COURT OF APPEAL FOR ONTARIO

CITATION: Cadieux v. Cloutier, 2018 ONCA 903

DATE: 20181204

DOCKET: C63160

Strathy C.J.O., Hoy A.C.J.O., Feldman, Brown and
    Paciocco JJ.A.

BETWEEN

Chad Cadieux, by his Litigation Guardian Michael
    Cadieux,
Michael Cadieux and Lance Cadieux

Plaintiffs
(Respondents/Appellants by way of cross-appeal)

and

Susan Cloutier, Pilot Insurance Company,
Eric
    Saywell
and the Wawanesa Mutual Insurance Company

Defendants

(Appellant/Respondent by way of cross-appeal)

David A. Zuber and Joshua J.A. Henderson, for the
    appellant/respondent by way of cross-appeal Eric Saywell

Allan Rouben and Éliane Lachaîne, for the respondents/appellants
  by way of cross-appeal

Kristian Bonn, for the intervener Ontario Trial Lawyers
    Association

Heard: May 1-2, 2018

On appeal from the judgments of Justice Charles T.
    Hackland of the Superior Court of Justice, sitting with a jury, dated December
    12, 2016 and December 23, 2016, with reasons reported at 2016 ONSC 7604, 63
    C.C.L.I. (5th) 79.

By the Court:

A.

Introduction

[1]

These reasons, and the reasons in
Carroll v.
    McEwen
, 2018 ONCA 902

released concurrently, address,
    among other issues, the intersection of tort damages and statutory accident
    benefits ("SABs") under s. 267.8 of the
Insurance Act
, R.S.O. 1990, c.
    I.8. This appeal concerns the deduction from the tort damages award of SABs paid
    before trial. The
Carroll
appeal concerns the assignment of future
    SABs to the tort liability insurer.

[2]

Both appeals require this court to determine how
    SABs are matched to tort damages for deduction and assignment purposes in
    accordance with the statute. Two different methods of matching SABs with tort
    awards, reflecting different interpretations of the statute, have developed in
    the case law.

[3]

One approach requires
temporal
    and qualitative matching of SABs to heads of tort damages
(the so-called "apples to apples" or strict matching approach) and is
    based on this court’s decision in
Bannon v. McNeely
(1998), 38 O.R. (3d) 659
(C.A.).
Bannon
involved an earlier and much
    different statutory scheme. The reasoning in
Bannon

was based on the decision of the British
    Columbia Court of Appeal in
Jang v. Jang
(1991), 54 B.C.L.R. (2d) 121 (C.A.). The authority of that decision
    was subsequently questioned by the Supreme Court of Canada in
Gurniak v.
    Nordquist
, 2003 SCC 59, [2003] 2 S.C.R. 652.

[4]

More recently, a "silo" approach has been
    applied, which requires the tort award only to match generally with the broad
  corresponding SABs categories or silos.

[5]

This court’s decision in
Gilbert v. South
, 2015 ONCA 712, 127
    O.R. (3d) 526 might be viewed as an application of the "apples to apples"
    approach in the assignment context, while this court’s decision in
Basandra
    v. Sforza
, 2016 ONCA 251, 130 O.R. (3d) 466 is an example of the silo
    approach in the deduction context.
This conflicting
    case law was most recently addressed by this court in
Cobb v. Long Estate
, 2017 ONCA 717, 416
    D.L.R. (4th) 222 and
El-Khodr v. Lackie
, 2017 ONCA 716, 416 D.L.R. (4th)
    189, leave to appeal refused, [2017] S.C.C.A. No. 461.
[1]

[6]

The
Carroll
appeal was initially heard
    by a panel of this court and was under reserve when this court released its
    decisions in
Cobb
and
El-Khodr
. The
Cadieux
appeal
    was scheduled to be heard in September 2017 when counsel for the respondent
    requested that a five-judge panel be constituted to determine whether this
    court’s decisions in
Bannon
and
Gilbert
, remain good law in
    light of
Cobb
and
El-Khodr
. That necessarily raised the issue
    of whether
Cobb
and
El-Khodr
themselves were correctly
    decided.

[7]

The
Cadieux
and
Carroll
appeals were heard together by a five-judge panel. The Ontario Trial Lawyers
    Association ("OTLA") was granted leave to intervene on the interpretation and
    impact of ss. 224 and 267.8 of the
Insurance Act
on civil trials and
    the retrospectivity of the amendment to the
Insurance Act
with respect
    to prejudgment interest.

[8]

For the reasons that follow in this case, and in
Carroll
, we affirm the silo approach to both deductibility and
    assignment of SABs set out at paras. 38-56 of
Cobb
and at paras. 33-72
    of
El-Khodr
. The silo approach is consistent with the statutory
    language of s. 267.8, is fair to plaintiffs, defendants and their insurers, and
    promotes efficiency in motor vehicle accident litigation. The decision of the
    Supreme Court of Canada in
Gurniak
questions the jurisprudential
    underpinnings of
Bannon
. In that light, and in view of subsequent
    changes to the
Insurance Act
,
Bannon
and
Gilbert
can
    no longer be regarded as binding authority in relation to the degree of "matching"
  required between tort damages and SABs for deduction and assignment purposes.

[9]

We begin with an overview of the relationship
    between SABs and tort damages, which sets the stage for the issues in both
    appeals.

B.

Statutory Accident Benefits and Tort Damages

(1)

Overview

[10]

Ontario’s automobile accident compensation
    scheme has two components. The first is based on mandatory automobile
    insurance, which provides "no-fault" first-party benefits (through SABs) to
    anyone injured in an automobile accident. The second component is a right to
    sue the "at fault" driver in a civil tort action, subject to certain statutory
    thresholds and deductibles, and a common law cap on non-pecuniary general
    damages:
Andrews v. Grand & Toy Alberta Ltd.
, [1978] 2 S.C.R. 229;
Thornton v. School District No. 57 (Prince George)
, [1978] 2 S.C.R.
    267;
Arnold v. Teno
, [1978] 2 S.C.R. 287.

[11]

SABs are the "no-fault" component of this scheme.
    They are available to anyone involved in a motor vehicle accident in Ontario,
    whether as driver, passenger, or pedestrian, and regardless of who was at
  fault.

[12]

There are three broad categories of SABs under
    the
Insurance Act
and the
Statutory Accident Benefits Schedule
,
    O. Reg. 34/10. These were referred to in
El-Khodr
as silos. The first
    category provides income replacement benefits or, if the person was not
    employed at the time of the accident, "non-earner" benefits, or "caregiver
    benefits", if they provided caregiver services to another person at the time of
  the accident.

[13]

The second category is health care benefits. "Health
    care" is a defined term in s. 224(1) of the
Insurance Act
. It
    "includes all goods and services for which payment is provided by the medical,
    rehabilitation and attendant care benefits provided for in the
Statutory
    Accident Benefits Schedule
." The
Statutory Accident Benefits Schedule
sets out in detail the available health care benefits. Health care expenses
    include medical, rehabilitation and attendant care benefits, goods and services
    of a medical nature, rehabilitation expenses, and services provided by an
    attendant or by a long-term care facility, nursing home, home for the aged, or
    chronic care hospital.

[14]

The third category of benefits addresses "other pecuniary
    loss", which includes lost educational benefits, expenses of visitors, and
  housekeeping and home maintenance expenses.

[15]

There are limits on the quantum of SABs and time
    period for which some SABs can be claimed, depending on the nature of the
    claimant’s injuries —  namely, whether they are classified as "catastrophic
    impairment", "non-catastrophic impairment", or within the "minor injury
    guideline". SABs are available to claimants immediately after the accident and
  on an ongoing basis.

[16]

The tort component of compensation permits an
    injured person to pursue a civil action for damages against the person(s)
    responsible for the accident. Subject to statutory thresholds and deductibles,
    and a common law cap on general damages, the plaintiff may claim all pecuniary
    and non-pecuniary losses incurred as a result of the accident. These can
    include past and future loss of income, medical expenses, costs of care, costs
    of housekeeping and home maintenance expenses, as well as general damages for
    pain and suffering and loss of enjoyment of life. In theory, an award of tort
    damages will put the injured plaintiff in the position that he or she would
    have been had the injury not occurred, so far as money can do.

[17]

These two forms of compensation —  SABs and tort
    damages —  are independent of one another. It is inevitable, however, that there
    will be overlap between the compensation provided to an accident victim by
    no-fault SABs and the award of damages to that person in a civil tort action.
    Section 267.8 of the
Insurance Act
contains provisions designed to address
    this overlap and to prevent double recovery. It reflects the principle that victims
    should be fairly compensated, but not over-compensated. Automobile insurers,
    who provide first-party benefits through SABs insurance, should not be required,
    when wearing their fault based liability insurer hats, to compensate an accident
    victim twice for the same losses. In preventing double recovery, the statutory
    regime modifies the common law "collateral source" rule —  that insurance or
    other benefits available to the injured plaintiff do not reduce the amount for
    which the tortfeasor is liable: see
Boarelli v. Flannigan
, [1973] 3
    O.R. 69 (C.A.).

[18]

In broad terms, s. 267.8 of the
Insurance
    Act
provides that: (a) the tort award must be reduced by the SABs received
    by the injured party before judgment (s. 267.8(1), (4), and (6)); and (b) SABs
    received by the plaintiff after judgment must be held in trust for or assigned
    to the defendant or tort insurer, until such time as the benefits have been
    exhausted or the defendant has been fully reimbursed for the payments it made
    under the judgment (s. 267.8(9)).

[19]

Before turning to the facts of this appeal, and
    the issues it raises, it will be helpful to set out and briefly comment on the relevant
    statutory provisions.

(2)

Statutory Provisions

[20]

The relevant provisions of the
Insurance Act
are set out below:

267.8 (1) In an action
    for loss or damage from bodily injury or death arising directly or indirectly
    from the use or operation of an automobile, the damages to which a plaintiff is
    entitled for income loss and loss of earning capacity shall be reduced by the
    following amounts:

1. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for statutory accident benefits in respect of
    the income loss and loss of earning capacity.

2. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for income loss or loss of earning capacity
    under the laws of any jurisdiction or under an income continuation benefit
    plan.

