Court File and Parties

COURT FILE NO.: CV-12-459089 DATE: 20220505

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SEAN OMAR HENRY, personally and as Estate Trustee for the Estate of SANDY ROBINSON Plaintiffs

Barbara A. MacFarlane and Michael D. Hodgins, for the Plaintiffs

- and -

DR. MARSHALL ZAITLEN, DR. EDGAR JAN, DR. JOSEPH FAIRBROTHER, DR. HILAIRE LOUISE SHEEHAN, DR. VERA BRIL, DR. ROBERT KURTZ, DR. JOHN DOE, JANE DOE, JOAN DOE, WILLIAM OSLER HEALTH CENTRE – BRAMPTON CIVIC HOSPITAL and UNIVERSITY HEALTH NETWORK – TORONTO GENERAL HOSPITAL Defendants

Stephanie Sugar, and Christine Windsor, for the Defendant, Dr. Marshall Zaitlen

HEARD: (By videoconference): January 19, February 11, and March 14, 2022

A.A. SANFILIPPO J.

REASONS FOR DECISION

(Post-Verdict Motion for Deduction of Benefits)

Overview

[1] The trial of this action, with a jury, proceeded against only Dr. Marshall Zaitlen on November 8-10, 12, 15-19, 22-26, 29-30, and December 1-3, 6-10, 2021, with the jury verdict rendered on December 13, 2021. The Plaintiffs moved, on December 13, 2021, for judgment on the jury verdict, which was opposed by the Defendant on the basis of Rule 52.08(1) (b) and (c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] The Defendant’s motion under Rule 52.08 was scheduled to be heard on January 19, 2022 together with a motion by the Defendant to deduct long-term disability benefits and pension contribution benefits from the jury’s award for past income loss (the “Benefits Deduction Motion”).

[3] On January 19, 2022, the parties reported that they settled the Defendant’s objection under Rule 52.08 to the Plaintiffs’ motion for judgment on the following agreements: (i) the jury’s verdict in answer to Question 3(f) (Past Value of Loss of Housekeeping and Maintenance) would be reduced, on consent, from the amount of $119,641.60 to the amount of $58,275.20; (ii) the Plaintiffs’ subrogated claims, being the Ontario Ministry of Health claims (past losses and future losses) and a Manulife claim, were settled in the total amount of $71,852. This left for determination only the Benefits Deduction Motion.

[4] The Benefits Deduction Motion was adjourned on January 19, 2022 to allow the parties an opportunity to address the Defendant’s objection to the admissibility of an affidavit filed by the Plaintiffs. I implemented a timetable for the preparation of this evidentiary issue for determination on February 11, 2022. On that day, I dismissed the Defendant’s objection to the Plaintiffs’ filing of the contested affidavit and implemented a timetable for the Defendant to file any reply evidence on its motion, and for cross-examinations to be completed. The Benefits Deduction Motion was then heard on March 14, 2022.

[5] On the basis of the reasons that follow, I order that the Defendant’s motion is dismissed.

I. THIS MOTION

[6] The jury found that Dr. Zaitlen breached the standard of care and awarded the Plaintiff, Sean Omar Henry, damages in the amount of $1,496,139.41. As part of this award, the jury awarded Mr. Henry past income loss in the amount of $194,171, expressly stated to be for the three years following his injury (2011-2013), and $429,786 for future income loss. The jury was instructed not to make any deduction or consider any benefits received by Mr. Henry in arriving at their determination on the assessment of his income loss.

[7] Mr. Henry began employment with the City of Toronto (the “City”) in or about 2006. Mr. Henry was a member of the Canadian Union of Public Employees, Local 79 (“CUPE Local 79”). There was a Collective Bargaining Agreement in place between CUPE Local 79 and the City that governed Mr. Henry’s benefits for the period from 2011-2013 (the “CBA”). It was not in dispute that when Mr. Henry was no longer able to work, he received Long Term Disability Benefits (“LTD Benefits”) pursuant to the terms of the CBA and that, under the CBA, Mr. Henry was required to enroll in the Ontario Municipal Employees’ Retirement System (“OMERS”) pension plan.

[8] The Defendant submitted that for the period in which the jury awarded Mr. Henry $194,171 in past income loss – specifically 2011-2013 – Mr. Henry received indemnification payments in an amount that exceeded his actual income loss. Accordingly, the Defendant contended that Mr. Henry will have double recovery unless his benefits are deducted from the award of past income loss. The Defendant thereby brought the Benefits Deduction Motion for the following relief:

(a) An Order deducting long-term disability benefits in the amount of $123,360 from the past income loss awarded to Mr. Henry at trial.

(b) An Order deducting pension contribution benefits in the amount of $25,663 from the past income loss awarded to Mr. Henry at trial.

[9] The Plaintiffs submitted that the Defendant ought not to benefit from the foresight of a prudent plaintiff who, directly or indirectly through his union, made arrangements, in this case through the CBA, that indemnify him for a loss that is caused by the Defendant’s negligence. The Plaintiffs say that Mr. Henry’s receipt of benefits further to the CBA comes within the private insurance exception to the principles against overcompensation in damage assessment, and is thereby not deductible. The Plaintiffs also submitted that there can be no overcompensation, in any event, because Mr. Henry is contractually obligated to reimburse the amount of any overcompensation to the City to the extent of the City’s payment of the LTD Benefits.

II. THE COMPENSATION

[10] I will begin by analysing the quantification of benefits that is at the core of the Benefits Deduction Motion.

[11] The jury’s award to Mr. Henry of $194,171 in past income loss represented a simple arithmetic computation of the three years of income that he would have received from his employment with the City but for the injuries sustained in 2010: specifically, $64,940 in 2011; $64,610 in 2012; and $64,621 in 2013. The jury was instructed not to make any deductions for benefits received by Mr. Henry and followed these instructions.

[12] Mr. Henry has been receiving LTD Benefits since January 6, 2011. The LTD Benefits are calculated as 75% of Mr. Henry’s pre-disability earnings, further to clause 12.06(a) of the CBA [1]:

Article 12. Long Term Disability: 12.06(a) The City will provide for all employees by contract with an insurer selected by the City a Long Term Disability plan for employees and will pay one hundred percent (100%) of the cost thereof to provide a Long Term Disability benefit of seventy-five (75%) of such employee’s basic salary per month for disability claims, inclusive of any benefits paid under any pension plan, insurance plan, Workplace Safety and Insurance Board or any other plan to which the City makes any contribution. …

[13] Mr. Henry’s income tax returns established that for the years 2011-2013 he reported total income of $149,223, consisting of the following amounts: $49,207 in 2011; $50,924 in 2012; and $49,092 in 2013. [2] On the basis of this evidence, over the three-year period reflected in the jury’s award of past income loss, Mr. Henry actually received, through LTD and CPP benefits, $44,948 less than the actual income that he would have earned but for the Defendant’s negligence ($194,171 - $149,223 = $44,948).

