Humphrey v. Portage LaPrairie Mutual Insurance Company

Humphrey v. Portage LaPrairie Mutual Insurance Company Court Supreme Court Date 2009-05-06 Citation 2009 NSSC 153 Docket Hfx 224571 Judge/Registrar/Adjudicator Beveridge, Duncan R. (Honourable Justice) (SC) Document Type Decision Decision Content SUPREME COURT OF NOVA SCOTIA Citation: Humphrey v. Portage La Prairie Mutual Insurance Company, 2009 NSSC 153 Date: 20090506 Docket: Hfx No.224571 Registry: Halifax Between: Keri Lynn Humphrey Plaintiff v. The Portage LaPrairie Mutual Insurance Company Defendant Judge: The Honourable Justice Duncan R. Beveridge Heard: April 28, 2009 in Chambers, Halifax, Nova Scotia Written Decision: May 6, 2009 Counsel: Robert B. Carter, for the Plaintiff Andrew B. Gough, for the defendant By the Court: INTRODUCTION [1] Terry Lynn Humphrey was injured in a motor vehicle accident that happened on December 5, 2000. She sued those responsible for damages she suffered. Her claim was eventually settled sometime in 2004. She also brought an action against her own insurer, The Portage La Prairie Mutual Insurance Company, claiming a failure by it to pay her the no-fault benefits required by the regulations under the Insurance Act to be included in every automobile insurance contract - commonly referred to as Section B benefits. The Portage La Prairie filed a defence asserting that it had paid all medical and rehabilitation benefits that Ms. Humphrey was entitled to and denying that she qualified for any loss of income benefits. [2] The Portage La Prairie requested from the plaintiff particulars of her settlement with the tortfeasors including any credit given for Section B coverage and amounts paid to her with respect to loss of income. The plaintiff declined on the basis that the requested information was not relevant. After a lengthy exchange of correspondence the defendant now brings this motion seeking an order from the court requiring Ms. Humphrey to produce copies of documentation or electronic information detailing the amount of compensation she received as a result of her settlement with the tortfeasors. POSITION OF THE PARTIES [3] The defendant says that its contract of insurance with the plaintiff is one of indemnity, and if the plaintiff has not in fact suffered a loss of income, then Section B loss of income benefits are not recoverable. It argues that if the plaintiff has been able to recover amounts for loss of past and future income from the tortfeasor, and then recover the same amounts from its own insurer, it would obtain a double recovery for the same loss; a result they say is contrary to the wording of Section B that provides the amount to be paid is less any payments for loss of income from employment under “(i) The laws of any jurisdiction”. As such, the amount paid by any tortfeasor for the same loss claimed against it would be highly relevant. [4] The plaintiff contends that Section B loss of income benefits are not true indemnity provisions and, in any event, the position of the defendant is directly contrary to Dugas- Mattatal v. General Accident Assurance Co. of Canada, [1994] N.S.J. No. 9; affirmed [ 1994] N.S.J. No. 289 (C.A.). ANALYSIS [5] There is no issue that under 14.12(1) of the Nova Scotia Civil Procedure Rules I have the authority to order the plaintiff to deliver a copy of any relevant document or electronic information. “Relevant” is defined as follows: 14.01 (1) In this Part, “relevant” and “relevancy” have the same meaning as at the trial of an action or on the hearing of an application and, for greater clarity, both of the following apply on a determination of relevancy under this Part: (a) a judge who determines the relevancy of a document, electronic information, or other thing sought to be disclosed or produced must make the determination by assessing whether a judge presiding at the trial or hearing of the proceeding would find the document, electronic information, or other thing relevant or irrelevant; (b) a judge who determines the relevancy of information called for by a question asked in accordance with this Part 5 must make the determination by assessing whether a judge presiding at the trial or hearing of the proceeding would find the information relevant or irrelevant. [6] With respect to the test for relevancy, the defendant relies on the decision of Hallett J., as he then was, in Sydney Steel Corp v Mannesmann Pipe and Steel Corp ( 1985), 69 N.S.R. (2d) 389, [1985] N.S.J. No. 41, where he wrote: [15] As relevancy is the issue on this application, it would not be inappropriate to consider what constitutes relevancy. The most accepted meaning of the word relevancy seems to be that made by Stephen in his Digest of the Law of Evidence and referred to by Cross on Evidence, Fourth Edition, at p. 16 where Sir Rupert Cross states: “It is difficult to improve upon Stephen's definition of relevance when he said that the word 'relevant' means that: 'any two facts to which it is applied are so related to each other that according to the common course of events one either taken by itself or in connection with other facts proves or renders probable the past, present, or future existence or non‑existence of the