The Supreme Court of Canada’s Decision in Saadati v. Moorehead

by Jessica DiFederico | Oct 10, 2017

Overview

In Saadati v. Moorehead, the Supreme Court of Canada considered the issue of whether evidence of a “recognizable psychiatric illness” is required to recover for mental injury.  Before the Supreme Court’s decision in Saadati, lower courts required that plaintiffs show a recognizable psychiatric illness to recover for mental injury, though the view was not without its critics.  In Saadati, the Supreme Court held that a recognizable psychiatric illness was not a precondition to recover for mental injury. In my view, the decision in Saadati represents a changing approach to mental injury.  The Supreme Court acknowledged that the stigma faced by individuals with mental illness and mental injuries is notorious and impedes their participation in civil society and further, that tort law should not perpetuate misguided prejudices.

This paper will begin by discussing the state of the law before Saadati.  The second part of this paper will discuss the Saadati decision at trial, at the British Columbia Court of Appeal and finally at the Supreme Court of Canada.  Next this paper will review possible implications of the decision and some of the ways in which it has been applied in different types of cases. Finally, I will provide some practical tips to consider going forward.

The Law before Saadati

Before Saadati, the state of the law on mental injuries was set out by the Supreme Court of Canada in Mustapha v Culligan of Canada Ltd.[1]  Mr. Mustapha sued Culligan for psychiatric injuries sustained when he saw a dead fly in a bottle of water.  He became obsessed with the event and its “revolting implications” for his family, which had been drinking the water supplied by Culligan for many years.  The plaintiff developed a major depressive disorder with associated phobia and anxiety.[2]

The trial judge found that seeing the flies in the water resulted in psychiatric injury to Mr. Mustapha and awarded him almost $350,000 in damages.[3]  The judgment was overturned by the Ontario Court of Appeal on the basis that the injury was not reasonably foreseeable.[4]  Mr. Mustapha appealed to the Supreme Court of Canada.  His appeal was not successful and the decision of the Court of Appeal was upheld.

Justice McLachlin writing for the Supreme Court held that the regular tort analysis should be applied to Mr. Mustapha’s claim, in other words: i) whether the defendant owed a duty of care; ii) whether the defendant breached the standard of care; iii) whether the plaintiff sustained damage; and iv) whether the damage was factually and legally caused by the defendant’s breach.[5]

After finding a duty of care and a breach of the standard, the Supreme Court considered whether Mr. Mustapha suffered injuries as a result of seeing the flies and concluded that he had, in fact, sustained damages.  In particular, Mr. Mustapha had been diagnosed with a major depressive disorder with associated phobia and anxiety by his treating physicians.  He was unable to drink water or shower.  The Supreme Court held that his psychiatric illness was debilitating and had a significant impact on his life, which qualified as a personal injury at law.

On the issue of causation, the Court held that factually, Mr. Mustapha’s injuries were caused by Cullgan’s breach of the standard; however, legal causation was not established because the damages were too remote.  The remoteness inquiry required that Mr. Mustapha’s mental injuries be reasonably foreseeable “in a person of ordinary fortitude”.[6]  Unusual or extreme reactions – such as Mr. Mustapha’s reaction – to a person’s negligence are not reasonably foreseeable, and they are therefore not compensable.

In Healey v Lakeridge Health Corporation, the Ontario Court of Appeal (sitting as a panel of five judges) considered the Supreme Court’s decision in Mustapha.[7]  Healey was a class action in which the plaintiffs received a notice from Lakeridge that they may have been exposed to tuberculosis and recommended they be tested.  Although none of the appellants tested positive for tuberculosis, they claimed to have suffered psychological harm as a result of receiving the notices.

