2020 NLCA 27, 2020 NLCA 27

John Doe (G.E.B. #25), John Doe (G.E.B. #26), John Doe (G.E.B. #33) and John Doe (G.E.B. #50) (appellants/respondents by cross- appeal) v. The Roman Catholic Episcopal Corporation of St. John’s (respondent/appellant by cross-appeal) (18/28 and 18/45) Indexed As: John Doe (G.E.B. #25) v. The Roman Catholic Episcopal Corporation of St. John’s 2020 NLCA 27 5 C.A.N.L.R. 634 Court of Appeal of Newfoundland and Labrador Fry C.J.N.L., Hoegg and O’Brien JJ.A. July 28, 2020

Summary: This matter arose from a suit filed in December 1999 by the appellants claiming damages against the Roman Catholic Episcopal Corporation of St. John’s (“the Archdiocese”) and the Christian Brothers Institute Inc. related to sexual abuse of the appellants while living at the Mount Cashel orphanage in St. John’s during the 1950s. It was not disputed that the Brothers had sexually abused the appellants, nor that the appellants had previously received partial payment of their claims from the Christian Brothers.

At trial, the appellants alleged that the Archdiocese was vicariously liable for the Brothers’ sexual abuse. The appellants also alleged that the Archdiocese was vicariously liable for the negligence of one of its priests, Monsignor Ryan, whom they argued beached his fiduciary duty to the appellants. Finally, the appellants also alleged that the Archdiocese was directly liable in negligence because it knew the appellants were being abused but failed to act on that knowledge. The Archdiocese argued that it was neither negligent nor vicariously liable for the Brothers’ or Monsignor Ryan’s actions or inaction.

The judge dismissed the appellants’ claims against the Archdiocese. Despite dismissing the claims, the judge provisionally assessed damages respecting each of the appellants. The appellants appealed the judge’s decision to dismiss the claims and the Archdiocese cross- appealed the judge’s provisional assessment of the damages. Held: Appeal allowed, cross-appeal allowed in part. The Court: The judge erred in concluding that the Archdiocese was not vicariously liable for the Brothers’ sexual abuse of the appellants.

The judge erred in lay by inappropriately characterizing the requirements to be met for vicarious liability, by failing to globally assess the evidence and by conflating ______________________________ Leave to appeal to SCC refused, 39343 (January 14, 2021). the “closeness” and “connection” inquires. The judge also made palpable and overriding errors by failing to consider relevant evidence (paragraphs 45-202). The judge did not err in finding that the Archdiocese was not vicariously liable for Monsignor Ryan’s conduct.

While the judge erred in finding that Monsignor Ryan owed no duty of care to the appellants, the judge did not err in finding that there was no breach of duty (paragraphs 203-408).

The judge did not err in concluding that the Archdiocese was not directly liable for the appellants’ abuse. The appellants did not establishthat the judge erred (1) in concluding that the Archdiocese discharged its duty of care by dealing appropriately with the report of sexualabuse by a civilian employee, and (2) in finding that there was no evidence that the Archdiocese had direct knowledge of the Brothers’abuse of the appellants. As such, there was no basis on which the Archdiocese could have been found to be directly negligent(paragraphs 409-434).

With regard to the cross-appeal, the judge applied the correct tests and properly took into account factors that contributed to theappellants’ losses. Furthermore, the judge properly assessed the provisional awards for economic loss. However, the judge erred in themanner in which he awarded pre-judgment interest on the provisional awards for loss of income (paragraphs 435-578). Cases cited: J.W.D. Estate v. Newfoundland and Labrador, 2010 NLTD 47, 298 Nfld. & P.E.I.R. 74 Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 Rich v.

Bromley Estate, 2013 NLCA 24, 336 Nfld. & P.E.I.R. 107, leave to appeal to S.C.C. refused (2013), 355 Nfld. & P.E.I.R. 81(note) Bussey v. White, 2001 NFCA 7 Madsen Estate v. Saylor, 2007 SCC 18, [2007] 1 S.C.R. 838 E.B. v. Order of the Oblates of Mary Immaculate in the Province of British Columbia, 2005 SCC 60, [2005] 3 S.C.R. 45 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983 John Doe v. Bennett, 2004 SCC 17, [2004] 1 S.C.R. 436 K.L.B. v. British Columbia, 2003 SCC 51, [2003] 2 S.C.R. 403 Bazley v. Curry, (SCC), [1999] 2 S.C.R. 534 Jacobi v.

Griffiths, [1995] B.C.W.L.D. 3081 (B.C. S.C.) Jacobi v. Griffiths, (SCC), [1999] 2 S.C.R. 570 (S.C.C.) Reference re Broome v. Prince Edward Island, 2010 SCC 11, [2010] 1 S.C.R. 360 Blackwater v. Plint, 2005 SCC 58, [2005] 3 S.C.R. 3 Salomon v. Matte-Thompson, 2019 SCC 14 Wiebe Door Services Ltd. v. Minister of National Revenue, (FCA), [1986] 3 F.C. 553, 70 N.R. 214 (F.C.A.) Chiasson v. Duguay Holdings Inc., 2015 NBCA 8 Matchim v. BGI Atlantic Inc., 2010 NLCA 9, 294 Nfld. & P.E.I.R. 46 Rankin (Rankin’s Garage & Sales) v. J.J., 2018 SCC 19, [2018] 1 S.C.R. 587 Donoghue v. Stevenson, (FOREP), [1932] A.C. 562 (U.K.

H.L.) Anns v. Merton London Borough Council, [1978] A.C. 728 (U.K. H.L.) Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537 Childs v. Desormeaux, 2006 SCC 18, [2006] 1 S.C.R. 643 Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129 Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, [2017] 2 S.C.R. 855 F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41 Galaske v. O’Donnell, (SCC), [1994] 1 S.C.R. 670 J.G. v. Nadeau, 2016 QCCA 167 Nelson (City) v. Mowatt, 2017 SCC 8, [2017] 1 S.C.R. 138

Fontaine v. British Columbia (Official Administrator) (1997), (SCC), [1998] 1 S.C.R. 424 H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2019 SCC 28 Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6, [2013] 1 S.C.R. 271 Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660 Galambos v. Perez, 2009 SCC 48, [2009] 3 S.C.R. 247 McInerney v. MacDonald, (SCC), [1992] 2 S.C.R. 138 Norberg v.

