



COURT OF APPEAL FOR ONTARIO

CITATION: Grieves v. Parsons, 2019 ONCA 335

DATE: 20190424

DOCKET: C65257

Doherty, Paciocco and Zarnett JJ.A.

BETWEEN

Jeffrey Grieves

Plaintiff (Respondent)

and

Andrea Parsons and Daniel Sheridan

Defendants (Appellants)

David Zuber and James Tausendfreund, for the appellants

Jonathan Lerman and Aron Zaltz, for the respondent

Heard: April 15, 2019

On appeal from the judgment of Justice Robert Charney of
    the Superior Court of Justice, dated March 21, 2018.

REASONS FOR DECISION


[1]

This appeal concerns the amount of collateral benefits that ought to
    have been deducted under s. 267 of the
Insurance Act
, R.S.O. 1990, c. I.8,
    from a jurys award in a personal injury case, and the effect of those
    deductions on the trial judges costs award. At the conclusion of this appeal,
    we dismissed it with reasons to follow. These are those reasons.

[2]

After a trial of his claim for personal injuries arising from a
    motorcycle accident that occurred in July 2012, the jury awarded the respondent
    damages payable by the appellants in the following amounts: $50,000 for general
    damages, $61,000 for past lost income and $90,000 for future lost earnings.

[3]

The trial judge found that the plaintiffs claim did not meet the
    threshold to fall within one of the exceptions in s. 267.5(5) of the
Insurance
    Act
, and therefore he disallowed the general (non-pecuniary) damages award.
    The trial judge then considered what adjustments to the balance of the jurys
    award would be required under the
Insurance Act
due in part to the
    respondents receipt of other payments.

[4]

The trial judge deducted $25,393.73 under s. 267.8(1)2 for the long-term
    disability benefits the respondent had received. No issue is raised about that
    deduction. Based on ss. 267.5(1)1 and 267.5(1)2(ii) of the
Insurance Act
,
    the trial judge also reduced the net past lost income award from $61,000 to
    $41,533.28. That reduction is also not in dispute.

[5]

The trial judge deducted $33,821.77 on account of income replacement
    benefits paid to the respondent. In doing so, he accepted the respondents
    position that the further sum of $2,887.94, which had also been paid, should
    not be included in the collateral benefits deduction: it arose from an
    overpayment by the insurer State Farm and the respondent was legally obliged to
    repay that amount to State Farm under s. 52(1) of the
Statutory Accident
    Benefits Schedule
, O. Reg. 34/10.

[6]

The trial judge also refused to deduct the $5,460 in short-term
    disability benefits that had been paid to the respondent. These benefits were
    paid in relation to a period of time when the plaintiff was not working, between
    May 10, 2017 and July 5, 2017. The claim form submitted for those payments based
    the claim on an injury to the plaintiffs left shoulder rotator cuff. The trial
    judge had instructed the jury that any damages resulting from injuries to the
    respondents left shoulder were not caused by the motorcycle accident of 2012,
    and he made a similar finding in his threshold decision. He found that it was
    unlikely that there was any overlap between the jurys award and the short-term
    disability payments. Accordingly, they were not deductible under s. 267.8(1) of
    the
Insurance Act
.

[7]

As a result of the trial judges deductions, the respondents judgment
    totaled $72,317.78. This exceeded the appellants r. 49 offer of $70,000.
    The respondent therefore received a costs award for the entire action.

[8]

Before us the appellant challenges the trial judges refusal to deduct
    the overpayment of $2,887.94 and the short-term disability benefits of $5,460. The
    appellants success on either issue would render the respondents judgment less
    favourable than the r. 49 offer. In that event, the appellants ask that the
    costs award be adjusted accordingly. Even if this court does not vary the
    damages award, the appellant asks this court to vary the costs award in the
    interest of proportionality, because the respondents judgment only narrowly
    exceeded the amount of the r. 49 offer.