other.' " [16] P.K. McWilliams, Q.C., in Canadian Criminal Evidence, Second Edition, at p. 35, in a section dealing with the meaning of relevance, makes reference to this quotation from Stephen's Digest and goes on to state: "Relevancy is also defined simply as whatever is logically probative or whatever accords with common sense." McWilliams goes on to state that one must keep in mind that the decisions on issues of fact are left to the common sense of the jury and therefore it is pointless to attempt to arrive at a precise or philosophical definition of relevancy. [7] In the case at bar, in my opinion, there is no issue whether or not the requested information is relevant to a determination of the fact of how much money the plaintiff received for her claimed loss of income. The parties’ disagreement is really whether the money the plaintiff received is a fact in issue. If it is not, then evidence about it is not material, and a priori, irrelevant ( See Sopinka, Lederman & Bryant, The Law of Evidence in Canada 2d ed. ( Toronto: Butterworths, 1999 at para.2.36; 2.50); Hill et al, McWilliams’ Canadian Criminal Evidence, Looseleaf 4th ed.( The Cartwright Group Ltd., Canada, 2008) at para. 4.10). [8] The bulk of the defendant’s submissions centred on the position that Section B benefits are part of a contract that is, at its core, indemnity insurance. As such, the insured must show two things: the happening of an event contemplated by the policy; and the event caused the insured an actual pecuniary loss. However, there are a number of attributes of this statutorily mandated insurance that are inconsistent with the requirement that the insured establish an actual pecuniary loss. [9] Section B benefits are mandated by s. 140 of the Insurance Act R.S.N.S. 1989, c. 231. It provides: 140 (1) Every motor vehicle liability policy shall provide (a) medical, rehabilitation, loss of income, death and funeral expense benefits; and (b) other benefits, set forth in regulations made by the Governor in Council, which shall be printed in every policy under the heading "Section B - Accident Benefits". [10] The relevant portion of the regulations in place as of December 5, 2000 are as follows: SECTION B - ACCIDENT BENEFITS The Insurer agrees to pay to or with respect to each insured person as defined in this section who sustains bodily injury or death by an accident arising out of the use or operation of an automobile: ... Part II - Loss of Income Subject to the provisions of this Part, a weekly payment for the loss of income from employment for the period during which the insured person suffers substantial inability to perform the essential duties of his occupation or employment, provided, (a) such person was employed at the date of the accident; (b) within 30 days from the date of the accident, and as a result of the accident, the insured person suffers substantial inability to perform the essential duties of his occupation or employment for a period of not less than seven days; (c) no payments shall be made for any period in excess of 104 weeks except that if, at the end of the 104 week period, it has been established that such injury continuously prevents such person from engaging in any occupation or employment for which he is reasonably suited by education, training or experience, the Insurer agrees to make such weekly payments for the duration of such inability to perform the essential duties. Amount of Weekly Payment - The amount of a weekly payment shall be the lesser of, (a) $140 per week; or (b) 80 percent of the insured person’s gross weekly income from employment, less any payments for loss of income from employment received by or available to such insured person under, (i) the laws of any jurisdiction, (ii) wage or salary continuation plans available to the person by reason of his employment, and (iii) subsection 2A, but no deduction shall be made for any increase in such payment due to a cost of living adjustment subsequent to the insured person’s substantial inability to perform the essential duties of his occupation or employment. [11] Benefits for loss of income are payable even though the insured was not in fact employed at the time of the accident, but need only have been employed any six out of the previous 12 months (para. 3). In addition, the authorities make it clear that actual pecuniary loss is not a prerequisite to these benefits. In Morrow v Barnhill ( 1987), 82 N.S.R. (2d) 141, affirmed 86 N.S.R. (2d) 444 ( C.A.), Nunn J. determined that while the liability of the tortfeasor for future loss of income was limited to the actual duration of employment, that of the Section B insurer continued for the duration of the disability- an indeterminate period, very well for life. [12] In Thompson et. al. v. Zurich Ins. Co. ( 1984), 45 O.R. ( 2d) 744 a 16 year old plaintiff was a student. He just started a summer job. He intended to return to school in the fall. The insured argued unsuccessfully that it was only liable to pay the loss of income from the date of the accident to when the plaintiff was to return to school. [13] In Vasquez v. Co-Operators General Insurance Co. ( 1985), 11 C.C.C.I. 73 ( Ont. C.A.), Arnup J.A. reviewed a number