COURT OF APPEAL FOR ONTARIO

CITATION: McCabe v. Roman Catholic Episcopal Corporation  for the Diocese of Toronto, in Canada, 2019 ONCA 213

DATE: 20190319

DOCKET: C63950

Strathy C.J.O., Benotto and
    Roberts JJ.A.

BETWEEN

Robert Joseph McCabe

Plaintiff (Respondent)

and

The Roman Catholic Episcopal Corporation for the
    Diocese of Toronto

Defendant (Appellant)

Chris Blom, for the appellant

Dena Varah and Chris Kinnear Hunter, for the respondent

Heard: November 19, 2018

On appeal from the judgment
    of Justice Gordon C. Lemon of the Superior Court of Justice, sitting with a
    jury, dated May 30, 2017.

Benotto J.A.:
(for the majority on all issues except punitive
    damages; dissenting on the issue of punitive damages)
.

[1]

When the respondent was 11 years old, he was sexually abused by a now
    deceased priest. Years later he sued the appellant for damages. A jury awarded
    general and aggravated damages, damages for loss of income, and punitive
    damages. The appellant claims that damages were inflated by the jury because of
    inflammatory remarks the respondents counsel made to the jury in closing
    submissions. It further submits that the trial judge erred in a ruling on the
    admissibility of hearsay evidence and that the award for punitive damages was
    unwarranted.

FACTS

The abuse

[2]

The respondent, Robert McCabe was born in 1952. He was raised in a
    devout Roman Catholic family. The church, the sacraments, and the catechism
    were an integral part of his life. He believed that a priest was Gods
    representative to be respected and obeyed.

[3]

He became an altar boy at age 11, around the time that Father Alphonse
    Robert had been assigned to his parish and took over the training of altar
    boys. Father Robert befriended Mr. McCabe, spent time with his mother and
    visited his home regularly. In 1963, Father Robert invited the 11-year-old on a
    trip to Montreal to visit the Basilica of Notre Dame. He arranged for the two
    of them to spend the night in a motel room in Cornwall. The room had only one
    bed. Father Robert sexually assaulted him that night by fondling him sexually
    and performing oral sex on him. Mr. McCabe believed that because Father Robert
    was a priest, the events of that night were his fault and that he was damned to
    hell.  He suffered guilt and shame. He was not able to confide in anyone and
    could not go to confession because Father Robert was his confessor.

[4]

The impact on Mr. McCabe led to difficulties in family relationships and
    alcoholism.

[5]

None of these facts is disputed.

The legal action

[6]

Mr. McCabe brought an action for damages against the Roman Catholic
    Episcopal Corporation for the Diocese of Toronto (the Diocese) in December
    2014. By this time, Father Robert was dead.

[7]

He claimed general and aggravated damages, special damages for both past
    and future loss of income, pecuniary damages, damages for mental distress, and
    punitive damages.

[8]

After years of denying liability, the Diocese admitted liability on the
    first day of trial. The only issue at trial was the amount of damages.

[9]

Both parties presented expert evidence about the effects of the abuse on
    Mr. McCabe.

[10]

Dr.
    Jeff McMaster was called by the Diocese. He was qualified to give evidence as a
    forensic psychologist on the impact of childhood sexual abuse. He testified
    that the abuse was not at the severe end of the spectrum, but rather toward the
    middle because of the relative non- intrusiveness of the abuse, the short
    period of time over which it occurred, the fact that it occurred only once, the
    young age of the victim, the absence of physical coercion or violence, and the
    childs ability to return to a place of safety afterwards. He opined that the
    abuse did not affect Mr. McCabes educational trajectory. He referred to the abuse
    as extremely unpleasant.

[11]

Dr.
    Peter Jaffe was also qualified as a forensic psychologist on the impact of childhood
    sexual abuse. He took issue with Dr. McMasters minimization of the abuse. In
    his opinion, the abuse was at the severe end and caused post-traumatic stress
    disorder (PTSD) and a severe alcohol use disorder, which led to educational
    and employment difficulties and economic consequences. He did acknowledge in
    cross-examination that Mr. McCabe may overattribute his symptoms to the abuse
    and that there were several other factors that could have affected his
    accomplishments in life.

[12]

Elizabeth
    Schramm, a social worker, was qualified to give evidence in the area of PTSD
    and other psychological problems stemming from sexual abuse. She began
    counselling Mr. McCabe in March 2014.

[13]

The
    evidence of Ms. Schramm and Dr. Jaffe was that the respondent was vulnerable
    and that the process of the litigation was causing him pain. This was
    aggravated by the fact that he was told he might not be believed. Dr. Jaffe
    referred to this as re-victimization.

[14]

Father
    Clough was the judicial vicar of the Diocese and responsible for investigating
    allegations of misconduct against priests. There is no suggestion that Father
    Clough knew of Father Roberts conduct at the time of the abuse. However, by
    the time the action began, Father Clough knew of other complaints against
    Father Robert involving inappropriate conduct and believed this may have led to
    Father Roberts transfer between Dioceses in 1973. Father Clough noted that
    Father Robert had transferred parishes a number of times and that he had been
    twice rejected from the priesthood.

The ruling excluding hearsay evidence

[15]

The
    trial judge made a ruling during the trial relevant to this appeal. He found
    that a chart from the Homewood Sanitarium where Mr. McCabe had treatment and
    the comments of teachers in Mr. McCabes academic records were not admissible.

[16]

The
    respondent had attended Homewood in 1988 for treatment of alcoholism. The notes
    of the hospital employees disclosed that the respondent did not attribute his
    alcohol use to childhood sexual abuse.

[17]

The
    academic records included comments and observations about positive academic
    results after the abuse.

[18]

The
    trial judge determined that the history taken from the respondent at Homewood
    was not recorded by someone with personal knowledge of the matters being
    recorded and therefore was inadmissible hearsay. He further concluded that the
    academic records were inadmissible opinion evidence.

Counsels closing submissions to the jury and pre-charge
    conference

[19]

Immediately
    following closing submissions, the appellants counsel raised concerns about
    some of the respondents counsels comments during his closing submissions to
    the jury. Specifically, the appellants counsel took issue with respondents
    counsel doing the following: indicating that the jury should identify with the
    victim as an 11-year-old; asking the jury to do the right thing; referencing
    facts without an evidentiary basis such as whether Winston Churchill failed a
    grade or whether Mr. McCabe went to a Catholic high school or joined the Youth
    Corps to be close to the institution; suggesting inferences regarding why Mr.
    McCabes relationships failed that were not based on the evidence; and
    suggesting the Diocese or Father Clough knew Father Robert was a problem
    priest. The trial judge took this into account when formulating his charge to
    the jury.

[20]

During
    the pre-charge conference, there was discussion about the respondents claim
    for punitive damages. The respondent first argued that punitive damages were
    appropriate because Dr. McMaster minimized the respondents suffering. The trial
    judge rejected this as a basis for punitive damages but agreed that the failure
    of the appellant to admit liability until the morning of trial would be put to
    the jury under this category.

The jury award

[21]

The
    jury awarded general and aggravated damages of $250,000, loss of income of
    $280,000, treatment expenses of $5,000, and punitive damages of $15,000.

ISSUES

[22]

I
    would frame the issues raised by this appeal as follows:

1.

Did the trial
    judge err in the hearsay ruling?

2.

Did the comments of counsel to the jury cause a miscarriage of justice?

3.

Was the damages
    award inappropriate?

4.

Was the punitive
    damages award unwarranted?
[1]

ANALYSIS

Issue #1: Did the trial judge err in the hearsay ruling?

[23]

The
    trial judge properly excluded the evidence in the Homewood chart and academic
    records. The documents had been tendered under the common law rule and not
    under s. 35 of the
Evidence Act.
To be admissible under the common law
    rule in

Ares v. Venner
,
    [1970] S.C.R. 608, business records must be made contemporaneously by someone with
    personal knowledge of the matters being recorded and under a duty to make the
    entry in the record. This exception as to hearsay deals with the recording of
    facts by individuals with first-hand knowledge and observation of the matters
    being recorded. The Homewood records did not fall within the personal knowledge
    of the author and thus could not be admitted for the truth of their contents. The
    school records were properly characterized by the trial judge as opinion and
    thus inadmissible.  Further, the respondent was not precluded from using the
    records for impeachment purposes in cross-examination yet chose not to do so.

[24]

In
    any event, there was other evidence of Mr. McCabes medical condition while at
    Homewood and his academic grades. The jury had the benefit of this evidence and
    there was no potential for a miscarriage of justice.

Issue #2: Did the comments of counsel to the jury cause a
    miscarriage of justice?

[25]

The
    appellant submits that the comments by the respondents counsel were
    inappropriate and would have inflamed the jury such that a new trial is in
    order. Under s. 134(6) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43, this court may only direct a new trial if a substantial wrong or
    miscarriage of justice has occurred: see
Fiddler v. Chiavetti
, 2010
    ONCA 210, 317 D.L.R. (4th) 385, at para. 9;
Landolfi v. Fargione
(2006),
    79 O.R. (3d) 767, at para. 121. In my view, the comments made by the respondent
    did not amount to a miscarriage of justice. I say this for two reasons.

[26]

First,
    the comments cannot be considered apart from the judges charge to the jury. Read
    as a whole, the jury charge made it clear that:

·

The jurys task was to be fair and impartial;

·

The jurors were to set aside all feelings of sympathy, prejudice,
    fear or passion;

·

Justice must be administered fairly and impartially; and

·

Despite the fact that counsels closing submissions may have
    created sympathy, the verdict should not be based on sympathy for any of the
    parties or the witnesses.

[27]

With
    respect to some of the specific impugned statements, the trial judge said:

·

You must not put yourself in the position of an 11-year-old Mr.
    McCabe;

·

There is no evidence about Winston Churchills education;

·

There is no evidence that Mr. McCabe worked for the Diocese to
    get closer to God. That would be conjecture;

·

There is no evidence that Mr. McCabe was fired from his
    employment for something other than his decision go over a budget to keep the
    employees safe;

·

Before you can draw an inference, you must be satisfied on a
    balance of probabilities that the result you reach is the most reasonable
    inference to be drawn. You must have a solid base of proven facts. Otherwise
    the result is guesswork;

·

You have no evidence as to why Father Robert was moved;

·

You must follow the law as I state it to you. You must disregard
    any views which counsel may have expressed about the law if it conflicts with
    what I say to you about the law;

·

You are not bound to accept any of the suggested ranges [for
    damages]. You and you alone will determine the amount you conclude is fair to
    both parties.

