



COURT OF APPEAL FOR ONTARIO

CITATION:
Demers v. Monty, 2012
    ONCA 384

DATE: 20120607

DOCKET: C53780

Laskin, Cronk and Blair JJ.A.

BETWEEN

Lynda Demers, Keith Verdenik, Jonelle Demers, a
    minor under the age of eighteen, Kevin Verdenik, a minor under the age of
    eighteen years and Kate-Lyn Verdenik, a minor under the age of eighteen years,
    by their Litigation Guardian Keith Verdenik

Plaintiffs (Respondents)

and

Dan Monty and B.R. Davidson Mining &
    Development Ltd.

Defendants (Appellants)

Nestor E. Kostyniuk, for the appellants

Robert E. Somerleigh and Ruby E. Van Bendegem, for the
    respondents

Heard: November 2, 2011

On appeal from the judgment of Justice D.C. Shaw of the Superior
    Court of Justice, dated May 2, 2011, with reasons reported at 2011 ONSC 2046,
    106 O.R. (3d) 513.

Laskin J.A.:

A.

introduction

[1]

In April 1999, the respondent, Lynda Demers, was injured in a car
    accident.  She has sued the defendants for damages for her personal injuries. 
    At the time of the accident, Ms. Demers worked for St. Josephs Care Group.  She
    continued to work there after the accident until February 2003 when she stopped
    due to disability.  She then applied for and received two pension disability
    benefits: Canada Pension Plan (CPP) disability benefits and Hospitals of
    Ontario Pension Plan (HOOP) disability benefits.

[2]

The parties brought a motion on an agreed statement of facts and on consent
    under rule 21.01(1)(a) of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, to determine whether as a matter of law the CPP and HOOP disability benefits
    would be deductible under s. 267.8(1)2 of the
Insurance Act
, R.S.O.
    1990, c. I-8, from  any award for loss of income or loss of earning capacity,
    and if so, whether the deduction should be gross or net of income tax.  Section
    267.8(1)2 provides:

267.8(1) In an action for
    loss or damage from bodily injury or death arising directly or indirectly from
    the use or operation of an automobile, the damages to which a plaintiff is
    entitled for income loss and loss of earning capacity shall be reduced by the
    following amounts:

2. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for income loss or loss of earning capacity
    under the laws of any jurisdiction or under an income continuation benefit
    plan.

[3]

The motion judge, Shaw J., thoroughly analysed the legislative history
    of s. 267 and the relevant case law, and determined that neither benefits were
    deductible.  He concluded that these benefits were paid because of Ms. Demers
    disability; they were not received for loss of income or loss of earning
    capacity.  He also determined, that if he were wrong, and either or both
    benefits were deductible, the deduction should be net of the income tax Ms.
    Demers pays on these benefits.
[1]

[4]

The defendants appeal and ask to vary the motion judges decision.  They
    accept that neither the CPP nor HOOP disability benefits compensate Ms. Demers
    for loss of income.  However, they submit that both benefits compensate her for
    loss of earning capacity and are therefore deductible under the statute.  The
    defendants also submit that the deduction should be gross rather than  net of
    income tax.

[5]

Ms. Demers asks that we uphold the decision of the motion judge for
    either of two reasons.  First, she submits that she receives CPP and HOOP
    benefits simply because of her disability and not for any loss of earning
    capacity.  Second, she submits that she does not receive these benefits in
    respect of the incident, that is in respect of the car accident in which she
    was injured.  Ms. Demers also submits that the motion judge correctly decided
    that any deduction should be net of income tax.

[6]

I would dismiss the appeal.  I agree with the conclusion of the motion
    judge.  My reasons will focus on the specific arguments raised in this court.

B.

the cpp and hoop disability benefits

[7]

Ms. Demers had to apply for and meet certain specified criteria to be
    entitled to receive these benefits.  However, and this is the important point,
    her entitlement did not depend on her being employed at the time of her
    application, on proving an income loss, or, indeed, on suffering an income loss: 
    see
Cugliari v. White
(1998), 38 O.R. (3d) 641 (C.A.), at pp. 647-48;
    and
Scott v.

