Millott Estate et al. v. Reinhard et al., 2002 ABQB 761

• Judge: Fraser, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 13, 2002
• Citations: 2002 ABQB 761;(2002), 322 A.R. 174 (QB)

Millott Estate v. Reinhard (2002), 322 A.R. 174 (QB)

MLB headnote and full text

Temp. Cite: [2002] A.R. TBEd. AU.066

Lauretta Millott As Administratrix of the Estate of James Ian Millott, the Estate of James Ian Millott, Lauretta Millott, Steven Millott and Samantha Millott, a Minor by Her Next Friend Lauretta Millott (plaintiffs) v. Carl Ivar Reinhard, Williams Moving & Storage (Cranbrook) Ltd., Reinhard Moving & Storage Ltd. and Univan Leasing Limited (defendants)

(Action No. 9901-15453; 2002 ABQB 761)

Indexed As: Millott Estate et al. v. Reinhard et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Fraser, J.

August 20, 2002.

Summary:

Millott was killed when the motorcycle he was riding collided with a tractor-trailer. His estate, wife and children sued the tractor-trailer driver and the owners of the tractor and trailer.

The Alberta Court of Queen's Bench, in a decision reported at 306 A.R. 1, held that the defendant driver's negligence was the sole cause of the accident, Millott was not contributorily negligent and the owner defen­dants were jointly and severally liable for the damages on the basis of vicarious liability. The court assessed damages. Fur­ther issues respecting damages arose.

The Alberta Court of Queen's Bench determined the issues accordingly.

Damages - Topic 1747

Deductions for payments or assistance by third parties - Contractually - Insurance - No-fault benefits - A husband/father was killed in a motor vehicle accident - At issue, inter alia, was whether Section B benefits paid to "dependent relatives" should be deducted from his wife's dam­ages, his daughter's damages or appor­tioned between them - The Alberta Court of Queen's Bench noted that Section B, Subsection 2, Part 1(3), stated that "the total sum payable shall be paid with respect to death of head of household or spouse to the surviving spouse" - That indicated that the entire amount was paid to the wife - In light of that provision and given the lack of evidence as to whether the daughter ultimately received any of that benefit, the entire amount paid in Section B benefits should be deducted from the wife's damages - See paragraphs 58 to 63.

Damages - Topic 2113

Torts causing death - Method of assess­ment of value of the dependency (lump sum) - Upward adjustment for future income or income tax - To prevent double recovery, an estate award (loss of deceased's future income) had to be deducted from a dependency award based on the deceased's lost income - The Alberta Court of Queen's Bench held that only the net amount remaining after the reconciliation was subject to tax gross-up - See paragraphs 11 to 13.

Damages - Topic 2113

Torts causing death - Method of assess­ment of value of the dependency (lump sum) - Upward adjustment for future income or income tax - The Alberta Court of Queen's Bench discussed the evidence required for calculation of a tax gross-up on a dependency award for income - See paragraphs 21 to 33.

Damages - Topic 2113

Torts causing death - Method of assess­ment of value of the dependency (lump sum) - Upward adjustment for future income or income tax - The Alberta Court of Queen's Bench agreed that "... the assessment of damage awards for manage­ment fees and tax gross-up are to be made on the amount of damages awarded for future losses as laid down in the author­ities, without deduction for the plaintiff's legal costs or other expenditure she may choose to make from the amounts recovered." - See paragraphs 39 to 40.

Damages - Topic 2113

Torts causing death - Method of assess­ment of value of the dependency (lump sum) - Upward adjustment for future income or income tax - A trial judge was unable to decide the tax gross-up issue with respect to dependency and estate awards in the original part of the trial because the parties did not present evi­dence or argument at that time - The Al­berta Court of Queen's Bench sub­se­quent­ly held that "the correct approach, consistent with policy and pre­cedent, is to set the past/future loss demar­cation (which deter­mines how much of the damages award will attract tax gross-up) at the original judgment date" - See para­graph 44.

Income Tax - Topic 3605

Amounts not included in computing income - Income from property acquired through damage award respecting injury to minor - The Alberta Court of Queen's Bench interpreted s. 81(1)(g.1) of the Income Tax Act as exempting a person under 21 from paying tax on interest income only where that income was derived from an award for the person's own injuries - The court held that a child's obvious trauma of tragically losing her father was not an included injury in s. 81(1)(g.1) - See paragraphs 49 to 52.

Cases Noticed:

Brooks et al. v. Stefura (2000), 266 A.R. 239; 228 W.A.C. 239 (C.A.), appld. [para. 7].

Watkins v. Olafson et al., [1989] 2 S.C.R. 750; 100 N.R. 161; 61 Man.R.(2d) 81, refd to. [para. 19].

Watkins v. Olafson et al. (1986), 40 Man.R.(2d) 286 (Q.B.), refd to. [para. 23].

McErlean v. Brampton (City) et al. (1987), 22 O.A.C. 186; 61 O.R.(2d) 396 (C.A.), refd to. [para. 25].

Townsend v. Kroppmanns et al. (2002), 171 B.C.A.C. 11; 280 W.A.C. 11 (C.A.), folld. [para. 31].

O'Hara et al. v. Belanger (1989), 98 A.R. 86 (Q.B.), refd to. [para. 33].

Morrison v. Coulter et al. (1990), 51 B.C.L.R. (2d) 203 (S.C.), revd. (1991), 3 B.C.A.C. 24; 7 W.A.C. 24; 82 D.L.R.(4th) 568 (C.A.), refd to. [para. 38].

Morrison v. Hicks et al. - see Morrison v. Coulter et al.

O'Brien v. Anderson (1999), 6 B.C.T.C. 15 (S.C.), revd. (2000), 142 B.C.A.C. 45; 233 W.A.C. 45 (C.A.), refd to. [para. 38].

Statutes Noticed:

Income Tax Act R.S.C. 1985 (5th Supp.), c. 1, sect. 81(1)(g.1) [para. 49].

Counsel:

M.B. Warren and N.C. Mayer, for the plaintiffs;

K.B. Haluschak, for the defendants.

This matter was heard on April 17-19 and May 13, 2002, by Fraser, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following deci­sion on August 20, 2002.