



COURT OF APPEAL FOR ONTARIO

CITATION: McCabe v. Roman Catholic Episcopal Corporation  for the Diocese of Toronto, in Canada, 2019 ONCA 213

DATE: 20190319

DOCKET: C63950

Strathy C.J.O., Benotto and
    Roberts JJ.A.

BETWEEN

Robert Joseph McCabe

Plaintiff (Respondent)

and

The Roman Catholic Episcopal Corporation for the
    Diocese of Toronto

Defendant (Appellant)

Chris Blom, for the appellant

Dena Varah and Chris Kinnear Hunter, for the respondent

Heard: November 19, 2018

On appeal from the judgment
    of Justice Gordon C. Lemon of the Superior Court of Justice, sitting with a
    jury, dated May 30, 2017.

Benotto J.A.:
(for the majority on all issues except punitive
    damages; dissenting on the issue of punitive damages)
.

[1]

When the respondent was 11 years old, he was sexually abused by a now
    deceased priest. Years later he sued the appellant for damages. A jury awarded
    general and aggravated damages, damages for loss of income, and punitive
    damages. The appellant claims that damages were inflated by the jury because of
    inflammatory remarks the respondents counsel made to the jury in closing
    submissions. It further submits that the trial judge erred in a ruling on the
    admissibility of hearsay evidence and that the award for punitive damages was
    unwarranted.

FACTS

The abuse

[2]

The respondent, Robert McCabe was born in 1952. He was raised in a
    devout Roman Catholic family. The church, the sacraments, and the catechism
    were an integral part of his life. He believed that a priest was Gods
    representative to be respected and obeyed.

[3]

He became an altar boy at age 11, around the time that Father Alphonse
    Robert had been assigned to his parish and took over the training of altar
    boys. Father Robert befriended Mr. McCabe, spent time with his mother and
    visited his home regularly. In 1963, Father Robert invited the 11-year-old on a
    trip to Montreal to visit the Basilica of Notre Dame. He arranged for the two
    of them to spend the night in a motel room in Cornwall. The room had only one
    bed. Father Robert sexually assaulted him that night by fondling him sexually
    and performing oral sex on him. Mr. McCabe believed that because Father Robert
    was a priest, the events of that night were his fault and that he was damned to
    hell.  He suffered guilt and shame. He was not able to confide in anyone and
    could not go to confession because Father Robert was his confessor.

[4]

The impact on Mr. McCabe led to difficulties in family relationships and
    alcoholism.

[5]

None of these facts is disputed.

The legal action

[6]

Mr. McCabe brought an action for damages against the Roman Catholic
    Episcopal Corporation for the Diocese of Toronto (the Diocese) in December
    2014. By this time, Father Robert was dead.

[7]

He claimed general and aggravated damages, special damages for both past
    and future loss of income, pecuniary damages, damages for mental distress, and
    punitive damages.

[8]

After years of denying liability, the Diocese admitted liability on the
    first day of trial. The only issue at trial was the amount of damages.

[9]

Both parties presented expert evidence about the effects of the abuse on
    Mr. McCabe.

[10]

Dr.
    Jeff McMaster was called by the Diocese. He was qualified to give evidence as a
    forensic psychologist on the impact of childhood sexual abuse. He testified
    that the abuse was not at the severe end of the spectrum, but rather toward the
    middle because of the relative non- intrusiveness of the abuse, the short
    period of time over which it occurred, the fact that it occurred only once, the
    young age of the victim, the absence of physical coercion or violence, and the
    childs ability to return to a place of safety afterwards. He opined that the
    abuse did not affect Mr. McCabes educational trajectory. He referred to the abuse
    as extremely unpleasant.

[11]

Dr.
    Peter Jaffe was also qualified as a forensic psychologist on the impact of childhood
    sexual abuse. He took issue with Dr. McMasters minimization of the abuse. In
    his opinion, the abuse was at the severe end and caused post-traumatic stress
    disorder (PTSD) and a severe alcohol use disorder, which led to educational
    and employment difficulties and economic consequences. He did acknowledge in
    cross-examination that Mr. McCabe may overattribute his symptoms to the abuse
    and that there were several other factors that could have affected his
    accomplishments in life.

