Kolapully v. TTC et al., 2022 ONSC 6024 (CanLII)

Section 267.8 of the Insurance Act, R.S.O. 1990, c. 1.8 mandates that in an action for loss or damage from bodily injury in an automobile accident, the trial judge must reduce the pecuniary damages awarded to the plaintiff by certain statutory accident benefits available to the plaintiff before the trial. This is to avoid any double recovery. 

In Kolapully v. TTC at al., the plaintiff was struck by a TTC bus on her way to the library. At trial, she was awarded $150,000.00 in damages for past loss of income.  The plaintiff had also previously received $95,354.23 in non-earner benefits (NEBs) under the Statutory Accident Benefits Schedule(SABS). The defendants argued that NEBs received by the plaintiff should be deducted from the plaintiff’s award for loss of income.

Justice Sugunasiri dismissed the defendants’ motion, finding that the court was bound by analysis of NEBs in the Court of Appeal decision Walker v. Ritchie. The Court of Appeal in Walker used the “apples to apples” approach from Bannon v. McNeely. Ultimately, it was held that NEBs were intended to compensate for loss of enjoyment of life, and therefore were not intended to be deductible from a loss of income award. 

Justice Sugunasiri’s finding that she was bound by Walker is noteworthy. Since Walker, the Court of Appeal has rejected the “apples to apples” approach used in Bannon and Walker, and adopted a broader “silo” approach to correlate SABS benefits with tort awards for deduction purposes. (see: El-Khodr v. Lackie). Since El-Khodr, there have been multiple decisions come out of the Court of Appeal applying the “silo” approach to various benefits, though none have specifically dealt with how to approach NEBs. 

The defendants argued that where Walker relied on the since-rejected “apples to apples” approach, it is no longer good law. Additionally, the SABS regime and provisions governing NEBs at the time Walker was decided were different than those in place at the time of the plaintiff’s accident. The defendants relied on the Court of Appeal decision Cadieux v. Clouter, wherein the “silo” approach was used, and the newer SABS provisions applied. Although NEBs were not directly addressed by the Court of Appeal, the defendants noted an obiter comment made in Cadieux where NEBs were categorized in the income loss silo, thereby suggesting that NEBs ought to be deductible. 

Justice Sugunasiri rejected the defendants’ arguments above. While she acknowledged the adoption of the silo approach and the changes made to the SABS, she still found that neither of these things would override the Court of Appeal’s conclusion in Walker that NEBs are not payments in the nature of loss of income and therefore are not intended to be deducted from a tort award for income loss. She noted that the Walker considered NEBs itself, and the analysis was based on eligibility requirements for NEBs and the activities impacted by the accident. She found that the logic behind the analysis of NEBs has not changed regardless of the changes to the SABS and approach used analyze deductibility. Further, she noted that if the Court of Appeal in Cadieux had intended to overturn its analysis of NEBs in Walker, it would have expressly done so. She found that she was not bound by obiter comments made by the Court of Appeal in Cadieux.

The key takeaway from this case is that Walker v. Ritchie, while tacitly overturned by the obiter comments by the Court of Appeal in Cadieux and implicitly found to no longer be the applicable approach as per El-Kohdr and Cobb Estate, has not actually been overturned and thus remains good law.  This is despite Walker using a now-rejected approach to categorizing benefits, as the focus remains on overarching principle that NEB eligibility compensates for a loss of activities that relate to things beyond just employment. It may be that the Court of Appeal simply needs to be asked, on appeal of this decision, whether the three most recent cases it decided on this issue using silos is the new and improved approach, or indeed whether Walker remains good law.  It would be another story altogether had the defendants in this case sought to deduct the NEB payments from general damages, as that would not follow the silo approach.  However, a sizeable payment for non earner benefits not being deducted from past income loss is in all manners of speaking, double recovery and inconsistent with the intent of the Court of Appeal as per their decisions in CadieuxEl-Kohdr and Cobb Estate.

The defendants are appealing the decision. We look forward to seeing how the Court of Appeal will deal with what is currently an irreconcilable tension between Walker v Ritchie and the CadieuxEl-Kohdr and Cobb Estate decisions.

Lauren Kolarek and Eric Grossman are co-authors of this blog. If you have any questions about this decision or a related file please reach out to Lauren or Eric.