Judgments

[1994] 1 F.C. 562

A-721-92

Her Majesty the Queen in Right of Canada (Appellant) (Defendant)

v.

Joseph Peeters (Respondent) (Plaintiff)

Indexed as: Peeters v. Canada (C.A.)

Court of Appeal, Heald, MacGuigan and Linden JJ.A.—Ottawa, October 26 and November 4, 1993.

Crown — Torts — Appeal from Trial Division decision awarding compensatory, punitive damages re: assault following hostage-taking in penitentiary — Convict assaulted by guards while being taken to hospital by ambulance — Whether Crown vicariously responsible as employer for punitive damages under Crown Liability Act, ss. 3, 10 — Degree of complicity by employer required — Inadequacy of guards’ training amounting to complicity.

Penitentiaries — Civilian CSC employee taken hostage, injured by convict — Convict subdued, sent to hospital by ambulance — CSC guards assigned to escort convict, still upset by hostage-taking incident, assaulted convict in ambulance while naked, strapped to stretcher — Crown appealing award of punitive damages — Award justified as inadequacy of training of escort sufficient to establish complicity — Guards not trained such that reasonable restraint second nature as necessary in case of employees expected to use force.

Damages — Non-compensatory — Exemplary — Vicarious responsibility of Crown as employer for punitive damages under Crown Liability Act, ss. 3, 10 — Compensatory, aggravated, punitive damages distinguished — Crown subject to punitive damages as assimilated to private persons under s. 3 — Whether blameless employer subject to punitive damages for employee’s fault — Authors reviewed, case law silent — Punitive damages based on deterrent effect — Employer’s complicity required for award of punitive damages.

This was an appeal from the decision of Muldoon J. awarding compensatory and punitive damages to the respondent, an inmate at Kingston Penitentiary. After a four-hour hostage- taking incident in which the inmate caused bodily harm to a civilian employee of the Correctional Service of Canada (CSC), the inmate was subdued and, having sustained injuries to his face, was taken to hospital by ambulance. In the ambulance, he was savagely beaten by the three CSC officers assigned to escort him from the penitentiary and who were still upset about the hostage-taking incident. The Trial Judge held that unnecessary force was applied by the officers and that their unprofessional lack of self-discipline, brutality and wilful malice constituted valid grounds for an award of punitive or exemplary damages. The main issue in this appeal was whether the Crown, as employer, could be held vicariously responsible for punitive damages under sections 3 and 10 of the Crown Liability Act.

Held, the appeal should be dismissed.

In a personal injury case, the plaintiff may be awarded punitive as well as compensatory damages. Punitive damages had to be distinguished from aggravated damages. Compensatory and aggravated damages are designed to compensate the plaintiff whereas punitive damages are designed to express the Court’s outrage and to deter such conduct in the future. Aggravated damages are not awarded in addition to general damages but as part of them; the aggravating features are taken into account by the court and the award of general damages is increased accordingly. The Trial Judge was right in holding that the Crown can be subject to punitive damages since such relief is available against private persons to whose position the Crown is assimilated under section 3 of the Crown Liability Act. Although it is generally acknowledged that the trial courts presently hold employers vicariously liable for punitive damages without fault on their part, such case law is not persuasive and there are no appellate decisions on that precise point. However, it can be said that in order to award punitive damages against an employer, there must have been at least some form or degree of complicity or blameworthiness on the part of that employer. If punitive damages must ultimately be justified on the basis of deterrence, there can be no possibility of a deterrent effect if there is no complicity by employers against whom punitive awards are sought. Therefore, an employer is subject to punitive damages only if his complicity in a tortious situation has been established by the plaintiff. The indicia of blamelessness on the part of the CSC were insufficient to establish a lack of complicity. On the other hand, the inadequacy of the training of the escort was sufficient to establish complicity. The CSC members had not been trained to the point where reasonable restraint was second nature to them, as they should have been, as employees expected to use force. The quantum of punitive damages awarded—$16,000—should be sustained although the Trial Judge erred in taking into account an amount awarded against CSC in a 1988 case when the facts in the case at bar took place in 1985.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Crown Liability Act, R.S.C. 1970, c. C-38, s. 4(2).