[12]

Elizabeth
    Schramm, a social worker, was qualified to give evidence in the area of PTSD
    and other psychological problems stemming from sexual abuse. She began
    counselling Mr. McCabe in March 2014.

[13]

The
    evidence of Ms. Schramm and Dr. Jaffe was that the respondent was vulnerable
    and that the process of the litigation was causing him pain. This was
    aggravated by the fact that he was told he might not be believed. Dr. Jaffe
    referred to this as re-victimization.

[14]

Father
    Clough was the judicial vicar of the Diocese and responsible for investigating
    allegations of misconduct against priests. There is no suggestion that Father
    Clough knew of Father Roberts conduct at the time of the abuse. However, by
    the time the action began, Father Clough knew of other complaints against
    Father Robert involving inappropriate conduct and believed this may have led to
    Father Roberts transfer between Dioceses in 1973. Father Clough noted that
    Father Robert had transferred parishes a number of times and that he had been
    twice rejected from the priesthood.

The ruling excluding hearsay evidence

[15]

The
    trial judge made a ruling during the trial relevant to this appeal. He found
    that a chart from the Homewood Sanitarium where Mr. McCabe had treatment and
    the comments of teachers in Mr. McCabes academic records were not admissible.

[16]

The
    respondent had attended Homewood in 1988 for treatment of alcoholism. The notes
    of the hospital employees disclosed that the respondent did not attribute his
    alcohol use to childhood sexual abuse.

[17]

The
    academic records included comments and observations about positive academic
    results after the abuse.

[18]

The
    trial judge determined that the history taken from the respondent at Homewood
    was not recorded by someone with personal knowledge of the matters being
    recorded and therefore was inadmissible hearsay. He further concluded that the
    academic records were inadmissible opinion evidence.

Counsels closing submissions to the jury and pre-charge
    conference

[19]

Immediately
    following closing submissions, the appellants counsel raised concerns about
    some of the respondents counsels comments during his closing submissions to
    the jury. Specifically, the appellants counsel took issue with respondents
    counsel doing the following: indicating that the jury should identify with the
    victim as an 11-year-old; asking the jury to do the right thing; referencing
    facts without an evidentiary basis such as whether Winston Churchill failed a
    grade or whether Mr. McCabe went to a Catholic high school or joined the Youth
    Corps to be close to the institution; suggesting inferences regarding why Mr.
    McCabes relationships failed that were not based on the evidence; and
    suggesting the Diocese or Father Clough knew Father Robert was a problem
    priest. The trial judge took this into account when formulating his charge to
    the jury.

[20]

During
    the pre-charge conference, there was discussion about the respondents claim
    for punitive damages. The respondent first argued that punitive damages were
    appropriate because Dr. McMaster minimized the respondents suffering. The trial
    judge rejected this as a basis for punitive damages but agreed that the failure
    of the appellant to admit liability until the morning of trial would be put to
    the jury under this category.

The jury award

[21]

The
    jury awarded general and aggravated damages of $250,000, loss of income of
    $280,000, treatment expenses of $5,000, and punitive damages of $15,000.

ISSUES

[22]

I
    would frame the issues raised by this appeal as follows:

1.

Did the trial
    judge err in the hearsay ruling?

2.

Did the comments of counsel to the jury cause a miscarriage of justice?

3.

Was the damages
    award inappropriate?

4.

Was the punitive
    damages award unwarranted?
[1]

ANALYSIS

Issue #1: Did the trial judge err in the hearsay ruling?

[23]

The
    trial judge properly excluded the evidence in the Homewood chart and academic
    records. The documents had been tendered under the common law rule and not
    under s. 35 of the
Evidence Act.
To be admissible under the common law
    rule in

Ares v. Venner
,
    [1970] S.C.R. 608, business records must be made contemporaneously by someone with
    personal knowledge of the matters being recorded and under a duty to make the
    entry in the record. This exception as to hearsay deals with the recording of
    facts by individuals with first-hand knowledge and observation of the matters
    being recorded. The Homewood records did not fall within the personal knowledge
    of the author and thus could not be admitted for the truth of their contents. The
    school records were properly characterized by the trial judge as opinion and
    thus inadmissible.  Further, the respondent was not precluded from using the
    records for impeachment purposes in cross-examination yet chose not to do so.

