





CITATION: Healey v. Lakeridge Health Corporation, 2011
      ONCA 55



DATE: 20110121



DOCKETS: C51777, C51778



COURT OF APPEAL FOR ONTARIO



Winkler C.J.O., Moldaver, Feldman, Sharpe and Simmons JJ.A.



BETWEEN



Garrett Joseph Healey



Plaintiff (Appellant)



and



Lakeridge Health Corporation and David J. Ross



Defendants
          (Respondents)



AND BETWEEN



Michael
          David Horgan



Plaintiff (Appellant)



and



Lakeridge Health Corporation, David J. Ross and Hak Ming
          Chiu



Defendants
          (Respondents)



Kirk Baert and Jonathan Ptak, for
          the plaintiffs (appellants)



Barry Glaspell and Tanya Goldberg,
          for Lakeridge Health Corporation

Mary Thomson and Belinda Bain, for
          David J. Ross and Hak Ming Chiu

Leah Price, for the intervener Law
          Foundation of Ontario



Heard: December 6 & 7, 2010



On appeal from the orders of Justice Paul Perell of the
          Superior Court of Justice dated March 31, 2010 and May 25, 2010, with reasons
          reported at 72 C.C.L.T. (3d) 361 and supplemental reasons reported at 2010
          ONSC 725.



Sharpe J.A.:



[1]

This appeal involves two class actions against the respondent Lakeridge
    Health Corporation (Lakeridge) and two physicians arising from incidents in
    which large numbers of people were exposed to two patients with tuberculosis (TB).
     None of the appellants tested positive for TB.  They allege that notices
    advising class members that they should be tested for TB as a result of
    possible exposure caused them mental anxiety, suffering and distress.  They
    admit that the harm suffered fell short of a recognizable psychiatric illness. 
    The central issue on this appeal is whether the harm they suffered gives rise
    to a claim for legally compensable damages in a negligence action.

FACTS

[2]

In October 2003, a frequent patient (the first index patient) at
    Lakeridges Oshawa site was diagnosed with active TB.  As required by the
Health
    Protection and Promotion Act
, R.S.O. 1990, c. H.7, Lakeridge reported this
    to the Durham Region Health Department.  Durham Public Health in turn notified
    2,800 people of their potential exposure to TB and advised them to get tested.  Most
    of those notified had been exposed when visiting Lakeridges emergency room between
    February and October 2003.

[3]

In April 2004, another Lakeridge patient (the second index patient) was
    diagnosed with active TB.  Again Durham Public Heath was advised, and 1,602
    people were notified and advised to be tested.  The majority of people
    contacted in this second group were exposed when visiting Lakeridges oncology
    unit between February and April 2004.  Many were cancer patients receiving
    chemotherapy and were immuno-compromised at the time of exposure.

[4]

TB is a potentially fatal disease caused by an organism that usually attacks
    the lungs.  TB exists in both latent and active forms.  Active TB is transmitted
    to others through the air through coughing, sneezing, or talking, but it is not
    highly infectious.  The latent form is not communicable, and the risk of
    infection from casual contact with a person who has active TB is low.  It is
    estimated that 10% of the non-aboriginal Canadian-born population is infected
    with latent TB.  In 2004, there were 657 cases of active TB in Ontario.  Given
    the prevalence of TB, public heath notices advising potentially infected
    persons to be tested are not uncommon.

[5]

The vast majority of individuals with latent TB will not develop the
    active disease.  The risk of latent TB becoming active can be reduced to less
    than 1% by taking a course of prophylactic medication.  However, the chances of
    latent TB becoming active are increased if the person infected is immuno-compromised,
    develops a chronic condition, or undergoes other severe physical or mental
    health issues.

[6]

The test for TB involves injecting a small amount of the tuberculin
    protein under the skin of the inner forearm.  The test site is then examined by
    a health professional 48 to 72 hours later.  A positive skin test may indicate
    TB infection, but often simply indicates the latent, asymptomatic form of TB
    that rarely develops into active disease.  A positive skin test is followed up
    with a chest x-ray and a sputum analysis to rule out active infection.  There
    is no way of determining when a patient with a positive skin test was exposed
    to TB.

[7]

It can take up to three months from the date of exposure for the skin
    test to produce an accurate result.  However, as the notices were sent after
    the date of potential infection, for many of the class members the three-month
    period would have elapsed by the time they received the notice and so they were
    able to be tested immediately.  It follows that a significant number would have
    known within 72 hours after the administration of the skin test that they were
    not infected.

[8]

No active case of TB was diagnosed as a result of the Lakeridge
    incidents.  In the 2003 exposure group, 2,155 people were tested for TB: 1,967
    people tested negative, indicating no TB infection, and 188 people tested
    positive, indicating past or current infection with TB, although not
    necessarily as a result of contact with the Lakeridge index patient.  In the
    2004 exposure group, 1,384 people were tested: 1,094 people tested negative and
    290 people tested positive.

[9]

A press release issued at the time of the 2003 notices stated:

Its important to note that
    the possibility of being infected as a result of exposure to TB is low and the
    possibility of actually developing the disease is even lower.  However, our
    goal is to try to alert those who may have been exposed and infected, and allow
    them to take preventative action.

[10]

Similarly, the notices to the 2004 exposure group stated that the risk
    to you is low. There was also evidence that when accurately informed of the
    actual risk they face, the concerns of individuals who test positive for latent
    TB tend to resolve completely.

The class actions

[11]

Two class actions were commenced on behalf of the individuals who had
    received Durham Public Health notices of potential exposure to TB.  The Healey
    action involved the 2003 incident and the Horgan action involved the 2004
    incident.  The representative plaintiffs allege that Lakeridge and the index
    patients treating physicians negligently failed to properly diagnose the index
    patients TB and negligently failed to take adequate steps to prevent the
    spread of infection.

