Gurniak v. Nordquist, [2003] 2 S.C.R. 652, 2003 SCC 59
Edward J. Nordquist and Domo Gasoline Corporation Ltd. Appellants
v.
Patricia Gurniak, Valerie Michelle Ross and Shannon Lee Ross,
by their Guardian ad Litem, Patricia Gurniak Respondents
Indexed as: Gurniak v. Nordquist
Neutral citation: 2003 SCC 59.
File No.: 28898.
2003: March 12; 2003: October 30.
Present: McLachlin C.J. and Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps JJ.
on appeal from the court of appeal for british columbia
Insurance — Automobile insurance — No-fault insurance scheme — Spousal death benefits and dependants’ benefits — Quebec insured killed in motor vehicle accident in British Columbia — Spouse and children collecting statutory benefits in respect of accident under Quebec no-fault insurance scheme — Whether benefits paid in Quebec should be deducted from damages awarded in British Columbia in tort action — Whether benefits similar in kind to benefits under Part 6 of British Columbia Insurance Act — Whether there must be a “match” between specific heads of damage in tort award and specific heads of damage under statutory accident scheme — Meaning of word “similar” in s. 25(1) of Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231.
A Quebec resident was killed in an automobile accident in British Columbia. His de facto spouse and his children, the respondents, received a spousal death benefit, funeral expenses and dependants’ benefits under Quebec’s no-fault insurance scheme. They also commenced a tort action in British Columbia under the British Columbia Family Compensation Act. The appellants applied for a declaration that the benefits paid in Quebec should be deducted from any damages awarded in the tort action under s. 25 of the Insurance (Motor Vehicle) Act. That section defines “benefits” for the purpose of deductibility as including benefits paid under other contracts or plans of automobile insurance wherever issued or in effect, as long as such benefits are “similar” to those described in Part 6 of the British Columbia Insurance Act. The British Columbia Supreme Court declared that the spousal death and funeral expense benefits were deductible but not the dependants’ benefits. The parties settled the action except for the issue of reducing liability for the benefits paid in Quebec. The appellants’ application to determine if any portion of the settlement proceeds should be reduced by the amount of the spousal death and funeral expense benefits was dismissed. The British Columbia Supreme Court concluded that these benefits were not deductible because they were not paid pursuant to a contract of indemnity. This conclusion was largely founded on Buksh v. Franco (1997), 54 B.C.L.R. (3d) 288 (C.A.), released after its earlier declaration regarding deductibility. The appellants appealed both decisions and the appeals were dismissed.
Held: The appeal should be allowed.
Per Iacobucci and Major, Bastarache, Binnie, Arbour, LeBel and Deschamps JJ.: The statutory accident benefits paid to the respondents under the Quebec Automobile Insurance Act are similar in kind to the benefits under Part 6 of the British Columbia Insurance Act and, accordingly, must be deducted from the overall tort award pursuant to s. 25 of the Insurance (Motor Vehicle) Act.
This appeal does not turn on the indemnity/non-indemnity classification of the Quebec benefits but rather on what is meant by “similar” under s. 25. The word “similar” in that section does not mean “identical” nor does it refer to the system of law in which the benefits originate. It conveys the principle that the benefits paid in Quebec must be of the same general nature or character as those under Part 6 of the Insurance Act. The benefits in this case are broadly “similar” and, while differing significantly in quantum, are of the same general nature or character. While the Quebec no-fault scheme was designed to supplant the tort system as a method of recovery for loss, this difference between the overall regimes in British Columbia and Quebec does not mean that the benefits are not similar. An analysis of similarity pursuant to s. 25 requires only a consideration of whether the benefits, not the overall insurance regimes, are of the same general nature and character. Nor is it relevant that the dependants’ benefits were paid to the litigation guardian, rather than directly to the children. The manner of payment does not alter the fundamental nature of the benefits.
Nothing in the language of s. 25(2) mandates that there be a “match” between the specific heads of damage in a tort award and the specific heads of damage under the contract or benefits scheme in question before a deduction is appropriately made. In this respect, Jang v. Jang (1991), 54 B.C.L.R. (2d) 121 (C.A.), and Buksh were wrongly decided. Importing a “matching” requirement, beyond the matching required in the analysis of similarity, risks undermining the legislature’s intent to prevent double recovery in a manner that is simple, expedient and effective. It would be an inappropriate encroachment into the domain of the legislature.
Per McLachlin C.J. and Gonthier J.: This case should be decided without overruling Jang. No submissions have been made on the effect of overruling that decision and there is no reason to do so at this juncture. The notion of heads of damage is a familiar one and matching is neither complex nor cumbersome. Further, both the wording of the British Columbia legislation and 12 years of judicial practice without legislative intervention support the matching approach described in Jang. While the approach adopted in this case by the majority may well be workable in practice, it is counter-intuitive to require tort victims to seek double compensation in order to avoid undercompensation. If they do not make tort claims in respect of losses for which they already have been compensated by statute, their total award will be reduced by the amount of their statutory benefits, no matter what head of loss that award was meant to address. To further the legislature’s intent to avoid double compensation, deductions should only be made where there would otherwise be double recovery.