[14] The Defendant established, again by reference to Mr. Henry’s income tax returns for 2011, 2012 and 2013, that Mr. Henry received LTD Benefits during this three-year period in the total amount of $123,360. This consisted of $48,750 in 2011; [3] $33,316 in 2012; [4] and $41,294 in 2013. [5] Mr. Henry’s receipt of LTD Benefits during this three-year period in the amount of $123,360 was conceded by the Plaintiffs.

[15] Under clause 13.01(b) of the CBA, Mr. Henry was required to enroll in the OMERS pension program:

Article 13. Pensions and Retirement: 13.01(b) All permanent employees hired after January 1, 1998, shall enrol in the OMERS plan.

[16] From 2011 onwards, Mr. Henry received a waiver of contribution towards his disability benefits, and thereby continued to earn credited service without payment of contribution. In addition to the employee portion of his contribution being deemed to having been paid, the City’s contribution to Mr. Henry’s OMERS pension continued to be paid, notwithstanding no monetary contribution by Mr. Henry by reason of his disability. The Defendant submitted that Mr. Henry’s tax returns for 2011-2013 show that he received $25,663 as pension contributions, consisting of $8,333 in 2011; $8,587 in 2012; and, $8,743 in 2013 (the “Pension Contributions”). [6]

[17] The Plaintiffs disputed that the Defendant established the nature of the Pension Contributions in that the Defendant failed to establish the monetary value of the credited service received by Mr. Henry. The Plaintiffs conceded that amounts totaling $25,663 were declared by Mr. Henry in his 2011-2013 Income Tax Returns as “Pension Adjustment” but denied that the Defendant established that the “Pension Adjustment” represented Pension Contributions in the nature of credited service. The Plaintiffs conceded that some portion of the “Pension Adjustment” was in the nature of credited service in consideration of Mr. Henry’s disability but argued that the Defendant did not tender any evidence that would allow for a determination to be made of the monetary value of the credited service.

[18] The amount of the LTD Benefits ($123,360) and the Pension Contributions ($25,663) received by Mr. Henry totaled $149,023.

[19] The Defendant submitted that Mr Henry would be overcompensated – indeed would have almost double recovery – if he receives the jury award for past income loss of $194,171 (reflective of his actual past income loss for 2011-2013) after having already received LTD Benefits and Pension Contributions totaling $149,023 for the same three-year period. The Defendant contended that this can be addressed by deducting the amount of $149,023 from the jury’s award of $194,171. The Defendant submitted that this would not result in under-compensation to Mr. Henry because the deduction of the LTD Benefits and Pension Contributions from the jury award for past income loss would still leave Mr. Henry with a past income loss award of $45,148 ($194,171 - $123,360 - $25,663 = $45,148). Once the amount of $45,148 is added to the amount of $149,223 that Mr. Henry actually received from 2011 to 2013, Mr. Henry will have received the total amount of $194,371 ($149,223 + $45,148 = $194,371) which is slightly more than the income that Mr. Henry would have earned during this three-year period but for Dr. Zaitlen’s negligence ($194,171).

[20] The Plaintiffs do not deny that Mr. Henry actually received the amount of $149,223 for the period from 2011-2013, and do not deny that the amount of $123,360 constituted LTD Benefits. The Plaintiffs do not deny that if there are no deductions to the jury award of $194,171 for past income loss, Mr. Henry would receive more money for the period from 2011-2013 than he would have earned but for the negligence of Dr. Zaitlen. The Plaintiffs contended that these benefits were received further to amounts paid by Mr. Henry for the entitlements arising from his CBA and therefore are excluded from deduction by the private insurance exception. The Plaintiffs submitted further that, in any event, Mr. Henry is contractually obligated to reimburse the City for any overcompensation to the extent of the City’s payment of the LTD Benefits.

III. APPLICABLE LEGAL PRINCIPLES

[21] The well-established, foundational principle on the analysis of damages in tort 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”: Cunningham v. Wheeler, [1994] 1 S.C.R. 359, at p. 368. The jury’s verdict for past income loss results in overcompensation to Mr. Henry in that it provides Mr. Henry with more income than he would have earned if his injury had not occurred when considered together with his receipt of benefits. The question on this Benefits Deduction Motion is whether the benefits that caused the overcompensation should be deducted from the jury’s award for past income loss. The principles that will guide my analysis of this issue are set out by the Supreme Court of Canada, principally in three decisions that I will now explain.

[22] In Ratych v. Bloomer, [1990] 1 S.C.R. 940, the Supreme Court considered whether a plaintiff who has lost work resulting from injuries caused by a tortfeasor can recover from the tortfeasor damages for loss of earnings where he has been paid his full salary pursuant to his contract of employment. The plaintiff had received indemnity benefits pursuant to a collective agreement which, once accounted for, resulted in the plaintiff sustaining no actual income loss.

[23] The Supreme Court affirmed the principle that “an injured person should be compensated for the full amount of his loss, but no more” (emphasis added): Ratych, at p. 962. The Court emphasized that the plaintiff is entitled to the “full measure of his loss as best that can be calculated” but that the plaintiff “is not entitled to turn an injury into a windfall”: Ratych, at pp. 962, 964.

[24] The Supreme Court stated that indemnity benefits obtained under a collective agreement that gave rise to overcompensation were deductible unless the plaintiff could show that he gave up something in exchange for the wages received post-injury. The Court applied case law that derived from the long-standing authority of Bradburn v. Great Western Rail Co., [1874-80] All E.R. 195 (Ex. Div.) that benefits awarded under a private insurance contract should not be deducted from damages awarded against a tortfeasor. The basis for this exception to the deductibility of benefits that give rise to overcompensation, which came to be referred to as the private insurance exception, is that indemnity payments received post-injury pursuant to a private contract of insurance derive from premium expense that the plaintiff sustained in planning and procuring the private insurance.

[25] The Supreme Court accepted that if an employee can establish that they suffered a loss in exchange for obtaining wages during the period in which the employee could not work, the employee should be compensated for that loss: Ratych, at p. 972. However, in Ratych, the evidentiary record did not establish that the employee sustained a loss, or a contribution equivalent to a payment, and the majority of the Supreme Court was unwilling to “infer simply from the fact that an employee receives a wage benefit that the employee has suffered loss or that the employee has contributed the equivalent of an insurance premium in exchange for the benefit”: Ratych, at p. 973. Rather, there must be proof of a loss or contribution by the employee in order to qualify for receipt of the indemnity payments upon injury, and in Ratych there was none: “The difficulty in this case is that neither a loss nor a contribution equivalent to payment of insurance policy is established in this case”: Ratych, at p. 972. As the plaintiff had incurred no cost – or loss – to obtain the indemnity payments, the award for income loss would constitute over-compensation, which was corrected by deducting the indemnity benefits from the amount of the award for income loss. The Supreme Court left open the issue of whether the indemnity payments would not have been deducted had the plaintiff established payment for the indemnity benefits: Ratych, at p. 972. The majority concluded that as a general rule, and subject to cases where a third party was subrogated to the wage benefit, “wage benefits paid while a plaintiff is unable to work must be brought into account and deducted from the claim for lost earnings”: Ratych, at p. 982.

