Mutual Life Assurance Company of Canada v. Neves

Mutual Life Assurance Company of Canada v. Neves Court Court of Appeal Date 2002-01-09 Citation 2002 NSCA 2 Docket CA 173236 Judge/Registrar/Adjudicator Roscoe, Elizabeth A. (Honourable Justice) (CA); Glube, Constance R. (Honourable Chief Justice) (CA); Bateman, Nancy J. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Mutual Life Assurance Company of Canada v. Neves - 2002 NSCA 2 - 2002-01-09 - Library Sheet Decision Content Date: 20020109 Docket: CA 173236 NOVA SCOTIA COURT OF APPEAL [Cite as: Mutual Life Assurance Company of Canada v. Neves, 2002 NSCA 2] Glube, C.J.N.S.; Roscoe and Bateman, JJ.A. BETWEEN: MUTUAL LIFE ASSURANCE COMPANY OF CANADA Appellant - and - GERALD NEVES Respondent __________________________________________________________________ REASONS FOR JUDGMENT __________________________________________________________________ Counsel: Jeffrey S. Moors for the Appellant Peter M. Landry for the Respondent Appeal Heard: January 8, 2002 Judgment Delivered: January 9, 2002 THE COURT: The appeal is dismissed with costs of $1,800.00 which is 40% of the amount awarded at trial, plus reasonable disbursements as per reasons for judgment of Roscoe, J.A.; Glube, C.J.N.S. and Bateman, J.A., concurring. ROSCOE, J.A.: [1] This is an appeal from a decision of Justice M. Jill Hamilton, as she then was, after a half-day trial in the Supreme Court of Nova Scotia. On appeal, the sole remaining issue between the parties is the interpretation of a clause in a group insurance policy which provides that the monthly long term disability benefit payable by the appellant insurer to the respondent insured is to be reduced by amounts the insured receives from other sources, specifically, from Workers’ Compensation and Canada Pension. The relevant parts of the clause are as follows: Benefit Reduction The monthly disability benefit is reduced by the following payments, before deductions, resulting from the member’s disability if, on or after the date the member became totally disabled, he qualifies to receive such benefits or payments, or would be entitled to receive them had he made satisfactory application. 1. the disability income to which the disabled member is entitled under a government plan (including benefits under the Canada/Quebec Pension Plan, including benefits for dependent children), and 2. the amount payable to the disabled member as a disability benefit under the Workers’ Compensation Act or similar statute. If a member is receiving disability or retirement income from other sources, the monthly disability benefit will be further reduced (in addition to the above reductions) so that the total amount of disability and retirement income receivable by or on behalf of the member from all sources does not exceed 85% of his monthly rate of earned income in force on the date he became totally disabled if the benefit payable to the member is taxable¼ [2] The respondent became permanently disabled on January 18, 1998. It is now settled that from January, 1998 through to June, 2000 he received Workers’ Compensation payments at the rate of $927.00 monthly, parts of which were received in lump sum payments, and that commencing in May, 1998 he was entitled to receive $713.07 monthly from Canada Pension. The temporary disability payments from Workers’ Compensation ceased in June, 2000, but the CPP benefits continue. The long term disability (LTD) benefit payable pursuant to the appellant’s policy is two-thirds of the respondent’s income, or $1,485.53 monthly, payable after a 17 week qualifying period. Therefore, in the months that the respondent received both CPP and Workers’ Compensation, his income exceeded the LTD amount and no payment was due from the insurer. In each of those 24 months, the amount that the respondent’s income exceeded the LTD benefit was $154.56, for a total of $3,709.44. [3] The issue on appeal is whether the reduction of the LTD benefit as a result of the other payments should be calculated on a monthly basis as submitted by the respondent or cumulatively, as argued by the appellant. The effect of a cumulative reduction would be that the $3,709.44, plus the amounts received as Workers’ Compensation for the 17 week qualifying period, would be deemed to have been received in the months following June, 2000, so that payment of the LTD benefit would be delayed for a further period of nine to ten months. [4] In other words, it is the appellant's submission that the amount by which the CPP and Workers' Compensation payments exceeded two-thirds of the respondent's income ($1,485.53 monthly), in any month, should be carried forward and accumulated. That total amount, says the appellant, together with the Workers' Compensation received by the respondent during the 17 week qualifying period should then be deemed to have been received by the respondent in the months following the end of the Workers' Compensation benefits (June, 2000), bringing the respondent's income to $1,485.53 monthly, so as to eliminate the need for an LTD payment from the insurer until that accumulation is exhausted. [5] The trial judge agreed with the respondent that the reductions should be calculated on a monthly basis, the effect of which would be that LTD payments of $772.46 would begin in July, 2000 when the Workers’ Compensation ceased. [6] Having reviewed the decision and considered the submissions of counsel, we are not persuaded that there was any error in the interpretation of the policy by the trial judge. The appeal is accordingly dismissed with costs to the respondent in the amount of $1,800.00, which is 40% of the amount awarded at trial, plus reasonable disbursements. Roscoe, J.A. Concurred in: Glube, C.J.N.S. Bateman, J.A.