IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20160111

Docket: M110432

Registry:
Vancouver

Between:

Manitoba Public Insurance

Plaintiff

And

Ole B. Dybhaun

Defendant

Before:
The Honourable Mr. Justice Skolrood

Reasons for Judgment

Introduction

[1]            
This matter is before the court by way of a Special Case pursuant to
Rule 9-3 of the Supreme Court Civil Rules, B.C. Reg. 168/2009.

[2]            
At issue is whether the plaintiff, which is the public automobile
insurer in the Province of Manitoba, may recover from the defendant certain
statutory benefits that it paid to one of its insureds as a result of a motor
vehicle accident that occurred in British Columbia and for which the defendant
was liable.

Facts

[3]            
The following facts are taken from an agreed statement of facts prepared
by the parties as part of the Special Case.

[4]            
On February 13, 2009, the defendant was driving a vehicle which he owned
on Highway 97 near Oliver, B.C. when it collided with a vehicle driven by
Joseph Kozokowsky (the “accident”).

[5]            
Geraldine Kozokowsky was a passenger in the vehicle driven by Joseph
Kozokowsky and was injured as a result of the accident.

[6]            
For the purposes of the Special Case, the defendant admits liability for
the accident.

[7]            
At all material times, Ms. Kozokowsky was a resident of Manitoba and
insured by the plaintiff, Manitoba Public Insurance (“MPI”), under the Manitoba
Public Insurance Corporation Act, C.C.S.M., c. P215 [MPICA].

[8]            
As an insured under the MPICA, Ms. Kozokowsky is entitled to
various types of benefits which are referred to as Personal Injury Protection
Plan (“PIPP”) benefits.

[9]            
Under s. 127 of the MPICA, there is a lump sum indemnity payment
known as a permanent impairment benefit (“PI Benefit”) available to those
insureds who have sustained a permanent physical or mental impairment because
of a motor vehicle accident.

[10]        
The maximum payable under s. 127 as a PI Benefit is $100,000, although
that amount is indexed annually such that, at the time of the accident, the
maximum amount payable was $133,099.

[11]        
MPI has made a PI Benefit payment to Ms. Kozokowsky under s. 127 of the MPICA
in the amount of $34,605.74.

[12]        
That amount is calculated in accordance with a formula established by
regulation in which an injured person’s injuries are assigned a percentage rate
which is applied against the statutory maximum in order to arrive at a value
for each injury: Permanent Impairments (Universal Bodily Injury
Compensation) Regulations, Man. Reg. 41/94. By way of example, Ms. Kozokowsky
suffered facial scarring in the accident which was assigned a rate of 3.0%
which, taken on its own, would result in a compensation payment of $3,992.97
($133,099 x 3.0%).

[13]        
Pursuant to the MPICA, MPI has also paid other types of PIPP
benefits to Ms. Kozokowsky in the amount of $22,505.18, bringing the total
of the benefits paid to her to $57,110.92. These additional benefits largely
relate to treatment and rehabilitation expenses.

[14]        
On April 3, 2009, Ms. Kozokowsky executed a subrogation indemnity
agreement in which she agreed to reimburse MPI for any PIPP benefits paid to
her out of any monies received as a result of a court action in B.C. in
connection with the accident.

[15]        
Ms. Kozokowsky commenced an action in B.C. against the defendant which
was settled in or around January 2011. In consideration of payment to Ms. Kozokowsky
by or on behalf of the defendant of $86,670, Ms. Kozokowsky executed a release
in favour of the defendant dated January 19, 2011.

[16]        
In this action, MPI seeks to recover from the defendant the $34,605.74
PI Benefit it paid to Ms. Kozokowsky. It does not seek to recover the
additional $22,505.18 in other PIPP benefits paid to her.

Issues

[17]        
By way of the Special Case, the parties seek the court’s answer to the
following three questions:

1.     Is the PI
Benefit in s. 127 of the MPICA an injury, loss, damage or expense that
raises a claim under a head of damages that may be claimed against the
defendant in tort?

