IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20131101

Docket: M103398

Registry:
Vancouver

Between:

Jodi
Gormick

Plaintiff

And

Sebastian
Amenta

Defendant

Before:
The Honourable Mr. Justice Sigurdson

Supplementary
Reasons to Supreme Court of British Columbia, June 25, 2013
(Gormick v. Amenta, 2013 BCSC 1128, Vancouver File No. M103398)

Supplementary Reasons for Judgment

Introduction

[1]            
Following release of my reasons (2013 BCSC 1128), the parties appeared
before me for clarification on two points.

[2]            
First, the amount I awarded for past wage loss, being $27,000, was
calculated on a gross income basis, and will have to be adjusted accordingly by
the parties to determine the net award.

[3]            
The other issue upon which I required further submissions was the
question of whether the amount for sick time paid out, being $17,850.03, should
be awarded on a gross or a net basis.

Agreed facts

[4]            
The parties agree on the following facts respecting the plaintiff’s sick
bank credits:

·                
Upon retirement, the plaintiff’s sick bank hours which are not
used revert back to her employer, the City of Port Moody.  Consequently, the
plaintiff is not entitled to cash out her unused sick bank hours upon
retirement.

·                
Evidence was led (testimony of the plaintiff) and introduced to
the court (exhibit #18) that the plaintiff is bound by a subrogation agreement
as it pertains to her sick time used in relation to the subject motor vehicle
accident.  Exhibit #18 is a copy of the relevant sections of the Collective
Agreement (Memorandum of Agreement) as between the plaintiff’s union and her
employer, which discusses the employer’s right of subrogation.  Specifically,
section 9.5 – Sick Leave Recovery states:

The Employer is subrogated to the
rights of an employee who has received sick leave payments pursuant to Section
9.3 of this Collective Agreement, against any third party liable to that
employee for damages, and may bring an action against a third party in the
employee’s name to recover the wages and/or benefits paid or payable by the
Employer

Upon reimbursement of the wages and/or benefit [sic], the
Employer shall reimburse the Sick Leave Plan the amount of money paid out of
the Plan in proportion to the total amount of money the employee reimburses the
Employer for wage loss and/or benefits.  This provision includes actions or
claims made to ICBC.

Discussion

[5]            
The authorities support awarding the gross amount for loss of sick bank
credits.

[6]            
Bjarnason v. Parks, 2009 BCSC 48, considered compensation for the
loss of sick bank credits.  Ballance J. reviewed the jurisprudence and noted
that the court “has long recognized the loss of sick bank credits as a
compensable loss” (at para. 56).  After noting a lack of evidence
pertaining to the details of the sick bank system in question, she concluded,
at para. 63:

As best I can
decipher from the evidence, the [sick bank loss that the plaintiff] has
sustained is a potential future loss in the sense that it would only be
experienced if she has insufficient sick leave credits to adequately cover a
future period of absence due to illness in respect of which she could have
drawn upon the lost sick bank for income continuation.

[Emphasis
added.]

[7]            
In view of her characterization of lost sick bank entitlement, Ballance
J. refused to make a deduction for income tax pursuant to ss. 95 and 98 of
the Insurance (Vehicle) Act, R.S.B.C. 1996, c 231.  She stated, at
para. 66:

In my view, this kind of loss is
not in the character of past wage loss. Accordingly, there will be no deduction
for income tax.

[8]            
The recent decision of DeGuzman v. Ge, 2013 BCSC 1450, follows Bjarnason
and elaborates on the rationale for awarding the gross and not the net amount
of damages in respect of loss sick bank entitlement.  I extract the pertinent
portion of the reasons of Smart J. at paras. 40-43:

Mr. Calder submits that the appropriate award is that
set out in the Notice to Admit – $45,598.26.  This includes the subrogated
interest of the plaintiff’s employer for repayment of her accumulated sick bank
time in the amount of $33,354.73.  Mr. Calder agrees the plaintiff is only
entitled to net past wage loss but argues that the award to replenish the sick
bank is the gross amount of past wage loss, not the net amount.  He refers me
to Chingcuangco v. Herback, 2013 BCSC 268, Chalmers v. Russell,
2010 BCSC 1662, and Bjarnason v. Parks, 2009 BCSC 48.

