The Ontario Court of Appeal released its decision today in Sutherland v. Singh.
In Sutherland, the claimant was eligible to receive income replacement benefits and caregiver benefits. His accident benefits insurer sent him an OCF-10 election form, requiring him to elect which of the benefits he wished to receive. It made clear that he could receive only one type of the SABS benefits.
He elected to receive caregiver benefits.
Mr. Sutherland eventually issued a statement of claim against the tortfeasors, in which he claimed for, among other things, past income loss. The defendants sought to deduct, from Mr. Sutherland’s past income loss, the value of the IRBs that were available to him but which he never received because he had elected to receive CGBs. They maintained that prior to his election, Mr. Sutherland could have chosen IRBs and, therefore, those payments were “available” within the meaning of section 267.8(1) of the Insurance Act.
The motions judge (on a question of law) agreed with the defendants. He found:
Where at the point of making his election for SAB benefits, the plaintiff can choose to receive income benefits but chooses not to as in this case, such benefits must be understood to have been “available” to the plaintiff at the point of the election. If available, then according to the provisions of 267.8(1), such benefits may be deducted from the damages to which the plaintiff is entitled.
Mr. Sutherland appealed.
The Court of Appeal disagreed with the motions judge and allowed Sutherland’s appeal. The Court noted that section 36(1) of the SABS (the election section) stipulates that a person in Sutherland’s position may receive only one benefit. The Court held that once he had elected to receive caregiver benefits, income replacement benefits were no longer available to him. The Court went on to state:It would not be fair to allow the defendants, who are the tortfeasors, to reduce the damages they ought to pay by an amount that Mr. Sutherland never received and, once he elected to receive CGBs, he could not receive.
The Court also made the following comments about section 267.8, which is designed to prevent plaintiffs from double recovery for their losses:
If the defendants’ argument is correct, they will be entitled to credit for both CGBs, which Mr. Sutherland received, and IRBs, which he never received. This would lead to a situation in which Mr. Sutherland is undercompensated and the defendants would receive a windfall. This would not be a fair result and it cannot have been intended. The purpose of s. 267.8 is to ensure that plaintiffs do not receive double compensation – not to create a windfall for tortfeasors.
Although the Court of Appeal’s decision is somewhat of a setback for the insurance industry, it does make sense from a policy standpoint.