Defence + Indemnity: June 2018 - Quantum Damages Issues: Case Summary: Capelet v. Brookfield Homes

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QUANTUM/DAMAGES ISSUES

A Plaintiff’s claims for psychological and physical injury arising from the discovery of mould in his home (which had been rectified within a few months) ten years in the past were summarily dismissed. Even if his emotional problems could be attributed to the mould incident they were not reasonably foreseeable and the Plaintiff had not established causation for his physical claims.

Capelet v. Brookfield Homes, 2017 ONSC 7283,
per Monahan J. [4276]
FACTS AND ISSUES:

The Plaintiff Capelet and his wife purchased a Property (the “Property”) newly constructed by the Defendant Brookfield Homes (“Brookfield”) in 1997 for around $263,900 and moved in to the home in October of the same year.
 
In 1999, the Plaintiff noticed signs of water leakage on the Property and in early 2002 he discovered mould while working in the basement. A mould inspection consultant tested the home on February 26, 2002 and delivered a report March 5 which concluded there was mould present and remediation was necessary.
 
Brookfield was notified and promptly retained an expert to test the Property, and a number of remediation steps were recommended by Brookfield’s expert on March 14.002. The remediation was carried out and the home was habitable on March 22. A further report by Brookfield’s expert was issued on September 22 which concluded all indoor concentrations of indoor mould were lower than the outdoor mould. On October 7, Brookfield sent a letter indicating all remediation work had been completed.
 
Prior to the discovery of the mould, Capelet retained an appraisal for the value of the Property for $321,000. Capelet sold the home in November 2002 for $347,000 – over $20,000 more than appraised. Capelet acknowledged he did not suffer loss on the sale of the Property as a result of the mould.
 
Capelet commenced the action in October 2003 for emotional/psychological injuries and  physical injuries (including “shortness of breath and other lung problems, sinus problems, eye and other infections, skin irritation and other health problems”). Examinations for discovery occurred in 2008 and 2015.
 
Brookfield had secured medical and engineering expert reports in 2014 and 2015 which concluded Capelet had not suffered any injury (physical or psychological) as a result of the residential mould exposure.
 
By 2016, Capelet had not served medical or other expert reports required to substantiate his claim. Brookfield moved for summary judgement under Ontario’s Rules of Civil Procedure dismissing the claim. Capelet was ordered to produce expert reports, which were served in March 2017.
 
Expert evidence for Capelet stated that he had developed “’Adjustment Disorder with Mixed Anxiety and Depressed Mood’ with symptoms that include low mood, feelings of sadness, worry, anxiety, insomnia and poor concentration” which had been caused by “the mould incident, combined with Mr. Capelet’s inability to successfully address and rectify the problem” resulting in “an emotional crisis for him”. This adversely affected his life including by way of a fight with his wife about it in 2014 which lead to his arrest and their subsequent separation.
 
In June 2017, the matter was determined to be appropriate for Summary Judgment.

HELD: Summary Judgment granted for Brookfield - no genuine issue for trial on any of the claims advanced by Capelet; costs on a partial indemnity basis for $45,000.

The Court concluded that in Hyrniak v Maudlin, 2014 SCC 7, the recent Supreme Court of Canada decision on summary judgement and the changes to the Ontario procedural rules mandated that “access to justice is a judicial imperative which must shape and inform how courts interpret all manner of procedural rules. In the context of summary judgment, this means that summary procedures must be interpreted broadly, so as to reduce the cost and time involved in civil litigation” (at para 17).

In this case, the Court held that it was fair to determine the issues raised based on the evidentiary record as there was voluminous evidence was prepared by both parties and the litigation had continued for over 14 years such that there was ample opportunity to muster available evidence.

The Court held that in order for a claim of psychiatric or mental injury to be compensable, they must be reasonably foreseeable (per Mustapha v Culligan of Canada Ltd. [2008] 2 S.C.R. 114) which was not the case here.

  • The Court found that there was evidence that Capelet suffered considerable mental distress flowing from discovering the mould in the property such that it created an emotional and spiritual crisis for him. He had been diagnosed with Adjustment Disorder with Mixed Anxiety and Depressed Mood by one of his retained experts.

The Court held that in this case Capelet had not made out his case for mental distress.

