Judgments

[1993] 3 F.C. 381

T-1667-86

Lorraine Boothman (Plaintiff)

v.

Her Majesty the Queen (Defendant)

Indexed as: Boothman v. Canada (T.D.)

Trial Division, Noël J.—Calgary, March 18; Ottawa, April 29, 1993.

Crown — Torts — Plaintiff’s supervisor, aware of her fragile mental state, harassing, intimidating her with intent to fragment personality, destroy self-esteem — Wilful injuria, malicious purpose constituting intentional tort — Plaintiff’s vulnerability irrelevant to whether tort committed in view of knowledge thereof — Tort directly attribuable to employment — Employer responsible for actions of employee placed in position of trust.

Practice — Limitation of actions — Action against Crown for harassment, intimidation of public servant by supervisor — Further claim for negligence on part of senior management for failure to prevent wrongful acts barred by provincial limitation of actions legislation as raised out-of-time — Amendment to pleadings raising new cause of action not retroactive in face of limitation statute unless Court ruling on limitation issue.

Damages — Compensatory — Awarded for emotional distress in case of intentional tort, though not in negligence cases.

Damages — Non-compensatory — Exemplary — Awarded where tortfeasor’s conduct outrageous, compensatory damages awarded inadequate deterrence.

Damages — Limiting principles — Mitigation — Action for assault, intimidation, intentional infliction of nervous shock — Plaintiff declining medical assistance as not trusting psychiatrists — Duty to mitigate damages not discharged.

This was an action claiming damages for assault, intimidation and the intentional infliction of nervous shock. The plaintiff worked alone in a branch office of Canada Oil and Gas Lands Administration (COGLA) with a supervisor. From the time that he hired her, her supervisor was aware of her fragile mental state. An authoritative individual, he sought to control her by threats of bodily harm, insults in front of others, and yelling profanities at her. He monitored her breaks and forbade her to leave the office without permission. Eventually, head office was forced to investigate and concluded that the supervisor was guilty of harassment and that the plaintiff had psychiatric problems. The situation continued to deteriorate, until the plaintiff was finally released from her employment. There was medical evidence that the supervisor’s conduct was applied to deliberately fragment the plaintiff’s personality, and destroy her self-worth. The plaintiff has a persisting phobic apprehension of harassment and fear of loss of emotional control and employment precipitated by the events at COGLA.

The plaintiff, in an amended statement of claim, further alleged negligence by senior managers in failing to prevent the supervisor from committing the wrongful acts. The amended statement of defence alleged that the claim raised in negligence was barred by the Limitation of Actions Act of Alberta, section 51 which provides that an action in negligence “may be commenced within 2 years after the cause of action arose, and not afterwards”. The facts on which this additional claim was framed took place in 1984 and 1985.

Held, the action should be allowed.

In order to engage the vicarious liability of the Crown, the plaintiff had to establish that a tort had been committed by a servant of the Crown, and demonstrate that this tort was committed in the course of the servant’s employment.

The argument has been made that a defendant should be held liable where he has actual notice of a person’s vulnerability and intentionally seeks to cause that person harm which goes to the heart of that vulnerability. The supervisor acted in the knowledge of the plaintiff’s condition and deliberately exploited it to bring her to a state of mental collapse so that she would quit her job. There was wilful injuria, and malicious purpose to cause the plaintiff to breakdown mentally. There was no issue of remoteness or foreseeability, nor was there any question of whether the supervisor’s actions would have caused nervous shock to a normal person. When a person knowingly exploits another’s emotional and mental vulnerability thereby causing a severe and lasting mental breakdown, it is irrelevant that a normal person would not have been so adversely affected.

There is no difference in law between a servant who, entrusted with the supervision of personnel, abuses that authority and a servant entrusted with the care of goods who converts those goods to his own use. In both cases, the wrong is directly attributable and connected to the responsibility conferred on the servant. The supervisor was placed by his employer in a special position of trust and used that position to inflict mental pain on the plaintiff. The employer must bear the responsibility of ensuring that an employee is capable of trust. That is the rationale behind the vicarious liability of an employer. In so abusing the position of trust, the supervisor was acting in the course of his employment and the defendant’s liability was engaged.