Crown Liability Act, R.S.C., 1985, c. C-50, ss. 3, 10, 16, 17, 18, 19, 20.

CASES JUDICIALLY CONSIDERED

APPLIED:

LeBar v. Canada, [1989] 1 F.C. 603; (1988), 33 Admin. L.R. 107; 46 C.C.C. (3d) 103; 90 N.R. 5 (C.A.) (as to an award of punitive damages against the Crown); Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085; (1989), 58 D.L.R. (4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R. (2d) 273; 94 N.R. 321; Norberg v. Wynrib, [1992] 2 S.C.R. 226; (1992), 92 D.L.R. (4th) 449; [1992] 4 W.W.R. 577; 68 B.C.L.R. (2d) 29; 9 B.C.A.C. 1; 12 C.C.L.T. (2d) 1; 138 N.R. 81; 19 W.A.C. 1; Swanson v. Canada (Minister of Transport), [1992] 1 F.C. 408; (1991), 80 D.L.R. (4th) 741; 7 C.C.L.T. (2d) 186; 124 N.R. 218 (C.A.).

DISTINGUISHED:

LeBar v. Canada, [1989] 1 F.C. 603; (1988), 33 Admin. L.R. 107; 46 C.C.C. (3d) 103; 90 N.R. 5 (C.A.) (as to fault attributed to directing mind of CSC per se); Rookes v. Barnard, [1964] A.C. 1129 (H.L.); Evaniuk v. 79846 Manitoba Inc. (1990), 68 Man. R. (2d) 306 (Q.B.).

AUTHORS CITED

American Law Institute. Restatement on the Law of Contracts, 2d. St. Paul, Minn.: American Law Institute Publishers, 1986.

American Law Institute. Restatement of the Law, Second - Torts 2d. St. Paul, Minn.: American Law Institute Publishers, 1979.

Cherniak, Earl A. and Jerome R. Morse. “Aggravated, Punitive and Exemplary Damages in Canada” in Special Lectures of the Law Society of Upper Canada, 1983: Torts in the 80’s. Don Mills, Ont.: De Boo, 1983.

Cooper-Stephenson, Kenneth D. and Iwan B. Saunders. Personal Injury Damages in Canada. Toronto: Carswell Co. Ltd., 1981.

Feldthusen, Bruce. “Recent Developments in the Canadian Law of Punitive Damages” (1990), 16 Can. Bus. L.J. 241.

Linden, Allen M. Canadian Tort Law, 5th ed. Toronto: Butterworths, 1993.

Ontario Law Reform Commission, Report on Exemplary Damages. Toronto: The Commission, 1991.

Waddams, S. M. The Law of Damages. 2nd ed.. Aurora, Ont.: Canada Law Book, 1992.

APPEAL from a Trial Division decision ((1992), 54 F.T.R. 289 (F.C.T.D.)) awarding general and punitive damages for an assault committed against respondent while an inmate at Kingston Penitentiary. Appeal dismissed.

COUNSEL:

Gilles Villeneuve for appellant (defendant).

Fergus J. O’Connor for respondent (plaintiff).

SOLICITORS:

Deputy Attorney General of Canada for appellant (defendant).

O’Connor, Bailey & Napier, Kingston, Ontario, for respondent (plaintiff).

The following are the reasons for judgment rendered in English by

MacGuigan J.A.: This appeal raises the issue of the vicarious responsibility of the federal government, as employer, for punitive damages.

