Hockley v. Riley et al. [Indexed as: Hockley v. Riley]
88 O.R. (3d) 1
Court of Appeal for Ontario,
Cronk, Gillese and Epstein JJ.A.
November 26, 2007
Damages -- Punitive damages -- Trial judge erring in awarding exemplary damages in amount of $20,000 to achieve objectives of punishment and deterrence without first considering whether general damages award of $100,000 was sufficient to achieve those objectives.
Damages -- Personal injury -- General damages -- Defendant's husband sexually abusing plaintiff in defendant's presence and with her knowledge while they were both babysitting plaintiff -- Trial judge not erring in finding that defendant was negligent because she had actual knowledge of husband's improper conduct or alternatively was wilfully blind to it and failed to take proper steps to prevent abuse -- Trial judge not erring in finding defendant jointly and severally liable with husband to pay general damages in amount of $100,000.
Fiduciaries -- Fiduciary relationship -- Defendant's husband sexually abusing plaintiff in defendant's presence and with her knowledge while they were both babysitting plaintiff -- Trial judge not erring in finding that defendant was in fiduciary relationship with plaintiff and that she breached her fiduciary duty to plaintiff.
Torts -- Negligence -- Defendant's husband sexually abusing plaintiff in defendant's presence and with her knowledge while they were both babysitting plaintiff -- Trial judge not erring in finding that defendant was negligent because she had actual knowledge of husband's improper conduct or alternatively was wilfully blind to it and failed to take proper steps to prevent abuse -- Trial judge not erring in finding defendant jointly and severally liable with husband to pay general damages in amount of $100,000.
The respondent sued the appellant and the appellant's ex- husband R, alleging that she was sexually abused by R on numerous occasions in the 1980s, in the appellant's presence, while R and the appellant were babysitting her. R, who had admitted the abuse and pleaded guilty to assault and indecent assault charges, did not defend the civil action. The appellant acknowledged that she was aware of R's propensity to abuse young girls but denied that she was present when the incidents involving the respondent occurred or that she was aware of them. The trial judge found that she was present when R abused the respondent and that she was in a fiduciary and trust relationship with the respondent. He found the appellant jointly and severally liable with R to pay general damages in the amount of $100,000. He also ordered the appellant to pay exemplary damages in the amount of $20,000. The appellant appealed. [page2 ]
Held, the appeal should be allowed in part.
Per Cronk J.A. (Epstein J.A. concurring): The trial judge's findings that the appellant was present during the incidents and that she was in a fiduciary and trust relationship with the respondent were supported by the evidence. The appellant repeatedly breached her fiduciary duty to the respondent by failing to take any steps to prevent R's abusive acts.
The trial judge found that the appellant was negligent because she had actual knowledge of R's improper conduct or, in the alternative, she was wilfully blind to the fact that he was sexually abusing the respondent, and that she failed to take proper steps to prevent the abuse. He also found that, at the relevant times, the appellant and R were both able to exercise some discretion or power in relation to the respondent, that they could each unilaterally exercise that power or discretion to affect the respondent, and that the respondent was vulnerable to the actions of the appellant as well as to those of R. On those findings, the appellant engaged in tortious conduct against the respondent distinct from that of R and acquiesced in or furthered R's wrongful conduct. Those findings were sufficient to fix the appellant with liability on a joint and several basis.
The trial judge erred in awarding exemplary damages. He stated that an award of exemplary damages was necessary to punish and deter conduct by the appellant that he found to be reprehensible. However, his reasons contained no indication that he undertook the necessary evaluation of whether an award of exemplary damages, in addition to the sizeable award of general damages, was necessary or rationally required to achieve those objectives; that is, his reasons contained no analysis of whether the general damages that he awarded were insufficient in all the circumstances and whether this case fell within that category of exceptional cases warranting an additional award of exemplary damages.
Per Gillese J.A. (dissenting): The trial judge did not err in awarding exemplary damages. While, as a result of that award, the appellant faced a greater financial responsibility than did R, R had been convicted of criminal offences and had been sentenced to nine months' incarceration and one year's probation. The role of exemplary damages is to make an example of the wrongdoer in order to deter others from committing the same tort. R's conviction and sentence had already served the purposes of punishment and deterrence. Thus, the fact that the appellant would face a larger financial responsibility than R was no obstacle to the imposition of exemplary damages against her.
