THE RECOVERY OF NON-PECUNIARY DAMAGES IN CANADA: The Cap on Recovery, Jury Trials, and other Unique Considerations for General Damage Awards

Transcription

1 THE RECOVERY OF NON-PECUNIARY DAMAGES IN CANADA: The Cap on Recovery, Jury Trials, and other Unique Considerations for General Damage Awards D. BRUCE GARROW* KATHERINE L. AYRE* Conference on International Aviation Liability & Insurance 2009

2 TABLE OF CONTENTS 1. INTRODUCTION THE PURPOSE OF GENERAL DAMAGES IN CANADA THE CANADIAN TRILOGY... 4 (a) The Current Cap on General and the Reasons for its Development... 4 (b) The Cap is here to Stay... 6 (c) Challenges to the Cap... 7 (i) The Facts of Lee v. Dawson and its Importance... 7 (ii) The Arguments made in Lee v. Dawson JURY TRIALS AND THE CAP ON GENERAL DAMAGES (a) Requesting the Trial Judge s Instructions to the Jury Regarding the Cap (b) How a Trial Judge is to Instruct the Jury on General and the Cap (c) What Happens When a Jury Award Exceeds the Cap GENERAL DAMAGES FOR WRONGFUL DEATH IN FATAL ACCIDENT CLAIMS (a) Loss of Companionship (b) The Lost Years: Estate Claims and the Loss of Expectation of Life NON-PECUNIARY DAMAGES FOR EMOTIONAL DISTRESS (a) Emotional Distress and Breach of Contract (b) Emotional Distress and Tort Actions (i) The Facts of Mustapha v. Culligan (ii) The Concept of Foreseeability AGGRAVATED DAMAGES IN PERSONAL INJURY CASES APPORTIONMENT OF GENERAL DAMAGES IN MULTI-PARTY DISPUTES WHERE THERE IS NO CAP ON GENERAL DAMAGES CONCLUSIONS Appendix I Appendix II Appendix III

3 1. INTRODUCTION In Canada non-pecuniary general damages may be awarded for intangible injuries, such as pain and suffering, loss of companionship, emotional distress, loss of enjoyment of life, the loss of expectation of life, and for the egregious conduct of a defendant in some circumstances. However, the courts have limited recovery under this head of damage, and in essence, compliance with this monetary limit is now a rule of law in Canada. This paper explains how general damages are analyzed and awarded in Canada, including the imposition of the cap limiting recovery. This paper also examines specific types of general damage awards, other than awards for pain and suffering, that call for a unique analysis in Canada. 2. THE PURPOSE OF GENERAL DAMAGES IN CANADA It is important to note at the outset that in Canada general damages is a term of art and must be distinguished from special damages. Specifically, general damages refers to those types of damages which are not easily quantifiable, such as for pain and suffering, loss of amenities, and expectation of life. While general damages are natural and probable consequences of a wrongful act, they lack precise measures or standards of determination. 1 Special damages refers to damages that can be numerically calculated with reasonable precision, such as loss of earnings and expenses for care incurred before trial. In Canada, general damages serve the purpose of *Bruce Garrow is a partner with the law firm of Borden Ladner Gervais LLP in Toronto, Ontario. Katherine L. Ayre is an associate with the firm in Toronto, Ontario. The authors wish to express their appreciation to Do- Ellen S. Hansen, a partner of Borden Ladner Gervais LLP in Vancouver, British Columbia and Marc Reardon and Bruce Karn, students-at-law, for their invaluable contribution to the research of this paper. The citations in this paper are provided according to CANADIAN GUIDE TO UNIFORM LEGAL CITATION (McGill Law Journal, 6 th ed. 2006). American cases have been cited in accordance with accepted Canadian standards. 1 The Canadian Encyclopedic Digest (Western) Vol II, Title

