In this puzzling ICBC top appeal on an award for income loss (Laxdal v. Robbins, BCCA) the injury claimant was involved in a four car motor vehicle accident on Bowen Road near the intersection of Pryde Avenue in Nanaimo, B.C. Fault for the accident was admitted but at issue was whether the claimant suffered any injuries in the accident and, if so, the nature, extent and duration of those injuries. The claimant said she suffered soft tissue injuries to her neck, shoulder and back. The trial judge made an oral decision after a two day trial (Laxdal v. Robbins, BCSC) and awarded just over $18,000.00. Top personal injury lawyers need to also be aware of case of Lines.
ICBC appeals only the $3,300.00 past wage loss award, seeking a reduction in the award under that head of damage. The sole issue for the lawyers and our top court was the effect of ss. 95 and 98 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 on an award of damages for past income loss arising from a motor vehicle collision in British Columbia. The appeal was justified, despite our new concept of proportionality, because it raises the question of the appropriate treatment of the tax consequences on an award of past income loss for income earners injured in motor vehicle collisions in British Columbia.
Not surprisingly the court of appeal stated,
[18] I have concluded that the trial judge was incorrect in interpreting ss. 95 and 98 of the Insurance (Vehicle) Act as not requiring a reduction in her award for past loss of income to reflect the tax consequences when that loss is combined with earned income during the same period. The words of those sections must be read in their grammatical and ordinary sense.
[19] Having found that the losses all occurred in 2006, the trial judge ought to have combined the respondent’s 2006 income with the past income loss award for the purpose of determining the income she would have earned for income tax purposes “as if she had continued working” (as per Tysoe J.A. at para. 185 of Lines). To achieve this result, the appellant proposed the use of what has been referred to as the “stacking approach”.
[20] I am satisfied that, where an income loss can be attributed to a particular tax year or years, the language of ss. 95 and 98 of the Insurance (Vehicle) Actrequires a resort to the stacking approach. Although Tysoe J.A. explained in the examples he referred to in Lines that “it was the intention of the Legislature to give a discretion to the judge to determine what period or periods are appropriate for the determination of net income loss in all of the circumstances”, once that determination is made, the legislation requires a deduction from the gross income loss to take into account the provisions of the Income Tax Act of British Columbia, the Income Tax Act of Canada and the Employment Insurance Act of Canada for the relevant year or years.
This law should be struck out as it is so confusing, contrived and obviously created to benefit only one entity in British Columbia, ICBC. As an example, if a person is negligently injured in a shopping mall they can be awarded gross income loss but if it is a car accident claim against ICBC then they can only get net income loss from even our top court. It seems this law has benefited ICBC greatly, but judging from this appeal, has cost the judicial system by using up court time which is ultimately funded by taxpayers in British Columbia. Posted by Mr. Renn A. Holness
Issue: Should ICBC be allowed to fund both side of an appeal and should ICBC get special treatment under the law?