Court Of Appeal Summaries (May 8, 2023 ' May 12, 2023)

• Law Firm: Blaney McMurtry LLP
• Subject Matter: Corporate/Commercial Law, Consumer Protection, International Law, Litigation, Mediation & Arbitration, Criminal Law, Family and Matrimonial, Contracts and Commercial Law, Family Law, International Trade & Investment, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Personal Injury, White Collar Crime, Anti-Corruption & Fraud, Dodd-Frank, Consumer Protection Act
• Author: Mr John Polyzogopoulos
• Published date: 24 May 2023

Good afternoon

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 8, 2023.

Bothwell v. London Health Sciences Centre considered the legal principles set out by the Supreme Court in Saadati v. Moorhead, for determining whether a plaintiff in a medmal case has proven a mental distress claim. The Court confirmed that phycological upset, without more, could not form the basis of compensable mental injury. In the result, the Court allowed the appeal and found that the respondent's persistent feelings of anger and frustration as a result of medical negligence, without any effect on his daily life, did not constitute compensable mental injury.

In All Communications Network of Canada v. Planet Energy Corp., the appellants brought an application to set aside an arbitral award in favour of the respondent on the basis that the arbitrator deprived the appellants of the opportunity to present their case, and the award to the respondent was contrary to public policy because it violated the Energy Consumer Protection Act, 2010, S.O. 2010, c. 8 ("ECPA"). The Court noted that the threshold for setting aside an arbitral award on the basis of a failure of due process is high. Parties must demonstrate that the arbitration process "offend[s] our most basic notions of morality and justice" to find that the arbitrator committed a breach of procedural fairness. The Court found that the appellants failed to meet this threshold.

In Ismail v. First York Holdings Inc., the appellant sought a stay in favour of arbitration pursuant to an arbitration clause in a share purchase agreement. The Court refused the stay on the ground that the target corporation to the share purchase agreement had not been incorporated. The contract therefore failed for lack of subject-matter and consideration. Without any contract, the arbitration clause in the contract was unenforceable. The Court distinguished cases such as this (where there is no contract), from cases where an arbitration clause can survive an otherwise unenforceable contract that is unenforceable due to breach.

Other cases this week included a summary judgment motion on a promissory note, setting aside a noting in default, and a tavern that was shut down by the city for operating without a business license.

Wishing everyone an enjoyable weekend.

CIVIL DECISIONS

Bothwell v. London Health Sciences Centre, 2023 ONCA 323

[Gillese, Benotto and Coroza JJ.A.]

Counsel:

A. McCutcheon, for the appellants

M. Miller and A. Wagman, for the respondents

Keywords: Torts, Negligence, MedMal, Damages, Mental Distress, Saadati v. Moorhead, 2017 SCC 28, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Housen v. Nikolaisen, 2002 SCC 33, Barker v. Barker, 2020 ONSC 3746, rev'd on other grounds, 2022 ONCA 567, Johnson v. Cline, 2017 ONSC 3916, aff'd on other grounds, 2019 ONCA 188, Weafer v. Vancouver Coastal Health Authority et al., 2007 BCSC 481, Owen v. Bains, 2020 ONSC 3958, aff'd 2021 ONSC 6666 (Div. Ct.)

facts:

The respondent had been diagnosed with Crohn's disease and underwent a number of resection surgeries. On September 22, 2011, he went to the London Health Sciences Centre, Victoria Hospital (the "Hospital") to undergo a reverse ileostomy for an earlier resection surgery at the Hospital. While recovering from his surgeries, the respondent's blood pressure began to drop and the doctor ordered that a blood volumizer be administered. The defendant nurse in the proceedings accidentally administered Heparin.

The respondent was aware of the incorrect administration of Heparin at the time, and as a paramedic, was aware of the fact that Heparin could cause massive bleeding. A short time later, the respondent underwent surgery to relieve abdominal cavity pressure as a result of substantial internal bleeding. Days later, he underwent further surgeries to close the abdomen and related procedures. When he later learned again of the administration of the Heparin, he was shocked, frustrated, and angry. His feelings of anger and frustration continued to the time of trial.

The respondent and his wife (together, the "respondents") are both paramedics and were at the time of the medication error. The respondent's wife thought she would lose her husband. The respondents sued the appellants for medical negligence (the "Claim").