[28]

With
    respect to the expert evidence, the trial judge fully and fairly reviewed the
    evidence for the jury and properly instructed the jury.

[29]

Second,
    the trial judge is in the best position to assess whether comments are
    inappropriate. As this court said in
Groen v. Harris
,

2010 ONCA 621, at para.
    9:

This court has been clear that
    considerable deference must be given to a trial judges assessment of whether
    counsels statements have impaired trial fairness and whether any correcting
    instruction is possible. The judge hearing the comments in the courtroom is
    best placed to assess their impact and whether the appearance and reality of
    trial fairness have been endangered so that correction by the appropriate
    charge is impossible.

[30]

I
    note that the impugned statements came at the conclusion of a 16-day trial
    which was devoid of any allegation of inflammatory comments to the jury.

[31]

The
    appellant submits that the award of damages itself is so far out of the
    appropriate range that it proves the jury was improperly inflamed. However, as
    I set out below the damages award is within a permissible range.

Issue #3: Were the damages awarded inappropriate?

[32]

The
    appellant submits that general and aggravated damages in similar sexual assault
    cases are in the range of $70,000 to $137,000 in 2017 dollars: see e.g.
K.T.
    v. Vranich
,
2011 ONSC 683;
D.M. v. W.W.
,
2013
    ONSC 4176;
D.F.M. v. J.D.
,
[2000] O.J. No. 559.

[33]

However,
    as this court recently found in
Zando v. Ali
, 2018 ONCA 680, a range
    of up to $290,000 can be appropriate in sexual assault cases. The jury award of
    $250,000 in general damages was well within the range for a serious sexual
    assault.

[34]

With
    respect to the loss of income or competitive advantage, I note that the jury
    awarded $280,000 while the respondents claim was for over $1.7 million. The
    award was well supported by the actuarial evidence and also demonstrates that
    the jury was not acting out of an impermissible sense of outrage caused by the
    closing submissions of the respondents counsel.

Issue #4: Was the punitive damages award unwarranted?
[2]

[35]

The
    jury awarded punitive damages of $15,000.

[36]

The
    appellants position on punitive damages is set out in para. 106 of its factum:

The award of punitive damages is
    unwarranted. It was argued on the basis that the [Diocese] failed to admit
    vicarious liability for the abuse until the first day of trial. The [Diocese]
    did not commit an intentional tort to attract a claim of punitive damages. The
    admission of liability on the first day of trial was not conduct of a malicious,
    oppressive or high-handed nature.

[37]

The
    appellant does not take issue with the trial judges charge to the jury on
    punitive damages. The charge accurately sets out the law and facts. Thus, it
    appears that the appellants position is actually that there was no basis for
    the trial judge to leave the issue of punitive damages with the jury in the
    first place.

[38]

To
    address this issue, I will first summarize the nature of punitive damages. I
    then consider
whether the trial judge erred by leaving
    the issue with the jury
. Finally, I will address the damages awarded.

(i)      Nature of punitive damages

[39]

Punitive
    damages are meant to punish the wrongful acts that are so malicious and
    outrageous that they are deserving of punishment on their own:
Honda Canada
    Inc. v. Keays,
2008 SCC 39, [2008] 2 S.C.R. 362, at para. 62; see also
Hill
    v. Church of Scientology,
[1995] 2 S.C.R. 1130, at para. 196, and
Whiten
    v. Pilot Insurance Co
., 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 73.

[40]

In
Hill
, the court also recognized that the jury must be given some
    leeway to do its job, and a jury award of punitive damages
can only be reversed
when it is so inordinately large
    as obviously to exceed the maximum limit of a reasonable range within which the
    jury may properly operate: para. 107 (emphasis added).

An
    actionable wrong

[41]

To
    award punitive damages, an independent actionable wrong is required. Although
    the appellant submits that the Diocese did not commit an intentional tort, in
Whiten
,
    at paras. 79-82, Binnie J. specified that an actionable wrong does not
    require an independent tort and that a breach of the contractual duty of good
    faith, or breach of a distinct and separate contractual provision, or other
    duty such as a fiduciary obligation can qualify as an independent wrong.

[42]

The
    circumstances of this case are different form an ordinary breach of contract.
    The extreme power imbalance and vulnerability of the wronged party are
    significant features. Punitive damages are awarded when the impugned conduct
    offends the ordinary standards of morality or decent conduct:
Norberg v.
    Whyrib
[1992] 2 S.C.R. 226 at para 57.

Conduct
    of the litigation

[43]

The
    conduct of the litigation has been held to be an independent actionable wrong that
    could give rise to punitive damages.

[44]

This
    court, in
Rutman v. Rabinowitz
, 2018 ONCA 80, 420 D.L.R. (4th) 310, at
    para. 100 stated that [t]he assessment of damages in each case must account
    for a myriad of idiosyncratic factors particular to the parties, the misconduct
    in question and
the conduct of the litigation

(emphasis added).

[45]

In
Hilltop Group v. Katana
, 2002 CanLII 9075 (Ont. S.C.), at para. 10,
    the motion judge found that the defendants had, throughout the proceedings,
    obfuscated, delayed and were less than forthright in their evidence. The judge
    also found that the defendants had lied and made false affidavits. The judge
    found that this behaviour directly or indirectly had a profound effect on the
    plaintiffs and the litigation, and awarded punitive damages in the amount of
    $200,000, an amount much higher than that awarded here.

[46]

In
Goldentuler Estate v. Crosbie
, 2017 ONCA 591, this court reversed the
    Superior Court finding that the respondents conduct could not support an award
    of punitive damages and found that the defendants egregious behaviour prior to
    and during litigation amounted to outrageous and high-handed conduct warranting
    punitive damages. The behaviour included the wrongful removal of the relevant
    client files from the deceaseds offices, the transfer of those files to a
    competing law firm, and the persistent failure to return the removed files, in
    defiance of a court order
:
paras. 10-12. This court found that
    compensatory damages alone were not sufficient to achieve the goals of
    deterrence and denunciation.

[47]

In
Ruston v. Keddco Mfg
.
(2011)
    Ltd.
, 2018 ONSC 2919, 49 C.C.E.L. (4th) 113, at para. 142, the Superior
    Court awarded $100,000 in punitive damages for a companys conduct in
    termination and during the litigation. Justice Chiappetta found that in
    addition to the employers conduct in the termination meeting, the employer
    attempted to intimidate the plaintiff during the trial process. The defendant
    presented a witness list of 25 witnesses they intended to call, a new trial
    date was set, and as the trial progressed, the defendant ultimately called
    three witnesses. The trial judge stated that this conduct prolonged the
    adjudication of the issues and caused the plaintiff to prepare for witnesses in
    vain. The defendant demonstrated an indifference to the litigation process.
    This was among a number of problems the trial judge identified with the
    defendants litigation conduct, which gave rise to the punitive damages award.

[48]

While
    punitive damages are the exception rather than the norm, they may therefore be
    awarded to address conduct of the litigation deserving of condemnation.

[49]

Here,
    the egregious behaviour was more nuanced than in the cases above. They all
    involved sophisticated parties without power imbalances. By contrast, the
    Dioceses strategic decision not to admit responsibility to a vulnerable victim
    of abuse  given these circumstances- is uniquely egregious.

(ii)     Was it a question for the jury?

[50]

Before
    a question is put to a civil jury, the trial judge must determine whether there
    is reasonable evidence to support the claim. Justice Rouleau explained this in
M.B.
    v. 2014052 Ontario Ltd.
, 2012 ONCA 135, 109 O.R. (3d) 351, at para. 51:

Whether a jury in a civil case should be asked to decide on a
    particular issue is a question of evidence. There must be "reasonable
    evidence" to allow a question to go to the jury. As Meredith J.A. stated
    in
Milligan v. Toronto Railway
(1908)
,
    17 O.L.R. 530 (Ont. C.A.):

Although the jury are the sole
    judges of fact they are such judges only in cases in which there is a
    reasonable question of fact to be determined. It is the duty of the Court to
    determine whether there is any reasonable evidence to go to the jury, upon any
    question of fact; and no such question can be rightly submitted to them until
    that question has been answered in the affirmative: at para. 50.

[51]

In
Cobb v. Long Estate
, 2017 ONCA 717, 416 D.L.R. (4th) 222, at para. 65,
    this court stated that trial judges decision not to put the question of
    punitive damages to the jury was reasonable in the circumstances of that case
    and entitled to deference.

[52]

In
    this case, the claim for punitive damages was based on the fact that the
    appellants failure to admit liability caused the fragile respondent to suffer
    pain. There was specific evidence that Mr. McCabe was suffering physically and
    mentally during the time that the appellant was denying liability.

[53]

Dr.
    Jaffe explained that the trauma suffered by Mr. McCabe was made worse by the
    fact that liability was being denied. Mr. McCabe was told that he would have to
    prove that the events of 1963 actually happened. This, Dr. Jaffe said, re-victimized
    him. The impact of the litigation caused him to be fragile, stressed and
    anxious. He was further hurt by the stress of having to relive the abuse. He
    was diagnosed with chronic obstructive pulmonary disorder, a form of asthma
    that was made worse by the proceedings.

[54]

Ms.
    Schramm described his reaction to the litigation process as being shaken,
    fatigued, feeling guilty, angered, fearful and shamed. She discussed his
    nightmares and night terrors. Ms. Schramm confirmed Mr. McCabes testimony
    about the litigation causing him pain.

[55]

Although
    Father Clough testified that he did not set out to deliberately to cause Mr.
    McCabe pain, he had read the report of Dr. Jaffe and the views of Ms. Schramm.
    He knew and agreed that the abuse needed to be validated. He also agreed that
    the refusal to admit liability was hurting Mr. McCabe and that the ongoing
    process was causing him pain. He knew that during the examination for discovery
    Mr. McCabes lawyer was told that Mr. McCabe would have to prove the event
    happened. He agreed that no new information came to the Diocese after
    examinations for discovery. He accepted as true what happened to Mr. McCabe. By
    the time the action was commenced, he was aware of other complaints made about
    Father Robert.

