Cobb v. Long Estate, 2015 ONSC 6799, November 13, 2015

November 27, 2015 | Talaal Bond

Following a four week jury trial, Justice Belch heard the plaintiff’s motion to settle terms of Judgment. The jury awarded $220,000 for all claims including $50,000 for past wage loss and $100,000 for future economic loss.

After deducting collateral benefits and the statutory deductible as well as the “appropriate rate of pre-judgment interest”, the defence argued that only $19,310 was owing. The plaintiff argued $157,612 was owing. The two main issues were the deductibility of the accident benefits settlement and the correct statutory deductible.

  • Does a Settlement Disclosure Notice sufficiently differentiate heads of damages for the purpose of tort deductions even if the Release indicates a lump sum?

The AB claims settled previously for the global amount of $152,000. Of this amount $132,000 was allocated to past, present and future income replacement benefits, $20,000 for medical benefits and $2,000 for costs. It was acknowledged that $29,300 had already been paid in IRB prior to the settlement.

The tort defendant argued that it is entitled to the deduction of the IRB settlement and payments which would have wiped out the jury award

The plaintiff stated that the Release indicated a global amount which took into consideration a claim for all ABs and bad faith, unlike the Settlement Disclosure Notice. The plaintiff argued that since the amount was undifferentiated in the Release, it could not be deducted from the jury award at all. (The plaintiff conceded that the tort defendant could get $29,300.)

Justice Belch held that the defendant was entitled to the entire amount deducted: the SDN clearly showed an amount allocated for IRB. This being the case, the tort defendant was entitled to the deduction.

Result: the Settlement Disclosure Notice clearly differentiates the heads of damages for the purpose of collateral deductions for the tort defendant.

– On the other issue of the statutory deductible, the court found recent changes allowing for the indexing of the deductible was substantive and therefore did not apply to accidents before August 1, 2015.

  • Does the indexed statutory deductible (s. 267.5(7) of the Insurance Act) apply to accidents pre-August 1, 2015?

The plaintiff cited El Khodr v. Lacki, 2015 ONSC 4766 which set the deductible at $30,000 and Wong v. Lee, 2002 CarswellOnt 742 (C.A.) which held that the deductible was a matter of substantive law and therefor the indexation ought not to apply to accidents pre-dating August 1, 2015.

The defence argued that the intent of the legislature was clear and unequivocal: if the plaintiff was to be paid an amount after August 1, 2015, then the amount has to take into consideration the law on the date of the payment.

The court agreed with the plaintiff that the deductible was substantive and should not apply retrospectively.

Result: The indexed statutory deductible does not apply to accidents that occurred prior to August 1, 2015.

Finally we note an interesting ruling regarding pre-judgment interest. Noting that El-Khodr is under appeal, the court preferred to wait until the Court of Appeal delivered its reasons. However, Justice Belch advised that he retired on October 15 and as such he felt compelled to rule on the issue. Using a Solomon like approach, he essentially split the PJI between the 0.5% requested by the defendant and 5% demanded by the plaintiff to arrive at 3%.


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