Date: Fri, 23 May 2008 01:15
From: Neil Foster
Subject: New SCC case on Nervous Shock
Dear Jason and others
Thanks for noting this. Seems an entirely orthodox and sensible judgment.
Just a few brief comments about the difference between this approach and the current approach under common law in Australia following Tame v. New South Wales (2002), 211 C.L.R. 317,  HCA 35 (which it is nice to see is cited in para  of Mustapha). It seems to me that the current approach of the High Court of Australia is not to adopt the Page v Smith view noted in  which completely equates psychological harm with other personal injury. In Australia I think the courts would require a finding at this point that psychological harm was separately foreseeable – e.g. Koehler v Cerebos. Still, it might not be too hard to show that in general contamination of a product may cause some sort of psychological harm. And Fahy in the HCA agrees with the SCC at  in Mustapha that the standard of foreseeability is whether it is a "real risk" and not "far-fetched".
On the question of "normal fortitude" there seems to be a distinct (though probably not terrifically important) difference. The majority of the High Court in Tame held that there is no separate requirement that the plaintiff be of "normal fortitude" to recover damages for psychological harm. See Gummow & Kirby JJ at , Gleeson CJ at  and Gaudron J at  concurring. (Three of the members of the Court would have preserved the requirement for “normal fortitude” as a separate rule - see McHugh J at , Hayne J at , Callinan J at .)
The issue of the nature of the plaintiff's subjective response, the majority said, should be dealt with under the overall question of foreseeability, not as a separate issue (because there are some circumstances where the plaintiff's response might have been actually foreseeable by the defendant if there was a prior relationship between them, and in those cases the plaintiff's lack of "normal fortitude" should not disentitle them from recovery).
In Mustapha the judgment of the court seems to hold at  that "normal fortitude" is a distinct requirement. (Interestingly, they cite Gleeson CJ in Tame on the issue, though in the very paragraph cited his Honour says that "'normal fortitude' cannot be regarded as a separate and definitive test of liability".) However, they go on in para  to deal with precise issue concerning the Tame majority by saying that "In those cases where it is proved that the defendant had actual knowledge of the plaintiff’s particular sensibilities, the ordinary fortitude requirement need not be applied strictly".
Hence the result is that effectively the same approach is adopted. I must express a preference for the Australian approach, however, as it seems to be more consistent to simply treat the issue as a question of overall foreseeability for the remoteness analysis. And on this point (whether the damage was not reasonably foreseeable) the result in Mustapha seems to be clearly right.
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>>> Jason Neyers 23/05/08 1:04 >>>
Mustapha is released. From the headnote:
Waddah Mustapha v Culligan of Canada Ltd.
In the course of replacing an empty bottle of drinking water with a full one, M saw a dead fly and part of another dead fly in the unopened replacement bottle. Obsessed with the event and its “revolting implications” for the health of his family, he developed a major depressive disorder, phobia and anxiety. He sued C, the supplier of the bottle of water, for psychiatric injury. The trial judge awarded him general and special damages, as well as damages for loss of business, but the Court of Appeal overturned the judgment on the basis that the injury was not reasonably foreseeable and hence did not give rise to a cause of action.
Held: The appeal and the cross-appeal should be dismissed.
M’s damages are too remote to allow recovery. As the manufacturer of a consumable good, C owed M, the ultimate consumer of that good, a duty of care in supplying bottled water to him, and it breached the standard of care by providing M with contaminated water. The requirement of personal injury, which includes serious and prolonged psychological injury, is also met: M suffered a debilitating psychological injury which had a significant impact on his life. C’s breach caused that injury in fact, but not in law: M failed to show that it was foreseeable that a person of ordinary fortitude would suffer serious injury from seeing the flies in the bottle of water he was about to install. Unusual or extreme reactions to events caused by negligence are imaginable but not reasonably foreseeable. In this case, the trial judge erred in applying a subjective standard.  [6-11]  
The claim for damages for breach of contract also fails. M's damages could not be reasonably supposed to have been within the contemplation of the parties when they entered into their agreement. 
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