[24]

In
    any event, there was other evidence of Mr. McCabes medical condition while at
    Homewood and his academic grades. The jury had the benefit of this evidence and
    there was no potential for a miscarriage of justice.

Issue #2: Did the comments of counsel to the jury cause a
    miscarriage of justice?

[25]

The
    appellant submits that the comments by the respondents counsel were
    inappropriate and would have inflamed the jury such that a new trial is in
    order. Under s. 134(6) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43, this court may only direct a new trial if a substantial wrong or
    miscarriage of justice has occurred: see
Fiddler v. Chiavetti
, 2010
    ONCA 210, 317 D.L.R. (4th) 385, at para. 9;
Landolfi v. Fargione
(2006),
    79 O.R. (3d) 767, at para. 121. In my view, the comments made by the respondent
    did not amount to a miscarriage of justice. I say this for two reasons.

[26]

First,
    the comments cannot be considered apart from the judges charge to the jury. Read
    as a whole, the jury charge made it clear that:

·

The jurys task was to be fair and impartial;

·

The jurors were to set aside all feelings of sympathy, prejudice,
    fear or passion;

·

Justice must be administered fairly and impartially; and

·

Despite the fact that counsels closing submissions may have
    created sympathy, the verdict should not be based on sympathy for any of the
    parties or the witnesses.

[27]

With
    respect to some of the specific impugned statements, the trial judge said:

·

You must not put yourself in the position of an 11-year-old Mr.
    McCabe;

·

There is no evidence about Winston Churchills education;

·

There is no evidence that Mr. McCabe worked for the Diocese to
    get closer to God. That would be conjecture;

·

There is no evidence that Mr. McCabe was fired from his
    employment for something other than his decision go over a budget to keep the
    employees safe;

·

Before you can draw an inference, you must be satisfied on a
    balance of probabilities that the result you reach is the most reasonable
    inference to be drawn. You must have a solid base of proven facts. Otherwise
    the result is guesswork;

·

You have no evidence as to why Father Robert was moved;

·

You must follow the law as I state it to you. You must disregard
    any views which counsel may have expressed about the law if it conflicts with
    what I say to you about the law;

·

You are not bound to accept any of the suggested ranges [for
    damages]. You and you alone will determine the amount you conclude is fair to
    both parties.

[28]

With
    respect to the expert evidence, the trial judge fully and fairly reviewed the
    evidence for the jury and properly instructed the jury.

[29]

Second,
    the trial judge is in the best position to assess whether comments are
    inappropriate. As this court said in
Groen v. Harris
,

2010 ONCA 621, at para. 
    9:

This court has been clear that
    considerable deference must be given to a trial judges assessment of whether
    counsels statements have impaired trial fairness and whether any correcting
    instruction is possible. The judge hearing the comments in the courtroom is
    best placed to assess their impact and whether the appearance and reality of
    trial fairness have been endangered so that correction by the appropriate
    charge is impossible.

[30]

I
    note that the impugned statements came at the conclusion of a 16-day trial
    which was devoid of any allegation of inflammatory comments to the jury.

[31]

The
    appellant submits that the award of damages itself is so far out of the
    appropriate range that it proves the jury was improperly inflamed. However, as
    I set out below the damages award is within a permissible range.

Issue #3: Were the damages awarded inappropriate?

[32]

The
    appellant submits that general and aggravated damages in similar sexual assault
    cases are in the range of $70,000 to $137,000 in 2017 dollars: see e.g.
K.T.
    v. Vranich
,
2011 ONSC 683;
D.M. v. W.W.
,
2013
    ONSC 4176;
D.F.M. v. J.D.
,
[2000] O.J. No. 559.