The trial judge noted that exemplary damages may be awarded where the conduct is of such a nature that it is deserving of punishment because of its "harsh, vindictive, reprehensible and malicious nature". He found that the appellant's conduct was reprehensible and ought to be punished and deterred. That finding was supported by the evidence. It was open to him to find that exemplary damages were warranted in the circumstances.
APPEAL by the defendant from the judgment of Festeryga J., 2005 [2005] O.J. No. 5144, [2005] O.T.C. 1033(S.C.J.) for the plaintiff.
Cases referred to Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, [2002] S.C.J. No. 19, 209 D.L.R. (4th) 257, 283 N.R. 1, [2002] I.L.R. Â1-4048, 2002 SCC 18, 20 B.L.R. (3d) 165, apld M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, [1992] S.C.J. No. 85, 96 D.L.R. (4th) 289, 142 N.R. 321, 14 C.C.L.T. (2d) 1, consd Other cases referred to Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3, [2006] S.C.J. No. 30, 271 D.L.R. (4th) 1; Frame v. Smith, 1987 74 (SCC), [1987] 2 S.C.R. 99, [1987] S.C.J. No. 49, 23 O.A.C. 84, 42 D.L.R. (4th) 81, 78 N.R. 40, 42 C.C.L.T. 1, 9 R.F.L. (3d) 225; [page3 []cf2]Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, [1992] S.C.J. No. 60, 68 B.C.L.R. (2d) 29, 92 D.L.R. (4th) 449, 138 N.R. 81, [1992] 4 W.W.R. 577, 12 C.C.L.T. (2d) 1 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 19.02(1)
Michael David Lannan, for appellant. Deborah L. Ditchfield, for respondent.
CRONK J.A. (EPSTEIN J.A. concurring): --
I. Overview
[1] The appellant, Marjorie Leudy (formerly Marjorie Riley), appeals from the judgment of Festeryga J. of the Superior Court of Justice dated October 20, 2005, whereby she was held jointly and severally liable with her former husband, Robert Gordon Riley, to pay general damages in the amount of $100,000 plus prejudgment interest to the respondent, Marcia Lorene Hockley, for historical sexual assaults committed by Mr. Riley against the respondent. The trial judge also awarded the respondent exemplary damages against the appellant, in the sum of $20,000 plus prejudgment interest.
[2] The appellant advances four grounds of appeal. She argues that the trial judge erred: (1) by finding that she was in a fiduciary and trust relationship with the respondent at the time of the assaultive incidents; (2) by finding that she was present when those incidents took place; (3) by imposing joint and several liability for damages based on the criminal acts of Mr. Riley; and (4) by awarding exemplary damages as against the appellant. The appellant seeks an order setting aside the trial judgment and dismissing the respondent's action against her, with costs. In the alternative, she seeks a reduction in the amount of general damages and the elimination of or a reduction in the award of exemplary damages payable by her.
[3] We called on the respondent's counsel to address only the last ground of appeal. For the following reasons, I would allow the appeal, in part, by setting aside the award of exemplary damages. In all other respects, I would dismiss the appeal.
II. Facts
[4] In the mid-1980s, the respondent resided, together with her parents, next door to the appellant and her husband. The two [page4 ]families socialized over the years. In 1999, when the respondent became pregnant with her own child, she told her mother that she had been abused as a child by Mr. Riley while he and the appellant were babysitting her. She alleged that Mr. Riley regularly masturbated in her presence and touched her genital and breast areas on numerous occasions. Following this disclosure, the respondent's mother reported the matter to the police.
[5] Mr. Riley pleaded guilty to the ensuing assault and indecent exposure charges brought against him. His guilty pleas at his criminal trial were based on an agreed statement of facts in which he admitted the abuse alleged by the respondent.
[6] Mr. Riley did not defend the civil action for damages commenced by the respondent and was noted in default. As a result, pursuant to rule 19.02(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, he was deemed to admit the truth of all allegations of fact made in the respondent's statement of claim. These allegations included the assertions that most of the sexual assaults perpetrated against the respondent by Mr. Riley occurred in the presence of the appellant and that the appellant had failed to intervene and protect the respondent from these assaultive acts.