2.     Is the PI
Benefit in s. 127 of the MPICA “similar” to those within the definition
of “benefits” in ss. 1.1 and 83 of the Insurance (Vehicle) Act, R.S.B.C.
1996, c. 231 [IVA]?

3.     Is the PI
Benefit in s. 127 of the MPICA a collateral benefit deductible from any
tort claim against the defendant?

Legislative Framework

[18]        
The MPICA establishes a no-fault compensation system for persons
injured in motor vehicle accidents. Specifically, s. 72 states:

No tort actions

72  Notwithstanding the
provisions of any other Act, compensation under this Part stands in lieu of all
rights and remedies arising out of bodily injuries to which this Part applies
and no action in that respect may be admitted before any court.

[19]        
Section 76 deals with situations in which a Manitoba resident is injured
in an accident that occurs outside of the province:

Entitlement of resident of Manitoba re accident outside
Manitoba

76(1)  A person who is entitled to compensation under this
Part in respect of an accident that occurred outside Manitoba may, subject to
the corporation’s right of subrogation under this Act, exercise any right or
remedy that he or she has under the law of the place where the accident
occurred for compensation in excess of the compensation received under this
Part.

Subrogation re accident outside Manitoba

76(2)  Notwithstanding section 72 (no tort actions),
where a person is entitled to compensation under this Part in respect of an
accident that occurred outside Manitoba, the corporation is subrogated to the
person’s rights and is entitled to recover the amount
of the compensation from any person

(a) who is not resident in
Manitoba and is responsible for the accident under the law of the place where
the accident occurred; or

(b) who is liable for compensation for bodily injury
caused in the accident by the non-resident.

[20]        
The PI Benefit is dealt with in ss. 126-127:

Meaning of "permanent impairment"

126 In this Division, "permanent
impairment" includes a permanent anatomicophysiological deficit and a
permanent disfigurement.

Lump sum indemnity for permanent impairment

127(1) Subject to this Division and the
regulations, a victim who suffers permanent physical or mental impairment
because of an accident is entitled to a lump sum indemnity of not less than
$500. and not more than $100,000. for the permanent impairment.

Lump sum indemnity for catastrophic injury

127(2) Subject to this Division and the
regulations, a victim who suffers permanent physical or mental impairment
because of a catastrophic injury resulting from an accident is entitled to a
lump sum indemnity of $215,000. for the permanent
impairment.

[21]        
British Columbia also has a partial no-fault system in that there are
certain no-fault benefits available to persons injured in vehicle accidents. These
benefits are set out in Part 7 of the Insurance (Vehicle) Regulation, B.C.
Reg. 447/83 [Regulation] and are in addition to an injured person’s
right to sue in tort.

[22]        
Section 83 of the B.C. IVA provides that where a person receives,
or is entitled to receive, no-fault benefits, the person is deemed to have
released any claim for damages to the extent of such no-fault benefits:

83
(1) In this section
and in section 84, "benefits"
means benefits

(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.

[23]        
“Benefits” is defined in s. 1.1 to mean the “prescribed benefits” which
are largely those benefits found in Part 7 of the Regulation (see Uhrovic
v. Masjhuri, 2007 BCSC 1096 at para. 5).

Case Law

[24]        
Issues similar to those arising on this Special Case have been
considered by the courts numerous times. It is therefore useful at the outset
to review some of the key authorities relied on by the parties.

[25]        
A good starting point is Manitoba Public Insurance Corp. v.
University of Waterloo et al, 2007 MBCA 107 [Waterloo], where the
Manitoba Court of Appeal considered the proper interpretation of s. 77 of the MPICA.
That section, which is similar in many respects to s. 76, deals with the right
of MPI to recover benefits paid to an insured from a non-resident of Manitoba
who is responsible for a motor vehicle accident occurring in Manitoba.

