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
We are pleased to present the sixth installment of Beyond the border, a publication aimed at providing the latest information to clients about new programs and other immigration-related information that may be pertinent to employers…
Read MoreLara Greenough and Sheila Mecking Board members, directors, committee members, employees and anyone acting for a regulatory body or under its governing legislation, all have the obligation to act and make decisions in good faith.…
Read MoreWe are pleased to present the eighth issue of Discovery, our very own legal publication targeted to educational institutions in Atlantic Canada. With COVID-19 vaccines rolling out across the country, a renewed sense of hope is…
Read MoreDante Manna with the assistance of Kali Robertson (summer student) The Nova Scotia Government recently released regulations reassigning the authority for administering financial hardship unlocking in the province. Effective July 1, 2021, individuals will apply directly…
Read MoreBrittany Trafford The Canadian borders have been restricted for over a year now and many families have struggled with being separated. Throughout 2020 and early 2021 restrictions have fluctuated as the federal government tried to…
Read MoreHarold Smith, QC with the assistance of Matthew Raske (summer student) A recent labour arbitration decision, Unifor Local 64 and Corner Brook Pulp and Paper Limited, shows how the permissibility of drug and alcohol testing continues…
Read MoreBrittany Trafford Last week the Maritime provinces announced various re-opening plans based on vaccine trajectories, with Newfoundland and Labrador making an announcement today¹. These plans address, among other things, who will be able to enter…
Read More*Last updated: May 31, 2021 (Originally published April 1, 2020) Kathleen Leighton Due to the COVID-19 pandemic, there are various implications for the immigration world, including for those already in Canada, as well as those…
Read MoreKatharine Mack Premier Ian Rankin and Chief Medical Officer of Health Dr. Robert Strang provided details on Nova Scotia’s reopening plan this afternoon. The Province’s plan has a total of 5 phases. Phase 1, which focuses…
Read MoreChad Sullivan A recent labour arbitration decision (Canadian Broadcasting Corp. and Canadian Media Guild (Khan), Re, 2021 CanLII 761) provides another example of how privacy law continues to evolve and can directly impact the outcome…
Read More