{"id":541,"date":"2018-10-10T18:31:12","date_gmt":"2018-10-10T18:31:12","guid":{"rendered":"https:\/\/sblegal.staging.pxlcrv.co\/?p=541"},"modified":"2022-07-22T01:12:50","modified_gmt":"2022-07-22T01:12:50","slug":"update-on-mental-distress-law-a-review-of-nissen-v-durham-regional-police-services-board","status":"publish","type":"post","link":"https:\/\/www.sblegal.ca\/wordpress\/update-on-mental-distress-law-a-review-of-nissen-v-durham-regional-police-services-board\/","title":{"rendered":"Update on Mental Distress Law: A Review of Nissen v. Durham Regional Police Services Board"},"content":{"rendered":"

Is There a Need to Review Your Reserves?<\/a><\/h3>\n

 <\/p>\n

Introduction<\/h3>\n

Since the decision of the Supreme Court in\u00a0Mustapha<\/em>\u00a0in 2008, the law of \u201cmental distress\u201d has continued to evolve. As some of my colleagues addressed at the\u00a0Stieber Berlach 2017 Insurance Law Update Seminar<\/em>, the Supreme Court held in 2017, in\u00a0Saadati<\/em>, that a finding of a recognized psychiatric or psychological injury, is no longer required for a plaintiff to succeed in a claim for mental distress.<\/p>\n

At about the same time that\u00a0Saadati<\/em>\u00a0 was released, the Ontario Court of Appeal in\u00a0Nissen<\/em>\u00a0reminded us that the imposition of a cap on general damages is limited to \u201cpersonal injury\u201d actions.\u00a0 The Ontario Court of Appeal in\u00a0Nissen v. Durham Regional Police Services<\/em>, upheld an award of $345,000 for mental distress and aggravated damages. The issue as to whether a cap applies to instances of \u201cmental distress\u201d arising in non-personal injury torts (e.g. negligence causing economic loss) is an open question which the Court of Appeal did not settle in\u00a0Nissen<\/em>. The purpose of this paper is to address the impact of the\u00a0Nissen<\/em>\u00a0decision.<\/p>\n

An analysis of\u00a0Nissen<\/em>\u00a0requires a review of the principles governing general damages awards and the adoption of a cap. I also address below cases, where the Supreme Court held that a cap on general damages, did not apply.<\/p>\n

 <\/p>\n

A Brief Review of Seminal Cases Pertaining to the law of \u201cMental Distress\u201d<\/h3>\n

In\u00a0Mustapha<\/em>, the Supreme Court of Canada held that there is no compensation for unusual reactions resulting from a negligent act. In addressing whether damages are foreseeable, it is assumed that the plaintiff is a person of \u201cordinary fortitude\u201d.[2]<\/a><\/p>\n

As mentioned above the Supreme Court in\u00a0Saadati,<\/em>\u00a0held that in proving a compensable mental injury, plaintiffs are not required as a matter of law to establish that the mental suffering is a recognizable psychiatric or psychological illness. To succeed the plaintiff must show that the injury (mental) is serious, prolonged and rises above the ordinary annoyances, anxieties and fears that come with living in a civil society.[3]<\/a> As the focus of the paper is not\u00a0Saadati<\/em>\u00a0which was addressed at last year\u2019s conference, I append a table of examples of cases where Courts have applied the principles of\u00a0Saadati<\/em>\u00a0in deciding whether a claim for mental distress was established.[4]<\/a><\/p>\n

 <\/p>\n

Principles Regarding General Damages<\/h3>\n

Courts have stressed that the purpose of general damages is not to set a value on the loss of a plaintiff\u2019s function or the value of lost happiness. Rather, the award is intended to provide the plaintiff with the means to make arrangements beyond those related directly to his\/her injury so that his or her life will be more endurable.[5]<\/a> In\u00a0Rizzi v. Mavros<\/em>, the Court of Appeal stressed that the award is to:<\/p>\n

\u201c(\u2026) aim to alleviate the plaintiff\u2019s misfortune allowing him or her to live as tolerably as possible.\u201d[6]<\/a><\/p>\n