3. All payments in
    respect of the incident that the plaintiff has received before the trial of the
    action under a sick leave plan arising by reason of the plaintiff’s occupation
  or employment.

…

(4) In an action for loss
    or damage from bodily injury or death arising directly or indirectly from the
    use or operation of an automobile, the damages to which a plaintiff is entitled
    for expenses that have been incurred or will be incurred for health care shall
    be reduced by the following amounts:

1. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for statutory accident benefits in respect of
    the expenses for health care.

2. All payments in
    respect of the incident that the plaintiff has received before the trial of the
    action under any medical, surgical, dental, hospitalization, rehabilitation or
    long-term care plan or law.

…

(6) In an action for loss
    or damage from bodily injury or death arising directly or indirectly from the
    use or operation of an automobile, the damages to which a plaintiff is entitled
    for pecuniary loss, other than the damages for income loss or loss of earning
    capacity and the damages for expenses that have been incurred or will be
    incurred for health care, shall be reduced by all payments in respect of the
    incident that the plaintiff has received or that were available before the
    trial of the action for statutory accident benefits in respect of pecuniary
    loss, other than income loss, loss of earning capacity and expenses for health
    care.

…

(8) The reductions
    required by subsections (1), (4) and (6) shall be made after any apportionment
    of damages required by section 3 of the
Negligence Act
.

(9) A plaintiff who
    recovers damages for income loss, loss of earning capacity, expenses that have
    been or will be incurred for health care, or other pecuniary loss in an action
    for loss or damage from bodily injury or death arising directly or indirectly
    from the use or operation of an automobile shall hold the following amounts in
    trust:

1. All payments in
    respect of the incident that the plaintiff receives after the trial of the
    action for statutory accident benefits in respect of income loss or loss of
    earning capacity.

2. All payments in respect
    of the incident that the plaintiff receives after the trial of the action for
    income loss or loss of earning capacity under the laws of any jurisdiction or
    under an income continuation benefit plan.

3. All payments in
    respect of the incident that the plaintiff receives after the trial of the
    action under a sick leave plan arising by reason of the plaintiff’s occupation
  or employment.

4. All payments in
    respect of the incident that the plaintiff receives after the trial of the
    action for statutory accident benefits in respect of expenses for health care.

5. All payments in
    respect of the incident that the plaintiff receives after the trial of the
    action under any medical, surgical, dental, hospitalization, rehabilitation or
    long-term care plan or law.

6. All payments in
    respect of the incident that the plaintiff receives after the trial of the
    action for statutory accident benefits in respect of pecuniary loss, other than
    income loss, loss of earning capacity and expenses for health care.

(10) A plaintiff who
    holds money in trust under subsection (9) shall pay the money to the persons
    from whom damages were recovered in the action, in the proportions that those
    persons paid the damages.

…

(12) The court that heard
    and determined the action for loss or damage from bodily injury or death
    arising directly or indirectly from the use or operation of the automobile, on
    motion, may order that, subject to any conditions the court considers just,

(a) the plaintiff who recovered
    damages in the action assign to the defendants or the defendants’ insurers all
    rights in respect of all payments to which the plaintiff who recovered damages
  is entitled in respect of the incident after the trial of the action,

(i) for statutory
    accident benefits in respect of income loss or loss of earning capacity,

(ii) for income loss
    or loss of earning capacity under the laws of any jurisdiction or under an
    income continuation benefit plan,

(iii) under a sick
  leave plan arising by reason of the plaintiff’s occupation or employment,

(iv) for statutory
    accident benefits in respect of expenses for health care,

(v) under any medical,
    surgical, dental, hospitalization, rehabilitation or long-term care plan or
    law, and

(vi) for statutory
    accident benefits in respect of pecuniary loss, other than income loss, loss of
    earning capacity and expenses for health care; and

(b) the plaintiff who recovered
    damages in the action co-operate with the defendants or the defendants’
    insurers in any claim or proceeding brought by the defendants or the defendants’
  insurers in respect of a payment assigned pursuant to clause (a).

(13) Subsection (9) no
    longer applies if an order is made under subsection (12).

…

(20) For the purposes of
    subsections (1), (3), (4) and (6), the damages payable by a person who is a
    party to the action shall be determined as though all persons wholly or
    partially responsible for the damages were parties to the action even though
    any of those persons is not actually a party.

[21]

We will discuss the application of these
    provisions below, but we note several key features of the legislation.

[22]

First, as a matter of statutory interpretation,
    ss. 267.8(1), (4), and (6) require the deduction of SABs received prior to
    trial from damages received in a tort action on a silo basis. That is, SABs for
    income loss are to be deducted from the tort award for income loss (s. 267.8(1));
    SABs for health care expenses are to be deducted from the tort award for health
    care (s. 267.8(4)); and SABs for other pecuniary loss are to be deducted from
    the tort award for other pecuniary loss (s. 267.8(6)). There is no reasonable
    interpretation of the legislation, in our view, that permits either a more
    generalized approach to deduction (that is, a deduction of SABs in one silo
    from a jury award for damages falling within another silo) or a more
    particularized approach to deduction (that is, the deduction of particular SABs
    within a silo only from damages for the identical head of damage awarded by the
    jury within the same silo).

[23]

Second, the deductions of SABs from the tort
    award are to be made taking into account the apportionment of damages to
    account for the plaintiff’s contributory negligence under s. 3 of the
Negligence
    Act
, R.S.O. 1990, c. N.1 (s. 267.8(8)). In addition, the deductions of
    SABs as between defendants must be allocated to the defendants based on their
    respective shares of liability. We will discuss the application of these requirements
    in due course.

[24]

Third, SABs received after trial are to be held
    in trust by the plaintiff and paid to the tortfeasor(s) in the same proportion that
    they paid the tort damages awarded (s. 267.8(9) and (10)). Alternatively, the
    court may order that the plaintiff assign to the tortfeasor its right to future
    SABs. The application of these provisions is discussed in our reasons in the
Carroll
appeal.

C.

the facts

[25]

In September 2006, Chad Cadieux (who was a plaintiff
    in this action and is a respondent/appellant by way of cross-appeal) and Eric
    Saywell (who was a defendant in this action and is the appellant/respondent by way
    of cross-appeal), both pedestrians, were involved in an altercation at or near
    the shoulder of a road. Saywell pushed Cadieux towards the road, causing him to
    stumble into the path of a truck driven by Susan Cloutier. Cadieux suffered
    brain damage and orthopaedic injuries. He became incapable of managing his own
    affairs.

[26]

Cadieux claimed SABs from the no-fault benefits
    insurer, Aviva. He also commenced a civil action against Saywell and Cloutier.
    Prior to trial, he settled both his SABs claim and his tort claim against
    Cloutier.

[27]

The SABs settlement with Aviva was for a total
    of $900,000. The Settlement Disclosure Notice
[2]
provided by Aviva to Cadieux reflects that the settlement had three components:
    (a) $300,000 for past and future income replacement benefits; (b) $250,000 for
    past and future medical benefits; and (c) $350,000 for past and future
    attendant care benefits.

[28]

The settlement with Cloutier’s liability insurer
    was for $500,000. It was a
Pierringer
settlement
[3]
, whereby Cloutier’s
    insurer settled her several tort liability without a right of contribution
  against the other tortfeasor.

[29]

Most of the settlement funds were used to
    procure a structured settlement, which would provide Cadieux with a stream of
    payments over time. Some of the settlement funds were used to buy a house where
    Cadieux could reside with his father, who was his caregiver.

[30]

Because Cadieux was incapable of managing his
    affairs, both settlements and applicable legal costs required and received
    approval by a judge of the Superior Court of Justice. The judge approved legal fees
    of $235,000 and disbursements of $30,999.36. The order did not allocate the fees
    and disbursements as between the SABs settlement and the tort settlement.

[31]

Cadieux then proceeded with the tort action
    against Saywell for his several liability. There were offers and counter-offers
    of settlement, discussed below, but the action did not settle and it proceeded
    to trial.

[32]

After a seven-week trial, the jury granted
    judgment in favour of Cadieux for $2,309,413. Although Cloutier was no longer a
    party, it was necessary for the jury to ascertain the degree of fault of each
    of Cadieux, Cloutier, and Saywell. The jury apportioned liability equally
    amongst the three: one-third against Cadieux in respect of his own contributory
    negligence, and one-third against each of Saywell and Cloutier. In principle
    then, subject to statutory deductions and the accounting for both pre-trial and
    post-trial SABs, Cadieux was entitled to recover from Saywell one-third of the damages
    awarded in the tort action.

[33]

The jury awarded damages as follows, plus
    applicable prejudgment interest:

General and
Family Law Act
,
  R.S.O. 1990, c. F.3 ("
FLA
") damages:

•

General damages for Cadieux —  $225,000

•

FLA
damages for Cadieux’s father —  $80,000

•

FLA
damages for Cadieux’s brother —  $30,000

Past and future loss of income:

•

Past loss of income —   $133,741

•

Future loss of income — $971,000

Total $1,104,741

Future costs of care:

•

Physiotherapy —  $23,073

•

Occupational therapy —  $9,491

•

Social work —  $4,745

•

Home gym equipment —  $3,569

•

Taxi fund —  $49,992

•

Bookkeeper —  $31,380

•

Acquired Brain Injury ("ABI") support worker —  $701,809

Housekeeping and other expenses:

•

Future housekeeping expenses — $33,113

•

Past expenses — $12,500

D.

The trial judge’s determination

[34]

After the jury’s verdict, the trial judge heard
    a motion to determine the required adjustments to the jury award and to
  determine costs. The issues were:

1.

reduction of the jury award for statutory deductions;

2.

reduction
    of the jury award for SABs received prior to trial and through the SABs
    settlement;

3.

application of prejudgment interest;

4.

the award of a management fee; and

5.

costs of the
    action (including consideration of Rule 49 offers to settle).

[35]

We will describe the trial judge’s disposition
  of these issues.

(1)

Statutory deductions

[36]

Section 267.5(7) of the
Insurance Act
requires that certain amounts be deducted from damage awards for non-pecuniary
    loss. Damage awards for non-pecuniary loss suffered by
FLA
claimants
    are subject to a prescribed deductible. The parties agreed that the only
    applicable deduction was to the
FLA
damages awarded to Cadieux’s
  brother. These were reduced from $30,000 to $11,730.

