Court of Appeal for Ontario

Citation: Catherine Hamblin v. The Standard Life Assurance Company of Canada, 2016 ONCA 854 Date: 2016-11-14 Docket: C61565

Before: Strathy C.J.O., Pardu and Brown JJ.A.

Between:

Catherine Hamblin Appellant

and

The Standard Life Assurance Company of Canada Respondent

Counsel: Erin M. Neal, for the appellant Gordon Jermane, for the respondent

Heard: November 8, 2016

On appeal from the judgment of Justice John R. McCarthy of the Superior Court of Justice, dated December 15, 2015.

Endorsement

[1] After hearing submissions of counsel we dismissed the appeal with reasons to follow. These are our reasons.

[2] The application judge held that the respondent was entitled to reduce the Long-Term Disability Income (LTD) payments it was making to the appellant, under its Group Insurance Plan as a result of the appellant’s first accident, by the amount of the Non-Earner Benefit (NEB) she was receiving from her own insurer under O. Reg. 34/10 Statutory Accident Benefits Schedule – Effective September 1, 2010 (SABS), as a result of her second accident.

[3] The appellant was not working at the time of her second accident. She elected to receive the NEB under s. 12(1) of the SABS. In order to qualify, she was required to establish that she suffered “complete inability to carry on a normal life as a result of and within 104 weeks after the accident” and that she did not qualify for an income replacement benefit.

[4] Under s. 12(2) of the SABS, the appellant’s automobile accident insurer was entitled to deduct the LTD payments from the amount of the NEB payable but, for reasons that were not explained, it did not do so.

[5] However, under the terms of its Group Insurance Plan, the respondent was entitled to reduce the monthly LTD payments by “any disability or retirement benefit … payable … under … a provincial auto insurance law.” After being notified by the appellant that she was receiving the NEB, the respondent began to deduct the amount of the NEB from its LTD payments. It takes the position that it is entitled to do so as long as the appellant’s auto insurer does not deduct the LTD payment from the NEB.

[6] The application judge found that the words “any disability … benefit” were broad enough to cover the NEB, which he found was a “disability benefit payable because of impairments which render a person completely unable to carry on a normal life.” The deduction of the NEB was consistent with the LTD policy being one of indemnity.

[7] The parties agree that the standard of review applicable to the insurance policy was correctness. In the absence of any evidence about the factual matrix of the contract, we proceed on this basis.

[8] In our view, the application judge’s interpretation was correct. There was no dispute that the NEB was payable under provincial auto insurance law and it was clearly a “disability … benefit.”

[9] The appellant relies on Bannon v. McNeely (1998), 1998 CanLII 4486 (ON CA), 38 O.R. (3d) 659 (C.A.), to support her argument that the no-fault SABS are to be deducted from other payments on an “apples for apples basis.” She argues, based on Walker v. Ritchie (2005), 2005 CanLII 13776 (ON CA), 197 O.A.C. 81 (C.A.), rev’d on other grounds, 2006 SCC 45, that the NEB is not an income benefit. Based on the “apples from apples” principle, she says, the NEB should not be deducted from the LTD payments, which are income benefits.

[10] We do not accept this submission. Bannon dealt with statutorily-mandated deductions from tort damage awards pursuant to s. 267 of the Insurance Act, R.S.O. 1990, c. I.8. By contrast, the deduction at issue in this appeal arises by virtue of the terms of the respondent’s policy of insurance. One must look to the language of the policy to determine the issue of deductibility. In our view, the policy language was clear and unambiguous and mandated the deduction.

[11] Nor do we accept the submission that the result gives the respondent a “windfall.” A deduction permitted by the plain language of the policy is not a “windfall.”

[12] For these reasons, the appeal is dismissed, with costs payable to the respondent fixed at $2,500.00, inclusive of disbursements and all applicable taxes.

“G. R. Strathy C.J.O.”

“G. Pardu J.A.”

“D.M. Brown J.A.”