Thank you to Jennifer Stirton for this week's contribution.
The Ontario Court of Appeal has recently confirmed that plaintiffs seeking damages for psychological injury independent of any claim for physical injury are required to show that they suffer from a “recognizable psychiatric illness”.
In Healey v. Lakeridge Health Corp., [2011] O.J. No. 231 (C.A.), the plaintiffs received notices to be tested for tuberculosis as a result of exposure to two infected patients at the defendants’ facility. The plaintiffs alleged that these notices caused them mental anxiety, depression, fear, shock, anger, distress and sleeplessness. They feared for the health and safety of friends and family and temporarily disrupted their social and family lives.
The plaintiffs admitted that the harm suffered fell short of a “recognizable psychiatric illness”. Rather, the plaintiffs alleged that the 2008 Supreme Court of Canada decision in Mustapha v. Culligan, in which the plaintiff found dead flies in an unopened bottle of water and was very upset by the idea that his family had been consuming tainted water, lowered the threshold for compensable psychological injury.
The Court of Appeal concluded that although there were some academic and judicial opinions to the contrary, there is a strong line of authority that to recover damages for psychological injury independent of physical injury, plaintiffs are required to show that they suffer from a recognizable psychiatric illness. The Court of Appeal concluded:
“As has been repeatedly stated in the case law, there are strong policy reasons for imposing some sort of threshold. It seems to me quite appropriate for the law to decline monetary compensation for the distress and upset caused by the unfortunate but inevitable stresses of life in a civilized society and to decline to open the door to recovery for all manner of psychological insult or injury. Given the frequency with which everyday experiences cause transient distress, the multi-factorial causes of psychological upset, and the highly subjective nature of an individual’s reaction to such stresses and strains, such claims involve serious questions of evidentiary rigour. The law quite properly insists upon an objective threshold to screen such claims and to refuse compensation unless the injury is serious and prolonged.”
The Court of Appeal acknowledged that the threshold for compensable psychological injury is the subject of debate and that it could be revisited on a proper factual foundation. For the moment, however, the test for compensable psychological injury remains unchanged.
Rabu, 23 Maret 2011
Rabu, 16 Maret 2011
The Appraisal Process in s. 128 of the Insurance Act
Letts v. Aviva Canada Inc., [2010] O.J. No. 5801 (S.C.J.)
This case deals with the appraisal process in s. 128 of the Insurance Act.
The plaintiffs made a fire loss claim and prepared a 56 page Request to Admit which contained an inventory of items they allege were destroyed or damage by the fire. They argued the insurer was required to specify the items took issue with as a condition precedent to the appraisal process.
Justice James disagreed:
While this may make sense in an appropriate case, I do not agree with the insureds that the insurer must provide a detailed response to the claim of the insureds before being able to invoke the appraisal mechanism contemplated by Section 128 of the Insurance Act.
Section 148 of the Act sets out what needs to be done prior to the appraisal process: a specific demand must be made and proof of loss delivered. Nothing else is required.
This case deals with the appraisal process in s. 128 of the Insurance Act.
The plaintiffs made a fire loss claim and prepared a 56 page Request to Admit which contained an inventory of items they allege were destroyed or damage by the fire. They argued the insurer was required to specify the items took issue with as a condition precedent to the appraisal process.
Justice James disagreed:
While this may make sense in an appropriate case, I do not agree with the insureds that the insurer must provide a detailed response to the claim of the insureds before being able to invoke the appraisal mechanism contemplated by Section 128 of the Insurance Act.
Section 148 of the Act sets out what needs to be done prior to the appraisal process: a specific demand must be made and proof of loss delivered. Nothing else is required.
Rabu, 09 Maret 2011
Proportionality in Discovery
Master Short recently conducted an exhaustive review of the principles of proportionality in discovery. In Warman v. National Post (2011), 103 O.R. (3d) 174 (S.C.J.), the defendant brought a motion seeking production of a mirror copy of the plaintiff’s computer hard drive. The action was a libel action brought under the Simplified Procedure.
Master Short held that the new rules changing the test from “relating to” to “relevant to” a matter in issue signal a shift away from the broad and liberal discovery practice that has existed in Ontario. The default rule should start with proportionality and a recognition that not all conceivably relevant facts are discoverable in every case. Master Short adopts an eight factor proportionality test for e-discovery used in an American case (Rowe Entertainment v. William Morris):
1. The specificity of the discovery requests;
2. The likelihood of discovering critical information;
3. The availability of such information from other sources;
4. The purposes for which the responding party maintains the requested data;
5. The relative benefit to the parties of obtaining the information;
6. The total cost associated with production;
7. The relative ability of each party to control costs and its incentive to do so;
8. The resources available to each party.
Master Short held that although relevancy should remain a threshold requirement, proportionality should replace relevancy as the most important principle guiding discovery.
