On appeal, the court found that statutory accident benefits for income replacement are not deductible from an income loss award in a tort claim where the plaintiff did not receive the benefits because of a statutory requirement to elect between income replacement and caregiver benefits.

[2011] O.J. No. 2901

2011 ONCA 470

Ontario Court of Appeal

M.J. Moldaver, E.E. Gillese and A. Karakatsanis JJ.A.

June 22, 2011

The plaintiff appellant appealed a motions decision on a question of law in which it had been held that statutory accident benefits for income replacement could be deducted from his claim for income loss in the within tort action on the basis that the income replacement benefits were “available” to the plaintiff even though he had not collected them.

The plaintiff appellant was injured in a rear-end motor vehicle accident.At the time he was employed full-time and was married and had three children.Because of the injuries he sustained, he was temporarily unable to work and unable to perform his pre-accident caregiving duties for his three children.Under the Ontario statutory accident benefits scheme, he was entitled to claim either a weekly income replacement benefit or a weekly caregiver benefit and had to make an election between the two.The plaintiff elected to receive the weekly caregiver benefit.The plaintiff subsequently brought this tort action and claimed damages for past income loss.The defendants in the action sought to deduct the value of the income replacement benefit from the past income loss claim on the basis of the following statutory provision:

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 an automobile, 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 for statutory accident benefits in respect of the income loss and loss of earning capacity.

(6)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 pecuniary loss, other than the damages for income loss or loss of earning capacity and the damages for expenses that have been incurred or will be incurred for health care, shall be reduced by 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 pecuniary loss, other than income loss, loss of earning capacity and expenses for health care. 1996, c. 21, s. 29.

At issue on the appeal was the question of whether the income replacement benefits were “available” to the plaintiff within the meaning of section 267.8(1) of the Insurance Act, given that he had properly elected to receive caregiver benefits rather than income benefits.The defendants argued that the plaintiff had chosen not to apply for income replacement benefits even though they were available to him and it was appropriate for him to bear the consequences of his decision.

The Court held that it would not be fair to allow the defendant tortfeasors to reduce the damages payable by an amount the plaintiff had never received and, once he elected to receive caregiver benefits, could not receive.Because of the election required by the statutory benefits scheme, the income replacement benefits were not “available” to the plaintiff once he had elected to receive caregiver benefits.If the defendants’ argument was accepted, they would be entitled to credit for both the caregiver benefits, which were received, and the income replacement benefits, which were not received.This would ignore the underlying purpose of the provision to avoid double recovery and would create a situation where the plaintiff would be undercompensated and the defendants would receive a windfall.

In the result, the Court allowed the appeal, set aside the decision below, and allowed the motion for the determination that the income replacement benefits were not "available" to the plaintiff for the purpose of being deducted from his claim for past income loss.