Client Update: Future CPP disability benefits are deductible under the SEF 44 in Nova Scotia
In an important case for insurance practice in Nova Scotia, the Court of Appeal has confirmed that the value of future CPP disability benefits is deductible under the SEF 44 family protection endorsement.
Justice Scanlan wrote the unanimous reasons in Portage LaPrairie Mutual Insurance Company v Sabean, 2015 NSCA 53 [“Sabean“].
The very purpose of the SEF 44 was crucial to the result in this case. Recall that this endorsement provides additional coverage for an insured, in the case of a motor vehicle accident with an underinsured motorist. As the Court of Appeal emphasized in the earlier case of Campbell-MacIsaac v Deveaux, 2004 NSCA 87, the SEF 44 is “excess” insurance, beyond the minimum coverage mandated by the Insurance Act. It has also been called “last ditch” and “safety net” insurance.
According to Justice Scanlan in Sabean, the nature of the SEF 44 as “an excess coverage provision” is a key part of the context when interpreting the endorsement.
The particular provision at issue here was clause 4(b)(vii):
- The amount payable under this endorsement to any eligible claimant is excess to any amount actually recovered by the eligible claimant from any source (other than money payable on death under a policy of insurance) and is excess to any amounts the eligible claimant is entitled to recover (whether such entitlement is pursued or not) from:
…- any policy of insurance providing disability benefits or loss of income benefits or medical expense or rehabilitation benefits;
The Court of Appeal agreed that CPP disability benefits are a “policy of insurance providing disability benefits” and therefore have to be deducted under this provision. Otherwise, the insured claimant would be “double dipping”, contrary to the purpose of the SEF 44 as excess insurance only.
With the release of Sabean, there is now a clear divide between the law in Nova Scotia and the law in New Brunswick on this issue. In Economical Mutual Insurance Co v Lapalme, 2010 NBCA 87, the New Brunswick Court of Appeal reached the opposite conclusion from the Court of Appeal in Sabean, and held that future CPP disability benefits are not to be deducted under New Brunswick’s version of the SEF 44. The NSCA expressly declined to follow Lapalme.
Congratulations to Scott Norton, Q.C., Scott Campbell, and Jennifer Taylor, all of Stewart McKelvey, who successfully represented the appellant in this case.
The foregoing is intended for general information only. If you have any questions or require further information on how this applies to your business, visit our Insurance practice group. For more on our firm, visit www.stewartmckelvey.com.
Archive
Joe Thorne & Jennifer Taylor In 2005, a bus accident occurred in Nova Scotia. The people injured in the accident were residents of Newfoundland and Labrador, which is where they sued the bus owner and driver…
Read MoreBy Killian McParland and Sophie Poulos As recently announced, the next Nova Scotia provincial election will be held on Tuesday, November 26, 2024. Under Nova Scotia’s Elections Act, every employee who is an eligible voter (i.e.…
Read MoreBy Sadira Jan, Dave Randell, Nancy Rubin, Kimberly MacLachlan, and Onye Njoku Bill 471, the Advancing Nova Scotia Opportunities Act, received Royal Assent and introduces changes to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation…
Read MoreBy Sadira Jan, Dave Randell, Nancy Rubin, G. John Samms, Kimberly MacLachlan, and Jamie Gamblin Bill C-49 received Royal Assent and will amend the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia…
Read MoreBy John Morse The New Brunswick provincial election is set to take place on Monday, October 21, 2024, with polling hours between 10:00 a.m. to 8:00 p.m. Under the New Brunswick Elections Act, all employees…
Read MoreLevel Chan and Dante Manna On September 9, 2024, the Canadian Association of Pension Supervisory Authorities (CAPSA) released the long-awaited final revisions to Guideline No. 3 – Guideline for Capital Accumulation Plans (CAPs) and the…
Read MoreSean Kelly and Tiegan A. Scott On September 5, 2024, the “Stronger Workplaces for Nova Scotia Act” (Bill No. 464) was introduced in the Nova Scotia House of Assembly for first reading by the Honourable Jill Balser…
Read MoreJohn A.C. Morse and Lauren Sorel The Human Rights Tribunal of Alberta (the “Tribunal”) recently awarded three complainants a total of $273,274.91 in compensation, with $155,000.00 of this amount designated as general damages – a…
Read MoreStephen Penney and Megan Kieley1 The Newfoundland and Labrador Court of Appeal’s recent decision in Index Investments Inc v Paradise (Town)2 is a significant decision for municipalities. The Court of Appeal endorsed the Newfoundland and…
Read MoreBy Kathleen Leighton & Brittany Trafford The Temporary Foreign Worker Program (“TFWP”) and International Mobility Program (“IMP”) provide Canadian employers the opportunity to hire foreign workers to address their labour needs, particularly when qualified Canadians…
Read More