[56]

Against
    these facts, the jury was asked the following question by the trial judge: Does
    the failure of the Diocese to admit liability before the trial warrant an award
    of punitive damages?

[57]

The
    trial judge then correctly set out the law as to punitive damages and related
    it to the facts described above.

[58]

In
    my view, the trial judges decision that there was evidence to allow the
    question to be put to the jury was entirely reasonable and is entitled to
    deference.

(iii) Quantum of damages

[59]

The
    jury awarded a very modest amount of $15,000 in punitive damages. In the words
    of
Hill
, a jury award of punitive damages can only be reversed when it
    is so inordinately large as obviously to exceed the maximum limit of a
    reasonable range within which the jury may properly operate.  In my view the
    jurys award was a symbolic condemnation of the Dioceses conduct in failing to
    admit liability despite knowledge of additional harm to Mr. McCabe.  To
    overturn the jurys determination would be to sanction the conduct.

[60]

I
    see no basis to disturb the jury award.

DISPOSITION

[61]

I
    would dismiss the appeal with costs to the respondent in the agreed-upon amount
    of $32,000 inclusive of disbursements and HST.

M.L. Benotto J.A.

I agree with the
    disposition with respect to grounds 1-3 (G.R. Strathy C.J.O.)

I agree with the
    disposition with respect to grounds 1-3 (L.B. Roberts J.A.)

Roberts J.A.:

[62]

I
    have had the benefit of reading my colleagues well-written reasons. I agree
    with her proposed disposition of the first three grounds of appeal but
    respectfully disagree with her proposed disposition of the fourth ground of
    appeal.

[63]

For
    the reasons that follow, I would allow the appeal in part and set aside the
    award of punitive damages. In my view, the trial judge erred in leaving this
    issue to the jury for determination because neither the pleadings nor facts of
    this case supported such an award. In essence, the trial judge created a new
    and unprecedented category of punitive damages arising out of the timing of the
    appellants admission of liability. There is no basis in law for such an award.

[64]

Starting
    with first principles, as my colleague has described, the well-established
    nature of punitive damages is to punish an independent actionable wrong that is
    the product of egregious, high-handed and outrageous conduct. It is a very high
    standard that is not easily reached. Punitive damages are not meant to be
    compensatory, but instead act as a deterrent for exceptional misconduct.
    Indeed, punitive damages should not be granted where, as here, the compensatory
    damages awarded suffice as a deterrent:
Whiten v. Pilot Insurance Co.
,
    2002 SCC 18, [2002] 1 S.C.R. 595, at para. 94.

[65]

In
    none of the cases cited to by my colleague does the failure or delay of the
    defendant to admit liability serve as the standalone basis for the awards of
    punitive damages that were granted. Rather, in all these cases, the misconduct
    of the defendant supporting the punitive damages awards was a continuation of
    the misconduct that gave rise to and was the subject of the action within the
    context of a particular relationship between the parties that is absent here.

[66]

In
    this respect,
Goldentuler Estate v. Crosbie
, 2017 ONCA 591, leave to
    appeal refused, [2017] S.C.C.A. No. 358, is instructive. This court allowed the
    appeal in part and awarded punitive damages because it found the trial judge
    erred in concluding the claim for punitive damages was solely related to
    litigation delay. Rather, the claim for punitive damages focused on the
    defendants egregious pre-litigation behaviour in effecting the wrongful
    removal of client files, the transfer of the files to a competing law firm, and
    the persistent failure to return the files to the claimant. This court found
    the defendants conduct to be outrageous and high-handed, and for which
    punitive damages was an appropriate remedy.

[67]

In
    determining whether punitive damages should be granted, the court must ask two
    threshold questions: first, what is the impugned conduct; and, second, whether
    the impugned conduct rises to the level of egregious misconduct warranting the
    exceptional award of punitive damages.

[68]

In
    the present case, the impugned conduct is only the appellants delay in
    admitting liability. The question left for the jury makes this plain: Does the
    failure of the Diocese to admit liability, before the trial, warrant an award
    of punitive damages? Similarly, as the lone basis for any award of punitive
    damages, the trial judges final charge to the jury focused solely on the
    appellants delay in admitting liability: And here you will consider the
    evidence of the delay in the Diocese admitting liability for the acts of Father
    Robert.

[69]

There
    is no allegation or evidence of any misconduct. As the trial judge fairly
    instructed the jury, the appellant did not deliberately inflict pain on the
    respondent. As a result, the appellants delay in admitting liability, alone,
    could not be characterized as egregious misconduct justifying an award of
    punitive damages. Rather, the appellant, as it was perfectly entitled to do,
    did not admit liability until the opening of trial. The appellants exercise of
    its litigation rights cannot be characterized as egregious misconduct
    warranting punitive damages.

[70]

The
    respondents action against the appellant is founded on its vicarious liability
    for the sexual assaults suffered by the respondent at the hands of the
    appellants employee priest in the course of his employment. The respondent
    pleaded that it was entitled to punitive damages against the appellant because
    of its vicarious liability for its employees wrongful actions, not because of
    any misconduct on the part of the appellant, including its failure to admit
    liability before trial. Respondents counsel did not raise that theory of
    punitive damages until the pre-charge conference when it was acknowledged that
    punitive damages could not be awarded on the basis of the appellants vicarious
    liability.  Over the objection of appellants counsel, the respondents new
    theory of punitive damages was left to the jury.

[71]

In
    my view, the trial judge erred in leaving punitive damages to the jury because
    no reasonable jury, properly instructed, could have made such an award. I say
    so for three reasons.

[72]

First,
    there was no basis in fact or law for this claim that punished the appellant
    for not making an earlier admission of liability. Punitive damages cannot be
    awarded solely for the failure or delay of a defendant to admit liability. To
    create such a category of punitive damages would completely undermine the
    foundation of the litigation process. A defendant is under no obligation to
    admit liability and, subject to attracting the elevated costs consequences I
    refer to below, may put the plaintiff to the strict proof of his or her
    allegations, no matter how painful the litigation process proves to be for the
    plaintiff, without fear of invoking a punitive damages award: see generally
Davies
    v. Clarington (Municipality)
, 2009 ONCA 722, 100 O.R. (3d) 66, at paras.
    44, 46;
Foulis v. Robinson
(1978), 21 O.R. (2d) 769 (C.A.), at p. 776.
    Unfortunately, that is the nature of the litigation process. It is adversarial.
    It is extremely expensive and often protracted. Its outcome is uncertain.
    Regardless of the underlying cause of action, all parties find the litigation
    process enormously stressful, especially plaintiffs who bear the burden of
    proving liability and damages because they commence the proceedings.  In sum,
    while a defendants failure or delay to admit liability may give rise to an
    adverse costs award, it does not serve as a standalone basis for punitive
    damages.

[73]

Second,
    the harm that the respondent alleges he suffered because of the continued
    litigation process, which formed the basis for the punitive damages claim left
    with the jury, was not obviated by the appellants admission of liability. The
    respondents evidence is that he felt re-victimized by having to recount the
    sexual assault in the litigation.  However, notwithstanding the appellants
    admission of liability, the respondent was still required to go through the
    painful details of the assaults and their impact on him to prove his damages.
    There is no suggestion that the appellant should also have conceded damages and
    that the respondent was entitled to punitive damages because the appellant
    failed to do so. This would be akin to saying that a defendant can never defend
    an action.

[74]

The
    appellant simply put the respondent to the proof of his case. There is nothing
    wrong with that. There can be no suggestion that the appellants liability was
    inevitable. Certainly, there can be little doubt that if the respondent had
    brought a motion for summary judgment, he would not have been successful and
    would have been required to go to trial. There was nothing improper or
    malicious in the appellant not admitting liability before trial.

[75]

Third,
    it was procedurally unfair to the appellant to allow the respondent to put
    forward a new basis for punitive damages that had not been pleaded or alleged
    until after the trial evidence was completed. In the particulars pleaded, the
    respondent alleged vicarious liability against the appellant for the punitive
    damages claimed against its employee priest. The respondents counsel raised
    the new theory of punitive damages based on the appellants delay in admitting
    liability after the trial judge advised there was no foundation for punitive
    damages on the basis of vicarious liability for the misconduct of another.

[76]

While
    I am of the view that a defendants denial of liability, without more, does not
    attract an award of punitive damages, it may give rise to a considerable costs
    sanction.

[77]

Section
    131 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, r. 57.01 of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, and the courts
    inherent jurisdiction to control its process to prevent an abuse of process
    allow for an award of costs up to full indemnity in response to egregious
    misconduct by a party in the course of the proceedings. More specifically,
    subrules 57.01(1)(e) and (g) explicitly include consideration of a partys
    conduct that either shortened or lengthened the proceedings, and a partys
    denial of or refusal to admit anything that should have been admitted.

[78]

It
    is important to note, however, that a defendants failure or delay to admit
    liability that falls short of litigation misconduct or abuse of process may not
    even attract elevated costs.

[79]

In
Foulis v. Robinson
, this court allowed an appeal of an elevated costs
    award, holding that the defendant was not required to admit liability or settle
    the action.

[80]

The
    trial judge was of the view that there was no defence to the motor vehicle action
    having considered the pleadings, the evidence, and the fact that the defendant
    pleaded guilty to criminal negligence for operating a motor vehicle while
    impaired:
Foulis
, at p. 770. The defendant and third party insurer
    disputed liability and damages. The trial judge awarded solicitor and client
    costs against the defendant and third party because they dragged the
    plaintiffs through a three day  trial when there was really no defence
    pleaded and no evidence of any defence produced at trial:
Foulis
,
    at p. 770. The trial judge commented that the plaintiffs were being penalized
    in dollars and cents for a situation over which they have no control and of
    which they are victims:
Foulis
, at p. 771.

[81]

This
    court held that the trial judge erred in principle in awarding costs on an
    elevated scale, noting that defendants are entitled to put the plaintiff to
    the proof, and there is no obligation to settle an action:
Foulis
, at
    p. 776. Dubin J.A., writing for this court, continued:

The fact that the issue of
    liability was not seriously contested at trial, that the defendant did not give
    evidence, that he had pleaded guilty to criminal negligence, and that no
    evidence was called by the defendant and third party on the issues of liability
    and damages are not factors which, by themselves, merit punitive action in the
    award of costs.