The appellants argued that the Supreme Court in Mustapha changed the state of the law and lowered the bar for a compensable psychological injury.  They argued that they no longer had to show a “recognizable psychiatric illness” which was the traditional test accepted by the court.  Instead, they had to show harm which: i) was beyond “upset, disgust, anxiety, agitation or other mental states that fall short of injury”; and ii) amounted to serious trauma or illness which was prolonged and which rose above “the ordinary annoyances, anxieties, and fears” that routinely come with living in society.[8]

The Ontario Court of Appeal reviewed the history and development of the recognizable psychiatric illness test. It was developed in a British case called Hinz v Berry, where Lord Denning stated that although damages are not awarded for grief or sorrow, damages are recoverable for “nervous shock or, to put it in medical terms, for any recognizable psychiatric illness caused by the breach of duty by the defendant.”[9]  The Ontario Court of Appeal acknowledged that the test was not without its critics; however, they ultimately concluded that Mustapha did not intend to change the law and the comments made by the Supreme Court were made in obiter since Mr. Mustapha was in fact diagnosed with a recognizable psychiatric illness.  The Ontario Court of Appeal also interpreted Mustapha as simply trying to explain in non-technical language the type of psychological injury which was compensable.[10]

The Law in Saadati

The Supreme Court had another opportunity to consider whether mental injuries are compensable in Saadati v. Moorehead.[11]  The plaintiff Mohsen Saadati was in a series of five motor vehicle accidents.  The relevant accident was his second, which occurred on July 5, 2005.  At the scene of the accident Mr. Saadati was described by first responders as shaken, emotional, and agitated; however, they did not observe any injuries which warranted taking Mr. Saadati to the hospital.  His Glasgow Coma Score was fifteen, indicating no abnormal signs suggestive of a brain injury. A few months later, on September 17, 2005, Mr. Saadati was in another accident.  The parties agreed that Mr. Saadati sustained a concussion in the September 2005 accident.

In 2010, after all the motor vehicle accidents, Mr. Saadati was declared mentally incompetent and the action was continued through a litigation guardian.  He was not able to give evidence at trial.

Trial Decision

Mr. Saadati was successful at trial.  The defendant admitted liability for the accident and the only issue was damages.

Mr. Saadati had an expert report from his family physician, Dr. Gill, opining that he sustained a concussion and developed chronic pain syndrome as a result of the July 2005 accident.  However, Mr. Saadati did not tell Dr. Gill that at the time of his second accident, he was still seeing his other family physician for his injuries from his first motor vehicle accident.  Dr. Gill therefore assumed that Mr. Saadati’s injuries from the first accident had quickly resolved, and he attributed those injuries to the July 2005 accident.  As a result, the trial judge placed no weight on Dr. Gill’s opinion.[12]

The trial judge accepted that Mr. Saadati developed chronic pain syndrome before the July 2005 accident. He accepted that prior to the July 2005 accident, Mr. Saadati reported headaches and sleeplessness to his physicians, but his complaints of cognitive difficulties only started following the July 2005 accident.[13]

The trial judge found that there was insufficient evidence of a physical injury or concussion; however, he found that Mr. Saadati sustained psychological injuries including personality changes and cognitive difficulties.[14]  The finding was based on evidence from family and friends that after the accident Mr. Saadati had slowed speech, mood swings, and was a “totally different person”.[15]

The trial judge allowed the claim for psychological injuries without any reference to Mustapha or the case law requiring a recognizable psychiatric illness to be compensated for a mental injury.  Mr. Saadati was awarded $100,000 in non-pecuniary damages.

Appeal Court Decision

The defendant appealed the decision, arguing that Mr. Saadati was required to show that he suffered from a recognizable psychiatric illness in order to be compensated.  Mr. Saadati argued that Mustapha changed the law such that he was no longer required to show a recognizable psychiatric illness.  The British Columba Court of Appeal rejected Mr. Saadati’s argument and held that Mustapha did not remove the recognizable psychiatric illness requirement.[16]  In doing so, the Court relied on the Ontario Court of Appeal’s decision in Healey, as well as a 2003 decision from the Supreme Court of Canada which held that compensation for psychiatric damages is available where the plaintiff suffers from a “visible provable illness” or “recognizable physical or psychological harm”.[17] The Court allowed the appeal, holding that Mr. Saadati was required to show a “recognizable psychiatric (or psychological) condition”.[18]

Although the defendant did not raise it as a ground of appeal, the Court also found that the trial judge erred by deciding the case on a basis which was neither pleaded nor argued by Mr. Saadati.[19]  Specifically, the Court stated that Mr. Saadati did not allege a psychological injury in his pleadings and did not advance that claim in closing submissions.  Rather, he based his claim entirely on having sustained a brain injury in the accident and the parties did not know that the trial judge was considering damages based on a psychological injury until the reasons for judgment were released.[20]