There should be a degree of consistency and uniformity in awards for general damages in similar cases[7]<\/a>. As the Supreme Court stated in\u00a0Andrews<\/em>:<\/p>\n

\u201cEveryone in Canada wherever he may reside, is entitled to more or less equal measure of compensation for similar non-pecuniary loss\u201d[8]<\/a><\/p>\n

An award for general damages is to be an amount that is fair to the plaintiff and society as a whole.[9]<\/a> Fairness is to gauged by earlier decisions.[10]<\/a><\/p>\n

As the purpose of awarding general damages is to compensate a plaintiff for his\/her loss, the award must also take into account the circumstances of the plaintiff and the effect of the injuries, on him or her. This was addressed by the Ontario Court of Appeal in\u00a0Koukounakis v. Stainrod[11]<\/a><\/em>. In that matter, the plaintiff suffered from a temporomandibular joint dysfunction as a result of a motor vehicle accident. The plaintiff had undergone 4 surgeries as well as other treatments which did not result in significant improvement. Her surgeon testified that this was the worst example of TMJ function, he had seen in 20 years of practice and that \u201cnothing comes close to this\u201d. Her surgeon stated:<\/p>\n

\u201cWe got in there and (\u2026) there was nothing normal in that joint that I could see at all. I could not find the temporal mandibular joint disc. (\u2026)
\nSo what we had, was a mass, like a hole. It looked like a grenade had gone off in there. There was just nothing normal in this space.\u201d<\/p>\n

The Court of Appeal noted that the plaintiff would need ongoing and substantial dental work for the rest of her life. It was found that she had chronic stress, depression, headaches, codeine dependency and anorexia. The defendants appealed the jury award of $180,000. The Court stressed that the Canadian approach to general damages emphasizes the effect of the injury or disability on the particular plaintiff. It held that the award of $180,000 (when the upper limit was $225,000) in that matter was not so excessive and therefore did not warrant the Court\u2019s intervention.[12]<\/a><\/p>\n

The Court of Appeal will not interfere with an award of damages assessed by a jury unless it shocks the Court\u2019s conscience and sense of justice.[13]<\/a>Put another way, a jury verdict will only be set aside where it is \u201cso plainly unreasonable and unjust that no jury, reviewing the evidence as whole(\u2026) could have reached it\u201d[14]<\/a><\/p>\n

 <\/p>\n

Cap on General Damages<\/h3>\n

The Supreme Court of Canada imposed an \u201cupper limit\u201d or \u201ccap\u201d on general damages in personal injury cases in the 1978 trilogy case\u00a0Andrews v. Grand and Toy<\/em>\u00a0Alberta Ltd.[15]<\/a><\/em>\u00a0In\u00a0Andrews<\/em>, the Supreme Court stressed that the paramount concern of Courts in awarding damages, was that a plaintiff will have adequate future care.[16]<\/a> It followed that Courts wished to ensure that any award would cover the plaintiff\u2019s costs of care i.e. the pecuniary losses.<\/p>\n

However, the Supreme Court found that the social burden of large awards, was a factor deserving of considerable weight with respect to non-pecuniary damages (i.e. general damages \u2013 as opposed to pecuniary damages e.g. costs of care)[17]<\/a>. The Court noted that there was no objective yard stick for translating non-pecuniary losses \u201csuch as pain and suffering, and loss of amenities, into monetary terms\u201d.[18]<\/a> The Court stated these had soared to dramatically high levels in the United States. It noted that this was the area where there was the clearest justification for moderation and therefore the adoption of an upper limit on general damages.[19]<\/a><\/p>\n

The Supreme Court explained the reason for an upper limit (a cap) on the value of general damages. In essence, it stressed that \u201cgeneral damages\u201d are in addition to \u00a0amounts addressing the care needs of the plaintiff (these are large amounts in the case of catastrophic injuries). Hence, awards for general damages are additional monies to make life more endurable. In this respect, the Court stated:<\/p>\n