[9]

We reject the argument that the short-term disability benefits should
    have been deducted from the jurys award. In his reasons, the trial judge
    properly referred to his instruction to the jury that any damages resulting
    from the respondents left shoulder injury were not caused by the motorcycle
    accident, and to his conclusion on the threshold motion that the respondents
    left side shoulder pain was not causally related to the motorcycle accident. The
    short-term disability benefits had been paid because of the respondents
    inability to work due to problems with his left shoulder. The trial judge
    reasoned that, given the modest amount of the jurys award, and the instruction
    he gave to the jury, it was unlikely that there is any overlap between the
    short term disability benefits provided by Great West Life for the plaintiffs
    left shoulder injury between May and July 2017, and the income loss awarded by
    the jury in relation to the plaintiffs right shoulder injury.

[10]

The
    trial judge was in the best position to assess whether there was any overlap
    between the jurys award and the short-term disability benefits. His assessment
    was reasonable and it is entitled to deference from this court. We are not
    persuaded that there was any reversible error in his decision that warrants appellate
    intervention.

[11]

The
    appellants and the respondent both sought to introduce fresh evidence relating
    to the overpayment issue. We admit the fresh evidence.

[12]

We
    reject the argument that the overpayment of $2,887.94 ought to have been included
    in the amounts deducted from the jurys award. The trial judge relied on correspondence
    from the insurer (State Farm) that had made the overpayment, notifying the
    respondent of his obligation to pay it back on the basis that the respondent
    had been working when he received it. There was no dispute about the
    correspondences authenticity. He also relied on the legal obligation to repay
    that amount under s. 52(1) of the
Statutory Accident Benefits Schedule
,
    which the respondent admitted. In our view, a payment made to the respondent by
    the insurer on the mistaken understanding that the respondent was not working, reclaimed
    by the insurer, and acknowledged as a legal repayment obligation by the
    respondent, is not a payment received or available for income loss and loss of
    earning capacity within the meaning of s. 267.8(1) of the
Insurance
    Act
. Deducting such a payment from the jurys award would not serve the
    purpose of s. 267.8 of the
Insurance Act
, preventing double recovery,
    which informs the interpretation of the provisions language: see for example
Bassandra
    v. Sforza
, 2016 ONCA 251, 130 O.R. (3d) 466, at para. 18.

[13]

The
    appellants fresh evidence does not affect this conclusion. The fact that State
    Farm was apparently reimbursed by another insurer, Economical, under a loss
    transfer arrangement for its payments to the respondent did not appear to affect
    State Farms position that it was entitled to repayment of the overpayment from
    the respondent. Indeed, the respondent was not even made aware that State Farm
    had received this loss transfer payment from Economical. Nothing in the record
    before us suggests that that inter-insurer arrangement somehow released the
    respondent from his obligation to return the overpayment.

[14]

The
    fresh evidence submitted by the respondent does, however, reinforce our
    conclusion that the overpayment should not have been included in the trial
    judges deduction. The respondent obtained a release from the successor of State
    Farm, after trial, of his obligation to return the overpayment in consideration
    for the release of the respondents claim against State Farms successor for
    certain further benefits. Valuable consideration was exchanged in that release,
    and it is not for the court to judge whether the claims released were precisely
    equal in ultimate value  the parties gave them that effect by virtue of the
    release. The point is that the respondent fulfilled his repayment obligation to
    the satisfaction of the person entitled to return of the overpayment.

[15]

Given
    the result, the r. 49 offer was not more favourable than the judgment obtained
    by the respondent. We would not vary the costs award on that ground. Nor do we
    see an error in principle in the trial judges decision to award the respondent,
    as the successful party, costs of the entire action where the result he
    obtained was more favourable than the appellants offer to settle.

[16]

Accordingly,
    we dismissed the appeal. Based on the agreement of the parties, we awarded the
    costs of the appeal to the respondent, fixed in the sum of $15,000 inclusive of
    disbursements and applicable taxes.

Doherty J.A.

David M. Paciocco J.A.

B. Zarnett J.A.