[33]

However,
    as this court recently found in
Zando v. Ali
, 2018 ONCA 680, a range
    of up to $290,000 can be appropriate in sexual assault cases. The jury award of
    $250,000 in general damages was well within the range for a serious sexual
    assault.

[34]

With
    respect to the loss of income or competitive advantage, I note that the jury
    awarded $280,000 while the respondents claim was for over $1.7 million. The
    award was well supported by the actuarial evidence and also demonstrates that
    the jury was not acting out of an impermissible sense of outrage caused by the
    closing submissions of the respondents counsel.

Issue #4: Was the punitive damages award unwarranted?
[2]

[35]

The
    jury awarded punitive damages of $15,000.

[36]

The
    appellants position on punitive damages is set out in para. 106 of its factum:

The award of punitive damages is
    unwarranted. It was argued on the basis that the [Diocese] failed to admit
    vicarious liability for the abuse until the first day of trial. The [Diocese]
    did not commit an intentional tort to attract a claim of punitive damages. The
    admission of liability on the first day of trial was not conduct of a malicious,
    oppressive or high-handed nature.

[37]

The
    appellant does not take issue with the trial judges charge to the jury on
    punitive damages. The charge accurately sets out the law and facts. Thus, it
    appears that the appellants position is actually that there was no basis for
    the trial judge to leave the issue of punitive damages with the jury in the
    first place.

[38]

To
    address this issue, I will first summarize the nature of punitive damages. I
    then consider
whether the trial judge erred by leaving
    the issue with the jury
. Finally, I will address the damages awarded.

(i)      Nature of punitive damages

[39]

Punitive
    damages are meant to punish the wrongful acts that are so malicious and
    outrageous that they are deserving of punishment on their own:
Honda Canada
    Inc. v. Keays,
2008 SCC 39, [2008] 2 S.C.R. 362, at para. 62; see also
Hill
    v. Church of Scientology,
[1995] 2 S.C.R. 1130, at para. 196, and
Whiten
    v. Pilot Insurance Co
., 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 73.

[40]

In
Hill
, the court also recognized that the jury must be given some
    leeway to do its job, and a jury award of punitive damages
can only be reversed
when it is so inordinately large
    as obviously to exceed the maximum limit of a reasonable range within which the
    jury may properly operate: para. 107 (emphasis added).

An
    actionable wrong

[41]

To
    award punitive damages, an independent actionable wrong is required. Although
    the appellant submits that the Diocese did not commit an intentional tort, in
Whiten
,
    at paras. 79-82, Binnie J. specified that an actionable wrong does not
    require an independent tort and that a breach of the contractual duty of good
    faith, or breach of a distinct and separate contractual provision, or other
    duty such as a fiduciary obligation can qualify as an independent wrong.

[42]

The
    circumstances of this case are different form an ordinary breach of contract. 
    The extreme power imbalance and vulnerability of the wronged party are
    significant features. Punitive damages are awarded when the impugned conduct
    offends the ordinary standards of morality or decent conduct:
Norberg v.
    Whyrib
[1992] 2 S.C.R. 226 at para 57.

Conduct
    of the litigation

[43]

The
    conduct of the litigation has been held to be an independent actionable wrong that
    could give rise to punitive damages.

[44]

This
    court, in
Rutman v. Rabinowitz
, 2018 ONCA 80, 420 D.L.R. (4th) 310, at
    para. 100 stated that [t]he assessment of damages in each case must account
    for a myriad of idiosyncratic factors particular to the parties, the misconduct
    in question and
the conduct of the litigation

(emphasis added).

[45]

In
Hilltop Group v. Katana
, 2002 CanLII 9075 (Ont. S.C.), at para. 10,
    the motion judge found that the defendants had, throughout the proceedings,
    obfuscated, delayed and were less than forthright in their evidence. The judge
    also found that the defendants had lied and made false affidavits. The judge
    found that this behaviour directly or indirectly had a profound effect on the
    plaintiffs and the litigation, and awarded punitive damages in the amount of
    $200,000, an amount much higher than that awarded here.