(2)

Deductions for SABs

[37]

As noted above, Cadieux had settled his SABs claim
    with the accident benefits insurer for a total of $900,000. The issue for the
    trial judge was the extent to which this settlement was to be deducted from the
  jury’s award for loss of income and future pecuniary damages.

[38]

There were several complex issues embedded
    within this question.

[39]

The
first issue
was
    the basis upon which deductions should be made, specifically, the extent of
    matching required when deducting SABs from the jury award. Should there be a
    strict matching of items in the jury award against the SABs benefits received,
    on an "apples to apples" basis, as Cadieux contended? Or, should the three
    different statutory categories of SABs (income replacement benefits, health
    benefits, and other pecuniary benefits) be regarded as silos, with deductions
    being made from the applicable silo, without a more precise matching of individual
    benefits within those silos against the identical heads of damages in the jury
  award?

[40]

This issue arose because the jury made no award
    for the costs of future attendant care, but made an award of $701,809 for an Acquired
    Brain Injury ("ABI") support worker. The parties agreed, and the trial judge
    found, that the jury award for the ABI support worker was a
    medical/rehabilitation award and not an attendant care award. Relying on an
    "apples to apples" strict matching approach, Cadieux argued that this award
    should only be set off against the portion of the SABs settlement for medical
    and rehabilitation benefits ($250,000) and not the portion for attendant care ($350,000).
    The defence, on the other hand, advocated a silo approach, arguing that both
    the health care benefits and attendant care benefits were properly classified
    as being within the silo of health care and should be deducted from the jury’s award
    for future costs of care, including the $701,809 in damages for the ABI support
    worker. The deduction would have had the effect of reducing the tort award for
  the ABI support worker to $101,809.

[41]

Relying on this court’s decision in
Basandra
and the decision of the Divisional Court in
Mikolic v. Tanguay
, 2016
    ONSC 8196, 129 O.R. (3d) 24 (Div. Ct.), the trial judge adopted the silo
    approach, holding that all the health care benefits should be deducted from the
    jury award for the ABI support worker. Put another way, the ABI support worker
    was a health care expense, whether or not the ABI support worker’s functions
  involved attendant care.

[42]

The
second issue
was whether, as Cadieux contended, the SABs settlement for past and future losses
    should be notionally apportioned equally between Saywell and Cloutier, with
    whom Cadieux had settled prior to trial, because the jury found them equally
    responsible for the accident. In other words, was the non-settling defendant,
    Saywell, entitled to set off the full amount of the SABs settlement against his
    portion of liability for the tort judgment, or was his set-off limited to 50
    percent of the SABs amount, having regard to Saywell’s proportionate liability
    for only one-third of the damages, after reduction for Cadieux’s contributory
  negligence and Cloutier’s notional one-third share?

[43]

The trial judge noted that the
Insurance Act
is silent with respect to the apportionment of deductions between two or more
    "protected" defendants.
[4]
There was evidence that Cloutier’s insurer was aware of the SABs settlement and
    took it into account when settling the tort claim against Cloutier. The trial
    judge also found that the SABs settlement and the tort settlement with Cloutier
    were a "package deal", in that Cadieux could not accept one without the other.
    He concluded, at paras. 50-51, that it would unjustly enrich the non-settling
    defendant Saywell if he were entitled to deduct the full amount of the SABs
    from his one-third share of the damages. This would serve as a disincentive to
    pre-trial settlement. Equity and common sense supported allocation of the
    deductions for SABs between the defendants based on their respective shares of
  liability.

[44]

The
third issue
was
    whether the full amount of the SABs settlement had to be deducted from the jury
    award, or whether the deduction could be net of the legal costs incurred by Cadieux
    in obtaining the settlement. The trial judge accepted the argument that failing
    to deduct these legal costs unfairly penalized and potentially under-compensated
    Cadieux. He accepted Cadieux’s apportionment of the legal fees between the SABs
    settlement and the tort settlement in proportion to their respective amounts.
    The proportionate share of fees and disbursements was deducted from the SABs
  settlement before the SABs were deducted from the jury award.

[45]

The
fourth and final issue
was whether all SABs received by Cadieux prior to the settlement with the
    insurer were to be deducted from the jury award. The trial judge disallowed the
    deduction of certain SABs.

(3)

Prejudgment interest

[46]

The issue relating to prejudgment interest concerned
    the operation of an amendment to the
Insurance Act
, effective January
    1, 2015, which ended the application of the 5 percent interest rate set out in
    s. 128(2) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, and Rule
    53.10 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, to non-pecuniary
    loss in actions for personal injury such as motor vehicle accident cases. The
    effect of the amendment was to replace the fixed 5 percent rate with the
    variable "prejudgment interest rate", defined in s. 127 of the
Courts of
    Justice Act
, and provided for in s. 128(1). That rate is subject to increase
    or reduction in the discretion of the court under s. 130. The court may also,
    in its discretion, change the period for which interest is payable or disallow
    interest altogether.

[47]

The plaintiffs sought interest at 5 percent,
    based on s. 128(2). They contended that the amendment was a substantive change
    in the law and, therefore, did not have retrospective application. The defendants
    argued that although entitlement to interest is a substantive right, the
    amendments concerned only the manner of calculation of interest, and therefore were
    procedural in nature and should apply retrospectively.

[48]

The trial judge held that in the interests of
    uniformity and predictability, he would apply the 5 percent rate to this case,
    which pre-dated the statutory amendment. In so doing, he followed the approach
    of the trial judge in
El-Khodr
who found that the entitlement to a
    particular rate of prejudgment interest is a matter of substantive law. He
    noted that nearly all subsequent reported decisions had followed that approach
    and that the issue would be addressed by this court in the
El-Khodr
appeal.

(4)

Management fee

[49]

The parties left it to the trial judge to
    determine an appropriate management fee for the administration of Cadieux’s
    assets. The trial judge determined that 5 percent was a "conventional award"
    and ordered a fee of $65,250, calculated in that manner. His calculation was
  based on 100 percent of the SABs settlement plus the net tort award.

(5)

Costs

[50]

There was a significant difference in the
    parties’ positions with respect to costs. This difference arose because about
    one month prior to trial, Saywell had made what the trial judge described as a
    "near miss" settlement offer, pursuant to Rule 49. The offer was for $500,000,
    plus partial indemnity costs. The offer was open for acceptance until the
    commencement of trial. Just before that offer, Cadieux had made an offer to
  settle for $900,000, plus costs.

[51]

The plaintiffs’ recovery at trial, after
    adjustment in accordance with the trial judge’s reasons, was $435,577, plus the
    management fee of $65,250. Thus, the plaintiffs’ total recovery was $500,827.
    It was less than Saywell’s offer without taking the management fee into account,
  and was slightly in excess of the offer once that fee was taken into account.

[52]

The plaintiffs claimed partial indemnity costs
    in the amount of $494,039 for fees and $98,798 in disbursements, plus HST, on
  the basis that the recovery exceeded Saywell’s offer.

[53]

Saywell, on the other hand, claimed costs of
    $358,380 for fees and $71,700 for disbursements, on the basis that his offer
    exceeded the jury verdict.

[54]

The trial judge found that the costs claimed by
    each party were reasonable. He observed that costs are discretionary and that
    relevant considerations include promoting settlement, fairness to the parties,
    access to justice and, in the context of personal injury cases, ensuring that
    an injured plaintiff is not under or over-compensated. He also referred to the
    importance of proportionality in the award of costs.

[55]

Referring to the decision of this court in
Elbakhiet
    v. Palmer
, 2014 ONCA 544, 121 O.R. (3d) 616, leave to appeal refused,
    [2014] S.C.C.A. No. 427, he found it was appropriate to consider Saywell’s
    "near miss" settlement offer in the exercise of his jurisdiction in relation to
    costs. The plaintiffs’ recovery, when the management fee was awarded, only
    slightly exceeded Saywell’s offer. He therefore awarded Cadieux costs of
    $100,000 (about one-fifth of the amount claimed) and the disbursements as
  claimed in the amount of $98,798.

E.

issues

[56]

The appeal and the cross-appeal raise a number
    of issues. Those issues, and our answers, are set out immediately below:

(1)

Deduction of SABs from tort awards:

a.

Should SABs be deducted from tort damages using the silo approach or the
    strict matching ("apples to apples") approach? Did the trial judge err in
    reducing the jury’s award for the ABI support worker by the SABs received for
  both medical and rehabilitation benefits and attendant care benefits?

The
    silo approach should apply and consequently, the trial judge did not err in deducting
    the SABs received for both the medical and rehabilitation benefits and the
    attendant care benefits from the jury award for health care expenses.

b.

Should past and future SABs be combined in each silo before deducting
    them from past and future tort damages?

There
    is no basis for making a temporal distinction between past and future SABs and
    they should be combined in each silo before deduction.

c.

Did the trial judge err in failing to deduct certain pre-settlement SABs
    payments?

The
    SABs paid prior to the settlement should be deducted from the jury award for
    corresponding past and future damages within the relevant silos. There is no
    reason in principle why SABs paid directly to third parties, as a matter of
    convenience, should not be deducted from the tort award.

d.

Where a plaintiff enters into a
Pierringer
agreement, with the
    result that only one severally liable defendant remains in the proceeding,
    should that non-settling defendant be entitled to a deduction of 100 percent of
    all SABs from its share of tort damages?

In
    these circumstances, the last defendant remaining in the action should not be entitled
    to a deduction of all the SABs paid to the plaintiff. It should only be
    entitled to a proportionate deduction. Such an interpretation is consistent
    with the application of the principles of statutory interpretation and
    considerations of practicality, fairness, and common sense.

e.

Should legal costs incurred by a plaintiff in pursuing recovery of SABs
    be deducted from the SABs before deducting SABs from the tort award? Put
    another way, should SABs be deducted from the tort award on a gross basis, or net
  of the plaintiff’s legal costs?

SABs
    should be deducted from the tort award on a gross basis. Depending on the
    circumstances, it may be appropriate to award the plaintiff costs of recovering
    SABs as part of the costs of the tort action.

(2)

Management fee

a.

