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
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"
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)
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.
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