Cases Cited
By Iacobucci J.
Overruled: Jang v. Jang (1991), 54 B.C.L.R. (2d) 121; Buksh v. Franco (1997), 54 B.C.L.R. (3d) 288.
By Gonthier J.
Referred to: Jang v. Jang (1991), 54 B.C.L.R. (2d) 121; Buksh v. Franco (1997), 54 B.C.L.R. (3d) 288; Bannon v. McNeely (1998), 38 O.R. (3d) 659; Matt v. Barber (2002), 162 O.A.C. 34; Brownell v. Tannahill (2000), 52 O.R. (3d) 227; Macartney v. Warner (2000), 46 O.R. (3d) 669; Gignac v. Neufeld (1999), 43 O.R. (3d) 741; Quiroz v. Wallace (1998), 40 O.R. (3d) 737.
Statutes and Regulations Cited
Automobile Insurance Act, R.S.Q., c. A-25, s. 83.60.
Family Compensation Act, R.S.B.C. 1979, c. 120 [now R.S.B.C. 1996, c. 126].
Insurance Act, R.S.B.C. 1996, c. 226, Part 6, ss. 152, 169, 175, Sch.
Insurance Act, R.S.O. 1990, c. I.8, s. 267(1).
Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, s. 25(1), (2).
Revised Regulation (1984) Under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, Part 7.
APPEAL from a judgment of the British Columbia Court of Appeal (2001), 93 B.C.L.R. (3d) 199, 156 B.C.A.C. 149, 15 M.V.R. (4th) 155, 33 C.C.L.I. (3d) 36, [2001] B.C.J. No. 1793 (QL), 2001 BCCA 515, affirming the decisions of the Supreme Court of British Columbia (1997), 34 B.C.L.R. (3d) 206, 43 C.C.L.I. (2d) 132, 27 M.V.R. (3d) 314, [1997] B.C.J. No. 1093 (QL) and [1999] B.C.J. No. 1473 (QL). Appeal allowed.
Avon M. Mersey and Michael Sobkin, for the appellants.
Patrice M. E. Abrioux, David A. Joyce and Jean Renaud, for the respondents.
The reasons of McLachlin C.J. and Gonthier J. were delivered by
1 Gonthier J. — I concur with Iacobucci J.’s disposition of this case. I would prefer, however, to decide it without overruling Jang v. Jang (1991), 54 B.C.L.R. (2d) 121 (C.A.), on the so-called matching requirement. In my view, the misstep in this case lies in Cumming J.A.’s conclusion, in Buksh v. Franco (1997), 54 B.C.L.R. (3d) 288 (C.A.), that the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 (formerly R.S.B.C. 1979, c. 204), was not intended to compensate for loss. Though the Act does not require proof of loss, this alone is not decisive in the statutory context. In my view, the Act is clearly intended to provide partial compensation for losses arising from motoring accidents.
2 Although the correctness of the matching requirement was raised by the parties, we heard no submissions on the effect of overruling Jang on other Canadian jurisdictions. Jang has been adopted and applied by the Court of Appeal for Ontario in a series of cases interpreting s. 267(1) of the Insurance Act, R.S.O. 1990, c. I.8. See Bannon v. McNeely (1998), 38 O.R. (3d) 659; Matt v. Barber (2002), 162 O.A.C. 34; Brownell v. Tannahill (2000), 52 O.R. (3d) 227; Macartney v. Warner (2000), 46 O.R. (3d) 669; Gignac v. Neufeld (1999), 43 O.R. (3d) 741; Quiroz v. Wallace (1998), 40 O.R. (3d) 737. This line of cases was not brought to our attention by the parties and was not the subject of submissions. I cannot avoid the conclusion that by overruling Jang, this Court must necessarily be taken to have overruled these Ontario cases as well. In my view, judicial restraint requires this Court to forbear from such a course until the matching requirement is directly before us and is the subject of full argument.
3 The approach adopted by Iacobucci J. may well be workable in practice. It nevertheless strikes me as counter-intuitive. In effect, tort victims will be required to seek double compensation in order to avoid undercompensation. If they do not make tort claims in respect of losses for which they have already been compensated by statute, their total tort award will be reduced by the amount of their statutory benefits, no matter what head of loss that tort award was meant to address. I cannot see how this furthers the legislature’s intent to avoid double compensation. In my view, deductions should only be made where there would otherwise be double recovery.
4 Unlike Iacobucci J., I do not see matching as particularly complex or cumbersome. The notion of heads of damage is a familiar one. Indeed, to depart from it seems odd, if not unjust. In my view, the matching approach described in Jang is supported by the wording of the B.C. legislation and, perhaps more tellingly, by 12 years of judicial practice without legislative intervention. In short, I see no theoretical or practical reason for overruling Jang at this juncture. And I hesitate to do so on the basis of incomplete submissions.
