Thiruchelvam v. RBC General Insurance Company, 2022 ONSC 554

Full Decision

The Divisional Court has recently weighed in on the applicability of the material contribution test for causation in the context of the Statutory Accident Benefits Schedule (“SABS”).

The Appellant, Stalin Thiruchelvam, was injured in a motor vehicle collision on September 4, 2013. He applied for accident benefits from his motor vehicle insurer, RBC General Insurance Company, for a determination that he was catastrophically impaired due to a mental or behavioural disorder, caused by the 2013 accident. The insurer agreed that he was catastrophically impaired, however, it disputed the finding that the 2013 accident caused his catastrophic impairments. The Appellant had been in two previous motor vehicle collisions in 2002, a week apart, that left him with significant, ongoing impairments. The insurer took the position that he was already catastrophically impaired prior to the 2013 collision, therefore it did not cause catastrophic impairments.

The arbitration decision dealt with the causation analysis for a catastrophic determination when there is more than one accident involved.

The FSCO arbitrator concluded that the Appellant sustained a catastrophic impairment. The Insurer appealed to the Director Delegate, who set aside the original decision. The Appellant sought judicial review of the Director Delegate’s decision.

The Divisional Court quashed the Director Delegate’s decision and restored the Arbitrator’s decision.

Main Issue Under Review

Did the Director Delegate err in concluding that any catastrophic impairment the Appellant may have suffered was not attributable to the accident of September 4, 2013?

Standard of Review

The standard of review is reasonableness.  

Arbitrator’s Decision

The Arbitrator made several important findings of fact. She noted that the Appellant’s serious pre-existing psychiatric condition had worsened following the September 2013 accident. She did not find that he was declared catastrophically impaired or otherwise had been accepted as catastrophically impaired in the time before the accident of September 4, 2013.

In the Arbitrator’s hands, the issue of whether Mr. Thiruchelvam was catastrophically impaired was a question of mixed facts and law. The Arbitrator found that:

… on a balance of probabilities; the MVA did have a material effect on the applicant’s psychiatric condition, leaving him with impairments more severe than those he was already suffering before September 4, 2013, and which are catastrophic within the meaning of the Schedule.

Director Delegate’s Decision

The Director Delegate was limited to an issue of law. However, he made a critical finding of fact not made by and inconsistent with those that were made by the Arbitrator. He found that, at the time of the accident, Mr. Thiruchelvam was already catastrophically impaired.

The Director Delegate was of the view that the Arbitrator had applied the incorrect legal test to the facts as she had found them. The Arbitrator considered whether there was a material change to the circumstances of Mr. Thiruchelvam that arose as a result of the accident of September 4, 2013, rather than applying what the Director’s Delegate sees as the applicable test: the “but for test”.

The Director Delegate’s decision flows from his conclusion that the applicant was already catastrophically impaired at the time of the 2013 accident. It coloured his analysis from the beginning and resulted in an unreasonable result.  

The Problem with the Director Delegate’s Conclusion

What if the applicant was not catastrophically impaired at the time of the 2013 accident? In such a circumstance applying the “but for test” says nothing other than, compared to a point in time prior to the two accidents in 2002, when, presumably, Mr. Thiruchelvam was not impaired, he is now catastrophically impaired. This has real, practical implications for how the SABS is applied. Suppose that sometime between 2002 and 2013 Mr. Thiruchelvam changed insurers: which one pays the benefits? Does that insurer pay all the enhanced benefits regardless of the nature of the accident and the injury its policy covered?

The policy proposition behind the SABS is not directed just to providing immediate relief to those injured in motor vehicle accidents, it also looks to the impact on insurers and their ability to provide insurance at a reasonable cost.

The issue to be determined is: Are those who make determinations as to whether a person has been catastrophically impaired, required in all circumstances to use and rely on the “but for” test?

The Divisional Court’s Analysis

A finding that an individual has been catastrophically impaired is not a medical determination. It is a legal standing defined by legislation.

It is a threshold of suffering identified through the application of the definitions found in a regulation (the SABS). It is not determined by doctors and other health professionals. It is the result of a process structured through legislation. An individual may be qualified to be catastrophically impaired but is only identified as such through the process the legislation mandates.

That means a person cannot be found to be catastrophically impaired unless they go through the legislated process of determination.

Generally, the “but for” test is preferred and should be applied when determining whether an accident caused an applicant’s impairments. However, the caselaw demonstrates that there are circumstances where it will not provide a satisfactory answer and a consideration of “material contribution” is appropriate.

In Clements v. Clements, the Supreme Court of Canada recognized the difference between the “but for” test and the “material contribution” test:

“But for” causation and liability on the basis of material contribution to risk are two different beasts. “But for” causation is a factual inquiry into what likely happened. The material contribution to risk test removes the requirement of “but for” causation and substitutes proof of material contribution to risk.

The “material contribution” does not signify a test of causation at all; rather it is a policy-driven rule of law designed to permit plaintiffs to recover in such cases despite their failure to prove causation. In such cases, plaintiffs are permitted to “jump the evidentiary gap”. That is because to deny liability “would offend basic notions of fairness and justice”.