There was no basis for allowing the wrongdoer to escape liability on the ground that the plaintiff had a pre-existent vulnerability because the supervisor knowingly exploited that vulnerability, thereby exacerbating her condition. Nonetheless, the award for damages had to be measured so as to compensate plaintiff for actual damages suffered and, in that regard, the plaintiff’s pre-existent vulnerability was relevant. Although damages have been awarded for psychological or emotional distress in intentional tort cases, recognizable psychiatric illness must be proven, and stress, strain, upset and anxiety have been held not compensable in negligence actions. In terms of damages, it mattered little that the plaintiff had a predisposition to mental collapse, as it was the wilful exploitation of that predisposition which caused the damages for which compensation was sought. Courts may award punitive or exemplary damages where a defendant deliberately exposed the plaintiff to risk without justification, even if not specifically pleaded. The sole factor militating against the award sought was that the plaintiff refused to accept offers of medical assistance extended by COGLA officials in that she distrusted psychiatrists. In not responding to such offers, the plaintiff failed in her duty to mitigate damages. The plaintiff was awarded $5,000 for pain and suffering due to the intentional infliction of nervous shock, $20,000 for loss of future earnings, $5,000 for pain and suffering as a result of assaults on her person, and in view of the supervisor’s outrageous conduct and the fact that $30,000 was inadequate for the purpose of deterrence, $10,000 as exemplary damages.

The amended statement of claim raised a cause of action which was distinct from that originally raised, and statute barred when the amended claim was filed. From the very beginning the plaintiff believed that she had been wronged by the actions of senior management. She could not now say that she only became aware of the additional cause of action in September 1992 when given full discovery of the relevant documents. An amendment which alleges a new cause of action is not retroactive in the face of a limitation statute, unless the Court in allowing the amendment actually rules on the issue of limitation.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Crown Liability Act, R.S.C., 1985, c. C-50, ss. 3(a), 10.

Federal Court Rules, C.R.C., c. 663, R. 420.

Judgment Interest Act, S.A. 1984, c. J-0.5, ss. 2, 4.

Limitation of Actions Act, R.S.A., 1980, c. L-15, s. 51.

CASES JUDICIALLY CONSIDERED

APPLIED:

Wilkinson v. Downton, [1897] 2 Q.B. 57; Starkman v. Delhi Court Ltd., [1961] O.R. 467; (1961), 28 D.L.R. (2d) 269 (C.A.); Broome v. Cassell & Co. Ltd., [1972] A.C. 1027 (H.L.); Rahemtulla v. Vanfed Credit Union, [1984] 3 W.W.R. 296; (1984), 51 B.C.L.R. 200; 4 C.C.E.L. 170; 29 C.C.L.T. 78 (S.C.); Timmermans v. Buelow (1984), 38 C.C.L.T. 136 (Ont. H.C.); Crown Diamond Paint Co. Ltd. v. R., [1980] 2 F.C. 794 (T.D.); The Queen v. Levy Brothers Company Limited and The Western Assurance Company, [1961] S.C.R. 189; (1961), 26 D.L.R. (2d) 760.

DISTINGUISHED:

Guay v. Sun Publishing Co., [1953] 2 S.C.R. 216; [1953] 4 D.L.R. 577; Heighington et al. v. The Queen in right of Ontario et al. (1987), 60 O.R. (2d) 641; 41 D.L.R. (4th) 208; 41 C.C.L.T. 230; 2 C.E.L.R. (N.S.) 93 (H.C.).

REFERRED TO:

McElroy v. Cowper-Smith and Woodman, [1967] S.C.R. 425; (1967), 62 D.L.R. (2d) 65; 60 W.W.R. 82; Weiss Forwarding Ltd. v. Omnus, [1976] 1 S.C.R. 776; (1975), 63 D.L.R. (3d) 654; 20 C.P.R. (2d) 93; 5 N.R. 511.

AUTHORS CITED

Prosser, William L. Handbook on the Law of Torts, 4th ed. St. Paul, Minn.: West Publishing Co., 1971.

Williams, Jeremy S. “Tort Liability for Nervous Shock in Canada.” Studies in Canadian Tort Law. Edited by Allen M. Linden. Toronto: Butterworths, 1968, pp. 139-159.

ACTION for damages for assault, intimidation and the intentional infliction of nervous shock by one Crown servant against another. Action allowed.

COUNSEL:

David J. Corry for plaintiff.

Bruce Logan for defendant.

SOLICITORS:

Milner Fenerty, Calgary, for plaintiff.

Deputy Attorney General of Canada for defendant.

The following are the reasons for judgment rendered in English by

Noël J.:

EDITOR’S NOTE

The Executive Editor has made a determination that His Lordship’s reasons for judgment herein should be reported as abridged. Omitted from the report are the initial 29 pages which contain a detailed review of the facts of the case. There follows a summary of the facts.

