



COURT OF APPEAL FOR ONTARIO

CITATION: Basandra v. Sforza, 2016 ONCA 251

DATE: 20160406

DOCKET: C60979

Strathy C.J.O., Lauwers and Benotto JJ.A.

BETWEEN

Subash Basandra

Plaintiff

(Appellant)

and

Giuseppe Sforza

Defendant

(Respondent)

Gary Mazin and Supriya Sharma, for the appellant

Bruce Chambers, for the respondent

Heard: March 17, 2016

On appeal from the order of Justice Wendy Matheson of the
    Superior Court of Justice, dated August 10, 2015.

Lauwers J.A.:

[1]

This action arose out of a motor vehicle accident. The jury questions, as
    negotiated between trial counsel and accepted by the trial judge, did not oblige
    the jury to structure its award of damages in a manner that reflected the requirements
    of s. 267.8 of the
Insurance Act
, R.S.O. 1990, c. I.8. That section
    requires the trial judge to reduce jury damages awards for pecuniary losses by
    the amount of collateral benefits paid to the injured plaintiff. The defendant had
    the onus of proof regarding both the entitlement to these reductions and their
    amounts. The appellant submits the trial judge erred by reducing the jurys
    awards for past and future attendant care, medical/rehabilitation, and
    housekeeping costs from $105,000 to nil, in the absence of clear evidence on
    the appropriate quantum of any reduction
[1]
.

[2]

For the reasons set out below, I would dismiss the appeal.

The Factual and Legal Context

[3]

The appellant was injured in a motor vehicle accident. The jury found
    the respondent liable and, consistent with the jury questions, awarded the
    following damages to the appellant:

1.       damages
    for pain and suffering in the amount of $137,000;

2.       damages
    for the cost of past care, medical/rehabilitation and    housekeeping in the
    amount of $55,000;

3.       damages
    for the cost of future care, medical/rehabilitation        and housekeeping
    in the amount of $50,000;

4.       damages
    for past loss of income of $45,000.

[4]

Section 267.8 of the
Insurance Act
, provides that pecuniary damages
    awarded in a tort action shall be reduced by payments that the plaintiff
    received as collateral benefits, such as statutory accident benefits including
    payments for health care expenses and other pecuniary losses. Since the
    defendant would benefit, the onus is on the defence to show whether and how the
    reductions should be made:
Bannon v. McNeely
(1998)
, 38 O.R. (3d) 659, 159 D.L.R. (4th)
    223 (C.A.), at para. 74.

[5]

An award can only be reduced by a corresponding statutory accident benefit,
    on a benefit-by-benefit basis, under s. 267.8 of the
Insurance Act
. This
    reflects the concept that apples should be deducted from apples, and oranges
    from oranges: see
Bannon v. McNeely
, at paras. 49, 74;
Gilbert v.
    South
,
2015 ONCA 712, 127
    O.R. (3d) 526, at para. 44. For example, an award for housekeeping can be reduced
    by a housekeeping benefit, but not by a medical rehabilitation benefit.

[6]

The jury questions in this case unfortunately lumped together damages
    for medical/rehabilitation, attendant care, and housekeeping. It was impossible
    for the trial judge to parse the jurys award in order to make the necessary
    statutory reductions on a benefit-by-benefit basis.

[7]

Some time after the jury rendered its verdict, counsel informed the
    trial judge that they were unable to agree on the impact of collateral benefits
    on the pecuniary damages award. They moved before the trial judge for an order
    determining whether and how the lumped-up jury awards of $55,000 for past loss
    of care, medical/rehabilitation and housekeeping and $50,000 for future care,
    medical/rehabilitation and housekeeping should be reduced under the provisions
    of s. 267.8(4) and (6) of the
Insurance Act
to account for the
    statutory accident benefits received by the appellant for healthcare and
    housekeeping.