[82]

This
    court acknowledged that the defendant and third party were not using the
    judicial process to harass the plaintiffs and that the conduct of the defendant
    and third party did not constitute an abuse of process:
Foulis
, at p.
    776.

[83]

Returning
    to the present case, the appellants delay in admitting liability until trial
    should not have been considered under the rubric of punitive damages.  Rather,
    it was more properly a question of costs.  Whether the delay was the kind of
    misconduct that attracted an elevated award of costs was a question that could
    have been left for the trial judges determination had the parties not agreed
    on costs.

[84]

For
    these reasons, I would allow the appeal in part and set aside the award of
    punitive damages. I would otherwise dismiss the appeal for the reasons
    expressed by my colleague.

Released: March 19, 2019

GRS

L.B. Roberts J.A.

I agree G.R. Strathy C.J.O.

[1]

As indicated, my colleagues are in the majority on the issue
    of punitive damages.

[2]

These are my dissenting reasons on the issue of punitive
    damages.


COURT OF APPEAL FOR ONTARIO

CITATION: McDowell v. Fortress Real Capital Inc., 2019 ONCA
    239

DATE: 20190326

DOCKET: C64290, C64288, C64289 and C64286

Strathy C.J.O., Feldman and Brown JJ.A.

BETWEEN

Arlene McDowell and
    Saverio Aversa

Plaintiffs/Appellants

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, Centro Mortgage Inc., Ildina Galati, FFM Capital Inc., Rosalia
    Spadafora, Krish Kochhar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti
    Law Professional Corporation, Olympia Trust Company and Financial Services
    Commission of Ontario

Defendants/Respondents

AND BETWEEN

Arlene McDowell

Plaintiff/Appellant

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, Empire Pace (1088 Progress) Ltd., Building & Development
    Mortgages Canada Inc., Ildina Galati, Derek Sorrenti, Sorrenti Law Professional
    Corporation, Olympia Trust Company and Michael Cane

Defendants/Respondents

AND BETWEEN

David Martino

Plaintiff/Appellant

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc., Jawad Rathore,

Vincenzo
    Petrozza, ADI Developments (Link) Inc., ADI Developments Inc., Building &
    Development Mortgages Canada Inc., Ildina Galati, FFM Capital Inc., Rosalia
    Spadafora, Krish Kochhar, Tony Mazzoli, Saul Perlov, Derek Sorrenti, Sorrenti
    Law Professional Corporation, Olympia Trust Company and Her Majesty the Queen
    in Right of Ontario

Defendants/Respondents

AND BETWEEN

Bryan Madryga and
Eileen Wallace

Plaintiffs/
Appellants

and

Fortress
    Real Capital Inc., Fortress Real Developments Inc.,
Fortress Kempenfelt Bay
    Developments Inc.
, Jawad Rathore, Vincenzo Petrozza, Harmony Village-Lake
    Simcoe Inc., City Core Developments Inc., Building & Development Mortgages
    Canada Inc., Ildina Galati, FMP Mortgage Investments Inc., Michael Daramola,
    Tonino Amendola, Graham McWaters,
FDS Broker Services Inc.
,
Glenn
    May-Anderson
,
Zafar Iqbal Khawaja
, Derek Sorrenti, Sorrenti Law
    Professional Corporation, Olympia Trust Company, Grant Edwardh Appraisers and
    Consultants Ltd. and Ian G. McLean

Defendants/
Respondents

Kevin Sherkin and Mitchell Wine, for the appellants

Jeremy Devereux and Jennifer Teskey, for Fortress Real
    Capital Inc., Fortress Real Developments Inc., Jawad Rathore and Vincenzo
    Petrozza

Markus Kremer and Ziad Yehia, for Empire Pace (1088
    Progress) Ltd.

Lisa Parliament and Lauren Ray, for Adi Developments
    (Link) Inc. and Adi Development Group Inc. (incorrectly named in the title of
    proceedings as Adi Developments Inc.)

Heard: Costs in writing March 25, 2019

On appeal from the
    orders of Justice Paul M. Perell of the Superior Court of Justice, dated August
    10, 2017, with reasons reported at 2017 ONSC 4791, 2017 ONSC 4789, 2017 ONSC
    4790, and 2017 ONSC 4792.

COSTS ENDORSEMENT

[1]

The parties were given the opportunity to file their costs submissions
    following the release of the courts reasons for decision.

[2]

Those submissions advise that the parties have reached agreement regarding
    the costs of the successful appellants in respect of the Empire Pace (1088
    Progress) Ltd. and Adi Developments (Link) Inc. appeals. They have agreed that
    each of those respondents will pay costs of the appeal in the amount of $10,000
    and costs of the motion in the amount of $12,500, all inclusive of
    disbursements and HST.

[3]

The successful respondents, Rathore and Petrozza, seek substantial
    indemnity costs of $33,275.43, or if substantial indemnity costs are not
    awarded, then partial indemnity costs of $22,384.53. The appellants submit that
    partial indemnity costs in the same amount as was agreed for the other parties
    ($10,000 each), is the appropriate amount to be awarded.

[4]

We agree with the submission of the appellants. The issue with respect
    to the personal liability of corporate directors and officers is a legal issue
    that depends on the pleaded allegations. The respondents were successful before
    the motion judge and his conclusion was upheld on the appeal based on the same
    pleading and legal principles. The complexity of the appeal arose in the
    context of the corporate actions and wording of the documents.

[5]

Costs are therefore ordered as follows: to the appellants from the
    respondent Empire Pace (1088 Progress Ltd.), $10,000 for the appeal and $12,500
    for the motion, both inclusive of disbursements and HST; to the appellants from
    the respondent, Adi Developments (Link) Inc., $10,000 for the appeal and
    $12,500 for the motion, both inclusive of disbursements and HST; to the
    respondent Rathore from the appellants, $10,000 for the appeal inclusive of
    disbursements and HST; to the respondent Petrozza from the appellants, $10,000
    for the appeal inclusive of the disbursements and HST.

G.R.
    Strathy C.J.O.

K. Feldman
    J.A.

David
    Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Merrifield v. Canada (Attorney General), 2019 ONCA
    205

DATE: 20190315

DOCKET: C63556

Juriansz, Brown and
    Huscroft JJ.A.

BETWEEN

Peter
    Merrifield

Plaintiff (Respondent/
Appellant by way of
  cross-appeal)

and

The Attorney
    General of Canada, Inspector James Jagoe,
Superintendent
    Marc Proulx

Defendants (Appellants/
Respondents by way of
  cross-appeal)

Sean Gaudet and James Gorham,
    for the appellants

Laura Young, John Kingman
    Phillips and John-Otto Phillips, for the respondent

Heard: September 18-19, 2018

On appeal from the judgment of Justice Mary E. Vallee of
    the Superior Court of Justice, dated February 28, 2017, with reasons reported
    at 2017 ONSC 1333, 42 C.C.L.T. (4th) 4.

By the Court:

[1]

This appeal relates to claims of harassment and bullying by Royal Canadian
    Mounted Police (RCMP) managerial members of the respondent Peter Merrifield from
    2005 to 2012. Merrifield was a junior RCMP Constable in 2005. He was promoted
    to Corporal in 2009 and Sergeant in 2014.

[2]

The litigation has been protracted; Merrifield issued his notice of
    action in May 2007 and a 40-day trial was held over a period of 17 months, from
    November 2014 - April 2016. A lengthy decision was released in February 2017.

[3]

The trial judges decision reviewed in considerable detail more than
    seven years of strained relations between Merrifield and several of his
    superiors in the RCMP. In allowing the action, the trial judge recognized a new
    freestanding tort of harassment and found that many of the managerial decisions
    made in relation to Merrifield constituted harassment. In addition, she found
    the appellants liable for intentional infliction of mental suffering in
    relation to one set of interactions. The trial judge awarded Merrifield
    $100,000 in general damages, $41,000 in special damages, and $825,000 in costs
    of the action.

[4]

We conclude that the trial judge erred by recognizing a tort of
    harassment, erred in applying the test for the intentional infliction of mental
    suffering, and made palpable and overriding errors in much of her fact-finding.
    The judgment must be set aside.

[5]

The appeal is allowed for the reasons that follow. Merrifields
    cross-appeal, seeking an increase in the damages awarded, is dismissed.

BACKGROUND

[6]

It is not necessary to review Merrifields career in detail. A brief
    summary of the facts relevant to the litigation suffices.

[7]

In February 2005, Merrifield was assigned to the RCMPs Threat
    Assessment Group (TAG), a unit responsible for providing protective services to
    federal politicians, including the Prime Minister. TAG duties also included
    monitoring criminal, extremist, and terrorist groups, and carrying out threat
    assessments.

[8]

Merrifields strained relations with RCMP management began in May 2005,
    when his superior officers learned that he had run for the nomination to be the
    Conservative Partys candidate in the upcoming federal election in the riding
    of Barrie without complying with the applicable RCMP regulations. It was
    decided that Merrifield was potentially in a conflict of interest position and
    should be removed from investigating a death threat made against Member of
    Parliament Belinda Stronach, who had recently left the Conservative Party
    caucus to join the Liberal Party caucus. Merrifield was transferred out of the
    TAG unit to another unit not responsible for protecting politicians.

[9]

On July 9, 2005, Merrifield appeared on a radio show as a terrorism
    consultant and was interviewed about terrorist threats to Canada. After having
    learned that this was not the first time that Merrifield had spoken publicly
    about national security, Merrifields line manager, Superintendent Marc Proulx,
    sent a memo to him on September 28, 2005, reminding him of his obligation to
    comply with applicable RCMP policies regarding media appearances.

[10]

In
    October 2005, Merrifield was refused assignment to the Special Operations
    Centre (SOC), which had been constituted to respond to a terrorist threat
    against Toronto.

[11]

In
    January 2006, Merrifield was transferred to Customs and Excise. He did not
    report for work but commenced sick leave. He did not report to his new post
    until July 2006. On January 5, 2006, Merrifield wrote to Proulx, accusing him
    of misconduct in his audit of Merrifields corporate American Express card
    usage. The card had been cancelled by the RCMP in October 2005 due to
    nonpayment.