State Farm Mutual Automobile Insurance Co.
(2006),
    39 C.C.L.I. (4th) 318 (Ont. Div. Ct.), at para. 11.

(a)

CPP Disability
    Benefits

[8]

Ms. Demers was entitled to CPP disability benefits because:

·

She met a minimum qualifying period of work  valid earnings and
    contributions for four of the last six calendar years, and;

·

She suffered a severe and prolonged mental or physical
    disability under s. 42(2)(a) of the
Canada Pension Plan
, R.S.C.,
    1985, c. C-8.

(b)

HOOP Disability
    Benefits

[9]

To receive HOOP benefits Ms. Demers was required to:

·

Be a member of the plan for two years and make the required contributions
    before the date of her disability;

·

Resign from her employment and apply for the benefits; and

·

Be totally and permanently disabled.

Ms. Demers met these requirements.

C.

background

(a)

Common Law Principles

[10]

Section
    267.8 of the
Insurance Act
modified the common law on the
    deductibility of benefits from tort awards.  I begin with a brief review of the
    common law principles.  I do so to show that the CPP and HOOP benefits Ms.
    Demers receives would not be deductible at common law.  Their non-deductibility
    at common law provides the context for assessing the impact of s. 267.8 of the
Insurance
    Act
.

[11]

The
    common law principles on the deductibility of benefits are well established and
    are discussed at length by Justices McLachlin and Cory in their reasons in
Ratych
    v. Bloomer
, [1990] 1 S.C.R. 940, and
Cunningham v. Wheeler
, [1994]
    1 S.C.R. 359.  The main goal of tort law is to compensate injured plaintiffs
    for the full extent of their losses but not to over compensate them.  This
    prohibition on over compensation, known as the rule against double recovery,
    has allowed for limited exceptions.  The exception applicable to this appeal is
    the private insurance exception, also known as a collateral benefits rule.

[12]

Under
    this exception, payments received under an insurance policy are not deducted
    from an injured plaintiffs tort award even though the effect of this exception
    may be to over compensate the plaintiff. The exception originated in the
    English case of
Bradburn v. Great Western Railway Co.
, [1874-80] All
    E.R. Rep. 195, and has been consistently applied by Canadian courts.  For
    example, in
Boarelli v. Flannigan
(1973), 3 O.R. 69, this court
    affirmed that in personal injuries cases collateral benefits should not be
    taken into account in assessing damages for loss of earnings or loss of earning
    capacity.

[13]

Then,
    in
Canadian Pacific Ltd. v. Gill
, [1973] S.C.R. 654, at p. 670, the
    Supreme Court of Canada extended the private insurance exception to CPP payments
    because they are so much of the same nature as contracts of insurance.  In
    other words, they are akin to payments under a private insurance policy.  In
    the later case of
Guy v. Trizec Equities Ltd.
, [1979] 2 S.C.R. 756,
    the Supreme Court relied on
Canadian Pacific Ltd. v. Gill
in holding
    that payments under a company pension plan were not deductible from a tort
    award.

[14]

In
Ratych v. Bloomer
and then in
Cunningham v. Wheeler
, the
    Supreme Court revisited the collateral benefits rule and discussed the
    rationale for maintaining it and for limiting its reach.  McLachlin J., who
    wrote for the majority in
Ratych
and for the minority in
Cunningham
,
    would have limited the scope of the exception to non-indemnity payments  that
    is payments of a previously determined amount on proof of a specified event,
    whether or not the plaintiff has incurred a pecuniary loss.  Indemnity payments
     that is payments intended to compensate an injured plaintiff for a pecuniary
    loss  would be deductible from a tort award.  Cory J., who wrote for the minority
    in
Ratych
and for the majority in
Cunningham
, maintained the
    private insurance exception that began with
Bradburn
.

[15]

For
    the purpose of this appeal, whether one adopts Cory J.s approach or McLachlin
    J.s approach, both the CPP and the HOOP disability benefits Ms. Demers
    receives would not be deductible at common law.  They come within the private
    insurance exception, which the Supreme Court of Canada expressly extended to
    CPP benefits. And under McLachlin J.s approach, they are non-indemnity
    payments.  They are paid to Ms. Demers on account of her disability and do not
    depend on her having incurred an income loss.