[7] The appellant did defend the action. She acknowledged that she was aware of a propensity by her husband to abuse young girls and that she knew of his criminal record for sexually inappropriate behaviour towards young girls. The appellant claimed, however, that the abusive incidents involving the respondent to which her husband had admitted did not take place in her presence and that she was unaware of them.
III. Discussion
(1) Challenge to the trial judge's findings
[8] The appellant challenges the trial judge's findings that she was in a fiduciary and trust relationship with the respondent at the material times and, further, that she was present when her husband abused the respondent. At the outset, I observe that these findings by the trial judge attract considerable deference from this court. The scope for appellate intervention with them is significantly constrained.
[9] For several reasons, I am not persuaded that the trial judge's impugned findings are tainted by reversible error.
[10] First, the trial judge, as he was entitled to do, rejected the appellant's evidence that the abuse in question had not occurred in her presence. He found that she knew of the abusive acts or was wilfully blind to them, that the acts in issue took place when [page5 ]she was present, and that -- although positioned to do so -- she did nothing to prevent them.
[11] During the course of oral argument before this court, counsel for the appellant acknowledged that these findings by the trial judge were supported by the evidence of the respondent's testimony at trial, which the trial judge accepted.
[12] Second, counsel for the appellant also acknowledged before this court -- responsibly in my opinion -- that there was evidence at trial that supported the trial judge's holdings that a relationship of trust existed between the appellant and the respondent, that the appellant owed a fiduciary duty to the respondent, and that this duty was breached by the appellant. The trial judge found that the respondent's parents left her in the care of the appellant from time to time, notwithstanding their apparent knowledge of Mr. Riley's propensity to masturbate in front of young girls, because they relied on the appellant to "keep an eye" on and protect the respondent. Importantly, during her testimony at trial, the appellant conceded that when the respondent was with her and her husband, she had a responsibility to ensure that no harm befell the respondent.
[13] Third, the trial judge addressed the applicable principles governing the creation of a fiduciary relationship as set out in Frame v. Smith, 1987 74 (SCC), [1987] 2 S.C.R. 99, [1987] S.C.J. No. 49, and concluded that the necessary prerequisites for such a relationship were satisfied in this case. As I have said, the appellant's counsel acknowledged during oral argument that the evidence at trial supported that conclusion.
[14] In all these circumstances, I agree that a relationship of trust existed between the appellant and the respondent and that the appellant owed a fiduciary duty to the respondent. On the findings of the trial judge, that duty was repeatedly breached by virtue of the appellant's deliberate failure to take any steps to prevent her husband's abusive acts in relation to the respondent.
(2) Joint and several liability
[15] I would also reject the appellant's challenge to the imposition of joint and several liability in this case.
[16] The trial judge found that the appellant was negligent because she had actual knowledge of her husband's improper conduct towards the respondent or, in the alternative, she was wilfully blind to the fact that he was sexually abusing the respondent, and she failed to take proper steps to prevent the abuse.
[17] The trial judge also found that, at the relevant times, the appellant and her husband were both able to exercise some discretion or power in relation to the respondent, that they could [page6 ]each unilaterally exercise that power or discretion to affect the respondent, and that the respondent was vulnerable to the actions of the appellant as well as to those of her husband.
[18] On the findings of the trial judge, therefore, the appellant engaged in tortious conduct against the respondent distinct from that of her husband and acquiesced in or furthered her husband's wrongful conduct. These findings are sufficient to fix the appellant with liability on a joint and several basis, rendering her fully liable to the respondent for the damages awarded by the trial judge. Her actions, as found by the trial judge, were those of a joint or an independent concurrent tortfeasor.
(3) Exemplary/punitive damages
[19] I reach a different conclusion, however, concerning the trial judge's award of exemplary or punitive damages. [^1]
[20] In his reasons, the trial judge explained that his award of general damages took into account the aggravating features of the case, including the fact that the assaults on the respondent were humiliating and undignified, that they began when the respondent was a young child, and that they persisted over many years. He then stated [at paras. 67-69]:
With respect to general damages I consider how the conduct affected the plaintiff. I accept her evidence as stated in the reasons above. I am satisfied that she was detrimentally affected personally and in her relationship with her friends, parents and husband. She will require assistance in the future. I also must keep in mind that the post-traumatic stress disorder falls into the mild to moderate range in terms of frequency of symptoms and into the moderate range in terms of intensity of symptoms.
