Ontario’s Superior Court of Justice recently ruled that payments under the Statutory Accident Benefits Schedule (SABS) may be garnisheed if the insured defaults against a creditor.
The case in question involved Vlado Serbinek who was insured by Markel Insurance Company of Canada when he was injured in a motor vehicle accident. He may become entitled to benefits under SABS, namely income replacement and benefits for medical expenses.
After Serbinek’s injury, a creditor obtained a default judgement against him for about $118,000 and served Markel with a notice of garnishment. Being unsure of the rules, Markel approached the court for clarification as to whether SABS benefits may be garnisheed.The court referred to section 7(1.1) of the Wages Act which contends that insurance payments or any other indemnity scheme provided to replace lost income because of disability are deemed to be wages, whoever administrates them. In other words, such payments are subject to garnishee. However, section 7(2) of the act exempts 80% of a person’s wages from any such seizure.
The court held that Markel must pay the creditor a portion of the monies due to Serbinek, subject to the rule that 80% of the benefits must go directly to Serbinek.
