The Ontario Court of Appeal has ruled in a monumental employment law claim which included intentional infliction of mental suffering, affirming an unprecedented award in Boucher v. Wal-Mart Canada Corp.
The case dealt with a workplace conflict where the plaintiff claimed to be constructively dismissed. The jury found for the plaintiff and awarded 20 weeks salary in damages, the amount specified in her employment contract, $200,000 in aggravated damages against the employer for the manner of dismissal, and $1,000,000 in punitive damages. The jury also awarded an additional $100,000 for intentional infliction of mental suffering against the manager with whom the plaintiff had the conflict with, as well as $150,000 in punitive damages. The employer was obviously vicariously liable for the actions of the manager.
Justice Laskin cited Prinzo v. Baycrest Centre for Geriatric Care to review the three elements of the tort of intentional infliction of mental suffering:
- The defendant’s conduct was flagrant and outrageous;
- The defendant’s conduct was calculated to harm the plaintiff;
- The defendant’s conduct caused the plaintiff to suffer a visible and provable illness.
The jury charge at trial over the second element of the tort was as follows:
In determining whether the conduct was calculated to produce harm, you must be satisfied that Mr. Pinnock either intended to produce the consequences or alternatively, ought to have known that the consequences were substantially certain to occur. Has it been established that Mr. Pinnock intended to cause mental suffering on the part of Ms. Boucher, or engaged in conduct that was substantially certain to cause such suffering?
[emphasis by the court]
The appellants claimed this was an error in law, as it imported a subjective element to the test. Justice Laskin agreed, referring again to Prinzo,
 …for the conduct to be calculated to produce harm, either the actor must desire to produce the consequences that follow, or the consequences must be known by the actor to be substantially certain to follow… As indicated in Wilkinson v. Downton, supra, [at p. 59 Q.B.] “it is no answer in law to say that more harm was done than was anticipated, for that is commonly the case with all wrongs.” There is some similarity to the facts of Timmermans v. Buelow (1984), 38 C.C.L.T. 136 (Ont. H.C.J.), where Catzman J. (as he then was) awarded a tenant damages for mental distress arising out of his landlord’s threatening and harassing eviction letters, based in part on the landlord’s knowledge of the plaintiff’s fragile emotional state.
Justice Laskin also pointed to Piresferreira v. Ayotte for elaboration on this point,
 “Recklessness” is a flexible term capable of different meanings in different contexts. As I read it, Correia indicates that in the context of the employment relationship, recklessness should be understood as proceeding in the face of subjective awareness that harm of the kind that resulted was substantially certain to follow. An objective approach to recklessness that considers whether a reasonable person would know that the harm was foreseeable or likely to result seems more consonant with negligence than with an intentional tort. Intentional torts provide remedies for advertent behaviour, rather than inadvertent behaviour. The law treats intentional torts more severely, for example by not limiting the scope of damages in the same way as in a negligence case. The test stated in Prinzo and reaffirmed in Correia maintains the distinction between intentional torts and negligence. As noted Weiler J.A. said in Prinzo that the “consequences must be known by the actor to be substantially certain to follow” (emphasis added).
 …In establishing the tort it must be shown that the defendant desired to produce the kind of harm that was suffered or knew that it was substantially certain to follow. In the seminal case of Wilkinson v. Downton, the court further noted at p. 59 that the defendant’s conduct must be “plainly calculated to produce some effect of the kind which was produced” (emphasis added). It is clear, as the trial judge observed, that where the tort is established, the plaintiff is entitled to recover the full extent of the damages suffered even if they could not have been anticipated. As indicated in Wilkinson v. Downton, “it is no answer in law to say that more harm was done than was anticipated, for that is commonly the case with all wrongs.” The extent of the harm need not be anticipated, but the kind of harm must have been intended or known to be substantially certain to follow.