The judgment of Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps JJ. was delivered by
5 Iacobucci J. — Robert Ross, a Quebec insured, was tragically killed in a motor vehicle accident in British Columbia. His de facto spouse, Patricia Gurniak, and their two children collected statutory death benefits in respect of that accident under a Quebec no-fault insurance scheme administered by the Société de l’assurance automobile du Québec (“SAAQ”). Ms. Gurniak then sued for tort damages in British Columbia and a settlement was reached with the insurer. The parties agreed to treat the settlement as a judgment for the purposes of this appeal, and in particular, for the purpose of addressing issues of deductibility.
6 This case turns on the proper interpretation to be given to s. 25 of the British Columbia Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231. That section defines “benefits” for the purpose of deductibility as including benefits paid under other contracts or plans of automobile insurance wherever issued or in effect, as long as such benefits are “similar” to those described in Part 6 of the British Columbia Insurance Act, R.S.B.C. 1996, c. 226.
7 In my opinion, the statutory accident benefits paid to Ms. Gurniak and her children under the Quebec Automobile Insurance Act, R.S.Q., c. A‑25 (“Quebec Act”), are similar in kind to the benefits under the British Columbia Insurance Act. Once it has been determined that such benefits are similar within the meaning of s. 25(1), any statutory benefits received must be deducted from the overall tort award pursuant to s. 25(2) of the Insurance (Motor Vehicle) Act.
8 I therefore conclude that the liability of the appellants should be reduced by the amount of the spousal and dependant benefits received by Ms. Gurniak and her children under the Quebec Act in respect of the death of Mr. Ross. Consequently, I would allow the appeal.
I. Facts
9 On November 14, 1991, a vehicle driven by the appellant Edward J. Nordquist and owned by the appellant Domo Gasoline Corporation Ltd. mounted a sidewalk in British Columbia and killed Robert Bruce Ross. At the time of the accident, Robert Ross and his de facto spouse, Patricia Gurniak, resided in Quebec with their two children.
10 The SAAQ administers the statutory scheme of automobile insurance available to residents of Quebec, the terms of which are set out in the Quebec Act. This no-fault scheme in Quebec is designed to displace the civil regime of extra-contractual liability. The death of Mr. Ross in a motor vehicle accident outside of Quebec entitled the respondents, Ms. Gurniak and her children, to compensation pursuant to that Act.
11 Ms. Gurniak received a lump sum spousal death benefit under the Quebec Act. She also received a lump sum payment for dependants’ benefits in her capacity as guardian for her two children. A further amount was paid out to Ms. Gurniak by the SAAQ for funeral expenses. The benefits paid by the SAAQ were funded from monies received by it from all owners of automobiles registered in Quebec and all drivers licensed in Quebec, whether through fees or insurance premiums. Prior to the accident, Mr. Ross had paid monies to SAAQ.
12 Section 83.60 of the Quebec Act provides that the SAAQ enjoys a right of subrogation if it compensates a person for an accident that occurred outside Quebec and tort compensation is received in respect of the accident.
13 Ms. Gurniak commenced an action in British Columbia under the Family Compensation Act, R.S.B.C. 1979, c. 120 (now R.S.B.C. 1996, c. 126), on her own behalf and as guardian ad litem for her two children. In this action, Ms. Gurniak sought to recover damages for losses arising from the death of her de facto spouse.
14 The appellants applied for a declaration that the benefits paid to the respondents by the SAAQ were “benefits” within the meaning of s. 25 of the British Columbia Insurance (Motor Vehicle) Act and ought to be deducted from any damage award under the Family Compensation Act.
15 At trial, Bauman J. of the Supreme Court of British Columbia held that the death benefits and funeral benefits paid to Ms. Gurniak were indeed “benefits” within the meaning of s. 25(1) of the Insurance (Motor Vehicle) Act, since they were similar in kind to those described in Part 6 of the British Columbia Insurance Act. He concluded, however, that the payments to the children were not similar to benefits payable under Part 6 of the British Columbia Insurance Act, and therefore not “benefits” within the meaning of s. 25(1) of the Insurance (Motor Vehicle) Act.
16 The parties thereafter settled the action except for the issue of reducing liability for the SAAQ benefits. The parties agreed to treat the settlement as a judgment for the purposes of determining the issue of deductibility. The matter returned to Bauman J. to determine if all or any portion of the settlement proceeds should be reduced by the amount of the SAAQ benefits. Bauman J. dismissed the application on the basis of the reasoning of the British Columbia Court of Appeal in Jang v. Jang (1991), 54 B.C.L.R. (2d) 121, and Buksh v. Franco (1997), 54 B.C.L.R. (3d) 288.