[16]

Thus,
    the principle question on this appeal is whether s. 267.8(1)2 overrides the non-deductibility
    of these benefits at common law.  To put this question in context, it is
    necessary to consider the legislative history of s. 267.8 together with this
    courts decision in
Cugliari v. White
.

(b)

Compensation Under
    the
Insurance Act

[17]

In
    his
Report of Inquiry into Motor Vehicle Accident Compensation in Ontario
,
    vol. 1 (Ministry of the Attorney General and Ministry of Financial
    Institutions, 1988) at pp. 428-44, Justice Coulter Osborne recommended that the
    collateral benefits rule be abolished. He proposed that collateral benefits in
    the nature of indemnity payments from either public or private sources... be
    deducted from the relevant component of a tort award made to the injured person
    so that there will be no overcompensation (pp. 442-43).

[18]

After
    the Osborne report, the Ontario government brought in a succession of statutory
    regimes for compensating persons injured in car accidents.  Three of these
    regimes that have dealt with the deductibility of collateral benefits are
    relevant to the issues on this appeal: Bill 68, the Ontario Motorist Protection
    Plan (OMPP), which applied to car accidents between October 23, 1989 and
    December 31, 1993; Bill 59, which governs this appeal, and applied to car
    accidents after November 1, 1996 and before October 1, 2003;
[2]
and Bill 168, which was passed in 2002.

(i)

Bill 68, OMPP

[19]

Section
    267(1)(c), enacted under Bill 68, modified the collateral benefits rule.  It
    provided that damage awards be reduced by payments for loss of income:

267(1) The damages
    awarded to a person in a proceeding for loss or damage arising directly or
    indirectly from the use or operation of  motor vehicle shall be reduced by,

...

(c) all payments that
    the person has received or that were or are available for loss of income under
    the laws of any jurisdiction or under an income continuation benefit plan and
    by the present value of any such payments to which the person is entitled; ...

(ii)

Bill
    59

[20]

The
    car accident in which Ms. Demers was injured occurred in 1999, and thus falls
    under the Bill 59 regime.  Section 267.8(1)2, the provision in issue on this
    appeal, was enacted as part of Bill 59 and further modified the collateral
    benefits rule.  For convenience I again set it out:

267.8(1) In an action for
    loss or damage from bodily injury or death arising directly or indirectly from
    the use or operation of an automobile, the damages to which a plaintiff is entitled
    for income loss and loss of earning capacity shall be reduced by the following
    amounts:

2. All payments in
    respect of the incident that the plaintiff has received or that were available
    before the trial of the action for income loss or loss of earning capacity
    under the laws of any jurisdiction or under an income continuation benefit
    plan.

[21]

As
    is evident from comparing the two provisions, s. 267.8(1)2 amended s. 267(1)(c)
    of the OMPP in three ways:

·

Loss of earning capacity is added to subparagraph 2 so that
    damages are to be reduced by payments for loss of income or loss of earning
    capacity;

·

Subsection (1) now identifies the type of damages to which the
    reduction applies - damages for income loss and loss of earning capacity;

·

The phrase in respect of is added to subparagraph 2 so that
    only payments the plaintiff receives in respect of the incident are to be
    deducted.

(iii)

Bill 168

[22]

Under
    Bill 168, O. Reg. 461/96 was amended by O. Reg. 312/03 in 2002.  Section 5.2 of
    the amendment expressly eliminated the collateral benefits rule (or insurance
    exception) for CPP disability benefits.  Section 5.2 states:

5.2  For the
    purposes of paragraph 2 of subsection 267.8(1), paragraph 2 of subsection
    267.8(9) and subclause 267.8(12)(a)(ii) of the Act, payments in respect of an
    incident for income loss or loss of earning capacity under an income
    continuation benefit plan shall be deemed to include the following payments, if
    the incident occurs on or after October 1, 2003:

1. Payments of
    disability pension benefits under the
Canada Pension Plan
. ...

[23]

Thus,
    if the accident in which Ms. Demers was injured had occurred after the
    beginning of October 2003, her CPP disability benefits would have been
    deductible.  The effect, if any, of this amendment was an important issue
    before the motion judge and on this appeal.