Wynrib, (SCC), [1992] 2 S.C.R. 226 Cuthbertson v. Rasouli, 2013 SCC 53, [2013] 3 S.C.R. 341 Cowper-Smith v. Morgan, 2017 SCC 61, [2017] 2 S.C.R. 754 Lac Minerals Ltd. v. International Corona Resources Ltd., (SCC), [1989] 2 S.C.R. 574 R. v. Mohan, (SCC), [1994] 2 S.C.R. 9 White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182 D.M. v. W.W., 2013 ONSC 4176 E.B. v. Order of the Oblates of Mary Immaculate (British Columbia), 2001 BCSC 1783 Johnstone v. Sealand Helicopters Ltd. (1981), [1982] 35 Nfld. & P.E.I.R. 76 (Nfld. C.A.) Slaney v.

Ellis, (NL SC), [1993] 108 Nfld. & P.E.I.R. 181 (Nfld. S.C.T.D.) Benedict v. Sealand Helicopters Ltd. (1993), (NL SC), [1994] 111 Nfld. & P.E.I.R. 66 (Nfld. S.C.T.D.) Baldwin v. Chalker (1984), 48 Nfld. & P.E.I.R. 86 (Nfld. C.A.) Goodyear & House Ltd. v. Eaton (1971), [1972] 2 Nfld. & P.E.I.R. 56 (Nfld. S.C.T.D.) Bank of America v. Mutual Trust Co., 2002 SCC 43, [2002] 2 S.C.R. 601 Blackwater v. Plint, 2001 BCSC 997 Courtney v. Cleary, 2010 NLCA 46, 299 Nfld. & P.E.I.R. 85 Prowse v. The Government of Newfoundland (1900), 8 Nfld. L.R. 386 Whiteway v. The Government of Newfoundland (1901), 8 Nfld.

L.R. 482 Fontaine v. Canada (Attorney General), 2017 MBQB 21 M.(K.) v. M.(H.), (SCC), [1992] 3 S.C.R. 6 Central Trust Co. v. Rafuse, (SCC), [1986] 2 S.C.R. 147 R. (G.B.) v. Hollett, (NS CA), 1996 NSCA 121, 139 D.L.R. (4th) 260, leave to appeal to S.C.C. refused (1997), 160N.S.R. (2d) 80 (note) J.P. v. Sinclair (1997), (BC CA), 37 B.C.L.R. (3d) 366, 148 D.L.R. (4th) 472 (B.C. C.A.) Q. v. Minto Management Ltd. (1985), (ON SC), 49 O.R. (2d) 531, 15 D.L.R. (4th) 581 (Ont. S.C.), aff’d (1986), (ON CA), 57 O.R. (2d) 781, 34 D.L.R. (4th) 767 (Ont. C.A.) F.W.M. v. Mombourquette, 1996 NSCA 125 J.B. v.

Jacob (1998), (NB CA), 204 N.B.R. (2d) 254, 166 D.L.R. (4th) 125 (N.B. C.A.) C.A. v. J.W.C. (1998), (BC CA), 60 B.C.L.R. (3d) 92, 166 D.L.R. (4th) 475 (B.C. C.A.) Statutes considered: Indian Act, S.C. 1951, c. 29

Limitations Act , SNL 1995, c. L-16.1, sections 5 , 6 , 8 , 17 , 24 Judgment Interest Act , RSN 1990, c. J-2, sections 3(3), 4 Judgment Interest Act , SN 1983, c. 81, sections 4(1), 10, 11 Court Order Interest Act , RSBC 1996, c. 79 Revised Statutes, 1990 Act , SN 1991, c. 41,

section 9 The Young Persons Offences Act , SN 1984, c. 2, sections 26, 33 Young Persons Offences Act , RSN 1990, c. Y-1 Judicature Act , RSO 1970, c. 228 Judicature Act , RSO 1980, c. 223,

section 36 Limitation of Personal Actions Act , RSN 1990, c. L-15 Rules considered: Court of Appeal Rules , N.L.R. 38/16, rule 58 Texts considered: J.W. Salmond, Salmond's Law of Torts , 10th ed. (London: Sweet & Maxwell, 1945) Other: Royal Commission of Inquiry into the Response of the Newfoundland Criminal Justice System to Complaints (St. John’s, NL: Office of the Queen’s Printer, 1991) Counsel: Eugene Meehan Q.C., Thomas Slade, Geoffrey E. Budden and Paul Kennedy, for the appellants/respondents by cross-appeal; Mark R. Frederick, Susan Adam Metzler and Chris T.

Blom, for the respondent/appellant by cross-appeal. The appeal was heard on March 21 and 22, 2019 before Fry C.J.N.L., Hoegg and O’Brien JJ.A. The following judgment was filed on July 28, 2020 by the Court. ______________________________________________________________ By the Court: INTRODUCTION [ 1 ] In a suit filed in December 1999, four plaintiffs, G.E.B. #25, G.E.B. #26, G.E.B. #33 and G.E.B. #50 (the plaintiffs or the appellants), claimed against the Roman Catholic Episcopal Corporation of St.

John’s (the Diocese or Archdiocese) and the Christian Brothers Institute Inc. for damages resulting from the sexual abuse they suffered while they were boys living at Mount Cashel orphanage in St. John’s during the 1950s. [ 2 ] The judge accepted and it is not contested on this appeal that the plaintiffs received partial payment of their claims against the Christian Brothers after bankruptcy proceedings resulted in liquidation of their assets.

The record does not disclose a Notice of Discontinuance or Satisfaction Piece in this regard, although counsel for the plaintiffs stated at a discovery proceeding that the action was discontinued. That said, the Christian Brothers Institute Inc. remained as a defendant on the Statement of Claim although they did not participate in the trial. [ 3 ] The plaintiffs’ suit was tried over approximately 35 days during 2016. The plaintiffs alleged that the Archdiocese was vicariously liable for the Brothers’ sexual abuse of them, arguing that the Archdiocese had a sufficiently close relationship with the

Brothers to justify it being found vicariously liable for their actions. As well, the plaintiffs alleged that the Archdiocese was vicariously liable for the negligence of one of its priests, Monsignor Ryan, who lived at the orphanage. The plaintiffs also alleged that Monsignor Ryan breached his fiduciary duty to them.

