Economical Mutual Insurance Co. v. Lapalme, 2010 NBCA 87

• Judge: Drapeau, C.J.N.B., Larlee and Quigg, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: March 31, 2010
• Jurisdiction: New Brunswick
• Citations: 2010 NBCA 87;(2010), 366 N.B.R.(2d) 199 (CA)

Economical Mutual v. Lapalme (2010), 366 N.B.R.(2d) 199 (CA);

    366 R.N.-B.(2e) 199; 942 A.P.R. 199

MLB headnote and full text

Sommaire et texte intégral

Temp. Cite: [2010] N.B.R.(2d) TBEd. DE.010

Renvoi temp.: [2010] N.B.R.(2d) TBEd. DE.010

Economical Mutual Insurance Company (appellant) v. Ginette Lapalme (respondent)

(157-09-CA; 2010 NBCA 87)

Indexed As: Economical Mutual Insurance Co. v. Lapalme

Répertorié: Economical Mutual Insurance Co. v. Lapalme

New Brunswick Court of Appeal

Drapeau, C.J.N.B., Larlee and Quigg, JJ.A.

December 2, 2010.

Summary:

Résumé:

In 1997, Lapalme was injured in a two vehicle accident. The other driver was at fault and was an "underinsured motorist". Lapalme entered into minutes of settlement with the other driver's insurer and commenced an NBEF 44 (underinsured motorist) action against her own insurer. In 1999, Lapalme's application for Canada Pension Plan (CPP) disability benefits was approved, retroactive to 1998. Lapalme's insurer filed a notice of motion seeking a determination of whether Lapalme's CPP benefits, past and future, were to be deducted from the aggregate amount to be paid under Clause 4 of the NBEF 44. The actual amount owing to Lapalme had yet to be adjudicated.

The New Brunswick Court of Queen's Bench, Trial Division, held that Lapalme's CPP disability benefits paid to the date of the minutes of settlement were to be deducted from the amount payable to Lapalme under the NBEF 44 endorsement, but any payments made subsequent to that date were not deductible. The insurer sought leave to appeal.

The New Brunswick Court of Appeal, per Green, J.A., in a decision reported at [2009] N.B.R.(2d) Uned. 118, granted leave to appeal.

The New Brunswick Court of Appeal allowed the appeal in part. The relevant date for Clause 4 purposes was the date of adjudication of the amount payable by the insurer. Clause 4(b)(vii), which provided for the deduction of amounts that an eligible claimant had not actually recovered, but was nonetheless entitled to recover under "any policy of insurance providing disability benefits", did not capture disability benefits under the CPP. Only actually recovered CPP disability benefits were deductible under Clause 4.

Contracts - Topic 7404

Interpretation - General principles - Ordinary meaning (Golden rule) - General - [See Insurance - Topic 4107 ].

Damages - Topic 208

Entitlement - Time for determination of - [See Insurance - Topic 4107 ].

Damages - Topic 1746

Deductions for payments or assistance by third parties - Contractually - Insurance - Accident and sickness benefits (incl. drugs, disability, etc.) - [See Insurance - Topic 4110.1 ].

Damages - Topic 1749

Deductions for payments or assistance by third parties - Contractually - Insurance - Future benefits - [See Insurance - Topic 4110.1 ].

Insurance - Topic 4107

Automobile insurance - Uninsured or underinsured motorist coverage - Requirement of "legally entitled to recover" - In New Brunswick, "excess" insurance coverage against losses sustained by an insured due to the fault of an underinsured motorist was provided through an endorsement titled NBEF 44 - Clause 2 required the insurer to indemnify each eligible claimant for the damages he or she "is" legally entitled to recover from an inadequately insured motorist - In Somersall v. Friedman et al. (2002 SCC) (Somersall), the majority held that the date of the accident was the relevant date for the determination for Clause 2 purposes of the insured's legal entitlement against the underinsured motorist - Clause 4 set out the formula for quantifying the amount payable by the insurer: the aggregate of the amounts actually recovered by the insured from all sources plus amounts entitled to be recovered from specific sources was deducted from the damages assessed against the underinsured motorist - Clause 4(b)(vii) provided for the deduction of amounts that an eligible insured had not actually recovered, but was nonetheless entitled to recover under "any policy of insurance providing disability benefits" - At issue on this appeal was an insurer's assertion that under Somersall both legal entitlement to recover against the inadequately insured motorist (Clause 2) and the amount payable (Clause 4) were to be determined as of the date of the accident, which meant that the present day value, as of the accident's date, of all amounts recoverable from any source was deductible under Clause 4(b) - The New Brunswick Court of Appeal rejected the insurer's argument - Somersall required "tracking back to the date of the accident with respect to the NBEF 44's threshold condition that the eligible claimant be 'legally entitled' to recover ..." - It did not do so with respect to the quantification contemplated by Clause 4 - The insurer's position was "at odds with the wording of Clause 4" - Further, Clause 5(b) of the NBEF 44 called for a determination of damages "in accordance with the law of the province governing the policy" - Under New Brunswick law, quantum was determined as of the date of adjudication - Therefore, the relevant date for Clause 4 purposes was the date of adjudication of the amount payable by the insurer - See paragraphs 28 to 79.

