By Sarah D. Pinsonnault
In Cunningham v. Wheeler  1 S.C.R. 359, the Supreme Court of Canada studied the “non-deductibility rule” (also known as the “insurance exception”) which holds that benefits received for loss of wages pursuant to a private insurance policy are not deductible from a plaintiff’s lost-wage claim. In this decision, the majority of the Supreme Court held that, in common law jurisdictions, the non-deductibility rule equally extends to benefits paid under employment contracts, when these are found to be akin to proceeds from a private insurance contract. The reasoning behind this is that it would be unfair to allow the defendant (i.e. the person who caused the damages) to benefit from the plaintiff’s sacrifices made in order to obtain an insurance policy that provides for lost wages. That being said, does the “non-deductibility rule” apply in Québec? The Superior Court answers this question in Asgar c. Syndicat de la copropriété Lofts Saint-Urbain, 2015 QCCS 179.
On May 23rd, upon returning from her job as interventional cardiologist at the Institut de Cardiologie de Montréal, the Plaintiff slipped on a pool of oil in the hallway of her condominium building. She holds the Syndicate of co-ownership liable for this fall and for the ensuing damages she sustained by alleging that it failed to keep the floors of the building clean and secure.
Subsequent to this fall, the Plaintiff was absent from work for a 55 working-day period. It is worth noting that throughout her disability period, as partner with Les Cariologue associés de l’Institut de Cardiologie de Montréal, the Plaintiff continued to receive her regular distributions from the « pool » of revenues the partners receive for their work from the Régie de l'assurance maladie du Québec (RAMQ).
She contended however that in order to receive the disability benefits provided for under the partnership agreement, she had to accept substantially lower distribution payments (i.e. inferior to the amount she billed the RAMQ).
Accordingly, the Plaintiff asserted that the aforementioned disability protection was “akin to insurance” and thus complied with the “non-deductibility rule” developed in Cunningham. She therefore argued that the amounts she received under the partnership agreement cannot be deducted from her claim for damages.
Daniel Payette, S.C.J., first acknowledged that the Plaintiff met the burden established in Cunningham. However, he added that this was unnecessary given that the Quebec legislators broadened the non-deductibility rule found in Cunningham when it enacted article 1608 of the Civil Code of Québec:
“ As the Supreme Court noted in Cunningham, the Québec legislators specifically provided that there was to be no deductibility when they adopted article 1608 of the Civil Code of Québec in 1991.
 Article 1608 of the Civil Code of Québec reads as follows:
1608. The obligation of the debtor to pay damages to the creditor is neither reduced nor altered by the fact that the creditor receives a benefit from a third person, as a result of the injury he has suffered, except so far as the third person is subrogated to the rights of the creditor. This article not only incorporates the « insurance exception » or « non-deductibility rule » formerly found in article 2494 C.C.L.C. but it broadens its scope as article 2494 C.C.L.C. only applied when the creditor received a prestation under an insurance contract whereas article 1608 C.C.Q. applies in all cases where the creditor receives a prestation from a third party, irrespective of who or what this third party is or why he, she or it pays that prestation.
 The Ministre de la justice du Québec confirmed the legislators’ intention to broaden the non-deductibility rule in his Commentaires. He wrote:
This article adopts, with a few changes and making its application more general, the rule regarding insurance contracts stated in art. 2494 C.C.L.C.
It is intended to resolve the question of whether the obligation on a debtor to compensate can be reduced or altered by payments made to the creditor by a third party, whether those payments are gratuitous or for consideration. This would be the case if, for example, without being required to do so, the creditor's employer continued to pay him his salary while he was unable to work; it would also be the case if the creditor's insurer paid him, in his capacity as an insured, the proceeds of an insurance policy he had taken out. (our underlining)”
In light of this, Justice Payette ruled as follows:
“ The Court therefore finds that the distribution payments received by Dr. Asgar from the Cardiologues associés in virtue of the partnership agreement during her disability period constitutes a « prestation » as contemplated by article 1608 C.C.Q.. The fact that she continued to receive her regular distributions during her disability period would not have altered the Syndicat’s obligation to indemnify Dr. Asgar for her loss of income during her disability period, had the Court found it to be responsible for Dr. Asgar’s fall.”
The Plaintiff nevertheless was awarded no damages for her claim against the Syndicate was dismissed, given that it was not found to be responsible for her fall.
To read this decision in its entirety and other elements discussed therein, click here.