I

The appeal is taken against a judgment of Muldoon J. dated 1 June 1992, [(1992), 54 F.T.R. 289 (F.C.T.D.)], by which the appellant was ordered to pay the respondent $3,600 in general damages and $16,000 in punitive damages for an assault committed against him while an inmate at Kingston Penitentiary.

The respondent was serving a sentence for robbery and assault when, on 28 November 1985, he took as hostage a civilian employee of the Correctional Service of Canada (CSC). The hostage incident lasted nearly four hours, during which time the respondent cut the hostage’s ear with a pair of scissors and threatened to kill him. The respondent was subdued by the CSC’s Emergency Response Team (ERT), and, having sustained injuries to his face, was taken by ambulance to a general hospital.

The Trial Judge described what happened in the ambulance as follows (at page 295):

The plaintiff testified that three CSC guards and one of the two ambulance attendants boarded the rear compartment of the vehicle where he lay naked, save for a covering blanket, strapped to a stretcher or gurney. He testified that, with the ambulance attendant “being so scared and unable to react in any kind of normal fashion” (Tr:24:) despite the plaintiff’s silent pleas for help, the three CSC officers assaulted the plaintiff most painfully by twisting and cramping his left leg, by striking a blow with a hard, blunt object to his kidney area, by striking him full force upon his testicles, (Tr:23) and by pressing a baton, bat or club against the plaintiff’s larynx (Tr:17).

Before the trial, the appellant admitted liability for the assault, and took disciplinary action against the three CSC officers involved. Penalties of $3,500 and $2,500 were assessed respectively against two officers, and the officer principally involved in the assault, who according to the respondent’s testimony was also one of the ERT, was discharged from the CSC. However, the penalties imposed were grieved, and were reduced by the Public Service Staff Relations Board to a six-month suspension for the principal malefactor (which amounted to a financial penalty of approximately $14,000) and to an approximate halving of the other penalties.

The Trial Judge’s comment was as follows (at pages 299-300):

Mary Cassidy, who was the warden of Kingston Penitentiary at the material times, testified that she was unaware then or now of any rule, regulation, standing order or policy about whether a guard who has been in an altercation with a prisoner may, within a short time, be that prisoner’s escort or a member of an escort team off the penitentiary premises (Tr. 98 & 99). Subject to exigencies of circumstances, of personnel availability and training, it would make good sense to prevent any CSC employee who was still “in a very riled-up, angry state” from performing escort duties in regard to an inmate offender, on or especially off, the penitentiary premises.

Indeed, whether CSC personnel do or do not believe that due processes of law are too inefficient, too slow or too lenient to punish inmate offenders, it is for the employer, the Crown, to insure that custodial staff are not turned loose upon inmates while such staff members are “in a very riled-up, angry state”. That, or pay the price. Professionalism is realistically expected of such custodial staff and, while professional behaviour can always evince a dispassionate strictness, it must also evince self-control. Just as inmates who offend, (especially in such a bloody, ear-cutting savagery as did the hostage-taking, hostage-wounding plaintiff herein), must expect lawful restraint and lawful punishment, so also CSC personnel who offend, (especially in a maliciously assaultive manner), must expect to attract punishment to themselves and/or an extraordinary award of damages against the Crown, which alas, always means the taxpayers.

…

Here the court finds direct, advertent malice on the part of the Crown’s employees. They wilfully applied painful and abusive force—utterly unnecessarily to the plaintiff’s person.

On appeal, the appellant took issue only with the award of punitive damages. On this matter, Muldoon J. wrote (at pages 302-303 and 305):

It is beyond doubt that punitive or exemplary damages are called for. The defendant’s servants’ unprofessional lack of self-discipline, their brutality and thuggery, and their wilful malice cry out for punitive or exemplary damages. Some officials of a civilized state they were! Barbarity always harms the State and especially if the State’s officials be the perpetrators. It is a pity that the taxpayers have to pay for the thuggish misbehaviour of Aitchison, Donahue and Hammond, when they themselves should be made to pay.

