Nemchin v. Green

Nemchin v. Green

Top up order set aside because trial judge acted on an unpleaded theory and misinterpreted ss.267.8(9),(10) and (12); where a plan provider withholds and remits income tax pursuant to statutory obligations, the assignee is entitled to the payments actually made (net after tax) and not to an additional top up by the...

Source-derived case information.

Citation
2021 ONCA 238
Parties
Plaintiff (appellant): Tatiana Nemchin; Defendant (respondent): Yvonne Green
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
16 April 2021
Procedural Posture
Civil / Appeal
Outcome
Appeal allowed in part; trial judge's top up order set aside and amended to reflect that assignment is of rights but amounts are net of tax withholdings while Sun Life continues to withhold
Legal Topics
Assignment of Collateral Benefits, Statutory Trust, Section 267.8 Insurance Act Interpretation, Income Tax Withholding by Insurers, Procedural Fairness (natural Justice), Set Off Against Damages
Source Language
english
Insurance Law Tort Law Tax Law Civil Procedure Assignment of Collateral Benefits Statutory Trust Section 267.8 Insurance Act Interpretation Income Tax Withholding by Insurers +2 more

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Parties

Tatiana Nemchin

Plaintiff (appellant)

Yvonne Green

Defendant (respondent)

Procedural Posture

Civil / Appeal

Legal Issues

  1. 1 Whether the trial judge’s unrequested 'top up' order was procedurally unfair and contrary to natural justice
  2. 2 Whether s.267.8(12)(a)(ii) entitles an assignee to gross pre-tax payments or only to payments actually received net of statutory tax withholdings
  3. 3 Effect of Sun Life’s statutory obligation to withhold and remit income tax on the operation of ss.267.8(9),(10) and (12)

Ratio Decidendi

Top up order set aside because trial judge acted on an unpleaded theory and misinterpreted ss.267.8(9),(10) and (12); where a plan provider withholds and remits income tax pursuant to statutory obligations, the assignee is entitled to the payments actually made (net after tax) and not to an additional top up by the plaintiff; the assignee must, at its own expense, take steps to challenge withholding or seek CRA relief; appellant awarded repayment of the $20,788.71 improperly deducted and given cooperation protections.

Court Disposition

Appeal allowed in part; trial judge's top up order set aside and amended to reflect that assignment is of rights but amounts are net of tax withholdings while Sun Life continues to withhold

Orders

  • Amend paragraph 2 of the October 28, 2019 order to reflect disclosure of both gross and net payments under the Sun Life plan
  • Set aside paragraphs 3, 5 and 6 of the October 28, 2019 order and replace with terms: assignment of rights under Sun Life plan to respondent's insurer is net of income tax withholdings so long as Sun Life continues to withhold and remit taxes; assignee may take steps to challenge withholdings but at its own expense;...