The Supreme Court’s Decision

The Supreme Court of Canada allowed Mr. Saadati’s appeal and restored the trial judge’s decision. An important theme throughout the decision is the Supreme Court’s view that claims for mental injuries should not be treated differently or held to a more difficult standard than those for physical injuries.  The Court stated that it never required plaintiffs to show a recognizable psychiatric illness.  Although it acknowledged that some trial level and appeal level courts did impose such a requirement; the Court said that those attempts to limit recovery for mental injury were based on “dubious perceptions of psychiatry and of mental illness in general” – for example that mental illness is subjective, easily feigned or exaggerated, and that the law should not provide compensation for “trivial matters”.[21]  The Court commented that the stigma faced by people with mental illness is notorious and often unjustly impedes their participation in civil society.[22]  Just as recovery for physical injury does not require expert diagnostic evidence, recovery for a mental injury does not require proof of a recognizable psychiatric illness.[23]

The Court reaffirmed the approach set out in Mustapha – that plaintiffs are required to show that the disturbance suffered is serious and prolonged, and rises above the ordinary annoyances, anxieties and fears that come with living in a civil society.[24]  Mental injury is not proven by existence of mere psychological upset and there is no legal right to happiness.[25]  In assessing whether a plaintiff has proven a claim for mental injury, relevant considerations are i) how seriously the plaintiff’s cognitive functions and participation in daily life are impaired, ii) the length of such impairment, and iii) the nature and effect of treatment.[26]  Although expert evidence is helpful in determining whether a mental injury is proven, such evidence is not required.  However, if claimants do not adduce relevant expert evidence to assist triers of fact in applying these relevant considerations, they run the risk of falling short.  Similarly, defendants may call expert evidence to establish that the accident cannot have caused any mental injury, or at least any mental injury known to psychiatry.  Although a lack of diagnosis is not on its own a reason to dismiss the plaintiff’s claim, the trier of fact may weigh that evidence against evidence supporting the existence of a mental injury.[27]

The Supreme Court also considered the pleadings issue which was raised by the Court of Appeal and stated that in claims for mental injury, it is generally sufficient that the pleadings allege some form of such injury.  For example, Mr. Saadati’s Statement of Claim alleged various injuries caused by the accident, including:

(h) such further and other injuries as may become apparent though medical reports and examinations, details of which shall be provided as they become known;

and the effects or results of the said injuries upon the Plaintiff include headaches, fatigue, dizziness, nausea and sleeplessness.[28] 

The Supreme Court pointed to portions of Mr. Saadati’s closing argument where he alleged a “psychological reaction” to the accident, even in the absence of a physical injury.  The defendant did not object to these submissions at trial.  The Court concluded that the defendant had sufficient notice of Mr. Saadati’s claim for damages from psychological injury.[29]

Implications going forward

In the section that follows, I discuss some of the potential impacts of the Saadaticase going forward.

Claims Related to the Death of a Family Member

In Snowball v. Ornge, the plaintiffs were the daughter and parents of Christopher Snowball who was killed in a helicopter accident.[30]  The plaintiffs claimed damages for mental distress following Mr. Snowball’s death, including distressing memories and dreams, dissociative reactions, angry outbursts, and irritability.  The plaintiffs also sought damages for loss of care, guidance and companionship under the Family Law Act.  The defendants brought a motion to strike the claim on the basis that the plaintiffs were not entitled to claim for mental injury from the death of Mr. Snowball.