of authorities and concluded that to be entitled to benefits, there was no need for the insured to show he was actually employed at the date of the accident nor that he would have continued to be employed, but for the accident. [14] No fault loss of income benefits are payable even if the plaintiff could not have been employed, and suffered no loss of income because he was incarcerated (See Thomas v. Great West Life Assurance Co. ( 1991), 56 B.C.L.R. (2d) 250 (S.C.); Penney v. Manitoba Public Insurance Corp. (1992), 81 Man.R. (2d) 145 (C.A.). [15] Many of these authorities were referred to by Freeman J.A. in Kirk v. Singh ( 1994), 135 N.S.R. (2d) 55, [ 1994] N.S.J. No. 486 (C.A.) in support of his conclusion that no fault Section B loss of income benefits did not cease as of the date of the plaintiff’s probable date of retirement. He wrote: [9] The Section B insurer's duty continues for so long as the victim is unable to engage in any suitable occupation or employment as a result of the disability caused by the accident. The words are clear and they must be given their plain meaning. There is nothing in Part II to suggest that the victim's age, and his or her prospects for retirement, are relevant factors in determining the duration of Section B benefits. It is the duration of the disability that governs, so long it is the disability from the accident that prevents the injured party from engaging in any suitable occupation or employment. [10] The anticipated date of retirement is relevant in calculating lost future income to be paid by the third person insurer, but it is not a material consideration for the Section B insurer. [16] It is plain from these authorities that Section B benefits for loss of income are payable so long as the insured qualifies under the language of the statutorily mandated benefits. [17] As already noted earlier, the defendant argues that the wording of Section B does not allow for an insured to obtain compensation for loss of income and recover the loss of income benefits under Section B without deduction of monies already received by the insured. The defendant contends that loss of income payments made by a tortfeasor or her insurer are payments received or available to her under (i) The laws of any jurisdiction. In other words the common law tort system constitute the “laws of any jurisdiction”. [18] The defendant correctly predicted that the plaintiff would rely on the decision of MacIntyre J. in Basque v. Halifax Insurance Co., 2002 NBQB 8, [2002] N.B.J. No. 4. The facts are strikingly similar. The plaintiff was injured in a motor vehicle accident. She sued the party responsible for the accident and she claimed Section B benefits form her own insurer. She settled her claim against the tortfeasor. When her Section B benefits were discontinued she sued her insurer. At discovery the defendant insurer sought to elicit details of her settlement, in particular how much she had received for loss of income. She refused to answer. The defendant brought a motion to compel her to do so. MacIntyre J. concluded that the question as to how much she received on her settlement with the third party was not relevant and hence need not be answered. He reasoned as follows: [8] I believe it to be well settled that an insurer's duty to make Section B payments is both statutory and contractual. Much as such payments are deductible from any amount paid under a Section A claim for loss of salary, the converse is not the law. Section A insurers must consequently be heedful upon settling a claim for loss of wages of any Section B payments made. Section B payments on the other hand are payable if the claimant qualifies and will continue to be paid even after the settlement of a claim with the third party tort‑feasor... [19] The defendant argued before me that MacIntyre J. erred in that he failed to turn his mind to the fact that Section B insurance is an indemnity policy and benefits can only be recoverable where there is proven loss that has not already been covered. [20] In its written submissions the defendant made no reference to the fact that MacIntyre J., in support of his proposition set out at para 8, above, adopted the decision of the Nova Scotia Court of Appeal in Dugas-Mattatall v. General Accident Assurance Co. of Canada, [ 1994] N.S.J. No. 289. [21] At the hearing of this motion the defendant asserted for the first time that the comments of the Court of Appeal in Dugas- Mattatal were obiter dicta and that I was therefore not bound by precedent and could consider the matter anew. [22] Dugas-Mattatal originated as a Chambers application before Richard J. as a special case for adjudication pursuant to then C.P.R. 27.01. The parties filed an agreed statement of facts and set out the questions of law that they wished to have adjudicated. [23] The facts that were stipulated were that the plaintiff was an insured person within the meaning of Section B and was disabled as a result of the serious bodily injuries she sustained in the accident. She made offers of settlement to the insurer of the tortfeasor which allowed for deduction of the loss of income benefits provided for under her Section B coverage. She settled her claim