Cooper v. Miller (No. 1), (1994) 164 N.R. 81 (SCC)

• Judge: Cory, McLachlin, Iacobucci and Major, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 04, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1994), 164 N.R. 81 (SCC);[1994] 4 WWR 153;164 NR 81;EYB 1994-28672;88 BCLR (2d) 273;46 ACWS (3d) 863;JE 94-496;[1994] CarswellBC 121;113 DLR (4th) 1;23 CCLI (2d) 205;20 CCLT (2d) 1;[1994] 1 SCR 359;[1994] SCJ No 19 (QL);1994 CanLII 120 (SCC);41 BCAC 1;66 WAC 1

Cooper v. Miller (1994), 164 N.R. 81 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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John Earl Miller (appellant) v. Mariea Cooper (respondent) and Confederation Life Insurance Company, The Great-West Life Assurance Company and London Life Insurance Company (intervenors)

Samuel H. Shanks (appellant) v. Thomas Harry McNee and Beverly Ann McNee (respondents)

Thomas Harry McNee and Beverly Ann McNee (appellants) v. Samuel H. Shanks (respondent) and Confederation Life Insurance Company, The Great-West Life Assurance Company and London Life Insurance Company (intervenors)

Bradwell Henry Cunningham (appellant) v. Cherylee Lyn Wheeler and Edward Kenneth Wheeler (respondents) and Confederation Life Insurance Company, The Great-West Life Assurance Company and London Life Insurance Company (intervenors)

(Nos. 22860; 22863; 22867)

Indexed As: Cooper v. Miller (No. 1)

Supreme Court of Canada

La Forest, L'Heureux-Dubé, Sopinka,

Cory, McLachlin, Iacobucci and Major, JJ.

March 17, 1994.

Summary:

Cooper, Shanks and Cunningham (the plaintiffs) were injured in separate motor vehicle accidents and commenced separate actions for damages against various de­fendants. In each case the plaintiffs were successful. Also in each case damages for lost earnings were calculated without any reduction for disability payments received pursuant to the plaintiffs' employment con­tracts. The defendants appealed, arguing that such benefits should be deducted in calcu­lating lost wages.

The British Columbia Court of Appeal, in a decision reported 6 B.C.A.C. 268; 13 W.A.C. 268, dismissed the appeal in the Cooper case, but allowed the appeals in the Shanks and Cunningham cases. Various appeals and cross-appeals were filed.

The Supreme Court of Canada, dealt with the appeals accordingly, ruling on the issue of deductibility of disability payments from damages for lost wages and on the issue of reduction of damages for lost wages for income tax. McLachlin, La Forest and L'Heureux Dubé, JJ., dissented.

Damages - Topic 1412

Special damages - Loss of wages - De­ductions - Income tax - Shanks was injured in a motor vehicle accident and was awarded damages for past wage loss - The Supreme Court of Canada held that Shanks' damages for lost income should not be reduced by the amount of tax which would have been payable had he earned that amount as income - The court stated that taxation of damages for lost income is a question that should be left to the legis­latures and is a question of tax policy and not of tort law - See paragraphs 57 to 63.

Damages - Topic 1550.1

General damages - Personal injuries - Pretrial loss of wages or earnings - [See Damages - Topic 1412 ].

Damages - Topic 1732

Deductions for payments or assistance by third parties - Contractually - From employer - Wages - General - [See sec­ond to sixth Damages - Topic 1736 ].

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - The Supreme Court of Canada stated that "for over 119 years, the courts of England and Canada have held that payments received for loss of wages pursuant to a private policy of insurance should not be deducted from the lost wages claim of a plaintiff ..." - The court stated further that "... there are convincing reasons both for the existence of the policy and its continuation" - See paragraph 8 - The court thereafter reviewed the history of the insurance exception - See paragraphs 9 to 19 - The court then discussed whether the insurance exemption should apply where disability benefits are obtained pursuant to a collec­tive bargaining agreement, rather than privately - See paragraphs 20 to 30.

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - The Supreme Court of Canada held that pay­ments received for loss of wages pursuant to a private insurance policy should not be deducted from a plaintiff's lost wages claim - The court stated that "where evi­dence is adduced that an employee-plain­tiff has paid in some manner for his or her benefits under a collective agreement or contract of employment, the insurance exception should apply" - See paragraph 23 - "Further, the presence or absence of a third party carrier for the insurance will not affect the non-deductibility of the benefits from the wage claim" - See para­graph 29 - The court thereafter discussed what proof is necessary to establish the insurance policy nature of disability bene­fits paid under a collective agreement or employment contract - See paragraphs 31 to 34.