Finally, the plaintiffs alleged that the Archdiocese was directly liable in negligence because it knew that the plaintiffs were being sexually abused at the orphanage but failed to act on that knowledge. [ 4 ] The evidence in this case implicated five Brothers at Mount Cashel who were there during the 1950s when the plaintiffs were residents. The Archdiocese did not dispute that the Brothers had abused the plaintiffs, and the judge accepted the Archdiocese’s acknowledgement in this regard.

However, the Archdiocese did dispute that it was negligent or that it was vicariously liable for the Brothers’ or Monsignor Ryan’s actions or inaction. The Archdiocese also disputed the degree of causal connection between the sexual assaults and the damages claimed by the plaintiffs. [ 5 ] In a written judgment filed March 16, 2018, the judge dismissed the plaintiffs’ claims against the Archdiocese.

Despite finding that the Archdiocese was not liable, the judge provisionally assessed damages respecting each of the four plaintiffs. [ 6 ] The judge made several comments respecting the plaintiffs’ claim against the Christian Brothers. At paragraph 2 of his decision, the judge stated that “the Christian Brothers appear to have acknowledged liability” and at paragraph 49 of his decision, he said that he had “no doubt about the Plaintiffs’ description of the events [the sexual abuse] that happened to them personally”.

Also, at paragraph 189 he stated that “there would be little doubt about the imposition of liability on the Christian Brothers organization”, and noted at paragraph 199 that “[t]he Christian Brothers organization, which would have been found vicariously liable, has liquidated its assets through bankruptcy proceedings…”. THE APPEAL AND CROSS-APPEAL [ 7 ] The appellants appeal the judge’s dismissal of their claims, saying that the judge made several errors in coming to his conclusions.

They argue that the judge erred in dismissing their vicarious liability claims against the Archdiocese, and maintain that vicarious liability ought to have been imposed on the Archdiocese by two routes. [ 8 ] First, they argue that the Archdiocese was so closely related to the Brothers at Mount Cashel that the imposition of vicarious liability on the Archdiocese is appropriate.

In this regard they say that the judge failed to consider the relationship between the Archdiocese and the Brothers in light of the policy rationales for the doctrine of vicarious liability, and that the judge assessed the evidence in a piecemeal fashion.

The appellants also argue that the judge failed to consider key pieces of evidence, and that he focused unduly on the Archdiocese’s lack of involvement in the day-to-day operations of the orphanage while minimizing or discounting evidence respecting the Archdiocese’s involvement and influence in other operational matters. [ 9 ] Second, the appellants argue that the judge erred in failing to find the Archdiocese vicariously liable for the negligence of its priest, Monsignor Ryan, whom the Archdiocese assigned to live on the property to be the spiritual advisor to the appellants.

The appellants say that Monsignor Ryan had been told about the Brothers’ sexual abuse of the residents and that he failed to take action to have it addressed. The appellants also argue that Monsignor Ryan breached his fiduciary duty to them. [ 10 ] Finally, the appellants also argue that the judge erred in dismissing their claim that the Archdiocese was directly negligent.

They submit that the evidence showed the Archdiocese knew of sexual abuse at the orphanage by a civilian employee and by the Brothers, and that it was negligent in failing to address the situation. [ 11 ] The Archdiocese says that the judge correctly dismissed the vicarious liability claims. The Archdiocese accepts that the Brothers sexually abused G.E.B. #25, G.E.B. #26, G.E.B. #33 and G.E.B. #50 while they were resident at Mount Cashel, but it denies that it is vicariously liable for the Brothers’ wrongdoings.

The basis for its denial is that the Brothers at Mount Cashel were separate from the Archdiocese, and that they acted independently from the Archdiocese in all respects involving the appellants and other residents of the orphanage. The Archdiocese also denies vicarious liability for the conduct of Monsignor Ryan, saying that he had no duty of care to the appellants, as the judge found, and that Monsignor Ryan cannot be shown to have breached such a duty of care in any event. The Archdiocese also rejects the appellants’ claim that Monsignor Ryan breached a fiduciary duty to them.

Finally, the Archdiocese maintains the judge correctly dismissed the appellants’ direct negligence claim against it. [ 12 ] On the cross-appeal, the Archdiocese appeals the judge’s provisional assessment of general damages for three of the four appellants.

They also appeal the provisional awards for economic loss, including pre-judgment interest, for two of the appellants. [ 13 ] The Archdiocese argues that the judge made errors in his calculation of provisional general damages by failing to apply the proper tests and failing to account for other factors in the appellants’ lives that may have contributed to their losses. The Archdiocese also argues that the judge erred in his causation analysis in determining the provisional awards for economic loss.

Finally, the Archdiocese argues that the judge erred in his provisional awards of pre-judgment interest. [ 14 ] The appellants argue that damage awards attract a high degree of judicial deference and that the judge’s provisional award of damages was appropriate. They also argue that the judge made no errors in his analysis and assessment of the economic loss claims and pre-judgment interest associated with those claims. ISSUES [ 15 ] The issues on appeal are as follows:

(1) Did the judge err in dismissing the appellants’ vicarious liability claim respecting the Brothers’ sexual abuse of the appellants? This issue involves determining: (

a) whether the judge set out the correct legal standard of vicarious liability to be applied to the evidence; (

b) whether the judge erred in his application of the legal standard to the evidence; and

(

c) whether the judge made other errors in the course of his analysis.

(2) Did the judge err in dismissing the appellants’ vicarious liability claim respecting the conduct of Monsignor Ryan? This issue involves determining: (

a) whether the judge erred in finding that Monsignor Ryan had no duty of care to the appellants; (

b) whether the judge erred in finding that, if Monsignor Ryan had a duty of care to the appellants, he did not breach it; and (

c) whether Monsignor Ryan had a fiduciary duty to the appellants, and if so, whether he breached the duty.