…

Warden Cassidy was absolutely correct in concluding that unnecessary force was applied. Indeed, she stated:

“A. Well, use of force is sometimes a very intrical [sic” integral’, (misspelled)] part of corrections management and the role of a Correctional Officer. Only that amount of force which is deemed necessary to ensure the safety or security of persons is acceptable in the performance of a Correctional Officer’s duties.

In my view, when Mr. Peeters was already restrained, there was no amount of force that was acceptable during the escort trip to the hospital. And so, it was on the basis of the inappropriate conduct and the exercise of power, that I took the discipline rather than because injuries had been sustained. (Emphasis not in original text) (Tr:87)

…

Although the warden’s attitude to that affair was wholly correct, she is not the government, the Crown, the Commissioner of Penitentiaries, or the Clerk of the Privy Council. It is apparent that the degree of self-restraint and professionalism needed to avoid, or never even to contemplate such brutal misbehaviour were not sufficiently inculcated upon the three perpetrators of the assault and battery inflicted on the plaintiff. Why do such persons—almost inevitably male persons—per- vert their role by evincing such goonsquad machismo, which is always nothing more than cowardly brutality? That is not their duty. Why do they not just do it right? Because they are not well selected, trained and admonished by their employer, they engage in brutal criminal behaviour and, by their example, make mockery of and push into disrepute the notion of a professional, proficient correctional service.

The appellant argued that, in these circumstances, punitive damages could be assessed only against the individual servants of the Crown and not against the Crown itself.

II

A successful plaintiff in a personal injury case receives compensation in the form of an award of damages. However, in addition to the special and general damages of a compensatory nature payable in ordinary tort cases, a plaintiff may receive an award of punitive damages, a concept which must be carefully distinguished from that of aggravated damages.

In his comprehensive and definitive work, Canadian Tort Law, 5th ed., 1993, at pages 55-56, my colleague, Linden J.A. distinguishes aggravated damages from punitive or exemplary damages as follows:

There is authority for awards of “aggravated” damages as contrasted with “punitive” damages, the former being granted to compensate the plaintiff for the loss to dignity resulting from the defendant’s malicious conduct, the latter being given to express the Court’s outrage and in order to deter such conduct in the future. Mr. Justice La Forest has recently explained [Norberg v. Wynrib, [1992] 2 S.C.R. 226, 263-4] that “[a]ggravated damages may be awarded if the battery has occurred in humiliating or undignified circumstances”. They are not awarded in addition to general damages, but as part of general damages. The “aggravating features” are taken into account by the court and the award of general damages is increased accordingly. Although these types of damages may overlap, they are distinguishable in that “punitive damages are designed to punish whereas aggravated damages are designed to compensate”.

The Ontario Law Reform Commission in its Report on Exemplary Damages, 1991, at page 3,[1] assigns a broader meaning to “exemplary” damages than to “punitive” damages: the former refers to all damages other than compensatory damages, the latter only to situations in which the retributive rationale dominates. However, in the present context there is no reason to distinguish between them, and I have utilized the word “punitive” since it is, I believe, the more commonly used term.

The appellant’s initial contention was that punitive damages cannot be imposed against the Crown pursuant to sections 3 and 10 of the Crown Liability Act, R.S.C., 1985, c. C-50,[2] the relevant parts of which read as follows:

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.

Punitive damages, so the appellant’s argument ran, are explicitly mentioned only in Part II of the Act (sections 16-20) which deals with the invasion of privacy by the interception of private communications, and therefore sections 3 and 10, which are contained in Part I, ought not to be interpreted to allow them. However, a reading of Part II would suggest that the only reason punitive damages are specifically mentioned in that Part is to limit Crown liability for such damages to “an amount not exceeding five thousand dollars” (section 18). Since there is no such limitation in Part I, to my mind that indicates that punitive damages are available without a specific cap under sections 3 and 10.