This was an action claiming damages of $50,000 for assault, intimidation and the intentional infliction of nervous shock. The alleged tortfeasor was plaintiff’s supervisor, Stalinski, at the Calgary office of Canada Oil and Gas Lands Administration, an organization which was a branch of both E.M.R. and Indian Affairs. An amended statement of claim alleged negligence on the part of other Crown servants for their failure to restrain Stalinski, but this cause of action was found to be barred as raised out of time.

Plaintiff, born in 1944, was a divorced woman who supported a child as a single mother. She held a secretarial diploma, a B.A. in Anthropology and had studied the latter subject at the Master’s level. Stalinski hired her as Assistant Liaison Officer over several other job applicants though doubting her psychological health. Plaintiff and Stalinski were the only two employees at COGLA’s Calgary office. On plaintiff’s first day on the job, her boss told her that her lack of eye contact at the interview suggested to him that she had a lot of guilt and might need time off for mental reasons. The working relationship between plaintiff and Stalinski, from the inception of her employment on July 4, 1984 until she was terminated on January 4, 1985, was stormy and tumultuous. On numerous occasions Stalinski threatened plaintiff with bodily harm. He would insult plaintiff in front of others and yell profanities at her. He monitored her breaks and forbade plaintiff to leave the office without his permission. During one of their heated arguments, Stalinski exclaimed: “What do I have to do to get you to do what I tell you? Bash your head in!” Eventually, plaintiff filed a complaint with the C.H.R.C. and brought the situation to the attention of COGLA Senior Management at Ottawa. A COGLA executive officer was sent out from Ottawa to conduct an investigation. This upset Stalinski who asked that plaintiff be given her release. The investigator concluded that plaintiff had psychiatric and emotional problems and that Stalinski was guilty of harassment. Stalinski had to travel to Ottawa for a psychiatric evaluation and a decision was made to carry out a financial and operations audit of the Calgary office. The investigation revealed that Stalinski had been using office facilities for the purposes of his own locksmithing business and making unauthorized charges to the public for government publications. Stalinski was let off with an oral reprimand—there being no prior documented evidence of misbehaviour on his part—and he and plaintiff were now to report directly to one Klaubert, a COGLA officer at Ottawa. This new reporting arrangement did little to ameliorate the situation. On one occasion Stalinski and plaintiff engaged in a tug-of-war over a cart used to move files. He yelled at her, calling her a bitch. Stalinski and plaintiff would send letters and memoranda to their supervisor complaining about one another. When senior officials finally decided that decisive action had to be taken, plaintiff was let go.

The Crown’s position was that Stalinski in no way harassed plaintiff but that if he did, he was not acting in the course of his employment. If plaintiff sustained any damages, the same resulted from her disorderly and disgraceful conduct.

His Lordship concluded that Stalinski took a military approach to those under his authority, was set in his ideas as to how an office should be run and considered COGLA’s Calgary office as his own. His use of violent language towards plaintiff had increased as plaintiff demonstrated her refusal to give in to his attempts to control and dominate her. On one occasion, Stalinski told his supervisor, Klaubert, that he could no longer bear plaintiff and would wring her neck “until all life has ceased”. Again, Stalinski threatened to rip off her lips and break her arm. On certain occasions when uttering such threats, Stalinski would be brandishing a screwdriver or have a hammer on his desk. Stalinski admitted to Klaubert that he kept tools at the office to irritate plaintiff. There was considerable evidence of conduct aimed at controlling and dominating plaintiff. Stalinski exploited plaintiff’s sensitivities by making derogatory comments and took actions which he knew would engender extreme emotional reactions. There was medical evidence that Stalinski’s conduct was “applied to deliberately fragment or break down her personality or identity structure and destroy her self-worth”. Expert evidence was given by a social worker to the effect that plaintiff’s “phobic apprehension of harassment, and loss of emotional control and employment in the work environment was precipitated by the traumatic events which took place during her employment” with COGLA. Plaintiff’s condition has persisted for over five years and the prognosis for recovery is doubtful. It was necessary for plaintiff to remember the facts in preparation for trial and the result of this circumstance was to “strengthen recall rather than facilitating the natural post—traumatic healing process and gradual suppression of painful recall”. The Court accepted the social worker’s evidence that, while plaintiff had difficulties in relating prior to joining COGLA, events there worsened her condition and triggered the state of severe depression from which she now suffers.

