Tag: Thomas v. Thompson

More on the Steep Consequences of Part 7 Benefits Deductions in Tort Trials

As previously discussed, if you are insured with ICBC and fail to pursue your own Part 7 benefits a Defendant can reduce their liability by the amount of the benefits you should have pursued.  This can result in a very harsh damages deduction.  This was again illustrated in reasons for judgement released last week by the BC Supreme Court, Kelowna Registry.
In last week’s case (Thomas v. Thompson) the Plaintiff was injured in a 2005 collision.  The case went to trial in 2010 and the Plaintiff was awarded damages for various losses including the cost of future medical care.  One of the future care items was the cost of Lyrica.   The parties were invited to make further submissions regarding the future costs of this medication.
The Court accepted that the present day value of the Plaintiff’s future need for Lyrica totalled $147,939.   This entire award was then deducted because the Plaintiff could have pursued payment for this directly under his no-fault benefits.  In allowing this six figure damage reduction Mr. Justice Brooke provided the following reasons:







[4] The defendants say that rather than ordering the payment to the plaintiff of the present value of Lyrica as a cost of future care, the court must apply the provisions of s. 83(5) of the Insurance (Motor Vehicle) Act. This section in its entirety says this:

83

(a) within the definition of section 1.1, or

(b) that are similar to those within the definition of section 1.1, provided under vehicle insurance wherever issued and in effect,

but does not include a payment made pursuant to third party liability insurance coverage.

(2) A person who has a claim for damages and who receives 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 the benefits.

(3) Nothing in this section precludes the insurer from demanding from the person referred to in subsection (2), as a condition precedent to payment, a release to the extent of the payment.

(4) In an action in respect of bodily injury or death caused by a vehicle or the use or operation of a vehicle, the amount of benefits paid, or to which the person referred to in subsection (2) is or would have been entitled, must not be referred to or disclosed to the court or jury until the court has assessed the award of damages.

(5) After assessing the award of damages under subsection (4), the amount of benefits referred to in that subsection must be disclosed to the court, and taken into account, or, if the amount of benefits has not been ascertained, the court must estimate it and take the estimate into account, and the person referred to in subsection (2) is entitled to enter judgment for the balance only.

[5] I am satisfied that the Part 7 benefits available to the plaintiff exceeded the present value of those benefits and judgment may not be entered for them.









For more information on the complexities of part 7 benefits and tort damage assessments you can click here to read my article “the two hats of ICBC“.

The Other Side of Bradley: Indivisible Injuries and Damage Deductions


In 2010 the BC Court of Appeal released welcome reasons for judgement (Bradley v. Groves) which made it easier for individuals to recover damages for “indivisible” injuries.  In short the Court confirmed that if two or more incidents caused an indivisible injury you could sue any of the party’s responsible for causing the harm and recover the whole of the loss.
There is, however, a downside to the benefits of Bradley v. Groves.  If you sustain an indivisible injury and receive compensation for it from one tortfeasor a subsequent tort feasor may be able to reduce their liability by the amount of the previous settlement or judgement.  This argument was considered in reasons for judgement released this week by the BC Supreme Court.
In this week’s case (Thomas v. Thompson) the Plaintiff sued for damages from a 2005 motor vehicle collision.  The trial judge found that some of the Plaintiff’s injuries were indivisible from those sustained in a 2002 collision.   The Plaintiff settled his claim for damages from the 2002 collision for $10,000.  Following trial the Defendant argued that the damage assessment for the 2005 collision should be reduced by $10,000 to take into account the previous settlement.
The Court noted that damages were assessed taking the Plaintiff’s pre-existing issues into account and that it would not be just to re-open the trial to allow for such a result.  Implicit in the Court’s judgement is that if the right evidence is tendered at trial such a deduction could be allowed.  Mr. Justice Brooke provided the following illustrative reasons:






[7] I did not accept the evidence of the plaintiff that he had made a full recovery from the 2002 accident. In assessing non-pecuniary damages for the effects of the accident of June 27, 2005, I took the plaintiff in the position he then occupied; that is, as continuing to make recovery from the earlier injuries. I did not treat him as if he were whole at the time of the second accident. Thus, I reject the submission that the settlement funds paid to the plaintiff following the first accident be deducted from the award for the damages sustained in the second accident. There is no double recovery.