I assess general damages after taking into account any aggravating features and therefore include aggravated damages in this figure of $100,000.00 total against both defendants for which they will be jointly and severally responsible.
A breach of trust flows from a fiduciary obligation in equity. Such a breach of trust may attract an independent damage award, but this award must be made under equity and not tort. The Supreme Court of Canada has addressed this specific issue in M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6 (S.C.C.) where it was held by the majority that the same policy objectives underlie awards of damages for sexual assault and for breach of fiduciary duty mainly, to compensate the victim and to punish the wrongdoer. In my award of general damages I have included a figure for breach of fiduciary duty so that that one figure is all encompassing. [page7 ]
[21] The trial judge's comments in the first two paragraphs, set out above, concern his assessment of general damages. This is apparent from the introductory language of these paragraphs, which expressly refers to general damages.
[22] It is less clear, however, whether the trial judge's remarks in the third quoted paragraph relate to various types of damages, or to general damages only. In particular, in relying on the decision in M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, [1992] S.C.J. No. 85, the trial judge referenced the policy objectives that "underlie awards of damages" for sexual assault and breach of fiduciary duty, commenting that these objectives are "to compensate the victim and to punish the wrongdoer". He then concluded this paragraph by again adverting to his assessment of general damages, indicating that his award of general damages included a figure for breach of fiduciary duty.
[23] To the extent that these remarks were intended to refer to the policy objectives underlying remedies for sexual assault and breach of fiduciary duty, they are unobjectionable and consistent with the decision of the Supreme Court of Canada in M. (K.) v. M. (H.). However, if, as I conclude, they are to be understood as reflecting the policy objectives of damages at large, that is, of general damages as distinct from punitive or exemplary damages, it is my view that the trial judge misspoke.
[24] General damages are compensatory damages. They are awarded primarily to compensate a plaintiff for pecuniary and non-pecuniary losses suffered as a result of a defendant's conduct. Punishment is not a principal aim of general damages. In contrast, punitive or exemplary damages are designed to punish the defendant and to deter both the defendant and other potential wrongdoers by addressing the objectives of retribution, deterrence and denunciation. See Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3, [2006] S.C.J. No. 30, at para. 61 and Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, [2002] S.C.J. No. 19, at para. 43. As Binnie J. put it in Whiten at para. 36"Because their objective is to punish the defendant rather than compensate a plaintiff (whose just compensation will already have been assessed), punitive damages straddle the frontier between civil law (compensation) and criminal law (punishment)."
[25] In Whiten, at para. 69, the Supreme Court of Canada emphasized that punitive damages should be resorted to only in exceptional cases and with restraint. Further, and importantly in the context of this case, the Supreme Court indicated at para. 67 that the mechanism in Canada for controlling awards of punitive damages "lies . . . in rationally determining circumstances that [page8 ]warrant the addition of punishment to compensation in a civil action". In explaining the court's conclusion on the prerequisite of rationality for an award of punitive damages, Binnie J. indicated at para. 129 in the context of the jury's punitive damages award in Whiten:
The jury followed the "if, but only if" model, i.e., punitive damages should be awarded "if, but only if" the compensatory award is insufficient. The form and order of the questions put to the jury required them first of all to deal with compensation for the loss of the plaintiff's house (replacement or cash value), its contents, and any increase in her living and moving expenses. Only after those matters had been dealt with was the jury instructed to turn their minds to a final question on punitive damages. They were clearly aware that compensatory damages might well be sufficient punishment to avoid a repetition of the offence and a deterrent to others.
(Emphasis added)
[26] In this case, the trial judge explained the basis for his additional award of exemplary or punitive damages against the appellant in one brief paragraph that followed immediately after the three paragraphs from his reasons quoted above. He said:
With respect to [the appellant], I must consider the claim for exemplary damages which may be deserving of punishment because of its harsh, vindictive, reprehensible and malicious nature. I must keep deterrence in mind. I am of the view that such conduct should not be condoned but should be punished and deterred. I find her conduct reprehensible and therefore award exemplary damages against her in the amount of $20,000.00.
