"Apples To Apples" – No More. Interpreting The Insurance Act In Relation To Plaintiff Damages

Lerners LLP


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For a plaintiff or defendant, a damages award is often the most important or concerning part of a civil claim as it determines how much a party will receive or how much a party must pay.
Canada Insurance
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For a plaintiff or defendant, a damages award is often the most important or concerning part of a civil claim as it determines how much a party will receive or how much a party must pay. The Court of Appeal released a decision on May 6, 2024, that provided guidance on the interpretation of the Insurance Act, R. S. O. 1990, c.I.8 and non-earner benefits. Non-earner benefits are in place to assist people who were students, unemployed, or retired at the time of an accident. These benefits are available to individuals who suffer from a "complete inability to carry on a normal life" as a result of an accident. In this case, the court determined that non-earner benefits are in the silo of income replacement benefits and are therefore deductible from a damages award of income loss.


The plaintiff, Shoba Kolapully, was struck by a Toronto Transit Commission ("TTC") bus while crossing the street in 2012. She brought this action against the bus driver and the TTC. This matter has had a lengthy litigation history including a Licence Appeal Tribunal (LAT) hearing, motions, and a six week jury trial.

At the LAT hearing, Ms. Kolapully was found to be catastrophically impaired and received $95,000 in non-earner benefits under the Statutory Accident Benefits Schedule (the "SABS").

At trial, the jury awarded Ms. Kolapully $175,000 in non-pecuniary damages and $200,000 in damages for loss of income. The jury determined that the TTC was 75% negligent and Ms. Kolapully was 25% negligent. Interestingly, the trial judge determined that the benefits earned under the SABS would not be deducted from the damages award for income loss under s. 267.8 of the Insurance Act, R.S.O. 1990, c. I.8 (the "Insurance Act").



The TTC appealed and argued that the trial judge erred in:

  1. allowing into evidence an untried medical test, the Single Photon Emission Computed Tomography ("SPECT") scan of Ms. Kolapully;
  2. excluding evidence of attendant care claims forms Ms. Kolapully signed in blank as part of her alleged participation in a fraudulent scheme;
  3. her articulation of the test for causation, the calculation of damages, and in her jury instructions;
  4. refusing to deduct non-earner benefits from the tort award under the Insurance Act; and
  5. the costs award.

Ultimately, the court dismissed the first three and final grounds but allowed the appeal in part with respect to the fourth issue.


With respect to the first issue, the trial judge found that the scan was properly used as a diagnostic aid and was not novel science. The trial judge admitted the report, but excluded the summary written by a physician who was unable to testify. The court noted that although the admissibility of the scan and report was challenged at trial, the TTC did not provide evidence to counter its admissibility. When assessing this aspect of the appeal, the court re-affirmed that there are two steps to consider when admitting expert evidence. The first is the threshold requirement, and the second engages the judge's discretionary gatekeeper function. The court stated that the test for reliability is accepted as:

  1. whether the theory or technique can be and has been tested.
  2. whether the theory or technique has been subjected to peer review and publication.
  3. the known or potential rate of error or the existence of standards; and,
  4. whether the theory or technique used has been generally accepted.

The court also cited former Justice Stephen T. Goudge's Report on the Inquiry into Pediatric Forensic Pathology in Ontario, as a "useful framework" when assessing the reliability of expert opinions based on novel or contested science. These factors included:

  1. the reliability of the witness, including whether the witness is testifying outside his or her expertise
  2. the reliability of the scientific theory or technique on which the opinion draws, including whether it is generally accepted and whether there are meaningful peer review, professional standards, and quality assurance processes;
  3. whether the expert can relate his or her particular opinion in the case to a theory or technique that has been or can be tested, including substitutes for testing that are tailored to the particular discipline;
  4. whether there is serious dispute or uncertainty about the science and, if so, whether the trier of fact will be reliably informed about the existence of that dispute or uncertainty;
  5. whether the expert has adequately considered alternative explanations or interpretation of the data and whether the underlying evidence is available for others to challenge the expert's interpretation;
  6. whether the language that the expert proposes to use to express his or her conclusions is appropriate, given the degree of controversy or certainty in the underlying science; and
  7. whether the expert can express the opinion in a manner such that the trier of fact will be able to reach an independent opinion as to the reliability of the expert's opinion.

The court ultimately found that the trial judge's decision to admit the scan evidence was discretionary and adequately explained. The court was critical that the TTC did not lead any evidence against the SPECT scans at trial and stated that a party must put its best foot forward at trial, which the TTC failed to do. It was clear that the governing principles for the admission of contested science were properly considered by the trial judge. However, the court stated that this decision should not be taken as determining the validity of the SPECT scans more broadly, but rather that this decision affirms that the evidence in this case was properly considered by the trial judge.

