2013 ONSC 7177, 2013 ONSC 7177

CITATION : Mikolic v. Tanguay and Albano, 2013 ONSC 7177 COURT FILE NO.: 49090/07 DATE: 2013/11/26 ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: ) ) ANDREW MIKOLIC ) ) ) Frank Burns, for the Plaintiff ) Plaintiff ) ) - and - ) ) ) DAVID TANGUAY and CORRIE ALBANO ) ) ) Brian Banfield, for the defendant, Corrie Albano ) Defendants ) ) ) ) HEARD: October 29, 2013 Arrell J.

REASONS RE MOTION TO SETTLE JUDGMENT Introduction: [ 1 ] The defendant, Corrie Albano, brings this motion to settle the judgment after receiving answers from the jury to various questions posed to it regarding this personal injury trial. [ 2 ] This action arises out of a motor vehicle accident which occurred on June 10, 2005. [ 3 ] The jury awarded the following:

a) General Damages $ 35,000.00

b) Past Loss of Income $ 20,000.00

c) Future Loss of Income $ 30,000.00

d) Cost of Future Care $ 15,000.00 Total $100,000.00 [4] The jury also found the plaintiff 20% contributorily negligent for failing to wear a seat belt. [5] The parties agree that the net amount for general damages, after deduction of the statutory deductible in place at the time ofthis accident and reducing that amount by the contributory negligence, is $4,000.00 plus interest payable to the plaintiff under that headof damage. The parties also agree that the past loss of income is zero after the deduction of the income replacement benefits paid by theA.B. insurer.

The Issue: [6] The parties do not agree on the future awards made by the jury and what, if any, deductions apply under those two heads ofdamage. Facts: [7] The evidence is overwhelming from both plaintiff and defendant doctors that the fracture healed well.

The evidence isequally overwhelming that this plaintiff developed chronic pain with the usual symptoms of depression, social withdrawal, headaches,some mild cognitive deficits, lack of motivation and sleep disruption. [8] I concluded in an earlier motion that the plaintiff’s injuries met the threshold in place at the time of this accident. [9] The plaintiff has not worked since the accident. He received various benefits from his AB insurer, Aviva. He eventuallysettled all claims with them in November 2010.

He received the usual six page Settlement Disclosure Notice setting out in detail theproposed settlement which he accepted and signed. That document indicated the following amounts under the following heads of damagewere being offered:

a) offer to settle income replacement benefits for all past and future income replacement benefits $ 77,500.00

b) offer to settle all past and future medical benefits $ 37,500.00

c) offer to settle all past and future rehabilitation benefits $ 35,000.00

d) offer to settle all past and future attendant care benefits $ 25,000.00 Total Offer $175,000.00 Position of the Parties: [10] The plaintiff argues that collateral benefits paid for the future are not deductible from the future awards made by the jury as itis not clear that the benefits paid match up to heads of damages awarded by the jury. [11] The defence argues that the heads of damage awarded by the jury line up directly with the settlement of the A.B. benefits andtherefore must be deductible to avoid double recovery.

Analysis: [12] The historical common law approach to collateral benefits was summarized by the Court of Appeal in Boarelli v. Flannigan, (ON CA), [1973] 3 O.R. 69 at para. 24: ... [M]oneys received as a result of a private insurance plan to cover the contingency of an accident have never been set off against thedamages which the defendant must otherwise pay. That principle was established in Bradburn v. Great Western Railway Co. (1874), L.R.10 Ex. 1, and has never been seriously challenged. The legal premise upon which such set off was refused is set forth by Asquith, L.J., inShearman v.

Folland, [1950] 2 K.B. 43 at p. 46, where he said as follows: If the wrongdoer were entitled to set off what the plaintiff was entitled to recoup or had recouped under his policy, he would in effect bedepriving the plaintiff of all benefit from the premiums paid by the latter, and appropriating that benefit to himself. [13]

Section 267.8(1) of the Insurance Act operates as an exception to the common law "collateral source rule". That provisionstates as follows: 267.8(1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of anautomobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following

amounts: 1. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action forstatutory accident benefits in respect of the income loss and loss of earning capacity. 2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action forincome loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan. 3.