[26] The dissenting opinion in Ratych agreed with the majority that any indemnity payments received by a plaintiff for which the plaintiff has incurred a cost are deductible, but disagreed that the plaintiff had not incurred a cost in the collective agreement for the indemnity benefits. The dissenting opinion was prepared to accept that a unionized employee must have given up some concession – whether monetary or a tradeoff of intangible factors – to obtain the wage indemnity. Justice Cory wrote, in dissent, that “it strains common sense to imagine that an employer would agree to pay the wages of an employee who is absent from work due to illness or injuries received in an accident without receiving in return certain concessions from the employees through their union”: Ratych, at para. 956. On this basis, the dissenting justices would not have allowed for deduction of the indemnity benefits received under the collective agreement.

[27] In Cunningham, the Supreme Court affirmed the basic principles that recovery in a tort action is “to compensate the plaintiff as fully as money may do for the loss suffered as a result of the tortfeasor’s negligence”, who is not entitled to double recovery: Cunningham, at p. 369. The majority in Cunningham found that the case was governed by the private insurance exception: “payments received for loss of wages pursuant to a private policy of insurance should not be deducted from the lost wages claim”: Cunningham, at pp. 396, 401.

[28] Justice Cory, writing for the majority, found that the three related appeals heard collectively in Cunningham were distinguishable from Ratych because the trial judges had evidence on which to find that the plaintiffs had paid, in some manner, for the indemnity benefits that were received under a collective agreement or contract of employment: Cunningham, at pp. 404, 408. The Court held that Ratych placed the evidentiary burden on the plaintiff to establish that they had paid for the indemnity benefits, stating that “what is required by the Ratych decision is that there be evidence adduced of some type of consideration given up by the employee in return for the benefit”: Cunningham, at p. 407. The method or means of the payment was not pertinent, and it did not matter whether the employer arranged for a third party carrier for the underwriting of the insurance.

[29] The Supreme Court stated that where the indemnity benefits are not shown to come within the private insurance exception, they must be deducted from the judgment for income loss subject to an assessment of whether the third party who paid the benefits has a right of subrogation: Cunningham, at p. 415.

[30] The Supreme Court further developed the framework for the deductibility of indemnity benefits under the private insurance exception in IBM Canada Limited v. Waterman, 2013 SCC 70, [2013] 3 S.C.R. 985. After review of the Court’s decisions in Ratych and Cunningham, Justice Cromwell, in writing for the majority at para. 76, stated the following 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. [Emphasis in original.]

[31] I will apply these principles to the evidence on this motion.

IV. THE EVIDENCE

[32] The moving party Defendant tendered on this motion the affidavit of Patti Ground, a law clerk with the lawyers for the Defendant (the “Ground Affidavit”). Ms. Ground deposed to two matters: the file materials produced by the Plaintiffs in relation to the benefits received by Mr. Henry; and the provision of unredacted documents material to the Benefits Deduction Motion.

[33] The parties jointly tendered at trial a “Joint Brief of Documents Re: Employment and Income”, which was marked as Exhibit 5, and a “Joint Brief of Documents Re: Disability Benefits”, which was marked as Exhibit 6. The documents in both briefs were redacted to remove any reference to the amount or value of the benefits received by Mr. Henry, in compliance with my trial ruling on the Plaintiffs’ motion to limit the use of evidence pertaining to the receipt by Mr. Henry of income loss benefits (the “Benefits Evidence Ruling”). Ms. Ground tendered unredacted copies of material documents selected from these briefs as pertinent to the Benefits Deduction Motion.

[34] These materials included the Administrative Service Agreement through which Manulife Life Insurance Company (“Manulife”) administers and distributes Mr. Henry’s LTD Benefits which are paid by the City (the “LTD Plan”). The LTD Plan sets out the terms pursuant to which Mr. Henry receives his income loss benefits including, as I will explain later, the obligation of Mr. Henry to reimburse any overcompensation to the extent of his LTD Benefits. Ms. Ground produced letters exchanged between the parties wherein the Defendant sought, and obtained confirmation that the Plaintiffs had produced the entirety of the Manulife file pertaining to the LTD Benefits. The materials produced by the Plaintiffs from the Manulife file do not contain the executed document that, in the Defendant’s submission, is required for the City to recover, either directly or through its agent, Manulife, any amount obtained by Mr. Henry that constitutes overcompensation.

[35] The Plaintiffs tendered the affidavit of Casey Barnett, the 2nd Vice President of CUPE Local 79, sworn January 13, 2022 (the “Barnett Affidavit”). The Defendant objected to the admission of the Barnett Affidavit on the basis that it was served without notice, and that the evidence sought to be tendered by Ms. Barnett ought to have been tendered by the Plaintiffs during the trial and constituted an impermissible “splitting” of the Plaintiffs’ case.

A. The Ruling on the Admissibility of the Barnett Affidavit

[36] The Defendant’s objection to the admissibility of the Barnett Affidavit on the basis that it was late-served, and thereby deprived the Defendant of an opportunity to deliver responding materials and to cross-examine, could be addressed by an adjournment to allow for the filing of responding materials and cross-examination, and in costs. The principal objection by the Defendant was that the proper procedure for the admission of the Barnett Affidavit was through a motion to re-open to enter new evidence in the trial.

[37] The Plaintiffs submitted, in my view correctly, that the Benefits Deduction Motion was trial managed to be heard after the jury’s verdict. This was because the necessity and relevance of the Benefits Deduction Motion depended on the jury’s verdict, and also because the jury would be specifically instructed not to deduct the amount of any benefits from its award, if any, of past income loss. The Defendant filed the Ground Affidavit in support of the relief sought, and the Plaintiffs contend that they acted properly in filing the Barnett Affidavit in their responding record. I agree, for reasons that I will now explain.

[38] The Barnett Affidavit contains Ms. Barnett’s evidence that the LTD Benefits received by Mr. Henry were the subject of a trade-off between Mr. Henry’s union, CUPE Local 79, and his employer, the City, in their negotiation of the CBA. Ms. Barnett’s evidence was intended to respond to the Defendant’s submission that the benefits received by Mr. Henry do not come within the private insurance exception. This evidence was not material to any issue raised in the trial – it is only material to the post-verdict Benefits Deduction Motion. Additionally, in compliance with the Benefits Evidence Ruling, the parties were not able to tender evidence of the value of the benefits received by Mr. Henry by reason of his disability. The issue of deduction of benefits is a question of law that was not only not put to the jury, but the jury was specifically instructed to determine Mr. Henry’s claim for past income loss without consideration of his receipt of any benefits.