17 The appellants appealed both decisions. Their appeals were dismissed.
II. Judicial History
A. British Columbia Supreme Court (1997), 34 B.C.L.R. (3d) 206 (“Gurniak No. 1”)
18 Bauman J. characterized the two issues before him as: (1) whether the SAAQ benefits were made under a contract or plan of automobile insurance wherever issued or in effect, and; (2) whether the SAAQ benefits were accident insurance benefits similar to those described in Part 6 of the Insurance Act. With respect to the first issue, he noted that SAAQ did not take issue with the defendants’ assertion that the SAAQ benefits are indeed payable under a contract or plan of automobile insurance. Turning to the more difficult issue, whether the SAAQ benefits were indeed similar to those described in Part 6 of the Insurance Act, Bauman J. observed that the proper comparison was between the SAAQ benefits and the benefits described under ss. 152, 169 and 175 and the Schedule of the Insurance Act.
19 Bauman J. held that, while differing significantly in quantum, the benefits under the British Columbia Insurance Act were similar in kind to SAAQ benefits with the exception of the lump sum death benefits paid to the children. In his view, there was no similarity between the Quebec legislation and the British Columbia Insurance Act with respect to lump sum death benefits paid to children, since the Quebec legislation contemplated the dependent children receiving a lump sum in their own right, while the British Columbia statute did not.
20 He then considered whether the portion of the SAAQ benefits payable to Ms. Gurniak was “similar” to benefits payable under the British Columbia Insurance Act. After examining the dictionary definition of “similar”, Bauman J. concluded at para. 58 that “[w]hile the payments to Ms. Gurniak are substantially higher under the Québec scheme, they are of the same general nature or character as those payable to her under Part 6 of the Insurance Act.” He ordered that there be a declaration that the SAAQ benefits paid to Ms. Gurniak in her own right were “benefits” within the meaning of s. 25(1) of the Insurance (Motor Vehicle) Act.
B. British Columbia Supreme Court, [1999] B.C.J. No. 1473 (QL) (“Gurniak No. 2”)
21 In Gurniak No. 2, Bauman J. noted that the plaintiffs’ action in respect of the death of Mr. Ross had been settled. The matter had returned to trial for the purpose of determining whether all or any portion of the settlement proceeds should be reduced by reason of the payment of the spousal death benefits, under s. 25 of the Insurance (Motor Vehicle) Act.
22 Bauman J. observed that since the decision in Gurniak No. 1 had been rendered, the Court of Appeal of British Columbia had delivered its reasons in Buksh. He viewed the threshold question in Gurniak No. 2 as whether the reasoning in Buksh applied to Part 6 Insurance Act death benefits, such that they should be classified as non-indemnity payments. He observed that while not identical, the Part 6 benefits were very similar to those set out in Part 7 of the Revised Regulation (1984) Under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83 (“Regulations”). Both were statutorily mandated and neither required a claimant to demonstrate actual loss or need. Bauman J. held that the Court of Appeal’s decision in Buksh did indeed apply to the Part 6 benefits and that those benefits were non-indemnificatory in nature.
23 The next issue, according to Bauman J., was whether the SAAQ benefits were deductible under s. 25, in light of Gurniak No. 1’s holding that the SAAQ benefits are similar to the Part 6 Insurance Act death benefits. The answer to this was contingent upon whether the SAAQ benefits were properly characterized as indemnity payments under the Buksh analysis. Bauman J. opined that because he had found that the SAAQ benefits were “similar” to the Part 6 death benefits under s. 25(1) of the Insurance (Motor Vehicle) Act, it was not open to him to conclude that the SAAQ benefits were indemnity payments. He was of the view that benefits could not at once be “similar” to Part 6 benefits for the purpose of s. 25(1), but different from those benefits in terms of their categorization as “indemnity” or “non-indemnity”.
24 Bauman J. also considered the question of whether, independent of the result dictated by Buksh and his finding in Gurniak No. 1, the SAAQ benefits were in the nature of a contract of indemnity. After reviewing the affidavit evidence of two Quebec lawyers, he concluded that the payments under the SAAQ scheme were non-indemnity payments, as they were payable upon proof of a specified event without regard to whether the claimant had suffered a pecuniary loss. Bauman J. observed that “[w]hile those benefits vary depending on the income and age of the victim . . . that alone does not make them indemnity payments” (para. 43). Notably absent was the critical ingredient of an indemnity payment: the need on the part of the survivor to prove actual loss.
25 He then turned to the issue of SAAQ’s statutory right of subrogation under the Quebec statute. He rejected the argument that a right of subrogation connotes a contract of indemnity. In his view, it was more accurate to say that a contract of indemnity gives rise to a right of subrogation. Bauman J. held that “[s]imply because SAAQ is given certain statutory rights to effectively stand in the shoes of their payee in extra-provincial litigation, it does not necessarily follow that its payments to that individual are then to be construed as being pursuant to a contract of indemnity” (para. 47).