The Trial Judges Reasons

[8]

The trial judge accepted the appellants evidence that he had received a
    total of $81,658.67 for medical rehabilitation benefits, $58,271.76 for
    attendant care benefits, and $6,939.84 for housekeeping benefits. These amounts
    included a 2009 lump sum settlement that allocated $30,000 for past and future medical
    rehabilitation and $5,000 for past and future attendant care.  The trial judge
    noted that the 2009 settlement did not set out the respective proportions
    related to past and future costs.

[9]

The trial judge acknowledged that in light of
Bannon v. McNeely
,
    there is no question that it is the defendant that bears the onus of
    establishing beyond dispute that the deduction should occur. She added: Using
    the words of
Bannon
, I must look at what is feasible. In doing so, I
    must consider the objective of avoiding double compensation and also the
    fairness to the plaintiff required by comparing like amounts. She noted that
    the sheer quantum of the collateral benefits already received under the three
    heads was significantly higher than the jury award.

[10]

This
    led the trial judge to the conclusion that the jurys awards for past and
    future attendant care, medical/rehabilitation, and housekeeping costs should be
    reduced from $105,000 to nil:

As I look at those actual figures, the evidence about what
    those actual figures were for and the timing of the settlement
vis-à-vis
the trial, I conclude that the jury award should be reduced under s. 267.8 by
    the amount of those collateral benefits in order to avoid what I conclude would
    be a substantial and indeed complete double recovery by the plaintiff.

The Positions of the Parties

[11]

The
    appellant argues that the defence had the onus to prove how the jury award
    should be reduced. In the absence of clear guidance from the jury, the trial
    judge erred by reducing the jurys awards for past and future attendant care
    medical/rehabilitation and housekeeping costs from $105,000 to nil. The
    appellants position throughout was that the respondent, having agreed to the
    jury questions, can now not seek the benefit from a lack of specific
    information needed to implement the s. 267.8 deductions on an apples and apples
    basis.

[12]

The
    respondent argues that the lack of clarity in the jury questions is the fault
    of the appellant who ... was content to ask the jury to make a combined award
    for all expenses related to his health care, medical rehabilitation and
    housekeeping needs, and who should not now be permitted to separate the
    various heads of expenses so as to frustrate the application of s. 267. The
    respondent submits that the amounts received by the appellant by way of
    accident benefits roughly match the categories of damages awarded by the jury
    so that the mandatory reductions under s. 267.8 of the
Insurance Act

can be made without any risk that doing so might deny the appellant full
    compensation.

The Issue

[13]

There
    is a single issue in this case: did the trial judge err by reducing the jurys
    awards for past and future attendant care medical/rehabilitation and housekeeping
    costs from $105,000 to nil in the absence of clear evidence about the quantum
    of each collateral benefit?

Analysis

The Governing Principles

[14]

I
    begin by setting the broader context within which this issue is placed.

[15]

The
    system of compensation for injuries suffered in motor vehicle accidents in
    Ontario is a hybrid of no-fault insurance coverage and traditional tort law. While
    the ability to sue for injuries is limited, injured parties have access to
    no-fault benefits. This court laid out the competing policy objectives of
    Ontarios system in
Meyer v. Bright
, 15 O.R. (3d) 129, at p. 134,
    [1993] O.J. No. 2446 (C.A.), at para. 6:

In our view, the Ontario legislature enacted s. 266 and other
    related amendments to the Act for the purpose of significantly limiting the
    right of the victim of a motor vehicle accident to maintain a tort action
    against the tortfeasor. The scheme of compensation provides for an exchange of
    rights wherein the accident victim loses the right to sue unless coming within
    the statutory exemptions, but receives more generous first-party benefits,
    regardless of fault, from his or her own insurer.

See also
Chisholm v. Liberty Mutual Groups
(2002),
    60 O.R. (3d) 776, 217 D.L.R. (4th) 145 (C.A.), at para. 7.

