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What Fraud Victims Should Know About Claims for Emotional Distress

Investigation Counsel Fraud Recovery Lawyers

Fraud and Sex Do Not Amount to Damages for Emotional Distress

We are often asked by fraud victims if they can recover by way of a judgment for damages for the emotional distress they experience as a result of the fraud perpetrated on them. Many fraud victims experience significant emotional distress that results in depression, loss of confidence, the breakdown of marital or other relationships, etc. This blog provides some information on the issue of recovery for emotional distress.

On March 2, 2017, the Ontario Court of Appeal released its decision on the usual topic of the application of the law of fraud to unplanned pregnancies. The court identified the female party only as “DD” and the male party as “PP” to protect their identities. The male party alleged that while he did not have an immediate financial loss as result of the female party’s deceit, he had suffered significant emotional distress.

The Court found that during the course of a two-month relationship, the female party DD advised PP that she was taking birth control pills and that she did not intend to conceive a child. After their relationship ended, PP was surprised to learn that DD was pregnant. DD gave birth to a healthy child. Paternity testing confirmed that PP was the father. PP was not happy – he sued.

PP’s action against DD alleged fraud, deceit and fraudulent misrepresentation, claiming that her deception deprived him of the right to choose when and with whom he would assume the responsibility of fatherhood. The issue of whether a court will order money damages for emotional distress caused by fraud was addressed.

The motion judge struck the claim as untenable at law. The Court of Appeal upheld the motion judge’s decision. We provide a summary of the reasons for this decision.

Facts Giving Rise to the Claim

In May of 2014 PP and DD met and began a romantic relationship. PP was a doctor. DD also worked in the health care sector. Both parties were sophisticated persons. There was no imbalance of power.

During the relationship PP repeatedly told DD that he would be happy to wear a condom during intercourse. DD said that she preferred intercourse without one and that she was taking birth control pills. PP and DD engaged in what the Court referred to as “sexual intercourse that included intravaginal ejaculation.”

In July of 2014, the DD and PP ended their sexual relationship. In August 2014 PP received a text message from DD stating that she was ten weeks pregnant. In March 2015 DD gave birth to a healthy child. PP experienced significant emotional distressed caused by his unplanned and unanticipated fatherhood. In July 2015, PP commenced his action for emotional damages.

PP did not allege a specific number for general damages but did claim for punitive damages. PP wanted to have the Court punish DD for lying to him about using birth control pills during the time they were sexually intimate. Despite seeking punitive damages, two days after the claim was issued, PP and DD signed an interim agreement for child support and access rights, indicating that notwithstanding his issues with the mother, as a father he wanted to support the child.

DD’s Motion to Strike the Fraud Claim

In Ontario a defendant can ask the Court to dismiss a claim if, assuming the facts plead are true, it is plain and obvious that the claim discloses no reasonable cause of action. The standard to prove a reasonable cause of action is very low, as no evidence is considered. The Court only considers the facts as plead as if they were true.

The motion judge decided that the claim of fraudulent misrepresentation could not be made because PP was only suing based on “a non-pathological emotional shock from becoming a parent.” The Court held that fraudulent misrepresentation is an economic tort, meaning that damages are meant to restore a person’s financial circumstances to what they were before the wrongdoing.

In other words, the Court held that an allegation of fraud could not be used to obtain a judgment for hurt feelings – or emotional distress. On this basis, the motion judge dismissed PP’s claim on the basis that it was plain and obvious that his claim disclosed no reasonable cause of action.

DD’s Motion to Strike the Negligence, Mental Shock, and Sexual Assault Claims

The Court also struck the doctor’s claim for negligence. In traditional negligence claims, damages can be sought for psychological distress. But in the case of the good doctor’s unplanned fatherhood, the Court held that even if a finding of negligence were made against the mother, there is no recovery for “non-pathological emotional” damages.

The Court also dismissed the claim of intentional infliction of mental suffering on the basis that PP did not suffer from a form of visible and provable illness or psychological damage.

The Court commented that most torts involving sexual issues are plead under the allegations of assault and battery. The Court held that even if these torts had been plead, they too would have been dismissed on the basis of consent to the sexual touching. The results of consensual sexual touching being the birth of a child was held not to be a basis for obtaining a money judgment.

The Court held the legal issues were novel. Accordingly the Court dismissed the mother’s claim for legal costs. The Court did not order either side to pay legal costs.

The Court of Appeal

The Court of Appeal noted that the central issue was – regardless of the tort plead – that there were no recoverable basis damages in Canadian law. In civil law, “fraud without damages gives rise to no cause of action”. It is noteworthy that in criminal law, liability for fraud can arise with the mere risk of loss.

The Court of Appeal noted that the unfortunate experience of emotional upset due to “broken dreams, disruption to lifestyle and career, a reduction in future earnings” resulting from unplanned parenthood is something quite different than receiving a sexually transmitted disease, such as AIDS, as a result of deceit. The Court also noted that the emotional upset from unplanned parenthood does not relate to a physical or psychiatric illness.

The Court of Appeal canvassed numerous cases dealing with health care provider negligence resulting in unplanned parenthood, including botched vasectomies. These cases held that the Courts do not grant money awards to parents to raise children. The Courts have held that:

The law must take the birth of a normal, healthy baby to be a blessing, not a detriment. It brings joy and sorrow, blessing and responsibility. The advantages and the disadvantages are inseparable… Society must regard the balance as beneficial… It is morally offensive to regard a normal, healthy baby as more trouble and expense than it is worth.

Extensive reference was also made to policy and decisions from family law cases.

Full Reasons for Judgment

We point out for fraud victims that the distinguishing what is emotional distress from psychological damage is not an exact science. We save a review of cases where courts have granted damages for psychological damages for another day.

For the full reasons for judgment for this case, see PP v. DD, 2017 ONCA 180.

Inquiries

At Investigation Counsel, we investigate and litigate fraud recovery cases. If you discover you are a victim of fraud, contact us to have your case assessed and a strategy for recovery mapped out before contacting police or alerting the fraudster. We also promote victim advocacy and academic discussion through various private and public professional associations and organizations. If you have an interest in the topics discussed herein, we welcome your inquiries.

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