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - Cunningham was injured in a motor vehicle accident caused by the defendant Wheeler - Cunningham received disability benefits for several weeks pursuant to a collective bargaining agreement - No deductions were made from his pay for premiums for disability benefits - The Supreme Court of Canada held that the collateral benefits obtained by Cunningham under the collective bargaining agreement were in the nature of a private policy of insurance, and like benefits obtained under a private insurance policy, the benefits should not be deducted from Cunning­ham's claim against the defendant for damages for lost wages - See paragraphs 2 to 35.

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - Cooper was injured in a motor vehicle accident caused by the defendant Miller - Cooper received disability benefits under accident and sickness insurance provided under a collective agreement - She paid directly for 30% of the premium cost which was deducted from her pay cheque - The Supreme Court of Canada held that the disability benefits were in the nature of an insurance policy, and as such, they should not be deducted from the lost wages recovered from the defendant - See paragraphs 36 to 44.

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - Shanks was injured in an automobile acci­dent caused by the defendant McNee - Shanks received benefits under a short-term and a long-term disability benefits under a collective agreement - Shanks paid 30% of the long-term disability pre­miums - No payroll deduction was made for the short-term disability premiums, however the agreement provided that in certain circumstances the employer retained the employee's 5/12th share of the unemployment insurance plan premium reduction as payment for the short-term plan - The Supreme Court of Canada held that both the short-term and long-term benefits were in the nature of insurance and should not be deducted from Shanks' claim for lost wages - See paragraphs 45 to 55.

Damages - Topic 1736

Deductions for payments or assistance by third parties - Contractually - Wages - Payable under collective agreement - The Supreme Court of Canada held that pay­ments received for loss of wages pursuant to a private insurance policy or under a collective agreement or contract of em­ployment, provided that the employee-plaintiff has paid in some manner for the employment benefits, should not be deducted from a plaintiff's lost wages claim - The court discussed whether subrogation was relevant in considering the issue of deductibility of disability benefits - See paragraph 56.

Damages - Topic 1746

Deductions for payments or assistance by third parties - Contractually - Insurance - Disability insurance - [See all six Dam­ages - Topic 1736 ].

Cases Noticed:

Ratych v. Bloomer, [1990] 1 S.C.R. 940; 107 N.R. 335; 39 O.A.C. 103; 69 D.L.R.(4th) 25; 30 C.C.E.L. 161; 3 C.C.L.T.(2d) 1, consd. [para. 6 et seq.].

Bradburn v. Great Western Rail Co., [1874-80] All E.R. Rep. 195 (Ex. Div.), refd to. [paras. 9, 78].

Shearman v. Folland, [1950] 1 All E.R. 976 (C.A.), refd to. [para. 11].

Browning v. War Office, [1962] 3 All E.R. 1089 (C.A.), refd to. [para. 12].

Parry v. Cleaver, [1969] 1 All E.R. 555 (H.L.), refd to. [paras. 13, 80].

Hussain v. New Taplow Paper Mills Ltd., [1988] A.C. 514; [1988] 1 All E.R. 541; 86 N.R. 308 (H.L.), refd to. [paras. 14, 83].

Tubb v. Lief and Gordon, [1932] 3 W.W.R. 245 (Sask. C.A.), refd to. [para. 15].

Dawson v. Sawatzky, [1946] 1 W.W.R. 33 (Sask. C.A.), refd to. [para. 15].

Bourgeois v. Tzrop (1957), 9 D.L.R.(2d) 214 (N.B.C.A.), refd to. [para. 15].

Boarelli v. Flannigan, [1973] 3 O.R. 69 (C.A.), refd to. [para. 15].

Chan v. Butcher, [1984] 4 W.W.R. 363 (B.C.C.A.), refd to. [para. 15].

Gill v. Canadian Pacific Ltd., [1973] S.C.R. 654, refd to. [paras. 15, 77].

Guy v. Trizec Equities Ltd., [1979] 2 S.C.R. 756; 27 N.R. 301; 32 N.S.R.(2d) 345; 54 A.P.R. 345, refd to. [paras. 15, 77].

Cirella v. R., [1978] 2 F.C. 195; 83 D.L.R.(3d) 553, refd to. [para. 57].

R. v. Jennings, [1966] S.C.R. 532, refd to. [para. 58].

Andrews v. Grand & Toy (Alberta) Ltd., [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182; 83 D.L.R.(3d) 452; [1978] 1 W.W.R. 577; 3 C.C.L.T. 225, refd to. [paras. 58, 109].