[46]

In
Goldentuler Estate v. Crosbie
, 2017 ONCA 591, this court reversed the
    Superior Court finding that the respondents conduct could not support an award
    of punitive damages and found that the defendants egregious behaviour prior to
    and during litigation amounted to outrageous and high-handed conduct warranting
    punitive damages. The behaviour included the wrongful removal of the relevant
    client files from the deceaseds offices, the transfer of those files to a
    competing law firm, and the persistent failure to return the removed files, in
    defiance of a court order
:
paras. 10-12. This court found that
    compensatory damages alone were not sufficient to achieve the goals of
    deterrence and denunciation.

[47]

In
Ruston v. Keddco Mfg
.
(2011)
    Ltd.
, 2018 ONSC 2919, 49 C.C.E.L. (4th) 113, at para. 142, the Superior
    Court awarded $100,000 in punitive damages for a companys conduct in
    termination and during the litigation. Justice Chiappetta found that in
    addition to the employers conduct in the termination meeting, the employer
    attempted to intimidate the plaintiff during the trial process. The defendant
    presented a witness list of 25 witnesses they intended to call, a new trial
    date was set, and as the trial progressed, the defendant ultimately called
    three witnesses. The trial judge stated that this conduct prolonged the
    adjudication of the issues and caused the plaintiff to prepare for witnesses in
    vain. The defendant demonstrated an indifference to the litigation process.
    This was among a number of problems the trial judge identified with the
    defendants litigation conduct, which gave rise to the punitive damages award.

[48]

While
    punitive damages are the exception rather than the norm, they may therefore be
    awarded to address conduct of the litigation deserving of condemnation.

[49]

Here,
    the egregious behaviour was more nuanced than in the cases above. They all
    involved sophisticated parties without power imbalances. By contrast, the
    Dioceses strategic decision not to admit responsibility to a vulnerable victim
    of abuse  given these circumstances- is uniquely egregious.

(ii)     Was it a question for the jury?

[50]

Before
    a question is put to a civil jury, the trial judge must determine whether there
    is reasonable evidence to support the claim. Justice Rouleau explained this in
M.B.
    v. 2014052 Ontario Ltd.
, 2012 ONCA 135, 109 O.R. (3d) 351, at para. 51:

Whether a jury in a civil case should be asked to decide on a
    particular issue is a question of evidence. There must be "reasonable
    evidence" to allow a question to go to the jury. As Meredith J.A. stated
    in
Milligan v. Toronto Railway
(1908)
,
    17 O.L.R. 530 (Ont. C.A.):

Although the jury are the sole
    judges of fact they are such judges only in cases in which there is a
    reasonable question of fact to be determined. It is the duty of the Court to
    determine whether there is any reasonable evidence to go to the jury, upon any
    question of fact; and no such question can be rightly submitted to them until
    that question has been answered in the affirmative: at para. 50.

[51]

In
Cobb v. Long Estate
, 2017 ONCA 717, 416 D.L.R. (4th) 222, at para. 65,
    this court stated that trial judges decision not to put the question of
    punitive damages to the jury was reasonable in the circumstances of that case
    and entitled to deference.

[52]

In
    this case, the claim for punitive damages was based on the fact that the
    appellants failure to admit liability caused the fragile respondent to suffer
    pain. There was specific evidence that Mr. McCabe was suffering physically and
    mentally during the time that the appellant was denying liability.

[53]

Dr.
    Jaffe explained that the trauma suffered by Mr. McCabe was made worse by the
    fact that liability was being denied. Mr. McCabe was told that he would have to
    prove that the events of 1963 actually happened. This, Dr. Jaffe said, re-victimized
    him. The impact of the litigation caused him to be fragile, stressed and
    anxious. He was further hurt by the stress of having to relive the abuse. He
    was diagnosed with chronic obstructive pulmonary disorder, a form of asthma
    that was made worse by the proceedings.

[54]

Ms.
    Schramm described his reaction to the litigation process as being shaken,
    fatigued, feeling guilty, angered, fearful and shamed. She discussed his
    nightmares and night terrors. Ms. Schramm confirmed Mr. McCabes testimony
    about the litigation causing him pain.