[27] Thus, the trial judge reasoned that an award of exemplary damages was necessary to punish and deter conduct by the appellant that he found to be reprehensible. However, the trial judge's reasons contain no indication that, in so concluding, he related the facts of this case to the underlying purposes of exemplary or punitive damages and considered how, in particular, an award of exemplary or punitive damages would further one or other of the objectives of the law not already met by his award of general damages. This was especially necessary in this case because, as I have said, the trial judge's reasons suggest that his general damages award contained a punitive element. This defect in the trial judge's reasoning was an error. See Whiten at para. 71.
[28] In the particular circumstances of this case, I cannot be satisfied that the trial judge undertook the necessary evaluation of whether an award of exemplary or punitive damages was necessary or rationally required, in addition to the sizeable award of general damages made by him, to achieve the stated objectives of deterrence and punishment. Stated somewhat differently, the trial judge's reasons contain no analysis of whether the general [page9 ]damages that he awarded were insufficient in all the circumstances and whether this case fell within that category of exceptional cases warranting an additional award of exemplary or punitive damages.
[29] The proper approach, in my opinion, was for the trial judge to award general damages for compensatory purposes. A separate evaluation of the respondent's exemplary damages claim should then have been undertaken, in light of the facts of this case, to determine whether one or more of the objectives of the law was not met by the award of general damages such that exemplary or punitive damages were required to achieve punishment of the appellant's conduct and deterrence. This did not occur in this case. As a result, I conclude that the award of exemplary damages cannot stand.
III. Disposition
[30] Accordingly, for the reasons given, I would allow the appeal, in part, by setting aside the award of exemplary damages, together with associated prejudgment interest. In all other respects, I would dismiss the appeal. Because success has been divided, I would make no award of costs for the appeal.
[31] GILLESE J.A (dissenting): -- I have read the reasons of my colleague and agree with her disposition of this appeal, apart from that in respect of exemplary damages. As I will explain, I see no basis on which to interfere with the trial judge's exercise of discretion in the award of exemplary damages. He made no error in his articulation of the relevant legal principles and his findings amply support such an award.
[32] The appellant argues that it was not reasonable to award exemplary damages against her. After all, as she points out, she did not actually commit the offences yet, as a result of the exemplary damages award, she is made to bear a greater financial responsibility than Riley. Moreover, because Riley is judgment proof, she will end up being responsible for all of the damages. A second argument, raised at the hearing, was to the effect that the trial judge awarded exemplary damages to punish the appellant but also gave punishment as a reason for the quantum of general damages that he assessed. Consequently, it was argued, no special purpose was served by the award of exemplary damages. I will deal with each of these arguments in turn.
[33] It is accurate to say that, as a result of the exemplary damages award, the appellant faces a greater financial responsibility than does Riley. However, some years before the trial of this [page10 ]action, Riley was convicted of criminal charges arising from his abuse of the plaintiff. After pleading guilty to charges of sexual assault and gross indecency, Riley was sentenced to nine months incarceration and probation for 12 months. To consider the damage award in isolation is to ignore the totality of punishment that the justice system has meted out to Riley. The trial judge is clear: it was because of Riley's conviction that he made no award of exemplary damages against him. The role of exemplary damages is to make an example of the wrongdoer in order to deter others from committing the same tort (see Norberg v. Wynrib, 1992 65 (SCC), [1992] 2 S.C.R. 226, [1992] S.C.J. No. 60); Riley's conviction and sentence had already served the purposes of punishment and deterrence. Thus, the fact that the appellant would face a larger financial responsibility than Riley is no obstacle to the imposition of exemplary damages against her.
[34] In order to respond to the argument that the trial judge erred because he used both general and exemplary damages to punish the appellant, it is necessary to consider the full reasons of the trial judge on the assessment of damages rather than to focus solely on the paragraph in which he concludes that exemplary damages are warranted.
[35] The relevant part of the reasons for judgment is entitled "Assessment of Damages". In this part, the trial judge begins by setting out that the plaintiff claimed general, aggravated and exemplary damages as against each of Riley and the appellant. He notes that the plaintiff also sought compensation for breach of fiduciary duty by the appellant because of the appellant's role "as caregiver, to care for and to administer to a child".
[36] Next, the trial judge considered Norberg v. Wynrib, supra, a decision of the Supreme Court of Canada on damages for sexual assault. He quoted the following from para. 54 of Norberg expressly because La Forest J. indicates in the quoted passage when and how aggravated and punitive or exemplary damages are to be awarded.
