Damages Arising From Future Loss Of Income Determined On Gross, Not Net Basis

MacDonald v MacVicar, 2018 NSSC 272 provides judicial guidance on s. 113BA(1) of the Insurance Act, RSNS 1989, c 231 ("Act"), holding that future loss of income damages for plaintiffs injured in motor vehicle accidents should be calculated on a gross, rather than net basis.

BACKGROUND

In MacDonald v MacVicar, 2018 NSSC 271, the court held that the Plaintiff, Kimberly MacDonald was entitled to future loss of income damages from her motor vehicle accident against the Defendant, Ralph MacVicar. Importantly, the court held that the award should be calculated on a gross basis and not subject to income tax, CPP or other deductions.1 The reasons for a gross basis calculation are set forth in the supplemental decision, MacDonald v MacVicar, 2018 NSSC 272 ("MacDonald"), discussed below.

THE DECISION

Issue

At common law, an award for future lost earnings is calculated on the basis of gross loss of income without deductions.2 At issue in MacDonald was whether provisions of the Act and its accompanying regulations had displaced the common law.

The Act and its Regulations

The court's analysis focused on s. 113BA(1) of the Act, and s. 2(1) of the Automobile Insurance Tort Recovery Limitation Regulations, NS Reg 182/2003 ("Regulations"), which defines the terms of s. 113BA(1). The court noted that, at first blush, the language of s. 113BA(1) of the Act does not contradict the common law: while damages in that section are to be calculated on a net basis, the calculus only applies to losses incurred prior to trial. On the other hand, the language of s. 2(1) of the Regulations appears to expand the net calculation to future losses.3

The court investigated whether s. 113BA(1) could be interpreted to apply to future losses. If so, there would be no conflict with s. 2(1) of the Regulations. The court noted that if s. 113BA(1) could not be interpreted to apply to future losses and that there was a conflict between the Act and its Regulations, the presumption against conflict would necessitate that the Act prevail.4

Applicability of Section 113BA(1) of the Act to future losses

The court held that s. 113BA(1) of the Act does not apply to future losses. The court relied on three presumptions of legislative drafting to arrive at its conclusion:

Presumption against changing the common law: Statutes should not be construed so as to make alterations to the common law. There was no clear and unambiguous language in s. 113BA to suggest that the legislature intended on...