[12]

The plaintiff classes in both actions were composed of the following
    subclasses:


·

those
      who tested positive for TB (the infected persons)

·

those
      who tested negative for TB or chose not to be tested (the uninfected persons);
      and

·

family
      members of the infected and uninfected persons with derivative claims under the
Family Law Act
, R.S.O. 1990, c. F.3 (the FLA claims).


[13]

This appeal involves the claims made on behalf of the uninfected persons
    and the related FLA claims.  The claims are for damages for the psychological
    harm allegedly caused by being told of the possibility of TB infection.

Summary Judgment Motions

[14]

In January 2010, Lakeridge moved for summary judgment dismissing the
    claims pursuant to Rule 20 on the ground that there was no genuine issue
    requiring a trial.  The appellants brought a cross-motion for partial summary
    judgment on two issues: (1) that the damages claimed by the uninfected persons
    are compensable in law, and (2) that the damages of the uninfected persons and
    the FLA claims be determined and fixed on an aggregate basis.

[15]

The appellants offered the evidence of nine class members as to the harm
    they had suffered.  It was acknowledged that the affiants were the most
    seriously affected class members in the two actions.  The most serious
    complaints came from patients who were being treated for cancer or who suffered
    from other serious pre-existing ailments.  There was no evidence from any
    physician or healthcare worker who had examined or treated any class member.  The
    appellants expert, a psychiatrist, deposed that in his opinion, it was
    reasonable to expect that 30-40% of individuals in the uninfected class would
    experience psychological injury or illness and that an additional 30-40% would
    suffer from a recognized psychiatric illness.  The appellants expert did not
    examine any class member or their medical records.

[16]

The appellants asked for an award of aggregate damages of $7,500 for
    each uninfected class member and $750 for each FLA claimant, both amounts to be
    discounted by 40% on account of the contingency reflected by the experts
    opinion that up to 40% of individuals would likely not suffer psychological
    injury, for a total award of $4,500 for each uninfected class member and $450
    for each FLA claimant.

The motion judges reasons for dismissing
    the claims

[17]

The motion judge gave extensive reasons for granting Lakeridges motions
    for summary judgment, dismissing the claims of the uninfected persons and the derivative
    FLA claims, and dismissing the appellants motion for partial summary judgment.
     In summary, the motion judge made the following determinations:

(a) Duty
    of Care

[18]

Lakeridge does not owe the uninfected persons a duty of care to prevent
    psychological injury.  If Lakeridge had a duty of care to the uninfected persons,
    it would be a duty not previously recognized by the law.  To establish the
    duty, the appellants must therefore satisfy the test set out in
Cooper v.
    Hobart
,
[2001] 3 S.C.R. 537, modifying the test in
Anns
    v. Merton London Borough Council,
[1978] A.C. 728 (the 
Cooper-Anns
test).  The motion judge found that the proximity element of the test was
    not satisfied and that, in any event, there were policy reasons sufficient to
    negative any duty of care.



(b)
    Psychological Injuries

[19]

The uninfected persons did not suffer a type of personal injury for
    which the law provides compensation.  While the evidence shows that the
    uninfected persons suffered psychological injuries, in the absence of accompanying
    harm to a body part, negligence law provides no compensation for psychological
    injury unless it is a recognizable psychiatric illness.  Here, the plaintiffs
    did not prove that any of the uninfected persons suffered a recognizable
    psychiatric illness.

[20]

The motion judge concluded, at para. 168, that there is no genuine
    issue requiring a trial that the affiants either: (a) did not suffer from a
    recognizable psychiatric illness that would qualify for compensation; or (b)
    already suffered from a psychiatric illness but there was no proof of
    exacerbation of their pre-existing psychiatric illness as a result of the shock
    of receiving the notification of exposure to TB.

[21]

The motion judge, at para. 167, rejected the appellants expert evidence
    on the ground that it just explained the common sense that frightening news
    causes stress and grief to varying degrees of seriousness and that it is
    possible that some people hearing frightening news may have a reaction that is
    a recognizable psychiatric illness.  He was not prepared to accept the experts
    opinion that 30-40% would suffer psychiatric illness as [t]hat threshold  was
    not proven to have been passed  by any of the affiants, many of whom actually
    denied any such an injury.



(c)
    Standard of Care

[22]

Whether the defendants breached the standard of care was an issue for
    another day.

(d)
    Causation

[23]

There is a genuine issue requiring a trial that the notification of
    exposure to TB caused in fact the psychological injuries of the uninfected persons.

(e)
    Remoteness of Damages

[24]

Any compensable psychological injuries suffered by the uninfected persons
    do not satisfy the test for remoteness.

(f)
    Aggregate Assessment of Damages

[25]

An aggregate assessment of damages is not available in the actions
    because the prerequisites of s. 24 of the
Class Proceedings Act, 1992
,
    S.O. 1992, c. 6, for an aggregate assessment have not been satisfied.  If
    aggregate damages were available, the motion judge assessed them at $1,000 for
    each uninfected person.

(g) Costs

[26]

The motion judge awarded partial indemnity costs to Lakeridge in the
    amount of $180,000 and to the respondent physicians in the amount of $80,000.

[27]

The motion judge also granted the respondent physicians subsequent
    motion for summary judgment pursuant to Rule 37.13(2)(a) dismissing the claims
    against them.

ISSUES

[28]

The appellants have raised a number of issues on this appeal:


(1)

Did
      the motion judge err in finding that Lakeridge did not owe a duty of care to
      the uninfected persons?

