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Threshold Motion: The Impact of Loss of Income Awards

By Katrina Taibi


The Court in Ramcharran v. State Farm Mutual Automobile Insurance,[1] heard a threshold motion and concluded that the plaintiff’s injuries met the statutory threshold under the Insurance Act, as well as the additional requirement for unidentified and underinsured motorist coverage.

Background Facts:

On February 12, 2010, the plaintiff, Norman Ramcharran, was involved in a motor vehicle accident while sitting in his parked car. An unidentified vehicle collided with the driver’s side rear corner of the plaintiff’s vehicle and left the scene. Mr. Ramcharran brought an action against his own insurer, State Farm Mutual Automobile Insurance Co.

Mr. Ramcharran had a pre-existing healed right elbow fracture with resulting arthritis, which he claimed was asymptomatic prior to the subject incident.  Mr. Ramcharran testified that during the collision, his right elbow hit the steering wheel and became painful.  In October 2015, Mr. Ramcharran had surgery on his right elbow to reduce discomfort. 

In March 2016, Mr. Ramcharran was assessed as having a good range of movement, but ongoing weakness. A defence medical expert testified that Mr. Ramcharran only experienced soft tissue injuries, which resolved shortly after the incident and that the remainder of his complaints were the result of his pre-existing conditions.

After a trial in June 2023, the jury awarded $62,250 for general damages, $305,000 for past income loss, and $60,000 for future income loss.  After the statutory deductible of $44,367.24, general damages were reduced to $17,882.76. 

Threshold Motion:

Pursuant to section 267.5(5)(b) of the Insurance Act,[2] State Farm brought a threshold motion.  Justice Dow stated that he prefers to rely on the verbal threshold test set out in Malfara v. Vukojavic,[3] rather than the earlier, slightly different version set out in Meyer v. Bright.[4]  The Malfara test asks the following questions:

  1. has the injured person sustained permanent impairment of a physical, mental, or psychological function;
  2. if yes, was the function which is permanently impaired an important one; and
  3. if yes, is the impairment of the important function serious?

The Court concluded that Mr. Ramcharran met the Malfara threshold test.  In regard to the first question, whether the plaintiff sustained a permanent impairment, the Court found that pain in the right elbow resulting in reduced strength and ability to grip is a physical function.

Despite the fact that complaints of pain and tests for grip strength are subjective, the case law is clear that subjective evidence can be relied on to meet the permanence test. Further, the Court noted that the jury’s verdict shows that the jury accepted that the plaintiff’s injuries and inability to work were a result of the subject accident.

Regarding the second and third questions, whether the permanently impaired function is an important one and whether it is serious, section 4.2 of Ontario Regulation 461/96[5] defines “permanent serious impairment” to include substantially interfering with the plaintiff’s ability to continue their employment. 

Mr. Ramcharran had worked for over 15 years as a meat cutter prior to the incident.  A forensic economic consultant found that if the plaintiff’s pain and decreased grip strength were believed, his lost income was in the range of $311,382 to $390,177, but if the defendant’s soft tissue damages were believed, there was no loss of income.  Justice Dow noted that the jury’s award of $365,000 for loss of income is instructive in this regard. 

OPCF 44R – Uninsured Coverage

As the motor vehicle involved in the incident was unidentified, the plaintiff’s recovery from his own insurer pursuant to the O.A.P. 1 coverage is limited to $200,000 pursuant to section 251 of the Insurance Act.[6] However, any amount in excess of $200,000 may be recoverable under the OPCF 44R Family Protection Endorsement.

For the plaintiff to be entitled to this coverage, the involvement of the unidentified vehicle must be corroborated by other material evidence. This corroboration can be by either independent witnesses or physical evidence.

There were no independent witnesses called at trial.  The Court was satisfied, based on photographs taken at the Collision Reporting Centre and the fact that State Farm did not deny that the accident occurred, that another vehicle was involved in the accident.

[1] Ramcharran v. State Farm Mutual Automobile Insurance Co., 2023 ONSC 3698.

[2] Insurance Act, R.S.O. 1990, c. I.8, s. 267.5(5)(b).

[3] Malfara v. Vukojevic, 2015 ONSC 78.

[4] Meyer v. Bright, 1993 ONCA 3389.

[5] O. Reg 461/96: Court Proceedings for Automobile Accidents that Occur On or After November 1, 1996, under Insurance Act, R.S.O. 1990, c. I.8.

[6] Insurance Act, supra note 2, s. 251.