(iv)

Cugliari v. White

[24]

In
Cugliari v. White
, this court addressed the question whether CPP
    disability benefits should be deducted from an injured plaintiffs damages award. 
    The accident giving rise to the litigation occurred in 1990 and, therefore, was
    governed by the OMPP (Bill 68).  However, this courts decision was rendered in
    1998, during the currency of the Bill 59 regime.

[25]

Charron
    J.A., writing for the panel, held that the CPP disability benefits were not
    deductible either at common law or under s. 267(1)(c) of the Act.  She
    recognized that the purpose of s. 267(1)(c) was to narrow the scope of the
    collateral benefits rule.  She grounded her decision in the distinction drawn
    by McLachlin J. in
Cunningham v. Wheeler
between indemnity and
    non-indemnity payments.  As she rightly said, at p. 647 of her reasons, the
    words payments  for loss of income [in s. 267(1)(c)] do import a notion of
    indemnification.  However, she held that CPP disability benefit payments are
    non-indemnity payments: the conditions for eligibility do not require that the
    recipient be employed at the time of the disability or that the recipient
    demonstrate a pecuniary loss.  Therefore, deducting these benefits would not
    advance the legislative purpose of eliminating double recovery (at p. 647).

[26]

Having
    concluded that the CPP disability benefits were not deductible under s.
    267(1)(c), Charron J.A. then added at p. 648: CPP disability benefits can
    arguably be seen to compensate for the loss of earning capacity but they cannot
    reasonably be construed as intending to indemnify a disabled person for loss of
    income.  This additional comment, perhaps made with an eye to the wording of
    s. 267.8(1)2, became a focal point of the present appeal.

D.

the  issues

(a)

Are the CPP Disability Benefits Ms. Demers Receives Deductible From
    Payments for Loss of Earning Capacity?

[27]

I
    do not accept the appellants argument that Charron J.A.s comment in
Cugliari
controls the answer to this question.  Her comment was obiter as the case
    before her was decided under the previous statutory regime, the OMPP.  That
    regime did not provide for the deductibility of payments for loss of earning
    capacity.  Because the panel did not have to decide this question, Charron J.A.
    did not analyse whether CPP disability benefits should be deducted from awards
    for loss of earning capacity.

[28]

Equally,
    however, I do not consider that my own reasons in
Kosanovic v. Wawanesa
    Mutual Insurance Co.
(2004), 70 O.R. (3d) 161 (C.A.), control the answer
    to this question.
Kosanovic
was decided under the Bill 59 regime. 
    However, the main issue in that case was whether the plaintiff was required to
    deduct disability benefits received under a private insurance policy from the
    amount he received under the unidentified driver coverage in the standard
    automobile policy  we said no.  Although I did refer to s. 267.8(1)2 of the
    Act, and
Cugliari
, I did not consider the deductibility of payments
    for loss of earning capacity.

[29]

Nonetheless,
    I would answer no to the question whether CPP disability benefits should be
    deducted from payments for loss of earning capacity for either of two reasons. 
    The first reason rests on the principle that clear and unambiguous legislative
    language is required to change common law rights.  The addition of the term
    loss of earning capacity in the Bill 59 regime does not clearly and
    unambiguously change the non-deductibility of CPP benefits at common law.

[30]

The
    second reason I would answer no is that CPP disability benefits are not paid
    in respect of the incident; they are paid in respect of Ms. Demers
    disability.  Thus, on the wording of s. 267.8(1)2 no deduction is required.

(i)

The Addition of Loss of Earning Capacity in s. 267.8(1)2 Does Not
    Clearly and Unambiguously Change the Common Law

[31]

As
    I have discussed, at common law CPP disability benefits are not deductible from
    a tort award.  They fall within the private insurance exception.  The
    legislature can, of course, change the common law.  However, as Charron J.A.
    noted in
Cugliari
at para. 20: The common law rights which existed
    prior to the enactment of s. 267 should only be displaced by clear and
    unambiguous language.

