Damages - Benefits, deductibility - Statutory provisions - Interpretation; Disability insurance - Collateral benefits

Jordan v. Lowe

Application by the insurer for a declaration that it was not required to pay a portion of the judgment obtained by the plaintiff for lost wages. The insurer argued the lost wages were included in the definition of "insured claim" under section 106 of the Insurance (Vehicle) Regulation. The insurer’s application was dismissed.

[2013] B.C.J. No. 170

2013 BCSC 151

British Columbia Supreme Court

P.M. Willcock J. (In Chambers)

January 18, 2013

The plaintiff obtained judgment against the insured for damages for injuries sustained in a motor vehicle accident. The plaintiff missed work as a result of his injuries and he was compensated by payments drawn from the City of Vancouver Police Department sick bank.

The insurer claimed the amount paid to the plaintiff from the Vancouver Police sick bank was a “benefit” or “compensation similar to benefits”, and therefore included in the definition of an “insured claim” under section 106 of the Insurance (Vehicle) Regulation.

The insurer argued the phrase “compensation similar to benefits” was broad enough to include payments as sick bank benefits whether or not it formed part of a plan of insurance.

The plaintiff said the insurer’s obligation to indemnify him should not be reduced by benefits that do not have some element of insurance. The plaintiff relied on Lopez v. Insurance Corporation of British Columbia, [1993] B.C.J. No. 811, where the Court of Appeal found that the words “any benefit” in section 106(1) imported some element of insurance. This decision flowed from the subheading of section 106, “Exclusion of other insured loss”, and the fact that the words “any benefit” were part of the definition of “insured claim”.

The Insurance (Vehicle) Regulation was amended after the decision in Lopez v. Insurance Corporation of British Columbia. The amendment added the words “compensation similar to benefits” to the definition of an "insured claim". The insurer argued this signaled the legislature’s intention to expand the definition. Further, this expansion brought into the definition of an “insured claim” benefits that are not paid pursuant to insurance and the definition no longer necessarily imported an element of insurance.

The court referred to Lopez v. Insurance Corporation of British Columbia and found that while the legislature had expanded the definition of what constituted compensation or a benefit, it did not remove the subheading or exclude from the insurer’s liability anything other than “insured claims”.

The court concluded that payment of sick leave benefits to police officers employed by the City of Vancouver Police Department do not have about them an element of insurance. Therefore, they are not an “insured claim”.