The Threshold

[16]

The
    restriction or limitation on an injured partys right to sue the at-fault party
    for personal injury of a motor vehicle accident is described as the
    threshold. Under ss. 267.5(3) and (5) of the
Insurance Act
, the
    right to sue is removed unless the injured person has died or has sustained
    permanent serious disfigurement or permanent serious impairment of an
    important physical, mental or psychological function.

The Reduction of No-fault Benefits from Damage Awards

[17]

The
    statutory scheme aims at full compensation for the injured party whose injuries
    exceed the threshold. It also aims to prevent double compensation. This was
    explained by Finlayson J.A. in
Bannon v. McNeely
,
at para. 51. If the plaintiffs
    injuries meet the threshold:

the injured party receives the first-party no-fault benefits
    and can still maintain an action in tort to the full extent of the law against
    the tortfeasor subject (as any tort action always has been) to the principle of
    recovery in tort, i.e. that the injured party is to be compensated for the full
    amount of his or her loss but no more, as encapsulated in s. 267(1).

However, Finlayson J.A. went on to state, at para. 51,
    that [o]nce a statutory exemption to the limitation on the right to sue is
    established, the no-fault benefits do not replace the tort award, but rather
    they are deducted from any tort award to the extent required to prevent double
    recovery.

[18]

The
    purpose of s. 267.8 of the
Insurance Act
is to prevent double recovery
    by the plaintiff, which would amount to unjust enrichment. As Stephen E.
    Firestone observed at p. 20 of his article Deductibility of Collateral
    Benefits under Ontarios Three Automobile Insurance Schemes, (1998) 21 Adv. Q.
    1, s. 267.8 of the
Insurance Act
is essentially a codification
    of the principles of this courts decision in
Bannon v. McNeely
.

The Division of Labour between the Trial Judge and the Jury

[19]

The
    statutory regime creates a division of labour between the trial judge and the
    jury. The trial judge has sole responsibility for determining whether the
    plaintiffs injuries meet the threshold under ss. 267.5(3) and (5) of the
Insurance
    Act
.  The trial judge does this without the intervention of the jury and
    may dismiss the case even where the jury makes an award of damages to the
    plaintiff: see
Kasap v. MacCallum
,

[2001] O.J. No. 1719;
DeBruge
    v. Arnol
, 2014 ONSC 7044.

[20]

The
    trial judge also has the sole responsibility to reduce the jurys award to
    account for the plaintiffs receipt of collateral benefits, as required by
    s. 267.8 of the
Insurance Act.
This
    task is performed
after the jurys verdict has been rendered.

The Responsibilities of Counsel

[21]

Section
    267.8 of the
Insurance Act

creates several categories of
    statutory accident benefits to be taken into account as possible reductions in
    a jury award: income loss and loss of earning capacity (s. 267.8(1)); health
    care expenses, which includes attendant care costs by definition under s.
    224(1) of the Act (s. 267.8(4)); and other pecuniary losses such as
    housekeeping costs (s. 267.8(6)). In view of the benefit-by-benefit basis
    of the reductions, these categories must be taken as silos.

[22]

For
    the statutory scheme to operate properly, counsel must ensure that any
    settlement of a statutory accident benefit claim allocates the settlement funds
    among the heads of collateral benefits applicable in the instant case.

[23]

Similarly,
    counsel must ensure that jury questions are structured to permit the trial
    judge to carry out the reductions on a benefit-by-benefit basis, as required by
    s. 267.8 of the
Insurance Act
,
    where that is an issue in the action
. In this case the jury
    questions were negotiated between counsel for the appellant and the respondent
    and were provided to, and accepted, by the trial judge. She noted that neither
    side raised an issue about the compounded nature of these jury questions.