4 putting the plaintiff in the position she or he would have been in but for the injury. 2 However, our courts recognize that no general damage award can provide full restitution for all consequences of suffering injury, especially where the injury has resulted in the loss of bodily or cognitive functions. Accordingly, general damage awards should be viewed as providing additional monetary support to make life more endurable for the plaintiff. 3 General damages are awarded to a plaintiff in a lump sum. And in awarding that lump sum, the courts attempt to set an amount commensurable to general damages awarded in similar cases. In the most serious of cases, where general damage awards can be quite significant, the Canadian limit or cap on the quantum of general damages a court can award will come into play. 3. THE CANADIAN TRILOGY (a) The Current Cap on General and the Reasons for its Development In Canada, general damage awards for pain and suffering are currently capped at $100,000 and indexed to inflation. Thus, the maximum award currently allowable in 2009 is roughly $325,000. No matter how serious or catastrophic an injury to a plaintiff may be, Canadian courts cannot award more than $325,000 in general damages. This cap on damages, was developed in three 1978 cases decided by Supreme Court of Canada: (a) Arnold v. Teno 4 (b) Andrews v. Grand & Toy 5 (c) Thornton v. Prince George 6 (collectively, the Trilogy ). 2 McIntyre v. Docherty (2009), 2009 ONCA 488 (Can LII). 3 Lindal v. Lindal, [1981] 2 S.C.R. 629.[Lindal v. Lindal]. 4 Arnold v. Teno, [1978] 2 S.C.R. 287 [Arnold v. Teno]. 5 Andrews v. Grand & Toy Limited, [1978] 2 R.C.S. (S.C.C.) [Andrews v. Grand & Toy]. 6 Thornton v. Prince George School District No. 57, [1978] 2 S.C.R. 267 [Thornton v. Prince George]

5 The Trilogy established a cap on general damages in part to have some form of national consistency in damage awards. 7 The cap was also developed to provide a Canadian answer to the spiralling damage awards that were occurring in the United States at the time. As Mr. Justice Dickson, writing for the court in Andrews v. Grand & Toy observed: 8 This area is open to widely extravagant claims. It is in this area that awards in the United States have soared to dramatically high levels in recent years. Statistically, it is the area where the danger of excessive burden of expense is greatest The concern that the American approach to large general damage awards would encroach into the Canadian legal landscape, and the associated social concerns with respect to large damage awards, was also expressed by Spence J. in Arnold v. Teno: 9 The very real and serious social burden of these exorbitant awards has been illustrated graphically in the United States in cases concerning medical malpractice. We have a right to fear a situation where none but the very wealthy could own or drive automobiles because none but the very wealthy could afford to pay the enormous insurance premiums which would be required by insurers to meet such exorbitant awards. However, the best articulation of the need for a cap on general damages arguably does not come from the Trilogy. Rather, the need to limit general damage awards is perhaps best articulated by The United States Court of Appeals for the Second Circuit in a case originating in New York, where no cap for general damages exists. In a parallel consideration of spiralling general damage awards and the need to limit these awards, the Court in Consorti v. Armstrong World Industries 10 reviewed an award of $12 million for pain and suffering to a plaintiff suffering from mesothelioma having worked with an asbestos manufacturer. The 7 Andrews v. Grand & Toy, supra note 5. 8 Ibid at Arnold v. Teno, supra note 4 at Consorti v. Armstrong World Industries Inc., 72 F.3d 1003 (2nd Cir. 1995) [Consorti v. Armstrong World Industries]

6 Court determined that the award of $12 million at trial was excessive. Writing for the Court Mr. Justice Leval stated: When courts fail to exercise the responsibility to curb excessive verdicts, the effects are uncertainty and an upward spiral. One excessive verdict, permitted to stand, becomes precedent for another still larger one. Unbridled, spiralling, excessive judgments predictably impose huge costs on society. A failure by courts to impose limits on jury verdicts would cause serious social dislocation. At the first level, unchecked costs attributable to tort liability, and resultant increases in insurance premiums, would inevitably raise the price of goods and services to the public. More serious exaggeration in unchecked jury awards can cause bankruptcies in productive enterprises, with consequent disappearance of jobs, and even bankruptcies among insurers, leaving segments of society unprotected. 11 (b) The Cap is here to Stay Three years after the Supreme Court of Canada established the $100,000 cap on general damages in 1978, the issue of whether or not, and under what circumstances, a trial judge might exceed the rough upper limit for general damages came before the court in Lindal v. Lindal. 12 Writing for the court Dickson J. reiterated the concerns for national consistency and the spiralling damage awards in the United States as supporting the rough upper limit. In addition, the Court ruled that it was inappropriate to compare the nature of injuries among different plaintiffs to determine whether or not they were more or less seriously injured than plaintiffs in the Trilogy. Rather, the amount of the award in any case should not depend alone upon the seriousness of the injury but on its ability to ameliorate the condition of the victim considering her or his particular situation. The Trilogy only sets a cap for the most catastrophic of injuries and the significant damage awards that can arise in those cases. In other words, the cap is simply an upper limit established in the interest of maintaining consistency, uniformity and predictability across the country. The Court in Lindal v Lindal 11 Ibid. 12 Lindal v. Lindal, supra note