Mr. Gibb notes that the plaintiff is only entitled under
the provisions of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231,
to recover net past wage loss and that income tax contributions and Employment
Insurance premiums are to be deducted from the gross earnings to determine net
past wage loss.  While he does not disagree with Mr. Calder’s arithmetic,
he does disagree that repayment of the sick bank time should be the gross wage
loss. He argues that it should be consistent with past wage loss awards and
should be the net amount – $39,247.42.  He says to make the award Mr. Calder
suggests would over-compensate the plaintiff.

I respectfully disagree with Mr. Gibb. In my view,
the purpose of an award for past wage loss is to compensate the plaintiff for
what she actually lost as a result of the MVA.  To only compensate her for the
net amount of her sick bank time would result in deductions being taken from
her twice – now and later when she uses them in the future.  This is because
when she does use her replenished sick bank time, she will have income tax and
other deductions taken from her by the employer and will only receive the net amount.

The plaintiff is entitled to the past wage loss in the amount
of $45,598.26.

[Emphasis
added.]

[9]            
As is evident from DeGuzman, treating loss of sick bank
entitlement as past wage loss undercompensates the plaintiff because deductions
could be taken from him or her twice.  This is consistent with Ballance J.’s
characterization of loss of sick bank entitlement as a “potential future loss”
not in the “character of past wage loss”.

[10]        
In addition, the following cases have adopted Bjarnason without
further comment in awarding the gross amount for loss of sick bank entitlement:

·                
Chingcuangoco v. Herback, 2013 BCSC 268 at paras. 128-133;

·                
Kilian v. Valentin, 2012 BCSC 1434 at paras. 125-127;

·                
Chalmers v. Russell, 2010 BCSC 1662 at para. 86;

·                
Pham-Fraser v. Smith, 2010 BCSC 322 at para. 90; and

·                
Rizzolo v. Brett, 2009 BCSC 732 at para. 67.

[11]        
Contrastingly, the defendant in the instant case relies on Redl v.
Sellin, 2013 BCSC 581, in which the court awarded the net and not the gross
amount in respect of damages for lost benefits (including paid sick days, paid
time off work for medical appointments and lost vacation credits).

[12]        
In Redl, the court rejected the plaintiff’s position that “as
full repayment of benefits to her employers appears to be required, the net
loss calculation should not be applied to the total subrogated portions of the
income loss claim” (at para. 33).  In this regard, the court said, at
para. 34:

It is clear under the Insurance
(Vehicle) Act that the defendant’s liability for all income losses –
regardless of whether a subrogated interest is claimed by an employer or an
insurer – is for the net amount only.  The rights of an insurer or employer
claiming a subrogated interest in an employee’s damages claim are no greater
than those of the employee.  The entire gross amount of Ms. Redl’s past
income loss of $37,360.05 is subject to a deduction for taxes.  How this
impacts Ms. Redl’s repayment obligations is a matter between her and her
employers.

[13]        
However, Redl make no note of Bjarnason or the other cases
following that decision.  It appears that those cases were not brought to the
attention of the judge deciding Redl.

[14]        
Further, the proposition which the defendant in the instant case
extracts from Redl – namely, that “[t]he rights of an … employer
claiming a subrogated interest in an employee’s damages claim are no greater
than those of the employee” – is not inconsistent with Bjarnason. Bjarnason
holds that an employee has the right to the gross amount of damages in respect
of loss of sick bank entitlement.  Accordingly, the employer claiming a
subrogated interest in the gross amount of those damages is not claiming a
greater right than that of the employee.

Conclusion

[15]        
As such the plaintiff is entitled to the net of tax equivalent of the
gross sum of $27,000 (which I leave to the parties to calculate), but the
plaintiff is entitled to the sum of $17,850.03 for sick time on a gross basis.

“J.S. Sigurdson J.”
The Honourable Mr. Justice J.S. Sigurdson