IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101104

Docket: S068051

Registry: Vancouver

Between:

Patricia Mae Schuk

Plaintiff

And

York Fire & Casualty Insurance Company,
The Manitoba Public Insurance Corporation, and
Insurance Corporation of British Columbia

Defendants

Before: The Honourable Madam Justice B.J. Brown

Reasons for Judgment
In Chambers

INTRODUCTION

[1]             In December, 2005, Ms. Schuk was struck by a highway tractor trailer on Highway 16 near Valemont, B.C. The tractor trailer was licensed in Manitoba. Ms. Schuk was a pedestrian at the time. She had a B.C. driver's license.

[2]             In October 2009 my brother, Mr. Justice Myers, was asked to determine which of the three named insurers was required to pay no-fault benefits to Ms. Schuk. He concluded that Ms. Schuk was entitled to payment of no-fault accident benefits from ICBC and MPIC, with MPIC being the primary insurer. He went on to say:

In its written argument, ICBC submitted that the MPIC policy substantially exceeded the benefits payable by ICBC ... . MPIC did not fully address that submission. If there is, in fact, a dispute over this point the parties can bring the matter back before me.

[3]             It is that question which comes to me, to be determined pursuant to Rules 18A, 33 or 34.

[4]             Before Mr. Justice Myers, the issue turned on whether Ms. Schuk was a pedestrian. If Ms. Schuk was a pedestrian, it was agreed that ICBC's liability would be secondary to that of MPIC. Mr. Justice Myers concluded that Ms. Schuk was a pedestrian and was therefore an insured for the purpose of the no-fault benefits under both MPIC and ICBC coverage, with MPIC being the primary insurer.

[5]             On this application, the plaintiff argues that she is entitled to the unlimited benefits provided under the Manitoba Public Insurance scheme. The limit of benefits in B.C. is $150,000 under Part 7 of the Regulations, whereas there is no limit under the MPIC legislation.

[6]             The plaintiff's argument focuses on the power of attorney and undertaking ("PAU") filed by MPIC with the Superintendent of Financial Institutions of British Columbia in 1988. That PAU provides, in part, that:

Manitoba Public Insurance Corporation ... undertakes …

C. not to set up any defence to any claim … which might not be set up if the contract had been entered into in and in accordance with the laws … of the Province … in which such action … may be instituted, and to satisfy any final judgment rendered against it or its insured by a court in such Province … in the claim … in respect of any kind or class of coverage provided under the contract or plan and in respect of any kind or class of coverage required by law to be provided ... in such Province ... up to the greater of

(a) the amounts and limits for that kind of class of coverage in the contract or plan, or

(b) the minimum for that kind of class of coverage … required by law to be provided under the plan or contract of automobile insurance entered into in such Province….

[7]             The plaintiff says that the Manitoba no fault legislation provides for greater amounts than does the B.C. legislation and, therefore, by virtue of the PAU, MPIC is required to pay the greater amount.

[8]             ICBC did not appear on this application, only the Manitoba Public Insurance Corporation appeared. It took the position that the plaintiff is not entitled to no-fault benefits under the Manitoba Public Insurance Corporation Act. It says that the PAU precludes the out-of-Province insurer from raising any defence that might not be set up if the contract of insurance had been issued in British Columbia. Because ICBC could not assert that it does not owe no-fault benefits to Ms. Schuk, MPIC is similarly precluded from arguing that it does not owe any no-fault benefits to Ms. Schuk.

[9]             MPIC argues that the Manitoba no-fault system is fundamentally different from the system of no-fault benefits in British Columbia. B.C. has a partial no-fault system in which the plaintiff may claim no-fault benefits, but also has full tort rights against a tortfeasor. Manitoba has a total no-fault system. Compensation under the Manitoba legislation is in lieu of tort compensation. These benefits are referred to as Personal Injury Protection Plan, or PIPP benefits. The PIPP benefits are not included in the Certificate of Insurance, rather they are found in the legislation. This, too, distinguishes the Manitoba scheme from the British Columbia scheme.

[10]         The tractor trailer involved in this case carried an automobile policy which is Exhibit A to the Agreed Statement of Facts. The summary page shows the applicable forms and coverages: Form A is the Manitoba Standard Auto Policy which provides coverage for third party liability, accident benefits, old vehicle damage, and uninsured motorist coverage.