Ultimately though, Justice Laskin did not give effect to this error of law because counsel for the manager and the employer failed to object to this point when provided the jury instructions in advance. He also found that the error was inconsequential as the manager actually did intent to cause the harm that occurred, namely “so much stress or mental anguish that she would resign.”
Justice Laskin refused to reduce the $100,000 in damages for intentional infliction of mental suffering against the manager, despite the amount being much higher than any other award of its kind in an employment contract case. However, the compensatory damages themselves had a punitive component, and Justice Laskin reduced this amount from $150,000 to $10,000, stating,
 The award of damages for intentional infliction of mental suffering was compensatory. It was meant to compensate [the plaintiff] for the harm she suffered because of [the manager]’s misconduct. Punitive damage awards are not compensatory. They are meant to punish the defendant in exceptional cases where the defendant’s conduct has been “malicious, oppressive and high-handed” and “represents a marked departure from the ordinary standards of decent behaviour”, see Whiten, at para. 36.
 In other words, punitive damages focus on the defendant’s conduct, not on the plaintiff’s loss. Their purpose is retribution, deterrence and denunciation. Here, for reasons I have already outlined, [the manager]’s misconduct met this exceptional standard of malicious and oppressive conduct. [The manager] deliberately targeted [the plaintiff]. He wanted her to resign. He persisted with his mistreatment of her over the course of over five months. He forced her to leave a job that meant a great deal to her. His conduct did indeed amount to a marked departure from the ordinary standards of decent human behaviour.
 That it did, however, does not alone mean the $150,000 award of punitive damages should be upheld. To be upheld, it must, together with the compensatory award of $100,000, be rationally required to punish [the manager]. The standard of appellate review is whether a reasonable jury, properly instructed, could have concluded that an award of punitive damages in that amount, and no less, was rationally required to punish the defendant’s misconduct, see Whiten, at para. 107.
 Putting the test the other way around, “if the award of punitive damages when added to compensatory damages, produces a total sum that is so ‘inordinately large’ that it exceeds what is ‘rationally’ required to punish the defendant, it will be reduced or set aside on appeal,”: see Whiten, at para. 109. And, as Binnie J. said in Whiten, at para. 108, to ensure rationality an appellate court has “supervisory powers over punitive damages that are more interventionist than in the case of other jury awards of general damages.”
Justice Laskin refused to reduce the $200,000 for aggravated damages against the employer or remove it on the basis of double recovery. This amount was also unprecedented in employment law, but was justified due to the employer’s response to complaints by the plaintiff. He emphasized that aggravated damages are part of compensatory damages, and cited Honda Canada Inc. v. Keays,
 … The normal distress and hurt feelings resulting from dismissal are not compensable.
 Damages resulting from the manner of dismissal must then be available only if they result from the circumstances described in Wallace, namely where the employer engages in conduct during the course of dismissal that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive” (para. 98).
He reduced the punitive damages here as well though, given the sizable compensatory damages which would have their own punitive effect,
 …[the employer] is already liable for significant compensatory damages. Its misconduct lasted less than six months. It did not profit from its wrong. And while it obviously maintained a power imbalance over [the plaintiff], it did not set out to force her resignation. In the light of these considerations, a punitive damages award of $100,000 on top of the compensatory damages it must pay is all that is rationally needed to punish [the employer] and denounce and deter its conduct. Accordingly, I would allow [the employer]’s appeal on punitive damages and reduce the award from $1,000,000 to $100,000.
However, Justice Hoy’s dissent did believe the aggravated damages against the employer were excessive and would have reduced it to $25,000,
 … it is clear that the jury considered [the manager]’s conduct in assessing the aggravated damages it awarded against [the employer]. The jury awarded damages against [the manager] to compensate [the employee] for her mental suffering because of his misconduct, and [the employer] is vicariously liable for the damages awarded against [the manager]. This resulted in an injustice: [the employer] is required to compensate [the employee]twice for the mental suffering occasioned by [the manager]’s misconduct, and [the employee] will receive double-compensation…
 Unlike my colleague, I am strongly of the view that from the charge as a whole, the jury would reasonably have understood that they were to take [the manager]’s conduct into account in assessing aggravated or mental distress damages against [the employer], whether or not they awarded damages against [the manager] for intentionally inflicting mental stress on [the employee].