ANALYSIS

The Crown Liability Act, R.S.C., 1985, c. C-50, governs the liability of the Crown in tort and, in order to establish her case, the plaintiff must come within the parameters of paragraph 3(a) and section 10 of that Act. They provide that:

3. The Crown is liable in tort for the damages for which, if it were a private person of full age and capacity, it would be liable

(a) in respect of a tort committed by a servant of the Crown;

…

10. No proceedings lie against the Crown by virtue of paragraph 3(a) in respect of any Act or omission of a servant of the Crown unless the act or omission would apart from the provisions of this Act have given rise to a cause of action in tort against that servant or the servant’s personal representative.

In order to engage the vicarious liability of the Crown, the plaintiff must first establish that a tort has been committed by a servant of the Crown, and then demonstrate that this tort was committed in the course of the servant’s employment.

Dealing with the first question, it is clear from the evidence that when Mr. Stalinski hired the plaintiff, he was well aware of her mental vulnerability. In my view, Mr. Stalinski did not hire plaintiff despite that vulnerability as he professed, but because of it. He was looking to hire an employee who would readily submit to his control, and plaintiff, because of her apparent fragile state, was a fitting candidate. He exploited that vulnerability from the onset, initially to assert his control and domination over the plaintiff and later, when that failed, with the view of causing her to break down and quit her job. The first thing he did on plaintiff’s initial day of employment was to convey to her the fact that he was aware of her mental problem and that she had only gotten the position on paper. The only conceivable reason for those remarks was to make it clear to plaintiff, from the very beginning, that her future with COGLA was wholly within his control.

Mr. Stalinski’s language and actions towards plaintiff grew progressively more violent as plaintiff showed her determination to resist his attempts to dominate her. He intentionally assaulted the plaintiff on numerous occasions by wilfully creating an apprehension of immediate harmful or offensive contact and, on one occasion, resorting to direct force against the plaintiff thereby causing bodily harm. In addition, Mr. Stalinski humiliated, insulted, manipulated and harassed the plaintiff at every turn. He exploited her and succeeded in destroying the plaintiff’s self-esteem. He intended to cause her harm and succeeded in that attempt. The damage resulting from these actions is psychological in nature and includes depression and anxiety attacks, feelings of suicidal despair and social isolation.

The law with respect to the intentional infliction of nervous shock and that of assault causing emotional or psychological harm has been the focus of much commentary.

In an essay found in Professor Linden’s work entitled Studies in Canadian Tort Law, Butterworths, 1968, Jeremy S. Williams comments on the tort of intentional infliction of nervous shock and makes the argument that, as an exception to the general rule, a defendant should be held liable where he has actual notice of a person’s vulnerability and intentionally seeks to cause that person harm which goes to the heart of that vulnerability. At pages 142-143, the author states that:

Persons with constitutional weaknesses making them more susceptible to nervous shock than those of average hardihood present a problem. It would be simple to allow them recovery on the same basis as ordinary members of the community, but this is thought to impose an unnecessarily heavy burden on defendants. An actor should be entitled to assume that persons likely to be affected by his actions have normal fortitude. Conduct which would not cause nervous shock to a normal person should not be regarded as tortious. Justice Schauer, in Amaya v. Home Ice (1963) 379, P. 2d 513, stated, “… the increased liability imposed on an intentional wrongdoer appears to reflect the psychological fact that solicitude for the interests of the actor weighs less in the balance as his moral guilt increases and the social utility of his conduct diminishes.” However, where a defendant has actual notice that a potential plaintiff has a pre-existent vulnerability, there will be liability, as an exception to the usual rule, because such actions carry a greater moral reprehensibility.

The case law on this point originates with the case of Wilkinson v. Downton, [1897] 2 Q.B. 57. In this case, a verbal hoax misfired and caused nervous shock to the person of the plaintiff. Wright J. said [at pages 58-59]:

The defendant has, as I assume for the moment, wilfully done an act calculated to cause physical harm to the plaintiff—that is to say, to infringe her legal right to personal safety, and has in fact thereby caused physical harm to her. That proposition without more appears to me to state a good cause of action, there being no justification alleged for the act. This wilful injuria is in law malicious, although no malicious purpose to cause the harm which was caused nor any motive of spite is imputed to the defendant.

In Rahemtulla v. Vanfed Credit Union, [1984] 3 W.W.R. 296 (B.C.S.C.), Madam Justice McLachlin, while sitting as a Justice of the Supreme Court of British Columbia, accepted the rule laid down in Wilkinson v. Downton as the foundation for the tort. In that case, the plaintiff was a bank teller who, as a result of being wrongfully accused of stealing money, suffered mental suffering.