7 also held that the cap may be increased in response to economic conditions, in particular, the debasement of purchasing power as a result of inflation. 13 Our courts today view the $100,000 cap indexed for inflation, and today the cap on general damages is approximately $325,000. Any doubt that the cap is here to stay, at least in the short term, has been laid to rest in two recent decisions. The Supreme Court of Canada, in the 1995 decision of ter Neuzen v Korn, stated is very clear terms that the cap is no longer a procedural issue; but rather, it is now a rule of law. 15 In the British Columbia Court of Appeal s 2005 decision in Lee v Dawson 16 the court determined that it could not overturn the cap set by the Supreme Court of Canada s Trilogy, despite compelling reasons to do so. Leave to the Supreme Court of Canada was denied without reasons. Until the Supreme Court of Canada decides to grant leave on the issue of whether the cap should be modified or removed, the cap will continue to limit the amount of general damages received by a personal injury plaintiff. 14 (c) Challenges to the Cap (i) The Facts of Lee v. Dawson and its Importance Lee v. Dawson is important because it was the first time the cap on general damages was constitutionally challenged as being inconsistent with Canadian equality values. When the cap on general damages was set in 1978, adoption of the Canadian Charter of Rights and Freedoms (the Charter ) was still four years away, so equality rights issues did not then have constitutional status. Essentially, the plaintiff in Lee v. Dawson argued that a cap on general 13 Ibid. 14 ter Neuzen v. Korn (1995), 11 B.C.L.R. (3d) 201, [1995] 3 S.C.R. 674 [ter Neuzen v. Korn]. 15 Ibid. 16 Lee v. Dawson, [2003] B.C.J. No (S.C.), aff d (2006), 267 D.L.R. (4th) 138 (B.C.C.A.), leave to appeal to S.C.C. denied [2006] S.C.C.A. No [Lee v. Dawson]

8 damages is inconsistent with the equality rights granted in the Charter, and therefore the cap should be entirely eliminated. In Lee v. Dawson, Mr. Lee, a 17-year old Korean in 1997, sustained injuries in a motor vehicle accident, including a mild brain injury, soft tissue injuries to the neck, shoulder, back, facial disfigurement, impaired psychological growth, and depression. Following a 13-day trial, the jury assessed damages at $782,000 for loss of future income earning capacity and $2,000,000 for general damages. The trial judge considered herself bound by the Supreme Court of Canada s previous ruling in ter Neuzen v. Korn establishing the cap on general damages as a rule of law, and reduced the jury s general damage award to $292,600 that being the cap indexed to inflation at the time. The defendants appealed seeking a further reduction, and the plaintiff cross-appealed seeking to restore the jury s initial assessment and challenging the cap as being contrary to the Charter. The British Columbia Coalition of People with Disabilities (the Coalition ) obtained leave of the Court to intervene in support of the plaintiff s argument that the cap was contrary to the Charter. (ii) The Arguments made in Lee v. Dawson On cross-appeal, the plaintiff and the Coalition argued that the upper limit should be reviewed or raised, or eliminated altogether, as it contravened the equality guarantees enumerated in s. 15 of the Canadian Charter. Although this action was between private litigants and did not involve the Government (as is required for Charter challenges to legislation and Canadian common-law), the plaintiff and the Coalition relied on a body of Canadian case law that holds that the common law must conform to Charter values 17 to argue that the cap set by the 17 Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R [Hill v. Church of Scientology]; Law v. Canada (Minister of Employment & Immigration, [1999] 1 S.C.R