Insurance - Topic 4110.1

Automobile insurance - Uninsured or underinsured motorist coverage - Deductions - In New Brunswick, "excess" insurance coverage against losses sustained by an insured due to the fault of an underinsured motorist was provided through an endorsement titled NBEF 44 - Clause 4 set out the formula for quantifying the amount payable by the insurer: the aggregate of the amounts actually recovered by the insured from all sources plus amounts entitled to be recovered from specific sources was deducted from the damages assessed against the underinsured motorist - Clause 4(b)(vii) provided for the deduction of amounts that an eligible insured had not actually recovered, but was nonetheless entitled to recover under "any policy of insurance providing disability benefits" - At issue on this appeal was whether "policy of insurance" in Clause 4(b)(vii) included the Canada Pension Plan's (CPP) disability benefits - The insurer here asserted that Clause 4(b) required a deduction of all recovered and recoverable CPP disability benefits during the time frame between the accident and adjudication of the amount payable under the NBEF 44 - The New Brunswick Court of Appeal stated that "[t]he scheme by which disability benefits are recoverable under the Canada Pension Plan may well be a 'substitute' for a disability insurance policy, 'tantamount', 'comparable', 'similar' or 'akin' to schemes under policies of disability insurance for the purposes of the collateral benefits rule in tort, but that does not morph the Canada Pension Plan into a 'policy of insurance' for Clause 4(b)(vii) purposes" - The relevant date for Clause 4 purposes was the date of adjudication of the amount payable by the insurer - Clause 4(b)(vii), which provided for the deduction of amounts that an eligible claimant had not actually recovered, but was nonetheless entitled to recover under "any policy of insurance providing disability benefits", did not capture disability benefits under the CPP - Only actually recovered CPP disability benefits were deductible under Clause 4 - See paragraphs 80 to 95.

Assurance - Cote 4107

Assurance automobile - Garantie relative à l'automobiliste non assuré ou sous-assuré - Indispensabilité "d'être en droit de recouvrer" - [Voir Insurance - Topic 4107 ].

Assurance - Cote 4110.1

Assurance automobile - Garantie relative à l'automobiliste non assuré ou sous-assuré - Déductions - [Voir Insurance - Topic 4110.1 ].

Contrats - Cote 7404

Interprétation - Principes généraux - Sens ordinaire (règle d'or) - Généralités - [Voir Contracts - Topic 7404 ].

Dommages-intérêts - Cote 208

Droit - Moment pour la détermination du droit aux dommages-intérêts - [Voir Damages - Topic 208 ].

Dommages-intérêts - Cote 1746

Déductions relatives à l'indemnisation ou à l'aide fournies par des tiers - Prestations contractuelles - Assurance - Indemnités d'assurance-accident ou d'assurance-maladie (y compris paiement de médicaments, assurance-invalidité, etc.) - [Voir Damages - Topic 1746 ].

Dommages-intérêts - Cote 1749

Déductions relatives à l'indemnisation ou à l'aide fournies par des tiers - Prestations contractuelles - Assurance - Indemnités futures - [Voir Damages - Topic 1749 ].

Words and Phrases

Policy of insurance - The New Brunswick Court of Appeal considered the meaning of the phrase "policy of insurance" as found in Clause 4(b)(vii) of an NBEF 44 endorsement in an insurance policy - See paragraphs 80 to 95.