[26]        
At the relevant time, s. 77(1) of the MPICA provided:

Notwithstanding section 72 (no tort actions), where a person
is entitled to compensation under this Part in respect of an accident that
occurred in Manitoba, the corporation is subrogated to the person’s rights and
is entitled to recover the amount of the compensation

                                
(a)         
from any person who is not resident in Manitoba, to the extent that the
person is responsible for the accident

[27]        
The central issue in the case was whether MPI, in an action brought
against a non-resident tortfeasor, could recover the entire amount paid to its
insured in statutory benefits, or whether it was limited to what would be
recoverable in a tort action, where principles such as remoteness,
forseeability and causation would apply.

[28]        
The trial judge found that MPI has a right of subrogation to acquire the
rights of the injured party but no more. As such, MPI could sue the
non-resident tortfeasor but the defendant could raise any defences that would
exist at common law. On appeal, the Court of Appeal agreed with this
interpretation. The court said at para. 42:

In summary, construing s. 77 in
the context of the Act as a whole, and the Act’s general scheme
and the adjuncts thereto, and applying the principles of subrogation, MPIC
cannot be in a better position than the injured Manitoban would be in, if he or
she could sue; that is the essence of subrogation. The right of MPIC to
recover, based on the concept of subrogation, is governed and potentially
limited by principles of the common law, such as remoteness, foreseeability and
causation. The judge was correct in so concluding. That conclusion is, as the
respondents argued here, fully consistent with the preservation of the no-fault
scheme for Manitobans.

[29]        
In coming to its conclusion, the court rejected the argument that the MPICA
confers on MPI a statutory right of recovery of all benefits paid. It said that
had the Legislature intended to confer such a right, it could have done so. Instead,
the Legislature chose to rely on established principles of subrogation (at
para. 51).

[30]        
The court therefore held that MPI could sue to recover the lesser of (a)
the amount payable in tort, and (b) the amount of PIPP compensation actually
paid (at para. 49).

[31]        
As an aside, s. 77 has since been amended and the reference to a right
of subrogation has been removed (S.M. 2014, c. 15, s. 9). Thus, on its face, s.
77 now appears to provide a statutory right of recovery.

[32]        
One further observation made by the court is worth noting as it relates
to an argument raised by the defendant in this case. At para. 47, the court
said:

It is important to remember that
when MPIC pays compensation to an injured party, it does so according to a
statutory system that may not include heads of damages which would attract
compensation at common law.

[33]        
The Court of Appeal’s analysis of MPI’s rights under s. 77 is
instructive because s. 76, which is at issue in this case, similarly uses the
language of subrogation. That language has not been removed from s. 76 as it
has from s. 77.

[34]        
In Matilda v. MacLeod, 2000 BCCA 1 [Matilda], our
Court of Appeal dealt with a case very similar to the one at bar. There, the
plaintiff, who was a resident of the United States, was injured in a motor
vehicle accident in B.C. He received medical benefits from his insurer,
Progressive Casualty Insurance Company (“Progressive”), who then sought to
recover the amount of those benefits from the defendant or ICBC. As in the
present case, the issue was brought in the form of a Special Case.

[35]        
At first instance (Matilda v. MacLeod (1997), 1 C.C.L.I. (3d) 94),
Mr. Justice J. T. Edwards held that Progressive could not recover the amount of
the benefits paid by virtue of the application of s. 25(2) of the Insurance
(Motor Vehicle) Act, R.S.B.C. 1996, c. 231, the predecessor section
to the now s. 83(2) of the IVA. The effect of that section was to
release ICBC for the amount of any medical benefits paid or payable to the
plaintiff. Mr. Justice Edwards found that Progressive had no statutory right of
subrogation thus it was subject to common law principles. He said at para. 23:

The common law right of
subrogation is derivative. Progressive can only pursue its subrogated claim
through the person of the plaintiff and recover no more from the defendant than
the plaintiff himself is entitled to receive.

[36]        
The Court of Appeal dismissed Progressive’s appeal. In that court,
Progressive argued that under its policies of insurance, it had a subrogated
right to recover the amounts it paid from the torfeasors insured by ICBC. It
argued further that its rights could not be defeated by the release provision
in s. 25(2) because it is constitutionally impermissible for B.C. legislation
to modify policies of insurance made outside of the province.