9 Trilogy is at odds with those values. Briefly, the plaintiff and the Coalition argued that the cap results in differential treatment between those seriously injured and those less seriously injured. The less seriously injured can expect to receive full compensation for their nonpecuniary losses, whereas those with serious or catastrophic injuries have their pain and suffering damages curtailed by the cap. The plaintiff described this differential treatment as discriminatory as it harmed the human dignity of seriously injured plaintiffs by making them feel less worthy of concern, respect and compensation. The defendants on the other hand argued that the court was bound by the doctrine of stare decisis and the Supreme Court of Canada s declaration that the cap constitutes a rule of law, and that courts in Canada had also been applying the cap on general damages for over 30 years by the time Lee v. Dawson made it to the Court of Appeal. Additionally, the defendants argued that the cap was not arbitrary or inconsistent with Charter values; rather, the cap was made in reference to the highest non-pecuniary damage awards made in the most catastrophic cases. It was created to treat like cases alike and inherently insisted on full compensation for those with catastrophic injuries. In dismissing the cross appeal and determining that the cap on general damages was consistent with Charter values, the British Columbia Court of Appeal held: While it seems that the plaintiff and the [Coalition] have advanced persuasive arguments for revisiting the conceptual basis for the rough upper limit, this Court remains bound by the trilogy.[t]he time may have come for the rationalization or conceptual underpinning for having a rough upper limit on non-pecuniary damages to be re-examined.some of the submissions advocating a reconsideration of the rough upper limit seem.compelling but, in the end, this Court cannot overturn the trilogy Lee v. Dawson, supra note 16 20,

10 The Court also dismissed the appeal and upheld the original jury award as reduced by the trial judge. 4. JURY TRIALS AND THE CAP ON GENERAL DAMAGES In Lee v. Dawson the trial judge reduced the jury award to uphold the rule of law requiring a general damage award to be commensurable with the cap. That approach was upheld by the British Columbia Court of Appeal. As jury trials are available for all civil cases across Canada, except in Quebec, 19 this leaves us with two questions: given the cap set by the Trilogy, (1) how is a jury to be instructed; and (2) how should a jury deliberate on general damages. (a) Requesting the Trial Judge s Instructions to the Jury Regarding the Cap In Canada, where present, the jury alone is the adjudicator of fact, whereas the law is to be left to the trial judge. Therefore, counsel should not discuss the cap on general damages or the reasons for the cap in their closing submissions to a jury. If counsel does instruct the jury on the law, it should be unequivocally objected to. If inflammatory remarks, misstatements, or comments on the law are made during closing submissions and are not objected to, there is no ground for appeal on those remarks or misstatements. Additionally, it is completely inappropriate for witnesses to express views on the monetary value to be allowed for general damages Bruce Garrow, Do-Ellen S. Hansen & Meredith L. Parkes, for Personal Injury and Wrongful Death in the Aviation Context (Paper, September 2003) at 32; Jeremy Solomon, A Civil Jury: A Comparative Study of the Selection of Jurors in Ontario and the United States in Practical Strategies for Personal Injury Lawyers: Tricks of the Trade : Plaintiff and Defence Strategies for Success in a Bill 59 Environment (Ontario: The Advocates Society, 2002) (QL) Gray v. Alanco Devs. Ltd., [1967] 1 O.R. 597, 61 D.L.R. (2d) 652 (C.A.) [Gray v. Alanco]

11 That said, counsel can specifically request that a Judge instruct the jury about the cap on general damages if counsel believes that a cap case is before them. In other words, if counsel believes that the evidence before the court may permit an award close to the limit allowable by the cap, then counsel may request that the Judge instruct the jury on the cap, and its effect on general damages before the jury begins deliberation. There are no set procedures for what counsel is to say to a trial judge in such request for instructions to the jury. Essentially, a trial judge contemplating instructions to a jury in catastrophe cases should consider the following: The trial judge should receive submissions from counsel in the absence of the jury as to whether or not instructions should be provided regarding the general cap. Those submissions can be made in the form of written briefs forming the basis for argument, having regard to the evidence proved at trial. 2. Counsel are not permitted to make submissions regarding damages directly to the jury as that is the function of the trial judge. The submissions are to assist the trial judge in formulating an appropriate range of damages. 3. Depending on what province the jury trial is taking place, if counsel agree on the range of damages and the trial judge is of the view it will be helpful, he or she shall so instruct the jury on the agreed range. It should be made clear to the jury that the range which is being put to them is for their guidance and assistance and is not a hard and fast upper and lower limit. 4. If counsel have requested that the judge not instruct the jury as to the range, the trial judge must not charge the jury respecting the range. However, a judge may always instruct a jury as to the upper limit on general damages that may be awarded in catastrophe cases. In all provinces, if a catastrophe case, or a case involving very serious injuries, is before a jury the judge may always instruct on the cap. However, if there is a non-catastrophe case before a 21 Junek v. Ede, [1991] 1 W.W.R. 60, 87 Sask. R. 126 (Sask. C.A.) [Junek v. Ede]; Howes v. Crosby (1984), 45 O.R. (2d) 449, 29 C.C.L.T. 60, 6 D.L.R. (4th) 698, 2 O.A.C. 375 (C.A.)