[12]

On
    January 6, 2006, Proulx commenced a formal investigation pursuant to Part IV of
    the
Royal Canadian Mounted Police Act
,

R.S.C., 1985, c.
    R-10 (
RCMP Act
), to establish whether Merrifields use of his credit
    card had contravened the RCMPs Code of Conduct. The final report of the
    investigator concluded that Merrifield had contravened administrative policy by
    failing to pay the balance due on the card and had used the card for minor unauthorized
    purposes. A line officer issued a performance log directing Merrifield as to
    use of the credit card and expense policy.

[13]

On
    June 27, 2007, Merrifield commenced this action against the Crown, on behalf of
    the RCMP, and individual RCMP members Inspector James Jagoe, Superintendent
    Marc Proulx, Assistant Commissioner Michel Seguin, Chief Superintendent Norman Mazzerolle,
    and Superintendent Martin Van Doren, seeking damages for the mental distress he
    suffered as a result of managerial bullying and harassment. He twice amended
    his statement of claim, most recently in April 2012, seeking further
    declaratory relief related to claims under ss. 2(b), 2(d) and 3 of the
Canadian
    Charter of Rights and Freedoms
. The action was discontinued as against
    Seguin, Mazzerolle and Van Doren by order of the trial judge on November 17,
    2014.

[14]

On
    January 5, 2012, Merrifield sent an email message to the RCMP Commissioner and
    several other senior members of the RCMP, asking why his harassment claim was
    not being settled. Receipt of the email message was acknowledged but his
    question went unanswered.

The trial judges decision

[15]

The
    trial judge found that the tort of harassment exists in Ontario. Her analysis
    concerning the existence of the tort is quite brief in the context of an
    otherwise lengthy decision  a mere 8 paragraphs of her 896-paragraph judgment.
    She set out four questions (as submitted by the plaintiff) that must be
    answered  in order to establish entitlement to damages for harassment:

1. Was the conduct of the defendants toward Merrifield
    outrageous?

2. Did the defendants intend to cause emotional distress or did
    they have a reckless disregard for causing Merrifield to suffer from emotional
    distress?

3. Did Merrifield suffer from severe or extreme emotional
    distress?

4. Was the outrageous conduct of the defendants the actual and
    proximate cause of the emotional distress?

[16]

The
    trial judge found that the elements of the tort were satisfied. She found, for
    example, that Merrifields managers acted unreasonably in rejecting his
    explanation for failing to advise them he was running for the Conservative
    Party nomination in 2005. She found, further, that Merrifields transfer out of
    the TAG unit was not
bona fide
, and
    the potential conflict of interest his managers apprehended was remote at
    best and a pretext for his transfer. She also found that Merrifield was stood
    down by the SOC because the manager at the SOC knew that he had been removed
    from TAG.

[17]

The
    trial judge found that the appellants had a reckless disregard for whether
    their behaviour would cause Merrifield to suffer from emotional distress; that
    Merrifield suffered severe emotional distress; and that the appellants
    outrageous conduct was the actual and proximate cause of his emotional
    distress.

[18]

The
    trial judge found, further, that Proulxs decision to order a Part IV
    investigation without first asking Merrifield for an explanation of apparent
    irregularities in the use of his American Express card was flagrant and
    outrageous conduct that he should have known would cause Merrifield harm. She
    considered that Proulx acted hypocritically in ordering the Part IV
    investigation, because he had himself engaged in discreditable conduct contemporaneously
    in attempting to procure the services of a prostitute. The trial judge was
    satisfied that Merrifield suffered from depression and post-traumatic stress
    disorder as a result of the RCMP actions, and she concluded that Merrifield had
    established the tort of intentional infliction of mental suffering (IIMS).

DISCUSSION

I
.
THE
    TORT OF HARASSMENT

[19]

The
    decision under appeal is the first case in which a Canadian appellate court has
    been required to determine whether a common law tort of harassment exists. What
    is required in order for a new tort to be recognized or established? Neither
    party canvassed this issue, yet it is key to the resolution of this appeal.
    Accordingly, it is helpful to begin with a brief consideration of the nature of
    common law change, before considering whether a tort of harassment should be
    recognized at this time.

The nature of common law change

[20]

Common
    law change is evolutionary in nature: it proceeds slowly and incrementally
    rather than quickly and dramatically,
as McLachlin J. explained
    in
Watkins v. Olafson
,
[1989] 2 S.C.R. 750, at p. 760
:

Generally
    speaking, the judiciary is bound to apply the rules of law found in the
    legislation and in the precedents. Over time, the law in any given area may
    change; but the process of change is a slow and incremental one, based largely
    on the mechanism of extending an existing principle to new circumstances. While
    it may be that some judges are more activist than others, the courts have
    generally declined to introduce major and far-reaching changes in the rules
    hitherto accepted as governing the situation before them.

[21]

As
    she went on to explain at pp. 760-761, courts may not be in the best position
    to address problems in the law; significant change may best be left to the
    legislature:

There
    are sound reasons supporting this judicial reluctance to dramatically recast
    established rules of law. The court may not be in the best position to assess
    the deficiencies of the existing law, much less problems which may be
    associated with the changes it might make. The court has before it a single
    case; major changes in the law should be predicated on a wider view of how the
    rule will operate in the broad generality of cases. Moreover, the court may not
    be in a position to appreciate fully the economic and policy issues underlying
    the choice it is asked to make. Major changes to the law often involve devising
    subsidiary rules and procedures relevant to their implementation, a task which
    is better accomplished through consultation between courts and practitioners
    than by judicial decree. Finally, and perhaps most importantly, there is the
    long-established principle that in a constitutional democracy it is the
    legislature, as the elected branch of government, which should assume the major
    responsibility for law reform.

[22]

These
    wise words of caution have been reiterated by the Supreme Court in a variety of
    contexts including
R. v.
    Salituro
,
[1991] 3 S.C.R. 654,
and
R. v. Mann
,
2004
    SCC 52, [2004] 3 S.C.R. 5
9. The same idea is seen in
    English law: see e.g.
Launchbury

v.
    Morgans
, [1972] UKHL 5,
[1973] A.C. 127.

[23]

Thus,
    when the Supreme Court created a duty of honest contractual performance
in

Bhasin v.
    Hrynew
,
2014 SCC 71, [2014] 3
    S.C.R. 494
, it did so on the basis that good faith contractual
    performance
already existed
in Canadian common law as
a general organizing principle that
    underpins and informs existing common law rules. Creation of the new common law
    duty was justified on the basis that it was an incremental step that followed
    from the implications of the general organizing principle, a step that
    responded to societal needs and vindicated the reasonable expectations of
    commercial parties without precipitating unintended effects.

Common law change in Ontario

[24]

The
    importance of incremental development of the common law was discussed in
Jones v. Tsige
, 2012
    ONCA 32
, 108 O.R. (3d) 241, in which this court recognized the existence of
    a tort of intrusion upon seclusion.

[25]

Far
    from being created from whole cloth, the intrusion upon seclusion tort was
    grounded in what Sharpe J.A. identified as an emerging acceptance of claims for
    breach of privacy. He carefully reviewed Ontario and Canadian case law, in
    which he discerned both supportive dicta and a refusal to reject the existence
    of the tort, and provincial legislation that established a right to privacy
    while not foreclosing common law development. He also considered academic
    scholarship, much of which supported the existence of a right to privacy. He
    drew upon American tort law, which recognizes a right to privacy, as well as
    the law of the United Kingdom, Australia, and New Zealand. He also noted
    societal change  in particular, technological developments that pose a threat
    to personal privacy  and the impetus for reform that it created. [M]ost
    importantly, he said, w
e are presented in this
    case with facts that cry out for a remedy: at para. 69.

[26]

Ultimately,
    Sharpe J.A.s conclusion was couched in terms of
confirming
the existence of the tort rather than
    simply creating it. As he put it, at para. 65:

In my view, it is appropriate
    for this court to confirm the existence of a right of action for intrusion upon
    seclusion. Recognition of such a cause of action would amount to an incremental
    step that is consistent with the role of this court to develop the common law
    in a manner consistent with the changing needs of society.

Authority does not support the recognition of a tort of
    harassment

[27]

The
    trial judge in this case relied on four trial-level decisions proffered by Merrifield
    as supporting the existence of the tort and establishing its elements:
Mainland Sawmills Ltd. et al v. IWA-Canada
et
    al,
2006 BCSC 1195, 41 C.C.L.T. (3d)
    52
;
Savino v. Shelestowsky
,
2013 ONSC 4394, 4 C.C.L.T. (4th) 94;
McHale v. Ontario
,
2014 ONSC
    5179
; and
P.M. v. Evangelista
,
2015 ONSC 1419.

[28]

She
    erred in doing so. Taken as a whole, these cases confirm neither the existence
    of the tort nor its elements.

[29]

Mainland Sawmills
is the key case in the
    analysis. It underlies all of the subsequent Ontario trial decisions  this,
    despite the fact that it is a British Columbia trial level authority in which
    the court did no more than
assume
,
    for purposes of dealing with an application seeking to have particular claims dismissed,
    that the tort exists. Far from confirming the existence of the tort, the
    application judge in
Mainland

Sawmills
specifically concluded that the law is
    unclear.

[30]

As
    for the elements of the tort, these too were assumed by the application judge
    in
Mainland Sawmills
based on the
    plaintiffs submission  a submission that was based on American caselaw
    arising out of the tort of intentional infliction of emotional distress. In
    short,
Mainland Sawmills
is not
    authority for either the existence of the tort of harassment or the elements of
    such a tort.

[31]

Nevertheless,
Mainland Sawmills
has been cited and
    relied on in several subsequent cases in Ontario in which the tort of harassment
    has been asserted.

[32]

In
Savino
, the motion judge does no more
    than find that although a tort of harassment is not largely accepted, the door
    does not appear to be entirely closed on the possibility of this torts
    existence: at para. 15. The court cites
Mainland
    Sawmills
as one of the few cases in which the elements of the tort
    are set out.

[33]

McHale
appears to assume the existence of the
    tort and cites two cases,
Lynch v. Westario Power
    Inc.
,

[2009]
    O.J. No. 2927 (S.C.),
and
Mainland
    Sawmills
,

for the elements of the tort, only to conclude
    that the tort was not pleaded with sufficient particularity.
Lynch
specifically states that the existence of
    the tort of harassment is unclear and, like
McHale
, finds that the
    tort was not pleaded with sufficient particularity in accordance with
Mainland Sawmills
in any event.