In Timmermans v. Buelow (1984), 38 C.C.L.T. 136 (Ont. H.C.), the Court found that the rule in Wilkinson v. Downton applied where the defendant, who had knowledge of the plaintiff’s fragile emotional state, assisted in obtaining his unlawful eviction. As a result, the plaintiff suffered serious psychological trauma. In this case, Catzman J. thoroughly canvassed the rule in Wilkinson v. Downton and distinguished the tort of intentional infliction of nervous shock from that of assault. At page 138, he states:

To start with, the Wilkinson principle is clearly distinguishable in function from the tort of assault. While this is no place for an exhaustive catalogue of the distinctions, I would offer the following:

(a) In assault, the apprehension felt by a plaintiff must be of imminent and unwelcome physical contact to himself. In Wilkinson cases, that may be so, but typically is not. Thus, Mrs. Wilkinson was afraid only for her husband’s safety, as was Mrs. Purdy in her case: while Mademoiselle Janvier’s fear was not of physical contact at all, any more than Miss Rahemtulla’s was; and poor old Mrs. Bielitski was stricken with unnecessary grief for her supposedly dead son, rather than any fear for herself.

(b) Assault is commonly held, upon the somewhat shaky authority … to be an essentially physical tort, necessarily involving some physical gesture and thus incapable of being committed by words alone. In contrast, the tort committed in Wilkinson cases is typically … entirely verbal ….

(c) In one respect, the Wilkinson tort, generally complementary to assault, is narrower than the latter tort. For in assault, a plaintiff need only show “apprehension,” the slightest emotional disquiet or annoyance being apparently enough. In Wilkinson v. Downton cases, by contrast, the plaintiff is compelled to show a devastating trauma to the nervous system sufficient in law to amount to that unscientific notion of “nervous shock”.

Catzman J. then went on to postulate the requirements for establishing the tort of intentional infliction of nervous shock. At page 140, he enumerates those requirements as follows:

(i) An overt act, whether physical, verbal or both by the defendant.

(ii) Intent by the defendant[1] to do that act or to speak those words.

(iii) Circumstances which would lead a reasonable person in the position of the defendant to foresee a reasonable likelihood of fear or emotional upset on the part of the plaintiff ….

(iv) Actual harm amounting to nervous shock—i.e. going beyond the kind of emotional upset needed to satisfy element (iii) … and going beyond, in many instances, the limits of reasonable prevision.

In the case at hand, Mr. Stalinski, as had the defendant in the Timmermans case, acted in the knowledge of plaintiff’s condition, but the distinguishing feature is that he deliberately exploited her condition with the view of bringing her to collapse mentally and quit her job. Not only was there general wilful injuria of the Wilkinson type, but there was also the malicious purpose to cause the plaintiff to breakdown mentally. There is accordingly no issue of remoteness or foreseeability in the present case, nor is there any question as to whether the actions of Mr. Stalinski would have caused nervous shock to a normal person. When a person knowingly exploits another’s emotional and mental vulnerability thereby causing a severe and lasting mental breakdown, it is no answer to state that a normal person would not have been so adversely affected.

Once it has been proven that a tort has been committed by a servant of the Crown, it remains for the plaintiff to establish that the tort was committed in the course of the servant’s employment. The jurisprudence with respect to the liability of a master for the actions of its servants is canvassed in the case of Crown Diamond Paint Co. Ltd. v. R., [1980] 2 F.C. 794 (T.D.). Dubé J. states, at pages 799-800:

Learned counsel for the defendant claimed that a master is not responsible for damage by his servant when the latter is not acting within the scope of duty but “on a frolic of his own”. She quoted a number of authorities on the subject. As I pointed out to her at the hearing, it used to be that a bailee was not responsible for the loss of property by the theft of his own servant, unless the bailee had given occasion for the theft by his own negligence, or by that of some other of his servants employed to take care of the property. However, the Court of Appeal has now held in Morris v. C.W. Martin and Sons Ltd., [1966] 1 Q.B. 716 at p. 737, that the responsibility of the bailee must depend on whether the servant by whom the theft is committed is one to whom the charge or custody of the thing stolen has been entrusted by his master. In other words, if such a servant steals the thing entrusted to him, he is acting nevertheless in the course of his employment. He is doing fraudulently what he is employed to do honestly. In Morris v. C.W. Martin and Sons Ltd. a firm of cleaners to whom a furrier had sent the plaintiff’s mink stole were found liable for the theft of the stole by an employee whose duty it was to clean it.

It is a question of fact whether the employment merely provided an opportunity for the theft, or was part of the task on which the servant was engaged.