Did
    the trial judge err in awarding a management fee of 5 percent? If not, did he
    err in requiring Saywell to pay management fees for 100 percent of the SABs
    settlement after finding that he was only entitled to a deduction of 50 percent
    of the SABs from the damages awarded against him?

The
    trial judge did not err in awarding a management fee, but made an error in
    principle in calculating that fee on the basis of 100 percent of the settlement
    and net tort award when Saywell was only entitled to a deduction of 50 percent
    of the SABs.

(3)

Prejudgment
    interest

a.

Are the amendments to the
Insurance Act
concerning the
    calculation of prejudgment interest on general damages procedural in nature and
    do they apply retrospectively to causes of action that arose before the
    amendments came into force?

The
    amendments are procedural and apply retrospectively.

b.

Were
Cobb
and
El-Khodr
correctly decided on this
    issue?

The
    issue was comprehensively addressed in
Cobb
and
El-Khodr
and
  we agree with MacFarland J.A.’s conclusion on this issue and endorse her reasons.

(4)

Costs, offers to settle, and disbursements

a.

Did the trial judge err in his award of costs?

The
    parties may make further submission on the issue of costs having regard to the
    effect of the judgment of this court.

b.

Should interest be calculated on Rule 49 offers to settle to the date of
    the offer, or to the date of trial?

If
    the parties are unable to agree on the interest payable and the effect of the
    offers to settle having regard to the effect of the judgment of this court,
    they may make further submissions.

c.

Did the trial judge fail to account for some of the plaintiffs’
  disbursements?

The
    appellant did not dispute the error raised by the plaintiffs and in our view,
    it should be corrected.

F.

analysis

(1)

The deduction and assignment of SABs

(a)

The silo approach rather than the strict matching approach should be applied

[57]

Cadieux, as appellant by way of cross-appeal,
    submits that the trial judge erred in deducting the attendant care SABs from
    the jury award for an ABI support worker. Relying on
Bannon
and
Gilbert
,
    he submits that SABs should only be deducted from tort awards on a strict matching,
    "apples to apples" basis. He submits that any other approach will under-compensate
    plaintiffs and unjustly enrich defendants. In this case, although the attendant
    care and medical rehabilitation components of the SABs settlement both fall
    within the health care silo, he submits that the benefits are not overlapping
  and should not both be deducted from the tort award for the ABI support worker.

[58]

OTLA supports this position. It submits that the
    approach adopted by the trial judge and supported by
Cobb
, would
    complicate jury trials by forcing plaintiffs to advance claims for which they
    have already been fully compensated by SABs.

[59]

For the reasons that follow, we do not accept
    these submissions. Until the decisions of this court in
Cobb
and
El-Khodr
,
    the evolution of the treatment of accident benefits in the case law has largely
    failed to take into account the difference between the statutory schemes that
    have been in place at various times. The policy rationale that supported the
    strict matching approach under a former statutory scheme is no longer applicable
    under the current legislative regime. In our view, the silo approach, based on
    the three broad categories of SABs under the
Insurance Act
and the
Statutory
    Accident Benefits Schedule
, should apply to both the deduction and the
    assignment of SABs.

(i)

The historical treatment of SABs and the judgments of this court in
Cobb
and
El-Khodr

[60]

In
Bannon
, this court interpreted an
    earlier and significantly different statutory scheme as requiring an "apples to
    apples" strict matching approach when deducting SABs from tort damages: a
    specific type of benefit was only deducted from a head of damage for the identical
  loss.

[61]

Confusion concerning the treatment of SABs was
    evident in post-
Bannon
case law, largely because, despite significant
    changes to the statutory regime, courts continued to apply the strict matching
    approach based on
Bannon
, in spite of that approach having been
    rejected by the Supreme Court in
Gurniak
. As we have noted, in the
    assignment of benefits context, courts have required a very strict matching of
    the tort damages to a specific SAB on a qualitative and temporal basis. The
    silo approach has recently prevailed in the deduction of benefits context. Under
    this approach, the damage award must only match generally with the
    corresponding broad SABs category.

[62]

The inconsistencies in the case law were
    discussed in
Cobb
and
El-Khodr
. Those appeals were heard
    together, because they raised some common issues concerning the interaction
    between the SABs regime and tort damages. The
Cobb
appeal focused on
    the deductibility of SABs received by the plaintiff before trial under ss.
    267.8(1)-(8) of the
Insurance Act
. The
El-Khodr
appeal dealt
    with the trust and assignment provisions that apply to the plaintiff’s receipt
    of SABs after judgment under ss. 267.8(9)-(12). Both appeals also raised the
    issue of the applicable rate of prejudgment interest under the
Courts of
    Justice Act
. The reasons were released concurrently.

[63]

In
Cobb
, as in the case before us,
    there had been a settlement of the plaintiff’s SABs claim prior to trial. The
    settlement included a lump sum for past and future income loss. One of the
    issues was whether the
Insurance Act
required a strict temporal
    matching in the deduction of SABs from a jury award —  specifically, whether
all
SABs received by the plaintiff before trial for
    income loss should be deducted from the jury award for both past income loss
    (i.e., income loss from the date of the accident to the date of trial) and
    future income loss (i.e., projected income loss from the date of trial to
    future retirement).

[64]

In
Cobb
, the plaintiff had received
    income replacement benefits of $29,300 up to June 29, 2010. On that date, the
    plaintiff settled the SABs claim, with $130,000 allocated to all past and
    future income replacement benefits. The jury awarded $50,000 for past income loss
    and $100,000 for future income loss. The trial judge deducted the full amount
    of the SABs from the jury award, with the result that the plaintiff was
    entitled to no tort award for income loss.

[65]

On appeal, the plaintiff argued that
Bannon
required separate treatment of SABs for past and future income loss —  that the
    jury award could only be reduced by a corresponding statutory benefit, on an
    "apples to apples", strict matching approach. Under this approach, the award
    for past income loss could only be reduced by SABs for past income loss and the
    award for future income loss could only be reduced by SABs for future income
    loss. The plaintiff argued that the onus was on the defendant to prove how much
    of the SABs settlement related to past loss and how much related to future
    loss. If that could not be established, the defendant was not entitled to any
  deduction.

[66]

MacFarland J.A. rejected that argument, finding,
    at para. 41, that the plaintiff’s interpretation was not supported by the
    legislation. Section 267.8(1)1 simply requires the deduction of "all ‘payments
    … that the plaintiff has received … before the trial of the action
for statutory accident benefits in respect of the income loss
  and loss of earning capacity’
" (emphasis in original).

[67]

Referring to this court’s decision in
Basandra
,
    MacFarland J.A. stated, at para. 48:

The legislation (s. 267.8(1)) does not distinguish between
    amounts that relate to past and to future income loss. It speaks only to
    amounts received prior to the trial for income loss. Whether those amounts
    relate to past or future claims is irrelevant for the purpose of deductibility.
    Obviously, any amounts received before trial that include a sum for future
    income loss will, in all likelihood, be received by a plaintiff in settlement
    of his claims for income loss. Such payments are still payments received before
    trial for SABs in respect of income loss and are properly deductible from a
    jury award for both past and future income losses.

[68]

MacFarland J.A. added, at para. 54, that, for
    the reasons more fully explained in
El-Khodr
, she had serious
    reservations as to whether the strict matching approach articulated in
Bannon
and in
Gilbert
remained good law, in light of subsequent legislative
    changes. Moreover, the Supreme Court’s decision in
Gurniak
had stated
    that
Jang
, the case on which
Bannon
was based, had been
    wrongly decided. She stated, at para. 54, that in her view, "
Gurniak
puts in considerable doubt any qualitative or temporal matching requirement
  that is not mandated by the current legislation."

[69]

In the result, this court in
Cobb
affirmed
    the trial judge on this issue.

[70]

The decision in
El-Khodr
dealt with the
    flip side of the issue: the assignment of future SABs payments to the tort
    insurer. Although that issue does not arise in this appeal, it arises in
Carroll
.

[71]

The issue in
El-Khodr
related to the
    assignment of future SABs to be paid in respect of medication, assistive
    devices, and professional services. The jury made a global award for future professional
    services, and a separate global award for future medication and assistive devices.
    The trial judge, following the approach in
Bannon
and
Gilbert
,
    did not grant an assignment to the insurer of future SABs for medication or
    professional services. She noted that the parties had not adopted the language
    that she had proposed for the jury verdict sheet and the jury had not split
    future care costs into separate awards for professional services such as
    physiotherapy and psychology, nor had it made separate awards for medications and
    assistive devices.

[72]

MacFarland J.A. suggested that the trial judge
    erred in applying the strict matching approach. At paras. 38-54, she explained
    why the policy rationale for the strict matching approach adopted in
Bannon
no longer applied in light of subsequent amendments to the
Insurance Act
and the Supreme Court’s decision in
Gurniak
.

[73]

In brief, the statutory provisions in force when
Bannon
was decided did not group benefits to be deducted into
    categories or silos. Instead, it lumped all accident benefits together and
    required their deduction from the tort award. In contrast, the current statute
    sets out broad categories of SABs from which the tort award must be deducted.

[74]

Moreover, the former statutory provisions also required
    that the present value of future no fault benefits be deducted from the jury
    award. No assignment provisions were included in that statutory regime. In
Chrappa
    v. Ohm
(1998), 38 O.R. (3d) 651 (C.A.), this court stated that there was a
    heavy onus on the defendant to establish that it was "beyond dispute" that the
    plaintiff would qualify for the future benefit. In that case, the court also
    approved of the use of a common law "Cox and Carter" order, which required the
    plaintiff to hold future accident benefits in trust and to pay them to the
  defendant to the extent that they overlapped with the judgment.

[75]

As MacFarland J.A. noted, the amendments to the
Insurance
    Act
since
Bannon
have obviated the need for strict matching of
    past and future benefits against the tort award and for "Cox and Carter" orders.
    The current legislative regime no longer requires the deduction of the present
    value of future benefits and the statutory trust and assignment provisions in ss.
  267.8(9)-(12) replace common law "Cox and Carter" orders.

