The appellant Foundation, a non-profit organization, operated residential care facilities for emotionally troubled children.
The Foundation hired an employee who sexually abused the respondent child while in the Foundation's care.
The respondent sued the Foundation for vicarious liability.
The Supreme Court of Canada held that an employer can be vicariously liable for an employee's unauthorized intentional torts, including sexual abuse, if the employer's enterprise and empowerment of the employee materially increased the risk of the harm.
The Court found the Foundation vicariously liable because the opportunity for intimate private control and the parental relationship required by the employment created the special environment that nurtured the abuse.
The Court also declined to create an exemption for non-profit organizations.
