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Canada: Future-Focused: N.S. Appeal Court Confirms Future CPP Disability Benefits Are Deductible From Future Income Loss Awards In MVA Claims In Holland v. Sparks
On January 18, 2019, the Nova Scotia Court of Appeal rendered
its unanimous (5-0) decision in Holland v. Sparks, overturning
a motion decision that carried significant consequences for the
calculation of future income loss awards in Nova Scotia. The
decision makes it clear that in Nova Scotia:
Future CPP Disability
Benefits. Future Canada Pension Plan (CPP) disability
benefits are deductible from damages awards for loss of future
income or earning capacity.
Interpretive
approach. Courts must interpret a statute in its full
context and purpose, looking to the meaning and intent of the
provision. Courts must read the words first in their ordinary
sense. A technical grammatical analysis of a statutory provision in
isolation from its legislative context is not commensurate with
this approach.
Look to the future.
Damages for loss of earning capacity are mostly
"future-focused", awarded where the plaintiff will be
capable of working post-trial, but not at their pre-injury
level.
In Holland v. Sparks, the
plaintiff was in a motor vehicle accident with the defendant on May
15, 2013. She brought an action seeking damages for her personal
injuries and loss of income on January 26, 2016. The parties
disagreed on whether future Canada Pension Plan (CPP) disability
benefits the plaintiff received after the trial of her action would
be deductible from any award for loss of earnings or loss of
earning capacity, pursuant to Section 113A of the N.S. Insurance
Act, which provides:
113A In an action for loss or damage
from bodily injury or death arising directly or indirectly from the
use or operation of an automobile, the damages to which a plaintiff is
entitled for income loss and loss of earning capacity shall be
reduced by all payments in respect of the incident that the
plaintiff has received or that were available before the trial of
the action for income loss or loss of earning capacity under
the laws of any jurisdiction or under an income-continuation
benefit plan if, under the law or the plan, the provider of the
benefit retains no right of subrogation. (emphasis added)
The parties also disagreed on whether the issue was already
determined in Tibbetts v. Murphy, in which
the N.S. Court of Appeal previously dealt with the deductibility of
CPP benefits under Section 113A. The plaintiff argued Tibbetts v. Murphy only dealt
with the deductibility of past CPP disability benefits received
before trial. The parties referred the issue to a judge for
determination on a motion.
The (Overturned) Motion Decision. The motion
judge determined future CPP benefits are not deductible from awards
for future income loss or earning capacity. The judge reach his
conclusion after conducting a technical grammatical analysis of
Section 113A, an approach that attracted appeal.
The Appeal Decision. The Court of Appeal
overturned the motion decision, holding that future CPP disability
benefits are deductible from awards for future income loss or
earning capacity. Emphasizing the need to interpret legislative
text in accordance with its purpose and broader context, the Court
held the motion judge erred in focusing on an isolated grammatical
nuance of each phrase of the text of Section 113A:
Legislative purpose.
With respect to the purpose of the legislation, the Court confirmed
its finding in
Tibbetts v. Murphy that the Legislature enacted Section 113A
primarily to control rising automobile insurance premiums by
reducing damages awards in tort actions.
No double recovery.
With this legislative purpose in mind, the Court determined the
only way to give full effect to the purpose Section 113A was to
interpret it to include both past and future CPP disability
benefits. The Court noted the motion judge's interpretation
would have permitted double recovery, the elimination of which was
one of the Legislature's primary goals in enacting Section
113A.
Section B benefits.
While CPP disability benefits were in issue, the Court drew a
comparison between CPP benefits and Section B benefits, and said
Section B benefits are also deductible from awards for past and
future income loss.
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