[76]

MacFarland J.A. also explained, at paras.
    55-61, why
Bannon
may no longer be good law, in light of
Gurniak
,
    which arguably overruled
Jang
. We say "arguably" because although
    Iacobucci J., writing for the majority, did not expressly overrule
Jang
,
    the minority (Gonthier J. and McLachlin C.J.) clearly interpreted the majority’s
  decision as having done so.

[77]

MacFarland J.A. noted that in
Mikolic
, Sanderson
    J. distinguished
Bannon
on the basis of the change in legislation,
    concluding that it was necessary to apply only the "limited matching", set out
    in ss. 267.8(1) and (4), which were the provisions engaged in that case.
  MacFarland J.A. concluded, at para. 61:

There is nothing in the language of the current Ontario
    statutory scheme that would require any further subdivision based on common-law
    heads of damage. In other words, although the legislation requires us to match
    apples with apples, the relevant categories of "apples" are
the statute’s categories
, not the common law’s. Given
    the Supreme Court’s explicit rejection in
Gurniak
of the matching
    approach in the
Jang
case and Gonthier J.’s comment in relation to
Bannon
and its progeny,
Gurniak
puts into considerable doubt any qualitative
    or temporal matching requirement that is not mandated by the current
    legislation. [Emphasis in original.]

[78]

In
El-Khodr
, MacFarland J.A. also
    considered whether the strict matching approach should be applied to the assignment
    of post-trial SABs, as was done in
Gilbert
. MacFarland J.A. noted that
    neither this court’s decision in
Gilbert
, nor the trial judge’s decision
    in
El-Khodr
, referred to the legislative changes since
Bannon
or to
Gurniak
. She observed that, since
Basandra
, courts have
    moved towards a silo approach in the deduction of benefits context, based on the
    broad statutory categories, rather than strict matching. In her view, the same
    approach should apply in relation to assignment. In the case before her, it was
    not necessary to resolve the issue.

[79]

MacFarland J.A. was of the view that the SABs assignment
    and trust provisions of the
Insurance Act
require a court "to match
    benefits that will be received after trial to the broad, enumerated statutory
  categories only in a general way": at para. 35.

[80]

With reference to
Gilbert
, she stated,
    at para. 68, that:

The decision in
Gilbert
is anchored by the trial
    judge’s factual determination that the jury award encompassed future care costs
    for which accident benefits would not be received and that the trial record did
    not provide a basis to reconcile the two. This likely explains why neither the
    trial judge nor this court considered the Supreme Court’s decision in
Gurniak
and no comparison was drawn between the current legislative scheme and the
    legislative scheme that applied when
Bannon
was decided. As stated
    earlier, the differences in the legislation are significant and important.

[81]

However, because she was able to factually
    distinguish
Gilbert
, (the respondent in
El-Khod
r was
    designated catastrophically impaired so no temporal limitation would apply and
    there were no benefits for which the assignment was requested that were not
    covered by SABs as in
Gilbert
) she concluded, at para. 37, that the
    specific question as to whether
Bannon
and
Gilbert
remain
    good law should be left for another day. Nevertheless, she reviewed the
    development of that law within the context of the legislative history discussed
    above and concluded, at para. 54, that the differences between those regimes
    and the current statutory scheme justified a different approach:

In my view, the policy rationale supporting the strict matching
    requirement in
Bannon
no longer applies, given these amendments to the
    statutory scheme. The concern that the court had in
Bannon
regarding
    the uncertainty of future payment of SABs simply does not arise under the
    current legislation. Courts are no longer required to calculate the present
    value of the future benefits to which a plaintiff would be entitled and to
    deduct that amount from the damage onward. The potential unfairness of this
    requirement, in my view, was the overriding concern and the rationale that
    originally drove the strict approach to deductibility under the legislative
    regime that this court addressed in
Bannon
.

[82]

Noting that the Supreme Court in
Gurniak
had rejected the strict matching approach on which
Bannon
was based,
    she suggested, at para. 60, that the present legislation should be interpreted
    as requiring a court "only to match statutory benefits that fall generally into
    the ‘silos’ created by s. 267.8 of the
Insurance Act
with the tort
    heads of damage." In her view, "
Gurniak
puts into considerable doubt
    any qualitative or temporal matching requirement that is not mandated by the
    current legislation": at para. 61. She stated, at para. 71, that "the approach
    in
Basandra
also should apply in relation to the assignment provisions
    in view of the text of the legislation and the decision of the Supreme Court of
    Canada in
Gurniak
".

[83]

The current state of the law then is that the
    broad silo approach will apply to the deduction of SABs received before trial,
    but a strict temporal and qualitative match of specific sub-categories of
    accident benefits to the tort award would continue to apply to those assignment
    cases that cannot be factually distinguished from
Gilbert
.

[84]

In our view, the uncertainty in this imperfect
    area of law must be resolved.

(ii)

The silo approach applies to the deduction of SABs received before trial

[85]

As regards the deduction of SABs received before
    trial, we agree with MacFarland J.A. that the statutory language does not
    support matching at a more particular level than the three silos of income loss,
    health care expenses, and other pecuniary loss. For example, s. 267.8(4), which
    governs the deduction of health care expenses, provides that the plaintiff’s
    damages for expenses "that have been incurred or will be incurred for health
    care shall be reduced by …
All payments
in respect
    of the incident that the plaintiff has received or that were available before
    the trial of the action for statutory accident benefits in respect of the
  expenses for health care" (emphasis added).

[86]

Bearing in mind the principle that the plaintiff
    should be entitled to full compensation for the loss incurred, but no more, a
    matching of the damage award to the corresponding silo does just that. Tort law
    compensates plaintiffs by an award of money. What the plaintiff does with the
    award is entirely up to him or her. For example, at trial, a plaintiff may
    claim damages for health care based on evidence of needs and costs for
    physiotherapy, psychological counselling, medication, and assistive devices and
    the jury may award damages on that basis. But once the award is paid, the
    plaintiff can do with the monetary award what he or she wishes. The plaintiff
    may use it for some or all of those purposes or for something completely
    different —  to buy a house, for example, as Cadieux did with the proceeds of his
    settlement. Deducting the SABs within the silo recognizes the plaintiff’s
    autonomy to spend the damage award the way he or she wishes. The matching is
  fair and reasonable.

[87]

The "apples to apples" strict matching approach unnecessarily
    complicates tort actions by focusing on immaterial distinctions or labels for
    heads of damages. It requires the trial judge to undertake what the Supreme
    Court in
Gurniak
referred to as a "complicated and cumbersome process
    of ‘matching’ a head of damage in tort to a particular claim for damages under
    a statutory scheme": at para. 45. Not requiring this type of "apples to apples"
    strict matching will have the benefit of simplicity and ease of application, an
  objective endorsed by the Supreme Court in
Gurniak
, at para. 45.

[88]

It follows that we do not accept the
    intervener’s submission that requiring plaintiffs to prove all expenses,
    whether covered by SABs or not, will make motor vehicle accident trials
    lengthier and more expensive. Plaintiffs should be required to claim at trial
    all damages arising from the accident, including expenses for which
    compensation has already been received through SABs or will in the future be paid
  through SABs. As MacFarland J.A. put it in
El-Khodr
, at paras. 84-85:

Future plaintiffs in motor vehicle accident cases should
    minimize trial courts' difficulty in matching damages and statutory benefits by
    presenting their claims according to the categories in s. 267.8 of the
Insurance
    Act
: they should make a claim for past and future income losses, a claim
    for past and future health care expenses; a claim for other past and future
    pecuniary losses that have SABs coverage; and a separate claim for any past and
    future pecuniary losses that lack SABs coverage. In cases involving
    non-catastrophic injuries, the presentation of the claim should account for the
    monetary limits and temporal limitations on benefits compensating for such
    injuries.

Plaintiffs should be required to present their cases in this
    way. They alone know best what amounts they have expended in relation to their
    injuries that their SABs insurer did not or will not reimburse. If those items
    are separately categorized, the matching difficulties disappear —  as does any
    risk of over or under-compensation.

[89]

Claims should therefore be presented on a
    "gross" basis, rather than net of SABs. We see nothing unusual or complicated
    in this approach. It is done as a matter of course in other forms of litigation
    where a plaintiff brings suit for both insured (subrogated) and uninsured
    (unsubrogated) claims. It is also commonplace that plaintiffs in personal
    injury actions will provide proof of underlying goods and services that have
    already been consumed as a result of their injuries, in order to demonstrate
    the severity of their injuries and their ongoing need for such expenses. This
    information will be readily available to counsel, and proof of the expenditures
    should be uncontroversial. The SABs paid will be a matter of record and can be
  readily established.

[90]

Any concerns as to trial efficiency can and
    should be dealt with through appropriate trial management and the cooperation
    of counsel. It seems to us that in most cases, the manner in which the jury
    questions are structured should be based on the silos. MacFarland J.A. gave
    useful guidance on this issue in
El-Khodr
, at paras. 81-86.

[91]

To the extent there are cases that have not yet
    reached trial, where claims have been advanced on a "net of SABs" basis,
    counsel should be permitted to amend the claim, if required, to advance the
  claim on a gross basis.

(iii)

The silo approach applies to SABs that will be received after trial

[92]

With respect to the assignment and trust
    provisions of the statute, as more fully explained in our reasons in
Carroll
,
    we see no principled basis on which to apply different approaches to SABs
    received before and after trial. The statutory assignment and trust provisions
    make it unnecessary to require strict proof of entitlement to future benefits. They
    pass no risk of under-compensation to a plaintiff. The benefits are assigned or
    held in trust as and when they are received until such time as the defendant or
    its insurer has been reimbursed for payments made under the judgment in respect
    of the particular silo. If the plaintiff’s entitlement is limited or
    terminated, the tort insurer simply does not recover an offset of the damages
  already paid to the plaintiff.

[93]

While
Bannon
can be distinguished as
    being based on a prior statutory regime, and the result in
Gilbert
was
    based on its unique facts, to the extent that both cases support a strict
    matching approach under the current statutory scheme, they should be overruled
    in light of
Gurniak
.

(b)

Past and future SABs should be combined before deduction

[94]

For the reasons expressed by MacFarland J.A. in
Cobb
,
    at paras. 38-56, pursuant to ss. 267.8(1), (4), and (6), SABs that were
    received or were available to the plaintiff prior to judgment must be applied
    to the jury award in respect of both past and future losses. That is, damages
    awarded for past and future losses are to be aggregated in each silo before the
    SABs applicable to that silo are deducted.