This decision will no doubt garner attention as a guideline for discovery. It will be interesting to see if the eight factors become the new standard for discovery in general or limited to e-discovery.
Master Short held that the new rules changing the test from “relating to” to “relevant to” a matter in issue signal a shift away from the broad and liberal discovery practice that has existed in Ontario. The default rule should start with proportionality and a recognition that not all conceivably relevant facts are discoverable in every case. Master Short adopts an eight factor proportionality test for e-discovery used in an American case (Rowe Entertainment v. William Morris):
1. The specificity of the discovery requests;
2. The likelihood of discovering critical information;
3. The availability of such information from other sources;
4. The purposes for which the responding party maintains the requested data;
5. The relative benefit to the parties of obtaining the information;
6. The total cost associated with production;
7. The relative ability of each party to control costs and its incentive to do so;
8. The resources available to each party.
Master Short held that although relevancy should remain a threshold requirement, proportionality should replace relevancy as the most important principle guiding discovery.
This decision will no doubt garner attention as a guideline for discovery. It will be interesting to see if the eight factors become the new standard for discovery in general or limited to e-discovery.
Rabu, 23 Februari 2011
The discoverability principle in third party claims
White v. Mannen, 2011 ONSC 1058 (S.C.J.)
This was a motion by the third party, Brant County, for summary judgment on the basis that the action against it was commenced out of time.
The main action arose out of a motor vehicle accident that occurred on May 22, 2004. The plaintiff was a passenger in the defendant's vehicle, which crested a hill and swerved to avoid a parked car, leaving the roadway and striking a tree. In the third party claim, the defendant alleged the road and hill obstructed his view.
The claim was issued December 2, 2005 and served on the defendant February 21, 2006. The third party claim was issued September 24, 2009. The defendant argued that it was only after examinations for discovery and receipt of an engineering opinion that he discovered he had a cause of action against the municipality.
Justice Gordon conducted a useful review of the case law with respect to discoverability, and specifically the due diligence required: a party must only learn of sufficient facts upon which to commence a claim and need not be in a position to prove it. Legal advice or an expert opinion is not necessarily required, and an examination for discovery may not be required. In resisting a motion for summary judgment, the responding party must address the due diligence requirement and provide full disclosure.
Justice Gordon held that the defendant knew at the time of the accident that there was restricted visibility on the hill. The failure of the defendant to tender evidence on due diligence was fatal to his position. The third party claim was well out of time and was dismissed.
This decision is a good review of the principles pertaining to discoverability and should be reviewed both by those pursuing third party claims and those defending them.
This was a motion by the third party, Brant County, for summary judgment on the basis that the action against it was commenced out of time.
The main action arose out of a motor vehicle accident that occurred on May 22, 2004. The plaintiff was a passenger in the defendant's vehicle, which crested a hill and swerved to avoid a parked car, leaving the roadway and striking a tree. In the third party claim, the defendant alleged the road and hill obstructed his view.
The claim was issued December 2, 2005 and served on the defendant February 21, 2006. The third party claim was issued September 24, 2009. The defendant argued that it was only after examinations for discovery and receipt of an engineering opinion that he discovered he had a cause of action against the municipality.
Justice Gordon conducted a useful review of the case law with respect to discoverability, and specifically the due diligence required: a party must only learn of sufficient facts upon which to commence a claim and need not be in a position to prove it. Legal advice or an expert opinion is not necessarily required, and an examination for discovery may not be required. In resisting a motion for summary judgment, the responding party must address the due diligence requirement and provide full disclosure.
Justice Gordon held that the defendant knew at the time of the accident that there was restricted visibility on the hill. The failure of the defendant to tender evidence on due diligence was fatal to his position. The third party claim was well out of time and was dismissed.
This decision is a good review of the principles pertaining to discoverability and should be reviewed both by those pursuing third party claims and those defending them.
Rabu, 16 Februari 2011
Tavern Liability - Section 39 of the Liquor Licence Act
Dickerson v. 1610396 Ontario Inc. (Carey’s Pub and Grill), 2010 O.N.C.A. 894 (CanLII)
Section 39 of the Liquor License Act creates civil liability for commercial establishments selling liquor. Section 39 reads as follows:
39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication such that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person.
In Dickerson, the Court of Appeal had occasion to comment on the standard of care set out in section 39. The Court disagreed with the plaintiff’s assertion that the standard is breached by simply overserving a patron to the point of intoxication. The Court held that section 39 requires a risk assessment by the commercial establishment. The plain and ordinary meaning of the section describes the level of overservice that attracts liability because of the risk it creates. The overservice must produce the patron’s intoxication or increase it sufficiently that the patron will be in danger of injuring another person. Section 39 requires only that the risk of injury be reasonably foreseeable, not that the type or kind of injury actually suffered be reasonably foreseeable. In addition, this section requires only that there be a reasonably foreseeable risk of injury to another person, not that the person injured be within the category of persons foreseeably at risk.