[39] The evidence in the Barnett Affidavit had no role in the trial evidence as it was irrelevant and thereby inadmissible to any issue to be determined by the jury. Ms. Barnett’s evidence would have had no role, at all, if the jury had denied Mr. Henry’s claim for past income loss. Ms. Barnett’s evidence first became material upon the Defendant bringing the Benefits Deduction Motion.

[40] The Defendant tendered the Ground Affidavit in support of its post-verdict motion, in my view consonant with Rule 39.01(1). The Defendant submitted that that Ground Affidavit tendered purely procedural evidence and was thereby admissible post-trial, but that the Barnett Affidavit contained substantive evidence and was thereby inadmissible. I do not accept that this is a distinguishing factor in the use of an affidavit on a motion, including a post-verdict motion. Although they are qualitatively different in their content, both affidavits were filed on the post-verdict motion in accordance with Rule 39.01(1). I see no basis on which to admit the moving party’s affidavit and exclude the responding affidavit.

[41] In Cowley v. Skyjack Inc., 2020 ONSC 1718, at para. 60, Justice Corthorn commented that the evidence on a post-verdict motion may include not only the trial evidence but any additional evidence on which the parties seek to rely, in affidavit form or through testimony, depending on the direction of the trial judge. I agree, particularly where, like here, the additional evidence on which a party seeks to rely could not have been admitted in the jury trial.

[42] For these reasons, I denied the Defendant’s objection to the admissibility of the Barnett Affidavit on the post-verdict Benefits Deduction Motion. I granted terms to afford the moving party Defendant the opportunity to deliver a reply motion record and to conduct cross-examination of Ms. Barnett.

B. The Motion to Re-Open

[43] In the event that I decided to grant the Defendant’s objection to the admissibility of the Barnett Affidavit, and in response to the Defendant’s submission that the Plaintiffs were required to seek and obtain leave to re-open their case in order to tender the Barnett Affidavit, the Plaintiffs brought a motion for leave to re-open their case solely for the purpose of tendering into evidence the Barnett Affidavit. Considering my denial of the Defendant’s objection to the admissibility of the Barnett Affidavit on the Benefits Deduction Motion, the Plaintiffs motion for leave to re-open was unnecessary. However, had it been necessary for the Plaintiffs to obtain leave to re-open their case to tender the Barnett Affidavit, I would have granted leave. I will explain why.

[44] The Defendant relied on 1307347 Ontario Inc. v. 1243058 Ontario Inc., [2001] O.J. No. 257 (S.C), at para. 9, as authority for the proposition that re-opening of evidence at trial is permissible where there is the prospect that a miscarriage may otherwise occur. The Plaintiffs relied on the two-part test set out by the Supreme Court in 671122 Ontario Ltd. v. Sagaz-Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, at paras. 59-63, citing Scott v. Cook, [1970] 2 O.R. 769 (H.C.), that the evidence sought to be admitted would have changed the result; and whether the evidence could have been obtained before trial by the exercise of reasonable diligence. This test is applicable when a decision on the trial or motion has already been rendered. Here, the Plaintiffs seek leave to re-open their case to tender evidence in relation to a post-verdict motion.

[45] I take from 1307347 Ontario Inc. the statement by Nordheimer J., as he then was, at para. 9, that the granting of leave to re-open the trial to admit evidence is in the discretion of the court, to be exercised to prevent a miscarriage of justice, with consideration of whether the evidence could have been discovered sooner with reasonable diligence. The Plaintiffs agree with the principle that the trial judge has the discretion to re-open a trial to ensure that a miscarriage of justice does not occur, citing Castlerigg Investments Inc. v. Lam (1991), 2 O.R. (3d) 216 (Gen. Div.).

[46] In Malkov v. Stovichek-Malkov, 2018 ONCA 620, 15 R.F.L. (8th) 255, at paras. 14-15, the Court of Appeal endorsed the factors set out in Catholic Children’s Aid Society of Toronto v. M.R., 2014 ONCJ 762, 64 R.F.L. (7th) 470, at para. 17, as applicable to a determination of whether to allow a plaintiff to re-open their case:

• At what stage of the trial is the motion made?
• Why was evidence not adduced during the party’s case? Did the party intentionally omit leading the evidence earlier? Or did the evidence only recently come to the party’s attention, despite diligent earlier efforts?
• What is the prejudice to the defendant? A defendant might have conducted his case differently if he had known and had an opportunity to investigate the evidence which is the subject of the motion.
• Can any prejudice be remedied in costs?
• How would reopening of the case affect the length of the trial? How much evidence would have to be revisited?
• What is the nature of the evidence? Does it deal with an issue which was important and disputed from the beginning, or with a technical or non-controversial point? Does it merely “shore up” evidence led in chief?
• Is the proposed new evidence presumptively credible?

[47] Here, the Benefits Deduction Motion was brought after the jury rendered its verdict. The evidence that is sought to be tendered is not in relation to an issue that was raised by the trial or expressly framed by the pleadings. The issue of benefit deduction is grounded on the jury’s award of past income loss and crystallized upon that award being rendered. The evidence sought to be adduced from Ms. Barnett is only material to the post-verdict motion and could not have been admitted earlier during the Plaintiffs’ case before the jury.

[48] The Defendant contended that Ms. Barnett’s evidence is not probative, so that no miscarriage will result from its exclusion. The Defendant’s concerns with the credibility, reliability and plausibility of Ms. Barnett’s evidence can be addressed by cross-examination, and by any responding evidence that the Defendant may tender. I do not see any prejudice to the Defendant in re-opening that cannot be addressed through an adjournment and leave to deliver reply affidavit evidence and to cross-examine Ms. Barnett, and costs. Further, in my view, the potential prejudice to the Plaintiffs in denial of their request to re-open to proffer the evidence of Ms. Barnett outweighs any prejudice to the Defendants.

[49] For these reasons, I would have granted leave for the Plaintiffs to re-open their case to tender the Barnett Affidavit, had I not denied the Defendant’s objection to the admissibility of the Barnett Affidavit on the Benefits Deduction Motion.

V. ANALYSIS

[50] I will apply the factors set out in Waterman, together with the principles established in Ratych and Cunningham, to determine whether the LTD Benefits and the Pension Contributions ought to be deducted from the award to Mr. Henry of past income loss.

A. What Benefits Were Established?

[51] The Plaintiffs did not dispute that Mr. Henry received the LTD Benefits totaling $123,360 for the period from 2011-2013.