[34]

P.M.
describes harassment as a still-developing tort and cites
Savino
and
Lynch
for the elements of the tort.
P.M.
is
    the only case cited by the respondent in which damages were awarded for harassment
    ($5,000), but the defendant in that case was the administrator of the estate of
    the tortfeasor and did not lead evidence.

[35]

The
    trial judge concluded that the law of harassment has evolved since 2011, citing
McHale
,
P.M.
,
    and
John v. Cusack
,

2015 ONSC 5004,

in
    support. The motion judge in
John
acknowledges that the existence of the tort is a live legal issue, but
    assumes its existence for purposes of a summary judgment motion, ultimately dismissing
    the claim as frivolous and vexatious.

[36]

This
    is the extent of the authority cited in support of the existence of the tort.
    In sum, these cases assume rather than establish the existence of the tort.
    They are not authority for recognizing the existence of a tort of harassment in
    Ontario, still less for establishing either a new tort or its requisite
    elements.

There is no other basis to recognize a new tort

[37]

Given
    that authority does not support the existence of a tort of harassment, should this
    court nevertheless recognize such a new tort?

[38]

To
    pose the question in this way is to suggest that the recognition of new torts
    is, in essence, a matter of judicial discretion  that the court can create a
    new tort anytime it considers it appropriate to do so. But that is not how the
    common law works, nor is it the way the common law should work.

[39]

At
    the outset, it is important to recognize that this is not a case like
Tsige
, which, as we have said, is best
    understood as a culmination of a number of related legal developments. As we
    have explained, current Canadian legal authority does not support the
    recognition of a tort of harassment.

[40]

We
    were not provided with any foreign judicial authority that would support the recognition
    of a new tort. Nor were we provided with any academic authority or compelling
    policy rationale for recognizing a new tort and its requisite elements.

[41]

This
    is not a case whose facts cry out for the creation of a novel legal remedy, as
    in
Tsige
.
That case concerned a highly significant
    intrusion into the plaintiffs personal information. The defendant, who was in
    a relationship with the plaintiffs former husband, used her workplace computer
    to gain access to the plaintiffs banking records and personal information over
    a period of several years  actions the court found to be deliberate,
    prolonged, and shocking. Discipline imposed on the defendant by her employer did
    not redress the wrong done to the plaintiff. In these circumstances, as Sharpe
    J.A. put it, [T]he law of this province would be sadly deficient if we were
    required to send [the plaintiff] away without a legal remedy.

[42]

That
    is not this case. In this case, there are legal remedies available to redress
    conduct that is alleged to constitute harassment. The tort of IIMS is one of
    these remedies, and it is discussed below.

[43]

In
    summary, the case for recognizing the proposed tort of harassment has not been
    made. On the contrary, as we will explain, there are good reasons opposing the recognition
    of the proposed tort at this time.

II.       THE INTENTIONAL INFLICTION OF MENTAL SUFFERING
    (IIMS)

[44]

The
    tort of IIMS is well established in Ontario and may be asserted as a basis for
    claiming damages for mental suffering in the employment context.

[45]

In
    the leading case,

Prinzo v. Baycrest Centre for Geriatric Care
, (2002) 60 O.R. (3d) 474
,
at
    para. 48, this court held that the test for IIMS is met where the plaintiff
    establishes conduct that is (1) flagrant and outrageous, (2) calculated to
    produce harm, and which (3) results in visible and provable illness.

[46]

A
    comparison of the elements of the proposed tort of harassment accepted by the
    trial judge and the elements of the existing tort of IIMS is instructive.

[47]

Whereas
    IIMS requires flagrant and outrageous conduct, the proposed harassment tort
    would require only outrageous conduct. More significant, IIMS is an intentional
    tort, requiring an intention to cause the kind of harm that occurred or
    knowledge that it was almost certain to occur. This is a purely subjective
    test:
Boucher v. Wal-Mart Canada Corp.
,
    2014 ONCA 419, 120 O.R. (3d) 481, at para. 43,
whereas the proposed tort
    of harassment would require either intention
or
objectively-defined
    reckless disregard. Finally, IIMS requires conduct that is the proximate cause
    of a visible and provable illness, whereas causing severe or extreme emotional
    distress is sufficient for the proposed tort of harassment.

[48]

Plainly,
    the elements of the tort of harassment recognized by the trial judge are
    similar to, but less onerous than, the elements of IIMS. Put another way, it is
    more difficult to establish the tort of IIMS than the proposed tort of
    harassment, not least because IIMS is an intentional tort, whereas harassment would
    operate as a negligence-based tort.

[49]

Given
    the similarities between IIMS and the proposed tort of harassment, and the
    availability of IIMS in employment law contexts, what is the rationale for
    creating the new tort?

[50]

Merrifield
    submits that the new tort must be created because there is an increased
    societal recognition that harassment is wrongful conduct. He notes that moral
    damages for mental distress can be awarded only at termination of employment,
    leaving a gap that the tort of harassment should fill. He asserts that the
decision of the Supreme Court in
Saadati v. Moorhead
, 2017 SCC 28, [2017] 1 S.C.R. 543, supports the
    creation of the tort of harassment, and
that the test the trial judge
    recognized for the tort is sufficiently stringent to limit the reach of the
    tort.

[51]

We
    disagree.

[52]

Saadati
is concerned with proof of mental injury in the
    context of a known cause of action. Although it may make damages for mental
    injury more readily available in negligence actions, it does not require the
    recognition of a new tort. Moreover, this court has not allowed negligence to
    ground a claim for mental suffering in the employment context:
Piresferreira
    v. Ayotte
, 2010 ONCA 384, 319 D.L.R.
    (4th) 665.

[53]

In
    summary, while we do not foreclose the development of a properly conceived tort
    of harassment that might apply in appropriate contexts, we conclude that
    Merrifield has presented no compelling reason to recognize a new tort of
    harassment in this case.

Was IIMS established?

[54]

The
    trial judge set out the test for IIMS outlined by this court in
Wal-Mart
. This requires a plaintiff to
    establish that the defendants conduct:

1) was flagrant and outrageous;

2) was calculated to harm the plaintiff; and

3) caused the plaintiff to suffer a visible and provable
    illness.

[55]

The trial judge found that Proulxs decision to order a Part IV
    investigation into Merrifields travel credit card usage was both flagrant and
    outrageous because: a) he did not ask Merrifield for an explanation for his
    cash withdrawals, b) he did not reply to Merrifields question about whether he
    had reason to believe the credit card was being used for non-RCMP purposes, c)
    he provided no particulars of the transactions that concerned him or a date
    range for which the investigation was to be conducted, and d) he alleged
    discreditable conduct contemporaneous to engaging in discreditable conduct
    himself, namely attempting to procure a prostitute. She found that
Proulx had a reckless disregard for causing Merrifield emotional
    distress, and that emotional distress was a consequence that was known to be
    substantially certain to follow from the decision to order the investigation.
    Finally, the trial judge found
that Merrifield suffered from depression
    and post-traumatic stress disorder, based largely on his evidence and that of
    his family doctor that he was off work sick. Thus, she concluded that the tort
    of IIMS was established solely on the facts of the Part IV credit card
    investigation.

[56]

This
    conclusion cannot stand. It flows from palpable and overriding errors in the
    trial judges fact-finding and the incorrect application of the legal test.

[57]

First,
    the trial judge suggests that Proulx was required to be satisfied that there
    was a breach of the RCMP Code of Conduct prior to ordering the investigation.
    This is incorrect. Proulx had the authority under s. 40(1) of the
RCMP Act
to
    order an investigation after having satisfied himself that Merrifield may have
    contravened RCMP policy on the use and payment of his RCMP credit card.

[58]

Second,
    Proulxs January 2006 mandate letter stated that Merrifield was suspected of
    having contravened administrative policy. At its highest, the letter stated
    that Merrifield may have engaged in disgraceful conduct. This was serious,
    but it was not equivalent to alleging the commission of criminal offences, as
    the trial judge stated.

[59]

Third,
    the trial judge found that Proulxs initiation of the Part IV investigation was
    flagrant and outrageous because Proulx himself had engaged in disgraceful
    conduct at a time contemporaneous to initiating the investigation: that is,
    that he had been identified as attempting to procure a prostitute in a John
    Sting operation. This was plainly a legal error. The inference that Proulxs
    concerns with Merrifields credit card misuse could not be
bona fide
because he had breached a wholly
    unrelated provision of the Code of Conduct
after
initiating the Part IV investigation is palpably wrong. There is simply no
    logical connection between the two. We accept the Crowns submission that the
    trial judges reliance on this evidence vitiates her entire finding with
    respect to the Part IV investigation, and also calls into question her
    evaluation of the rest of Proulxs evidence. In our view, this piece of
    evidence was irrelevant. It was never pleaded and should not have been
    admitted.

[60]

In
    sum, the IIMS argument failed at the first requirement and the trial judge
    erred in concluding otherwise. But the trial judge also erred in finding that
    the second and third elements of the tort were established. There was no
    evidence that Proulxs conduct was intended to cause harm or that he knew that
    harm was substantially certain to follow from his decision to order the Part IV
    investigation, and emotional distress was insufficient in any event. Finally,
    despite multiple findings of flagrant and outrageous conduct, the evidence did
    not establish the requisite causal connection.

[61]

Our conclusions that the trial judge erred in recognizing the
    tort of harassment and in finding that the tort of IIMS was established in
    regard to the Part IV investigation are sufficient to allow the appeal. It is
    not necessary to address all of the additional arguments made by the appellants;
    however, given that most of the trial was focused on contested issues of fact, we
    consider it appropriate to address additional palpable and overriding errors the
    trial judge made in her analysis, as we explain below.

III.      FACTUAL ERRORS

[62]

The
    trial judge made numerous palpable and overriding errors in her fact- finding.
    These errors include ignoring relevant evidence, considering irrelevant
    matters, and making findings of fact that are clearly wrong. These errors
    preclude a conclusion that Merrifield was harassed  even assuming that a tort
    of harassment exists, with the elements accepted by the trial judge  as well
    as the trial judges conclusion that the tort of IIMS was established in
    relation to the Part IV investigation or in any other context.

Merrifields conduct and explanation for running for the
    Conservative Party nomination

[63]

The
    event that initiated Merrifields dispute with the RCMP was his standing for
    the Conservative Party nomination in the Barrie riding in 2005. The trial
    judges findings concerning Merrifields rationalization of his conduct and the
    RCMPs reaction are clearly unreasonable.