26 In the final analysis, Bauman J. remarked that he was required to determine which of the two insurers, Insurance Compensation of British Columbia (“ICBC”) or SAAQ, would bear the responsibility for the first $193,200 of Ms. Gurniak’s compensation. Since s. 25(1) of the Insurance (Motor Vehicle) Act was of no avail to the British Columbia insurers under the analysis in Buksh, Bauman J. dismissed ICBC’s petition seeking deduction of the amount paid by SAAQ pursuant to statute.
C. British Columbia Court of Appeal (2001), 93 B.C.L.R. (3d) 199, 2001 BCCA 515
27 Hall J.A., for the court, did not feel it necessary to decide the issue of “similarity” because he concluded that the deductibility argument of the defendants must fail on the indemnity issue. After reviewing in some detail the relevant case law on the distinction between a contract of indemnity and non-indemnity, he concluded that while there were features of the lost income payment under the Quebec Act that had indemnity characteristics, the same could not be said about the death benefits under the SAAQ scheme. In particular, there was no requirement for a survivor to establish actual pecuniary loss.
28 Like Bauman J., he considered the previous decision of the British Columbia Court of Appeal in Buksh as militating against a successful argument by ICBC that the SAAQ payments could be classified as indemnity payments and be deducted.
29 Hall J.A. agreed that previous cases considering contracts of indemnity had not yet considered a statutory scheme of the type administered in Quebec and that there was indeed a measure of logic to ICBC’s argument that the outcome was not entirely satisfactory because of what could arguably be viewed as a species of double recovery. In light of Buksh, however, he felt that it would be contrary to the spirit of stare decisis to accede to the appellants’ submissions in this case. As a result, he held that the decision of Bauman J. on the indemnity issue should be sustained and the appeals dismissed.
III. Analysis
30 The central issue in this appeal is whether accident benefits paid to Ms. Gurniak and her children under the Quebec no-fault insurance scheme are deductible from a tort damages award recovered in British Columbia under s. 25 of the British Columbia Insurance (Motor Vehicle) Act. To resolve this issue, one need look no further than the wording of s. 25 itself, which contemplates a deduction of statutory accident benefits from a tort award once it has been shown that the benefits received are “similar” to those in Part 6 of the British Columbia Insurance Act. Section 25 of the British Columbia Insurance (Motor Vehicle) Act reads:
25 (1) In this section and in section 26, “benefits” means a payment that is or may be made in respect of bodily injury or death under a plan established under this Act, other than a payment pursuant to a contract of third party liability insurance or an obligation under a plan of third party liability insurance, and includes accident insurance benefits similar to those described in Part 6 of the Insurance Act that are provided under a contract or plan of automobile insurance wherever issued or in effect.
(2) A person who has a claim for damages and who receives or is entitled to receive benefits respecting the claim, is deemed to have released the claim to the extent of the benefits. [Emphasis added.]
31 I agree with Bauman J. that s. 25 requires a court to consider whether the benefits payable under the Quebec Act are “similar in kind” to those under the British Columbia Insurance Act. Obviously, “similar” does not mean “identical”. Benefits may be similar in kind while differing in quantum. “Similar” does not refer to the system of law in which the benefits originate, the overall regime under which they are administered or the legal process by which they are claimed. To my mind, the legislature’s use of the word “similar” in this context was intended to convey the principle that the benefits in question must be of the same general nature or character as the benefits described in Part 6 of the British Columbia Insurance Act.
32 In my view, there is no need to engage in a comprehensive comparative analysis of the benefits under the two regimes, as it is readily apparent that the benefits are indeed broadly “similar” within the meaning of s. 25(1) of the Insurance (Motor Vehicle) Act. The Quebec accident benefits, while differing significantly in quantum, are of the same general nature or character as those found in Part 6 of the British Columbia Insurance Act. Both statutes provide for lump sum death benefits to spouses and dependants of a deceased insured. Such benefits are calculated according to a predetermined formula or scale, and are designed to compensate, either in whole or in part, for the economic loss engendered by the death of the insured.
33 I recognize that the Quebec no-fault scheme is unique in that it was designed to supplant the tort system as a method of recovery for loss suffered as a consequence of motor vehicle accidents. The law in most other provinces, including British Columbia, does not remove entirely the right to sue, in exchange providing comparatively more fulsome compensation under a statutory no-fault insurance scheme. Though this is a significant difference between the overall regimes in British Columbia and Quebec, this does not mean that the benefits under both schemes are not “similar” within the meaning of s. 25 of the British Columbia Insurance (Motor Vehicle) Act. An analysis of similarity pursuant to this section requires only a consideration of whether the benefits — not the overall insurance regimes — are of the same general nature and character.
34 Further, I respectfully disagree with the trial judge’s conclusion that the dependant benefits are not similar within the meaning of the statute because the British Columbia legislation requires that they be paid to Ms. Gurniak in her capacity as litigation guardian, rather than directly to the children themselves. In my view, it is irrelevant who the legal claimant of the benefits is, so long as the benefits themselves are similar to those described in the British Columbia Insurance Act. In this case, the benefits under both schemes are intended to compensate dependants for economic losses occasioned by the death of a guardian. The manner of payment does not alter the fundamental nature of the underlying benefit.