[52] The Plaintiffs did not dispute that Mr. Henry continued to earn credited service towards his OMERS pension and qualified for an employee pension contribution disability waiver because of his disability. The Plaintiffs admitted that the total of the “Pension Adjustment” entries on Line 206 of Mr. Henry’s tax returns for 2011-2013 total $25,663. However, the Plaintiffs submitted that the Defendant failed to establish that Mr. Henry received a disability waiver of pension contributions in the nature of credited service in the amount of $25,663. I agree.

[53] The total entries for “Pension Adjustment” on Mr. Henry’s income tax returns do not distinguish between the waiver of pension contributions resulting from Mr. Henry’s disability as opposed to the employer’s contribution to Mr. Henry’s pension. The former contribution would be attributable to Mr. Henry’s injuries, whereas the latter contribution would have been paid regardless of Mr. Henry’s injuries.

[54] The Defendant submitted that Mr. Henry would not have had any Pension Adjustment entry on Line 260 of his income tax returns but for the finding of disability. This was not established on the evidence. The Defendant did not establish the amount of the Pension Adjustment entry that comprised the employer funded contribution to Mr. Henry’s OMERS pension which was unrelated to his injury. The Defendant established that Mr. Henry was provided with a waiver of pension contributions resulting from the finding of disability, but did not, in my view, tender sufficient evidence to establish the amount of this waiver. I would disallow the Defendant’s motion for deduction of Pension Contributions on this ground alone but, as I will explain, there are further grounds to deny the deduction of the Pension Contributions from Mr. Henry’s award of damages for past income loss.

B. Are the Benefits an Indemnity?

[55] The LTD Benefits and the Pension Contributions can only be considered for deduction from the past income loss award if they are an indemnity. This is a critical element, because if the LTD Benefits and the Pension Contributions are not paid to indemnify Mr. Henry for a pecuniary loss then they do not constitute compensation: Cunningham, at pp. 371-72. Justice Cromwell emphasized this point in Waterman, at para. 69: “However, there is no decision of the Court of which I am aware that has required deduction of a non-indemnity benefit to which the plaintiff has contributed, like the pension benefits in this case.”

[56] To determine whether a benefit is in the nature of an indemnity, the first inquiry is whether the benefit was intended to be a substitute for wages: Waterman, at para. 81. The second inquiry is whether the benefits would be reduced by other income received by the plaintiff, such that the benefits were “not freestanding entitlements – they were linked to and defined by the extent of actual income loss”: Waterman, at para. 81. In Cunningham, at p. 371, Justice McLachlin adopted the definition used by the 1988 Osborne Commission report: “An indemnity payment is one which is intended to compensate the insured in whole or in part for a pecuniary loss.”

[57] The Plaintiffs did not dispute that the LTD Benefits were an indemnity. The Plaintiffs submitted that the Pension Contributions were not an indemnity. I agree, for reasons that I will explain.

[58] First, the component of the Pension Contributions that consists of the employer’s contribution to Mr. Henry’s pension was payable regardless of the injuries sustained by Mr. Henry and could not constitute an indemnity. Second, the component of the Pension Contributions that was funded on Mr. Henry’s behalf as contribution credits by reason of Mr. Henry’s disability were not a substitute for his wages. Mr. Henry’s pension report, delivered annually from 2011-2013, described Mr. Henry’s membership status as “Disability Waiver” and described the disability pension contribution credit as follows:

You continue to earn credited service toward your retirement pension while you are off work because of a disability. You are not contributing (see Section 3, Contributions) to OMERS for this period. The earnings used in your pension calculation are “deemed” (see Section 2, Earnings).

[59] The Disability Waiver was not provided to address income loss but rather to provide for continued pension contribution notwithstanding Mr. Henry’s disability. This is, in my view, a freestanding entitlement, not a benefit that gives rise to a compensating advantage that has the purpose of indemnifying Mr. Henry for his past loss of income claim. I accept that Mr. Henry would not have qualified for the Disability Waiver but for the injury found to have been caused by the Defendant that, as found by the City, rendered Mr. Henry disabled. However, Mr. Henry did not advance any claim for pension loss or lost pension benefits against which the value of the credited service could be considered for deduction.

[60] Third, the calculation of Mr. Henry’s LTD Benefits already accounted for benefits under his OMERS pension plan. Article 12.06(a) of the CBA provides that Mr. Henry’s LTD benefit is calculated as “seventy-five (75%) of such employee’s basic salary per month for disability claims, inclusive of any benefits paid under any pension plan, insurance plan, Workplace Safety and Insurance Board or any other plan to which the City makes any contribution” (emphasis added).

[61] Had I not concluded that the Defendant failed to prove the amount of the Pension Contributions, I would have found that the Pension Contributions alleged by the Defendant are not an indemnity, and therefore could not be considered for deduction from Mr. Henry’s past income loss award.

C. Did Mr. Henry Pay for the Benefits?

[62] The Plaintiffs submitted that there are two ways that Mr. Henry contributed to the cost of the LTD Benefits and Pension Contributions that he received: (i) by “trade-offs” that were provided by City employees through the negotiation of the CBA; and (ii) the CBA stipulates that Employment Insurance rebates (the “EI Rebate”) which would otherwise be paid to the City employees may be used by CUPE Local 79 to offset the cost of the benefits. I will consider these issues in order.

(a) Contribution through Trade-Off in Negotiation

[63] The Plaintiffs relied on the evidence of Ms. Barnett in support of their submission that Mr. Henry contributed to the cost of the City providing him with the LTD Benefits through trade-offs or concessions granted in the process of negotiating the CBA. Ms. Barnett deposed that she has been the 2nd Vice President of CUPE Local 79 since 2018. She conceded that she was not associated with CUPE Local 79, at all, when the CBA and the LTD Plan were implemented in the period leading to 2011. Ms. Barnett conceded in cross-examination that she was not involved in the negotiations of any collective bargaining agreement that would have applied to Mr. Henry when he was a full-time, active employee of the City, and certainly no agreement from which Mr. Henry’s LTD Benefits and Pension Contributions derive.

[64] Ms. Barnett’s evidence, at its highest, was that in relation to the negotiation of the current CBA – not the earlier CBA that governs Mr. Henry’s entitlements – both the City and CUPE Local 79 “consider the cost of providing this benefit as part of the overall monetary package”, meaning that CUPE Local 79 “traded off” other compensation items and that CUPE Local 79 would have otherwise demanded and received some other monetary benefit. The Plaintiffs conceded that this evidence is not in relation to the CBA in issue, and submitted that I should draw an inference that the same negotiations were conducted, and the same trade-offs were exchanged, in relation to the CBA as were conducted a decade later in relation to the current CBA.