The Trial Judge held that the clear wording of the Act establishes the possibility of punitive damages against the Crown, since such damages are available against the private persons to whose position the Crown is assimilated (at page 306):

There is no exception in the Act either for punitive and exemplary damages per se, nor in contemplation of the notion of respondeat superior, nor yet again in relation to the departmental nature of emanations of the government in which the three miscreants of the C.S.C. operate at a different level from the warden or the commissioner of the penitentiaries and at a far remove from the Solicitor General, Treasury Board or the Privy Council Office. Section 10 does nothing to dilute the normalcy of the notion of awarding such damages against the Crown.

I agree entirely with these words of the Trial Judge. Moreover, that the Crown can be subject to punitive damages may also be inferred, as the Trial Judge said, from the decision of this Court in LeBar v. Canada, [1989] 1 F.C. 603.

The appellant’s next argument was that an employer, or at least the Crown as employer, cannot be subject to punitive damages where it is blameless, even if the employees’ conduct was blameworthy.

The commentators generally acknowledge that the courts presently hold employers vicariously liable for punitive damages without fault on their part, but question whether that is a desirable rule. Thus Earl A. Cherniak, Q.C. and Jerome R. Morse, “Aggravated, Punitive and Exemplary Damages in Canada” in Special Lectures of the Law Society of Upper Canada, 1983: Torts in the 80’s, p. 151 at page 199, state:

When an employee is guilty of conduct which attracts exemplary or punitive damages, is the employer vicariously liable for such damage? The short answer appears to be “yes” where the employee is acting in the course of his employment, but the rationale for same has not yet been developed in any detail. Munro v. Toronto Sun et al. (1982), 21 C.C.L.T. 261 (Ont. H.C.J.), is the most recent reported decision on point. The defendant newspaper was held vicariously liable for its employee’s wrongful conduct obligating the employer to respond to an award of punitive damages to the plaintiff in the amount of $25,000. J. Holland, J. held, at page 306: “It is … an appropriate case in which to award punitive damages against Ramsay and Raguly [the employees] and to provide that the corporate defendant [the employer] be vicariously liable therefor”.

In Dalsin v. T. Eaton Co. [(1975), 63 D.L.R. (3d) 565, [1976] W.W.R. 28 (Alta Dist. Ct.)], punitive damages were awarded against the employer for the wrongful acts of its employee.

There has been academic criticism of such an approach. This criticism contends that the purpose of the award to punish is not accomplished when someone other than the wrongdoer must respond to the award.

The Ontario Law Reform Commission, in its Report on Exemplary Damages, at page 57, citing the same two cases, says:

In Canada it appears that the courts will hold employers vicariously liable for punitive damages; that is, employers will be held liable, without fault, for punitive damages awarded against an employee acting in the course of employment. The case for and against doing so has not received attention expressly. It is often unclear whether employer liability is truly vicarious, or whether it would satisfy the complicity test, discussed below. Moreover, a principled resolution of this issue depends, to a large extent, on the purpose of the award, since the arguments differ for compensation and deterrence on the one hand, and punishment on the other.

It would appear that the various jurisdictions in the United States are divided on the issue. Some follow the ordinary respondeat superior rule, while others follow a variation of the complicity rule, which requires managerial authorization or ratification, or reckless hiring or retention of an unfit employer. Scholars are also divided on the issue. Again, this is complicated by the multiple purposes served by the awards there.

Professors Kenneth D. Cooper-Stephenson and Iwan B. Saunders, Personal Injury Damages in Canada, 1981, at pages 705-707, are opposed to employers’ vicarious liability for punitive damages without fault:

Where an employer is vicariously liable for losses caused by an employee acting within the scope of employment, is he additionally liable for exemplary damages levied against the employee, or which would have been levied had the employee himself been sued? Most Canadian decisions appear to hold, without discussion, that he is. But why extend the doctrine of vicarious liability to exemplary awards as well as compensatory? The employer is blameless. It is the employee who merits sanction, not his employer. It is no argument that the employer will likely be solvent whereas the employee will likely not. While the entrepreneur theory can justify vicarious liability for compensatory damages, it cannot justify such liability for punitive damages.