(3) Did the judge err in dismissing the appellants’ negligence claim against the Archdiocese? [ 16 ] The issue on the cross-appeal is whether the judge erred in his provisional assessment of damages. This issue involves determining: (

a) whether the judge erred in calculating the provisional damages awards by applying the wrong tests and failing to take account of other factors in the appellants’ lives which may have contributed to their losses; (

b) whether the judge erred in assessing the provisional awards for economic loss; and (

c) whether the judge erred in the manner in which he awarded pre-judgment interest on the provisional loss of income awards. CONCLUSION ON GROUNDS OF APPEAL AND CROSS-APPEAL [ 17 ] On Issue 1 of the appeal on liability, we allow the appeal. We conclude the judge erred in deciding that the Archdiocese was not vicariously liable for the Brothers’ sexual abuse of the appellants. The judge made errors of law by inappropriately characterizing the requirements to be met for vicarious liability, by failing to globally assess the evidence, and by conflating the “closeness” and “connection” inquiries.

He also made palpable and overriding errors by failing to consider relevant evidence in his analysis. Accordingly, we have set aside the judge’s conclusion and determined that the Archdiocese is vicariously liable for the Brothers’ abuse of the appellants. [ 18 ] On Issue 2, we uphold the judge’s finding that the Archdiocese is not vicariously liable for Monsignor Ryan’s conduct . While we find the judge erred in deciding Monsignor Ryan owed no duty of care to the appellants, we conclude the judge did not err in finding there was no breach of duty.

As a result, Monsignor Ryan was not negligent and the Archdiocese is not vicariously liable.

We also find that the judge made no error in concluding that there was no breach of fiduciary duty by Monsignor Ryan. [ 19 ] On Issue 3, we conclude the judge made no error in concluding the Archdiocese was not directly negligent. [ 20 ] As the appellants were successful on Issue 1, in the result the appeal on liability is allowed. [ 21 ] On the cross-appeal, with respect to the provisional awards for general damages, we conclude the judge applied the correct tests and properly took into account factors that contributed to the appellants’ losses.

Further, we find the judge properly assessed the provisional awards for economic loss. However, we find the judge erred in the manner in which he awarded pre-judgment interest on the provisional awards for loss of income. [ 22 ] In the result, the cross-appeal is allowed on the issue of pre-judgment interest on the loss of income awards. BACKGROUND [ 23 ] The Roman Catholic community began establishing itself within the eastern part of Newfoundland during the late 18th century. The first chapel was built in the city of St.

John’s around this time and in 1784 the Pope officially recognized the territory of Newfoundland as a distinct region of the Church to be overseen by the Church in Quebec. In 1829 the first Roman Catholic Bishop of Newfoundland, Bishop Michael Fleming, was appointed to the Diocese of Newfoundland. (In 1856 the official name became the Diocese of St. John’s, Newfoundland and in 1904 it became the Archdiocese of St.

John’s, Newfoundland.) [ 24 ] During the 18th and 19th centuries, it was common for religious denominations to provide social services, especially services related to health and education, to the community. Dr. John Fitzgerald, an expert witness tendered by the Archdiocese, testified to this practice at trial. See also J.W.D. Estate v.

Newfoundland and Labrador , 2010 NLTD 47 , 298 Nfld. & P.E.I.R. 74 at paras. 4 , 12 and 19. [ 25 ] In the 1870s, a private non-sectarian organization called the Benevolent Irish Society (the “BIS”) was interested in providing education to children through respective religious denominations and encouraged the Bishop to invite the Irish Christian Brothers to come to Newfoundland to teach in Roman Catholic schools. The Brothers had been established in Ireland early in the 19th century to educate poor and orphaned Roman Catholic boys.

The Brothers were lay men who agreed to live together in a community under a set of rules established and enforced by Superiors of the organization. The Brothers were an Order of Pontifical Rite, meaning that they were generally answerable to the Vatican. The chain of command respecting the Brothers in this province went from the Brother Superior in Newfoundland and continued to the Brothers Superior in New Rochelle, New York and the province of Canada (as described in the Brothers’ structure), and ultimately to the Vatican.

This chain of command was qualified by the requirement that the Bishop, or later the Archbishop, as the authority for the Diocese of Newfoundland, would be required to approve the establishment of any religious order in the Diocese and that Canon Law would ultimately govern the order and its members. [ 26 ] In 1875, the BIS asked the then Roman Catholic Bishop, Bishop Power, to approach the Christian Brothers in Ireland to come to Newfoundland for the purpose of educating Roman Catholic boys. Bishop Power wrote to a contact he had in Ireland and invited the

Brothers to come and teach in Newfoundland. [ 27 ] In accordance with Canon Law, the Bishop granted these Christian Brothers permission to come to the Diocese of Newfoundland to establish an educational institute. An agreement dated September 8, 1875 between Bishop Power and the Assistant to the Superior of the Christian Brothers in Ireland was signed. The Agreement stated: 8 th September 1875 Draft of agreement between the Right Rev Dr. Power of St. John’s Newfoundland, and the Superior General of the Christian Brothers Institute in Ireland. 1.

That an annual collection for the support of the Institute be taken up on the last Sunday in January in the Cathedral and other churches in St. John’s. 2. That the Ecclesiastical Authorities on the Second last Sunday in January announce the collection and give it all reasonable sanction. 3. The Christian Brothers will be free to receive such other subscriptions and donations as the generosity of the public may suggest for the extension of the Institute in St. John’s and Newfoundland. 4.

The Brothers will not be obliged to receive or accept any government grant, or to place their schools under government inspection. 5. That the lease of land – little over four acres – selected by the Rev. Br. McDonnell, be transferred to the Institute, or should the Christian Brothers prefer it, a sufficient portion of the field at the rear of the Palace held in Fee will be given them. 6. That on the land so selected, a suitable dwelling house for the Institute be erected by the Bishop. The Bishop trusting to the well known generosity of the people for the necessary funds. 7.

That as speedily as possible, a temporary dwelling house be secured by the Bishop for the Brothers, all necessary accommodations provided for them including an oratory; the Bishop being responsible for all rents and taxes in connection with such dwelling. 8. The Bishop will supply funds to render existing schools suitable for the reception of children according to the system of the Brothers in Ireland and will also undertake to supply all other necessary requisites 9.

