[1] These reasons, and the reasons in Carroll v. McEwen, 2018 ONCA 902 released concurrently, address, among other issues, the intersection of tort damages and statutory accident benefits (“SABs”) under s. 267.8 of the Insurance Act, R.S.O. 1990, c. I.8. This appeal concerns the deduction from the tort damages award of SABs paid before trial. The Carroll appeal concerns the assignment of future SABs to the tort liability insurer.
[2] Both appeals require this court to determine how SABs are matched to tort damages for deduction and assignment purposes in accordance with the statute. Two different methods of matching SABs with tort awards, reflecting different interpretations of the statute, have developed in the case law.
[3] One approach requires temporal and qualitative matching of SABs to heads of tort damages (the so-called “apples to apples” or strict matching approach) and is based on this court’s decision in Bannon v. McNeely (1998), 1998 CanLII 4486 (ON CA), 38 O.R. (3d) 659 (C.A.). Bannon involved an earlier and much different statutory scheme. The reasoning in Bannon was based on the decision of the British Columbia Court of Appeal in Jang v. Jang (1991), 1991 CanLII 2015 (BC CA), 54 B.C.L.R. (2d) 121 (C.A.). The authority of that decision was subsequently questioned by the Supreme Court of Canada in Gurniak v. Nordquist, 2003 SCC 59 (CanLII), [2003] 2 S.C.R. 652.
[4] More recently, a “silo” approach has been applied, which requires the tort award only to match generally with the broad corresponding SABs categories or silos.
[5] This court’s decision in Gilbert v. South, 2015 ONCA 712 (CanLII), 127 O.R. (3d) 526 might be viewed as an application of the “apples to apples” approach in the assignment context, while this court’s decision in Basandra v. Sforza, 2016 ONCA 251(CanLII), 130 O.R. (3d) 466 is an example of the silo approach in the deduction context. This conflicting case law was most recently addressed by this court in Cobb v. Long Estate, 2017 ONCA 717 (CanLII), 416 D.L.R. (4th) 222 and El-Khodr v. Lackie, 2017 ONCA 716 (CanLII), 416 D.L.R. (4th) 189, leave to appeal refused, [2017] S.C.C.A. No. 461.
[6] The Carroll appeal was initially heard by a panel of this court and was under reserve when this court released its decisions in Cobb and El-Khodr. The Cadieux appeal was scheduled to be heard in September 2017 when counsel for the respondent requested that a five-judge panel be constituted to determine whether this court’s decisions in Bannon and Gilbert, remain good law in light of Cobb and El-Khodr. That necessarily raised the issue of whether Cobb and El-Khodr themselves were correctly decided.
[7] The Cadieux and Carroll appeals were heard together by a five-judge panel. The Ontario Trial Lawyers Association (“OTLA”) was granted leave to intervene on the interpretation and impact of ss. 224 and 267.8 of the Insurance Act on civil trials and the retrospectivity of the amendment to the Insurance Act with respect to prejudgment interest.
[8] For the reasons that follow in this case, and in Carroll, we affirm the silo approach to both deductibility and assignment of SABs set out at paras. 38-56 of Cobb and at paras. 33-72 of El-Khodr. The silo approach is consistent with the statutory language of s. 267.8, is fair to plaintiffs, defendants and their insurers, and promotes efficiency in motor vehicle accident litigation. The decision of the Supreme Court of Canada in Gurniak questions the jurisprudential underpinnings of Bannon. In that light, and in view of subsequent changes to the Insurance Act, Bannon and Gilbert can no longer be regarded as binding authority in relation to the degree of “matching” required between tort damages and SABs for deduction and assignment purposes.
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Carroll v. McEwen, 2018 ONCA 902 (CanLII), <http://canlii.ca/t/hwf2k
B. THE ISSUES
[12] The appeal before this court is narrow. Neither the allocation of liability nor the quantum of damages is contested. There are two general issues.
[13] The first or main issue is whether the trial judge erred in assigning to Aviva and Pilot Ms. Carroll’s right to SABs “in respect of medical and rehabilitation benefits and attendant care benefits”, provided the judgment is paid in full. Two sub-issues arise:
(1) Did the trial judge err in law in granting the conditional assignment where the “jury’s lump sum assessment did not allow the court to match the award of future care costs to the particular accident benefits that might be received in the future”?
(2) Did the trial judge err in law in granting the conditional assignment order prematurely, before the judgment had been paid in full?
[14] The second general issue relates to the costs order. The trial judge reduced the costs order for three reasons, namely: (1) the behaviour of the appellants’ counsel relating to a September 11, 2015 settlement offer made by the respondents; (2) the lack of benefit to the appellants in pursuing the trial; and (3) behaviour by the appellants that extended the trial. The appellants claim that each of these bases for doing so was in error, so each must be considered in turn. The threshold question is whether leave to appeal the costs order should be granted on any or all of these bases. If leave is granted, it must then be determined whether the trial judge erred in the costs order he made.
E. ORDER
[81] We dismiss the appeal from the conditional assignment order, and vary the conditional assignment order in the judgment as follows. The amendments we make are underscored for ease of identification:
(1) Within 30 days of the receipt of this judgment, the Plaintiff Barbara Lynn Carroll is to disclose to the Defendant the Aviva Insurance Company of Canada the amount that she has received by way of statutory accident benefits payments in respect of medical and rehabilitation benefits and attendant care benefits since October 30, 2015.
(2) Upon payment by the Aviva Insurance Company of Canada in its capacity as the insurer of the Defendants Robert McEwen and Caroline McEwen and by Pilot Insurance Company, in its capacity as the OPCF 44R insurer of Barbara Lynn Carroll, of the sum of $2,610,744.32 plus costs and post-judgment interest, minus the amount of statutory accident benefits payments in respect of medical and rehabilitation benefits and attendant care benefits that Barbara Lynn Carroll has received since October 30, 2015, Barbara Lynn Carroll will assign to the Aviva Insurance Company of Canada and Pilot Insurance Company, all payments in respect of the motor vehicle accident of March 28, 2009 that Barbara Lynn Carroll is entitled to receive, after the judgment has been paid, for statutory accident benefits in respect of medical and rehabilitation benefits and attendant care benefits from her own insurer, Pilot Insurance Company. Such payments shall be made to the Aviva Insurance Company of Canada and Pilot Insurance Company and/or such payments shall be assigned to the Aviva Insurance Company of Canada and Pilot Insurance Company. This right of assignment is conditional on payment by the Aviva Insurance Company of Canada and/or Pilot Insurance Company, within 30 days of the receipt by the Aviva Insurance Company of Canada of the disclosure of the amount Barbara Lynn Carroll has received by way of statutory accident benefits payments in respect of medical and rehabilitation benefits and attendant care benefits since October 30, 2015. Moreover, to the extent that Barbara Lynn Carroll assigns her rights in respect of all payments to which Barbara Lynn Carroll is entitled in respect of the accident of March 28, 2009, from the Aviva Insurance Company of Canada and Pilot Insurance Company for medical and rehabilitation benefits and attendant care benefits, Barbara Lynn Carroll will co-operate with the Aviva Insurance Company of Canada and Pilot Insurance Company in any claim or proceeding brought by the Aviva Insurance Company of Canada and Pilot Insurance Company in respect of such assigned payments including participating in any mediation, litigation or arbitration proceeding commenced by the Aviva Insurance Company of Canada and Pilot Insurance Company to recover such payments.
[82] We also deny leave to appeal the costs order.
[83] As agreed between the parties, we award costs in the appeal to the respondents, together, in the amount of $35,000, inclusive of HST and all disbursements.