[32]

This
    statement reflects one of the presumptions of legislative intent: in
    interpreting a statute, we start from the presumption that the legislature does
    not intend to change the common law:  see Ruth Sullivan,
Statutory
    Interpretation
, 2d ed. (Toronto:  Irwin Law, 2007) at 244-45.  McLachlin
    J. gave effect to this presumption in her dissenting reasons in
R. v.
    McIntosh
, [1995] 1 S.C.R. 686, at para. 73, dealing with the self-defence
    provisions of the
Criminal Code
.  She wrote: To effect such a
    significant change, Parliament would have made its intention clear.  This it
    did not do.

[33]

I
    take a similar view of s. 267.8(1)2.  If the legislature intended to change the
    non-deductibility of certain benefits, such as CPP disability benefits, it did
    not make that intention clear.  The addition of loss of earning capacity does
    not demonstrate a clear intention to change to the common law because the jurisprudence
    has not treated the phrase in a consistent way.  Some cases have differentiated
    loss of earning capacity from loss of income; but others have treated the terms
    interchangeably.

[34]

An
    example of a case where the two phrases have been distinguished is the decision
    of the Nova Scotia Court of Appeal in
M.(L.M.) v. Nova Scotia (A.G.)
, 2011
    NSCA 48, 303 N.S.R. (2d) 243, at para. 63.  There, the court endorsed the
    following excerpt from the trial judges reasons:

There is, it should be noted, a
    distinction between loss of earning capacity and lost future income.  This
    point was discussed in
Exide Electronics Ltd. v. Webb
(1999), 177
    N.S.R. (2d) 147., where Freeman J.A., for the court, wrote, at para. 44, that
    Loss of earning capacity is loss of a capital asset; it can be compensated for
    even when it is not accompanied by a reduction in income, as in a situation
    where a plaintiff can return to work, but with a disability that restricts the
    scope of other employment that might become available in the future.  By
    contrast, The simplest illustration for an award to replace future income is
    total permanent disability, which requires an assessment based on earning
    expectations over the plaintiffs working lifetime.  Similarly, in
Abbot
    v. Sharpe
, 2007 NSCA 6, Saunders J.A. said, at para. 156:  this award
    was intended to compensate for diminished earning capacity which is seen as a
    loss to a capital asset, as opposed to a mathematical calculation of projected
    future lost income.  In my view loss of earning capacity is the relevant
    approach in the present case.

[35]

On
    this view, damages for loss of earning capacity compensate for the loss of a
    capital asset.  They do not depend on proving a pecuniary loss.  Instead, they
    are triggered by a particular disability, which impairs the ability to work. 
    In this sense, CPP disability benefits tend to duplicate damages for loss of
    earning capacity.  Neither requires proving a pecuniary loss; both depend on
    proving a disability.  As the one tends to duplicate the other, the one should
    be deductible from the other.

[36]

However,
    this view is not uniformly held.  This court treated loss of income and loss of
    earning capacity interchangeably in
Walker v. Ritchie
(2005), 25
    C.C.L.I. (4th) 60.  So too did the British Columbia Supreme Court in
MacKenzie
    v. Rogalasky
, 2011 BCSC 54.

[37]

In
    his text,
Personal Injury Damages in Canada
, 2nd ed. (Toronto: Thomson
    Canada Ltd., 1996), Ken Cooper-Stephenson summarized much of the case law when
    he wrote at p. 138:

As far as concerns lost income, the
    courts fluctuate between the notion of loss of earnings and loss of earning
    capacity, not for the most part intending any aspect of the substance of an
    assessment to depend on the particular wording, since damages are universally
    quantified on the basis of what the plaintiff
would have
, not what he
    or she
could have
earned absent the injury.

As the motion judge noted, McLachlin J. cited this
    exact excerpt with approval in her reasons in
M.B. v. British Columbia
,
    2003 SCC 53, [2003] 2 S.C.R. 477, at para. 49.