[95]

In light of our conclusions outlined above in
    parts 1(a) and 1(b) of this Analysis, the trial judge in this case properly deducted
    that portion of the SABs settlement attributed to past and future medical and
    rehabilitation benefits, and that portion of the SABs settlement attributed to
    past and future attendant care benefits from the jury award for the cost of the
    ABI support worker.

(c)

The trial judge erred in failing to deduct certain pre-settlement SABs

[96]

In addition to allowing deductions from the jury
    award for the items that formed part of the SABs settlement, the trial judge
    considered the deductibility of SABs paid to Cadieux prior to the settlement.

[97]

Before the settlement was negotiated, the SABs
    insurer paid a total of $262,543.96 in accident benefits, of which $86,863.83
    was paid directly to Cadieux. The appellant Saywell takes issue only with the
    $86,863.83 amount which is comprised of visitor expenses, clothing, attendant
    care, income replacement, and medical and rehabilitation benefits. In oral
    argument, counsel for the appellant conceded that the insurer did not seek a
    credit for the roughly $175,000 in other benefits that were paid directly to third
    party service providers.

[98]

The trial judge only gave the appellant the
    benefit of a reduction from the jury award for past and future income loss of
    one-half of the income replacement benefits paid (one-half of $62,264.78) prior
    to trial. The trial judge was not satisfied that the other past payments had
    been received by Cadieux, or that they matched the jury award so as to
    constitute double recovery.

[99]

The appellant asserts that while the trial judge
    correctly deducted half the past income replacement benefits, he made a
    palpable and overriding error in rejecting unchallenged affidavit evidence that
    $20,755.72 in past health care SABs and $3,843.33 in past "other pecuniary
    expenses" SABs had also been paid directly to Cadieux. He submits that the
    trial judge erred in refusing to deduct past SABs received from the
  corresponding future tort damages under each silo.

[100]

The respondent, Cadieux, contends that the trial judge appropriately
    declined to deduct these past payments because the evidence does not indicate
    the nature of these payments but only the broad categories to which they were
    attributable. In addition, certain of the SABs were not "received" personally
    by Cadieux: $14,977.16 was paid to a third party for attendant care and
  $8,139.16 was paid directly to Cadieux’s father.

[101]

In our view, SABs paid prior to the settlement should be deducted
    from the jury award for corresponding past and future damages within the
    relevant silos. As stated previously in these reasons, there is no basis for
    drawing a temporal distinction between past payments of SABs and future tort
    damages within the silo.

[102]

There is also no reason in principle why SABs paid to third parties,
    as a matter of convenience, should not be deducted from the award. The trial
    judge in
El-Khodr
made no distinction between SABs paid directly to
    the plaintiff and those paid to third party service providers in relation to
    the assignment of post-judgment SABs. She concluded that the plaintiff would be
    required to account to the defendants for post-trial SABs payments made
    directly to third party service providers. Otherwise, plaintiffs could avoid
    the trust and assignment provisions by requesting that their insurer pay third
    parties directly for services for which they recovered damages. The same
    rationale applies to SABs paid directly to service providers prior to trial.
    This result is consistent with the statutory requirement in ss. 267.8(1), (4),
    and (6) of deduction of amounts that the plaintiff "has received
or that were available
before the trial of the action"
  (emphasis added).

(d)

The non-settling defendant is only entitled to a proportionate deduction
    of SABs

[103]

The amount of the SABs deduction to which Saywell, as the
    non-settling defendant, is entitled turns on the meaning of the words "the
    damages to which a plaintiff is entitled" in ss. 267.8(1), (4), and (6) of the
Insurance
    Act
. Those subsections each provide that "the damages to which a plaintiff
    is entitled" for income loss, health care expenses, and other pecuniary loss
    shall be reduced by "all payments" that the plaintiff "has received or that
    were available before the trial" in respect of income loss, expenses for health
  care, and other pecuniary losses respectively.

[104]

As we have noted, Cadieux settled prior to trial with both the SABs
    insurer, Aviva, and the truck driver, Cloutier. The issue is whether the non-settling
    defendant, Saywell, is entitled to set off the full amount of the SABs
    settlement against his share of the tort damages, or whether he can only deduct
    50 percent, in proportion to his share of the tort damages that were attributed
    to the defendants.

[105]

Saywell argues that the "damages to which the plaintiff is entitled"
    means the actual
net
several damages payable by a
    defendant after the contributory negligence of the plaintiff is taken into
    account and the damages attributable to any non-party, in this case the
    settling defendant Cloutier, are deducted.

[106]

Counsel for Saywell conceded in argument that if the tort action had
    proceeded to trial against both Saywell and Cloutier, the SABs would have been
    divided proportionate to liability, with each defendant’s share of the tort
  damages being reduced by their share of the SABs.

[107]

However, he submits that the effect of the settlement is that Saywell
    is entitled to deduct 100 percent of the SABs from his share of the damages. Having
    released the truck driver Cloutier, he argues, Cadieux cannot avoid the
    consequences of ss. 267.8(1), (4), and (6), which provide that the plaintiff’s
    damages are to be reduced by "
all payments
" which
    the plaintiff has received for SABs. He also relies on s. 267.8(8), which
    provides that the "reductions required by subsections (1), (4) and (6) shall be
    made after any apportionment of damages required by section 3 of the
Negligence
    Act
." Finally, he relies on this court’s decision in
McDonald v. Kwan
,
    2011 ONCA 789, 286 O.A.C. 184.

[108]

For the reasons that follow, we agree with the approach taken by the
    trial judge. In our view, his conclusion on the statutory language is supported
    by the application of the principles of statutory interpretation as well as
    considerations of practicality, fairness, and common sense.

[109]

The principles of statutory interpretation are well known. The words
    of the statute are to be read in their entire context and in their grammatical
    and ordinary sense harmoniously with the scheme of the Act, the object of the
    Act, and the intention of the enacting legislative body:
Rizzo & Rizzo
    Shoes Ltd. (Re)
, [1998] 1 S.C.R. 27, at para. 21;
Agraira v. Canada
    (Public Safety and Emergency Preparedness)
, 2013 SCC 36, [2013] 2 S.C.R.
    559, at para. 64. Accordingly, it is important that the words "the damages to
    which a plaintiff is entitled" and "all payments" be considered within the
  context of s. 267.8 as a whole and with the purpose of this provision in mind.

[110]

In our view, the grammatical and ordinary sense of the words "the
    damages to which a plaintiff is entitled" is clear. Subsections 267.8(1), (4),
    and (6) do not refer to "net" damages or even to damages "payable". In our
    view, the words do no more than describe the effect of the deduction that is to
  be made.

[111]

Such an interpretation is supported by the underlying purpose of s.
    267.8. As stated, s. 267.8 contains provisions that are designed to address the
    overlap between the tort damages and SABs to ensure that the plaintiff is
    fairly compensated but is not under or over-compensated. The various provisions
    of s. 267.8 prescribe an order of operations that applies to the calculation of
    the plaintiff’s damages to ensure fair compensation. It does not make sense
    that the last defendant remaining in the action should be able to deduct all
    the SABs paid to the plaintiff. As the trial judge noted, this would discourage
    settlement, would under-compensate the plaintiff, and would unfairly enrich the
  non-settling defendant.

[112]

Section 267.8 also incorporates the principle that the plaintiff’s damages
    reflect the liability of all responsible parties involved in the incident. Subsection
    267.8(20), specifically provides that "[f]or the purposes of subsections (1),
    (3), (4) and (6), the damages payable by a person who is a party to the action
    shall be determined
as though all persons wholly or
    partially responsible for the damages were parties to the action
even
    though any of those persons is not actually a party" (emphasis added). The
    purpose of this subsection is to ensure that the liability of a defendant, for
    the purpose of calculating its entitlement to deduct SABs from the judgment
    against it, is based on its proportionate liability, regardless of whether
    other defendants, protected or not, are parties to the proceeding and
    regardless of whether other defendants have settled with the plaintiff or on
    what basis. To construe the words "damages to which a plaintiff is entitled" as
    net several damages after apportionment between tortfeasors fails to give
    effect to that explicit direction by ignoring the settling defendant’s proportionate
  responsibility for the loss.

[113]

Moreover, a contextual analysis of s. 267.8 as a whole supports the
    conclusion that the plain meaning of the words "the damages to which the
    plaintiff is entitled" in ss. 267.8(1), (4), and (6) cannot reasonably be
  interpreted as referring to "net damages payable".

[114]

We do not accept the appellant’s submission that s. 267.8(8)
    requires apportionment as between defendants before the SABs deduction is made.
    In our view, the principle of statutory interpretation known as the presumption
    of implied exclusion (sometimes referred to as
expressio unius est exclusio
    alterius
) precludes such an approach. The principle of implied exclusion presumes
    that "to express one thing is to exclude another" and accordingly, when a statutory
    provision refers to a particular thing, but is silent with respect to other
    comparable things, that silence reflects an intention to exclude the unmentioned
    items: Ruth Sullivan,
Sullivan on the Construction of Statutes
, 6th
    ed. (Markham: LexisNexis Canada, 2014), at p. 248. In other words, "legislative
    exclusion can be implied when an express reference is expected but absent:"
University
    Health Network v. Ontario (Minister of Finance)
(2001), 151 O.A.C. 286 (C.A.),
    leave to appeal refused, [2002] S.C.C.A. No. 23, at para. 32.

[115]

Subsection 267.8(8) specifically refers to apportionment
required by s. 3
of the
Negligence Act
, which
    deals only with the contributory negligence of plaintiffs. Subsection 267.8(8)
    does not address the apportionment of liability as between two tortfeasors and accordingly,
    it directs only that SABs are to be deducted from the plaintiff’s damages,
  after those damages are reduced for any contributory negligence.

[116]

There is no specific language in any other subsection that expressly
    requires that the damages attributable to a non-party defendant be deducted
    before the SABs deductions required by ss. 267.8(1), (4), and (6) are made.