12 jury, whether a judge may instruct the jury as to a suitable range of damages depends on which province the jury trial is held. 22 (b) How a Trial Judge is to Instruct the Jury on General and the Cap In instructing a jury on general damages in a non-catastrophic case, the trial judge should state in clear and unequivocal terms that it is the jury s task to determine damages and that the judge s function is to assist the jury. The trial judge should make it clear that any range of damages being put to jury is for its guidance and assistance and is not a hard-and-fast upper and lower limit, rather, the range is what the trial judge considers appropriate in the circumstances, having regard to the evidence. 23 In a cap case involving catastrophic injuries the same is true, although the trial judge will likely emphasize the upper limit set by the Trilogy, as opposed to any range. The difference is that the trial judge must not only inform the jury of the existence of the cap on general damages, but must also explain the policy reasons for the cap. 24 For example, in Rizzi v. Marvos, 25 the jury awarded the plaintiff $236,494 in damages, including $41,000 for general damages. The plaintiff appealed and argued that the trial judge improperly instructed the jury on how to assess non-pecuniary damages. At trial, the judge told the jury that the maximum pain and suffering award in Canada for a young person who is quadriplegic was just under $300,000 and that the jury s range should be somewhere between zero and $300,000 for the plaintiff s pain. The Ontario Court of Appeal agreed with the plaintiff that this was an improper charge and held that the trial judge erred by not explaining the policy reasons for the cap. In effect, the court held that the trial judge should have 22 Ibid.; Gray v. Alanco Devs. Ltd., supra note Ibid. 24 Rizzi v. Marvos (2008), 236 O.A.C. 4 (Ont. C.A.) [Rizzi v. Marvos]. 25 Ibid

13 instructed the jury that the cap is in place to keep damage awards in check, and the cap is not intended to invite jury members to believe that certain forms of pain are intrinsically more or less valuable than others. Similar to the concerns raised by the plaintiff and the intervenor Coalition in Lee v. Dawson, it would be entirely inappropriate that a jury use quadriplegia or any other catastrophic injury as the standard against which a fibromyalgia or emotional distress damage award should be scaled or measured against. The Ontario Court of Appeal in Rizzi v. Marvos ultimately substituted its own general damage award of $80,000, almost double the amount of general damages awarded at trial. (c) What Happens When a Jury Award Exceeds the Cap Despite the trial judge s improper jury instructions in Rizzi v. Marvos, the jury did not award general damages that exceeded the cap set by the Trilogy. But what if it had? 26 The answer lies in the decision of the Supreme Court of Canada in ter Neuzen v. Korn: 27 Whether the jury is or is not advised of the upper limit, if the award exceeds the limit, the trial judge should reduce the award to conform with the cap set out in the trilogy and adjusted for inflation. While a trial judge does not sit in appeal of a jury award, the trilogy has imposed as a rule of law a legal limit to non-pecuniary damages in these cases. It would be wrong for the trial judge to enter judgement for an amount that as a matter of law is excessive. As a result of the ruling in ter Neuzen v. Korn, trial judges in all jurisdictions must reduce general damage awards made by juries where the award exceeds the cap set by the Trilogy. Furthermore, where a jury award is completely out of proportion to the damages allowed by the cap, a trial judge in essence has the same jurisdiction as an appellate court to alter the amount of the award ter Neuzen, supra note Ibid Ibid.; Lee v. Dawson (2003), 17 B.C.L.R. (4th) 80, 2003 BCSC 1012 (B.C. S.C); see also Vaillancourt v. Molnar Estate (2002), 2002 BCCA ; Hoskin v. Han (2003), 2003 BCCA