[65] I do not accept the Plaintiffs’ submission that the evidence of Ms. Barnett meets the evidentiary threshold set out in Cunningham to establish contribution to the cost of the benefits. In Cunningham, at pp. 407-8, Justice Cory thoughtfully set out a non-exhaustive list of four categories of evidence that would be sufficient to establish that the employee paid for the benefit. Each of the four categories calls for proof that the employee paid to receive the benefits, either through foregoing higher wages or other benefits; by foregoing some other source of money; by giving up another specific entitlement; by direct payment by way of payroll deduction; or evidence of payment by the employer for the employee. In the three appeal cases heard in Cunningham, the Court was satisfied that the trial judge accepted admissible evidence that supported the findings that the employees had paid for the benefits.

[66] Ms. Barnett did not have any direct evidence on the negotiation of any collective bargaining agreement since she joined CUPE Local 79 in 2018. I do not accept that the Plaintiffs established any trade-offs or concessions to obtain benefits through the collective bargaining process. Even if I had accepted that the Plaintiffs had established that there were trade-offs in the negotiation of the current CBA, I would have declined to infer that trade-offs or concessions of a similar nature and character occurred in the negotiation of the CBA applicable to Mr. Henry’s benefits.

[67] The Plaintiffs have not established that CUPE Local 79, and through the union Mr. Henry, contributed anything to the LTD Benefits provided by the CBA. Any other conclusion would, in my view, contravene the admonition expressed in Ratych, at p. 973, that “it is inconsistent with the principles governing the recovery of damages in tort that the court should assume that because a benefit has been conferred by a third party, the plaintiff has suffered an equivalent loss”. The evidence tendered by the Plaintiffs on this motion is nothing more than urging acceptance of the “common sense inference” that there must have been some trade-off in the collective bargaining process. This was specifically rejected in Ratych and affirmed in Cunningham and Waterman as insufficient to establish contribution to the cost of the benefit.

[68] In my view, the Plaintiffs did not discharge their burden of proving payment or contribution by Mr. Henry for the LTD Benefits or the Pension Contribution Benefits through trade-offs made in the negotiation of the applicable CBA.

(b) Contribution Through the EI Rebate

[69] The Plaintiffs submitted that Mr. Henry contributed to the cost of the benefits because his union agreed that the value of the EI Rebate could be applied to offset the cost of the benefits. This is set out in a single paragraph of the CBA, which states, in its entirety: “The Union agrees to use the EI rebate to offset the cost of the benefits”.

[70] The Plaintiffs did not tender any evidence regarding the nature or character of the EI Rebate. More importantly, the Plaintiffs did not tender any evidence to establish that any EI Rebate was paid under the CBA to fund the cost of the benefits. This is unlike Justice Cory’s analysis of the trial judge’s determination in Cunningham, at p. 412, in consideration of the appeal in Shanks v. McNee, where Justice Cory found that the trial judge had evidence that the EI Rebate had produced a monetary amount that was applied to payment of the benefits: “The evidence indicated that the short-term indemnity plan did meet those requirements and that the employer kept the premium which would otherwise have been returned to the employee”.

[71] The Plaintiffs led no evidence that the EI Rebate produced a monetary amount that was applied to payment of the benefits. The Plaintiffs did not establish, in my view, that Mr. Henry made any contribution toward the cost of the benefits through the EI Rebate provision contained in the CBA.

(c) Conclusion – Cost of the Benefits

[72] The burden is on Mr. Henry to establish that he paid for the provision of his benefits: Cunningham, at p. 406; Ratych, at p. 972. I find that the Plaintiffs did not establish that Mr. Henry incurred any cost in exchange for the LTD Benefits and the Pension Contribution.

D. Policy Considerations

[73] The Supreme Court in Waterman stated that there is room in the deductibility analysis for public policy considerations, specific and focused on the case at hand. The Defendant urged consideration of the finding by Justice Skarica in Mazzucco v. Herer, 2015 ONSC 7083, at pp. 7-8, that there was a broad public policy consideration in deducting LTD benefits paid to a school board employee because both the defendants and the LTD provider were publicly funded. I decline to apply this public policy consideration because there is not sufficient evidence in this case to make the suggested finding that the Ontario taxpayer is funding both the LTD benefits and the Defendant.

[74] Neither party presented a cogent public policy consideration apart from the overriding objective of ensuring that the deduction of benefits does not result in under-compensation and the denial of deduction of benefits does not result in over-compensation.

E. The Issue of Subrogation

[75] I have determined that the LTD Benefits are an indemnity against the past income loss claim advanced by Mr. Henry, and that Mr. Henry did not establish that he contributed to the cost of the LTD Benefits. On these findings, the private insurance exception would not apply with the result that the LTD Benefits would be deducted from the jury’s award to Mr. Henry for past income loss. This is because, on this analysis, Mr. Henry would be over-compensated and would have double-recovery unless the LTD Benefits were deducted. But there is another consideration.

[76] The Supreme Court instructed that where the benefits do not fall within the private insurance exception, they must be deducted from the loss of income claim except where the third party who paid the benefits has a right of subrogation. Justice Cory wrote in Cunningham, at pp. 415-16, that if the third party who paid the LTD Benefits has a right of subrogation, then there should not be any deduction, regardless of whether the right of subrogation is exercised:

Generally, subrogation has no relevance in a consideration of the deductibility of the disability benefits if they are found to be in the nature of insurance. However, if the benefits are not “insurance” then the issue of subrogation will be determinative. If the benefits are not shown to fall within the insurance exception, then they must be deducted from the wage claim that is recovered. However, if the third party who paid the benefits has a right of subrogation then there should not be any deduction. It does not matter whether the right of subrogation is exercised or not. The exercise of the right is a matter that rests solely between the plaintiff and the third party. The failure to exercise the right cannot in any way affect the defendant’s liability for damages. However, different considerations might well apply in a situation where the third party has formally released its subrogation right. [Emphasis in original.]

[77] In writing for the dissent in Cunningham, Justice McLachlin wrote, at pp. 386-87, that the subrogated right of the payor of the benefits is only a complete answer to a request for deduction where the subrogated right is exercised. In Waterman, Justice Cromwell did not refer to the impact of subrogation in the factors listed at para. 76, as set out earlier, but instructed, in para. 24, that there is no excess recovery where a party supplying the benefits has a claim to their recovery:

For example, there is no excess recovery if the party supplying the benefit is subrogated to – that is, steps into the place of – the plaintiff and recovers the value of the benefit. In those circumstances, the defendant pays the damages he or she has caused, the party who supplied the benefit is reimbursed out of the damages and the plaintiff retains compensation only to the extent that he or she has actually suffered a loss.

[78] In further comment on the significance of subrogation in application of the private insurance exception to the deductibility of benefits, Justice Cromwell stated, at para. 41, that subrogation can limit the application of the private insurance exception by removing the compensating advantage, specifically, the potential for double recovery:

The core of the [private insurance] exception is well established: benefits received by a plaintiff through private insurance are not deductible from damage awards. However, both the precise scope and the rationale of the exception have been the subject of judicial and scholarly debate. Its practical importance is limited given the widespread use of subrogation, which avoids the compensating advantage altogether. [Emphasis added.]