[55]

Although
    Father Clough testified that he did not set out to deliberately to cause Mr.
    McCabe pain, he had read the report of Dr. Jaffe and the views of Ms. Schramm.
    He knew and agreed that the abuse needed to be validated. He also agreed that
    the refusal to admit liability was hurting Mr. McCabe and that the ongoing
    process was causing him pain. He knew that during the examination for discovery
    Mr. McCabes lawyer was told that Mr. McCabe would have to prove the event
    happened. He agreed that no new information came to the Diocese after
    examinations for discovery. He accepted as true what happened to Mr. McCabe. By
    the time the action was commenced, he was aware of other complaints made about
    Father Robert.

[56]

Against
    these facts, the jury was asked the following question by the trial judge: Does
    the failure of the Diocese to admit liability before the trial warrant an award
    of punitive damages?

[57]

The
    trial judge then correctly set out the law as to punitive damages and related
    it to the facts described above.

[58]

In
    my view, the trial judges decision that there was evidence to allow the
    question to be put to the jury was entirely reasonable and is entitled to
    deference.

(iii) Quantum of damages

[59]

The
    jury awarded a very modest amount of $15,000 in punitive damages. In the words
    of
Hill
, a jury award of punitive damages can only be reversed when it
    is so inordinately large as obviously to exceed the maximum limit of a
    reasonable range within which the jury may properly operate.  In my view the
    jurys award was a symbolic condemnation of the Dioceses conduct in failing to
    admit liability despite knowledge of additional harm to Mr. McCabe.  To
    overturn the jurys determination would be to sanction the conduct.

[60]

I
    see no basis to disturb the jury award.

DISPOSITION

[61]

I
    would dismiss the appeal with costs to the respondent in the agreed-upon amount
    of $32,000 inclusive of disbursements and HST.

M.L. Benotto J.A.

I agree with the
    disposition with respect to grounds 1-3 (G.R. Strathy C.J.O.)

I agree with the
    disposition with respect to grounds 1-3 (L.B. Roberts J.A.)


Roberts J.A.:

[62]

I
    have had the benefit of reading my colleagues well-written reasons. I agree
    with her proposed disposition of the first three grounds of appeal but
    respectfully disagree with her proposed disposition of the fourth ground of
    appeal.

[63]

For
    the reasons that follow, I would allow the appeal in part and set aside the
    award of punitive damages. In my view, the trial judge erred in leaving this
    issue to the jury for determination because neither the pleadings nor facts of
    this case supported such an award. In essence, the trial judge created a new
    and unprecedented category of punitive damages arising out of the timing of the
    appellants admission of liability. There is no basis in law for such an award.

[64]

Starting
    with first principles, as my colleague has described, the well-established
    nature of punitive damages is to punish an independent actionable wrong that is
    the product of egregious, high-handed and outrageous conduct. It is a very high
    standard that is not easily reached. Punitive damages are not meant to be
    compensatory, but instead act as a deterrent for exceptional misconduct.
    Indeed, punitive damages should not be granted where, as here, the compensatory
    damages awarded suffice as a deterrent:
Whiten v. Pilot Insurance Co.
,
    2002 SCC 18, [2002] 1 S.C.R. 595, at para. 94.

[65]

In
    none of the cases cited to by my colleague does the failure or delay of the
    defendant to admit liability serve as the standalone basis for the awards of
    punitive damages that were granted. Rather, in all these cases, the misconduct
    of the defendant supporting the punitive damages awards was a continuation of
    the misconduct that gave rise to and was the subject of the action within the
    context of a particular relationship between the parties that is absent here.

[66]

In
    this respect,
Goldentuler Estate v. Crosbie
, 2017 ONCA 591, leave to
    appeal refused, [2017] S.C.C.A. No. 358, is instructive. This court allowed the
    appeal in part and awarded punitive damages because it found the trial judge
    erred in concluding the claim for punitive damages was solely related to
    litigation delay. Rather, the claim for punitive damages focused on the
    defendants egregious pre-litigation behaviour in effecting the wrongful
    removal of client files, the transfer of the files to a competing law firm, and
    the persistent failure to return the files to the claimant. This court found
    the defendants conduct to be outrageous and high-handed, and for which
    punitive damages was an appropriate remedy.