14 5. GENERAL DAMAGES FOR WRONGFUL DEATH IN FATAL ACCIDENT CLAIMS Civil juries across Canada must deliberate on a variety of heads of general damages, ranging from pain and suffering to aggravated damages. General damages awarded in wrongful death claims under fatal accidents or dependents relief legislation have a twist depending on the province in which the claim is brought. General damages in wrongful death claims include dependent survivor claims for grief, loss of companionship, care, guidance and love. Wrongful death claims may also include the estate claim for the deceased victim s pre-death pain and suffering. However, no claim by an estate for the victim s loss of expectation of life is allowed except in the Northwest Territories and Nunavut. Regardless, if the claim involves a loss of companionship or an estate claim, there are different provincial rules as to this type of general damage. 29 (a) Loss of Companionship General damages may include survivor claims for loss of care, guidance and companionship, as well as for grief suffered by the surviving members of the deceased victim s family. Generally, such awards are subject to the general damages cap and at the discretion of the courts unless provincial legislation specifically curtails recovery under this head of general damage. 30 Generally, most of the provincial legislation in this area limits the amount recoverable for loss of companionship to much less than is allowable by the cap. 31 In Alberta, general damages for loss of companionship are not only legislated, but they are also 29 Appendix I charts legislation across Canada regarding survival actions by estates of deceased victims, Appendix II charts Canadian legislation as it relates to fatal accident claims by dependents of the deceased. 30 Appendix II charts fatal accident legislation across Canada and a claimant s ability to recover for loss of companionship. 31 Other provincial legislation in the context of minor injuries occurring in motor vehicle accidents also limits the amount recoverable for general damages well below the amount set by the cap. For example, see Alberta s Insurance Act, R.S.A. 2000, c. I-3, s , its corresponding regulations and the recent case of Morrow v. Zhang (2009), 2009 ABCA 215. Similarly, in Nova Scotia there is An Act to Amend the Laws Respecting Automobile Insurance, S.N.S. 2003, c. 1 and Hartling v. Nova Scotia (Attorney General) (2009), 2009 NSSC

15 mandatory. 32 Specifically, Alberta s Fatal Accidents Act requires the court to award damages for grief and the loss of care, guidance and companionship in the amount of $75,000 to the spouse or adult partner of the deceased person; $75,000 to the parent or parents of the deceased person if the deceased person was a minor or was an unmarried/un-partnered adult; and $45,000 to each minor or unmarried/un-partnered child of the deceased person. 33 In short, only the spouse, parent, or child of the deceased person can claim for bereavement damages, and the categories are closed to child meaning a son or daughter (whether legitimate or illegitimate), and parent meaning only a mother or father. As with Alberta, Saskatchewan has legislation that addresses general damages for wrongful death recoverable by the deceased s surviving dependents. Saskatchewan s The Fatal Accidents Act 34 also allows for recovery of bereavement damages. But unlike Alberta, a spouse, parent or child of the deceased is more broadly defined. In Saskatchewan, a parent includes a father or mother, grandfather or grandmother, stepfather or stepmother, or a person who acted as a parent to the deceased. Additionally, a child is defined as a son or daughter, grandchild, stepchild, or a person to whom the decease acted as a parent. 35 In addition to general damages in Saskatchewan, the court may award pecuniary (special) damages to a spouse parent or child. 36 In addition to the loss of care, guidance and companionship, the courts in Saskatchewan may also award general damages for grief suffered by the surviving dependants. 37 However, in Saskatchewan the damages for loss of companionship or grief are 32 Alberta Fatal Accidents Act, R.S.A. 2000, c. F-8 [Alberta s Fatal Accidents Act], s Ibid. 34 The Fatal Accidents Act, R.S.S. 1978, c. F-11 [The Fatal Accidents Act]. 35 Ibid., s Ibid., s. 4(2). 37 Ibid., s. 4.1(2)

