Executive Summary: Key Legal and Evidentiary Issues

• Proposed class members are Nova Scotia automobile insureds who had their Section B Weekly Indemnity Payments reduced through deductions of Collateral Disability Benefits — namely LTD Benefits, CPP Disability Benefits, and EI Disability Benefits — since April 2007.
   
• Central to the case is whether those collateral benefits qualify as "wage or salary continuation plans available to the person by reason of his employment" under the Standard Automobile Policy (S.P.F. No.1), which would permit their deduction.
   
• Four causes of action were advanced: breach of contract, unjust enrichment, breach of the duty of good faith, and fraudulent misrepresentation and concealment.
   
• All five certification criteria under s.7(1) of the Class Proceedings Act, S.N.S. 2007, c.28 were analyzed; the court found the pleadings disclosed a cause of action and that the five common issues identified relating to EI Disability Benefits deductibility met the common issues requirement.
   
• Disqualifying the motion was the finding that proposed representative plaintiff Dougalenes Bowman could not adequately represent the class as refined, because her insurer deducted LTD Benefits — not EI Disability Benefits — meaning she lacked personal experience with the only deduction certified as a common issue.
   
• Costs of the motion remained undetermined, with the court granting class counsel one month to advise whether they wished to substitute a new representative plaintiff.

Facts of the case

This is a decision on a motion to certify a class action under the Class Proceedings Act, S.N.S. 2007, c.28, heard before Justice Gail L. Gatchalian of the Supreme Court of Nova Scotia over four days in April 2025. The proceeding was commenced by Nathan Paul Forest Barnard and Dougalenes Bowman as plaintiffs, with Dougalenes Bowman serving as the sole proposed representative plaintiff. The defendants are twelve automobile insurers operating in Nova Scotia: The Portage Mutual Insurance Company, CAA Insurance Company, The Personal Insurance Company of Canada, Intact Insurance Company, Royal & Sun Alliance Insurance Company of Canada, Aviva General Insurance Company, Allstate Insurance Company of Canada, Security National Insurance Company, Economical Mutual Insurance Company, The Wawanesa Mutual Insurance Company, Travelers Insurance Company of Canada, and Co-operators General Insurance Company. Six originally named defendants — Unifund Assurance Company, Northbridge General Insurance Corporation, Sonnet Insurance Company, Pembridge Insurance Company, Echelon General Insurance Company, and TD Home and Auto Insurance Company — were discontinued from the action by Ms. Bowman.

Automobile insurance is mandatory in Nova Scotia. Every insured driver must hold a Standard Automobile Policy (S.P.F. No.1), and pursuant to s.140 of the Insurance Act, R.S.N.S. 1989, c.231, all such policies must include Section B — Mandatory Accident Benefits (the "Section B Contract"), as prescribed by the Automobile Insurance Contract Mandatory Conditions Regulations, NS Reg 181/2003. Because the Section B Contract is set by regulation, its wording is identical for all insureds and all defendant insurers. In support of certification, the plaintiff relied on affidavits from twelve individuals — including representative affiants Dougalenes Bowman (Intact), Nathan Barnard (Portage), Joan Baker (Aviva), Trudy Demone (Economical), Catherine Old (Co-operators), Paula Avery (Travelers), Eric Wright (CAA), Chris Gallant (Allstate), Andrea Skeet (Royal & Sun Alliance), Jacqueline Foster (Security National), Belinda Works (Wawanesa), and Ashley Byrne (The Personal) — each of whom stated that their Weekly Indemnity Payments had been reduced due to the receipt of one or more Collateral Disability Benefits.

Policy terms and contractual clauses at issue

The Weekly Indemnity Payment under the Section B Contract is calculated as the lesser of: (a) $250 per week; or (b) 80 percent of the insured person's gross weekly income from employment, less any payments for loss of income from employment received by or available to such person under (i) the laws of any jurisdiction, or (ii) wage or salary continuation plans available to the person by reason of his employment. The plaintiff's central position was that the three categories of Collateral Disability Benefits — LTD Benefits (disability insurance for which the insured personally paid premiums in whole or in part), CPP Disability Benefits, and EI Disability Benefits — are not "wage or salary continuation plans available to the person by reason of his employment" within the meaning of subparagraph (ii), and therefore may not lawfully be deducted. The defendants maintained the deductions were proper under the policy language, relying in particular on Nova Scotia court authority holding that CPP Disability Benefits are properly deductible under the calculation at subparagraph (b).

Reasoning and analysis

Justice Gatchalian applied the five-part certification test under s.7(1) of the Class Proceedings Act, as interpreted purposively and generously in accordance with Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534, and Hollick v. Metropolitan Toronto (City), 2001 SCC 68. The applicable standard at certification — apart from the cause of action criterion — is "some basis in fact."

On the cause of action criterion, the court found that the pleadings disclosed causes of action in breach of contract and breach of the duty of good faith, though the claim framed as a systematic deduction practice was found to sound in good faith rather than breach of contract. The unjust enrichment and fraudulent misrepresentation and concealment claims were also found to be properly pleaded. The court found that CPP Disability Benefits deductibility presented a more contested question given prior Nova Scotia authority, but declined to strike that claim as plainly and obviously without merit at the certification stage.

On the common issues criterion, the court certified five common issues, all directed to EI Disability Benefits: whether such benefits constitute "payments for loss of income from employment" under the laws of any jurisdiction or "wage or salary continuation plans available by reason of employment" within the Section B policy; and if neither, whether their deduction breaches the policy, whether the defendants had a uniform practice of deducting them, and whether that practice breached the duty of good faith. The court declined to certify common issues relating to LTD Benefits and CPP Disability Benefits deductibility on the basis that individual contract-specific inquiries would predominate over any common question. Aggregate damages were also refused as a common issue, as the plaintiff had not established that damages could be assessed on a class-wide basis.

The court was satisfied that the certification criteria of an identifiable class, common issues, preferable procedure, and an appropriate litigation plan were met with respect to EI Disability Benefits. On preferability, the court considered the s.7(2) factors and concluded that a class proceeding was fair, efficient, and manageable, and preferable to individual actions or a test case, given in particular the access to justice barrier that would remain if class members were required to litigate individually.

Ruling and overall outcome

Despite finding that all other certification criteria were satisfied in relation to EI Disability Benefits deductibility, the motion was ultimately not granted. Justice Gatchalian determined that Ms. Bowman could not adequately represent the class as refined because her insurer, Intact, deducted LTD Benefits from her Weekly Indemnity Payments — not EI Disability Benefits — leaving her without personal experience of the only deduction certified as a common issue. As a result, there was a conflict between her interests and those of the class members whose claims would be advanced. Rather than dismissing the motion outright, the court gave class counsel one month from the date of the decision to advise whether they wished to amend the motion to substitute a new representative plaintiff. If so, the court indicated it would reconvene to hear submissions on whether that substitution should be permitted and whether the proposed replacement would fairly and adequately represent the class. The issue of costs of the certification motion was expressly left to be determined. No monetary award was made.