[37]        
The Court of Appeal rejected that argument on the basis that s. 25(2) is
concerned with tort actions within B.C:

The focus of s. 25(1) and (2) is
on the tort action by Progressive’s insureds against ICBC’s insureds. The torts
are the motor vehicle accidents that occurred within British Columbia and
clearly are within provincial jurisdiction. The subsections simply provide that
accident benefits cannot be claimed in the B.C. tort actions irrespective of
where the policy paying the benefits was made. That does not purport to modify
the terms of the extra-provincial policies. It merely limits the damages
recoverable in tort whether by the insured beneficially or Progressive as
subrogated claiming in the name of its insureds (Matilda at para. 8).

[38]        
Progressive recently sought to revisit the outcome from Matilda
in Middleton v. Heerlein, 2015 BCSC 1236 [Middleton]. Similar
to Matilda, Progressive insured a married couple from Washington State
who were both injured in an accident in B.C. and both received benefits from
Progressive under their insurance policies. Progressive, through its insureds,
sought recovery in their B.C. tort actions of the amount of the benefits paid.

[39]        
Progressive argued that Matilda was no longer good law because
when the former Insurance (Motor Vehicle) Act, which was in place when Matilda
was decided, was replaced by the IVA, the statutory right of subrogation
was extended to other insurers beyond ICBC. Mr. Justice Johnston rejected that
argument and held that Matilda remains good law and was a full answer to
Progressive’s claim (Middleton at para. 21).

[40]        
In Unifund Assurance Co. v. Insurance Corp. of British Columbia,
2003 SCC 40 [Unifund], the Supreme Court addressed a similar fact
situation in which an out-of-province insurer sought to recover benefits paid
to its insured following a motor vehicle accident in B.C.

[41]        
There, a married couple, who were Ontario residents, were injured when
their rental car was struck by a tractor-trailer on the upper levels highway in
North Vancouver. Both were injured and both subsequently received statutory
benefits from their Ontario insurer, Unifund Assurance Company (“Unifund”). Under
s. 275 of the Ontario Insurance Act, R.S.O. 1990, c. I.8, an insurer
that pays statutory benefits is entitled to seek indemnification from the
insurer of any heavy commercial vehicle involved in the accident. Pursuant to
that right, Unifund applied to the Ontario Superior Court of Justice for the
appointment of an arbitrator to determine the question of indemnification. ICBC
brought a cross-application for a stay of the proceeding on the basis that the
Ontario insurance scheme could not constitutionally apply to it on the facts of
the case.

[42]        
By a narrow 4-3 majority, the Supreme Court decided the case in favour
of ICBC on the ground that the Ontario legislation is constitutionally
inapplicable to it. Speaking for the majority, Mr. Justice Binnie said at para.
83:

The most that can be said for [Unifund]
in this case is that the fact of a motor vehicle accident in British Columbia
triggered certain payments in Ontario under Ontario law. However, the fact the
Ontario legislature has chosen to attach legal consequences in Ontario to an event
(the motor vehicle accident) taking place elsewhere does not extend its
legislative reach to a resident of “elsewhere”. It can also be said that these
payments in Ontario, in turn, triggered a deduction of an equivalent amount
under the laws of British Columbia. Again, however, the decision of the British
Columbia legislature to attach legal consequences (the deduction) in that
province to an event that occurred in Ontario (the SAB payments) does not bring
the appellant (beneficiary under the British Columbia legislation) into the
orbit of the Ontario legislature for the purpose of taking away the British
Columbia benefit in favour of an Ontario insurance company.