(2)

Did
      the motion judge err in finding that the threshold for compensable damages is a
      recognizable psychiatric illness?

(3)

Did
      the motion judge err in finding the injuries too remote?

(4)

Did
      the motion judge err in finding that causation-in-fact was a genuine issue
      requiring trial?

(5)

Did
      the motion judge err in finding that an aggregate assessment of damages was not
      available?

(6)

Did
      the motion judge err in his assessment of the damages?

(7)

Did
      the motion judge err in his application of Rule 20?

(8)

Did
      the motion judge err in his costs award?



ANALYSIS

1. Did
    Lakeridge owe a duty of care to the uninfected persons?

[29]

The first element of a tort claim for negligence is a duty of care owed
    by the defendant to the plaintiff.  Analysis of whether a duty of care exists
    begins by asking whether the plaintiff and the defendant are in a relationship
    that has previously been recognized as involving a duty of care.  If so, or if
    the relationship is analogous to a recognized relationship, a
prima facie
duty of care is established:
Cooper v. Hobart
, at para. 36.

[30]

If the relationship has not been previously recognized as one giving rise
    to a duty of care, the two-part
Cooper-Anns
test is to be applied:

1.

Does the relationship
    between the parties justify the imposition of a duty of care on the defendant?
    This stage involves consideration of foreseeability and proximity, which may
    include aspects of policy.

2.

If the claim survives the
    first stage, are there overriding public policy grounds that negative the
prima
    facie
duty of care?

[31]

The motion judge adopted the respondents proposed description of the
    alleged duty of care, namely, did the respondents owe a duty of care to the Uninfected
    Persons to prevent psychological injury or
a
    duty of care to prevent the psychological injury that would be an incident of
    giving the Uninfected Persons notification of exposure to an infectious
    disease?
He found that such a duty had not been previously recognized
    and proceeded to analyze the alleged duty under the
Cooper-Anns
test.  He
    decided that the proximity element was not satisfied and that, in any event,
    the alleged duty was negatived for reasons of policy.

[32]

In my respectful view, the motion judge erred in his description of the
    alleged duty at issue and, on account of that error, he failed to recognize
    that, properly framed, the alleged duty of care fell into a well-recognized
    category and that it was therefore unnecessary to apply the full
Cooper-Anns
analysis.

[33]

The appellants properly described the duty of care at issue in their
    statement of claim: The defendants owed a duty of care to the plaintiff and
    class members to take appropriate steps to prevent the potential transmission
    of ... TB infection.  In oral argument before us, Lakeridge quite properly
    conceded that it owed a duty of care to patients and visitors at the hospital
    to take reasonable care to prevent the transmission of infectious diseases.

[34]

While some of the earlier cases may have treated the issue of whether
    damages for psychological injury may be recovered as involving the duty of
    care, as I read
Mustapha v. Culligan,
[2008] 2 S.C.R. 114, whether the
    plaintiff has sustained compensable damages is a separate and distinct issue
    not to be conflated with the question of whether a duty of care exists.  In
Mustapha
,
    the plaintiff found dead flies in an unopened water bottle and became very
    upset by the idea that he and his family had been consuming tainted water.  He
    suffered no physical injury.

[35]

McLachlin C.J. set out the elements of the tort of negligence at para.
    3:

A successful action in negligence requires that the
    plaintiff demonstrate (1) that the defendant owed him a duty of care; (2) that
    the defendants behaviour breached the standard of care; (3) that the plaintiff
    sustained damage; and (4) that the damage was caused, in fact and in law, by
    the defendants breach.

[36]

McLachlin C.J. noted, at para. 6, that [i]t has long been established
    that the manufacturer of a consumable good owes a duty of care to the ultimate
    consumer of that good.  She treated the nature of the injury and the question
    of whether damages for such an injury are recoverable as a separate issue, to
    be dealt with at the third and fourth stages of the analysis, after the
    plaintiff has established a duty of care and a breach of the standard of care.

[37]

Where there is a duty of care to avoid physical harm to person or
    property, that duty embraces the category of claims for nervous shock.  In
Cooper
,
    when describing the relationships that will give rise to a
prima facie
duty
    of care, a unanimous Supreme Court wrote, at para. 36: 
First,
    of course, is the situation where the defendants act foreseeably causes
    physical harm to the plaintiff or the plaintiffs property.  This has been
    extended to nervous shock
(citations omitted).


[38]

Accordingly, I respectfully disagree with the motion
    judges decision that the claim should be dismissed on the ground that the
    respondents did not owe the appellants a duty of care.

2. Is the
    threshold for compensable damages a recognizable psychiatric illness?

[39]

A plaintiff who claims damages for nervous shock or psychological injury
    faces two hurdles.  First, the plaintiff must satisfy the court that he or she
    has suffered the type of damages that are compensable.  It is well-established
    that, absent physical injury, there is a threshold that the plaintiff must meet
    when claiming damages for the negligent infliction of mental, psychological or psychiatric
    harm.  The appellants do not dispute that such a threshold exists.  They do,
    however, challenge the traditional view that a plaintiff must show some
    physical symptoms like a heart attack or a miscarriage, or some recognizable
    psychiatric illness: Allen M. Linden & Bruce Feldthusen,
Canadian Tort
    Law
, 8th ed. (Markham: LexisNexis, 2006) at pp. 425-26 (footnotes omitted).

[40]

The second hurdle is that the plaintiff must satisfy the court that the
    psychological injury was caused by the negligence of the defendant.  This
    involves asking whether psychological damage was a reasonably foreseeable
    consequence of the defendants negligence.