  • Monahan, J. held that even assuming the mental distress claimed was genuine, Capelet’s reaction was not reasonably foreseeable. There was evidence this reaction was highly unusual.
  • Furthermore, it was not clear whether Capelet’s current issues resulted from his pre-existing conditions or the exposure to the mould. According to Brookfield’s expert, he had a markedly difficult childhood.
  • The Court held:
25 Assuming these findings to be true, the issue is whether this kind of reaction could be said to be a reasonably foreseeable consequence of the discovery of mould in one’s home. Would a person of “ordinary fortitude” have reacted in the way the Mr. Capelet did to the discovery of mould? There is no evidence in the record before me supporting such a finding. In fact, there is considerable evidence supporting the opposite conclusion, namely, that Mr. Capelet’s reaction to the mould was highly unusual and the product of particular sensitivities on his part.
 
26 I would note, first, that the plaintiff’s expert, Dr. Waisman, was not asked to consider whether a person of “ordinary fortitude” would have reacted to the discovery of mould in the manner evidenced by Mr. Capelet. . . .
 
27 The Bloom Report from the defendant’s psychiatric expert noted that Mr. Capelet is the product of a “markedly difficult childhood and adverse experience within his family of origin.” . . .  Dr. Bloom concludes that “the problem with the mould in his house and ensuing litigation has, for him, snowballed into something that other people wouldn’t have seen as so large and immovable as Mr. Capelet has come to experience it.” Dr. Bloom further speculates that the events in question, including the litigation, have become a “cause celebre for Mr. Capelet because they have provided a tangible target onto which he has (unconsciously) displaced an accumulation of insufficiently addressed grievances and psychological injustices originating in his past.”
 
28 On the evidence before me, it is not entirely clear whether Mr. Capelet’s current emotional and psychiatric problems are a result of his pre-existing conditions, as opposed to his exposure to the mould. I am prepared to assume, for purposes of this motion, that his current emotional and psychiatric difficulties can be attributed, in whole or in part, to exposure to the mould. Nevertheless I am of the view that this loss is not compensable through the law of negligence for the simple reason that it is not a reasonably foreseeable consequence of faulty home construction.
 
29 Ontario has long regulated the rights and responsibilities of purchasers and builders of new homes in Ontario. This includes warranties regarding the proper construction of the home, a process for conciliation of disputes, and a guarantee fund to provide compensation to purchasers who have suffered losses from breach of warranty. This scheme does not provide compensation for emotional or psychiatric injuries suffered by purchasers resulting from defects in their new homes.
 
30 The February 1997 agreement of purchase and sale between Mr. Capelet and Brookfield incorporated the warranty provided at that time under the Ontario New Home Warranty, and provided that this warranty constituted the full extent of the purchaser’s right to recover for “damage, loss or injury of any sort.” Accordingly, it was not within the contemplation of the parties at the time of the entering into of the APS that Mr. Capelet would have a right to claim for emotional or psychiatric losses resulting from defects in construction of the Property.
 
31 As the Supreme Court of Canada noted in Mustapha, the law of negligence seeks to achieve a result that is fair to both plaintiffs and defendants and that is “socially useful”. If purchasers of new homes could recover for emotional or psychiatric damages suffered from defects in house construction, these costs would necessarily have to be factored into the price of new homes and paid for by purchasers. I see no authority or mandate for this Court to assume this cost-shifting role.
 
[foonotes omitted]
 

The Court went on to hold that in order for a claim of physical harm to be compensable, the harm has to have been caused by the mould exposure which was not the case here:

  • Capelet’s case did not prove it was more likely than not that the exposure to the mould caused his physical injuries.
  • Brookfield’s expert concluded that it was extremely unlikely that the mould exposure cause his injuries.
  • There was evidence that Capelet’s breathing issue surfaced in 1998, well before the mould was discovered.
  • The record failed to provide a basis that it was more likely than not Capelet’s injuries were caused by mould exposure.
  • The claims for pecuniary damages were held not to have raised a genuine issue for trial as there was no evidence tendered and Capelet had tendered no evidence in support of his claim for financial loss.
COMMENTARY: 

While this case may be used for its application of the principles from Mustapha v Culligan of Canada Ltd, it is also instructive for summary judgement principles. Given Hyrniak v Maudlin, Courts across the country are applying considering summary judgement more frequently. Here, the case had been proceeding for 14 years and there was not yet sufficient evidence from Capelet.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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