[43]        
A decision central to the position of both parties on this Special Case
is Gurniak v. Nordquist, 2003 SCC 59 [Gurniak], the leading
decision on the interpretation of s. 25 of the Insurance (Motor Vehicle)
Act, now s. 83 of the IVA. In that case, a Quebec resident was
killed in an accident in B.C. and his spouse and children received various statutory
benefits under the Quebec no-fault scheme. An action was also commenced in B.C.
under the Family Compensation Act, R.S.B.C. 1996, c. 126, which
the parties settled. At issue was whether any of the Quebec benefits could be
deducted from the settlement amount.

[44]        
The case turned on the proper interpretation of s. 25 which provided for
the deductibility of benefits paid under other contracts or plans of insurance
that are “similar” to the benefits described in Part 6 of the now repealed B.C.
Insurance Act, R.S.B.C. 1996, c. 226.

[45]        
The Court’s analysis focussed on the meaning of the word “similar” and
whether the Quebec benefits were similar to the B.C. benefits so as to be
deductible. The Court found that the benefits were deductible and the following
passages from the majority decision of Mr. Justice Iacobucci are particularly
relevant:

Obviously, “similar” does not mean “identical”. Benefits may
be similar in kind while differing in quantum. “Similar” does not refer to the
system of law in which the benefits originate, the overall regime under which
they are administered or the legal process by which they are claimed. To my
mind, the legislature’s use of the word “similar” in this context was intended
to convey the principle that the benefits in question must be of the same general
nature or character as the benefits described in Part 6 of the British Columbia
Insurance Act.

In my view, there is no need to engage in a comprehensive
comparative analysis of the benefits under the two regimes, as it is readily
apparent that the benefits are indeed broadly “similar” within the
meaning of s. 25(1) of the Insurance (Motor Vehicle) Act. The Quebec
accident benefits, while differing significantly in quantum, are of the same
general nature or character as those found in part 6 of the British Columbia Insurance
Act.

Though [there] is a significant difference between the
overall regimes in British Columbia and Quebec, this does not mean that
the benefits under both schemes are not “similar” within the meaning of
s. 25 of the British Columbia Insurance (Motor Vehicle) Act. An analysis
of similarity pursuant to this section requires only a consideration of whether
the benefits – not the overall insurance regimes – are of the same general
nature and character (at paras. 31-33).

[Emphasis in original.]

[46]        
The majority rejected the argument, emanating from earlier B.C. Court of
Appeal decisions, that there must be a match between the specific heads of
damage in a tort award and the heads of damage under the insurance contract or
benefit scheme in issue in order for a deduction to be made. Mr. Justice Iacobucci
said at para. 45:

This approach has the benefit of
simplicity and ease of application and likely explains why British Columbia
chose not to introduce an explicit matching requirement into the statute, when
it could readily have done so. A trial judge, once he or she has determined
that the benefits under the two regimes are broadly similar under s. 25(1),
will deduct from the tort award any benefits already received in respect of the
claim for damages arising from the motor vehicle accident. The trial judge will
not be required to engage in a complicated and cumbersome process of “matching”
a head of damage in tort to a particular claim for damages under a statutory
scheme. This interpretation of s. 25(2) is supported by the fact that under
some statutory schemes, the benefits received are not neatly classified into
the various heads of damage for which they compensate, thereby making it nearly
impossible for trial judges to give meaningful effect to any sort of matching
principle.

[47]        
The following key principles emerge from the authorities:

1.     Section 76
of the MPICA purports to confer on MPI a right of subrogation for the
purpose of enabling MPI to pursue recovery of statutory benefits paid to its
insureds in connection with motor vehicle accidents that occur outside of
Manitoba. As a right of subrogation, as distinct from a statutory right of
recovery, MPI is limited to seeking recovery of only the amount that would be
payable in a tort action;

2.     As a
matter of constitutional law, a provincial legislature may not legislate beyond
its territorial competence so as to affect civil rights in another province;

3.     Where an
out-of-province insurer pays benefits to an insured who is injured in an
accident in B.C., those benefits are deductible from any damages award made in
a tort action in B.C. to the extent that they are similar to benefits payable
under Part 7 of the Regulation; and

4.     The
question of similarity is to be assessed by reference to the general nature and
character of the benefits in issue and a precise match is not required.