[41]

Both the threshold issue and the issue of remoteness were argued before
    the motion judge.  I will deal first with the question of whether there is a
    triable issue that the plaintiff class suffered the type of damages that are
    compensable.

[42]

The appellants filed the affidavits of several uninfected class members
    and FLA claimants, and cross-examinations were conducted.  It is common ground
    that those affiants were the most seriously affected class members.  The motion
    judge provided a very helpful detailed summary of their evidence, at paras. 148-65,
    that I need not repeat here.  Suffice it to say that the affiants variously
    described their reactions to the notices and to awaiting the results of their
    tests as being depression, fear, shock, anxiety, anger, frustration, shame,
    outrage, distress and sleeplessness.  Many of them feared for the health and
    safety of friends and family, and temporarily disrupted their social and family
    lives.  Several of the deponents suffered from pre-existing medical conditions
    that already produced some or all of the psychological complaints they
    attributed to the TB notification and it may well be that the notification
    exacerbated the degree of their anxiety and distress.  None of the affiants
    suffered a recognizable psychiatric illness. Many did not even consult a doctor
    about their complaints.

[43]

The appellants do not challenge the motion judges finding that their
    evidence fails to raise an issue for trial under the traditional test for
    damages for pure psychological injury requiring a plaintiff to prove a
    recognizable psychiatric illness.  The appellants essentially rest their case
    on the proposition that the Supreme Court of Canada changed, and significantly
    lowered, the threshold for compensable psychological injury in
Mustapha
,
    citing paras. 8 and 9 of McLachlin C.J.s unanimous judgment:

Generally, a plaintiff
    who suffers personal injury will be found to have suffered damage.  Damage
    for purposes of this inquiry includes psychological injury.  The
    distinction between physical and mental injury is elusive and arguably
    artificial in the context of tort.  As Lord Lloyd said in
Page v. Smith
,
    [1996] 1 A.C. 155 (H.L.), at p. 188:




In an age when medical knowledge is expanding
          fast, and psychiatric knowledge with it, it would not be sensible to commit the
          law to a distinction between physical and psychiatric injury, which may already
          seem somewhat artificial, and may soon be altogether outmoded.
Nothing
            will be gained by treating them as different kinds of personal injury, so as
            to require the application of different tests in law.





This said,
    psychological disturbance that rises to the level of personal injury must be
    distinguished from psychological upset.  Personal injury at law connotes
    serious trauma or illness: see
Hinz v. Berry
, [1970] 2 Q.B. 40 (C.A.),
    at p. 42;
Page v. Smith
, at p. 189; Linden and Feldthusen, [
Canadian
    Tort Law
, 8th ed. (Markham: LexisNexis, 2006)] at pp. 425-27.  The law
    does not recognize upset, disgust, anxiety, agitation or other mental states
    that fall short of injury.  I would not purport to define compensable
    injury exhaustively, except to say that it must be serious and prolonged and
    rise above the ordinary annoyances, anxieties and fears that people living in
    society routinely, if sometimes reluctantly, accept.  The need to accept
    such upsets rather than seek redress in tort is what I take the Court of Appeal
    to be expressing in its quote from
Vanek v. Great Atlantic & Pacific Co.
    of Canada
(1999), 48 O.R. (3d) 228 (C.A.): Life goes on (para. 60). 
    Quite simply, minor and transient upsets do not constitute personal
injury
,
    and hence do not amount to damage. [Emphasis in original.]

[44]

The appellants submit that this passage changes the law by removing the
    need to show a recognizable psychiatric illness and replacing for that
    requirement the need to show harm that goes beyond 
upset, disgust, anxiety, agitation or other mental states
    that fall short of injury and
amounts to serious trauma or illness
    that
is

serious and prolonged and ris[ing] above
    the ordinary annoyances, anxieties and fears that people living in society
    routinely, if sometimes reluctantly, accept.  The appellants say that
the
    evidence before the motion judge demonstrated that such harm had been suffered
    and, accordingly, that the motion judge erred by granting summary judgment
    dismissing their claim rather that granting summary judgment in their favour.

[45]

The term recognizable psychiatric illness was first used by Lord
    Denning in
Hinz v. Berry
, [1970] 1 All E.R. 1074 (C.A.), at p. 1075,
    where the plaintiff claimed damages for nervous shock caused by seeing her
    husband fatally injured:

In English law no damages are awarded for grief or
    sorrow caused by a persons death.  No damages are to be given for the worry
    about children, or for the financial strain or stress, or the difficulties of
    adjusting to a new life.  Damages are however 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.

[46]

This court has adopted and applied the recognizable psychiatric illness
    language from
Hinz v. Berry
in a number of cases.  In
Duwyn v.
    Kaprielian
(1978), 22 O.R. (2d) 736 (C.A.), Morden J.A., at pp. 754-55, stated
    that [t]he law is relatively clear that the kind of nervous shock for which
    recovery may be had involves something more than general emotional upset and quoted
    the passage from
Hinz v. Berry
referring to recognizable psychiatric
    illness.  As there was no medical evidence that Mrs. Duwyn was suffering from
    any recognizable psychiatric illness, her claim for mental distress was
    dismissed.  In
Koerfer v. Davies (c.o.b. Caeleon Farms),
[1994] O.J. No.
    1408, this court set aside an award of damages for vexation, frustration and mental
    distress and stated, at para. 4, that [t]he courts to date have declined to
    award damages for mental distress arising from negligence, except where the
    distress stems from recognizable psychiatric illness.

[47]

Both the House of Lords and the High Court of Australia have affirmed
    the recognizable psychiatric illness requirement.