against the tortfeasor for a global sum, which did not “actually or notionally” attribute a claim for loss of income. It was understood by the plaintiff and the tortfeasor that the Section B insurer would continue to pay to the plaintiff her loss of income benefits pursuant to Section B. However, the plaintiff allowed the tortfeasor a credit for what was considered to be the present value of the future loss of income accident benefits which would be paid by the Section B insurer. [24] Once the plaintiff’s claim was settled, the Section B insurer stopped payments to the plaintiff. The two questions submitted for determination were: 1. Was the obligation of the Defendant General Accident ( Section B insurer) to pay loss of income accident benefits to the Plaintiff terminated by the settlement between the Plaintiff and the Carter insurer? 2. In the event that the Chambers Judge determines that the Defendant General Accident shall pay to the Plaintiff loss of income accident benefits, are there any appropriate deductions authorized by statute? [25] Richard J. concluded that the answer to the first question was no, citing amongst other cases, Morrow v Barnhill , supra. With respect to the second question, Richard J. found that the only appropriate deductions authorized by statute were the Canada Pension Plan Disability Benefits, and not the settlement sum from the tortfeasor’s insurer. [26] On appeal, Freeman J.A. wrote the unanimous decision for the court. With respect to liability of the Section B insurer to continue to make payments to the insured, he noted that the duty of the insurer is both statutory and contractual. It does not cease by virtue of the settlement by plaintiff with a third party. He wrote: [10] The cases cited by the appellant are intended to suggest the existence of administrative difficulties arising from this section by illustrating a lack of uniformity in the approach taken by trial courts in giving effect to the releases to which third parties or their insurers are entitled with respect to future schedule B benefits. Those cases, which were not appealed, were predicated upon the continuing availability of future Schedule B loss of income benefits. These issues do not arise in the present case because the s. 146 release with respect to future Schedule B benefits was presumably dealt with between the third party insurer and the respondent at the time of the settlement. Administrative problems do not exist for the Section B insurer, whose duty is merely to continue discharging an obligation imposed by statute and confirmed by contract: it must continue to pay the benefits to which the respondent is entitled for the duration of her period of eligibility. Section 146 does not relieve Schedule B insurers of their statutory duty to pay the benefit to their insured on a no fault basis and none of the cases cited by the appellant suggest that it does. If Schedule B benefits are not factored into a settlement made by the third party or his insurer with the disabled victim, it is to the disadvantage of the third party insurer and to the advantage of the disabled victim. It is of no concern to the Schedule B insurer. [Emphasis Added] [27] With respect to the second question, Freeman J.A. agreed that the Canada Pension Plan Disability Benefits were to be deducted from the $140 per week. The appellant specifically argued that the third party settlement should be considered payments for loss of income from employment received by or available to such person under the laws of any jurisdiction and hence also deducted. Freeman J.A. disagreed. He reasoned: [22] The appellant suggested in argument that under paragraph (b)(i) above the third party settlement should be considered "payments for loss of income from employment received by or available to such person under (i). The laws of any jurisdiction." The effect of the s. 146 release is to make that a theoretical impossibility. The third party was responsible for indemnifying the respondent for the entire amount of her lost future income, less an allowance for no fault benefits. Therefore the portion of the loss covered by Schedule B benefits is not included in the compensation paid by the third party insurer. Schedule B benefits are deductible from third party compensation, not the other way around. [28] The sole basis for the defendant’s contention that Dugas- Mattatal is not binding on me is that the facts in Dugas-Mattatal are said to be different than in the case before me. I do not accept this argument. The difference relied on by the defendant is it was specifically agreed in Dugas-Mattatal that the global settlement sum was not actually or notionally attributed to the plaintiff’s loss of income claim. [29] In the case at bar, counsel for the plaintiff asserts that this was also the case. The defendant refuses to accept this representation without proof by affidavit. The plaintiff refuses to do so. The factual context may therefore be potentially different in one respect- that is the plaintiff here may have received compensation for past or future loss of income as part of her settlement. In my opinion, this difference is immaterial. [30] The principle of stare decisis mandates that lower courts are bound to follow the decisions of higher courts in the same jurisdiction. Obviously not everything said by a judge in the course of a judgement constitutes a binding precedent. There may well be facts that make the application of a general principle in one case, not binding on a court in another. It is only the ratio decidendi (the reason for deciding) that binds lower courts. [31] According to Cross, Precedent in English Law, 2d ed.