Court of Appeal Decision of the Week

Mental Distress Damages for Breach of Building Contracts

Hickey’s Building Supplies Limited v. Sheppard, 2014 NLCA 43

Keywords: Deficiencies, Lien, Awarding General Damages

Basic Facts: Hickey’s Building Supplies (the Appellant) contracted with Harvey and Patsy Sheppard (the Respondents) to build a house for them, Patsy being wheelchair-based. The majority decision of the Newfoundland and Labrador Court of Appeal is by Justice Hoegg J.A., with Justice Welsh writing dissenting reasons (in part).

The main problems with the house were: delay (failed to meet contract completion date); lack of adhesion of a hardwood floor to a concrete sub-floor; transition areas between hardwood and ceramic were “problematic”.

Importance: Justice Hoegg noted the “trial judge found that an important part of the house contract was to provide peace of mind for the Sheppards in that their retirement home would suit Mrs. Sheppard’s special circumstances.  He concluded that “peace of mind” was part of the home building contract…” (para. 65).

Justice Hoegg reviewed relevant jurisprudence from1854 to 2011, and wrote inter alia as follows:

“That Hickey’s understood the psychological benefit for which the Sheppards had contracted was aptly demonstrated by the evidence of both Mr. and Mrs. Hickey [sic?] having advised Hickey’s of their need for seamless flooring, both separately and together, on several occasions… Moreover, Hickey’s concedes in its factum that the contract can fairly be characterized as a “peace of mind” contract, and does not allege that the trial judge made any factual or legal errors relating to foreseeability. (para. 87)

… As a result of the defective flooring, Mrs. Sheppard must go about her activities in space fraught with the risk of tripping and falling and in a state of fear and anxiety associated with that risk…  Mrs. Sheppard’s mental distress is of an order which can be fairly described as significant.  In my view, it is far more than incidental or minimal and rises above “the ordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept” (Mustapha, paragraph 9)(para.90).

Mr. Sheppard has also suffered.  In addition to dealing with the tear up associated with repairing the flooring, he is also at risk of tripping, and he bears the worry and concern of his wife going about her daily activities in an unsafe home… In sum, the mental distress suffered by both Mr. and Mrs. Sheppard is serious, prolonged and far from trifling.  It is sufficient to warrant compensation.” (para. 91)

The C.A. concluded (para. 94): “In the result, I see no error in the trial judge’s award…in general non-pecuniary damages jointly to the Sheppards.  It is sound in law and is well supported by the evidence.  I would not disturb it.”

Counsel for the Appellant: Keith Morgan (Browne, Fitzgerald, Morgan & Avis, St. John’s)

Counsel for the Respondent: Genevieve Dawson (Benson Buffett, St. John’s)

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Posted: Wednesday, January 21, 2015