[64]

In
    evaluating the factual record, the trial judge failed to keep in mind the requirements
    of the governing regulations:
Royal Canadian Mounted Police Regulations,
    1988
, SOR/88-361. (These regulations were repealed in 2014, after all the
    events of this case.)

[65]

Section
    58.4 (1) of the regulations provided that a member who was a peace officer may,
    only while on leave without pay granted for that purpose, (a) run for
    nomination, or stand as a candidate, in a federal, provincial or territorial
    election. Nothing in the RCMP Administrative Manual is inconsistent with the regulations.

[66]

Merrifield
    was aware of the regulations in 2004. On February 3, 2004, he wrote an email to
    Sergeant Verrecchia  Advisor, Harassment, Human Rights, Conflicts of Issue,
    Central Region  seeking clarification of the regulations. His email indicates that
    he had considered the regulations closely, as he quoted and commented on
    several sections. He questioned whether the regulations applied if he were
    standing for nomination in an electoral district that did not exist as yet. Verrecchia
    replied stating unequivocally: [T]he policy states you must be on LWOP [leave without
    pay] to run for nomination. She added that the leave would be without pay and
    that it applied, in the case of the nomination process, beginning on the day
    on which the member enters the process and ending the day he withdraws or the
    process concludes. Verrecchia then provided Merrifield with a written
    memorandum dated February 11, 2004, indicating that the Professional Standards
    and Special Advisory (Legal) Unit of Internal Affairs had confirmed that while
    running for nomination a member must be on LWOP. The memo reminded Merrifield
    that he had to submit his request for LWOP through proper channels and have it
    approved, and that it was his responsibility to identify and avoid situations
    of conflict.

[67]

In
    2004, Merrifield sought nominations in three ridings, but sought LWOP for only
    two of the three ridings. Subsequently, Merrifield ran as a candidate in the
    federal election while on LWOP and returned to his duties following his defeat.

[68]

In
    2005, Merrifield filed his papers seeking nomination in the Barrie riding some
    weeks before the nomination meeting was held on May 14, 2005. Merrifield
    revised his campaign literature from 2004 and had it reprinted. He had 300
    pamphlets distributed. He had people working on his campaign, obtained a list
    of local party members, made audio recorded telephone calls, and had a campaign
    website. However, he did not advise the RCMP that he was running and did not
    request LWOP to run for the nomination.

[69]

Shortly
    before the nomination meeting on May 14, Merrifield was asked if he had any
    ambition to run in another election. According to Assistant Sergeant Crane,
    Merrifield stated: None whatsoever. It was too expensive. Merrifield
    testified that he told Crane and Jagoe that he would not be running in an
    election anytime soon. This, after informing those present at a dinner that
    he had received a call from the Richmond Hill riding of the Conservative Party
    offering him the candidacy in that riding.

[70]

A
    few days following the nomination meeting, Crane and Jagoe learned that
    Merrifield had been running for the Conservative Party nomination in Barrie at
    the time of the conversation detailed above. They thought that Merrifield had
    not been forthright with them. When they confronted him with the fact he had
    run for nomination without disclosing it or obtaining proper leave, Merrifield
    explained the difference between running for nomination and running in a public
    election "at least twice, and stated that he was running as a protest.
    The trial judge thought it unreasonable of Crane, Jagoe, and Proulx not to
    accept Merrifields explanation. At para. 749 of her decision, she states:

A
    logical explanation of the difference between a nomination meeting [and] an
    election fell on deaf ears. Surely, these two higher ranking officers [Crane
    and Jagoe] who had management responsibilities were capable of understanding
    the difference. I find that they chose not to understand it.

[71]

At
    para. 752 of her decision, the trial judge states that Proulx did not know the
    difference between a nomination meeting and an election. To him it was all the
    same thing.

[72]

Given
    the regulations, it made no difference whether Merrifield had been running for
    nomination or for election. He was required to be on leave during the entire
    period he was running for nomination. He should have sought and obtained LWOP
    before he stood for nomination, as Verrecchia had advised him in writing in
    2004.

[73]

The
    trial judge was clearly wrong in finding that Crane, Jagoe, and Proulx were
    unreasonable in not accepting Merrifields reliance on the irrelevant
    distinction between an election and a nomination. Merrifields responses to
    direct questions led them to believe he had no current political ambitions at a
    time when he was actively involved in the political process. That, his failure
    to advise his line supervisor and request LWOP, and his subsequent self-serving
    rationalization for his conduct gave his superior officers good reason to
    conclude that he could not be trusted to be forthright with them. They could
    reasonably believe that a forthright colleague would have disclosed that he was
    running for nomination at the very time he was asked questions exploring his
    political ambitions. Crane and Jagoe could reasonably view Merrifields
    response to the question about whether he had ambition to run for election
    none whatsoever  as a half-truth at best. At trial, Crane still believed
    that Merrifield had lied to him  that he had said one thing and done another.

[74]

The
    trial judge supports Merrifields rationalizations by pointing to several
    irrelevant considerations.

[75]

The
    trial judge rejected the RCMPs argument at trial that Merrifield ran to win
    the nomination and accepted Merrifields testimony that he stood for nomination
    only to have the status to speak at the nomination meeting and as a strategy to
    divert votes from the leading candidate. She accepted that Merrifield had not
    sold any (para. 688) (or many (para. 747)) memberships and did not have the
    required support to win the nomination.

[76]

These
    irrelevant considerations do not excuse Merrifield for contravening the
    regulations. They do not change the facts that Merrifield stood for nomination;
    that he did not apply for leave; that he did not advise the RCMP before he ran;
    and that he did not disclose the fact he was running when asked directly about
    his political ambitions.

[77]

The
    trial judge also excused Merrifields conduct by observing that the nomination
    was a private event open only to party members, and that there was no
    wide-spread public knowledge of Merrifields involvement. Again, this was
    irrelevant. The regulations requiring leave expressly applied to the nomination
    process without regard to the nature of that process. It was a legal error to
    consider that the private nature of a nomination process excused Merrifields
    non-compliance with the regulations.

[78]

The
    trial judge minimized the significance of Merrifields candidacy for the nomination
    throughout her decision. The fact is that he ran as a candidate for the
    nomination. He completed the nomination papers and distributed campaign
    material and flyers to party members. It was irrelevant what his intentions
    were in doing so  irrelevant whether he intended to win or could have done so.

[79]

The
    trial judge accepted Merrifields testimony that he did not believe he needed LWOP
    based on his conversation with Sgt. Boos and his understanding of how the
    earlier LWOPs were re-categorized. Indeed, there had been confusion about how
    his previous leaves without pay to run for nominations and election should be
    coded. But Sgt. Boos said nothing that could reasonably be construed to lead
    Merrifield to believe that he did not need LWOP, however it was coded. Even accepting
    that Merrifield believed his LWOP could be coded personal needs LWOP or
    special leave without pay, the fact remains that he still had to arrange leave
    and advise the RCMP that he was running for nomination.

[80]

The
    trial judge did not disagree with Merrifields position at trial that he needed
    leave only for the day of the nomination meeting. But that position is plainly
    a self-serving reading of the regulation. Verrecchia had clearly advised
    Merrifield otherwise in writing in February 2004. Merrifield should have
    arranged leave from the date he filed his candidacy papers with the riding
    until he was no longer a candidate for nomination. During this period he was
    sending out his campaign flyers, had an active website, and was soliciting
    support for his nomination. Had Merrifield complied with the regulations,
    Crane, Jagoe, and Proulx would not have been surprised to learn that he had
    run.

[81]

In
    summary, the trial judges analysis of Merrifields rationalization of his
    conduct and the RCMPs reaction to it is clearly unreasonable. Merrifields
    RCMP superiors had good reason to regard him as a colleague who could not be
    trusted to be completely forthright with them  a matter of importance in any
    position, but especially so in the context of Merrifields employment in the
    RCMP.

Merrifields potential conflict of interest

[82]

A
    second significant error was the trial judges finding that Merrifields
    potential conflict of interest was remote at best and that the RCMPs concern
    about it was not
bona fide
. In arriving at this conclusion, the trial
    judge failed to consider all of the evidence. In particular, she failed to
    consider the evidence that Merrifield himself had perceived the potential for a
    conflict, and she failed to consider the evidence of Verrecchia, despite having
    summarized it earlier in her reasons.

[83]

At
    para. 149, the trial judge mentioned in passing that Merrifield declined to
    perform an Order in Council check on Belinda Stronach because he was friends
    with her. This is neither a complete nor accurate account of Merrifields
    testimony. Merrifield described his personal relationship with Stronach as
    acquaintances. Significantly, he said that I feltthat me conducting an order
    in council check for her
would be a conflict of interest, so I declined to
    do it
 (emphasis added). When asked to explain why he thought it would be a
    conflict of interest, he responded: It would be a conflict of interest,
    because if there was something omitted or something erroneously reported, that
    personal relationship could be seen as a conflict of interest, whether through
    concealment or advantage. So it would be best not to conduct that order in
    council check. He further expressed his view that the conflict did not arise
    from his political affiliation but from his personal relationship with
    Stronach. What Merrifield described as a personal relationship was an artifact
    of his political activities. He said Stronach had been very helpful and
    supportive throughout the 2004 campaign year for me. He added that he had sat
    with her on the Conservative caucus for the Greater Toronto Area.

[84]

Further,
    the trial judge noted that when Merrifield was assigned to investigate a death
    threat against Stronach, he contacted Ms. Stronach directly on that day to ask
    her if she was comfortable with his doing the investigation. In his testimony,
    he described this contact with Ms. Stronach as having taken steps to avoid [a]
conflict of interest
and ensure that the person who was [the] subject of
    the threats was comfortable with the investigation (emphasis added).

[85]

This
    testimony may not establish that Merrifield thought he was in a conflict of
    interest position, but it does show that he perceived the
possibility
of
    a conflict.

[86]

The
    trial judge did not refer to Merrifields decision not to perform the Order in
    Council check, or to his asking Stronach if he should recuse himself from
    investigating the death threat, when she concluded at para. 754 that the
    potential for a perceived conflict of interest was remote at best. The
    evidence that Merrifield shared the RCMPs perception of a possible conflict of
    interest undermines her finding that the perception was remote at best.