[24]

Jury
    questions in motor vehicle actions related to pecuniary losses typically refer
    to past losses and to future losses. I make two observations about this
    distinction. First, separate jury questions for past and future losses are
    necessary because the plaintiff bears different burdens of proof for each. With
    respect to past losses, the burden of proof is on the balance of probabilities.
    For future losses, the burden is somewhat relaxed and can be proven on the
    basis of substantial possibilities based on such expert or cogent evidence:
Schrump
    et al. v. Koot et al.
, 18 O.R. (2d) 337, at p. 340, [1977] O.J. No. 2502
    (C.A), at para. 13. The distinction between past and future losses is also
    necessary since pre-judgment interest is granted only for past losses.

[25]

Second,
    the division of jury questions into past and future is relevant to the reduction
    of collateral benefits for each category of benefits listed in s. 267.8 of the
Insurance
    Act
.
At issue in this case are health care benefits under s. 267.8(4)
    of the
Insurance Act
:

(4)  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 expenses
that have been incurred or will be
    incurred for health care
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 for
    statutory accident benefits in respect of the expenses for health care.

2.       All
    payments in respect of the incident that the plaintiff has received before the
    trial of the action under any medical, surgical, dental, hospitalization,
    rehabilitation or long-term care plan or law. [Emphasis added.]

[26]

Section
    267.8(4) of the
Insurance Act
recognizes that an award may include
    damages for expenses that have been incurred [past] or will be incurred
    [future] for health care. It provides that the sum of those awards must be
    reduced by the amount of payments the plaintiff has received or that were
    available before the trial of the action for statutory accident benefits in respect
    of the expenses for health care. The plaintiffs entitlement to future, that
    is, post-trial, collateral benefits for health care is addressed in ss. 267.8
    (9) - (13) of the
Insurance Act
.

[27]

Under
    s. 267.8(4) of the
Insurance Act
,
    the total amount of any statutory accidents benefits settlement for past losses
    or for future expenses is to be combined f
or the purpose of the
    reducing the jurys awards in respect of those benefits. There was accordingly no
    need for the trial judge to consider separately the effect of the 5-6 year
    period during which one might fairly say there were future amounts on the
    settlement, but past amounts as at the trial.

[28]

To
    summarize, trial counsel must ensure that jury questions are structured to
    permit the trial judge to carry out the reductions required by s. 267.8 of the
Insurance
    Act
, where that is an issue in the
    action
. There should be a separate jury question for each past and
    future award in respect of each of the collateral benefits listed in s.267.8 of
    the
Insurance Act
that may arise in
    the case.
Anything less would impair the trial judges ability to
    discharge her responsibilities under the section. I note that the trial judge
    has the authority to turn back inadequate jury questions and must approve the
    final version.

The Principles Applied

[29]

The
    trial judge was faced with a mandatory statutory direction to deduct collateral
    benefits under s. 267.8 of the
Insurance Act
. She was reasonably
    assured, by comparing the quantum of benefits awarded to the appellant by the
    jury with the benefits that he had already received, that the appellant had
    been fully compensated for the applicable heads of damage, even though they
    were lumped up. The appellant had received about $40,000 more than the jury
    awarded.

[30]

It
    was reasonable for the trial judge to consider that the defendant had met the onus
    of proof for the reduction of the jury award for pecuniary losses under both s.
    267.8 of the
Insurance Act
and under
Bannon v. McNeely
. As the
    trial judge noted, it would have been preferable for the jury questions to have
    reflected the statutory scheme. However, in the context of this case, she
    committed no error in proceeding as she did.  She reasonably gave effect to one
    policy objective in the statutory scheme  full compensation  while respecting
    another policy objective  no overcompensation. The trial judge reasonably
    apprehended that if she did not make the reductions sought by the defence, the
    appellant would have been overcompensated.

[31]

I
    would dismiss the appeal with costs to the respondent in the amount of
    $7,500.00 all inclusive, as agreed.

Released:  April 6, 2016  GS

P.
    Lauwers J.A.

I
    agree G.R. Strathy C.J.O.

I
    agree M.L. Benotto J.A.





[1]
Note that general damages for pain and suffering are called non-pecuniary
    losses by s. 267.8(7) of the
Insurance
    Act
, and are not subject to such reductions.


