Future CPP disability benefits did not reduce amount payable by insurer

Supreme court | Insurance

Automobile insurance

Underinsured motorist endorsement

Future CPP disability benefits did not reduce amount payable by insurer

Plaintiff’s action against defendant tortfeasor with respect to motor vehicle accident was allowed with award of damages exceeding limits of tortfeasor’s insurance policy. Plaintiff claimed shortfall from his own insurer under SEF 44 Family Protection Endorsement, but insurer took position that Endorsement’s deduction of future disability benefits from “any policy of insurance” applied to Canada Pension Plan (CPP) disability benefits. Trial judge ruled that CPP benefits were not deductible from shortfall owed to plaintiff by insurer. Insurer’s appeal was allowed. Plaintiff appealed. Appeal allowed. Ordinary meaning of words at issue was clear, reading Endorsement as whole. Average person applying for this additional insurance coverage would understand “policy of insurance” to mean optional, private insurance contract and not mandatory statutory scheme such as CPP. Insurer could not rely on its specialized knowledge of jurisprudence to advance interpretation that went beyond clear words of policy. Precedent relied on by insurer and appellate court with respect to meaning of “policy of insurance” was decided in very different interpretive context and did not support alternative reasonable interpretation. Future CPP disability benefits did not reduce amount payable by insurer.
Sabean v. Portage La Prairie Mutual Insurance Co. (2017), 2017 CarswellNS 38, 2017 CarswellNS 39, 2017 SCC 7, 2017 CSC 7, McLachlin C.J.C., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., and Brown J. (S.C.C.); reversed (2015), 2015 CarswellNS 472, 2015 NSCA 53, Beveridge J.A., Hamilton J.A., and Scanlan J.A. (N.S. C.A.).

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