[79] In my view, Justice Cromwell’s statements in Waterman on the impact of subrogation on the deductibility of benefits affirms and restates the guidance provided earlier by Justice Cory in Cunningham, that there is no compensating advantage – no double recovery – when the amounts sought to be deducted are subject to a right of recovery by the party who paid the benefits: Cowley v. Skyjack Inc., 2020 ONSC 1718, at paras. 100-4.

[80] The Plaintiffs submitted that the City has a right of subrogation in relation to its payment of LTD Benefits under the LTD Plan, citing the Third Party Liability Provision contained in the LTD Plan. Ms. Barnett explained that the City has a contract with Manulife to administer long term disability benefits, but that the City is ultimately responsible for paying the full cost of benefits to its employees through the CBA.

[81] The Third Party Liability Provision requires that a totally disabled employee, such as Mr. Henry, who has a cause of action against a party for income loss resulting from this disability, complete a Reimbursement Agreement/ Direction Form, failing which his disability benefits will cease:

THIRD PARTY LIABILITY

Where a totally disabled employee has a cause of action against a third party for income lost as a result of his disability, the employee will be required to complete a Reimbursement Agreement/Direction form. If he fails to do so, his disability benefits under this plan will cease. After the completed Reimbursement Agreement/Direction form has been received by Manulife Financial, the monthly disability benefit will be paid as specified under BENEFIT DETERMINATION.

[82] The Defendant submitted that Mr. Henry did not establish that he completed the Reimbursement Agreement, as required by the Third Party Liability Provision. I accept this submission. Ms. Ground deposed that the lawyers for the Defendant confirmed with the lawyers for the Plaintiffs that all material components of the Manulife file had been produced. The Manulife file material so produced does not contain an executed Reimbursement Agreement. Further, the Plaintiffs had ample opportunity to tender an executed Reimbursement Agreement through affidavit evidence on this Benefits Deduction Motion or as part of their motion to re-open and did not do so.

[83] The Third Party Liability Provision states that a City employee who receives LTD Benefits and has a cause of action against a third party, is required to reimburse to the City the amount of any overcompensation recovered from the third party:

The employee will be required to reimburse the amount of his overcompensation to the [City]. The employee’s overcompensation shall be defined as any amount received for loss of income which is in excess of his actual loss of income for any given month. In calculating the amount of an employee’s overcompensation, compensation for lost income from all sources specified as Other Income under BENEFIT DETERMINATION, plus interest, shall be considered and the net legal fees and disbursements attributable to the wage loss portion of the claim against the third party shall be deducted. The amount to be reimbursed, less interest, shall not exceed the amount of benefits paid by the [City]. The Reimbursement Agreement/ Direction form will set out the precise calculation of the employee’s overcompensation and will contain a direction that the amount is to be paid directly to Manulife Financial (as agent for the [City]) by the employee’s lawyer.

[84] The Third Party Liability Provision states that following notification to Manulife, as the City’s agent, of any judgment or settlement, the City will not pay any further benefits to the employee until the overcompensation is reimbursed to the City:

Following notification to Manulife Financial (as agent for the [City]) of the judgment or settlement, no further benefits will be paid under this plan until such time as Manulife Financial has been reimbursed the amount determined in accordance with the Reimbursement Agreement/ Direction Form.

[85] The Defendant submitted that the Third Party Liability Provision should not limit deduction of the benefits paid to Mr. Henry for four reasons: first, there will be no overcompensation for Mr. Henry to reimburse the City once the benefits are deducted from the jury award for past income loss; second, the City, either directly or through Manulife, did not bring any claim against the Defendant in furtherance of its claim for reimbursement; third, Mr. Henry did not execute the Reimbursement Agreement; fourth, the deduction of benefits will not cause Mr. Henry to be under-compensated. I do not accept these submissions, for reasons that I will now explain.

[86] I reject the first ground submitted by the Defendant on the basis that it is circular and inconsistent with the established legal principles. The factors that must be considered on the issue of deductibility, as set out in Ratych, Cunningham and Waterman, require that the issue of subrogation be considered before a deduction can be ordered. Accordingly, the benefits cannot be deducted before analysis of the issue of subrogation, contrary to the Defendant’s submission, which means that my finding that Mr. Henry will be overcompensated by receipt of the award for past income loss must form part of my analysis of the impact of the Third Party Liability Provision.

[87] Second, I do not accept that the City, as payor of the LTD Benefits, was required to bring a separate claim against the Defendant for recovery of the amounts that it had paid as LTD Benefits. Mr. Henry pleaded that he had sustained a loss of income, and that this was caused by the Defendant. It was not disputed that the LTD benefits were indemnity for Mr. Henry’s past loss of income. Mr. Henry thereby claimed for the full recovery of past income loss, which was awarded by the jury for the period from 2011-2013. The City had a contractual right to claim reimbursement from Mr. Henry for any overcompensation in accordance with the Third Party Liability Provision. This right is triggered by the award received by Mr. Henry of damages for past income loss.

[88] The Defendant’s submission that the City, or its agent Manulife, was required to plead that it had an intention to seek repayment of any overcompensation resulting from its payment of LTD Benefits is based on Tree-Techol Technology v. Via Rail Canada Inc., 2017 ONSC 755, aff’d 2017 ONCA 876, 140 O.R. (3d) 159. There, the Court of Appeal upheld the motion judge’s finding that an insured was not required, either by contract or statute, to include an insurer’s subrogated claim in its action against a tortfeasor. In Tree-Techol, the insurer had paid the insured the amount of its covered claim, and the insured brought an action against a third party for recovery of its non-covered claim. The insurer did not bring a subrogated action within the applicable limitation period to seek recovery of the amounts that it had paid under its policy, and thereby lost the subrogated claim because the insured had no obligation to amend its statement of claim to bring the claim on behalf of the insurer.

[89] Tree-Technol is distinguishable from the current case because here there are no separate covered and non-covered claims. There are no separate and distinct silos of rights. The City’s claim against Mr. Henry for any overcompensation forms part of, and flows from Mr. Henry’s successful claim for past income loss. The Defendant’s argument, taken at its highest in the context of the facts as I have found them, is that the City, or Manulife as its agent, had an obligation to plead that in the event that Mr. Henry successfully obtained judgment for past income loss, the City required that Mr. Henry pay any such amounts to the City to the extent of its payment of LTD Benefits. I decline to find that the City had an obligation to sue the Defendant to recover the amount that it paid to Mr. Henry in LTD Benefits, or that the City lost its right against Mr. Henry under the Third Party Liability Provision to recover Mr. Henry’s overcompensation, to the extent of the LTD Benefits, by reason of not pleading this claim.