[48]

In
White and Others v. Chief Constable of South Yorkshire
,

[1999] 2 A.C. 455 (H.L.) at p. 491, in a
    passage quoted by the motion judge, Lord Steyn stated:

The law divides those who were mentally scarred 
    in different categories. There are those whose mental suffering was a concomitant
    of physical injury. This type of mental suffering is routinely recovered as pain
    and suffering. Next, there are those who did not suffer any physical injuries
    but sustained mental suffering. For present purposes this category must be
    subdivided into two groups. First, there are those who suffered extreme grief.
    This category may include cases where the condition of the sufferer is
    debilitating. Secondly, there are those whose suffering amounts to recognisable
    psychiatric illness. Diagnosing a case as falling within the first or second
    category is often difficult. [y]et the law denies redress in the former case.
    [o]nly recognisable psychiatric harm ranks for consideration. Where the line is
    to be drawn is a matter for expert psychiatric evidence. This distinction
    serves to demonstrate how the law cannot compensate for all emotional suffering
    even if it is acute and truly debilitating. [Citations omitted.]

[49]

In
Tame v. New South Wales
(2002), 211 C.L.R. 317 (H.C.A.) at
    paras. 193-94, Gummow and Kirby JJ. stated:

In Australia, as in England, Canada and New
    Zealand, a plaintiff who is unable affirmatively to establish the existence of
    a recognisable psychiatric illness is not entitled to recover. Grief and sorrow
    are among the ordinary and inevitable incidents of life; the very
    universality of those emotions denies to them the character of compensable loss
    under the tort of negligence. Fright, distress or embarrassment, without more,
    will not ground an action in negligence. Emotional harm of that nature may be
    evanescent or trivial.

Properly
    understood, the requirement to establish a recognisable psychiatric illness
    reduces the scope for indeterminate liability or increased litigation. It
    restricts recovery to those disorders which are capable of objective
    determination. To permit recovery for recognisable psychiatric illnesses, but
    not for other forms of emotional disturbance, is to posit a distinction
    grounded in principle rather than pragmatism, and one that is illuminated by
    professional medical opinion rather than fixed purely by idiosyncratic judicial
    perception. Doubts as to adequacy of proof (which are particularly acute in
    jurisdictions where civil juries are retained) are to be answered not by the
    denial of a remedy in all cases of mental harm because some claims may be
    false, but by the insistence of appellate courts upon the observance at trial
    of principles and rules which control adjudication of disputed issues. [Footnotes
    omitted.]

[50]

In
Odhavji Estate v.Woodhouse
, [2003] 3 S.C.R. 263 at paras.
    40-41, Iacobucci J. observed that a plaintiff cannot claim damages for grief or
    emotional distress, but that it is well established that compensation for
    psychiatric damages is available in instances in which the plaintiff suffers
    from a visible and provable illness or recognizable physical or
    psychopathological harm (citations omitted).

[51]

Against this line of authority the appellants cite instances in
    which some Canadian courts have questioned, either implicitly or explicitly,
    the recognizable psychiatric illness threshold.
In
McDermott
    v. Ramadanovic Estate

(1988), 44 C.C.L.T. 249 (B.C.S.C.), Southin J.
    held, at p. 259, that there is no 
logical
    difference between a scar on the flesh and a scar on the mind and allowed
a
    13-year-old girl who saw her parents die in a car accident to recover damages
    for emotional pain despite the fact that she had not suffered a recognizable
    psychiatric illness.  See also the concurring judgment of
Southin J.A. in
Rhodes v. Canadian
    National Railway
(1990), 75 D.L.R. (4th) 248 (B.C.C.A.).
However, in
Graham v. MacMillan
(2003), 15 C.C.L.T.
    (3d) 155 at para. 8, the British Columbia Court of Appeal confirmed that, notwithstanding
    decisions such as
McDermott
, the weight of authority supports a
    recognized psychiatric illness as a condition for liability.

[52]

In Ontario, Molloy J. relied on
McDermott
in
Mason v. Westside
    Cemeteries Ltd.
(1996), 135 D.L.R. (4
th
) 361 (Ont. Gen. Div.). 
    The defendant lost the cremated remains of the plaintiffs parents.  The plaintiff
    had lost peace of mind, but did not require any professional care or
    medication as a result of his emotional distress.  Molloy J. made a modest
    damage award, commenting at p. 379:

It is difficult to rationalize awarding damages for
    physical scratches and bruises of a minor nature but refusing damages for deep
    emotional distress which falls short of a psychiatric condition. Trivial
    physical injury attracts trivial damages. It would seem logical to deal with
    trivial emotional injury on the same basis, rather than by denying the claim
    altogether.

[53]

Cosgrove J. followed this approach in
Vanek v. Great Atlantic
    & Pacific Co. of Canada
, [1997] O.J. No. 3304 (Gen. Div.).  He awarded
    damages to the parents of an 11-year-old child who became anxious after their
    child swallowed contaminated grape juice packed in her school lunch.  That
    judgment was reversed by this court in
Vanek
    v. Great Atlantic & Pacific Co. of Canada
(1999), 48 O.R. (3d) 228, leave to appeal refused [2000] S.C.C.A. No.
    50.  This court allowed the appeal on the basis that the defendants and the
    third parties could not have reasonably foreseen the parents highly unusual
    reaction and the psychiatric damages that flowed from it.  This made it
    unnecessary for the court to decide whether the recognizable psychiatric
    illness threshold should be maintained.  MacPherson J.A. stated, at para. 62,
    that 
[t]here is no  doubt  that  for many years 
    it  was  settled  law  in  Ontario 
    and   in   most jurisdictions that recovery could not take
    place without  such  a finding (citations omitted).