Those involved in tavern liability cases before juries may want to review this decision as a useful precedent for the charge to a jury in a tavern case, as well as the appropriate questions to be put to the jury.
Section 39 of the Liquor License Act creates civil liability for commercial establishments selling liquor. Section 39 reads as follows:
39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication such that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person.
In Dickerson, the Court of Appeal had occasion to comment on the standard of care set out in section 39. The Court disagreed with the plaintiff’s assertion that the standard is breached by simply overserving a patron to the point of intoxication. The Court held that section 39 requires a risk assessment by the commercial establishment. The plain and ordinary meaning of the section describes the level of overservice that attracts liability because of the risk it creates. The overservice must produce the patron’s intoxication or increase it sufficiently that the patron will be in danger of injuring another person. Section 39 requires only that the risk of injury be reasonably foreseeable, not that the type or kind of injury actually suffered be reasonably foreseeable. In addition, this section requires only that there be a reasonably foreseeable risk of injury to another person, not that the person injured be within the category of persons foreseeably at risk.
Those involved in tavern liability cases before juries may want to review this decision as a useful precedent for the charge to a jury in a tavern case, as well as the appropriate questions to be put to the jury.
Rabu, 09 Februari 2011
D&O Insurance: The Policy Prevails
The Ontario Courts have reiterated the old insurance law adage that the wording of a policy prevails.
In Dunn v. Chubb Insurance, 2011 ONCA 36, the Court of Appeal recently upheld an application judge's decision requiring the insurer Chubb to pay 90% of certain defence costs of the respondents Dunn and Beatty, pursuant to a directors’ and officers’ liability insurance policy.
This proceeding arose out of allegations against Dunn and Beatty, former Nortel directors and/or officers. They allegedly committed some "Wrongful Acts" (a term defined in the policy) in 2001 and then again in 2003. The policy was a "claims made" policy and covered the period 2001.
The insurer Chubb agreed to provide defences for Dunn and Beatty for proceedings relating to the 2001 conduct. However, the insurer refused to pay the full defence costs for other proceedings arising out of both the 2001 and 2003 conduct. The insurer argued that it was not responsible for the defence costs to the extent that those costs relate exclusively to the 2003 conduct.
There was however in the policy a special endorsement requiring the insurer to pay 90% of defence costs where there is a claim that includes both covered and uncovered matters. However, the insurer took the position that the claims still had to fall within the period of 2001 and that the endorsement applied to allegations against insureds of wrongful conduct engaged in by an insured which is excluded from coverage, e.g. allegations of wrongful conduct in some capacity other than as a director and/or officer.
In the result, the application's judge and the Court of Appeal agreed that the endorsement in the policy applies and that the insurer is to pay 90% of defence costs per the terms of the endorsement.
This case emphasizes once again the importance of the terms of the policy itself.
Kamis, 03 Februari 2011
Negligent Supervision of Children
Can parents or grandparents be liable for negligently supervising children in their care?
In Connolly (Litigation guardian of) v. Riopelle, [2010] O.J. No. 5798 (S.C.J.), the eight year old plaintiff was injured in an automobile accident. The defendant driver brought a third party claim against the boy’s grandfather, alleging that the grandfather was negligent in his supervision of the child and this caused or contributed to the accident. The child was visiting his grandparents’ home and was left outside to play alone when the accident occurred.
The grandfather brought a motion to strike the claim. He alleged that the child had been taught appropriate safety rules, was generally well behaved and did not require a greater level of vigilance than other children his age.
The motion was dismissed.
The Court held that is was open to the trier of fact to conclude that the grandfather ought to have looked out from time to time to ensure the child was adhering to the rules that were set, and there was an absence of evidence as to the accepted standard of care of other caregivers in the neighbourhood where the accident occurred.
Justice James concluded that the question of negligent supervision was better assessed in a trial setting.
In Connolly (Litigation guardian of) v. Riopelle, [2010] O.J. No. 5798 (S.C.J.), the eight year old plaintiff was injured in an automobile accident. The defendant driver brought a third party claim against the boy’s grandfather, alleging that the grandfather was negligent in his supervision of the child and this caused or contributed to the accident. The child was visiting his grandparents’ home and was left outside to play alone when the accident occurred.
The grandfather brought a motion to strike the claim. He alleged that the child had been taught appropriate safety rules, was generally well behaved and did not require a greater level of vigilance than other children his age.
The motion was dismissed.
The Court held that is was open to the trier of fact to conclude that the grandfather ought to have looked out from time to time to ensure the child was adhering to the rules that were set, and there was an absence of evidence as to the accepted standard of care of other caregivers in the neighbourhood where the accident occurred.
Justice James concluded that the question of negligent supervision was better assessed in a trial setting.
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