All payments in respect of the incident that the plaintiff has received before the trial of the action under a sick leave plan arisingby reason of the plaintiff's occupation or employment. [14] As was stated by Finlayson J. in Bannon et al. v. McNeely et al., (ON CA), [1998] O.J. No. 1673 (O.C.A.)at para. 49: …I believe that, where possible, any no-fault benefit deducted from a tort award under s.267(1)(

a) must be deducted from a head ofdamage or type of loss akin to that for which the no-fault benefits were intended to compensate. In other words, and employing thecomparison of Morden J. in Cox, supra, if at all possible, apples should be deducted from apples, and oranges from oranges. [15] Lump sum awards to settle law suits regarding future I.R.B.’s or other wage continuation plans have been held not to bedeductible because such payments are a compromise made to settle a legal obligation one party sought to enforce by litigation againstanother and therefore fall outside the scope of s. 267.8(1)2.

They cannot be considered weekly payments for loss of income in the futurebut rather a lump sum negotiated as a compromise to resolve the risks to both parties of the law suit. (Tsiaprailis v. Canada 2005 SCC 8, [2005] 1 S.C.R. 113; Cromwell v. Liberty Mutual Insurance Co. (2008), (ON SC), 89 O.R. (3d) 352 (SCJ);Vanderkop v. Personal Insurance Co. of Canada, [2008] O.J. No. 1937 (SCJ)) [16] There is no evidence before me as to what amount of the total I.R.B. settlement constitutes future payments.

As such, there isno evidence led by the defence, which has the onus, to tell me whether the plaintiff received $1.00 or $77,500.00 for future I.R.B.’s. Theamount offered and accepted was a lump sum compromise by both parties to resolve the risks and costs of continuing with a law suit. Itis therefore not possible for this court to be able to determine what amount, if any, should be deducted from the damages for futureincome loss awarded by the jury.

I would therefore make no deduction under that head of damage. [17] Likewise, there is no evidence before me as to what portion of the A.B. settlement of past and future attendant care, medicalrehabilitation, or medical benefits are specifically for the future. As well, the jury award does not break down the amount under the threeheadings in the release signed by the plaintiff regarding the settlement of those A.B. benefits.

Under such circumstances it is impossiblefor this court to know whether it would be “…deducting apples from apples.” I therefore conclude there should be no deduction from thejury’s award under the head of damage for future care costs. [18] In Hoang (Litigation guardian of) v. Trieu, Justice Wilson held: Rather, the award of the jury for future expenses was in the nature of a lump sum award without any allocation towards what category ofexpense the monies related to.

The jurisprudence is clear that SABS must be deducted from the “type of loss akin to that for which theno-fault benefits were intended to compensate. In other words, and employing the comparison of Morden J. in Cox, supra, if at allpossible, apples should be deducted from apples, and oranges from oranges”: Bannon v. McNeely, (1998), (ON CA),38 O.R. (3d) 659 (C.A.), at p. 679, citing Cox v. Carter (1976), (ON SC), 13 O.R. (2d) 717 (H. Ct. J.). [Emphasisadded] Hoang, (Litigation guardian of) v. Trieu, 2012 ONSC 6644 , [2013] O.J.

No. 321 (SCJ) [Hoang] at para. 34. [19] The parties will now be able to make the necessary deductions, deduct for liability and calculate interest to settle thejudgment. [20] I invite the parties to settle the issue of costs, but if they are unable to do so they may make written submissions to me of nomore than 4 pages double-spaced, in addition to any relevant offers, draft bills of costs and relevant case law, within 30 days of therelease of this judgment. The court will deem the issue of costs settled if no submissions are received by December 31, 2013. ___________________________ Arrell J.

Released: November 26, 2013 CITATION: Mikolic v. Tanguay and Albano, 2013 ONSC 7177 COURT FILE NO.: 49090/07 DATE: 2013/11/26

ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: ANDREW MIKOLIC Plaintiff - and - DAVID TANGUAY and CORRIE ALBANO Defendants REASONS RE MOTION TO SETTLE JUDGMENT Arrell J. Released: November 26, 2013