…

Moreover, a punitive sum which is defrayed by the employer can scarcely punish or deter the employee, or others like him. So why make employers pay?

There are a number of possible responses. The stock response is that vicarious liability for exemplary damages will serve to encourage good management, by inducing employers to take greater care in the selection, training and supervision of employees. Furthermore, exemplary awards can punish employers for ordering, participating in, or ratifying the employee’s misconduct. But both responses themselves incur rejoinders. In the first place, neither proposition supports the automatic imposition of punitive damages on employers in every case. Punitive damages should not be imposed unless poor management or complicitous behaviour is substantiated in fact. As a matter of basic legal principle, no one should be punished (fined) unless proven guilty.

…

In summary, arguably an employer ought never to be vicariously liable for exemplary damages assessed on account of his employee’s misconduct. Vicarious liability would be unjust in principle (because the employer is blameless) and pointless in practice (because the employee will get off scot-free). The one plausible justification in some cases is to encourage employers to sanction their employees themselves, where they are more favourably placed than the legal system to do so effectively. On the other hand, where evidence establishes that the employer himself merits punishment (for complicity in the employee’s wrongdoing) or deterrence (against inferior management techniques), punitive damages may justifiably be assessed against him personally, provided that the plaintiff was a victim of the punishable behaviour and that the proposed quantum is adequate to achieve the intended purpose.

Professor S. M. Waddams, The Law of Damages, 2nd ed., 1991, paragraph 11.400, at page 11-23, states squarely that “[a]s the purpose of exemplary damages is to punish and deter conduct of which the court disapproves, there cannot be any justification for making such an award against persons who have acted innocently.” However, he reluctantly accepts, paragraph 11.420, at page 11-25, that “in practice, exemplary damages have sometimes been awarded against corporations on the basis of the misconduct of employees whenever the same misconduct justifies holding the corporation liable for compensatory damages.”

In the light of the present state of the law, this Court has effectively a tabula rasa on which to write. Not only are there no appellate decisions directly on point, but such law as there is from trial courts is too sketchily reasoned to be persuasive. The learned Trial Judge in the case at bar relied on this Court’s decision in LeBar. But LeBar is silent on the precise point whether punitive damages can be attributable to a blameless employer, since the whole context of that case, where the Government failed to release a penitentiary inmate on the release date calculated in accordance with a declaratory judgment issued in another case, makes it clear that the decision was made at a managerial level, so that the Government was on the facts not blameless. As the appellant’s factum in the case at bar put it, LeBar can be distinguished on the basis that it concerned an “institutional decision” of the CSC whereby fault can be attributed to the directing mind of the CSC per se.

Some guidance may perhaps be found from the recent decision of the Supreme Court of Canada in Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085. Vorvis established that the limited view taken of punitive damages in the United Kingdom in Rookes v. Barnard, [1964] A.C. 1129 (H.L.),[3] is not the law in Canada since punitive damages apply generally, in contract as well as in tort. McIntyre J. stated for the majority, at pages 1107-1108:

Moreover, 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. I do not suggest that I have exhausted the adjectives which could describe the conduct capable of characterizing a punitive award, but in any case where such an award is made the conduct must be extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment.

McIntyre J. also emphasized, at page 1106, that the only basis for the imposition of punitive damages “must be a finding of the commission of an actionable wrong which caused the injury complained of by the plaintiff.” He also referred with approval to the American Law Institute’s Restatement of the Law of Contracts, 2nd ed., as to when punitive damages are recoverable for breach of contract.