16 capped at $60,000 for a spouse, and $30,000 for each parent, or $30,000 for each child of the deceased. 38 Unlike Alberta and Saskatchewan, there is no recovery for grief in Ontario. 39 Awards for the loss of companionship, care and guidance are available in Ontario and at the discretion of the Ontario court and always subject to a reasonableness requirement. The Ontario Court of Appeal addressed this issue head on in Scamolla Estate v. Tenax. 40 In this case, the court considered whether there should be a cap on non-pecuniary damage awards made for the loss of care, guidance and companionship. The jury had awarded general damages as follows: $100,000 for the deceased s daughter, $45,000 to the deceased s son, and, $373,000 to his wife. The Ontario Court of Appeal held that these awards could not stand. The Court explained that though there was no question that the surviving relatives genuinely suffered enormous grief and mental anguish, it is well established that losses of that character are not compensable as a matter of law. 41 Although the court expressed sympathy for the members of the deceased s family, it substituted its own award for general damages, and awarded $35,000 to the deceased s daughter, $20,000 to the deceased s son, and $75,000 to the deceased s wife. 42 (b) The Lost Years: Estate Claims and the Loss of Expectation of Life Unlike survivor claims for grief or loss of companionship, generally an estate claim for a loss of expectation of life will fail in Canada. Across this country, with the exception of the 38 Ibid., s. 4.1(2). 39 Alberta, Saskatchewan and New Brunswick specifically allow for the recovery of damages for grief suffered by family members, Appendix II. 40 Scamolla Estate v. Tenax Ltd., [1995] O.J. No (C.A.) [Scamolla Estate v. Tenax]. 41 Ibid Ibid

17 Northwest Territories and Nunavut, the estate of a deceased person cannot make a claim for lost years. The rationale for disallowing claims for lost years is twofold. The primary purpose of fatal accident legislation is to put dependants in the same financial position they would have been in had the deceased lived and continued to provide support. And, allowing lost years claims pursuant to survival of actions legislation simply results in a windfall to the estate, and may in some cases lead to overlap and double recovery. If a tort causing personal injury occurs in either the Northwest Territories or Nunavut, and death ensues, the victim s estate may claim for the deceased person s loss of expectation of life under these Territories trustee statutes. Section 31(1) of the Northwest Territory s Trustee Act 43 provides as follows: The executors or administrators of a deceased person may maintain an action for all torts or injuries to the person or to the real or personal estate of the deceased, except in case of libel and slander, in the same manner and with the same rights and remedies as the deceased would if living have been entitled to do. The wording is identical wording under the Nunavut legislation. These sections have been interpreted broadly by both the Nunavut Court of Appeal 44 and the Northwest Territories Court of Appeal 45 as allowing an estate to claim for a loss of expectation of life, despite all other provinces in Canada disallowing such a claim. 6. NON-PECUNIARY DAMAGES FOR EMOTIONAL DISTRESS The assessment of general damages for emotional distress, such as anxiety and post-traumatic stress disorder, has also been the subject of considerable analysis by the courts. In Canada, a claimant must prove not just psychological disturbance or upset as a result of the tort, but also 43 Trustee Act, R.S.N.W.T. 1998, c. T-8, s. 31(1). 44 Caron Estate v. Paneak Estate (2006), 2006 NUCA 4 (Nun. C.A.). 45 Tilson Estate v. Summit Air Charters Ltd., [2007] A.W.L.D (N.W.T. C.A.)

