are included in the parties’ materials, there is no evidence of why OW benefits were paid. A connection to the 2011 automobile accident cannot be assumed in light of the plaintiff’s tuberculosis and HIV conditions at the time that applications were made for both types of social assistance benefits.
[27] I accept the plaintiff’s submission that the OW and ODSP payments were not “in respect of” the 2011 automobile accident.
Were OW and ODSP payments “available” to the plaintiff prior to March 30, 2015?
[28] Allstate submits:
The record of evidence at trial established that the general physician encouraged the plaintiff to apply for OW and ODSP through 2012.… Allstate is entitled to a credit for income support benefits “received or available” and the jury’s verdict for past income loss is extinguished by the deduction of benefits available before March 2015.
[29] Whether such payments were available from the government agencies responsible for the OW program or ODSP requires proof, from those agencies, that such payments would have been paid to the plaintiff had he only applied.
[30] The evidence relied upon by Allstate falls far short. At best, it does no more than allow one to speculate that such payments might have been available to the plaintiff. I find that Allstate has not demonstrated, on the balance of probabilities, that OW and ODSP payments were available to the plaintiff prior to March 30, 2015.
CONCLUSIONS
[31] I have determined that there is no need for a threshold decision in the unique circumstances of this action. I have also found that the OW and ODSP payments to the plaintiff should not be deducted under the award for past loss of income.
[32] I encourage the parties to resolve the issue of costs of this action. However, if they are unable to do so, the parties shall deliver their costs submissions, up to five pages in length, as well as their Bills of Costs. The plaintiff shall do so within two weeks of the date this decision is released, and Allstate shall do so within three weeks of the date this decision is released.
M. D. Faieta J. Released: April 24, 2017