. . . aggravated damages may be awarded if the battery has occurred in humiliating or undignified circumstances. These damages are not awarded in addition to general damages. Rather, general damages are assessed "taking into account any aggravating features of the case and to that extent increasing the amount awarded": see N. (J.L.) v. L. (A.M.) (1998), 47 C.C.L.T. 65 (Man. Q.B.) at p. 71 per Lockwood J. These must be distinguished from punitive or exemplary damages. The latter are awarded to punish the defendant and to make an example of him or her in order to deter others from committing the same tort; see Linden, Canadian Tort Law (4th ed.) 1998 at pp. 54-55. In Vorvis v. Insurance Corporation of British Columbia, [1998] 1 S.C.R. 1085, at pps. 1107-9, McIntyre J. thus set forth the circumstances where the defendant's conduct would merit punishment: . . . [page11 ]
Punitive damages may only be awarded in respect of conduct which is of such nature as to be deserving of punishment because of its harsh, vindictive, reprehensible and malicious nature.
[37] Based on the guidance provided by Norberg, the trial judge refused to award aggravated damages in addition to general damages. Instead, he took the aggravating features of the assaults into consideration when he assessed general damages.
[38] The trial judge set out some of the many aggravating features in this case including that the repeated assaults and indecent exposure continued over a long period of time beginning when the plaintiff was a very young child. He also considered the detrimental effects of the abuse on the plaintiff and all of her personal relationships. He found that the plaintiff will require assistance in the future and that she suffers from mild to moderate post-traumatic stress disorder. He then assessed general damages of $100,000.
[39] Thereafter, the trial judge considered that a breach of trust may attract an independent damage award. He referred to the decision of the Supreme Court of Canada in M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, [1992] S.C.J. No. 85, which addresses this issue and noted the majority view that the same policy objectives underlie awards of damages for sexual assault and for breach of fiduciary duty, which objectives are to compensate the victim and to punish the wrongdoer. He stated that he had included a figure for breach of fiduciary duty in his assessment of general damages. By this last statement, I understand the trial judge to be refusing to award additional compensation for the appellant's repeated breaches of fiduciary obligation because he had already given due consideration to that factor when he assessed general damages.
[40] The trial judge then considered the claim for exemplary damages as against the appellant. Although he had already quoted the test for exemplary damages as articulated in Norberg, he reiterated that test, stating that exemplary damages may be awarded where the conduct is of such a nature that it is deserving of punishment because of its "harsh, vindictive, reprehensible and malicious nature". He found that the appellant's conduct was reprehensible and ought to be punished and deterred. He therefore awarded exemplary damages of $20,000 as against the appellant.
[41] While it would have been preferable had the trial judge reiterated the findings on which he concluded that the appellant's behaviour was reprehensible, a reading of his reasons as a whole reveals that he made the necessary findings. Those findings include the following. Despite the fact that Riley pleaded guilty to the offences against the plaintiff well in advance of the trial, the appellant continued to maintain at trial that Riley was [page12 ]not capable of such misconduct. The plaintiff's parents left the plaintiff in the care of the appellant and relied on the appellant to keep their daughter safe when they were not present. The appellant breached that position of trust on countless occasions. The appellant knew of Riley's problems and prior convictions for sexual offences but permitted the plaintiff to regularly be in Riley's presence without other adult supervision. The appellant had actual notice of Riley's misconduct towards the plaintiff or else was wilfully blind that he was sexually abusing her. The appellant was present with Riley and the plaintiff when Riley watched pornographic movies and would expose himself and masturbate. The appellant did nothing to protect the plaintiff or to prevent the masturbation and touching to take place even while professing to love the plaintiff.
[42] On these findings, which are amply supported in the record, it was open to the trial judge to find, as he did, that exemplary damages were warranted in order to punish the appellant and to deter others from committing the same egregious breach of trust.
[43] I see nothing in the reasons to suggest that the trial judge confused the objectives that underlie awards of general and exemplary damages. He made explicit the need for a finding of reprehensible behaviour that warranted punishment and deterrence and, when the reasons are read as a whole, he made the requisite findings. Consequently, in my view, there is no basis on which to interfere with the exercise of his discretion to award exemplary damages.
Appeal allowed in part.
Notes ----------------
[^1]: The trial judge referred to these damages as "exemplary" damages. Throughout these reasons, I use the terms "exemplary" and "punitive" interchangeably.