[90] I turn to the Defendant’s third submission, that since Mr. Henry did not execute a Reimbursement Agreement, the City no longer has a claim against any overcompensation received by Mr. Henry in the jury award for past income loss. I do not accept that this is a proper construction of the Third Party Liability Provision. The requirement that Mr. Henry complete a Reimbursement Agreement does not have a temporal limitation. In my view, the Third Party Liability Provision provides the City with a right to terminate Mr. Henry’s benefits if he does not provide a Reimbursement Agreement, and a right to discontinue Mr. Henry’s benefits if he does not reimburse to the City the amount of any overcompensation.

[91] The Defendant did not establish that the City, either directly or through its agent Manulife, released or waived its rights under the Third Party Liability Provision. All of the elements required for Mr. Henry’s obligation to reimburse the overcompensation to the City did not arise until judgment or settlement of his claim against the Defendant. In any event, the Supreme Court stated clearly that whether the party who paid the benefits exercises its rights to recovery or waives them, is an issue between the plaintiff and the third party, only: Cunningham, at pp. 415-16: “It does not matter whether the right of subrogation is exercised or not. The exercise of the right is a matter that rests solely between the plaintiff and the third party.”

[92] On the same interpretation of the Third Party Liability Provision, I reject the Defendant’s submission that there is no possibility that Mr. Henry will be under-compensated if the benefits are deducted. Mr. Henry has an obligation to reimburse the City for the amount of the overcompensation following notification to the City of the judgment, failing which the City has the right to deny Mr. Henry any further benefits. For ease of reference, I repeat the applicable section of the Third Party Liability Provision:

Following notification to Manulife Financial (as agent for the [City]) of the judgment … no further benefits will be paid under this plan until such time as Manulife Financial has been reimbursed the amount determined in accordance with the Reimbursement Agreement/ Direction form.

[93] Mr. Henry’s contractual obligation to pay any overcompensation to the City, to the extent of the LTD Benefits paid for 2011-2013 means that Mr. Henry is not contractually entitled to retain any overcompensation. If Mr. Henry does not pay the overcompensation to the City, or its agent Manulife, the City has a contractual right to terminate Mr. Henry’s benefits under the LTD Plan and, in such an event, Mr. Henry has the potential to be under-compensated.

[94] I reach the same conclusion as Justice Roger in Caron v. Omers Realty Corporation, 2019 ONSC 1374, at para. 117, where the Court declined to deduct benefits on the basis that it would “transfer too much risk to the plaintiff”, considering that the LTD benefit provider could reduce the plaintiff’s benefits resulting in under-compensation.

[95] I conclude that the City’s contractual claim to overcompensation as set out in the Third Party Liability Provision is a complete answer to the Defendant’s claim for deduction of the amount of the LTD Benefits paid by the City for the period from 2011-2013 ($123,360) from the jury’s award for past income loss for this same period ($194,171). The jury’s award overcompensates Mr. Henry to the extent of the LTD Benefits paid for 2011-2013. Mr. Henry is contractually obligated to pay these funds to the City, or its agent Manulife. If he fails to do so, he is at risk of termination of his benefits under the LTD Plan. The Third Party Liability Provision eradicates any compensating advantage because the overcompensation is subject to a right of recovery by the City. If the City chooses not to enforce its right to reimbursement, or fails to take steps to do so, this is an issue between the City and Mr. Henry: Cunningham, at p. 416: “The failure to exercise the right cannot in any way affect the defendant’s liability for damages.”

[96] For these reasons, the Defendant’s motion for deduction of benefits is dismissed.

VI. COSTS

[97] The parties agreed that the successful party on this motion would receive an award of costs fixed in the amount of $17,515, all inclusive of fees, disbursements and applicable taxes, and also inclusive of the costs of the motion to re-open.

[98] Accordingly, as the Plaintiffs were successful in the Benefits Deduction Motion, the Plaintiffs are awarded costs of this motion and of the motion to re-open, payable by the Defendant, fixed in the amount of $17,515, all inclusive.

VII. DISPOSITION

[99] On the basis of these reasons, I order as follows:

(a) The motion brought by the Defendant Dr. Marshall Zaitlen for an order to deduct the long-term disability benefits received by the Plaintiff Sean Henry in the amount of $123,360 and for an order to deduct the pension contribution benefits received by the Plaintiff Sean Henry in the amount of $25,663 from the past income loss of $194,171 awarded by the jury to the Plaintiff Sean Henry is dismissed.

(b) The Plaintiffs, Sean Omar Henry and the Estate of Sandy Robinson, are awarded costs of this motion for deduction of benefits, inclusive of the costs of the motion to re-open, payable by the Defendant, Dr. Marshall Zaitlen, fixed in the amount of $17,515, all inclusive of fees, disbursements, and applicable taxes.

[100] If the parties agree on a form of Judgment, they may forward the form of Judgment by email to my judicial assistant, in both pdf and Word format, along with their approval as to form and content, for consideration, also uploading these materials to CaseLines. If the parties are unable to agree on the form of Judgment, they may jointly request the scheduling of a case conference, under Rule 50.13, to settle the form of Judgment.

A.A. Sanfilippo J.

Date: May 5, 2022

COURT FILE NO.: CV-12-459089 DATE: 20220505 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: SEAN OMAR HENRY, personally and as Estate Trustee for the Estate of SANDY ROBINSON Plaintiffs - AND – DR. MARSHALL ZAITLEN, DR. EDGAR JAN, DR. JOSEPH FAIRBROTHER, DR. HILAIRE LOUISE SHEEHAN, DR. VERA BRIL, DR. ROBERT KURTZ, DR. JOHN DOE, JANE DOE, JOAN DOE, WILLIAM OSLER HEALTH CENTRE – BRAMPTON CIVIC HOSPITAL and UNIVERSITY HEALTH NETWORK – TORONTO GENERAL HOSPITAL Defendants REASONS FOR DECISION (post-verdict motion for deduction of benefits) A.A. SANFILIPPO J. Dated: May 5, 2022

[1] The parties tendered into evidence Collective Bargaining Agreements for the following periods: January 2005 to December 31, 2008; January 1, 2009 to December 31, 2011; and, January 1, 2012 to December 31, 2015. The parties agreed that the CBA that governed Mr. Henry’s benefits is the CBA of January 1, 2012.

[2] Line 150 of Mr. Henry’s income tax returns for 2011, 2012 and 2013.

[3] Lines 101 ($465) and 104 ($48,285) of Mr. Henry’s 2011 income tax return.

[4] Lines 101 ($21,109) and 104 ($12,207) of Mr. Henry’s 2012 income tax return.

[5] Line 101 ($41,294) of Mr. Henry’s 2013 income tax return.

[6] Line 206 of Mr. Henry’s 2011, 2012 and 2013 income tax returns.