18 that the psychological disturbance rises to the level of a recognizable psychiatric illness. 46 The main issues regarding general damages for this type of injury also revolve around the concept of foreseeability. (a) Emotional Distress and Breach of Contract The Supreme Court of Canada in Fiddler 47 held that for a plaintiff to obtain general damages for emotional distress arising from a breach of contract, such damages must have reasonably been in the contemplation of the parties at the time the contract was signed. This reflects adherence to the classic Anglo-Canadian theory of contract damages assessment. 48 Essentially, to be able to award contract damages for emotional distress, a court deliberating on this issue must be satisfied of the following: (a) a purpose of the contract was to secure a psychological benefit and should a breach of the contract occur, resulting emotional distress was within the reasonable contemplation of the parties at the time of contracting; and (b), the degree of emotional distress caused by the breach was of a degree sufficient to warrant compensation. 49 In Canada, the law does not award damages for incidental frustration. 50 In addition to emotional distress damages arising from a breach of contract, emotional distress claims may also arise in a tort action; and again, the issue revolves around the concept of reasonable expectations or foreseeability. However, the determination of what such reasonable expectations are is not within a contractual framework, but rather more broadly 46 Vanek v. Great Atlantic & Pacific Co. of Canada (1999), 180 D.L.R. (4th) 748 (Ont. C.A.) [Vanek v. Great Atlantic]; Kotai v. Queen of the North (Ship), (2009), 2009 BCSC 1405 [Kotai v. Queen of the North]; Mustapha v. Culligan of Canada Ltd., [2008] 2 S.C.R. 3 [Mustapha v. Culligan]. 47 Fiddler v. Sun Life Assurance Co. of Canada (2006), 2006 SCC 30 [Fiddler] Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145 (H.L.). 49 Fiddler., supra note Ibid

19 based social norms, such as those that inform assessment of the existence of tort law duties of care. (b) Emotional Distress and Tort Actions (i) The Facts of Mustapha v. Culligan The concept of foreseeability in the assessment of tort damages for emotional distress was recently affirmed by the Supreme Court of Canada decision in Mustapha v. Culligan. 51 For approximately 15 years, without incident, the Mustaphas regularly consumed bottled water produced by Culligan of Canada. However, in 2001, the Mustaphas were replacing a large bottle on their home dispenser when they noticed a dead fly and part of another fly inside the bottle. As a result of this incident, the Mustaphas claimed that they both became ill. 52 Mrs. Mustapha claimed that as a result of seeing a fly in a bottle, she suffered severe anxiety, emotional distress, nervous shock, depression, and the premature birth of her second daughter with whom she was seven months pregnant at the time. The trial judge dismissed Mrs. Mustapha s claim as her reaction did not rise to the level of nervous shock or psychiatric illness that is required for recovery of emotional distress damages. 53 Interestingly, Mr. Mustapha s claim for emotional distress arising from the manufacturer s tort posed more analytic difficulty. After finding a fly in the bottled water, Mr. Mustapha claimed he experienced immediate nausea with abdominal pain and vomiting, obsessive thoughts about the incident including the nexus he made between the incident and the premature birth of his daughter, and chronic phobic anxiety regarding the use of water, which led him to avoid drinking or washing with it. Mr. Mustapha also claimed depression, reduced 51 Mustapha v. Culligan of Canada Ltd., supra note In Canada, a manufacturer of consumable goods owes a consumer a duty of care as stated by Donaghue v. Stevenson, [1932] AC 562 (H.L.). 53 Vanek v. Great Atlantic, supra note 46; Kotai v. Queen of the North, supra note

20 energy, nightmares, a loss of a sense of humour, and impaired concentration and memory. Although the trial judge accepted the evidence of Mr. Mustapha in that Mr. Mustapha suffered from significant depression and anxiety, the issue at trial and on appeal was whether Mr. Mustapha s emotional distress should be compensated for by an award of general damages. Ultimately, that determination hinges on the concept of foreseeability. (ii) The Concept of Foreseeability Reasonable foresight of emotional distress is the touchstone of liability according to the Supreme Court of Canada in Mustapha v. Culligan. The test for reasonable foreseeability is an objective test, not a subjective one. In other words, the focus should not be on the individual characteristics and vulnerabilities of the plaintiff; but rather the test is whether or not, viewed objectively, it is reasonably foreseeable that a person of ordinary fortitude would suffer a psychiatric injury as a result of the tort. The correct stage at which to apply this test is after a duty of care has been established and the standard of care has been found to have been breached. Once a breach has been found, it is then up to the court to consider whether or not the type of emotional distress suffered is of the nature that warrants compensation, 54 and if so, whether the emotional distress damages are too remote. In Mustapha v. Culligan, the court found that: 1) Culligan owed a duty of care to the consumer as per Donaghue v. Stevenson, and that it fell below the standard of care in supplying the Mustaphas with contaminated water. 2) Mr. Mustapha sustained injuries including a serious and debilitating psychiatric illness. As such, this form of emotional distress could be compensated for by way of general damages. 54 Ibid