An Insurer of an at-fault driver (“Belair”) was entitled to deduct from the award against its Insured the amount of benefits to which the Plaintiff (“Wong”) would have been entitled to receive pursuant to legislation providing for the payment of such benefits on a no-fault basis

Wong v. Luong, [2005] B.C.J. No. 919, British Columbia Supreme Court

Wong was in a motor vehicle accident on October 19, 1999. Section 25 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, provided that 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. “Benefits” under section 25 are defined to include 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.” Belair took the position that the special damages and future care costs awarded to Wong should be deducted from the award against Belair’s Insured pursuant to section 25 of the Insurance (Motor Vehicle) Act.

Wong argued that section 25 applied only to ICBC and did not apply to Belair, an Ontario Insurer. The court rejected this argument noting that the Act specifically applied to contracts and plans of automobile insurance “wherever issued or in effect”.

Wong further argued that, at the time of the judgment, there was no amount “payable for benefits” referred to in subsection 25(1) because Wong had released ICBC from all liability for such benefits. The court reviewed the release and noted that it was clear that Wong received consideration from ICBC for releasing his Part 7 claims arising from the October 1999 accident, although the consideration was not quantified. The court noted that to accept Wong’s position would allow him some unquantified double recovery and the possible avoidance of liability for Part 7 benefits by ICBC at the expense of a stranger to their agreement. The court reviewed the case of Cole v. Smith (26 November 2002) Vancouver B994062 (B.C.S.C.) where the court ruled that a release of Part 7 benefits given by a Plaintiff could not avoid a deduction from the judgment. The court further noted that section 24(4) referred to the amount of benefits paid, or “to which the claimant is or would have been entitled”. The court held that if Wong did in fact release his entitlement to benefits, they were still benefits to which he “would have been entitled” and as such, the legislation required them to be deducted from the award.

The court found that the special damages for prescription medication, chiropractic treatment and ambulance service and the future care costs for medication were clearly benefits that would have been payable to Wong under Part 7 and were therefore deductible under section 25. As well, the court accepted case law submitted by Belair as establishing that travelling expenses for medical attention, massage treatments, the cost of the pain clinic and psychological counselling were also deductible under section 25 as Part 7 benefits payable pursuant to the Regulations.

In the result, Belair was entitled to deduct from the judgment against its Insured the amount of $46,516.17.

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