Apples to Apples

Both the Ontario Court of Appeal and the Divisional Court have recently considered the treatment of collateral benefits and the trust provisions of the Insurance Act under 267.8. The Court of Appeal in Gilbert v. South, 2015 ONCA 712 (CanLII) reiterates the fundamental principle that if a deduction is to be made, or the trust provisions engaged, that apples must be deducted from apples.

The Court noted that the benefit to be assigned must qualitatively mirror the tort awarded head of damage and there must be certainty that the collateral benefits cover the same time period as the tort award. The Defendant was not able to satisfy either requirement in Gilbert case. The Jury made an award for future care costs and did not allocate damages to any particular item of future care. Thus, the Trial Judge could not determine what amount of damages for future care costs overlapped with items of the insured’s SABS and a Trust Order was not made. Similarly, as Gilbert was not deemed catastrophically impaired, the Judge could not determine which portion of the Jury award was for care costs arising with Gilbert’s ten-year entitlement to accident benefits and, therefore, a Trust Order was not proper.

However, as the Divisional Court in Mikolic v. Tanguay, 2015 ONSC 71 (CanLII) ruled, the requirement is only that apples be subtracted from apples and not that McIntosh apples be matched with McIntosh apples, etc. In the case of Mikolic, the Court’s task was easier as the accident benefit claim had settled and the Court had access to the Settlement Disclosure Notice. In that case, there was no need to differentiate future past and future income loss, or past and future medical benefits, as the specific amounts received for IRBs and medical rehabilitation benefits were delineated on the Settlement Disclosure Notice which allowed the Court to make the deduction confident that apples were being deducted from apples.

The lesson for a tort insurer is clear. The insurer should ask specific Jury questions that will allow the proper apples to apples comparison to be made if the insurer intends to seek deduction or a Trust Order under s. 267.8 of the Insurance Act.

For Plaintiffs counsel the message is also obvious; before agreeing to a deduction or the application of the trust provisions in the Insurance Act, counsel must be satisfied that the section applies and that apples are being deducted or held in trust for apples. The principle is straightforward, but its application can be very complicated as shown by the Gilbert case.

For additional information concerning this decision or any related personal injury matter, please contact D. Joel Dick at or 416-572-3516 directly.

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