[117]

In our view, the legislature’s specific inclusion of s. 267.8(8) is actually
    incompatible with the appellant’s "net damages payable" argument. To interpret the
    words of ss. 267.8(1), (4), and (6) as meaning net several damages payable after
    apportionment, as the appellant advocates, would require the apportionment
    exercise to implicitly take place under ss. 267.8(1), (4), and (6). There would
    then have been no need to expressly direct apportionment for contributory
    negligence under s. 267.8(8). Such an interpretation would render s. 267.8(8) functionally
    meaningless. Because the legislature specifically directed that the damages to
    which a plaintiff is entitled are subject to reduction for any contributory
    negligence, the presumption of implied exclusion precludes any interpretation
    of ss. 267.8(1), (4), and (6) that would require implicit apportionment as
  between defendants before the SABs deduction is applied.

[118]

In addition, the principle of statutory interpretation known as the
    presumption of consistent expression precludes an interpretation of the words
    "damages to which the plaintiff is
entitled
" in ss.
    267.8(1), (4), and (6) as meaning "damages
payable
".
    The presumption of consistent expression requires that when different words are
    used in separate provisions in a single piece of legislation, they must be understood
    to have different meanings:
Agraira
, at paras. 80-81. The words
    "damages payable" are explicitly used in s. 267.8(20). Because different words
    are used in ss. 267.8(1), (4), and (6), the principle of consistent expression
    requires that these subsections be interpreted as meaning something other than
  net several damages actually payable by a party defendant.

[119]

Finally, we reject the submission based on
McDonald v. Kwan
.
    That case dealt with successive accidents involving independent torts. The
    trial judge found that the first accident was the sole cause of the plaintiff’s
    past and future loss of income. There was no income loss arising from the
    subsequent accident. In that case, the defendant whose negligence was the sole
  cause of the plaintiff’s income loss, was entitled to deduct all the SABs.
McDonald
is clearly distinguishable on that basis.

[120]

In sum, we agree with the approach taken by the trial judge and with
    his conclusion that the result of this approach is fair. In our view, the order
    of operations mandated by s. 267.8 in respect of the two protected defendants in
    this case requires the following approach within each silo of SABs: (1) the
    damages attributable to Cadieux’s contributory negligence are deducted from the
    damages awarded by the jury; (2) the total SABs paid and the settlement amounts
    attributed to that silo are deducted from the damages awarded by the jury; (3)
    responsibility for the payment of the remaining sum is then determined in
  accordance with the non-settling defendant Saywell’s proportionate liability.

(e)

SABs should be deducted on a gross basis, not net of legal fees

[121]

The appellant Saywell submits that the trial judge erred in
    deducting the legal costs that Cadieux incurred in pursuing the SABs settlement
    from the calculation of the SABs deduction from tort damages.

[122]

We agree. The deduction of legal costs is inconsistent with the
    plain wording of ss. 267.8(1), (4), and (6) which provide that "the damages to
    which a plaintiff is entitled  …
shall be reduced by
…
all payments
in respect of the incident that the
    plaintiff has received … [in respect of SABs]" (emphasis added). The statute
  calls for deduction of SABs on a gross basis, not a net basis.

[123]

For the reasons that follow, it may, in some cases, be appropriate
    to award the plaintiff, as part of the costs of the tort action, some or all of
    the costs actually incurred by the plaintiff in recovering SABs which have
    reduced the amount of the tort award under s. 267.8.

[124]

There are two strands in the jurisprudence from the Superior Court
    of Justice concerning this issue. One strand, exemplified by the approach taken
    by the trial judge in this case, is a "net approach" in which SABs deducted
    from the tort award are net of the legal costs incurred to obtain them. In
    adopting this approach, the trial judge referred to
Anand v. Belanger
,
    2010 ONSC 5356, 90 C.C.L.I. (4th) 138 and
Siddiqui v. Siddiqui
, 2015
    ONSC 6260, which followed
Anand
. See also:
Jones v. Hanley and

Jones v. Livska
, 2018 ONSC 145, 22 C.P.C. (8th) 419. The underlying
    rationale of this approach, identified by Stinson J., at para. 32 of
Anand
,
    is that the tort liability insurer should bear the costs of the plaintiff’s
    claim against the SABs, because it has received the benefit of the risk and expense
  incurred by the plaintiff in pursuing recovery of the SABs.

[125]

A second strand, illustrated by the decision of the Divisional Court
    in
Carr v. Modi
, 2016 ONSC 7255, 62 C.C.L.I. (5th) 295 (Div. Ct.), permits
    the plaintiff to recover legal fees and expenses incurred in recovering SABs as
    part of the costs of the tort action where appropriate, rather than accounting
    for these costs in the SABs deduction process in all cases. See also:
Ananthamoorthy
    v. Ellison
, 2013 ONSC 4510;
Hoang v. Vicentini
, 2014 ONSC 5893,
    40 C.C.L.I. (5th) 231;
Ryan v. Rayner
, 2015 ONSC 3310.

[126]

The rationale for this approach is similar to that expressed by
    Stinson J. in
Anand
, and was explained by D. Wilson J. in
Ananthamoorthy
,
    at paras. 21-22:

… In cases where a Plaintiff claims for damages occasioned by a
    motor vehicle accident, there is a comprehensive scheme that provides for
    payment of accident benefits, including loss of income benefits, which includes
    procedures for dispute resolution that must be followed. However, the payment
    of these accident benefits is inextricably linked to the action against the
    driver because the defendant insurer can claim a deduction for amounts the
    Plaintiff receives from her own insurer. Thus, the solicitor for the Plaintiff
    is bound to pursue his client's entitlement to various benefits or face the
    argument at trial from the tort insurer that the Plaintiff could have and
    should have received benefits from the no-fault insurer.

… In the case before me, it was the obligation of [plaintiff’s
    counsel] to pursue the Plaintiff's entitlement to various benefits and this
    inured to the credit of the defendant tortfeasor. Had he not done so, it would
    have been exceedingly difficult to argue at trial that the Plaintiff was totally
    disabled from working as a result of the injuries from the accident when her
    own insurer denied payment of benefits based on inability to work. [Plaintiff’s
    counsel] has taken off the sum that he received from the first party insurer,
  which is appropriate to avoid double recovery of fees.

[127]

In
Hoang
, decided a year later, D. Wilson J. qualified her
    observations, noting, at paras. 65-66 and 68-69, that the plaintiff’s costs of
    pursuing the SABs claim should not be visited upon the tort defendant as a matter
  of course. Rather, this determination should be made on a case-by-case basis:

The issue of whether a tort defendant ought to pay some amount
    of costs that were incurred by Plaintiff’s counsel for the pursuit of SABS is
    fact driven and depends on the particular circumstances of a case. The
    Regulations provide a comprehensive scheme for the recovery of benefits
    associated with motor vehicle accidents, and there are provisions for the
    payment of costs. There are different levels of procedure and adjudication
    available to applicants, including appeals. The pursuit of SABS and whether to
    settle or proceed to the next level is in the discretion of counsel and the
  injured party.

A Plaintiff has an obligation to apply for benefits, and if the
    request is rejected, there are different options that may be pursued. Tort
    defendants are not involved in the SABS process and have no ability to control
    it. It would be unfair as a general proposition, in my view, to lay the costs
    of the accident benefits pursuit at the feet of the tort defendants.
There may be times when a tort defendant derives a clear
    benefit from the accident benefits matters by way of a deduction of the amounts
    from damages, and in those circumstances a judge fixing costs in a tort action
    may consider it appropriate that the tort defendant pay the costs incurred by
    the Plaintiff in securing the benefits. At other times, however, there may be
    "compelling circumstances
," as described in
Moodie v. Greenaway
    Estate
, [1997] O.J. No. 6525 (Ont. Ct. J., Gen. Div.), at para. 4,
where it would be inappropriate to visit the costs of dealing
    with other insurers on a Defendant in a tort claim. There is no hard and fast
    rule
(emphasis added).

…

As I stated in
Ananthamoorthy
, at para. 21, "the
    solicitor for the Plaintiff is bound to pursue his client's entitlement to
    various benefits..." There are limitations on that activity. The statutory
    scheme which exists for securing accident benefits provides for the payment of
    costs. In many if not the majority of cases where there is a tort action going
    forward, the pursuit of accident benefits is quite separate from the tort
    action, including separate disbursements and expert reports. It is appropriate
    in these circumstances that the solicitor for the Plaintiff accepts the costs
    as awarded at FSCO.

In other cases, depending on the facts, it may be appropriate
    for some of the time expended in pursing statutory benefits to be included in
    the fees sought in the tort action. I do not agree that a Plaintiff can take
    whatever steps he or she wishes to recover accident benefits and then demand
    and expect payment from the tortfeasors in a different proceeding.

[128]

In our view, the approach in the second strand of cases should be
    followed. It respects the statutory direction in s. 267.8, while enabling the
    court to make a fair allocation of the costs of pursuing SABs in appropriate
    cases.

[129]

The court has jurisdiction, under s. 131(1) of the
Courts of
    Justice Act
, to award "costs of and incidental to a proceeding". Legal
    fees and disbursements in pursuing SABs can reasonably be considered incidental
    to the proceeding where the SABs have reduced the damages payable by the
  tortfeasor.

[130]

We agree with the observations of D. Wilson J. in
Hoang
and
    in
Ryan v. Rayner
, at para. 8, that the tort defendant should not be
    required to pay the costs of the plaintiff’s pursuit of SABs as a general
    principle or as a matter of course. The issue, as she observed, is fact driven
  and depends on the particular circumstances of the case.

[131]

That observation is particularly relevant in the settlement context.
    The amount, if any, allocated to costs by plaintiff’s counsel and the SABs
    insurer in a settlement disclosure notice should not necessarily determine the
    costs to be paid by the tort insurer. Many factors can influence the amount
  allocated to costs.