\u201c(\u2026) If the principle of the paramountcy of care is accepted, then it follows that there is more room for the consideration of other policy factors in the assessment of damages for non-pecuniary losses.<\/p>\n

(\u2026)<\/p>\n

If damages for non-pecuniary loss are viewed from a functional perspective, it is reasonable that large amounts\u00a0should not be awarded\u00a0<\/u>once a person is properly provided for in terms of future care for his injuries and disabilities. The money for future care is to provide physical arrangements for assistance, equipment and facilities directly related to the injuries. Additional money to make life more endurable should then be seen as providing\u00a0more general physical arrangements above and beyond those related directly to the injuries<\/u>. The result is a coordinated and interlocking basis for compensation, and a\u00a0more rational justification for non-pecuniary loss compensation<\/u>.\u201d[20]<\/a>
\n(emphasis added)<\/em><\/p>\n

The Ontario Court of Appeal in\u00a0Koukounakis<\/em>, stressed that the cap was an arbitrary figure adopted to respond to policy concerns (i.e. large awards) and was on the assumption that awards under other heads of damages (e.g. future care), largely achieved the compensation goal.[21]<\/a> The Court of Appeal stressed that attempts to use the upper limit other than as a very rough guide for comparative purposes, ignore the policy reasons for the creation of the cap.[22]<\/a><\/p>\n

The Ontario Court of Appeal has held that where a trial judge is of the view that non-pecuniary damages could be awarded at or near the cap, the judge must explain to the jury not to engage in a \u201cdirect\u201d comparison and advise the jury that the cap was established for the policy reasons discussed in\u00a0Andrews<\/em>\u00a0[23]<\/a>. The Court of Appeal identified that these policy reasons were the heavy financial burden that otherwise would result from excessive awards.[24]<\/a><\/p>\n

 <\/p>\n

Seminal Cases Where the Supreme Court Has Held That a Cap on General Damages is Not Applicable<\/h3>\n

Young v. Bella<\/u><\/em><\/p>\n

The Supreme Court held in\u00a0Young v. Bella<\/em>\u00a0that at that time, there was no cap on general damages in an action for negligence causing economic loss.[25]<\/a> Policy reasons for the imposition of cap in such an action, were not before the Court.<\/p>\n

The plaintiff, Ms. Young, was a university student taking courses towards her goal of being admitted to the Newfoundland School of Social Work. A misunderstanding with respect to a term paper which was missing a footnote, lead her professor, Ms. Bella to believe that she was possibly a child abuser. This later lead to a report to the Child Protection Services.<\/p>\n

The term paper pertained to juvenile sex offenders. The appendix was a case study from a textbook which was a \u201cfirst person\u201d account of sexual abuse. In the absence of a footnote, professor Bella believed that the account was autobiographical, was a confession by the plaintiff of having sexually abused children and was a cry for help. Professor Bella made an informal phone call to the Child Protection Services and was advised to seek an explanation from the plaintiff which professor Bella did not seek.\u00a0 Instead Ms. Bella provided the Appendix to the School of Social Work and advised the Director that it was not referenced, nor was there an explanation for it \u201cin terms of the paper\u201d.\u00a0 The Appendix was sent to Child Protection Services and the Director of the School of Social Work suggested that it was alarming and that it may be appropriate for the local RCMP detachment to follow-up.<\/p>\n

The plaintiff\u2019s application to the School of Social Work was denied. The plaintiff only became aware of the misunderstanding 2 years later when Child Protection Services (CPS) interviewed her.\u00a0 CPS concluded its investigation within 24 hours after Ms. Young provided the excerpt from the textbook, setting out the same text as the Appendix to the term paper.<\/p>\n

The Court found that Ms. Young suffered an economic loss as the events terminated her hope of becoming a social worker. She had difficulty in finding work in light of the mistaken belief that she had been identified as a potential child abuser. There was evidence before the jury that she suffered anxiety, embarrassment, insomnia, paranoia and depression as a result of the false report. The jury found that the plaintiff\u2019s professors breached the duty of care owed to a student. The jury awarded $430,000 in general damages.<\/p>\n

