One Sunday each month OnPoint Legal Research provides Slaw with an extended summary of, and counsel’s commentary on, an important case from the British Columbia, Alberta, or Ontario court of appeal.
JORDAN v. LOWE, 2013 BCCA 520
1. CASE SUMMARY
Areas of Law: Motor Vehicles; Insurance
~ Sick bank credits accruing to employee under contract of employment not constituting “insured benefit” under Motor Vehicle (Insurance) Regulation—Insurer not entitled to deduct sick bank credits from loss of income award in personal injury action ~
Background: The plaintiff was injured in a motor vehicle accident with the defendant, an uninsured driver. He obtained judgment for damages that included past income loss. After trial, the defendant argued that there should be a deduction from this head of damage for an amount the respondent had received from a sick bank accumulation with his employer. Only ICBC could make that argument so it was joined as a third party. ICBC, relying on s. 106 of the Insurance (Vehicle) Regulation, asserted that the past income loss was subject to a deduction for the sick bank benefits received by the plaintiff. Section 106 states that ICBC is not obliged to pay an amount in a claim “paid or payable as an insured claim”. “Insured claim” is defined as “any benefit, compensation similar to benefits, right to indemnity or claim to indemnity accruing to a person entitled to benefits”. A previous iteration of s. 106 defined “insured claim” simply as “any benefit, right to indemnity or claim to indemnity”. ICBC argued that by reason of the addition of the phrase “compensation similar to indemnity”, it was entitled to deduct the sick bank benefits and applied for a declaration to this effect. The application was dismissed and ICBC appealed.
Appeal decision: Appeal dismissed. In Lopez v. Insurance Corporation of British Columbia (1993), 78 B.C.L.R. (2d) 157 (C.A.), the court interpreted the previous version of s. 106 and held that “benefit”, as that term was then used in the context of the section as a whole, required an element of insurance. One key finding in Lopez was that the heading of the section “Exclusion of other insured loss” meant that the section at the very least required an element of insurance be present in any benefit that would be subject to deduction. The Court of Appeal held that as the heading had never been changed since Lopez was decided, there was no logical reason why “compensation similar to a benefit” would not also require an element of insurance. Further, the evidence did not support ICBC’s contention that the sick bank benefits were a form of insurance. The employment contract documents in evidence simply showed that the plaintiff was entitled to receive credit on a semi-annual basis for sick leave not used, to be offset by payment of wages for time away from work due to accident or injury. The documents did not suggest that there was an outside insurer involved or that there was an internal scheme in the nature of insurance. Entitlement to some payment of wages during work absences caused by injury or illness (not work-related) was simply a term of the contract of employment. Accordingly, it could not be said that accumulation of sick leave credits involved an element of insurance.
2. COMMENT BY THE COUNSEL FOR THE RESPONDENT, John Cameron
Jordan v Lowe was a personal injury action arising from an incident in which a Vancouver Police Constable (Eric Jordan) was injured when the Defendant (Mark Lowe) drove a vehicle at high speed into Cst. Jordan’s police cruiser on Bayshore Drive in Vancouver. Mr. Lowe was being pursued by police at the time and had previously collided with other vehicles. Liability was admitted and the case was an assessment of the appropriate quantum of damages.
I take particular interest in cases of this nature as I previously spent approximately 10 years working as a police officer prior to opening my law practice and frequently act for police officers injured in accidents occurring both on and off duty.
Mr. Lowe was an uninsured driver and the case was defended by ICBC in his name.
Cst. Jordan’s damages ended up being assessed at approximately $120,000 which was satisfying as the best offer prior to trial had been approximately $50,000.
Cst. Jordan’s damages award included an amount for wages missed while he was recovering from his injuries. While off work he received full pay as he was able to draw on his “sick bank” which he had accumulated over his police career. His sick bank paid him $9,087.77 while he was off work. To reinstate the sick bank Cst. Jordan would need to repay the employer. As a result, he claimed that amount in the tort action.
At the end of the trial the Defendant sought to avoid paying the police sick bank amount on the basis that s.106 of the Insurance (Vehicle) Act Regulations allows ICBC to avoid paying amounts for which a person has an “insured claim” through another source.
It was noted by the trial judge that the Defendant did not have any standing to advance the s.106 argument and that argument needed to be made by ICBC. Accordingly, after the trial ICBC, was given leave to join the litigation and seek a ruling and the matter then proceeded. The s.106 issue was one which ICBC had apparently spent some time researching as they had, just prior to the Jordan case, appealed the very same issue in another police case called Loeppky v ICBC 2012 BCSC 7 (CanLII). In Loeppky the deduction under s.106 had been denied. ICBC appealed that ruling but the matter settled without going to hearing of the appeal. It was clear that this would be a recurring issue until it was resolved.
Section 106 had been redrafted not too long ago and had added a very broad and inclusive definition for the types of payments to a Plaintiff which could be deducted as insured claims:
insured claim means any benefit, compensation similar to benefits, right to indemnity or claim to indemnity accruing to a person entitled to benefits, compensation or indemnity …. and includes a benefit, compensation, right or claim.
ICBC’s argument was essentially that the sick bank was a benefit or a compensation similar to a benefit which the Plaintiff had obtained from his employer and accordingly ICBC were excused from paying that portion of the claim. The Plaintiff agreed that while the sick bank may well be a “benefit” it was not a benefit which had any element of insurance and therefore not deductible. The Plaintiff primarily relied on a previous Court of Appeal decision (Lopez v ICBC) in which the Court of Appeal had held that the title to the section s.106 “Exclusion of other insured loss” meant that “any benefit” as used in s. 106(1) at the very least required there to be some element of insurance to the benefit in question. The evidence was that the police sick plan did not operate in the manner of an insurance plan or disability plan as it was earned through service and involved no payment of premiums.
The trial judge in Jordan followed Lopez and held (as had the judge in Loeppky) that the change to the wording of s.106 did not alter the fact that the heading had not changed and that some element of insurance would still be needed. ICBC was ordered to repay the sick bank amount.
ICBC appealed that decision and eventually produced a very impressive and comprehensive factum referencing approximately 50 authorities in support of their position. I don’t mind admitting that it was a little daunting and that I needed to work closely through the factum several times to grasp the nuances of the argument. At the end of the day I believed that Lopez was still rightly decided and that narrow issue alone would most likely resolve the appeal. I filed a very brief three page factum in reply (which I admit felt a little risky).
At the end of the day the Court of Appeal agreed with the trial judge and held that an element of insurance was required to make a benefit deductible under s.106, and the deduction was therefore denied.
Jordan has clarified one of the issues that may arise in cases involving uninsured motorists and injured Plaintiff’s who make use of sick bank benefits.”