35 Consequently, both the spousal and dependant death benefits under the Quebec statutory scheme are “similar” to those under Part 6 of the British Columbia Insurance Act, within the meaning of s. 25(1) of the Insurance (Motor Vehicle) Act. It follows, once “similarity” has been established under s. 25(1), that in order to prevent double recovery the statutory benefits must be deducted under s. 25(2) of the Insurance (Motor Vehicle) Act. This section provides that a person who has a claim for damages and who receives or is entitled to receive benefits in respect of the claim, shall be deemed to have released his or her claim to the extent of those benefits.
36 The respondents and the British Columbia Court of Appeal suggest that the analysis is more complicated. In two appellate decisions, Jang and Buksh, the British Columbia Court of Appeal imported additional requirements — what the appellants refer to as a “judicial gloss” — into the s. 25 analysis.
37 In Jang, the British Columbia Court of Appeal examined the issue of whether disability benefits paid to a homemaker should be deducted from a general damage award for non-pecuniary losses. The court noted that the non-pecuniary damage award was for pain and suffering and for loss of some of the amenities of life, including a diminution in the zest for living. There was no allocation of any part of the award of non-pecuniary losses specifically to that part of the suffering that could be said to have been caused by the plaintiff’s inability to carry out her household tasks. Lambert J.A. stated, at para. 13:
The theory underlying s. 24 [now s. 25] of the Insurance (Motor Vehicle) Act is that there should not be double compensation for the same loss. But that does not mean that all of the benefits paid under Pt. 7 must be deducted one way or another from some item of damages, or from the total award of damages. It is only where the benefit corresponds with the particular heading of claim for damages that the benefit is to be deducted, and then only from the award for that particular head of damages. The requirement that the benefit match the claim is implicit in the legislative scheme as it was described in Baart v. Kumar, supra, and is explicit in s. 24(2), which matches “a claim for damages” with “benefits respecting the claim.” I do not think that the claim there referred to is the whole claim; rather, it is a claim to a particular heading of loss matched by a particular heading of benefits. [Emphasis added.]
38 Thus, in Jang, the court concluded that there was no match between the benefits paid to Ms. Jang for homemaker disability and her claim for general damages to compensate for pain, suffering, and loss of amenities of life.
39 In Buksh, the British Columbia Court of Appeal considered whether death benefits under Part 7 of the Regulations should be deducted from a tort damages award. The argument advanced by the appellants in that case was the following, at para. 21:
The appellants argue that because the death benefits are scaled in accordance with the age of the deceased and the status the deceased held in the household, it is evident that the benefits are intended to be an indemnification for the loss of the pecuniary contribution made by the deceased to the household. They argue that the matching requirement set out in Jang is met by the general purpose or intent of the legislation and by the fact that the term “death benefits” is essentially an all inclusive term broad enough to include a variety of heads of damages. The logic is as follows: since the death benefits are pecuniary and are intended to include all heads of damages they should be deducted from any award of damages under the Family Compensation Act intended to compensate survivors for the pecuniary loss caused by the death — failure to do so results in double recovery.
40 Cumming J.A. was of the view that in order to accept the argument of the appellants, it had to be first established that the death benefits were in fact indemnity payments. If the death benefits were intended to compensate for loss in the same way as tort damages, then they could be deducted from the overall award. If the death benefits were not intended to compensate for loss, they could not be deducted. Cumming J.A. ultimately concluded, at para. 30:
. . . the language in sections 92 and 93 of the Insurance (Motor Vehicle) Act Regulations is indicative of a non-indemnity payment. There is no requirement to demonstrate actual loss and there is no distinction based on need. In addition, if the intention of the legislation was to compensate for actual loss I find it difficult to reconcile that purpose with the fact that the legislation also provides a death benefit for the loss of a dependant child. By definition, a dependant child — especially one under 5 years of age — is generally the recipient of financial support and not a contributor of it. In my opinion, the death benefits provided for in sections 92 and 93 were clearly meant to provide something beyond mere compensatory payments. As a result, the proposition of the appellants must fail. Once it has been established that the benefits are not indemnifications it is not possible to satisfy the specific matching requirements mandated in Jang. [Emphasis added.]
41 On the facts of Buksh, the Court of Appeal concluded that the death benefits payable under Part 7 of the Regulations were not payments of indemnity and therefore were not deductible from the damages that the two plaintiffs had been awarded in respect of the deaths of their spouses.
42 The Part 7 benefits under the Regulations that were in issue in Buksh are substantially the same as or, in the words of Bauman J., “virtually identical” to the benefits under Part 6 of the British Columbia Insurance Act. Both provide for payment of a lump sum death benefit to the surviving spouse of a deceased insured in an amount based on the age and status of the deceased.