A master will not get off his liability merely because his servant was temporarily going on a frolic of his own. The question is whether the activity was reasonably incidental to the performance of his authorized duties, or involved so substantial a departure that the servant must be regarded as a stranger vis-à-vis his master.

This has been the law in Canada for some time. In The Queen v. Levy Brothers Company Limited and The Western Assurance Company, [1961] S.C.R. 189, Mr. Justice Ritchie, in a case involving the theft of a parcel of diamonds by officers of the Customs Postal Branch, stated [at pages 191-192]:

Customs officers are required by s. 44(3) of the Post Office Act … to “deal with” dutiable mail in accordance with the laws relating to customs pending delivery to the addressee or return to Canada Post Office, and it was in the course of so dealing with the respondent’s parcel of diamonds that an employee or employees of the Crown converted them to his or their own use. The employee or employees concerned were thus doing fraudulently that which they were employed to do honestly and the theft was, therefore, in my view, committed under circumstances as to render the employer liable for the loss. The law governing these circumstances has been stated in Story on Agency, 7th ed., para. 452, in terms which have been approved in this Court on more than one occasion. It is there said:

… he (the principal) is held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, torts, negligences, and other malfeasances, or misfeasances, and omissions of duty, of his agent, in the course of his employment, although the principal did not authorize, or justify, or participate in, or, indeed, know of such misconduct, or even if he forbade the acts, or disapproved of them. [Underlining is mine.]

I can see no difference in law between the case where a servant who, entrusted with the supervision of personnel, abuses that authority in the manner described in these reasons, and that of a servant entrusted with the care of goods who converts those goods for his or her own use. In both cases, the wrong is directly attributable and connected to the duty or responsibility conferred on the servant.

In the case at hand, Mr. Stalinski was placed by his employer in a special position of trust. As Mr. Sherwin, Director General, Resource Evaluation Branch, stated in the disciplinary letter written to Stalinski on October 26, 1984:

You must realize that, due to the fact that the Calgary Office is removed from direct Headquarters supervision, you are in a special position of trust in terms of doing your job and conducting yourself in a manner that reflects well on COGLA, and on you as an employee.

Mr. Stalinski was without supervision. He had ultimate authority to hire, and exercised that authority in a wrongful manner. He was the sole authority in a two-person office and, after having been placed in that position by his employer, he used that authority to inflict upon plaintiff mental pain and suffering, to harass her, intimidate her, interfere with her, and on occasion assault her. He was placed in this position notwithstanding the fact that Mr. Sherwin and other senior officials of COGLA knew him to be a difficult individual, abrasive in his behaviour, evasive vis-à-vis his responsibilities, and prone to losses of temper.

The evidence indicates the occurrence of a prior event where, again, a female employee working alone under Mr. Stalinski’s orders left her job after suffering a mental breakdown. If senior officials in Ottawa failed to make the connection between the two occurrences, Mr. Stalinski did not as is evidenced by his memorandum of September 1984 to Don Sherwin wherein, in an attempt to get plaintiff terminated, he stated:

My concern was that Ms. Boothman was exhibiting certain mannerisms also exhibited by a former employee who had some rather serious personality disorders that made it impossible for them to function in a normal work environment.

In my view, when an employer places an employee in a special position of trust, he or she bears the responsibility of ensuring that the employee is capable of trust. That is the rationale which stands behind the vicarious liability of an employer.

Mr. Stalinski used the position of trust in which he was placed by his employer to cause harm to the plaintiff. In so doing, he was acting in the course of his employment and the defendant’s liability was thereby engaged.

DAMAGES

I now turn to the issue of damages. As noted earlier, if Mr. Stalinski knowingly exploited the plaintiff’s vulnerability, thereby making her condition extensively worse, I can see no basis whatsoever for allowing the wrongdoer to escape his liability on the ground that the plaintiff had a pre-existent vulnerability. That being said, it remains that the award for damages must be measured so as to compensate plaintiff for the actual damages suffered and, in that regard, the plaintiff’s pre-existent vulnerability is relevant.