Cases Noticed:

Somersall v. Friedman et al., [2002] 3 S.C.R. 109; 292 N.R. 1; 163 O.A.C. 201; 2002 SCC 59, consd. [para. 2].

Melanson v. Co-Operators General Insurance Co. et al. (1997), 192 N.B.R.(2d) 273; 489 A.P.R. 273 (C.A.), dist. [para. 3].

MacNeill v. Co-operators General Insurance Co. et al. (2003), 223 Nfld. & P.E.I.R. 199; 666 A.P.R. 199; 2003 PESCAD 9, dist. [para. 5].

Campbell-MacIsaac et al. v. Deveaux et al. (2004), 224 N.S.R.(2d) 315; 708 A.P.R. 315; 2004 NSCA 87, dist. [para. 5].

Gignac v. Neufeld et al. (1999), 119 O.A.C. 43 (C.A.), dist. [para. 8].

Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada (2010), 406 N.R. 182; 293 B.C.A.C. 1; 496 W.A.C. 1; 2010 SCC 33, refd to. [para. 28].

Canadian National Railway Co. et al. v. Royal & Sun Alliance Insurance Co. of Canada et al., [2008] 3 S.C.R. 453; 381 N.R. 332; 243 O.A.C. 340; 2008 SCC 66, refd to. [para. 28].

Non-Marine Underwriters, Lloyd's of London v. Scalera - see Scalera v. Lloyd's of London.

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 2000 SCC 24, refd to. [para. 28].

Fraser v. Haines (2008), 334 N.B.R.(2d) 182; 858 A.P.R. 182; 2008 NBCA 59, refd to. [para. 33].

Art Hauser Centre Board Inc. v. Canadian Union of Public Employees, Local 882 et al. (2008), 311 Sask.R. 272; 428 W.A.C. 272; 2008 SKCA 121, refd to. [para. 42].

Hanna Collision Repair (1984) Ltd. v. Insurance Corp. of British Columbia, [2009] B.C.T.C. Uned. 1200; 2009 BCSC 1200, refd to. [para. 42].

Pass Creek Enterprises Ltd. v. Kootenay Custom Log Sort Ltd. (2003), 188 B.C.A.C. 110; 308 W.A.C. 110; 2003 BCCA 580, refd to. [para. 42].

Scanlon v. Castlepoint Development Corp. et al. (1992), 59 O.A.C. 191 (C.A.), refd to. [para. 42].

National Trust Co. v. Mead, [1990] 2 S.C.R. 410; 112 N.R. 1; 87 Sask.R. 161, refd to. [para. 42].

Robichaud v. Pharmacie Acadienne de Beresford ltée - see Pharmacie Acadienne de Beresford ltée v. Beresford Shopping Centre Ltd./ltée et al.

Pharmacie Acadienne de Beresford ltée v. Beresford Shopping Centre Ltd./ltée et al. (2008), 328 N.B.R.(2d) 205; 841 A.P.R. 205; 2008 NBCA 12, refd to. [para. 42].

Vincent v. Abu-Bakare (2003), 259 N.B.R.(2d) 66; 681 A.P.R. 66; 2003 NBCA 42, refd to. [para. 50].

Campbell-MacIsaac et al. v. Deveaux et al. (2003), 214 N.S.R.(2d) 129; 671 A.P.R. 129; 2003 NSSC 111, refd to. [para. 63].

Ellis v. Fisher, [1977] O.J. No. 2380 (H.C.), affd. [1978] O.J. No. 3715 (C.A.), refd to. [para. 87].

Theriault v. Fidelity Insurance Co. of Canada (1984), 52 N.B.R.(2d) 236; 137 A.P.R. 236 (C.A.), refd to. [para. 93].

Authors and Works Noticed:

Halsbury's Laws of England (2003) (4th Ed. - Reissue), vol. 25, para. 87 [para. 37].

Norwood, David, and Weir, John P., Life Insurance Law in Canada (3rd Ed. 2002), p. 479 [para. 44].

Counsel:

Avocats:

André G. Richard, Q.C., for the appellant;

Stéphane Viola, for the respondent.

This appeal was heard on March 31, 2010, by Drapeau, C.J.N.B., Larlee and Quigg, JJ.A., of the New Brunswick Court of Appeal. On December 2, 2010, Drapeau, C.J.N.B., delivered the following reasons for judgment in both official languages for the court.