It would be useful at this point to turn to the American Law Institute’s proposal on punitive damages in Restatement of the Law, Second—Torts 2d, 1979:[4]

^§ 909. Punitive Damages Against a Principal

Punitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if,

(a) the principal or a managerial agent authorized the doing and the manner of the act, or

(b) the agent was unfit and the principal or a managerial agent was reckless in employing or retaining him, or

(c) the agent was employed in a managerial capacity and was acting in the scope of employment, or

(d) the principal or a managerial agent of the principal ratified or approved the act.

In this proposal the American Law Institute, like the Canadian authors I have cited, comes down on the side of an award of punitive damages against an employer only where there is some kind of complicity on the part of the employer. This complicity may be direct, as where the doing and the manner of the servant’s act was authorized (subsection (a)) or subsequently ratified (subsection (d)), or was at a managerial level such that the act must be taken to have been the act of the employer (subsection (c)). Responsibility may also be indirect, such as where the employer recklessly employed an unfit person (subsection (b)).

In my opinion, the last-mentioned category of indirect responsibility is too narrowly drawn. The employer ought equally to be responsible in punitive damages where the employee’s training is inadequate for the task assigned and this lack of training is found to be relevant to the tort committed. Such a factor may not, perhaps, be so important in the case of a private employer as in that of a government, which has, for example, employees who are specifically trained to use force as part of their employment.

That being said, and taking the Restatement’s examples as illustrative rather than definite, I am inclined to the view that, for the awarding of punitive damages against an employer, there must have been at least some form or some degree of complicity or blameworthiness on the part of the employer.

I would not only agree with the Ontario Law Reform Commission, Report on Exemplary Damages, at page 85, that “there is no compelling reason to distinguish public authorities from private employers for the purpose of vicarious liability”, but I would add that in the light of section 3 of the Crown Liability Act such a distinction does not seem possible at the federal level.

Even an employer who is entirely innocent of a servant’s tort can be vicariously liable for compensatory damages for that fault, if only because there may be a social interest in allocating the cost of tortious conduct to a party that can bear them. This is true even of aggravated damages, since they are still compensatory. As La Forest J. put it in Norberg v. Wynrib, [1992] 2 S.C.R. 226, at page 264 “[a]lthough aggravated damages will frequently cover conduct which could also be the subject of punitive damages … the two types of damages are distinguishable; punitive damages are designed to punish whereas aggravated damages are designed to compensate.”

In the case of all compensatory damages, employers are unable to escape liability by attempting to distinguish between the doing of the acts they authorized and the tortious manner in which their servants may have carried them out. The employers’ authorization of the mere doing of acts is sufficient; they can escape liability only if the acts themselves were unauthorized and were “frolics” on the servants’ parts.

But there is something different about punitive damages, which have a criminal-law-like aspect, even if the fines are intended, not for the state’s coffers, but for injured plaintiffs. However, such damages could not be socially and legally justifiable if they were merely punishment for punishment’s sake. They must be deterrent as well as retributive, if they are not to be wholly assimilated to criminal law. As Madam Justice McLachlin put it in Norberg v. Wynrib, supra, at pages 299-300:

Punitive damages are awarded, not for the purpose of compensating the victim for her loss, but with a view to punishing the wrongdoer and deterring both him and others from engaging in similar conduct in the future. [Emphasis added.]

Linden J.A. memorably expressed the same thought in this Court in Swanson v. Canada (Minister of Transport), [1992] 1 F.C. 408 (C.A.), at page 426, when he said that government officials charged with the duty of maintaining public safety “must learn that negligence, like crime, does not pay.”

If, as I am convinced, punitive damages must ultimately be justified on the basis of deterrence, there can be no possibility of a deterrent effect if there is no complicity by employers against whom punitive awards are sought. I am therefore led to the conclusion that an employer’s complicity in the tortious situation must be established by a plaintiff before punitive damages can be awarded against that employer.

