Reilly v. Insurance Corp. of British Columbia,  B.C.J. No. 2660, British Columbia Supreme Court
This was a judgment following an application for an opinion pursuant to Rule 33 of the B.C. Rules of Court. The Plaintiff brought this action against ICBC following a separate personal injury action in which the Plaintiff was awarded damages and costs as a result of injuries he suffered when he was struck by a motor vehicle driven by the Insured. ICBC was liable for the limits of the Insured’s $1 million third party liability coverage.
Judgment was given in the underlying action on February 28, 2000 ordering that the Plaintiff recover, inter alia, $2,340,000 which represented the then-present value of the award for loss of opportunity. Counsel for both parties agreed that the Plaintiff was also entitled to $113,091 which represented what they referred to as “interest” on the loss of opportunity award but which was really an adjustment to the stale-dated figure calculated from the date of trial rather than the date of judgment. However, the judgment in the underlying action was appealed and the Court of Appeal reduced the award for loss of opportunity from $2,340,000 to $1,650,000 which the parties agreed had the effect of reducing the $113,091 “interest” award to $79,943. In addition, the Plaintiff was awarded costs of the trial and the Plaintiff owed the Insured costs of the appeal in the amount of $35,271, as well as a further $1,114 on an unsuccessful application for leave to the S.C.C.
Three issues were put before the Court. The first was whether the $79,943 “interest” on the loss of opportunity award constituted an award of pre-judgment interest and was payable by ICBC in excess of the $1 million policy limits pursuant to s. 69 of the Revised Regulation (1984) of the Insurance (Motor Vehicle) Act. ICBC argued that the $79,943 was never truly pre-judgment interest, but rather was only characterized as such by counsel to avoid requiring a recalculation of the stale-dated loss of opportunity award. Although counsel’s characterization became part of the formal Order entered in the underlying action, the Court was satisfied that the description did not alter the fundamental characterization of the award as a stale-dated adjustment rather than as pre-judgment interest. Accordingly, ICBC was not required to pay this amount in excess of the policy limits.
The second issue was whether ICBC was obliged to pay interest from the date of judgment on the trial costs awarded to the Plaintiff in excess of the Insured’s $1 million policy limits. ICBC had refused to pay post-judgment interest on any costs awarded in favour of the Plaintiff submitting that s. 69(c) of the Regulations does not specifically require it to pay post-judgment interest on trial costs in addition to the policy limits. The Court held that s. 69(c) should be interpreted as requiring ICBC to pay post-judgment interest on a cost award against its Insured in order to avoid conflict with the Insured.
The third issue was whether ICBC was entitled to set-off the amounts the Plaintiff owed to the Insured for costs on the appeal and on the S.C.C. leave application from any trial costs owed to the Plaintiff. The Court held that the right of set-off to which the Insured was entitled did not extend to ICBC. The net award of costs in favour of the Plaintiff after deduction of the costs award to the Insured in relation to the appeals formed part of the whole of the judgment award in favour of the Plaintiff against the Insured. Accordingly, ICBC was not entitled to set-off a specific aspect of the Insured’s obligations to the Plaintiff when the Insured remained liable to the Plaintiff for the balance of the judgment.
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