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CIVIL PROCEDURE - Charge to jury - Pre-judgment interest

Monday, December 16, 2019 @ 9:31 AM  

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Appeal by the defendants from a jury verdict and an order for pre-judgment interest. The respondent sued for damages suffered because of being sexually abused by M, a priest, while attending a school run by the appellants. The appellants were aware that M was abusing boys and moved M to different schools when sexual abuse allegations arose. The respondent left his military career allegedly because his commanding officer reminded him of M and he wanted to get away from him. The appellants acknowledged that the abuse caused or materially contributed to the respondent’s general damages, aggravated damages, and future care costs but did not admit that the sexual abuse resulted in any loss of income or should attract punitive damages. The jury awarded $1,588,781 lump sum damages for income loss and $500,000 in punitive damages. The appellants argued the trial judge erred by failing to properly instruct the jury on the burden of proof for claims for past loss of income for sexual abuse, that the award of punitive damages was excessive and that the trial judge erred in setting the rate of prejudgment interest at five per cent for non-pecuniary damages.

HELD: Appeal allowed in part. The legal instruction given to the jurors to determine entitlement and quantum of damages for loss of income contained no reversible error. There was no dispute that the respondent earned less than he would have, had he remained in the armed forces. However, there were several possible reasons for his leaving the armed forces and, through no fault of his, it was not clear which cause resulted in the financial loss. Therefore, to establish entitlement to past and future economic loss, the respondent only had to prove there was a real and substantial possibility that the sexual abuse caused his economic loss. While the charge might have been put more clearly in respect of the fact that damages for income loss must be commensurate with the percentage chance that the opportunity would have materialized, the trial judge made no reversible error in articulating the legal principles. While the award for punitive damages was high, the jury considered the general objective of punitive damages as punishment, deterrence, and denunciation. The instruction in respect of punitive damages contained no error and the damages awarded were not so excessive as to call for intervention. In rendering its award, the jury likely took into account the evidence that the appellants knew M had been abusing boys before he was even ordained, they allowed M to sexually abuse children for more than three decades as a teacher and religious figure, and they decided to move him to different schools when incidents of abuse were reported instead of preventing further harm. The annual prejudgment interest rate should have been 1.3 per cent. While the trial judge was correct that s. 258.3(8.1) of the Insurance Act did not apply, his conclusion that therefore the default prejudgment interest rate of five per cent applied was not correct in law. He should have considered the factors listed in s. 130(2) of the Courts of Justice Act, including the changes in market interest rates. In not doing so, he placed no weight or insufficient weight on the consideration of market interest rates.

MacLeod v. Marshall, [2019] O.J. NO. 5472, Ontario Court of Appeal, R.J. Sharpe, K.M. van Rensburg and J.A. Thorburn JJ.A., October 25, 2019. Digest No. TLD-December162019001