An extra provincial insurer has no express statutory right of subrogation under the Insurance (Vehicle) Act and cannot bring a subrogated claim to recover the amounts it paid to its insureds in respect of a motor vehicle accident occurring in British Columbia

Insurance law – Automobile insurance – Benefits – No-fault coverage – Statutory provisions – Subrogation – Right of insurer to subrogation

Middleton v. Heerlein, [2015] B.C.J. No. 1524, 2015 BCSC 1236, British Columbia Supreme Court, July 17, 2015, R. Johnston J.

The plaintiffs were US residents who were injured in a motor vehicle accident in British Columbia. Their insurer, Progressive Max Insurance Company (“Progressive”), paid for necessary medical services which the plaintiffs were entitled to receive under their insurance policy. Pursuant to the requirements of the Motor Vehicle Act, R.S.B.C. 1996, c. 318, Progressive was also obliged to provide the plaintiffs with the same no-fault benefits they would be entitled to receive if they were insured under the Insurance (Vehicle) Regulation, B.C. Reg. 447/83, and Progressive paid those benefits. Progressive brought an application in the plaintiffs’ names seeking a determination as to whether it could recover the amounts it paid by way of a subrogated claim.

The issue was whether Progressive’s claims were released by s.83(2) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c.231, which provides:

83.(2) a person who has a claim for damages and who received or is entitled to receive benefits respecting the loss on which the claim is based, is deemed to have released the claim to the extent of those benefits.

The same issue had been litigated by Progressive in Matilda v. MacLeod, 2000 BCCA 1 (“Matilda”), which was decided under the identical provision contained in the predecessor to the current legislation. In Matilda, the court of appeal held that in the absence of any express statutory right of subrogation, Progressive had no status as a subrogated insurer to advance any claim in its own name. Progressive argued that s.84 of the current legislation provided it with a statutory right of subrogation as “an insurer”. The application judge noted that the definition of “insurer” in the current legislation included only “the corporation” or “an insurer under an optional insurance contract” and that Progressive met neither branch of the definition.

In the result, it was held that Matilda governed the interpretation of s.83 and the applications were dismissed.

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