The Court found that the “but for” test must be applied in a robust common sense fashion. There is no need for scientific evidence of the precise contribution the defendant’s negligence made to the injury.[1] Recourse to a material contribution to risk approach is necessarily rare, and justified only where it is required by fairness and conforms to the principles that ground recovery in tort.[2] This would happen in circumstances where there were two or more tortfeasors and the plaintiff is unable to show that anyone of them was the necessary or “but for” cause of the injury.[3] The special conditions that permit resort to a material contribution approach were not present in the case. This was a simple single-defendant case: the only issue was whether “but for” the defendant’s negligent conduct, the injury would have been sustained.[4]

What is apparent from Clements is that the “but for” test is the default test, however, there are exceptional circumstances where the “material contribution” approach is needed.

The presence of more than one potential cause of an injury does not mean the material contribution test has to be used. There are two requirements that must be met before the “material contribution” test may be applied:

  1. It must be impossible for the plaintiff to prove that the defendant’s negligence caused the plaintiff’s injury using the “but for test”. The impossibility must be due to factors outside the plaintiff’s control.
  2. It must be clear that the defendant breached the duty of care owed to the plaintiff, thereby exposing the plaintiff to an unreasonable risk of injury, and the plaintiff must have suffered that form of injury. The plaintiff’s injury must fall within eh ambit of the risk created by the defendant’s breach.[5]

The cases reviewed to this point used these tests to determine whether a party was legally responsible for the injury that was under review: was the defendant negligent?

This case is different. Here the test is being used to determine if a particular party is entitled to an elevated level of benefits: did the injury result from the accident, not who caused the accident. Fault for the accident is not an issue. The SABS is a no-fault program. The concern that is the second of the conditions Hanke lists as a requirement before an exception to the “but for” test can be applied (clear that the defendant has breached a duty of care) directs that the constituents of a finding of fault are necessary. This would take the application for benefits outside the fundamental policy that informs the SABS.

Monks v. ING Insurance Co of Canada[6] was a case that dealt with the issue of whether the applicant was catastrophically impaired in the context of three separate motor vehicle collisions over time. The Court of Appeal concluded that the trial judge’s use of the “material contribution” test conformed with a long line of arbitrational decisions in which this test has been utilized to resolve causation issues in accident benefits disputes, including in cases where the benefits claimant suffered from pre-existing condition prior to the accident.

Additionally, in Monks, it did not matter which test was used because both arrived at the same result. The Court of Appeal concluded that:

Accordingly, where — as here — a benefits claimant’s impairment is shown on the “but for” or material contribution causation tests to have resulted from an accident in respect of which the claimant is insured, the insurer’s liability for accident benefits is engaged in accordance with the provisions of the SABS.

The Court adopted a more flexible approach to the use of the “material contribution” test in the context of no-fault accident benefits determinations.

Another Divisional Court judicial review of a Director Delegate’s decision, Sabadash v. State Farm,[7] confirmed that in the statutory accident benefits context, the test for establishing causation is as follows:

  1. The test for establishing causation is the “but for” test.
  2. In exceptional circumstances, where:

    a) the plaintiff establishes that his/her loss would not have occurred “but for” the negligence of two or more tortfeasors, each of whom could be responsible for the loss; but

    b) the plaintiff is unable through no fault of his/her own, to show that one tortfeasor is the “but for” cause of her injuries because each tortfeasor can point to the other as the possible “but for” cause of the injury, a plaintiff may establish liability against one defendant if that defendant’s conduct materially contributed to the plaintiff’s risk of injury.


It was reasonable for the Arbitrator to find that it was not possible to disaggregate the events and effects of three accidents such that it could be established (on a balance of probabilities) which one, if in fact any one of them, on its own, caused Mr. Thiruchelvam to cross the threshold and become catastrophically impaired. 

It was unreasonable for the Director’s Delegate to conclude that the Arbitrator committed a legal error in failing to apply the “but for test”. Mr. Thiruchelvam ‘s application to be identified as catastrophically impaired falls within the circumstances set by Sabadash v. State Farmwhere an exception arises requiring resort to the material contribution test. There is more than one tortfeasor and the plaintiff, through no fault of his own, is unable to show that one of them is the “but for” cause of his injuries.

Furthermore, the Director Delegate’s decision is not justified because it relies on the supposed fact that Mr. Thiruchelvam was catastrophically impaired prior to the accident of September 4, 2013, and ignores the law that provides that the appeal to the Director’s Delegate can only be on a question of law.

The Arbitrator’s decision was restored, the Director Delegate’s decision was quashed.

[1]  Clements v. Clements, 2012 SCC 32 at para 9

[2] Ibid at para 16

[3] Ibid at paras 46(2) & 50

[4] Ibid at para 50

[5] Resurfice Corp. v. Hanke, 2007 SCC 7 at para 24

[6] Monks v. ING Insurance Co of Canada, 2008 ONCA 269

[7] Sabadash v. State Farm et al., 2019 ONSC 1121

Written by

Victoria is an associate in Siskinds’ Personal Injury Law Group. She provides top-quality legal services to her client by prioritizing clarity and accessibility when explaining legal options to her clients. Her practice includes motor vehicle litigation, short/long term disability claims, slips/trips and falls, and dog bite cases.

Victoria attended Western Law, where she worked and volunteered in the legal clinic. In addition to her academics and advocacy, Victoria competed as a varsity fencer for the Western Fencing Team.