Portage LaPrairie Mutual Insurance Company v.
Sabean,2015 NSCA 53, per Scanlan, J.
I. FACTS AND ISSUES
The respondent was involved in a motor vehicle collision and
commenced an action under the SEF 44 endorsement in his insurance
policy for actual damages that exceeded the amount of payment by
the tortfeasor in the settled claim. The parties disagreed as to
whether the amount paid by the insurer should be reduced by
deducting CPP disability benefits the respondent would receive,
based on the meaning of the phrase "any policy of
insurance" in the Endorsement.
The trial judge determined that the CPP disability benefits were
not to be deducted. The insurer appealed.
II. HELD: Future CPP disability benefits are deductible from
amounts payable by SEF 44 insurers
1. Is this term "any policy of insurance" ambiguous
and therefore contra proferentum applies?
(a) The trial judge cited a New
Brunswick Court of Appeal case that found CPP disability benefits
are not deductible from SEF 44 due to ambiguity.
(b) The Court found that there is no
ambiguity based on general principles of contract interpretation,
including the plain, ordinary and proper meaning of the words, the
law in Canada at the time the SEF 44 became available, and its
(i) The purpose of the SEF 44 is an
indemnity policy of "excess insurance", limiting an
insurer's liability to actual loss.
(ii) At the time the SEF 44 became
available, the SCC had established that benefits payable pursuant
to the CPP were paid pursuant to "any contract of
insurance" based on another act (Pacific Railway
Gill, SEF 42 was drafted which made no
attempt to prevent double recovery. The SEF 42 was later withdrawn
by the insurance industry because of the expanded coverage this
resulted in, and was replaced with the more restrictive SEF 44
(c) The Court held that there is no
real difference between the phrase "any contract of
insurance" as considered in Gill,
and the phrase "any policy of insurance" in this
(i) The Ontario Court of Appeal had
relied on Gill to find that CPP
disability benefits are money paid under a "valid policy of
(ii) In Nova Scotia, the definitions
of "contract" and "policy" suggest that there
is no real difference in these words ("policy" is defined
as "the instrument evidencing a contract")
(d) Because CPP benefits were found
previous to the SEF 44 to be "of the same nature as contracts
of insurance"; the wording is clear in the SEF 44 that it is
excess insurance, not allowing for double recovery; and there is no
importance to the use of the word "policy" rather than
"contract", there is no ambiguity in this clause.
(i) Therefore the trial judge erred
in adopting the reasoning from the NBCA case
(e) The appeal was allowed and the
matter was remitted to the trial judge to determine the value of
the respondent's future CPP disability benefits that are to be
deducted from the amount payable to him by the insurer.
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