I have referred to the case law with respect to awards under the heading of nervous shock which highlights the distinction between an action framed in negligence and one framed in tort per se, i.e an intentional tort. The basis for this distinction can be gleaned from a reading of the case law which I canvassed earlier. The cases of Wilkinson, Rahemtulla and Timmermans involved intentional torts and, in each case, damages were awarded for psychological or emotional distress similar to that from which the plaintiff suffers. Other cases, notably Guay v. Sun Publishing Co., [1953] 2 S.C.R. 216, and Heighington et al. v. The Queen in right of Ontario et al. (1987), 60 O.R. (2d) 641 (H.C.), establish that, in an action framed in negligence, recognizable psychiatric illness must be proven, and stress, strain, upset and anxiety are not compensable. The difference of approach in cases of negligence and of tort was commented on by Professor Prosser in Handbook on the Law of Torts, 4th ed. (1971). At pages 30-31, he notes:

There is a definite tendency to impose greater responsibility upon a defendant whose conduct has been intended to do harm, or morally wrong. More liberal rules are applied as to the consequences for which he will be held liable, the certainty of proof required, and the type of damage for which recovery is to be permitted, as well as the measure of compensation. The defendant’s interests have been accorded substantially less weight in opposition to the plaintiff’s claim to protection when moral iniquity is thrown into the balance. Apparently the courts have more or less unconsciously worked out an irregular and poorly defined sliding scale, by which the defendant’s liability is least where his conduct is merely inadvertent, greater when he acts in disregard of consequences increasingly likely to follow, greater still when he intentionally invades the rights of another under a mistaken belief that he is committing no wrong, and greatest of all where his motive is a malevolent desire to do harm.

In the case at hand, the actions of Mr. Stalinski took plaintiff from a fragile emotional state, which was noted by Mr. Stalinski at the time she was hired, to a state of mental collapse and severe nervous depression, the impact of which she continues to exhibit some seven years after the fact. In terms of damages, it matters little, in the circumstances of this case, that plaintiff had a predisposition as it has been shown that it is the wilful exploitation of that predisposition which caused the damages for which she is now seeking compensation.

It has been authoritatively held in this country that there is jurisdiction to award punitive damages or exemplary damages where a defendant deliberately exposes the plaintiff to risk without justification.[2] Indeed, it does not appear that exemplary damages need be specifically pleaded in order for the Court to exercise this jurisdiction. In Starkman v. Delhi Court Ltd., [1961] O.R. 467 (C.A.), McGillivray J.A. said [at page 472]:

In the present case the award was of a lump sum of $5,000. In claims of this nature it is not the practice to allow a separate and distinct sum for punitive damages but such, when the circumstances justify it, may be taken into account in the overall assessment. As they are not to be assessed separately there is no compelling necessity that they should be specifically claimed.

Yet, the distinction between compensatory damages and punitive damages must be maintained. As Lord Reid stated in Broome v. Cassell & Co. Ltd., [1972] A.C. 1027 (H.L.) [at page 1089]:

The only practical way to proceed is first to look at the case from the point of view of compensating the plaintiff. He must not only be compensated for proved actual loss but also for any injury to his feelings and for having had to suffer insults, indignities and the like. And where the defendant behaved outrageously very full compensation may be proper for that. So the tribunal will fix in their minds what sum would be proper as compensatory damages. Then if it has been determined that the case is a proper one for punitive damages the tribunal must turn its attention to the defendant and ask itself whether the sum which it has already fixed as compensatory damages is or is not adequate to serve the second purpose of punishment or deterrence. If they think that that sum is adequate for the second purpose as well as for the first they must not add anything to it. It is sufficient both as compensatory and as punitive damages. But if they think that sum is insufficient as a punishment then they must add to it enough to bring it up to a sum sufficient as punishment. The one thing which they must not do is to fix sums as compensatory and as punitive damages and add them together. They must realise that the compensatory damages are always part of the total punishment.

It is always difficult for the Court to ascertain damages with any precision. The Court must look at the evidence and the state of the plaintiff and, as Lord Reid said in Broome v. Cassell Co. Ltd. (supra), look at the case with a view of compensating the plaintiff. Here, the total award sought by plaintiff is $50,000.

The sole factor militating against that award lies in the fact that, at the relevant time, plaintiff refused to accept the offers of medical assistance extended by the COGLA officials. Plaintiff argued that she was justified in refusing this assistance because she did not trust psychiatrists. This may be so, but, in assessing damages, the Court must look objectively at the means which were made available to plaintiff to minimize or contain the damages from which she now suffers. In not responding to the offers of medical assistance, she failed in her duty to minimize her damages.

In view of all the evidence, I award the following:

1. For damages suffered as a result of the intentional infliction of nervous shock, the sum of $5,000 for pain and suffering and $20,000 for loss of future earnings.

2. For pain and suffering as a result of the assaults on her person, the sum of $5,000.

3. Given the reprehensible conduct of Mr. Stalinski, his outrageous and unacceptable behaviour towards the plaintiff, the fact that the sum of $30,000 is inadequate for the purpose of deterrence, I would add to that amount the sum of $10,000 as exemplary damages.