[48]        
These principles inform the analysis of the questions posed in this
Special Case.

Analysis

Preliminary Issue

[49]        
Before turning to the questions posed in the Special Case, I will
address an issue that arose during the course of the hearing. As noted in
paragraph 14 above, MPI signed an indemnity agreement with Ms. Kozokowsky
pursuant to which it is entitled to recover from her the amount of any PIPP
benefits recovered in a court action. Further, as noted in paragraph 15, Ms. Kozokowsky
executed a release in favour of the defendant upon the settlement of her action
in B.C.

[50]        
I raised with counsel whether either or both of these factors would
preclude MPI from now suing the defendant to recover the amount of PI Benefit
paid, given that it is a subrogated claim and the law is clear that an insurer stands
in no better position than its insured: Matilda at para. 7.

[51]        
While counsel for both parties acknowledged that MPI’s claim might well
be defeated in the circumstances, the defendant does not seek to rely on either
the indemnity agreement or the release. Rather, the parties agree that this is
a test case and they ask that the court decide the matter by reference to
general principles and without regard to the specific limiting factors present
in this case.

[52]        
In light of the position taken by both parties, I agreed to do so. I
will therefore address each of the three questions posed in the Special Case.

Question one: Is the PI Benefit in s. 127 of the MPICA an injury, loss, damage or expense that raises a claim
under a head of damages that may be claimed against the defendant in tort?

[53]        
The defendant submits that the recovery of the PI Benefit is not a
legally recognized head of damages for which a claim in tort can be advanced. He
notes again that under the MPICA, MPI has a right of subrogation
pursuant to which it can only advance claims that could be made by its insured.

[54]        
In this regard, it is useful to recall the observation of the Manitoba
Court of Appeal in Waterloo, reproduced at para. 32 above, that the
statutory compensation payable by MPI does not always correspond to heads of
damage recoverable in tort.

[55]        
For its part, MPI submits that there is no authority cited in support of
the defendant’s position and that, in any event, it is acting pursuant to the
statutory authority conferred by s. 76 of the MPICA.

[56]        
I agree with MPI that the issue raised by the defendant under this
question is not a bar to MPI’s claim. As MPI notes, notwithstanding the fact
that similar issues have been litigated on numerous occasions, the authorities
do not support the defendant’s contention that the statutory benefits must align
with a head of damages recoverable in a claim in tort.

[57]        
Indeed, to require such an alignment would be contrary to the Supreme
Court’s finding in Gurniak that the court should not engage in the
cumbersome process of matching a head of damage in tort to a particular
statutory benefit.

[58]        
Further, I would note that, in any event, the PI Benefit on its face is
payable in respect of injuries sustained in a motor vehicle accident and, as
such, is of the same nature or character as damages recoverable in a tort action.

[59]        
Lastly, I agree with MPI that it is acting pursuant to the statutory
authority granted to it under s. 76 of the MPICA. However, on this
point, it is important to keep in mind again that pursuant to that section, MPI
is granted a right of subrogation as distinct from a statutory right of
recovery. If the legislation purported to grant MPI a statutory right of
recovery from a B.C. resident in respect of an accident that occurred in B.C.,
it would suffer from the same constitutional limitation that the court found in
Unifund.

[60]        
Pursuant to its right of subrogation, MPI may advance its claim for recovery
of the PI Benefit in the B.C. tort action. The answer to question one is
therefore “yes”. However, the right of subrogation is narrowly defined and is
subject to any defences or limiting principles that may be raised by the
defendant in the B.C. action, including the application of s. 83 of the IVA.
That is the focus of the second question in the Special Case.

Question two: Is the PI Benefit in s. 127 of the MPICA “similar” to those within the definition of “benefits” in
sections 1.1 and 83 of the IVA?