[54]

MacPherson J.A. noted that some trial judges had questioned that
    principle and, at para. 64, that there was also criticism in the academic
    literature of the recognizable psychiatric illness factor, most notably by
    Linden, the dean of Canadian tort scholars, in
Canadian Tort Law,
[6th
    ed., (Toronto: Butterworths, 1997)] at p. 402.  He concluded, however, at
    para. 68, that as it was unnecessary to decide the issue, it is wise to leave
    reconsideration of the recognizable psychiatric illness factor to another case.

[55]

There are also two appellate-level decisions that certified class
    actions involving claims for psychological injury falling short of recognizable
    psychiatric illness but both arose at the certification stage where the point
    was decided on the pleadings under the minimal plain and obvious test.

[56]

Anderson v. Wilson
(1999), 44 O.R. (3d) 673 (C.A.), leave to
    appeal refused [1999] S.C.C.A. No. 476, involved a class action on behalf of
    patients notified that they might have been infected with Hepatitis B.  The
    uninfected class members asserted a claim similar to that at issue in the
    present appeal, one for nervous shock on the basis of the psychological trauma
    they had allegedly experienced after being told of the possibility of infection
    and the uncertainty as to their condition until they received a negative test.  This
    court set aside the decision of the Divisional Court refusing to certify the
    claim of the uninfected class members, citing
Mason
and the trial
    decision in
Vanek
. Carthy J.A. held, at p. 679:

Given the uncertain state of the law on tort relief
    for nervous shock, it is not appropriate that the court should reach a
    conclusion at this early stage and without a complete factual foundation. It
    cannot be said, in this case, that it is plain and obvious that the claim for
    the tort of mental distress standing alone will fail.

[57]

In
Fakhri v. Alfafas
    Canada, Inc.
(2004), 203 B.C.A.C. 227, the defendants appealed from an
    order certifying a class action for claims arising from the distribution of
    food contaminated by the Hepatitis A virus.  The British Columbia Court of
    Appeal held, at para. 16, that it could not be said with finality that only
    psychiatric disorders are compensable but there the class members also claimed
    to have suffered a physical disturbance when immunized due to the alleged
    carelessness of the appellant.  To repeat, however, both
Anderson v. Wilson
and
Fakhri v. Alfafas Canada, Inc.
were decisions at the certification
    stage under the minimal
plain and obvious test.

[58]

Post-
Mustapha
judicial decisions have, for the most part,
    rejected the argument that
Mustapha
changed the nature of the threshold.
Kotai v. Queen of the North (The)
(2009), 70 C.C.L.T. (3d) 221
    (B.C.S.C.) involved a class action arising from the sinking of a ferry.  The
    class action judge, at paras. 64-65, rejected the submission that
Mustapha
had changed the threshold for recovery of damages for psychological injury.
Frazer
    v. Haukioja
(2010), 101 O.R. (3d) 528 (C.A.), involved a claim arising from
    a misdiagnosis and non-disclosure of a leg fracture.  While the plaintiff did
    suffer from a recognizable psychiatric illness, LaForme J.A. observed, at para.
    37, that there must be physical symptoms or some recognizable psychiatric
    illness for there to be compensable damages.  LaForme J.A. also stated, at
    para. 16, that he took the
Mustapha
reference to mental injury to be
    the equivalent to this courts reference to recognizable psychiatric illness.

[59]

Academic writers accept that recognizable psychiatric illness is the
    current legal test but some argue that it should be abandoned in favour of a
    more lenient approach to accommodate compensating less grievous psychological
    harm: see e.g. Linden and Feldthusen, at pp. 439-40; Philip H. Osborne,
The
    Law of Torts
, 3d. ed (Toronto: Irwin Law, 2007) at pp. 82-89; D. Spencer
    Campbell & Chris Montigny, Psychological Harm and Tort Law: Reassessing the
    Legal Test for Liability in Hon. Todd Archibald & Michael Cochrane, eds.,
Annual
    Review of Civil Litigation (2003)
(Toronto: Thomson Carswell, 2003) 133 at
    pp. 145-46; Louise Bélanger-Hardy, Droit et émotion: réflexion novatrice sur
    le préjudice moral in Sanda Rodgers, Rakhi Ruparelia & Louise
    Bélanger-Hardy, eds.,
Critical Torts
(Markham: LexisNexis, 2009) 203 at
    pp. 221-25; Des Butler,
Damages for Psychiatric Injuries
(Annandale,
    NSW: Federation Press, 2004) at pp. 135-36.

[60]

It is apparent from this review of the jurisprudence that the appellants
    face a very strong  although admittedly not unbroken or unquestioned  line of
    authority that to recover damages for psychological injury independent of any
    claim for physical injury, they are required to show that they suffer from a
    recognizable psychiatric illness.

[61]

When the passage the appellants rely on from
Mustapha
is read in
    the light of this body of jurisprudence and scholarly writing, I find it
    impossible to imagine that McLachlin C.J. could have intended her brief
    description of the type of psychological injuries that qualify as being
    compensable to change a well-established, though at times contested, rule.  She
    explicitly stated, at para. 9, that she did 
not purport to define compensable injury exhaustively.  As I read
Mustapha
, McLachlin C.J. was simply trying to explain in non-technical
    language the level to which psychological injury had to rise to be eligible for
    legal compensation.  Had she intended to make a fundamental change to the law,
    she almost certainly would have discussed the authorities and the policy issues
    at stake in a more extensive manner.