[8] I refer to the decision of the British Columbia Court of Appeal in Bradley v. Groves, 2010 BCCA 361 where the plaintiff had been injured in a second accident which aggravated injuries sustained in the first accident. At paragraph 38 the Court said this:

Without a finding of divisibility, the appellant’s arguments cannot succeed. The trial judge found as a fact that the plaintiff’s injuries from the first accident and the second accident were indivisible. The defendant and the other motorist both caused and contributed to the plaintiff’s soft tissue injuries. He also found those injuries were not separable. There is no basis on which to interfere with these findings of fact. Flowing from them is the conclusion of joint and several liability.

[9] On all of the evidence before me, I found that the plaintiff’s injuries in the first and second accident were indivisible.

[10] While I accept that I have discretion to reopen the trial, I am not satisfied that it is right and just to do so.







For an example of this deduction argument succeeding see the 2008 BC Court of Appeal decision of Ashcroft v. Dhaliwal.

Unintended Consequences: ICBC Wage Loss Claims and Undeclared Income


As I’ve previously written, if a person does not declare their earnings when paying their taxes they can still advance a wage loss claim in a personal injury lawsuit, however, doing so not only makes the claim more difficult to prove but also could expose the Plaintiff to repercussions from Revenue Canada.  Reasons for judgement were released last week demonstrating why this is so.
In last week’s case (Thomas v. Thompson) the Plaintiff was involved in a 2005 motor vehicle collision in Kelowna, BC.  He went to trial without a lawyer and advanced a claim for damages for over $1.3 million.   Fault for the crash was admitted by the Defendant.  At trial many of the Plaintiff’s claims were rejected by the trial judge however the Court did accept that the Plaintiff suffered from “continuing pain” as a result of the collision and this would need to be treated on an ongoing basis with medication.  As a result the Plaintiff was awarded damages for non-pecuniary loss and cost of future care.
The Plaintiff gave evidence that he earned an average income of more than $60,000 per year in the period shortly prior to the crash.  However, his tax returns did not reflect this.  Despite the unreported nature of the pre-injury income Mr. Justice Brooke accepted that the Plaintiff did earn a “substantial income” in the years prior to the crash.  The Court rejected the claim for loss of past and future income, however, finding that the Plaintiff’s injuries, while on-going, did not impair his earning capacity.
The end result is that, in advancing an unsuccessful claim for past loss of income, the Plaintiff testified in open court as to the amount of income he earned that he failed to report to Revenue Canada.   As reasons for judgement are publicly available there is nothing stopping government agencies such as Revenue Canada from pursuing Plaintiffs who give such evidence for payment of back taxes and penalties.  These can, of course, be substantial.  The difficulties with advancing wage loss claims when the history of earnings is unreported is demonstrated by the following passage from the trial judge:

[24]         I now turn to the damages claimed by the plaintiff, and the question of credibility.

[25]         First of all, the plaintiff said under oath that he earned an income in 2004 of $63,886 and in 2005 from January 3 to June 28 an income of $31,444 (or more than $60,000 on average a year), in home renovation work. Mr. Dave Novak gave evidence for the plaintiff that he hired him on a regular basis to do home improvements and renovations, based on an estimate in advance, for which he sometimes paid in cash and sometimes by cheque. He did not disagree with the amounts shown by Mr. Thomas on forms of sales orders, but acknowledged that he had no firm recollection. In his 2003 tax return summary, Mr. Thomas reported an income of $21,815 employment insurance benefits. No reference is made to income from employment. In 2004 Mr. Thomas reported an income of $6,840 from employment insurance, and other income of $500 for a total of $7,340. In 2005 Mr. Thomas reported no income, and in 2006 and following Mr. Thomas reported an income of Social Assistance payments varying from a little more than $2,000 a year to almost $11,000 a year. There is no reference to any employment income in any tax return placed in evidence. Mr. Thomas explains this by saying that he did not understand that tax was payable on earned income where the tax payer did not charge GST or PST. I find this to be preposterous. What Mr. Thomas is saying is that he is well informed enough to claim employment insurance benefits, but not well informed enough to report actual income. It is noted that in each year his tax return was prepared by H&R Block, a commercial tax preparer. I also note that Mr. Thomas made an assignment in bankruptcy on August 24, 2007 in which he disclosed liabilities of in excess of $41,000 made up of student loans and credit card debts. While I accept that Mr. Thomas has been challenged in his language skills in the past, and I must consider what role if any this might have played, I find his understanding and usage was fluent and effective and I can only conclude either that he knowingly failed to disclose his true income in his tax returns, or that he did not earn the kind of income that he claims to have made in the home renovation business.

[26]         I find that Mr. Thomas was working in 2003, 2004 and 2005 and earning a substantial income. But, not only was he failing to report that income but he seemingly was drawing employment insurance which is, of course, payable upon being fit but unable to find work.

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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