In the Claim, the respondents alleged that the respondent had experienced an exacerbation of his symptoms of Crohn's disease, injuries to internal organs, digestive issues, neurologic injury, weakness, muscle wasting, sensory loss, nightmares, emotional distress, anxiety, depression, and psychological injury as a result of the erroneously administered medication.

The defence theory was that an intraoperative injury caused the hemorrhage, the respondent was already hemorrhaging before the Heparin administration error occurred, and he would have required the further operation to stop the bleeding in any event.

The trial of the Claim was bifurcated, with liability to be decided in the first trial and damages in the second. The first trial was focussed on causation: had the mistaken administration of Heparin (1) caused Mr. Bothwell to hemorrhage and suffer the ensuing physical consequences, and (2) caused the Respondents psychological damage amounting to a mental injury?

The trial judge rendered two decisions. In the first decision, the trial judge found against the respondents on the first causation issue, agreeing with the defence's theory. In the second decision, the trial judge accepted that the respondent was frustrated and angry about the medication error, and that those feelings had persisted.

The trial judge stated that the appellants owed the respondent a duty of care which they breached through administering Heparin to him. He concluded that the causation requirement between the breach and the respondent's psychological upset met the standard described in Saadati v. Moorhead: the respondent's feelings were objectively and subjectively serious and went beyond ordinary annoyances. It is the determination in the Second Decision that the respondent suffered a mental injury caused by the administration of Heparin which was the subject of this appeal.

issues:

(1) Did the trial judge err in failing to apply the correct legal test in determining whether the respondents sustained a compensable mental injury?

(2) Did the trial judge err in concluding that the respondent's anger about the medication error was sufficient to prove a compensable mental injury at law?

holding:

Appeal allowed.

reasoning:

(1) Yes.

The appellant argued that the trial judge had erred in law by failing to consider key factors set out in Saadati for determining whether the respondent sustained a mental injury: cognitive impairment; the effect on his daily activities; and, the nature of, and response to, any treatment for his emotional response to the medication incident. The Court found that the trial judge had failed to reflect the Supreme Court's instructions on how to determine whether the claimant had succeeded in proving mental injury.

The Court noted that Claimants must show that the disturbance they suffered was serious and prolonged and rose above the ordinary annoyances, anxieties, and fears that come with living in civil society. Accordingly, the Court found that Saadati instructs that it is insufficient for the trier of fact to find evidence of psychological upset, such as feelings of anger and frustration: the inquiry must include a consideration of the level of impairment that the claimant's particular feelings represent.

The Court held that, in concluding that the respondent had succeeded in showing a mental injury, the trial judge failed to consider the degree of disturbance the respondent experienced as a result of his psychological upset. These failures caused the trial judge to fail to determine whether the respondent's continuing psychological upset met the requisite degree of disturbance to become a compensable mental injury. The Court held that this amounted to an error in law, and the decision was owed no deference.

(2) Yes.

The Court held that the evidence fell short of establishing that the respondent's feelings of anger and frustration were sufficient to support a finding of mental injury. The Court found that there was no evidence to show that the respondent's continuing feelings of anger and frustration arising from the medication error led to impairment in his cognitive functions or participation in daily life.

The Court held that, while Saadati makes it clear that expert medical evidence is not necessary to prove a mental injury, it also makes clear that where claimants do not adduce relevant expert evidence to assist in considering the Saadati factors and other relevant considerations, "they run a risk of being found to have fallen short". In addition to an absence of evidence of impaired cognitive functions or participation in daily activities, there was no evidence that the respondent had a physical manifestation of his psychological upset or sought medical assistance to deal with his persistent feelings of anger and frustration due to the maladministration of Heparin.

The Court denied the respondents' argument that this case was analogous to ones involving "a near death experience". The Court stated that the question is not whether the respondent suffered a near-death experience but, rather, whether his persistent feelings of anger and frustration following the medication incident met the requisite "degree of disturbance" to be a compensable mental injury. The near-death cases were distinguishable because in those cases there was evidence of impairment.

The Court concluded that the medication error breached the standard of care owed to the respondent. However, feelings of anger and frustration as a result of that breach, without more, was evidence of psychological upset, and not compensable injury.

Trayanov v. Icetrading Inc., 2023 ONCA 322

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