[38]

Cooper-Stephenson
    elaborated on the failure of the courts to distinguish between loss of income
    and loss of earning capacity at 138-9:

And if there were real substance to
    the terminological debate, something significant could have been made of it in
Ratych
    v. Bloomer
on the issue of the deductibility of collateral benefits, but
    nothing was: the basic principle is that damages for lost working capacity are
    reduced by actual benefits received  indicating that the notion of a capacity
    and actual moneys are considered
in parmi materia
.  If anything, the
    judgments of both McLachlin and Cory JJ. in
Ratych
suggest that loss
    of earnings or loss of income is the preferable terminology.  They support
    the notion that the award is being made for the loss of a stream of income
    rather than an abstract capacity. [Footnotes omitted.]

[39]

He
    eventually concluded at 214:

All this, however, is terminology. 
    And the terminology, as between loss of earnings and loss of earning
    capacity is used quite indiscriminately, as if nothing would depend on their
    choice.

[40]

On
    this view, an award for loss of earning capacity, like an award for loss of
    income, compensates for an actual pecuniary loss.  It is an indemnity payment. 
    As the CPP disability benefits are non-indemnity payments they should not be
    deducted.

[41]

My
    point here is not to come down on one side or the other of this debate.  What
    the debate shows is that the addition of the term loss of earning capacity in
    s. 267.8(1)2 did not clearly and unambiguously change the common law. 
    Non-indemnity payments such as CPP disability benefits, therefore remain
    non-deductible under Bill 59.

[42]

That
    is where the amendment to the regulation in 2002 becomes important.  That
    amendment removes any doubt about the deductibility of CPP benefits. They are
    now expressly deductible.

[43]

I
    agree with the appellants that a mere amendment of a regulation does not imply
    anything about the previous state of the law, and especially does not imply
    that the previous state of the law was different:  see
Legislation Act,
    2006
, S.O. 2006, C. 21, Sched. F, s. 56.  Equally, however, the court
    should not presume the law is the same despite the amendment:  see
Vijeyekumar
    v. State Farm Mutual Automobile Insurance Co.
(1998), 38 O.R. (3d) 590 (C.J.
    (Gen. Div.)) at p. 610; affd (1999), 44 O.R. (3d) 545 (C.A.).  The amendment
    standing alone is a neutral consideration.  In this case, however, it turns an
    unclear and ambiguous legislative intent into a clear and unambiguous
    legislative intent.  As Bill 59 did not clearly and unambiguously change the
    non-deductibility of CPP disability benefits at common law, I would, on this
    ground alone, dismiss the appeal.

(ii)

CPP Disability Benefits are Not Paid to Ms. Demers In Respect of the
    Incident

[44]

To
    be deductible under s. 267.8(1)2 payments must be in respect of the
    incident.  I agree with Ms. Demers submission that the CPP disability
    benefits she receives are payments in respect of her disability, not payments
    in respect of the incident  that is the accident for which she claims damages
    for her personal injuries.  On this ground too, I would dismiss the appeal.

[45]

This
    ground relies on the reasons of Iacobucci J. in
Sarvanis v. Canada
,
    2002 SCC 28, [2002] 1 S.C.R. 921.  In that case, an inmate while working at a
    federal penitentiary, sustained serious personal injuries for which he sued the
    Crown in tort.  He also qualified for and received CPP disability benefits,
    which were paid to him out of the Consolidated Revenue Fund.  In the light of
    the inmates receipt of CPP benefits, the court had to decide whether his tort
    claim was barred by s. 9 of the
Crown Liability and Proceedings Act
,
    R.S.C. 1985 c. C-50.  That section provided:

9 No proceedings lie against the
    Crown or a servant of the Crown in respect of a claim if a pension or
    compensation has been paid or is payable out of the Consolidated Revenue Fund
    or out of any funds administered by an agency of the Crown in respect of the
    death, injury, damage or loss in respect of which the claim is made.