The Bishop will pay the expenses of each Brother from Ireland and supply them to the number of five at the rate of fifty pounds per annum for the support of each Br. until such time as the annual collection takes place. 9. [sic] The Brothers will be allowed the free exercise of the Rules and Religious observances in the same manner as in Ireland. 10. That in all things appertaining to such rules and observances they will be subject to their own Superior and to no other person. 11.

That the schools under the management of the Christian Brothers be conducted by them with due efficiency both with regard to secular education and the Religious Instruction of the children. 12. That as soon as circumstances permit a community of not less than five Brothers will represent the Institute in St. John’s. [sgd.] Rt. Rev. T.J. Power, Bishop of St. John’s [sgd.] D.M. McDonnell, Assistant to Superior of Christian Brothers 9 th September 1875

[ 28 ] As a result of the agreement, the Brothers began teaching at St. Patrick’s Hall School, one of the Roman Catholic schools funded by the BIS. By the 1890s, the Brothers were also teaching at St. Bonaventure’s College and Holy Cross School. [ 29 ] According to a brochure entered into evidence, written by J.B. Ashley and published at St.

John’s by Guardian Press Limited to commemorate the 75th anniversary of Christian Brothers coming to Newfoundland, Bishop Power had begun negotiations with the Superior General of the Christian Brothers in Dublin in 1892 respecting the feasibility of Brothers coming here to take charge of an orphanage. After Bishop Power passed away, Bishop Howley took over the effort. In the late 1890s, the Government of Newfoundland proposed financial assistance to religious denominations for the care of vagrant and otherwise disadvantaged children. At that time there was no orphanage for Roman Catholic boys.

There had previously been a small Roman Catholic orphanage operated by a priest in the Topsail area, but it closed when the priest died. On September 14, 1897, Sir Robert Bond, Colonial Secretary, on behalf of the Government of Newfoundland, wrote to the then Roman Catholic Bishop Michael Howley, asking if the Diocese would be prepared to take charge of such Roman Catholic boys. On September 17, 1897, Bishop Howley responded to the Government via letter. Relevant sections of his reply are: “In reply, I have to say that ever since I assumed the Episcopal Government of the Diocese of St.

John’s the subject of opening such an institution for our children has been a constant matter of consideration with me, and notwithstanding the pressure of the times, I had fully determined, before the receipt of your very welcome letter, to open such an institution this fall.

I had already made preliminary arrangements, having ordered bedsteads and other furniture, I had also entered into a correspondence with the Superior of Christian Brothers in Dublin with a view to securing a staff of Brothers, who are experts in the management of such work, from the far-famed Institution of Artane. … I guarantee to have the establishment carried out in such a manner as shall amply satisfy all the demands required by any Act of Parliament which may be enacted, to erect suitable buildings, and make the enterprise in every sense a complete success.

Special attention shall be paid to the instruction of the boys in useful trades and technical and practical training in agriculture and farming shall be an object of primary consideration, with a view to settling the boys on the fertile tracts of the interior of the country.” [ 30 ] As Bishop Howley indicated, the Diocese had already begun preparations to open an “institution” for Roman Catholic boys in need and to have it staffed by Christian Brothers from Ireland.

Also as indicated, Bishop Howley gave the Government his guarantee that suitable buildings would be erected and that the establishment would be carried out in such a manner as to make it in every sense a complete success. Government funding for denominational orphanages did not materialize at that time due to a change in government. Regardless, Bishop Howley continued with his plan and Christian Brothers arrived in St. John’s between 1897 and 1898 to staff the institution. The institution was situated on property formerly owned by the family of Bishop Howley.

Bishop Howley had announced at an organizational meeting in 1897 that the property would be used for the institution. The property consisted of Howley Cottage, a chapel dedicated to St. Raphael the Archangel which had been added to the cottage, and surrounding land. The institution was named Mount Cashel and it opened in the fall of 1898 with much fanfare, including a mass at St.

Raphael’s celebrated by Bishop Howley. [ 31 ] In 1903, Bishop Howley arranged for the property, which had previously been conveyed to the Diocese, to be conveyed in trust to the Brothers for the express purpose of establishing “an Industrial Home and Orphanage”. The conveyance contained a clause providing for ownership of the property to revert to the Diocese should the Brothers cease to operate the orphanage. [ 32 ] Over time Mount Cashel expanded. New buildings were added, financed by parishioners through the Archdiocese and prominent business families. A residence for the Brothers was erected on site by 1907.

St. Raphael’s chapel was extended and a priest’s residence was attached in 1915. In 1925, St. Raphael’s parish was formally established. Father Thomas Bride was appointed pastor of St. Raphael’s and chaplain of Mount Cashel, and assigned to live on-site. In 1926, Mount Cashel was destroyed by fire. Insurance proceeds fell short of covering the loss, so the Archbishop called on Catholic Societies and generous parishioners to provide the funds to rebuild. [ 33 ] In addition to the residents and later the Brothers, parishioners who lived in the area attended services at St. Raphael’s.

In 1952, Archbishop Skinner assigned Monsignor Ryan to minister to the spiritual and religious needs of the residents as well as to the parishioners of St. Raphael’s. Monsignor Ryan lived in the priest’s dwelling attached to the other orphanage buildings when the appellants lived at Mount Cashel. [ 34 ] The exact nature of the relationship between the Archdiocese and the Brothers during the early half of the 20th century was in dispute at trial. Documentary evidence illuminating the issue was scanty; it is unclear whether helpful documentation was not found or whether it simply did not exist.

Correspondence between the Archbishop and the Newfoundland Government which spoke to the relationship between the Archdiocese and the Brothers at Mount Cashel was introduced at trial, and there was evidence showing that operational funding for the orphanage came from several sources including the Archdiocese.

At some point around 1952 the Government of Newfoundland, by then a provincial government within the Canadian confederation, began to provide grants to Mount Cashel based on the number of boys in residence. [ 35 ] The appellants were residents of Mount Cashel for varying periods of time between the late 1940s and the late 1950s. Their claims relate to sexual abuse they suffered between 1951 and 1958 at the hands of five Brothers at Mount Cashel: Brothers Lasik, J.E. Murphy, Spollen, Collins, and Ford. [ 36 ] In the 1980s, serious sexual abuse at Mount Cashel orphanage became known to the public.