Justice Laskin did not give effect to this argument, because like the objective basis for intentional infliction of mental harm, counsel did not object to the jury charge at trial.
Although the court clearly indicated the facts here were exceptional, this case helps demonstrate that where the employer or the employer’s agent acts in particularly egregious ways Wallace-type damages are still readily available. Where the employer is not liable for sizable compensatory and aggravated awards, as in Whiten, punitive damages may still play a significant role in deterrence of future conduct.
What is less clear is how a trial judge should properly instruct a jury to explain how large compensatory and aggravated damages contain a punitive element, thereby diminishing the need for significant punitive damages, without inadvertently suggesting what the appropriate quantum should be. Ontario courts appear to have struggled with punitive and aggravated in the years following Whiten.
The solution provided by Justice Borins in Pereira v. Hamilton Township Farmers’ Mutual Fire Insurance Co. was for parties to provide the judge a range which could be put to a jury,
 …while it is open to the respondents to again seek punitive damages at the new trial, the quantum of punitive damages awarded by the jury is irrationally high. I therefore suggest that at the new trial, to avoid the possibility of another irrational award of punitive damages, the parties should attempt to agree on a range of punitive damages for the trial judge to leave with the jury.
The jury in Pereira awarded $2,500,000 in punitive damages on top of $500,000 in compensatory damages before a new trial was ordered due to improper jury instruction. Justice Borins stated,
 The quantum of punitive damages awarded by this jury, however, is another matter entirely, and it is appropriate to comment on this for the benefit of the parties and the judge at the new trial. The total award of $2,500,000 is, in my view, grossly excessive. It was also irrational.
 The amount here exceeded by a factor of 2.5 the $1,000,000 award in Whiten, which Justice Binnie said was at the “upper end” of the permissible range. More important than this numeric comparison, the conduct here was not nearly as egregious as was that in Whiten. I have also arrived at my conclusion by considering the sum of the other damages awarded, which amounted to nearly $500,000.
After Boucher, such punitive awards may not be grossly excessive or irrational where the conduct is egregious and compensatory damages are modest. Plaintiff’s counsel may attempt to rely on this case to suggest that a higher punitive award is more appropriate in these circumstances, while defence counsel may object to this characterization.
In another decision soon after Pereira, a different approach was adopted. In Plester v. Wawanesa Mutual Insurance Co. the court dismissed the appeal of the $450,000 punitive damages awarded by the jury. Instead, the jury’s award of $175,000 for aggravated damages was considered grossly excessive, and reduced to $50,000.
Another interesting twist is where damage awards emerge in the context of a personal injury claim. The court in McIntyre v. Grigg reviewed a jury award of $250,000 in general damages, $100,000 in aggravated damages and $100,000 in punitive damages. As aggravated damages are considered part of compensatory damages they are subject to the Andrews-cap, whereas punitive damages are not. In large personal injury cases involving extreme misconduct where compensatory damages reach the cap, additional damages in likely modest amounts may more strategically be obtained in the future through punitive damages, though the court indicated these situations were rare in personal injury,
 This is a novel case. The parties were unable to produce any Canadian case law in which punitive damages were awarded as a result of injuries sustained in a motor vehicle accident caused by an impaired driver nor were they able to produce any appellate authority that prohibited such damages in this context. This is in stark contrast to the United States, where punitive damages have been routinely awarded in a majority of the states for injuries caused by impaired drivers…
The court in McIntyre did award punitive damages, but in a modest amount.
Boucher ultimately serves as an important reminder for employers that they should take complaints about disruptive and harassing behaviour seriously. They should properly investigate such incidents to avoid constructive dismissal claims, which can have significant financial implications.