[87]

The
    trial judges finding that the RCMPs perceived conflict was not
bona fide
lacks evidentiary support. The RCMP management was aware that Merrifield had
    asked Stronach if he should recuse himself from the investigation and was
    concerned about the appearance of their relationship as a potential conflict.
    As Jagoe explained in his testimony, if Merrifield were not removed from the
    death threat investigation, it would appear that Ms. Stronach was deciding who
    was doing the investigation and this could be viewed as a conflict. This was a
    reasonable consideration.

[88]

In
    summarizing the evidence, the trial judge recounted that Proulx checked with
    Verrecchia on May 24, 2005, asking whether he was wrong to think that there
    was a conflict. The trial judge reviewed Verrecchias testimony beginning at para.
    168. Verrecchia said that Proulx sought her guidance about the conflict of
    interest policy and whether Merrifield had contravened it. Among other things,
    she told Proulx that Merrifields investigation of Stronachs death threat was
    a conflict as he was partisan and his objectivity might be questioned. The RCMP
    had to be objective, especially with respect to political investigations. According
    to the trial judge, at para. 170, Verrecchias view was that:

[O]bjectively, it was an apparent conflict for Mr. Merrifield
    and the RCMP. If something had happened, Mr. Merrifields integrity could be
    questioned and the Forces objectivity could be questioned as well. His
    involvement in the Stronach investigation created both perceived and apparent
    conflicts.

[89]

Verrecchia
    also stated her concerns about the campaign literature Merrifield had
    distributed while he was not on LWOP and still working for the RCMP. He was
    speaking against some of the laws of the day, for example the gun registry,
    which was a law of Canada that had to be enforced by the RCMP. Verrecchia said:
    While working as an RCMP officer, he should not have taken a public stance
    against the government and its existing laws. He had an obligation to enforce
    the laws and remain objective. Significantly, the trial judge noted that Verrecchia
    had advised Proulx that Mr. Merrifield was proceeding contrary to the advice that
    she had given him in 2004.

[90]

Verrecchia
    also pointed out that section 12.12 F of the RCMP Conflict of Interest Policy
    states that once a member returns from LWOP, the officer is to determine a
    suitable assignment taking into account political opinions expressed, political
    impact that may result from the posting and investigations with political
    overtones being conducted by the proposed unit. She stated that she had
    advised Proulx that Merrifield should not be doing any political investigations
    as it was a conflict.

[91]

The
    fact that Proulx consulted and followed the advice of internal resources at the
    RCMP before forming a firm opinion that Merrifield posed a potential conflict
    of interest, and before transferring him out of TAG, demonstrates that the
    trial judges finding that his action was not
bona
    fide
was clearly wrong. On no understanding could his conduct be
    said to be outrageous.

[92]

A
    more minor matter is that Verrecchias explanations show that the trial judge
    was also clearly wrong in stating, at para. 752, that Mr. Merrifields
    political views were irrelevant. His political views would have been less
    problematic if he had followed the regulations and been on LWOP, but as an
    active RCMP officer he had expressed political views in opposition to the laws
    of Canada that he was required to enforce, and in these circumstances it was
    not unreasonable to be concerned about a conflict of interest.

[93]

The
    trial judge considered it significant that no conflict was apprehended when
    Merrifield, after running in the election in 2004, worked in the Integrated National
    Security Enforcement Team (INSET) and was assigned to TAG, a sub-unit of INSET,
    in February 2005. Verrecchia explained in her testimony that this was not a
    concern as his LWOP status had separated him from the RCMP during the campaign
    and election period. As well, Proulx, who became Merrifields line officer at
    TAG in February 2005, was unaware of Merrifields previous political activities
    and unfamiliar with the policies that applied to RCMP members engaging in
    political activities. That is why he consulted Verrecchia.

[94]

In
    her analysis section, the trial judge made only passing reference to Verrecchia.
    At para. 753, she said that Proulx consulted Sgt. Verrecchia who believed that
    there could be a problem with perceived conflict. The trial judge then went on
    to state that Proulx also consulted the RCMP Policy Branch. The trial judge
    pointed out that the Policy Branch took a long time to respond and that, when
    it did, its reply was not responsive to the issue. She then found that if
    there was a significant concern that Mr. Merrifields attendance at the Barrie
    nomination meeting had compromised his ability to work in national security,
    the Policy Branch would have provided Supt. Proulx with direction in a timely
    manner.

[95]

As
    the Crown points out, there are two problems with this.

[96]

First,
    the issue was not whether Merrifields political activities compromised his
    ability to work in national security; it was whether his political activities
    compromised his ability to protect politicians. Second, the trial judge was
    wrong to ascribe bad faith to Proulx, who was not responsible for the delay of
    the Policy Branch and was acting on the best information and advice he had been
    given. It is illogical for the trial judge to conclude that, because the Policy
    Branch took longer to answer Proulxs inquiries than she considered reasonable,
    Proulxs concerns were not
bona fide
.

[97]

Setting
    aside the trial judges finding that Proulxs concern over a potential conflict
    of interest was not
bona fide
sweeps
    away additional findings. For example, it sweeps away the finding that
    Merrifields transfer out of TAG constituted an other type of discipline that
    was unjustified and punitive.

Merrifields January 5, 2012 email correspondence

[98]

On
    January 5, 2012, Merrifield sent a lengthy email to a number of senior members
    of the RCMP, including the Commissioner, Deputy Commissioner, and Assistant
    Commissioner, lamenting that the RCMP had taken no steps to settle his case and
    that the Department of Justice did not have the best interest of the RCMP at
    heart. In the email he made a serious allegation of misconduct by Proulx.

[99]

The
    trial judge evidently regarded the email as significant and set it out in full
    at para. 557 of her reasons. She said that in the email Merrifield was taking
    extraordinary steps to contact upper management with the hope of resolving his
    concerns. She found that Merrifield received no response to the email and that
    the RCMPs conduct in ignoring this email went beyond all standards of what is
    right or decent. I find that it was one of the actual and proximate causes of
    Mr. Merrifields severe emotional distress.

[100]

The trial judges
    analysis is clearly erroneous. Merrifield and the RCMP were opposing parties in
    litigation. The proper avenue for communication between the parties was through
    counsel. In effect, Merrifield was complaining that the RCMP was defending the
    action rather than settling it. His request should have been communicated
    through his counsel. The RCMP response, if any, likewise should have been
    through counsel.

[101]

In any event, the
    trial judge was mistaken in saying the RCMP did not respond to the email. The Assistant
    Commissioner emailed Merrifield on January 6, 2012, the day after his email was
    received, informing him that the RCMP was continuing its discussions with Department
    of Justice counsel regarding the most appropriate manner to proceed with this
    civil action against us that is currently before the courts.  He added that
    the RCMP had not abandoned efforts towards trying to reach a resolution and anticipated
    additional discussions with you
and your counsel
in this regard (emphasis
    added).

[102]

In the circumstances,
    this was an entirely appropriate response.

Proulxs failure to set the record straight

[103]

It was patently wrong
    for the trial judge to find it outrageous for Proulx not to have set the
    record straight with Van Doren by telling him after the SOC incident that his
    concerns with Merrifield had been addressed, and that Merrifield had been
    cleared of wrongdoing. As we have explained above, the perception that
    Merrifield could not be trusted to be completely forthright could reasonably be
    held. The fact that Proulxs September 28, 2005 letter to Merrifield warned
    rather than disciplined him did not give rise to an obligation on Proulx to
    inform anyone that Merrifield had been cleared.

[104]

In our view, this
    matter illustrates the readiness with which the trial judge identified
    wrongdoing on the part of the RCMP managers and found them to have acted
    outrageously. We note that the trial judge found that many of the other things
    the RCMP did or did not do were elements of conduct she considered outrageous.
    We are not to be taken to agree with those other findings, but for purposes of
    this decision it is not necessary or fruitful to go through all of them here.

CONCLUSION

[105]

In summary, the trial
    judge erred in concluding that the tort of harassment exists in Ontario and we
    are not persuaded that the tort should be recognized. The trial judge also
    erred in concluding that the tort of IIMS was made out based on Proulxs
    initiation of a Code of Conduct investigation. No other facts found by the
    trial judge met the test for IIMS.

[106]

For these reasons, the
    appeal is allowed. The cross-appeal is dismissed.

[107]

The appellants are
    entitled to costs of the appeal, the cross-appeal, and the trial.
The appellants may make brief submissions on costs, not exceeding 10
    pages, to the Registrar of this court within 10 days of this decision. The
    respondent will have 10 days from
service of those written submissions
    to serve and file his submissions, which shall not exceed 10 pages.

Released: March 15, 2019 (D.B.)

R.G. Juriansz J.A.

David Brown J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Miracle v. Maracle, 2019 ONCA 238

DATE: 20190326

DOCKET: C65937

Feldman, Simmons and Nordheimer JJ.A.

BETWEEN

Andrew
    Clifford Miracle

Plaintiff

and

Andrew
    Clifford Maracle III, Jasmin Johnson and

The Canadian Imperial Bank of Commerce
    (CIBC)

Defendants

R.A. (Rod) Gram, self-represented

Charles Hammond, for the respondents Andrew Clifford
    Maracle III and Smokin Speedway

Heard and released orally: March 22, 2019

On appeal from the
    order of Justice Patrick Hurley of the Superior Court of Justice, dated
    September 10, 2018.

REASONS FOR DECISION

[1]

The appellant moved before the motion judge for an order to be added as
    a party to the action. We agree with the motion judge that there is no basis to
    add the appellant as a necessary party to the action under r. 5 of the
Rules
    of Civil Procedure
.

[2]

The appellant was an expert witness on behalf of the plaintiff at the
    arbitration. His rights as a creditor of the plaintiff, who was successful in
    the action under which the arbitration was conducted, do not make him a
    necessary party to the action for the purpose of enforcing the plaintiffs
    judgment.

[3]

To the extent that r. 60.06 was referred to, that rule does not address
    adding parties to an action and cannot be used for that purpose.

[4]

The appeal is therefore dismissed with costs, fixed in the amount of
    $4,000, inclusive of disbursements and HST.

K.
    Feldman J.A.

Janet
    Simmons J.A.

I.V.B.
    Nordheimer J.A.