Allegations of cover ups and failure to take earlier complaints seriously were widespread, not only against the Archdiocese and the Brothers but also against the provincial Departments of Justice and Social Services. Eventually the Government of Newfoundland called a public inquiry into the abuse and cover-ups by the government departments. The Royal Commission of Inquiry into the Response of the Criminal Justice System to Complaints, commonly known as the Hughes Inquiry, was held in St. John’s during 1989-1990, and the Commissioner, The Honorable S.H.S.

Hughes Q.C., a retired Ontario Supreme Court judge, filed his report in 1991. [ 37 ] Both criminal and civil proceedings followed the release of the Hughes Inquiry report, and several of the Brothers from Mount

Cashel who had been identified as abusers during the 1970s and 1980s were prosecuted and convicted. Civil claims based on sexualabuse were filed by former residents of the orphanage. The civil claims that related to time periods which implicated the Government ofNewfoundland’s Departments of Justice and Social Services were settled against the Government of Newfoundland and Labrador in1996. The plaintiffs in those cases assigned their claims against the Christian Brothers to the Government of Newfoundland andLabrador as part of the settlement.

The civil claims made by the four appellants in this case arose before the Government ofNewfoundland was implicated, and accordingly were not part of the 1996 settlement. [38] Due in large part to the abuse revelations, Mount Cashel closed in 1989. Ownership of the orphanage and the property on whichit was situated reverted to the Archdiocese in accordance with the original agreement. The orphanage was subsequently torn down andthe property was sold to a commercial developer.

STANDARD OF REVIEW [39] Simply put, questions of law are reviewed on the standard of correctness, and questions of fact are reviewed on the standard ofpalpable and overriding error. Questions of mixed fact and law are also reviewable on the standard of palpable and overriding error,although if such questions are based on an incorrect characterization of a legal standard or an extricable legal principle relating to thelegal standard, the standard of review is correctness. [40] This was explained in Housen v.

Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at para. 36: To summarize, a finding of negligence by a trial judge involves applying a legal standard to a set of facts, and thus is a question of mixedfact and law. Matters of mixed fact and law lie along a spectrum. Where, for instance, an error with respect to a finding of negligencecan be attributed to the application of an incorrect standard, a failure to consider a required element of a legal test, or similar error inprinciple, such an error can be characterized as an error of law, subject to a standard of correctness.

Appellate courts must be cautious,however, in finding that a trial judge erred in law in his or her determination of negligence, as it is often difficult to extricate the legalquestions from the factual. It is for this reason that these matters are referred to as questions of “mixed law and fact”. Where the legalprinciple is not readily extricable, then the matter is one of “mixed law and fact” and is subject to a more stringent standard. The generalrule, as stated in Jaegli Enterprises, [ (SCC), [1981] 2 S.C.R. 2 (S.C.C.)] is that, where the issue on appeal involves thetrial judge’s

interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error. [41] In Housen, the review standard of palpable and overriding error was explained as an error “clear to the mind to see” and one thathad to have discredited the result. In R. v.

Clark, 2005 SCC 2, [2005] 1 S.C.R. 6, the Supreme Court of Canada explained palpable andoverriding error in further detail: [9] … Appellate courts may not interfere with the findings of fact made and the factual inferences drawn by the trial judge, unless theyare clearly wrong, unsupported by the evidence or otherwise unreasonable. The imputed error must, moreover, be plainly identified.

And it must be shown to have affected the result. “Palpable and overriding error” is a resonant and compendious expression of this well-established norm… [42] A failure to consider relevant evidence can also constitute palpable and overriding error (Rich v. Bromley Estate, 2013 NLCA 24,336 Nfld. & P.E.I.R. 107 at para. 17, leave to appeal to S.C.C. refused (2013), 355 Nfld. & P.E.I.R. 81 (note), and Bussey v. White, 2001NFCA 7 at para. 7. See also Madsen Estate v.

Saylor, 2007 SCC 18, [2007] 1 S.C.R. 838). [43] The doctrines of negligence and vicarious liability are legal standards which must be correctly applied to a set of facts in order todetermine whether liability ensues. In this case, if the legal standard the judge applied to the evidence is not correct, a question of lawarises, and the review standard of correctness applies. If the judge erred in his application of the legal standard to the evidence, questionsof mixed fact and law arise, for which the review standard of palpable and overriding error applies (E.B. v.

Order of the Oblates of MaryImmaculate in the Province of British Columbia, 2005 SCC 60, [2005] 3 S.C.R. 45 at para. 23) unless the error is an extricable error ofprinciple, in which case the review standard is correctness.

If the judge failed to consider relevant evidence or made factual findings ordrew inferences which are plainly wrong or unsupported by the evidence, he will have committed palpable and overriding error. [44] If the judge is found to have made errors, the issue becomes whether the proper application of the correct legal standard to all ofthe evidence would warrant this Court imposing liability on the Archdiocese. ANALYSIS: THE APPEAL Issue 1: Did the judge err in concluding that the Archdiocese is not vicariously liable for the Brothers’ sexual assaults of theappellants?

The Law [45] The doctrine of vicarious liability developed primarily during the nineteenth century as a means to compensate those whosuffered losses at the hands of individuals whose actions caused the losses but whose ability to compensate their victims was minimal ornon-existent.

It has been described as a strict liability doctrine, for it is imposed on parties who have not committed tortious conduct, andaccordingly is counter-intuitive to the well-entrenched principles of tort law that usually hold a person liable for loss only when he or shecauses it and then only if he or she is at fault. [46] In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, Major J. explained the theory thisway at paragraph 25: Vicarious liability is not a distinct tort.

It is a theory that holds one person responsible for the misconduct of another because of therelationship between them. …

[47] In Sagaz, the Court referred to vicarious liability as having its basis in policy. Major J., writing for a unanimous Court, describedthe policy considerations as (1) a just and practical remedy for people who suffer harm as a consequence of wrongs perpetrated by anemployee and (2) deterrence of future harm.