[46]

The
    Supreme Court decided that s. 9 did not bar the inmates claim.  The decision
    turned on the meaning of the words in respect of:  in other words, were the
    CPP disability benefits paid in respect of the  injury, damage or loss
    suffered by the inmate?  Iacobucci J. acknowledged at para. 20 that in respect
    of is a broad phrase.  It signals an intent to convey a broad set of connections. 
    Yet, it is not a phrase of infinite reach (para. 22).  It has to be
    interpreted in its context.

[47]

In
    s. 9 of the federal statute, the phrase in respect of is tied to a list of
    specific events: death, injury, damage or loss.  Iacobucci J. concluded that
    the tort claim would be barred only if the pension was given for the same event
    for which the tort claim was made.  He held at para. 31 that CPP benefits were
    not contingent on the events specified in s. 9, but depended solely on the
    disabled condition of a qualified contributor:

Keeping in mind that s. 9 refers to
    pensions and compensations in respect of particular kinds of
events
, I am of the opinion that disability benefits
    under the CPP do not fall within its scope on the ordinary meaning of the
    words.  I concede that the words in respect of may encompass more than
    direct compensation for loss.  However, I do not believe that the CPP
    makes its payments on the same
basis
as s. 9 seems
    to require.  That is, s. 9 contemplates payment in some manner contingent
    on the occurrence of an event of death, injury, damage or loss.  A CPP
    disability benefit, by contrast, is not contingent on events at all, but on the
    present disabled condition of a qualified contributor under 65 years of age who
    makes an application for payment.  Whether or not the present serious and
    long-term disability that entitles an otherwise qualified contributor to
    receive CPP disability benefits happens to be the
result
of death, injury, damage or loss is not relevant to the determination of
    eligibility.  The only relevant question, assuming a person has met the
    conditions of eligibility with respect to age and contribution status, is the
    status of the applicant as disabled at the time the application is made.

[48]

The
    context in which the phrase in respect of is found in s. 267.8(1)2 of the
Insurance
    Act
is similar to its context in s. 9 of the
Crown Liability and
    Proceedings Act
.  The phrase is tied to the incident, in this case the car
    accident in which Ms. Demers was injured.  Her CPP benefits, as in
Sarvanis
,
    are not tied to the incident.  Instead, they depend on her disability and on
    meeting the qualifications for receiving these benefits.  Accordingly, I
    conclude that CPP disability benefits are not paid to Ms. Demers in respect of
    the incident and therefore are not captured by s. 267.8(1)2.

(b)

Are the HOOP Disability Benefits Ms. Demers Receives Deductible From
    Payments for Loss of Earning Capacity?

[49]

The
    analysis of the question whether HOOP disability benefits are deductible does
    not differ from the analysis for CPP disability benefits.  Thus, Ms. Demerss
    HOOP benefits, too, are not deductible from payments for loss of earning
    capacity.

[50]

There
    is one distinction between the two benefits.  Unlike the case with CPP
    disability benefits, there is no amending regulation to now make HOOP benefits
    deductible.  However, the absence of an amendment does not change the analysis.

E.

conclusion

[51]

I
    agree with the motion judge that neither the CPP disability benefits nor HOOP
    disability benefits that Ms. Demers receives are deductible under s. 267.8(1)2
    of the
Insurance Act
from any tort award for loss of income or loss of
    earning capacity.  It is, therefore, unnecessary to determine whether if these
    benefits were deductible, the deduction would be net or gross of income tax.

[52]

I
    would dismiss the appeal, with costs in the agreed amount of $8,500 plus
    applicable taxes.

Released: June 7, 2012

JL                                                                     John
    Laskin J.A.

I
    agree E.A. Cronk J.A.

I
    agree R.A. Blair





[1]
The motion judge also determined that the interest paid to Ms. Demers on
    overdue statutory income replacement benefits is not deductible from an award
    of damages for income loss and loss of earning capacity.  This determination
    has not been appealed.



[2]
Bill 164, which applied to car accidents between January 1, 1994 and October
    31, 1996, precluded injured persons from suing the owner or occupant of a car
    for economic loss.  As the motion judge pointed out at para. 7 of his reasons,
    the issue of collateral benefits therefore did not arise under Bill 164
    accidents.