ADDITIONAL CLAIM RAISED BY AMENDED STATEMENT OF CLAIM

By her amended statement of claim, plaintiff further alleges that senior management was negligent in failing to take the necessary steps and measures to prevent Mr. Stalinski from committing or continuing to commit the above-described wrongful acts.

In her amended statement of defence, the defendant alleges inter alia that the claim raised in negligence by the amended statement of claim is barred by Limitation of Actions Act, R.S.A. 1980, c. L-15.

At the end of the hearing on the original statement of claim, I pointed out to counsel for the plaintiff, during argument, that he was seeking recovery on grounds which were not reflected by the statement of claim. It is a result of this comment that plaintiff moved to amend her statement of claim under Rule 420 [Federal Court Rules, C.R.C., c. 663]. Counsel for the defendant consented to the amendment on terms that he be allowed to file an amended defence and that he be allowed to adduce evidence on the new allegations.

I allowed the amendment because it appeared to me at that time that it could be necessary to the determination of the real question in controversy between the parties. I have since heard evidence on these amended allegations, and I have come to the conclusion that they raise a cause of action which was distinct from that originally raised, and statute barred at the time when the amended claim was filed, that is on November 6, 1992.

Section 51 of the Limitation of Actions Act of Alberta provides that an action in negligence “may be commenced within 2 years after the cause of action arose, and not afterwards”. While the negligence alleged by the amended statement of claim is related to the wrongful acts of Mr. Stalinski, it nevertheless raises a distinct and separate ground of action. As the facts on which this additional claim is framed took place back in 1984 and 1985, I must conclude that it cannot be sustained as it was made out of time.

Plaintiff recognized so much but argued that the defendant was estopped from raising the limitation period as a defence by reason of the consent which was given to the filing of the amended statement of claim. In my view, the defendant was not thereby estopped from raising any defence. In fact, the amendment was granted subject to the defendant’s unlimited right to respond by way of an amended defence, and it was open to the defendant to raise the statute of limitation as a defence at the time of filing of the amended defence.

Plaintiff further argued that the material facts allowing her to raise a further claim in negligence were only communicated to her in September of 1992 when she was given full discovery of the relevant documents by the defendant. Plaintiff therefore concludes that the starting point for the computation of the limitation period is September of 1992, and not the time when the events giving rise to the claim of negligence took place.

A review of the massive amount of documentary evidence emanating from the plaintiff and generated at the time when the relevant events took place indicates that plaintiff, from the very beginning, held the belief that she had been wronged by the inappropriateness of the actions of senior management. Quite clearly her main contention was with the actions of Mr. Stalinski, but it is clear that she was most mindful of what she viewed as the failings of senior management at the time when the original action was launched in July of 1986. I therefore cannot accept that plaintiff only became aware of this additional cause of action in September of 1992.

Finally, plaintiff argues that an amendment to a statement of claim, once duly made, takes effect retroactively from the time when the original document which it amends took effect. It follows, plaintiff argues, that the cause of action in negligence must be held to have been raised in July of 1986, when the original claim was filed. I do not believe that, in the face of a limitation statute, an amendment which alleges a new cause of action can be considered to have been made at a time other than that at which it was actually made, unless the Court, in allowing the amendment, actually rules on the issue of limitation. This is not the case here.

For the above reasons, I must come to the conclusion that the cause of action in negligence raised by the amended statement of claim was barred by statute at the time it was made and, hence, cannot succeed. I had reserved the issue of costs on plaintiff’s motion to amend her statement of claim. In the circumstances, I have concluded that no order should be made in that regard.

AWARD

On the original claim, judgment is awarded to plaintiff in the amount of $40,000. Interest shall be calculated pursuant to the Alberta Judgment Interest Act, S.A. 1984, c. J-0.5. The Act states that pre-judgment interest shall be awarded when the cause of action arose. Given the nature of the claim which essentially deals with the cumulative effect of various acts, I believe the effective date to be January 4, 1985.

With respect to the $10,000 award for pain and suffering for assault and intentional infliction of nervous shock, subsection 4(1) prescribes that pre-judgment interest for such non-pecuniary damages shall be calculated at 4% a year.

With respect to the $20,000 award for loss of future earnings, subsection 4(2) prescribes that the rate of pre-judgment interest for pecuniary damages shall be fixed every year by the Lieutenant Governor. It should therefore be computed by reference to the rate prescribed annually.

Under subsection 2(2), no pre-judgment interest is to be computed on the $10,000 award for exemplary damages.

Counsel may, if the need arises, submit their proposed interest calculations for adjudication.

Costs are awarded against the defendant.

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