[132]

A trial judge considering whether to award such costs, and if so,
    the amount of the award, will have regard to all the circumstances, including:
    (a) the fees and disbursements actually billed to the plaintiff in pursuit of
    the SABs; (b) relevant factors in Rule 57.01, including whether the litigation
    of the SABs claim involved particular risk or effort; (c) the proportionality
    of the legal costs and expenses incurred by the plaintiff to the benefit of the
    SABs reduction to the defendant; (d) whether the SABs were resolved by way of
    settlement or by arbitration; (e) any costs paid as a result of the settlement
    or arbitration; (f) whether all or any portion of the costs were incurred as a
    result of unusual or labour-intensive steps that should not reasonably be visited
    upon the tort defendant; (g) whether or not plaintiff’s counsel was acting on a
    contingent fee basis and, if so, the terms of the arrangement; and (h) the
    overall fairness of the allocation of the costs of pursuing SABs as between the
    plaintiff and the SABs insurer and as between the plaintiff and the tort
  insurer.

[133]

There has been a change in the SABs arbitration procedure, effective
    April 1, 2016. Under the regime in effect at the time of the accident in this
    case (2006), s. 282 of the
Insurance Act
provided for arbitration of
    disputed SABs claim and s. 282(11) provided that the arbitrator could award a
    party the expenses of the arbitration. Arbitrations took place under the
    auspices of the Financial Services Commission ("FSCO"). A party was not
  required to arbitrate and could pursue a claim in the courts.

[134]

Effective April 1, 2016, disputed SABs claims must be pursued in proceedings
    before the Licence Appeal Tribunal ("LAT") and not in the courts. The LAT has
    no jurisdiction to award costs, except in cases where a party has acted
    unreasonably or the appeal is frivolous, vexatious, or commenced in bad faith,
    in which case the party may make a request for costs:
Common Rules of the
    License Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission
(effective October 2, 2017), s. 19.1; see also
License Appeal Tribunal Act,
    1999
, S.O. 1999, c. 12, Sched. G, s. 8. The import is that in most cases,
    the party will bear its own costs of asserting a contested SABs claim against
    the insurer. The issue is not before us and we make no comment on the effect,
    if any, of the change in procedure on the recoverability of the costs of the SABs
    claim in the tort action.

[135]

In the case at bar, because the trial judge adopted the net
    approach, he did not consider whether any portion of the expenses incurred in
    recovering SABs could be claimed as part of the costs of the tort action. There
    is nothing in the trial judge’s reasons, nor in the record that is before us,
    that permits us to address that issue, having regard to the factors outlined
    above. Accordingly, we are unable to conclude whether it would be
appropriate in the particular factual circumstances of this case for
    some of the costs incurred
in pursuing the SABs settlement
    to be included in the costs sought in the tort action if the parties are unable
    to resolve this issue. The question to be addressed in additional written
    submissions by the parties is: Whether, having regard to all of the
    circumstances,
it is appropriate that the appellant pays
    some of the costs incurred by the respondent in recovery of the SABs, and if
    so, how much?

(2)

Management fee

[136]

It was agreed by counsel for the parties that the trial judge would
    fix an appropriate management fee for the administration of the damages awarded
    to Cadieux.

[137]

A management fee ensures that the tort award is not prematurely exhausted
    due to the victim’s inability to manage his or her affairs:
Townsend v.
    Kroppmans
, 2004 SCC 10, [2004] 1 S.C.R. 315, at para. 6. Here, Cadieux’s affairs
    were being managed by his father, who was inexperienced in financial
  management.

[138]

Counsel provided the trial judge with case law concerning the quantum
    of a management fee. The trial judge settled on a fee equal to 5 percent of the
    assets under administration, which he described as a "conventional award": see
Gordon
    v. Greig
(2007), 46 C.C.L.T. (3d) 212 (Ont. S.C.). He applied that
    percentage to the amount of the SABs settlement ($900,000) plus the net tort
    award after liability apportionment and, after deduction of the
FLA
portion, arrived at a management fee of $65,250.

[139]

The appellant Saywell asserts that: (a) it was a legal error to
    award a management fee when, based on the evidence, the jury had already made
    an award of $31,380 for bookkeeping expenses; (b) the funds were in a
    structured settlement and required no management (relying on the decision of
    this court in
Wilson v. Martinello
(1995), 23 O.R. (3d) 417 (C.A.), at
    p. 422); and (c) the trial judge erred in calculating the management fee based on
    100 percent of the SABs settlement when he had found that Saywell was only
    entitled to deduct 50 percent of the SABs amount from his share of damages.

[140]

The determination of whether a management fee is appropriate, and
    the amount of the fee, are questions of fact to be made on a case-by-case
    basis: see
Mendzuk v. Insurance Corporation of British Columbia
,
    [1988] 2 S.C.R. 650.

[141]

The parties were clearly satisfied that there was sufficient
    evidence and authority before the trial judge to establish that a management
    fee was appropriate and to enable him to fix a fair and reasonable management
    fee. Having entrusted the issue to the court, the appellant can hardly complain
    that the trial judge found it appropriate to make some award for asset
    management. There was no dispute that Cadieux was incapable of managing his
    affairs and there was no clear overlap with the bookkeeping award, which
    appears to have been for banking and other personal financial affairs.

[142]

However, while the amount of the award is reasonable, the appellant
    has identified an error in principle in calculating the award on the basis of
    100 percent of the SABs settlement and net tort award, when he was only entitled
    to deduct 50 percent of the SABs amount. We would therefore allow the appeal to
    that extent.

(3)

Prejudgment interest

[143]

The appellant re-asserts the submission he made at trial that while
    the entitlement to prejudgment interest in s. 128(1) is a substantive right,
    the amendment to the
Insurance Act
regarding the applicable prejudgment
    interest rate speaks only to the method of calculation of interest and is
    simply procedural and therefore has retrospective operation. The respondent
    plaintiffs, supported by the OTLA, take the position that the right to
    prejudgment interest is substantive and vests at the moment of the accident.

[144]

The issue was comprehensively addressed by MacFarland J.A. in
Cobb
,
    at paras. 66-104. She concluded that as a matter of statutory interpretation
    the
Insurance Act
amendment was intended to apply to actions such as
    this, commenced before the legislation came into effect but tried after. Her
    conclusions were adopted in
El-Khodr
.

[145]

We respectfully agree with her conclusion on this issue and endorse
    her reasons. We therefore allow the appeal with respect to this issue. The
    default rate prescribed by s. 128 will therefore apply unless it is appropriate
    for the court to reduce or increase the prescribed rate of interest or to
    disallow interest otherwise payable under s. 128. As the trial judge made no
    findings that would permit us to exercise that discretion, we are unable to
    conclude whether it would be appropriate to do so in this case. The
    parties may address that issue by further written submissions. The question
    to be addressed is whether, having regard to all the circumstances, it is
    appropriate that the court exercise discretion under s. 130 of the
Courts
    of Justice Act
to award prejudgment interest at a rate other than the
    default rate prescribed by s. 128.

(4)

Costs, offers to settle, and disbursements

(a)

Costs in the court below

[146]

The parties may make further written submissions with respect to
    costs in the court below, having regard to the effect of the judgment of this
    court. As set out above, those submissions may address whether, having regard
    to all of the circumstances,
it is appropriate that the
    appellant, Saywell, pays some of the costs incurred by the respondent, Cadieux,
    in recovery of the SABs.

(b)

Interest and the Rule 49 offers

[147]

If the parties are unable to agree on the interest payable and the
    effect of the Rule 49 offers to settle having regard to the effect of the
    judgment of this court, they may make further written submissions on this issue.

(c)

Disbursements

[148]

Following the trial judge’s ruling on costs, the plaintiffs, who are
    respondents in this appeal, brought to his attention a calculation error in
    respect of $28,027.80 in disbursements that had been excluded from the costs
    award. The trial judge advised the parties that he had intended to award the
    disbursements, but would not make any adjustments to the costs award in light
    of the delivery of the appellant’s notice of appeal. The respondents ask this
  court to correct this error.

[149]

The appellant did not dispute the error, and in our view it should
    be corrected.

G.

order

[150]

For these reasons, we allow the appeal in part, allow the
    cross-appeal in part and order that:

1.

those portions of the SABs settlement for past and future medical and
    rehabilitation benefits and for past and future attendant care benefits should
    be set off against the jury award of $701,809 for an ABI support worker;

2.

the appellant is entitled to deduct health care SABs paid prior to the
    settlement in the amount of $20,755.72 and SABs for other pecuniary loss paid
    prior to the settlement in the amount of $3,843.33 from the jury award;

3.

the appellant is entitled to set off 50 percent of the SABs settlement
    against his liability for the tort judgment;

4.

legal costs incurred in obtaining the SABs settlement should not have been
    deducted from the SABs settlement before it was deducted from the jury award —
    the parties may make further submissions on the issue of whether all, or some
    part of those legal costs, should be awarded as costs of this proceeding;

5.

the management fee should be calculated based on 50 percent of the SABs
    settlement and net tort award;

6.

prejudgment interest should be calculated in accordance with the
    variable prejudgment interest rate provided for in s. 128(1) subject to
    increase or decrease pursuant to s. 130 of the
Courts of Justice Act
—
    the parties may make further submissions on the issue of whether, having regard
    to all the circumstances, it is appropriate that the court exercise discretion
    under s. 130 of the
Courts of Justice Act
to award prejudgment
    interest at a rate other than the default rate prescribed by s. 128; and

7.

the respondents/appellants by way of cross-appeal are entitled to
    disbursements in the amount of $28,027.80.

Released: "GS" DEC 04 2018

"George R. Strathy C.J.O."

"Alexandra Hoy A.C.J.O."

"K. Feldman J.A."

"David Brown J.A."

"David M. Paciocco J.A."

[1]
This court refused to grant a rehearing of
El-Khodr
with the
Cadieux
and
Carroll
appeals: 2018 ONCA 66, 140 O.R. (3d) 557.

[2]
The legislative scheme requires that, when a settlement has occurred, a written
    disclosure notice in a form approved by the Superintendent of Insurance must be
    provided to the insured. The settlement disclosure notice must contain certain
    prescribed information, including the insurer’s offer with respect to the
    settlement:
Automobile Insurance
, R.R.O. 1990, Reg. 664, as amended.

[3]

Pierringer v. Hogan
(1963), 124
    N.W.2d 106, 21 Wis.2d, 182.

[4]

The
Insurance Act
distinguishes between protected and
    non-protected persons in relation to their liability for certain damages. The
    owner of the automobile, the occupants, and any person present at the incident
    are considered "protected". In this appeal, we are concerned only with
    protected defendants.