With respect to a just and practical remedy for victims, he explained the policy incorporatedthe ability of an employer to bear the loss of compensating a victim, and also fairness, because fairness dictates that an employer whointroduces an enterprise that carries risks into the community should bear the loss when those risks materialize. In other words, when “aperson who employs others to advance his own economic interest should in fairness be placed under a corresponding liability for lossesincurred in the course of the enterprise” (Sagaz, at para. 31).

With respect to the policy of deterrence of future harm, Major J. said that“employers are often in a position to reduce accidents and intentional wrongs by efficient organization and supervision” (Sagaz, at para.32).

He related the policy of deterrence to the policy of fair compensation, saying “the introduction of the enterprise into the communitywith its attendant risk, in turn, implies the possibility of managing the risk to minimize the costs of the harm that may flow from it”(Sagaz, at para. 32). [48] The common thread in vicarious liability cases is that it is relationship based, in that fairness dictates that liability ensues only ifthe relationship between an enterprise or entity and the wrongdoer is close enough to warrant it.

The closeness of the relationshipbetween the entity and the wrongdoer imports legal principle into the appropriateness of imposing vicarious liability, and provides acheck on careless application of the doctrine. The doctrine of vicarious liability has been part of our common law for centuries. Whileresort to it is relatively rare, it can produce results that resonate intuitively with fairness and justice. [49] As Major J. explained in Sagaz, use of the doctrine is relationship based. It was initially applied in the context of amaster/servant, or employer/employee relationship.

Over time, it has been extended to apply to many other relationships, like vehicleowner/driver, entity/volunteer, and so on. This Court specifically addressed the status of a wrongdoer within an entity in Bromley. ThisCourt explained that the label attached to the wrongdoer, or the status of the wrongdoer vis à vis the entity, is not a determining factor ina vicarious liability consideration. Rather, what is determinative is whether the relationship between the entity and the wrongdoer issufficiently close to justify the imposition of liability on the entity (Bromley, at paras. 117-120, John Doe v.

Bennett, 2004 SCC 17,[2004] 1 S.C.R. 436 at para. 17, and K.L.B. v. British Columbia, 2003 SCC 51, [2003] 2 S.C.R. 403 at para. 19). In K.L.B., the Courtdescribed the relationship issue as the first hurdle a plaintiff must overcome to establish vicarious liability. [50] A few years prior to K.L.B. the doctrine of vicarious liability was developed in order to properly address compensation forwrongs perpetrated on children in institutional care. In Bazley v.

Curry, (SCC), [1999] 2 S.C.R. 534, the SupremeCourt of Canada considered vicarious liability as a means of redress for the sexual assaults of residents in a home for emotionallytroubled children. The assaults were committed by an employee of the home, which was operated by an entity called the Children’sFoundation (the “Foundation”). [51] In Bazley, the plaintiff sued the employee as well as the home. There was no question that the employee had sexually abused theplaintiff (he had been criminally convicted for sexually abusing the plaintiff as well as several other victims).

The question was whetherthe Foundation was vicariously liable for the employee’s actions. [52] The Foundation denied liability for the employee’s actions, but was found vicariously liable at trial. A five-person panel of theBritish Columbia Court of Appeal unanimously affirmed the trial judge’s decision, although the affirmation was delivered in fourdifferent sets of reasons. The Foundation applied for leave to appeal to the Supreme Court of Canada.

The Supreme Court grantedleave, describing the four different appellate court decisions as “divergent in emphasis and detail” and having presented a “sophisticatedand nuanced review of this difficult issue and the considerations which properly bear on it” (Bazley, at paras. 7-8). [53] Ultimately the Supreme Court of Canada dismissed the Foundation’s appeal, affirming the lower courts’ rulings that theFoundation was vicariously liable for the employee’s actions.

In so doing, McLachlin J., writing for a unanimous Court, set out ananalytical framework for determining vicarious liability in cases involving the sexual assault of children in institutional care. [54] McLachlin J. stated the broad issue: [9] … May employers be held vicariously liable for their employees’ sexual assaults on clients or persons within their care? … and then looked for guidance to the traditional common law “Salmond test”, found in the well-known text, J.W. Salmond, Salmond'sLaw of Torts, 10th ed. (London: Sweet & Maxwell, 1945).

She described: [10] …employers are vicariously liable for (1) employee acts authorized by the employer; or (2) unauthorized acts so connected withauthorized acts that they may be regarded as modes (albeit improper modes) of doing an authorized act. … She took issue with the description of the second basis for vicarious liability in the Salmond test, saying its focus was on semantics, soshe reformulated the analytical approach. [55] McLachlin J. began by saying that courts grappling with vicarious liability claims respecting child abuse in institutional careshould first look to whether there are precedents that would “unambiguously determine” whether vicarious liability exists in a givenfactual situation.

If there are such precedents, courts need go no further than to apply those precedents to an instant case. But if priorcases are of no assistance, courts must go on to determine whether vicarious liability should be imposed in light of the broad policyrationales (Bazley, at para. 15). [56] McLachlin J. described the policy rationales at paragraph 29 of Bazley as (1) the provision of a just and practical remedy for theharm and (2) deterrence of future harm, and elaborated on them as follows: [34] The policy grounds supporting the imposition of vicarious liability __ fair compensation and deterrence __ are related.

The policyconsideration of deterrence is linked to the policy consideration of fair compensation based on the employer’s introduction orenhancement of a risk. The introduction of the enterprise into the community with its attendant risk, in turn, implies the possibility ofmanaging the risk to minimize the costs of the harm that may flow from it.

In explaining why deterrence is a valid policy to ground liability, she quoted the trial judge in Jacobi v. Griffiths , [1995] B.C.W.L.D. 3081 at para. 69 (B.C. S.C.) : If the scourge of sexual predation is to be stamped out, or at least controlled, there must be powerful motivation acting upon those who control institutions engaged in the care, protection and nurturing of children.

That motivation will not in my view be sufficiently supplied by the likelihood of liability in negligence. … [ 57 ] McLachlin J. went on to say that the two policy rationales can only be served where the wrongdoing is sufficiently close to the entity such that it can be said that the entity has introduced the risk of the wrong into the community and is thereby fairly and usefully charged with its management and minimization, and where there is a significant connection between the introduction of the risk and the wrong that accrues from it ( Bazley , at paras. 37 and 41 ).