III

In the case at bar the appellant maintained that the Crown’s conduct as employer was blameless for the following six reasons: (a) the three correctional officers were strictly punished; (b) CSC directives on “The Use of Force and Firearms” (issued January 1, 1985), “Criminal Code Authority for the Use of Force” (issued February 29, 1984) were issued and circulated; (c) each correctional officer has an obligation to familiarize him/herself with these directives; (d) each corrections institution must prepare a contingency plan in case of emergency situations, such as hostage takings; (e) each corrections institution normally performs a hostage-taking simulation for the benefit of its staff; and (f) the CSC dispenses use-of-force training to its officers on entering the Service and periodically as a refresher course.

These indicia of blamelessness on the part of the CSC are relevant, but in the circumstances insufficient to establish a lack of complicity. The most egregious example of complicity on these facts would be, if it actually occurred, the assignment of an ERT member or members to escort the respondent to the hospital immediately following their freeing of the hostage and while their adrenalin was still running. Whether or not forbidden by CSC directives, this would be an act of folly on which the Trial Judge rightly fastened.

Since the Trial Judge also expressed a slight reservation about the accuracy of this testimony that an ERT member had actually been involved, I should indicate that in my opinion the inadequacy of the training of the escort, which was also a finding of the Trial Judge, was also sufficient to establish complicity. This was not a case like Evaniuk v. 79846 Manitoba Inc. (1990), 68 Man. R. (2d) 306 (Q.B.), where the hotel owner could seek to escape an award for punitive damages on the ground that the offending doormen were authorized only to escort, and not to eject, patrons. The CSC members here involved were trained in the use of force and were expected by their superiors to use force. The divisional instruction (800-3-05.1, dated 1983-11-30) to which we were referred, sets out the proper use of force by CSC members (Appeal Book at page 13):

7.   A staff member shall use as much force as he believes, in good-faith and on reasonable and probable grounds, is necessary to carry out his legal duties. He shall use force in good judgement, considering the protection of inmate, and refrain from personal abuse, corporal punishment and personal injury. Inmate will be protected from injury, harassment and damage to personal property. If the force used is excessive, he is criminally responsible for such excess, and he may also be liable for civil action where the use of excessive force is claimed.

The theory was excellent, but the CSC members clearly had not been trained to the point where reasonable restraint was second nature to them, as they should have been, as employees expected to use force. Instead, at the first temptation they succumbed to what the Trial Judge rightly called “goon-squad machismo.”

IV

The appellant’s final argument succeeded in establishing one clear error on the part of the Trial Judge with respect to the apparent basis of his finding as to the quantum of punitive damages. The Trial Judge wrote (at page 307):

Because the lesson promulgated by Mr. Justice MacGuigan in the LeBar case seems not to have permeated the C.S.C., the Court is justified, if not virtually obligated to escalate the quantum. The defendant shall pay punitive or exemplary damages to the plaintiff in the amount of $16,000.

The problem with this reasoning is that the events in the case at bar took place in 1985, whereas LeBar was not decided until 1988. Quite apart from that chronological point, in my view it would take a great deal more factual similarity than merely the presence of the same government agency to justify reference to another case in assessing punitive damages. Indeed, it would be only in a highly unusual case where such a procedure would be appropriate.

The quantum of the award cannot therefore be sustained on the narrowest basis on which the Trial Judge appeared explicitly to rest it. However, as the respondent pointed out, a reading of the whole of the Trial Judge’s reasons for decision reveals abundant justification for an award of that amount. Indeed, the supervising warden, as I have mentioned, estimated that the principal malefactor’s penalty of half a year’s employment amounted to about $14,000 (which was a saving of that amount to the CSC)—and that, be it noted, was a lesser penalty than the discharge from the Service that the warden had herself imposed. On this broader basis, therefore, the Trial Judge’s assessed quantum of $16,000 is supported.

In the result, the appeal must be dismissed with costs.

Heald J.A.: I agree.

Linden J.A.: I agree.

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