[62]

I agree with and adopt para. 63 of the motion judges reasons,
    explaining why
Mustapha
cannot be read as having changed that standard
    to some other more flexible standard:

For the purposes of the case
    at bar, four observations may be made about Chief Justice McLachlins comments.
    First, jurisprudentially speaking, her comments about the threshold of
    psychological injury in a tort claim for negligence were at most
obiter
    dicta
because in
Mustapha,
it was a given that Mr. Mustapha suffered
    a recognizable psychiatric illness. Second, it is doubtful that the Chief
    Justice would make an important and potentially far-reaching change in the law
    by
obiter dicta.
Third, and in any event, if her comments are taken to
    be more than
obiter
and are an authoritative statement of the law, all
    she decided was that: (a) personal injury damages include psychological injury;
    but (b) not all psychological upset constitutes personal injury damages.
    Justice McLachlin expressly left open - she said: I would not purport to
    define - the definition of compensable psychological injury except to say that
    it must be serious and prolonged and rise about the ordinary annoyances,
    anxieties and fears that people living in society routinely, if sometimes
    reluctantly accept.  Quite simply, minor and transient upsets do not
    constitute personal injury and hence do not amount to damage. Fourth, her
    citation of
Hinz v. Berry
suggests that she was equating a psychological
    disturbance that rises to the level of personal injury to a psychiatric illness
    recognizable to the medical profession.

[63]

As the appellants essentially rest their case on the proposition that
Mustapha
changed the law and as that argument fails, I would dismiss the appeal on this
    ground.  However, I wish to add two points.

[64]

First, even if I were to accept the submission that
Mustapha
did
    change the law, it is my view that the evidence in this case falls short of
    demonstrating that the appellants suffered harm of sufficient gravity and
    duration to qualify for compensation.  The harm revealed by the evidence was
    not  
serious trauma or illness that amounted to
    more than upset, disgust, anxiety, agitation or other mental states that fall
    short of injury or that was serious and prolonged and [rising] above the
    ordinary annoyances, anxieties and fears that people living in society
    routinely, if sometimes reluctantly, accept.

[65]

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 individuals 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.  Even critics
    of the current rule tend to agree that it is conceptually sound to limit
    compensable claims for psychological harm to those that are serious.  Indeed,
    as I have mentioned, the appellants themselves do not dispute the need to
    impose some threshold.

[66]

Second, I do not wish to be taken as saying the possibility of any
    change in the formulation of the test should be foreclosed once and for all.  The
    precise manner in which the threshold is defined or identified is a matter of
    legitimate debate and the recognizable psychiatric illness test has attracted
    criticism from the authors I have already cited as being unduly rigid and
    dependent upon shifting medical opinion. However, as the nature of the
    appellants complaints in this case falls below what I would regard as a
    minimum acceptable threshold for compensable claims for psychological injury,
    this case does not provide a proper factual foundation for any reconsideration
    of the traditional recognizable psychiatric illness test.

3.
    Other issues

[67]

As the issues of remoteness, causation and
    aggregate damages are only reached if the appellants establish an injury that
    meets the threshold for a compensable claim, it is not strictly necessary for
    me to consider those issues.

[68]

However, for the sake of completeness, I offer
    the following observations with respect to the issues of causation and
    aggregate damages.

4.
    Causation

[69]

I see no error in the motion judges conclusion
    that the issue of causation was one that could only be determined at trial.  The
    evidence led by the appellants shows that many members of the uninfected class
    faced health, financial and family issues that were the source of stress and
    the motion judge did not err in concluding, at para. 241,
that a trial
    would be necessary to determine the difficult question of whether but for the
    notice they suffered compensable psychological injuries.

5.
    Aggregate damages

[70]

Where it is possible to determine damages on a class-wide basis without
    proof of the damages suffered by individual class members, aggregate damages
    may be awarded.  Section 24(1) of the
Class Proceedings Act
provides as
    follows:

24 (1)
    The court may determine the aggregate or a part of a defendants liability to
    class members and give judgment accordingly where,

(a) monetary
    relief is claimed on behalf of some or all class members;

(b) no
    questions of fact or law other than those relating to the assessment of
    monetary relief remain to be determined in order to establish the amount of the
    defendants monetary liability; and

(c) the
    aggregate or a part of the defendants liability to some or all class members
    can reasonably be determined without proof by individual class members.

[71]

Given the nature of the claims advanced here, it seems to me apparent
    that the assessment of damages requires proof of the harm suffered by the individual
    class members.  The appellants concede that not all members of the class
    suffered compensable harm, even on the relaxed test they advance for
    psychological injury.  Some class members will have suffered no compensable
    harm and some will have suffered more stress and anxiety than others.  The
    claims are inherently individual in nature and hence fall squarely within the
    principle identified by Winkler J. in
Bywater v. Toronto Transit Commission
(1998), 27 C.P.C. (4th) 172 (Ont. Gen. Div.) at paras. 18-19, where the
    plaintiff class advanced a claim for damage caused by smoke inhalation:

The
    action advances claims for personal injury, property damage and claims under
    the
Family Law Act
. These claims cannot, reasonably be determined
    without proof by individual class members as required by s. 24(1)(c).
    Furthermore, each individual claim will require proof of the essential element
    of causation, which, in the words of 24(1)(b), is a question of fact or law
    other than those relating to an assessment of damages.

In addition, the assessment of damages in each case
    will be idiosyncratic. All of the usual factors must be considered in assessing
    individual damage claims for personal injury, such as: the individual
    plaintiffs time of exposure to smoke; the extent of any resultant injury;
    general personal health and medical history; age; any unrelated illness; and
    other individual considerations. Indeed here, the representative plaintiff was
    suffering from and experiencing symptoms of food poisoning at the time of the
    incident. The property damage claims of class members must be assessed
    individually as the underlying facts will vary from one class member to the
    next.

