COURT OF APPEAL FOR ONTARIO
RE:
RUTH von BISMARK (Plaintiff/(Respondent)) – and BRIDGETTE SAGL (Defendant/(Appellant))
BEFORE:
SHARPE, CRONK and GILLESE JJ.A.
COUNSEL:
Bridgette Sagl in person
Mark D. Johnston for the respondent
HEARD:
April 23, 2002
On appeal from the trial judgment of Justice Margaret P. Eberhard dated July 14, 2000, [2000] O.J. No. 2757.
E N D O R S E M E N T
[1] This is an appeal from the judgment of Eberhard J. awarding the respondent damages for breach of contract and conversion and punitive damages for breach of fiduciary duty.
[2] The action arises from an agreement by the appellant to promote and sell the respondent's paintings. The trial judge gave extensive written reasons finding that the respondent delivered the promised paintings to the appellant but that the appellant, who chose not to testify at trial, did not fulfil her side of the agreement. The trial judge found that the appellant failed to take any steps to sell the paintings and instead appropriated the paintings for herself. Many of the paintings were destroyed in a fire at the appellant’s residence. The trial judge awarded the respondent the net sum of $83,500 in damages for breach of contract and conversion, which was the price of the paintings she had delivered to the appellant less the amounts paid to the respondent by the appellant. The trial judge also awarded the respondent $50,000 in punitive damages, together with pre- and post-judgment interest.
[3] The appellant raises four grounds of appeal.
- Reasonable apprehension of bias
[4] We see no merit to the appellant’s contention that the trial judge’s conduct of the trial and reasons for judgment give rise to a reasonable apprehension of bias. The trial judge made very clear and cogent findings of fact adverse to the appellant. On the record before her, she was entitled to make those findings. In particular, we see no merit to the contention that the trial judge exhibited bias by labelling the appellant's conduct in terms appropriate to justify the award of punitive damages.
- Credit for commissions
[5] The appellant submits that she should be credited with 40% of the price of the paintings because the agreement provided that she would be paid a commission if she sold the respondent's paintings. However, the appellant did not sell the paintings. The trial judge found that the appellant had failed to take any steps to market or promote the paintings and the trial judge accordingly refused to credit the appellant with 40% commission on the price of the paintings she appropriated. We agree with the trial judge's reasoning on this issue and see no reason to interfere with this aspect of the judgment.
[6] This conclusion applies to the paintings appropriated by the appellant after the parties signed the written agreement dated January 9, 1995. That agreement contemplated that the appellant would either sell or buy the paintings. Had the appellant sold the paintings, she would have been entitled to the commission. However, she did not do so. We see nothing in the agreement or the relationship between the parties that entitled the appellant to a 40% reduction in the purchase price of the paintings.
- Punitive damages
[7] We are not persuaded that we should interfere with the trial judge’s award of punitive damages. There was evidence to support the trial judge’s conclusion that the behaviour of the appellant rose to the level of wrongdoing necessary to justify such an award. There was also evidence to support the finding of an independent actionable wrong necessary for an award of punitive damages, namely, the appellant’s breach of fiduciary duty in appropriating the paintings and her misrepresentation that some of the paintings were being sold to an American buyer.
[8] Nor are we persuaded that the amount awarded was so inordinately high that it exceeded what was rationally required to punish the defendant. Although the trial judge did not have the benefit of the Supreme Court of Canada’s decision in Whiten v. Pilot Insurance Co., [2002] S.C.C. 18, her findings correspond with the factors listed by Binnie J. at para. 113 that bear upon quantification. In particular, the trial judge's findings include the following:
the appellant was guilty of planned and deliberate misconduct;
the intent and motive of the appellant was to benefit herself at the expense of the respondent;
the appellant persisted in her wrongful conduct over a lengthy period of time;
the appellant concealed her attempt to cover up her misconduct by misrepresenting the true facts as to the sale and placement of the paintings;
the appellant was aware that what she was doing was wrong;
the appellant profited from her misconduct; and
the interest violated by the misconduct was known to be deeply personal to the respondent, namely, the advancement of her professional reputation as a painter.
[9] In our view, these findings are rational reasons supporting the award of $50,000 in punitive damages. No basis has been advanced that would justify this court's interference with that award.
[10] However, as was conceded by the respondent, the award of pre-judgment interest on the punitive damages is unwarranted, thus we set it aside.
- Insurance proceeds
[11] This issue relates to the appropriate term of the judgment with respect to any insurance proceeds the appellant might receive as a result of the fire at her home that destroyed many of the respondent's paintings. In her reasons for judgment, the trial judge found that the respondent was entitled to priority with respect to fire insurance proceeds payable to the appellant. The respondent agrees that she is only entitled to priority with respect to insurance proceeds directly related to the loss of the paintings. Accordingly, we would add the following paragraph to the judgment of the trial judge:
This Court further orders and declares that the defendant holds in trust for the plaintiff any or all monies to be received from Chubb Insurance as a result of a fire loss on December 16, 1997 at 245 Dalton Drive, Mississauga, Ontario, respecting paintings created by the plaintiff and insured by the defendant. If Chubb Insurance does not clearly specify the portion of the insurance proceeds related to the paintings, the plaintiff may apply to the trial judge for determination of the portion of the insurance proceeds related to the paintings to which the plaintiff is entitled.
Disposition
[12] For these reasons, we set aside the award of pre-judgment interest on the punitive damages award in para. 4 of the judgment, and we amend the judgment by adding the paragraph set out above in para. 11 of these reasons. In all other respects, we dismiss the appeal. We order the appellant to pay the respondent’s costs of this appeal on a partial indemnity basis fixed at $4,000 inclusive of disbursements and GST.
“Robert J. Sharpe J.A.”
“E.A. Cronk J.A.”
“E.E. Gillese J.A.”