( London : Oxford University Press, 1968) at p. 169 the ratio decidendi is generally, any rule of law expressly or impliedly treated by the judge as a necessary step in reaching his conclusion. Other statements in the decision may well be persuasive but fall into the category of obiter dictum and are not binding ( Cross, ibid, p.36-38). This distinction is also set out in Halsbury’s Laws of Canada, 1st ed., Civil Procedure I (Canada: LexisNexis Canada Inc. 2008) at p. 282: Ratio vs obiter. To employ the traditional terminology: only the ratio decidendi of the prior court decision is binding on a subsequent court. The term ratio decidendi describes the process of judicial reasoning that was necessary in order for the court to reach a result on the issues that were presented to it for a decision. All other comments contained within the reasons of the prior court are termed obiter dicta, and in essence such incidental remarks are treated as asides. They may have persuasive value, but they are not binding. [32] In Dugas-Mattatal, the court was specifically asked to interpret the provisions of the regulations made pursuant to the Insurance Act that payments from a third party settlement should be considered as payments for loss of income received or available to such person under “ The laws of any jurisdiction”. Freeman J.A., for the court, concluded they were not since the portion of the loss covered by the Section B benefits is not to be included in the compensation paid or payable by the third party insurer. He held that Section B benefits were, by virtue of s. 146 of the Insurance Act, deductible from third party compensation, not the other way around. [33] I consider myself bound by the decision of the Court of Appeal in Dugas-Mattatal. Even if I were not so bound and was at liberty, as the defendant suggests, to consider the matter afresh, I would have no hesitation in coming to the same conclusion. Furthermore, I am of this view without the need for reliance on the fact that even if the comments of Freeman J.A. are obiter dicta, they constitute persuasive authority. [34] Despite the length of time that no fault loss of income benefits have been in place in the various Canadian jurisdictions ( See Brown, No-Fault Automobile Insurance in Canada ( Toronto: The Carswell Co. Ltd., 1988), the defendant provided no authority for the proposition that the phrase “The laws of any jurisdiction” includes the common law principles of recovery of damages from a tortfeasor. [35] The reduction of payments for loss of income from employment received or available to such person under “ The laws of any jurisdiction” has been held to include employment insurance, (but not welfare payments), ( Akiens v. Pitts Insurance Co. [ 1981] O.J. No. 312 ( Co.Ct.), and Canada Pension Plan benefits ( Paese v. United States Fidelity & Guarantee Co., [1985] O.J. No. 2733 (Dist. Ct.); Dugas - Mattatal, supra.). [36] To accept the position of the defendant would be contrary to the no fault nature of the statutorily mandated benefits for loss of income. If the plaintiff does not pursue the tortfeasor who injured her, the Section B insurer could seek to limit its payments on the basis that loss of income payments were “received or available” to her. It would in essence require a plaintiff to pursue his or her theoretical recourse against third parties until it was established that they were not liable for any loss of income being suffered by the insured. If fault was established by the insured against a third party, then the Section B insurer would get to deduct monies paid or available to the insured. In this way, payments by a third party insurer would act as a release of the liability for a Section B insurer. This would be inconsistent with the legislative scheme established by the Insurance Act. [37] Section 143 provides that for occupants of a motor vehicle the insurer of the motor vehicle shall in first instance be liable for payment of the no-fault benefits mandated by s. 140 of the Act. By virtue of s. 146(2), where an insurer makes a payment under the provisions of Section B, or if a claimant is entitled to any such payment, it constitutes a release by the insured person against the insurer and any person who may be liable to the insured. [38] In my opinion, Section B benefits paid or available to an insured are relevant to the extent of the liability of a third party and his or her insurer. The payments available or received by an insured from a third party are not relevant to the extent of the liability of a Section B insurer. [39] The motion by the defendant is dismissed with costs payable to the plaintiff in the amount of $500.00 payable forthwith. _________________________________ Beveridge, J.