With respect to the second issue, the TTC argued that the trial judge erred in excluding evidence attendant care forms signed in blank by Ms. Kolapully. The TTC argued that Ms. Kolapully was not credible because she was involved in a fraudulent scheme to recover funds for care that she did not receive. The trial judge found the forms to be irrelevant and excluded them. The court ultimately dismissed this ground of appeal and found that the trial judge made no error on her conclusions. It said that the attendant care claim was not pursued at trial; therefore, the forms were not relevant to a fact in issue. The court agreed with the trial judge's decision that the forms were not allowed purely for the purpose of attacking Ms. Kolapully's credibility, a decision that fell within the trial judge's discretion.

With respect to the third issue, the TTC argued that the trial judge erred in her jury instruction on causation and the calculation of damages. The court ultimately dismissed this ground of appeal. At trial, counsel for the TTC objected to plaintiff's counsel statement to the jury that the proper test for causation was the "material contribution" test. The trial judge provided a correcting instruction, the form of which had been consented to by counsel for the TTC. On appeal, the TTC argued that the charge was inadequate. The court rejected this argument and stated that the charge was adequate and directly addressed the concerns. Further, at trial, counsel for the plaintiff incorrectly suggested that the jury ought to calculate non-pecuniary damages on a per diem basis. Counsel for the TTC objected and the trial judge provided a correction to the jury. The court rejected this ground of appeal and stated that the trial judge's correction clearly identified the offending comments and included a proper instruction.

With respect to the fourth issue, the TTC argued that the trial judge erred in failing to deduct the plaintiff's SABS benefits from the award for loss of income. The court outlined that s. 267.8 of the Insurance Act mandates that, in an action for loss or damage from bodily injury in an automobile accident, the trial judge must reduce the pecuniary damages tort award by the amount received by the plaintiff in corresponding statutory accident benefits. In her analysis, the trial judge found that non-earner benefits were not related to loss of income, and were therefore not deductible from a tort award for loss of income under s. 267.8(1). The TTC argued that this conclusion conflicted with Cadieux v. Cloutier, 2018 ONCA 903 ("Cadieux"), where non-earner benefits were listed in the category of "income replacement benefits". The trial judge found that this particular part of the decision was obiter and not binding. She had found that if the legislature had wanted non-earner benefits to be considered income replacement benefits, then the legislature would have used express language to do so.

The court found that this was an error. The court re-affirmed governing principles, including that the statutory scheme aims at full compensation for an injured party, but also aims to prevent double compensation. The court recognized that two lines of case law had emerged in the analysis of statutory benefit deduction following statutory changes in 1996. The first line of cases used the "apples to apples" approach when analyzing the deduction of benefits from an award. This approach suggested that statutory accident benefits were deducted from "identical" heads of damage. In these cases, it was determined that non-earner benefits were not the same as a loss of income and could not be deducted from a damages award for loss of income. The second line of cases used a "silo" approach. This was a broader approach, where benefits that fell within the same broad category were deductible from a corresponding damages category. The court clarified that the silo approach followed in Cadieux was binding on the trial judge. The court confirmed that the "silo" approach should be followed rather than the "apples to apples" approach. The court held that the trial judge erred in failing to consider the legislature's introduction of silos into s. 267(8) of the Insurance Act. The court clarified that the key principle in this analysis is that deduction from the tort pecuniary damages award ought to be considered in a silo. In other words, if a claimant receives no damages award for income loss, the amount the claimant received for income loss under the SABS is not deducted from any award under the other two silos – "health care benefits" or "other pecuniary loss". Nor are statutory accident benefits to be deducted from a general damages award as per s. 267.8(7) of the Insurance Act. Using the silo method and in following Cadieux, it was held that the trial judge was required to deduct the SABS non-earner benefits from the income loss damages award.

Finally, the TTC argued that the trial judge erred in making her cost award on a partial indemnity scale for all of the costs in the action, including the legal costs for the LAT proceeding and disbursements. The TTC was primarily concerned that no deduction was considered or applied. The court dismissed this ground of appeal, stating that the threshold for this ground is very high and only in the most obvious cases should an appellate court find that the trial judge erred in exercising discretion. As such, the appeal was only allowed with respect to the interpretation of the Insurance Act.


The Court of Appeal has provided helpful clarity in the proper interpretation of s. 267.8(7) of the Insurance Act. The deduction of non-earner benefits from an income loss damages award will have a large impact on the overall damages award that a plaintiff receives or a defendant has to pay. Moving forward, it will be interesting to see if this decision has any broader implications on how insurance matters are brought and/or progress.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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