[11]         MSEF No. 25(I) provides clarification of coverage "Section B - accident benefits - as required by law" and MSEF No. 25(iv) provides "Section B of the MSF no. 1 policy provides for accident benefits coverage as required by law. A charge of $950 is processed for accident benefits coverage for those drivers not eligible for the Personal Injury Protection Plan (PIPP)".

[12]         MPIC argues that the auto policy does not provide entitlement for anyone to Manitoba PIPP benefits. Entitlement to Manitoba PIPP benefits arises by virtue of the legislative provisions. MPIC argues that Ms. Schuk does not qualify for PIPP benefits because she is not a Manitoba resident and not a victim as required by that legislation. Further, s. 75(I) of the Manitoba legislation provides that non-residents injured in an accident in Manitoba have only PIPP benefits and no tort claim.

[13]         MPIC argues that the PAU ensures that a pedestrian injured in British Columbia has the anticipated B.C. no-fault benefits, even where the vehicle which struck her did not have that coverage. By contrast, licensed drivers and vehicle owners in Manitoba would not expect that their premiums were being used to fund a very generous no-fault benefits program to non-residents with no connection to Manitoba.

[14]         MPIC argues that this court does not have jurisdiction to determine the types or amounts of benefits to which Ms. Schuk would be entitled if she were entitled to PIPP benefits. The scheme of PIPP benefits does not contemplate the court reaching such a decision; the Act sets up an automobile injury compensation appeal commission as a specialist tribunal to hear appeals under Part 2.

[15]         Finally, MPIC argues that if Ms. Schuk is entitled to claim benefits under the Manitoba PIPP system, she is also required to follow its procedures with respect to assessment and determination of her appeals, relying on Hwang v. Axa Pacific Insurance Company, 2001 BCCA 410.

DISCUSSION

[16]         The issue before me turns on the proper interpretation of the Power of Attorney and Undertaking filed by the Manitoba Public Insurance Corporation. In this case, the relevant provisions of the undertaking provide that the Manitoba Public Insurance Corporation undertakes to:

A. ... appear in any action … against it or its insured …

C. ... not to set up any defence to any claim … which might not be set up if the contract had been entered into in accordance with the laws relating to motor vehicle liability insurance contracts or plan of automobile insurance in the Province … and to satisfy in a final judgment rendered against it or its insured by a court … in respect of any kind or class of coverage … up to the greater of

(a) the amounts and limits for that kind or class of coverage … provided in the contract or plan, or

(b) the minimum for that kind or class of coverage … required by law in such province ….

[17]         There is no issue that the coverage for the kind or class of insurance, being no-fault benefits is greater in Manitoba. The question is whether its undertaking makes MPIC liable to pay that amount to Ms. Schuk. In my view, it does not. The undertaking provides that MPIC will satisfy any final judgment rendered against it "in respect of any kind or class of coverage provided under the contract or plan", and "in respect of any kind or class of coverage required by law to be provided under a plan" in British Columbia.

[18]         In this case, there is no coverage provided under the contract or plan to Ms. Schuk for no-fault benefits under Part 2 of the Manitoba Act. To qualify for that coverage, a person must be a Manitoba resident or injured in an accident in Manitoba (s. 74). As MPIC argues, the Manitoba standard automobile policy does not incorporate PIPP benefits. PIPP benefits are available based upon statutory entitlement.

[19]         Here, Section B of the contract provided accident benefits "as required by law". The Manitoba legislation provides PIPP benefits only to those resident in or injured in Manitoba. Those benefits are not "required by law" for one, like Ms. Schuk, who is not a resident of Manitoba and not injured in Manitoba. The driver of a Manitoba licensed vehicle is not required to carry PIPP coverage. The Section B endorsement carried a charge of $950 for "accident benefits coverage for those drivers not eligible for Personal Injury Protection Plan (PIPP)". I accept the submissions of Manitoba Public Insurance that this would be drivers who were not Manitoba residents and were not injured in Manitoba.

[20]         Ms. Schuk did not have PIPP benefits coverage under either the contract or the plan.

[21]         The other portion of MPIC's undertaking, that is not to set up any defence which might not be set up if the contract had been entered into in the Province of British Columbia, also does not assist the plaintiff. ICBC could certainly have set up the defence that it does not provide benefits under the Manitoba legislation; that Ms. Schuk does not qualify for PIPP benefits.

[22]         Ms. Schuk's application is dismissed.

"B.J. Brown J."

The Honourable Madam Justice B.J. Brown