43 The argument of the respondents in the instant case is essentially this: according to Jang, there must be a “matching” between the benefit received under the statutory accident scheme and the tort damage award. Only where there is a match can the statutory benefit be deducted. In the instant case, there can be no match under the logic of Buksh unless the death benefit is intended to compensate for the same loss as general tort damages (i.e., unless the death benefit can be categorized as a contract of indemnity). Since the British Columbia Court of Appeal in Buksh refused to categorize a “death benefit” under the British Columbia Insurance (Motor Vehicle) Act as a contract of indemnity, it follows, according to the respondents, that a death benefit under the Quebec Act is equally not in the nature of a contract of indemnity. If, on the other hand, the death benefit under the Quebec Act can somehow be considered an indemnity contract, then the benefits described under s. 25(1) would not be “similar” within the meaning of the statute. The similarity requirement necessary for deduction would therefore not be satisfied.
44 With respect, I find the reading of the statute advanced by the British Columbia Court of Appeal and adopted by the respondents problematic in several respects. First, and most importantly, it grafts onto the statutory sections something that is simply not there. I do not agree with the statement in Jang that “[t]he requirement that the benefit match the claim is implicit in the legislative scheme . . . and is explicit in s. 24(2) [now s. 25(2)], which matches ‘a claim for damages’ with ‘benefits respecting the claim’” (para. 13). Section 25(2) of the Insurance (Motor Vehicle) Act reads:
A person who has a claim for damages and who receives or is entitled to receive benefits respecting the claim, is deemed to have released the claim to the extent of the benefits.
Since the term “benefits” is defined under s. 25(1) as “includ[ing] accident insurance benefits similar to those described in Part 6”, it follows that “benefits respecting the claim” must in this case refer to the full panoply of accident insurance benefits received under the Quebec legislation in respect of the death of Mr. Ross. It is, in my view, a contrived reading of the statute to interpret “benefits respecting the claim” as encompassing various individual heads of damage claimed under the SAAQ scheme, and to thereafter require that these benefits be deducted only to the extent that they individually overlap with elements of the tort award. In my opinion, “benefits respecting the claim” refers to the global package of benefits paid under the SAAQ regime in respect of Ms. Gurniak’s claim for damages arising from Mr. Ross’s death in a motor vehicle accident. There is, to my mind, nothing in the language of this provision that mandates that there be a “match” between the specific heads of damage in a tort award and the specific heads of damage under the contract or benefits scheme in question before a deduction is appropriately made.
45 This approach has the benefit of simplicity and ease of application and likely explains why British Columbia chose not to introduce an explicit matching requirement into the statute, when it could readily have done so. A trial judge, once he or she has determined that the benefits under the two regimes are broadly similar under s. 25(1), will deduct from the tort award any benefits already received in respect of the claim for damages arising from the motor vehicle accident. The trial judge will not be required to engage in a complicated and cumbersome process of “matching” a head of damage in tort to a particular claim for damages under a statutory scheme. This interpretation of s. 25(2) is supported by the fact that under some statutory schemes, the benefits received are not neatly classified into the various heads of damage for which they compensate, thereby making it nearly impossible for trial judges to give meaningful effect to any sort of matching principle.
46 I acknowledge that there may be rare cases where, even though the benefits are similar within the meaning of s. 25(1), the benefits awarded under a statutory insurance scheme may not duplicate the individual heads of damage awarded in tort, and therefore s. 25(2) may not fulfill the goal of preventing double recovery. An obvious example is that of a compensatory statutory accident benefit being deducted from a punitive damages award in tort. In such a case, it is arguably counter to the policy rationale underpinning s. 25 to make a deduction even though the benefits under comparison are broadly similar within the meaning of s. 25(1). In my view, this will typically be more of a theoretical concern than a real one. Parties will, as a matter of course, advance tort claims for the full extent of the benefits to which they believe they are legally entitled (i.e., full compensatory and punitive damages). It would be an anomalous case indeed where the tort award consisted solely of heads of damage that did not have some type of a counterpart in the benefits determined to be similar under s. 25(1). To the limited extent that this may occur, this problem is more appropriately addressed through legislative reform. Importing a “matching” requirement into s. 25(2), beyond the matching required in the analysis of similarity, would risk undermining the legislature’s intent to prevent double recovery in a manner that is simple, expedient and, on the whole, effective.
47 For these reasons, I am of the view that, contrary to what the British Columbia Court of Appeal held in Jang and Buksh, the wording of the section does not contemplate a second level of matching between a specific head of damage in a tort award and a specific head of damage under the insurance scheme in question. In this respect, I believe that Jang and Buksh were wrongly decided.
48 A second problem with the analysis advanced by the respondents, based on the British Columbia Court of Appeal’s analysis in Buksh and Jang, is that it does not necessarily ensure that the policy goal underpinning s. 25 of the Insurance (Motor Vehicle) Act — the prevention of double recovery — is realized. Here, common sense dictates that both the death benefits under the Quebec Act and the damages awarded in the British Columbia tort action were intended to compensate Ms. Gurniak and her children for economic loss flowing from the death of Mr. Ross. To refuse to recognize this fact, on the basis that the statutory accident benefit may not technically constitute a contract of indemnity (a point which I do not decide), is to permit the double recovery against which s. 25 was generally designed to safeguard. If the Quebec benefits are not deducted from the tort award, and leaving aside any issue of SAAQ’s right of subrogation, Ms. Gurniak and her children will indeed recover twice for the same loss.
