CPP Disability Payments Deductible From Future Loss

The Nova Scotia Court of Appeal overturned a motion decision in Sparks v Holland, 2019 NSCA 3 ("Sparks"), holding that Canadian Pension Program ("CPP") disability payments are deductible from future loss of income and earning capacity.

BACKGROUND

The respondent, Catherine Holland, was involved in a motor vehicle accident with the appellant, Josh Sparks, on May 15, 2013. As a result of the injuries suffered in the motor vehicle accident, Ms. Holland received CPP disability benefits.

Ms. Holland commenced a motion against Mr. Sparks in 2016 to determine whether CPP disability benefits could be deducted from future loss of income or loss of earning capacity. The motion judge held that CPP disability benefits were not deductible from future loss. The motion judge stated that Tibbetts v Murphy, 2017 NSCA 35 ("Tibbetts") did not specifically address the issue of deductibility of CPP benefits from future earnings or earning capacity, and was therefore not binding on him.1

Mr. Sparks appealed the motion judge's decision.

THE DECISION

At issue in Sparks was whether the motion judge was bound by Tibbetts and whether the motion judge erred in its interpretation of the s. 113A of Insurance Act, RSNS 1989, c 231 ("Act").

Issue 1: Did the motion judge err in concluding that he was not bound by Tibbetts?

Justice Farrar, writing for the Court of Appeal, stated that the issue of CPP deductibility from future earnings was implicitly dealt with in Tibbetts.

The trial decision in Tibbetts held that s. 113A of the Act requires the deduction of future CPP disability payments from awards of future loss,2 a conclusion with which the Court of Appeal concurred.3 In this regard, Justice Farrar held that Tibbetts was indistinguishable from the present case, and therefore a binding precedent.4

Issue 2: Did the motion judge err in his interpretation of s. 113A of the Act?

The Court of Appeal noted that modern statutory interpretation requires answering the following three questions:

What is the meaning of the legislative text? What did the legislature intend? What are the consequences of adopting a proposed interpretation?5 What is the meaning of the legislative text?

In determining the meaning of the legislative text, the court assessed the purpose of s. 113A of the Act, thereby answering the first and second questions in a single analysis.

The court noted that an interpretation that would tend to frustrate or defeat the legislature's purpose should be rejected.6 The...