The judge declined to strike out the plaintiffs’ claim.  The judge acknowledged that for more than 200 years, the law did not allow a plaintiff to claim for “distress of the mind” or grief from the death of a loved one.[31]  The case law in Ontario developed such that while recovery was available for plaintiffs who themselves witnessed the bodily injury or death of a loved one, it was not available for individuals who did not witness the injury or death.  Courts refused to award damages to plaintiffs who were merely informed of the death.[32]

Relying on Saadati, the Court denied the motion to strike holding that the plaintiffs’ claim for mental distress might succeed even though they did not witness the traumatic event. In particular, the Supreme Court in Saadati called it unnecessary and futile to set up arbitrary barriers to recovery for mental injury, underscoring that the traditional framework for negligence claims (duty of care, breach of the standard, causation, and damages) is equally applicable for such claims.[33]

Although Snowball could be seen as a shift in the law, there is quite a high bar to strike out a claim for having no cause of action – it requires that it be plain and obvious that the claim has no reasonable prospect of success.  On such motions, courts are required to take a generous approach where the law has not yet recognized a particular claim, and must “err on the side of permitting a novel but arguable claim to proceed to trial.”[34]

Automobile Claims

Saadati has not yet been considered in Ontario in the context of an automobile claim.  It will be interesting to see how the case is applied given Ontario’s threshold which requires plaintiffs to show a “permanent serious impairment of an important physical, mental or psychological function”.[35]  British Columbia does not have a similar threshold requirement and the impact of Saadati on auto claims in Ontario may therefore be somewhat tempered.

The regulations to the Insurance Act  indicate that plaintiffs must provide evidence from a physician regarding the nature and permanence of the impairment as well as the function which is impaired and the importance of the impaired function.[36]  It may be that plaintiffs, relying on Saadati, obtain expert reports which conclude that even in the absence of a specific diagnosed psychological injury, the plaintiff’s symptoms are such that the plaintiff has a permanent serious impairment of an important physical, mental or psychological function, and therefore, argue that the threshold is met.

Employment Cases

In my view, Saadati  is likely to have an impact in employment cases where plaintiffs claim moral damages.  In employment law, moral damages are awarded to compensate an employee for the employer’s bad faith manner of dismissal where it was reasonably foreseeable that such conduct would cause mental distress.[37]

Prior to Saadati, the law was unclear on whether employees required medical evidence to show mental distress when arguing an entitlement to moral damages: see for example Brien v. Niagara Motors Limited, where the Ontario Court of Appeal held that although the employer’s misconduct could have led to an award of “mental distress damages”, the mental distress that the employee suffered was not of the nature and scope to qualify for damages since the employee did not seek medical attention, professional assistance, or undergo any therapy for her mental distress.[38]  To the extent that medical evidence was required for an award of moral damages, plaintiff’s counsel will rely on Saadati  to argue that such is no longer the case on the rationale that the law should not impose a higher evidentiary burden on a person suffering a mental injury from the manner in which they were terminated as compared to a person suffering such an injury as a result of a car accident or other negligent acts.

This view has been endorsed by the British Columbia Court of Appeal in Lau v. Royal Bank of Canada.[39]  The plaintiff Mr. Lau was terminated for cause following an investigation by his employer Royal Bank of Canada into his alleged improper conduct in misrepresenting the nature of his sales.  The trial judge held that Mr. Lau’s actions constituted “misconduct” but was not cause for dismissal and awarded damages for the reasonable notice period.  She also awarded moral damages even though there was no evidence that Mr. Lau suffered from depression or mental distress from the manner in which he had been terminated. Similarly, there was no evidence from others regarding the impact of the manner of termination upon him. Despite this, the judge concluded that Mr. Lau was depressed because of the “slow, quiet, and almost monotone manner in which he testified”.[40]

On appeal, the defendant argued that an award for moral damages required medical evidence of a psychological condition such as depression.  The British Columbia Court of Appeal rejected the argument and, relying on Saadati, held that medical evidence is not required for an award of moral damages.[41]  Despite this, the Court allowed the defendant’s appeal on the basis that damages for mental distress beyond the ordinary upset from termination cannot be proven simply from the demeanor of the plaintiff.  Rather, there must be evidence demonstrating a serious and prolonged disruption that goes beyond ordinary emotional upset or distress.

Practical Steps

In light of Saadati, below are some practical strategies you may want to consider.

Pleadings– If you have a Statement of Claim which has broad wording of injuries, ask for particulars on discovery.  If no further particulars are known at discovery, ask for an undertaking that counsel will provide them when they become known.  Although the parties have an obligation to update their discovery evidence, having an undertaking gives additional comfort that the plaintiff will provide this information to you, or that there may be consequences if he fails to do so.  As you approach trial, consider writing to counsel to ask whether there are any particulars of mental injury.