[67]

In
    determining whether punitive damages should be granted, the court must ask two
    threshold questions: first, what is the impugned conduct; and, second, whether
    the impugned conduct rises to the level of egregious misconduct warranting the
    exceptional award of punitive damages.

[68]

In
    the present case, the impugned conduct is only the appellants delay in
    admitting liability. The question left for the jury makes this plain: Does the
    failure of the Diocese to admit liability, before the trial, warrant an award
    of punitive damages? Similarly, as the lone basis for any award of punitive
    damages, the trial judges final charge to the jury focused solely on the
    appellants delay in admitting liability: And here you will consider the
    evidence of the delay in the Diocese admitting liability for the acts of Father
    Robert.

[69]

There
    is no allegation or evidence of any misconduct. As the trial judge fairly
    instructed the jury, the appellant did not deliberately inflict pain on the
    respondent. As a result, the appellants delay in admitting liability, alone,
    could not be characterized as egregious misconduct justifying an award of
    punitive damages. Rather, the appellant, as it was perfectly entitled to do,
    did not admit liability until the opening of trial. The appellants exercise of
    its litigation rights cannot be characterized as egregious misconduct
    warranting punitive damages.

[70]

The
    respondents action against the appellant is founded on its vicarious liability
    for the sexual assaults suffered by the respondent at the hands of the
    appellants employee priest in the course of his employment. The respondent
    pleaded that it was entitled to punitive damages against the appellant because
    of its vicarious liability for its employees wrongful actions, not because of
    any misconduct on the part of the appellant, including its failure to admit
    liability before trial. Respondents counsel did not raise that theory of
    punitive damages until the pre-charge conference when it was acknowledged that
    punitive damages could not be awarded on the basis of the appellants vicarious
    liability.  Over the objection of appellants counsel, the respondents new
    theory of punitive damages was left to the jury.

[71]

In
    my view, the trial judge erred in leaving punitive damages to the jury because
    no reasonable jury, properly instructed, could have made such an award. I say
    so for three reasons.

[72]

First,
    there was no basis in fact or law for this claim that punished the appellant
    for not making an earlier admission of liability. Punitive damages cannot be
    awarded solely for the failure or delay of a defendant to admit liability. To
    create such a category of punitive damages would completely undermine the
    foundation of the litigation process. A defendant is under no obligation to
    admit liability and, subject to attracting the elevated costs consequences I
    refer to below, may put the plaintiff to the strict proof of his or her
    allegations, no matter how painful the litigation process proves to be for the
    plaintiff, without fear of invoking a punitive damages award: see generally
Davies
    v. Clarington (Municipality)
, 2009 ONCA 722, 100 O.R. (3d) 66, at paras.
    44, 46;
Foulis v. Robinson
(1978), 21 O.R. (2d) 769 (C.A.), at p. 776.
    Unfortunately, that is the nature of the litigation process. It is adversarial.
    It is extremely expensive and often protracted. Its outcome is uncertain.
    Regardless of the underlying cause of action, all parties find the litigation
    process enormously stressful, especially plaintiffs who bear the burden of
    proving liability and damages because they commence the proceedings.  In sum,
    while a defendants failure or delay to admit liability may give rise to an
    adverse costs award, it does not serve as a standalone basis for punitive
    damages.

[73]

Second,
    the harm that the respondent alleges he suffered because of the continued
    litigation process, which formed the basis for the punitive damages claim left
    with the jury, was not obviated by the appellants admission of liability. The
    respondents evidence is that he felt re-victimized by having to recount the
    sexual assault in the litigation.  However, notwithstanding the appellants
    admission of liability, the respondent was still required to go through the
    painful details of the assaults and their impact on him to prove his damages.
    There is no suggestion that the appellant should also have conceded damages and
    that the respondent was entitled to punitive damages because the appellant
    failed to do so. This would be akin to saying that a defendant can never defend
    an action.

