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March 30, 2011

Action dismissed due to failure to comply with Municipal Act notice provision

Zogjani v. Toronto (City), [2011] O.J. No. 1002 (S.C.J.)

In this slip and fall case against the City of Toronto, the City brought a motion for summary judgment on the basis that the plaintiff failed to comply with the 10 day notice period provided by section 44(10) of the Municipal Act. The plaintiff slipped and fell on December 22, 2005 on snow and ice on a Municipal sidewalk. She consulted a lawyer in February 2006 and notice was provided to the City on March 1, 2006. The plaintiff swore that until she met with the lawyer on February 28, 2006, she was not aware of the 10 day notice requirement in section 44. Since the plaintiff failed to comply with section 44(10), it was her onus to show that she fit within subsection 44(12) of the Municipal Act, which provides that the failure to give notice is not a bar to the action if a judge finds that there is reasonable excuse and the Municipality is not prejudiced in its defence.

The City’s argument was that because it did not receive notice of the claim in a timely manner, the City’s investigator was unable to investigate the location promptly and could not observe or record the conditions of the location at the time of the accident. The plaintiff’s response was that snow would have melted in the days immediately following the incident and so even if the 10 day notice period had been met, there was no practical prejudice to the City.

The City’s field investigator swore an Affidavit indicating that he patrolled the area 4 days before the date of loss and 6 days after the date of loss. If he had been notified immediately, he would have been able to recall what the road and sidewalk conditions looked like during his patrols; however, because the City did not receive notice until 2 ½ months later, he was unable to recall what the location looked like at the time of his patrols.

Justice Lauwers was satisfied that the Municipality was practically prejudiced by the effect of the delay on the field investigator’s memory. He granted summary judgment.

At times it may seem that section 44(10) is a limitation period without teeth; however, in the right circumstances and with the right evidence proffered on a motion for summary judgment, section 44(10) can be a useful tool with which to dispose of an action at an early date.

March 23, 2011

The test for compensable psychological injury

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.

March 16, 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.

March 9, 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.