The Supreme Court decided that the cap did not apply. It stressed that the policy considerations in instances of negligence causing a catastrophic personal injury, were not applicable and should not be extended to limit the award. It stressed that it had rejected the application of a upper limit for general damages in defamation actions. It further stated:<\/p>\n

\u201cIn our view, the case for imposing a cap in cases of negligence causing economic loss is not made here either.\u201d[26]<\/a><\/p>\n

The Supreme Court adopted with approval a statement of the British Columbia Court of Appeal where it was stressed that there was no evidence of any impact on the public purse and that a cap was not required to protect the general public from \u201ca serious social burden\u201d, such as enormous insurance premiums.[27]<\/a><\/p>\n

The issue as to whether a cap applies to non-pecuniary damage \u201coutside the catastrophic personal injury context\u201d, was left for another day. The Supreme Court stated:<\/p>\n

We leave open for consideration in another case (where the policy considerations supporting a cap are more fully developed in evidence and argument)<\/u>\u00a0the issue of whether and in what circumstances the cap applies to non-pecuniary damage awards outside the catastrophic personal injury context.[28]<\/a><\/em><\/p>\n

Except in one instance[29]<\/a>,\u00a0<\/em>up until 2017,\u00a0Young v. Bella\u2019<\/em>\u00a0s application in Ontario was limited to sexual abuse cases. It should be noted though that in sexual abuse cases, damages are awarded to compensate for the humiliation and degradation[30]<\/a>.<\/p>\n

Young v. Bella<\/em>\u00a0was applied in an action for negligent police investigation where the trial judge awarded $200,000 in general damages for humiliation and worry suffered by the plaintiff.[31]<\/a> In that matter, the Court of Appeal reversed the finding of liability and provided\u00a0obiter<\/em>\u00a0comments on the trial judge\u2019s reliance on\u00a0Young v. Bella<\/em>\u00a0in awarding $200,000 in damages. The Court of Appeal found the emotional upset suffered by the plaintiff, did not rise to the level of personal injury compensable in accordance with the principles of\u00a0Mustapha[32]<\/a><\/em>. As this case predated\u00a0Saadati<\/em>, the Court of Appeal also stressed that there was no evidence of a psychiatric (or psychological) disorder.[33]<\/a><\/p>\n

Cinar Corporation v. Robinson<\/em>\u00a0\u2013 Copyright Infringement<\/span><\/p>\n

In\u00a0Cinar<\/em>\u00a0Corporation v. Robinson<\/em>, the Supreme Court held that there was no cap on general damages in actions for copyright infringement. It reminded us that the policy concerns in bodily injury cases, was the burden on society of increasing amounts awarded for general damages.[34]<\/a>\u00a0It is of interest that the Supreme Court clarifies in\u00a0Cinar,<\/em>\u00a0that the social burden was with respect to general damages.\u00a0A reading of\u00a0Andrews<\/em>\u00a0when the Supreme Court adopted a cap, could suggest that the court\u2019s concern at that time, was the rising awards for future care costs.<\/p>\n

In\u00a0Cinar<\/em>, the Supreme Court stressed that Cinar did not persuade the Court that there was an imminent risk of a burdensome upward trend in general damages in copyright infringement cases. Hence, there were no policy concerns which would justify the adoption of an upper limit on general damages in copyright infringement cases.[35]<\/a><\/p>\n

The facts giving rise to the claim were that Mr. Robinson had shared with Cinar, story boards and scripts for a children\u2019s television show. Marketing efforts failed and the project was abandoned. Robinson brought an action for copyright infringement after a children\u2019s show depicting characters and story similar to his own project, was aired. The trial judge awarded $5.2 million to Mr. Robinson, including $1.7 million for the disgorgement of profits, $1 million in punitive damages and $400,000 for psychological harm. Relying on\u00a0Andrews<\/em>, the Quebec Court of Appeal reduced the award for psychological injury to 50% of the value of the cap at the time (i.e. $121,000).<\/p>\n

Cinar had advanced two arguments to the Supreme Court in seeking a revision of the $400,000 award for general damages by the trial judge. It advanced:<\/p>\n