Skip to content

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):

  1. 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:

    1. 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.

SHARE

Archive

Search Archive


 
 

Reset for renewables: Nova Scotia overhauls energy regulation and governance in advance of influx of renewable energy

April 5, 2024

By Nancy Rubin and James Gamblin The Government of Nova Scotia has embarked on a path to dramatically reshape the regulation and governance of the energy sector with the passage of Bill 404, the Energy…

Read More

An employer’s guide to human rights law in Atlantic Canada

April 2, 2024

By Kathleen Starke and Annie Gray Human rights landscape Human rights legislation prohibits discrimination in specific contexts, including employment and the provision of services. In all Atlantic Provinces, Human Rights Commissions are responsible for enforcing…

Read More

Recognizing subtle discrimination in the workplace: insights from recent legal cases

March 4, 2024

By Sheila Mecking and Michiko Gartshore Subtle discrimination can have a much stronger and longer effect on employees when not properly addressed. It can also result in costly consequences for an employer who does not…

Read More

Immediate changes to travel eligibility for citizens of Mexico

February 29, 2024

By Brittany Trafford and Brendan Sheridan Today Immigration, Refugees and Citizenship Canada (“IRCC”) has announced significant changes to the travel requirements for Mexican citizens. As of February 29, 2024 at 11:30p.m. Eastern Time, all electronic…

Read More

Updated guidance on business reporting obligations under Canada’s supply chain transparency legislation

February 23, 2024

By Christine Pound, ICD.D., Twila Reid, ICD.D., Sarah Dever Letson, CIPP/C, Hilary Newman and Daniel Roth Introduction As we reported on November 30, 2023, the Fighting Against Forced Labour and Child Labour in Supply Chains…

Read More

Trustees beware! New trust reporting and disclosure requirements under the Income Tax Act are here – are you ready for them?

February 21, 2024

By Richard Niedermayer, K.C., TEP  & Rackelle Awad New trust disclosure rules originally announced on February 27, 2018, are now in force, and trusts with taxation years ending on or after December 31, 2023 are…

Read More

Proposed Criminal Interest Rate Regulations: exemptions to the lower criminal interest rate

February 14, 2024

By David Wedlake and Andrew Paul In late December 2023, the Federal Government issued draft Criminal Interest Rate Regulations under the Criminal Code. These proposed regulations follow the Budget Implementation Act, 2023, No. 1 which…

Read More

Outlook for 2024 Proxy Season

February 9, 2024

By Andrew Burke, Colleen Keyes, Gavin Stuttard, David Slipp and Logan Walters With proxy season on the horizon, many public companies are once again preparing their annual disclosure documents and shareholder materials for their annual…

Read More

Significant changes announced for new study permit applications

February 6, 2024

By Brendan Sheridan and Tiegan Scott The Government of Canada recently announced further changes to the international student program that not only limits the number of new study permit applicants per year, but also increases…

Read More

Plans of arrangement come to Newfoundland and Labrador

January 30, 2024

By Tauna Staniland, K.C., ICD.D, Joe Thorne, and Nadine Otten What can you do when your corporation wants to complete a complex transaction requiring significant corporate restructuring that cannot be easily completed under the corporation’s…

Read More

Search Archive


Scroll To Top