Law Times

Law timeS • SEPTEMBER 29, 2008 FOCUS Fly in the water, isn't in the ointment BY JULIUS MELNITZER For Law Times Canada Ltd. — a case about a fly in the water — had the potential of becoming the fly in the oint- ment. Fortunately, a fly in the water does not a fly in the oint- ment make — at least not after the Supreme Court of Canada's May 2008 decision in Mustapha. To the relief of the business and insurance community, the high court upheld the 2006 ruling of the Ontario Court of Appeal overturning a $341,000 judgment by Superior Court Justice John Brockenshire in favor of Windsor resident Waddah Mustapha, who suffered severe mental distress af- ter noticing a fly in a replacement bottle of drinking water supplied by Culligan, a popular distributor of "clean water" products. "Had the Supreme Court al- T o the consternation of Canada's insurers, Mu- stapha v. Culligan of lowed Mr. Mustapha's claim, it would have set the bar for suc- cess so low that Canadian courts would have been inundated with similar claims," says Hillel David of McCague Peacock Borlack McInnis & Lloyd, who represent- ed Culligan. "I also believe that had Mustapha succeeded, there would have been sufficient outcry from the business community to bring about remedial legislation." The "trivial" nature of the case had brought to mind the up- roar that followed the U.S. jury award of $2.9 million (reduced to $640,000 by the trial judge) sever- al years ago in favour of a 79-year- old man who spilled a cup of hot McDonald's coffee on himself. Paul Pape of Pape Barristers, Mustapha's lawyer, maintains that the Pandora's box scenario, with U.S. style litigation pouring out of the box, was his client's most formidable obstacle to success. "If the Supreme Court decid- ed in my client's favour in a situ- ation where the vast majority of the population would never have had the reaction that he did, it would have brought the system of justice into disrepute," Pape says. "But my answer to that is that hard cases make bad law." In 1986, a Culligan represen- Mr. Mustapha's reaction was "objectively bizarre," Brock- enshire found that his cultural background and the family's high level of cleanliness and avoidance of insects predis- posed his reaction. On appeal to the Court of Although he observed that Appeal, Culligan did not deny that the fly-in-the-bottle con- tributed to Mustapha's illness. But David argued that Brock- enshire had erred by failing to consider the objective question whether the effects of the inci- dent were reasonably foresee- able in a person of "reasonable fortitude and robustness." The Ontario Court of Ap- peal agreed with David and dis- missed Mustapha's suit. How- ever, a three-judge panel of the Supreme Court granted leave to appeal, indicating a belief that there was merit and national im- portance to the issues raised. Proponents of American-style rights for Canadian plaintiffs were overjoyed. But the elation was short-lived: after hearing full argument on the case, a seven- ligan owed the plaintiff a duty of care that the company breached, and that Mr. Mustapha's reaction, although purely psychological, was compensable, the court ruled that he could not recover because "the law of tort imposes an obligation to compensate for any harm done on the basis of reasonable foresight, not as insurance." Here, Mr. Mustapha's "unusual" judge bench agreed unanimous- ly with the appeal court that Mustapha could not succeed. While acknowledging Cul- or "extreme" reaction to Culligan's negligence, while "imaginable," was not reasonably foreseeable and therefore too remote to attract an award of damages. Lisa La Horey, who was co- counsel with David, maintains that the decision is beneficial both to Canadian plaintiffs and to de- fendants. "To the extent this rul- ing brings clarity to the law, it is beneficial to all litigants, because it makes it easier for lawyers to provide guidance to their clients." But Professor Russell Brown of the University of Alberta's Faculty of Law is unhappy with the ruling. Supreme Court agreed to hear this case," he says. "The court passed up the opportunity to make a comprehensive statement on the law regarding compensa- tion for nervous shock other than to say that the distinction between physical and mental injury is 'elusive and arguably artificial' — and if they weren't going to make a comprehensive statement, why hear the case?" Brown says the decision raises "It's not clear to me why the more questions than it answers. "The court provides little guidance for distinguishing psy- Structured Settlements BC LT 4/6/05 2:54 PM Page 1 chological upset, which it says is not compensable, from psy- chological disturbance that rises to the level of compensable in- jury," he says. And, Brown adds, the court has also thrown the "thin-skull" rule into limbo. "The thin skull rule says that negligent defendants must take their victims as they find them, complete with vulner- abilities," he says. "But in this case the court held that Mr. Mustapha's reaction was too remote. Does that mean that the thin skull rule only applies to physical injury?" LT PAGE 21 tative who extolled his product's purity as particularly beneficial for pregnant women and children, convinced Mustapha to install Culligan dispensers at his business and at his home. The family used Culligan water for the next 15 years. In 2001, as Mustapha and his wife replaced the bottle in the dispenser, they saw a dark object in the replacement bot- tle that turned out to be a dead fly. Mustapha felt nauseous and experienced abdominal pain. He could not get the fly out of his mind and became obsessed with fear that his health and that of his family had been compromised, and that Culligan had betrayed them. He had nightmares, was unable to drink water, avoided long showers, and required treat- ment and medication. Brockenshire accepted the medical evidence that Mustapha had developed "nervous shock," a major depressive disorder with associated phobia and anxiety that supported a claim in negligence. Untitled-6 1 Often imitated, never duplicated. The McKellar Structured Settlement™ For almost 30 years, McKellar has set the standard for excellence in structured settlements. With over 250 years of combined claims, legal, accounting and structure expertise at your disposal... Why settle for less? www.mckellar.com VANCOUVER 1-800-465-7878 EDMONTON 780-420-0897 McKELLAR STRUCTURED SETTLEMENTS INC. GUELPH 1-800-265-8381 www.lawtimesnews.com 9/24/08 11:03:01 AM HALIFAX 1-800-565-0695 USA 1-800-265-2789

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