See also
Caputo v. Imperial Tobacco Ltd.
(2004),
    236 D.L.R. (4th) 348 (Ont. S.C.) at para. 55, where Winkler J. stated:

The circumstances [in
Bywater
] were starkly
    similar to those in the present case. This case is equally unsuited to an
    aggregate assessment concerning the damages claimed. There are numerous, and
    significant, individual issues pertinent to the issue of liability and damages
    that must be determined. As stated by Feldman J.A. in
Chadha
[
v.
    Bayer Inc.
(2003), 63 O.R. (3d) 22 (C.A.)] at para. 49:





... s. 24 of the
Class
            Proceedings Act
is applicable only once liability has been established, and
            provides a method to assess the quantum of damages on a global basis, but not
            the fact of damage.





[72]

I agree with the motion judges conclusion, at para. 277:

[T]his is a case like
Bywater

where the assessment of damages cannot be
    bifurcated and resolved independently of the determination of liability, and,
    most particularly, in the case at bar causation-in-fact must be determined
    before there could be an aggregate assessment of damages.

[73]

I do not accept the appellants submission that the following passage
    from
Anderson v. Wilson
, at pp. 678-80, supports their contention that
    aggregate damages are appropriate:

There are many persons with the same complaint, each
    of which would typically represent a modest claim that would not itself justify
    an independent action. In addition, the nature of the overall claim lends
    itself to aggregate treatment because individual reactions to the notices would
    likely be similar in each case  fear of a serious infection and anxiety during
    the waiting period for a test result. If evidence from patients to support such
    reactions to the notices is necessary, it would probably suffice to hear from a
    few typical claimants. The balance of the evidence as to liability would relate
    to the conduct of the clinics, the reaction of the Public Health Authorities
    and foreseeability issues.

[74]

Anderson v. Wilson
was a certification decision and in the
    passage cited, Carthy J.A. was discussing the appropriateness of a class
    proceeding to advance the claims under the test for certification and not the issue
    of the availability of aggregate damages pursuant to s. 24(1).  This point is
    reinforced at p. 680, where Carthy J.A. states that it might be possible to
    deal with the claim that the defendants conduct should attract punitive and
    exemplary damages under s. 24, as that claim could be
determined 
without a significant
    involvement of the individual class members, but he makes no reference to the claim
    for psychological injury in the category of claims susceptible to being dealt
    with on an aggregate basis.

6.
    Assessment of damages

[75]

In view of my conclusion that the harm suffered by the class members was
    not compensable and that aggregate damages are not available, it is unnecessary
    for me to consider whether the motion judge erred in his assessment of the
    damages.

7. Did the
    motion judge err in his application of Rule 20?

[76]

The appellants submission that the motion judge erred in his
    application of Rule 20 in granting summary judgment is inconsistent with the
    position they took before the motion judge when they considered the record
    sufficient to support summary judgment in their favour.  In my view, given the
    nature of the issues, the extensive evidentiary record provided the motion
    judge with a sufficient basis to decide that there was no genuine issue for
    trial.  In these circumstances, it is unnecessary to consider the effect of the
    recent amendments to Rule 20.  I leave that question to another day without
    commenting on the motion judges analysis of those amendments.

8. Did the
    motion judge err in his costs award?


[77]

The appellants submit that the motion judge erred in awarding $260,000 in
    costs to the respondents.  The Law Foundation of Ontario (LFO) joins in that
    submission.  LFO funded the litigation, thereby triggering ss. 59.1(2) and 59.4
    of the
Law Society Act
, R.S.O. 1990, c. L.8, which permits defendants to
    apply to the Class Proceedings Fund for payment of a costs award made against a
    plaintiff, where the plaintiff has received financial support from the fund.  The
    appellants and LFO submit that the issues raised were novel, qualified as a
    test case, and involved matters of public interest, and that the actions were
    brought to provide access to justice to a vulnerable class of individuals.  They
    rely on s
.
31(1) of the
Class Proceedings Act
:

31(1) In exercising its discretion with respect to
    costs under subsection 131 (1) of the
Courts of Justice Act
, the
    court may consider whether the class proceeding was a test case, raised a novel
    point of law or involved a matter of public interest.

[78]

The appellants also submit that the costs award was prohibitively
    excessive.

[79]

The motion judge agreed with the respondents that s. 31(1) does not
    apply, as this was not a test case, did not amount to public interest
    litigation, and the bulk of the time was spent on the threshold for compensable
    damages, which is not a novel issue.

[80]

The motion judge gave detailed and comprehensive reasons for making the
    costs award.  Deference must be accorded to his determination of entitlement
    and quantum of costs.  Although I would not wish to be seen as endorsing all elements
    of his reasoning, I can see no arguable error of law or principle that could
    justify appellate intervention.  While departure from the normal loser pays
    rule may sometimes be justified in class actions, which are designed to foster
    access to justice, in view of the carefully considered reasons of the motion
    judge and the dubious and speculative nature of the claims advanced in this
    proceeding, the appellants and LFO have not persuaded me that leave to appeal
    the costs order should be granted.  Accordingly, I would refuse leave to appeal
    costs.

CONCLUSION

[81]

Accordingly, I would dismiss the appeals.  The respondents may make
    brief written submissions as to the costs of the appeals within 15 days of the
    release of these reasons and the appellants may file their response within 10
    days thereafter.

Robert J. Sharpe J.A

I agree W. Winkler
    C.J.O.

I agree M.J. Moldaver
    J.A.

I agree K. Feldman
    J.A.

I agree J.M. Simmons
    J.A.

RELEASED:  January 21, 2011