49 A third weakness in the approach applied by the Court of Appeal is that it makes it necessary to decide, definitively, whether the death benefits under the Quebec scheme are “indemnity” or “non-indemnity” payments, a decision that may be difficult to make in a principled fashion. A statutory accident benefit, such as the death benefit in Quebec, is not easily amenable to rigid characterization. As the parties have noted, statutory accident benefits exhibit some characteristics of an indemnity contract and other characteristics of a non-indemnity contract, and therefore do not neatly fit into either category.
50 Even if the Quebec accident benefits were to be classified as non-indemnificatory on the basis that payment of the benefits is not contingent upon proof of loss, this does not change the fact that there are clearly features of the death benefits that were intended to serve the same general functions as a compensatory tort award. As the appellants note, at para. 37 of their factum:
The interpretation adopted by Cumming J.A. [in Buksh] ignores the underlying purpose of no-fault benefits, which are designed to compensate an injured person or their dependants for losses. This is particularly the case where benefits are paid under a complete no-fault scheme such as Québec’s, which was designed to replace in its entirety the tort system for motor vehicle accidents in that province. The tort system exists to allow those suffering damages in motor vehicle accidents to recoup their losses. Where a no-fault system eliminates the right to sue, it follows that its aim is to compensate injured parties, and their dependants, for losses.
This point was also made by the British Columbia Court of Appeal in the instant case when Hall J.A. recognized that the Quebec legislature enacted the statutory automobile accident compensation scheme “for the purpose of compensating those who had suffered financially because of death or injury occurring as the result of a motor vehicle accident” (para. 13).
51 The appellants, at paras. 44-45 of their factum, also stress that the Quebec death benefits, based as they are on the age and status of the deceased, reflect the fact that they were intended to compensate for economic loss:
The benefits paid to these Plaintiffs correspond to their economic losses. The lump sum benefit paid to the Plaintiff Ms. Gurniak was calculated on the basis of Mr. Ross’s age and net income. Both factors relate rationally to the actual loss suffered: they would be the primary factors in any court’s determination of future income loss or loss of dependency. Such payments are intended to compensate for loss of support or dependence, and therefore are cumulatively lower than a deceased victim could recover for loss of income had he or she survived. Even the statutory minimum indemnity reflects the legislative assumption that death results in the loss of economic value. Except perhaps in the rarest of cases, injury and death inevitably result in economic loss. . . .
Similarly, the Dependant Benefits paid to the Plaintiffs Valerie and Shannon Ross were based on their age at the date of Mr. Ross’s death. The age criterion reflects the fact that as children get older, their loss of dependancy is diminished. The express object of the Dependant Benefits is to provide compensation for loss of dependancy, and the criterion of age provides an expeditious method of estimating this loss. The fact that the payment is made directly to the surviving children does not alter its fundamental character as a form of compensation for economic loss.
52 Without classifying a statutory death benefit as either a contract of indemnity or not, I believe it accurate to say that no-fault accident benefits under a scheme such as the one in place in Quebec are indeed intended to compensate for economic loss occasioned by the death of an insured.
53 I refer to the indemnity/non-indemnity distinction only because it was the primary subject of contention between the parties. This appeal, however, does not turn on that distinction, but rather on what is meant by “similar” under s. 25 of the Insurance (Motor Vehicle) Act. In my view, the trial judge was correct in Gurniak No. 1 to hold that “similar” under s. 25(1) requires only that the payments under the contract or scheme in question — here, the Quebec Act — and Part 6 of the British Columbia Insurance Act be of the same general nature and character in order to be deductible.
54 Under s. 25, the only “match” to be made is between benefits under Part 6 of the Insurance Act and the benefits under the contract or statutory scheme in question. Where these benefits are “similar” as required under s. 25(1) of the Insurance (Motor Vehicle) Act, the benefits awarded under the contract or statutory scheme must be deducted from a tort damage award under s. 25(2). The language of the British Columbia legislative scheme does not support a second level of matching between specific heads of damage under a tort award and heads of damage under a statutory scheme. To read this “matching” requirement into the statute would, in my view, be an inappropriate encroachment into the domain of the British Columbia legislature.
IV. Disposition
55 I would therefore allow the appeal with costs throughout, set aside the judgment of the British Columbia Court of Appeal and order that the appellants’ liability to the respondents be reduced by the amount of the spousal death benefits and the dependant benefits already received by the respondents under the SAAQ scheme.
Appeal allowed with costs.
Solicitors for the appellants: Fasken Martineau DuMoulin, Vancouver.
Solicitors for the respondents: Quinlan Abrioux, Vancouver.