[61]        
As MPI submits, this is the crux of the issue between the parties. It
says that the PI Benefit is not a prescribed benefit within the meaning of s.
1.1 of the IVA, those being Part 7 benefits, nor is it similar to such
benefits according to the Gurniak analysis. MPI does not take issue with
the fact that the similarity analysis must be based on the general nature or
character of the benefits in issue but submits that even applying such a high
level comparison leads to the conclusion that the benefits are not similar.

[62]        
In contrast, the defendant submits that the PI Benefit is of the same
general character as the benefits available under Part 7 of the Regulation
in that both are intended to provide compensation for injuries resulting from a
motor vehicle accident. He says that this broad similarity is sufficient to
trigger the application of s. 83 of the IVA.

[63]        
I agree with the defendant.

[64]        
Part 2 of the MPICA, in which s. 76 is found, is headed
“Universal Bodily Injury Compensation” and, pursuant to s. 71(1), it “applies
to any bodily injury
suffered by a victim in an accident”. Thus, on its face, the Manitoba
legislation is intended to compensate individuals injured in motor vehicle
accidents.

[65]        
By
comparison, Part 7 of the Regulation is headed “Accident Benefits” and
pursuant to s. 79 thereof, ICBC will “pay benefits to an insured in
respect of death or injury caused by an accident that arises out of the use or
operation of a vehicle.”

[66]        
The language used in the different provisions is strikingly similar and,
as such, satisfies the Gurniak test, with the result that the “full
panoply of accident insurance benefits” (emphasis in original) are deductible
and subject to the release provision in s. 83 of the IVA (Gurniak at
para. 44).

[67]        
In Westmount (City) v. Rossy, 2012 SCC 30, the Supreme
Court of Canada described the Manitoba no-fault accident benefit scheme as
being modelled after the Quebec scheme (at para. 31). As the defendant submits,
given the similarities between the Manitoba and Quebec schemes, it would be an
unusual result for the Quebec benefits to be deductible pursuant to s. 83, as
per Gurniak, but not the Manitoba benefits.

[68]        
Building on this point, as seen by the review of the relevant case law
at paras. 24-47 above, courts on numerous previous occasions have found
against the position now taken by MPI in this case. In my view, there is no
basis on which to depart from those authorities and to come to a different
conclusion here.

[69]        
I would therefore answer “yes” to the second question posed in the
Special Case.

Question three: Is the PI Benefit in s. 127 of the MPICA a collateral benefit deductible from any tort claim
against the defendant?

[70]        
The third question in the Special Case is posed by the defendant as an
alternative to his position on question two. Given my answer to question two,
it is technically not necessary to answer question three. However, in order to
assist the parties in this test case, I will do so nonetheless.

[71]        
The defendant submits that the PI Benefit is a collateral benefit
provided under mandatory vehicle insurance in Manitoba and as such the private
insurance exception to the collateral benefits rule does not apply.

[72]        
MPI submits that where a third party has paid benefits to an insured
party and has a right of subrogation, the collateral benefits rule has no
application. MPI cites Cunningham v. Wheeler; Cooper v. Miller; Shanks
v. McNee, [1994] 1 S.C.R. 359, 113 D.L.R. (4th) 1, in support of its
position.

[73]        
I agree with MPI. In bringing its action, MPI is acting pursuant to s.
76 of the MPICA. As noted above, that section authorizes it to bring a
subrogated claim in B.C. but it does not confer a statutory right of recovery
as to do so again, would exceed the territorial competence of the Manitoba
legislature. As set out above, because MPI has a subrogated claim, it is
subject to the release provision in s. 83 of the IVA which operates to
defeat MPI’s claim.

[74]        
In my view, the collateral benefits rule has no application in this case
and accordingly, I would answer “no” to question three.

Conclusion

[75]        
In summary, I would answer the questions posed in the Special Case as
follows:

Question one:         Yes

Question two:          Yes

Question three:       No

[76]        
Declarations to this effect may be included in the formal order.

[77]        
Neither party sought costs. In the circumstances, I decline to make any
order for costs although the parties are at liberty to speak to the issue if
they cannot agree.

“Skolrood
J.”