Objections– At trial if the plaintiff argues damages for mental injury at trial but the pleadings are broad and particulars have not been provided, raise an objection.  Even if your objection is not successful at trial, it can form the basis of an appeal.

Expert evidence– In order to recover for a mental injury, the plaintiff must show a disturbance which is serious and prolonged and rises above the ordinary annoyances, anxieties and fears that come with living in a civil society.

Following Saadati, expect that courts will focus less on physicians’ medical diagnoses and more on the plaintiff’s symptoms and the impact of those symptoms.  The Court commented that allowing recovery only for conditions which can be identified using diagnostic tools (such as the Diagnostic and Statistical Manual of Mental Disorders, commonly known as the DSM) is “inherently suspect as a matter of legal methodology”, as these diagnostic tools can be controversial.  Moreover, the Court stated that basing liability on diagnostic tools does not foster objectivity, certainty or predictability, rather it causes the law to follow “a sometimes meandering path” of thinking in modern psychology.[42]

Although a plaintiff does not require expert evidence to establish his claim, defendants may want to have expert evidence indicating that the accident cannot have caused any psychological or psychiatric injury, or at least none known to psychiatry.

Assessing your case– When assessing cases where the plaintiff has alleged mental injuries, keep in mind that the Supreme Court has espoused a different way of thinking about and approaching mental injuries and the people who have them.  The Supreme Court has recognized that people with mental illness face notorious stigma and should not be regarded with skepticism or hostility, and that courts should not perpetuate misguided prejudices about people with mental illness.  In light of these comments by the Supreme Court, judges (though perhaps not juries) may be inclined to treat claims for mental injury more seriously and with less skepticism.


[1] Mustapha v Culligan of Canada Ltd., 2008 SCC 27 (“Mustapha”)

[2] Mustapha, supranote 1 at para 1

[3] Mustapha v. Culligan of Canada Ltd., [2005] O.J. No. 1469 (Sup Ct)

[4] Mustapha v. Culligan of Canada Ltd. (2006), 84 O.R. (3d) 457 (CA)

[5] Mustapha, supra note 1 at para 3

[6] Mustapha, supra note 1 at para 15

[7] Healey v Lakeridge Health Corporation, 2011 ONCA 55 (“Healey”)

[8] Ibid, supranote 7 at para 44

[9] Hinz v Berry, [1970] 1 All ER 1074 at p 1075

[10] Healey, supra note 7 at para 61-62

[11] Saadati v. Moorehead, 2017 SCC 28 (“Saadati”)

[12] Saadati v Moorhead, 2014 BCSC 1365 at para 22

[13] Ibid at para 20 and 32

[14] Ibidat para 50

[15] Ibidat para 45

[16] Saadati v Moorhead, 2015 BCCA 393 (“Saadati Appeal”)

[17] Sadati Appeal, supra note 16 at para 22, citing Odhavji Estate v. Woodhouse, 2003 SCC 69

[18] Sadati Appeal, supra note 16 at para 28

[19] Ibidat para 34

[20] Ibidat para 5.

[21] Saadati, supra note 11 at para 2

[22] Ibidat para 21

[23] Ibidat para 2

[24] Saadati, supra note 11 at para 39

[25] Ibidat para 37

[26] Ibidat para 38

[27] Ibid

[28] Ibidat para 10

[29] Saadati, supra note 11 at paras 10-11

[30] Snowball v. Ornge, 2017 ONSC 4601 (“Snowball”)

[31] Ibidat para 12

[32] Ibidat para 16

[33] Snowball, supra note 30 at para 19

[34] Ibidat para 11

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

[36] O. Reg. 461/96: Court Proceedings for Automobile Accidents that Occur on or after November 1, 1996 at s. 4.3(2)

[37]Honda Canada Inc. v. Keays, 2008 SCC 39 at para 59

[38]Brien v. Niagara Motors Limited, 2009 ONCA 887

[39] Lau v. Royal Bank of Canada, 2017 BCCA 253 (“Lau”)

[40] Ibidat para 15

[41] Lau, supra note 39 at para 46-47

[42] Saadati, supra note 11 at paras 31-33