[74]

The
    appellant simply put the respondent to the proof of his case. There is nothing
    wrong with that. There can be no suggestion that the appellants liability was
    inevitable. Certainly, there can be little doubt that if the respondent had
    brought a motion for summary judgment, he would not have been successful and
    would have been required to go to trial. There was nothing improper or
    malicious in the appellant not admitting liability before trial.

[75]

Third,
    it was procedurally unfair to the appellant to allow the respondent to put
    forward a new basis for punitive damages that had not been pleaded or alleged
    until after the trial evidence was completed. In the particulars pleaded, the
    respondent alleged vicarious liability against the appellant for the punitive
    damages claimed against its employee priest. The respondents counsel raised
    the new theory of punitive damages based on the appellants delay in admitting
    liability after the trial judge advised there was no foundation for punitive
    damages on the basis of vicarious liability for the misconduct of another.

[76]

While
    I am of the view that a defendants denial of liability, without more, does not
    attract an award of punitive damages, it may give rise to a considerable costs
    sanction.

[77]

Section
    131 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, r. 57.01 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, and the courts
    inherent jurisdiction to control its process to prevent an abuse of process
    allow for an award of costs up to full indemnity in response to egregious
    misconduct by a party in the course of the proceedings. More specifically,
    subrules 57.01(1)(e) and (g) explicitly include consideration of a partys
    conduct that either shortened or lengthened the proceedings, and a partys
    denial of or refusal to admit anything that should have been admitted.

[78]

It
    is important to note, however, that a defendants failure or delay to admit
    liability that falls short of litigation misconduct or abuse of process may not
    even attract elevated costs.

[79]

In
Foulis v. Robinson
, this court allowed an appeal of an elevated costs
    award, holding that the defendant was not required to admit liability or settle
    the action.

[80]

The
    trial judge was of the view that there was no defence to the motor vehicle action
    having considered the pleadings, the evidence, and the fact that the defendant
    pleaded guilty to criminal negligence for operating a motor vehicle while
    impaired:
Foulis
, at p. 770. The defendant and third party insurer
    disputed liability and damages. The trial judge awarded solicitor and client
    costs against the defendant and third party because they dragged the
    plaintiffs through a three day  trial when there was really no defence
    pleaded and no evidence of any defence produced at trial:
Foulis
,
    at p. 770. The trial judge commented that the plaintiffs were being penalized
    in dollars and cents for a situation over which they have no control and of
    which they are victims:
Foulis
, at p. 771.

[81]

This
    court held that the trial judge erred in principle in awarding costs on an
    elevated scale, noting that defendants are entitled to put the plaintiff to
    the proof, and there is no obligation to settle an action:
Foulis
, at
    p. 776. Dubin J.A., writing for this court, continued:

The fact that the issue of
    liability was not seriously contested at trial, that the defendant did not give
    evidence, that he had pleaded guilty to criminal negligence, and that no
    evidence was called by the defendant and third party on the issues of liability
    and damages are not factors which, by themselves, merit punitive action in the
    award of costs.

[82]

This
    court acknowledged that the defendant and third party were not using the
    judicial process to harass the plaintiffs and that the conduct of the defendant
    and third party did not constitute an abuse of process:
Foulis
, at p.
    776.

[83]

Returning
    to the present case, the appellants delay in admitting liability until trial
    should not have been considered under the rubric of punitive damages.  Rather,
    it was more properly a question of costs.  Whether the delay was the kind of
    misconduct that attracted an elevated award of costs was a question that could
    have been left for the trial judges determination had the parties not agreed
    on costs.

[84]

For
    these reasons, I would allow the appeal in part and set aside the award of
    punitive damages. I would otherwise dismiss the appeal for the reasons
    expressed by my colleague.

Released: March 19, 2019

GRS

L.B. Roberts J.A.

I agree G.R. Strathy C.J.O.





[1]

As indicated, my colleagues are in the majority on the issue
    of punitive damages.



[2]

These are my dissenting reasons on the issue of punitive
    damages.


