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Test for Mental Injury the Same in Contract as Tort

 

Personal injury lawyers should know this wrongful dismissal contract case, as the employer successfully appealed a $30,000 mental distress award for aggravated damages. The Court of Appeal found there was no evidentiary foundation for a mental injury award for aggravated damages  despite the Supreme Court Case Saadati (Lau v. Royal Bank of Canada,2017 BCCA 253).

 In awarding aggravated damages, the judge in this case made an award for “mental distress” which is now part of the general claim for mental injury. As the Court of Appeal has now made clear:

[47] In any event, following argument in this matter the Supreme Court of Canada rendered its decision in Saadati v. Moorhead, 2017 SCC 28, reversing a decision of this Court (2015 BCCA 393), which the parties referred to on this appeal. The Supreme Court of Canada in Saadati specifically rejected the notion that legally compensable mental injury must rest on the claimant proving a recognized psychiatric illness (at paras. 2, 36‑38). Saadati was a tort case rather than a contract case. However, I am of the view the discussion in Saadati on proving mental injury is nevertheless applicable.

[48]  The test for mental distress damages is, in principle, the same in contract and in tort: Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 at para. 19, [2008] 2 S.C.R. 114; Harvin D. Pitch and Ronald M. Snyder, Damages for Breach of Contract, 2nd ed, loose-leaf (updated 2017, Release 2) (Toronto: Thomson Reuters, 2017), ch. 5 at §6. This is particularly so given that the law of contract accepted compensation for mental distress earlier than the law of tort: see S.M. Waddams, The Law of Damages, loose-leaf (updated November 2016, Release 25) (Toronto: Thomson Reuters, 2016) at ¶3.1250.

[49] On the other hand, damages for mental distress beyond the ordinary upset that accompanied termination of employment cannot be evidenced simply from the demeanor of the plaintiff in the witness stand. There must be an evidentiary foundation for such an award (see Mustapha at para. 9). That evidentiary foundation may be testimony demonstrating a “serious and prolonged disruption that transcended ordinary emotional upset or distress” (Saadati at para. 40).

 In this case there was no evidence from family members, friends, or third parties concerning the impact of the termination on the claimant and his mental state. Although not required, there was no expert evidence, medical or otherwise. The  appeal was allowed and the award for aggravated damages set aside.

Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: contract, Saadati v. Moorhead

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