After a hearing, the Judge found that because the Plaintiff was a person who “is or would have been” entitled to Part 7 benefits, the Court was required to estimate his entitlement to future Part 7 benefits, and deduct them from the tort award, even if the Plaintiff may never receive those benefits. The Judge also found that the statutory discount rate set by s. 56 of the Law & Equity Act provided no basis for a “top-up” on the award of future pecuniary damages.

Sovani v. Jin, [2005] B.C.J. No. 1979,  British Columbia Supreme Court

The judge was asked to determine four remaining issues related to a jury award made against the Defendants after a trial in which three actions were tried together. At trial, the jury allocated non-pecuniary damages among the three actions on the following basis: $475,000 to the Jin and Yang Defendants (the “Jin Defendants”), $1.00 to the Craig Defendants and $24,999 to the Defendant Kwiatkowski.

The first issue was whether the jury’s award for non-pecuniary damages against the Jin Defendants was appropriate given that it exceeded the “upper limit” established by the trilogy. The judge found that the award was not appropriate and reduced it from $475,000 to $299,761.

The second issue was whether the calculation of net past income loss in accordance with sections 52 and 54 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, C.231, (the “Act”) should have included a deduction for income tax payable as required by these sections. The judge cited case law which held that the Act requires that tax on the award be determined as if the past income had all been earned at the effective date of the jury’s assessment and ordered tax on the Plaintiff’s gross past wage loss to be calculated by the lump sum method and deducted.

The third issue was whether Part 7 benefits to which the Plaintiff “is or would have been entitled” under s. 25 of the Act should have been deducted from the $524,000 award for future care costs. The Plaintiff argued that the Jin Defendants were estopped from claiming such a deduction, as ICBC had refused to pay the Plaintiff Part 7 benefits after he failed to keep his appointments. ICBC had maintained that the Plaintiff forfeited his rights to Part 7 benefits under s. 90(2) of the Regulations. The Defendants argued that the dispute between the Plaintiff and ICBC regarding Part 7 benefits had nothing to do with the Defendants’ entitlement to a deduction under s. 25. The judge declined to follow her decision in a previous case and found that because the Plaintiff was a person who “is or would have been” entitled to Part 7 benefits, the Court was required to estimate entitlement to future Part 7 benefits and deduct them from the tort award, even if the Plaintiff may never receive those benefits.

The fourth issue was whether the Plaintiff was entitled to a “top-up” of future pecuniary damages under s. 55 of the Law and Equity Act. The “top-up” of approximately $300,000 was intended to permit purchase of an annuity that was indexed to the Consumer Price Index. The Defendants argued that the statutory discount rate set by s. 56 of the Law and Equity Act prohibited the Plaintiff from being entitled to a “top-up” of future awards. The Court found that s. 55 of the Law and Equity Act provides no basis for consideration of a “top-up” and that the Plaintiff was not entitled to one.

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