Watkins v. Olafson et al., [1989] 2 S.C.R. 750; 100 N.R. 161; 61 Man.R.(2d) 81; 61 D.L.R.(4th) 577; [1989] 6 W.W.R. 481; 39 B.C.L.R.(2d) 294; 50 C.C.L.T. 101, refd to. [para. 58].

British Transport Commission v. Gourley, [1956] A.C. 185; [1955] 3 All E.R. 796 (H.L.), refd to. [para. 58].

National Insurance Co. of New Zealand v. Espagne (1961), 105 C.L.R. 569 (Aus. H.C.), refd to. [para. 58].

O'Brien v. McKean (1968), 118 C.L.R. 540 (Aus. H.C.), refd to. [para. 58].

Livingstone v. Rawyards Coal Co. (1880), 5 App. Cas. 25 (H.L.), refd to. [para. 70].

Hodgson v. Trapp, [1988] 3 All E.R. 870; [1988] 3 W.L.R. 1281; 102 N.R. 287 (H.L.), refd to. [para. 70].

Graham v. Baker (1961), 106 C.L.R. 340 (Aus. H.C.), refd to. [para. 85].

Propeller Monticello v. Mollison (1854), 58 U.S. (17 How.) 152, refd to. [para. 86].

Statutes Noticed:

Civil Code of Quebec, S.Q. 1991, c. 64, art. 1608 [paras. 19, 124]; art. 2474 [para. 124].

Insurance Act, R.S.O. 1990, c. I-8, sect. [para. 19].

Authors and Works Noticed:

Brown, Craig and Julio Menezes, In­surance Law in Canada (2nd Ed. 1991), p. 1:1:7 [para. 77].

David, An Update on Collateral Benefits: Ratych v. Bloomer (1992), 14 Advocates' Q. 221, generally [para. 126].

David, Collateral Benefits: Ratych v. Bloomer (1990), 12 Advocates' Q. 124, generally [para. 126]

Dougans, Gillian, Collateral Benefits: Some Further Thoughts (1991), 49 Ad­vocate 43, generally [para. 126].

Flaherty, James M., A Purposeful Uniform Collateral Benefits Rule (1991), 3 C.I.L.R. 1, generally [para. 116]; p. 3 [para. 125].

Fleming, John G., The Law of Torts (8th Ed. 1992), p. 246 [para. 87].

Krishna, Vern, The Fundamentals of Ca­nadian Income Tax (4th Ed. 1993), pp. 315, 316 [para. 57].

Ontario Law Reform Commission, Report on Compensation for Personal Injuries and Death (1987), pp. 54 [para. 60]; 189 [para. 114].

Ontario, Report of Inquiry into Motor Vehicle Accident Compensation in Ontario (1988), vol. 1, pp. 429 [para. 77]; 430 [para. 114]; 438 [para. 122].

Quebec, Code Civil du Québec: commen­taires du ministre de la Justice, 1993, Commentary of Article 1608 [para. 19].

Shuman, Daniel W., The Psychology of Deterrence in Tort Law (1993), 42 Kan. L. Rev. 115, generally [para. 103].

Taylor, Christopher A., When is a Loss Not a Loss?: The Deductibility of Col­lateral Benefits after Ratych v. Bloomer (1990), 12 Advocates' Q. 231, generally [para. 126].

Counsel:

Mark M. Skorah, Guy Brown and Cheryl Talbot, for J.E. Miller, T.H. McNee, B.A. McNee, C.L. Wheeler and E.K. Wheeler;

Kenneth W. Thompson, for Mariea Cooper;

John F. Carten, for S.H. Shanks;

Richard Sugden and Robin N. McFee, for B.H. Cunningham;

P.G. Foy and C.A. Arthurs, for the intervenors.

Solicitors of Record:

Harper Grey Easton, Vancouver, British Columbia, for J.E. Miller, T.H. McNee, B.A. McNee, C.L. Wheeler and E.K. Wheeler;

Ramsay, Thompson, Lampman, Nanaimo, British Columbia, for Mariea Cooper;

John F. Carten, Comox, British Columbia, for S.H. Shanks;

Sugden McFee & Roos, Vancouver, British Columbia, for B.H. Cunningham;

Ladner Downs, Vancouver, British Columbia, for the intervenors.

This appeal was heard on November 4, 1993, before La Forest, L'Heureux-Dubé, Sopinka, Cory, McLachlin, Iacobucci, and Major, JJ., of the Supreme Court of Canada. The decision of the court was delivered on March 17, 1994, in both official languages, including the following opinions:

Cory, J. (Sopinka, Iacobucci and Major, JJ., concurring) - see paragraphs 1 to 65;

McLachlin, J., dissenting (La Forest and L'Heureux-Dubé, JJ., concurring) - see paragraphs 66 to 131.