She was careful to explain that the degree of connection between the entity’s introduction of the risk of wrong and the wrong itself must be more than just opportunity, emphasizing that it is the strength of the causal link between the opportunity to perform the wrongful act and the wrongful act itself that matters: [40] … When the opportunity is nothing more than a but-for predicate, it provides no anchor for liability.

When it plays a more specific role – for example, as permitting a peculiarly custody-based tort like embezzlement or child abuse – the opportunity provided by the employment situation becomes much more salient. [ 58 ] At paragraph 41, McLachlin J. summarized the principles to guide courts in determining whether the wrongful act is sufficiently related to the conduct authorized by the employer, which K.L.B. later characterized as the second step in a vicarious liability analysis: …

(1) They should openly confront the question of whether liability should lie against the employer, rather than obscuring the decision beneath semantic discussions of “scope of employment” and “mode of conduct”.

(2) The fundamental question is whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability. Vicarious liability is generally appropriate where there is a significant connection between the creation or enhancement of a risk and the wrong that accrues therefrom, even if unrelated to the employer’s desires. Where this is so, vicarious liability will serve the policy considerations of provision of an adequate and just remedy and deterrence.

Incidental connections to the employment enterprise, like time and place (without more), will not suffice. Once engaged in a particular business, it is fair that an employer be made to pay the generally foreseeable costs of that business. In contrast, to impose liability for costs unrelated to the risk would effectively make the employer an involuntary insurer.

(3) In determining the sufficiency of the connection between the employer’s creation or enhancement of the risk and the wrong complained of, subsidiary factors may be considered. These may vary with the nature of the case. When related to intentional torts, the relevant factors may include, but are not limited to, the following: (

a) the opportunity that the enterprise afforded the employee to abuse his or her power; (

b) the extent to which the wrongful act may have furthered the employer’s aims (and hence be more likely to have been committed by the employee); (

c) the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise; (

d) the extent of power conferred on the employee in relation to the victim; (

e) the vulnerability of potential victims to wrongful exercise of the employee’s power. (Emphasis in original.) [ 59 ] McLachlin J. elaborated on the subsidiary considerations listed in item (3) above. She gave examples of factors that could enhance the risk of a wrongdoer sexually abusing a child in institutional care, such as the wrongdoer being permitted to be alone with the child for extended periods of time, the wrongdoer being expected to bathe or toilet the child ( Bazley , at paras. 43-44 ), or the wrongdoer being placed in a positon of intimacy or power over the child.

She noted that when and where wrongs occur could also influence the assessment. She then summarized the test: [46] In

summary, the test for vicarious liability for an employee’s sexual abuse of a client should focus on whether the employer’s enterprise and empowerment of the employee materially increased the risk of the sexual assault and hence the harm. The test must not be applied mechanically, but with a sensitive view to the policy considerations that justify the imposition of vicarious liability __ fair and efficient compensation for wrong and deterrence. This requires trial judges to investigate the employee’s specific duties and determine whether they gave rise to special opportunities for wrongdoing.

Because of the peculiar exercises of power and trust that pervade cases such as child abuse, special attention should be paid to the existence of a power or dependency relationship, which on its own often creates a considerable risk of wrongdoing. [ 60 ] In the result, a unanimous Supreme Court imposed vicarious liability on the Foundation for its employee’s tortious conduct. [ 61 ] In Bazley , the wrongdoer was an employee of the entity. As a result, the principles set out in the decision are couched in employer/employee language.

However, as noted in Bromley (at paragraph 46 above), it is not necessary that a wrongdoer be an employee in the traditional sense of drawing a pay cheque or following direct orders for liability to ensue. Similarly, in Sagaz, the Court explained that the issue was not whether the tortfeasor was an independent contractor but whether the tortfeasor was working on his own account or working on the account of Sagaz. The Court stated that “the total relationship of the parties” determined the issue ( Sagaz , at para. 46).

The result in Sagaz did not rest on the tortfeasor’s classification as an independent contractor. Rather, Sagaz was not held vicariously liable because the independent contractor was truly working on his own account, and not that of Sagaz. Accordingly,

wrongdoers who are authorized to carry out activities which benefit an entity, or who work on the account of an entity, whatever theirtitles or formal status, can attract liability to that entity. [62] Jacobi v. Griffiths, (SCC), [1999] 2 S.C.R. 570 (S.C.C.), was a companion case to Bazley. It involvedvicarious liability claims by a brother and sister against a Boys and Girls Club for sexual abuse committed by an employee of the club.

The employee had isolated the victims from the Club’s group activities by inviting the children to personal get-togethers away from theClub, and these personal get-togethers gave the employee opportunity, time and place to sexually assault the children. In a split decision,the Supreme Court of Canada ruled that the ultimate misconduct was too remote from the employer’s enterprise to justify imposingvicarious liability. [63] A few years later the Supreme Court of Canada had occasion to revisit vicarious liability for the sexual abuse of children, thistime for children in the care of foster parents.

In K.L.B. the Court ruled that vicarious liability was not established because therelationship between the Government and the foster parents was not sufficiently close and the policy of deterrence was not sufficientlyengaged to justify its imposition. In so ruling, McLachlin C.J.C. stated this

summary of the test: [19] To make out a successful claim for vicarious liability, plaintiffs must demonstrate at least two things. First, they must show that therelationship between the tortfeasor and the person against whom liability is sought is sufficiently close as to make a claim for vicariousliability appropriate. This was the issue in 671122 Ontario Ltd. v.

Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, 2001 SCC 59,where the defendant argued that the tortfeasor was an independent contractor rather than an employee, and hence was not sufficientlyconnected to the employer to ground a claim for vicarious liability. Second, plaintiffs must demonstrate that the tort is sufficientlyconnected to the tortfeasor’s assigned tasks that the tort can be regarded as a materialization of the risks created by the enterprise.

Thiswas the issue in Bazley, supra, which concerned whether sexual assaults on children by employees of a residential care institution weresufficiently closely connected to the enterprise to justify imposing vicarious liability. These two issues are of course related.

A tort willonly be sufficiently connected to an enterprise to constitute a materialization of the risks introduced by it if the tortfeasor is sufficientlyclosely related to the employer. (Emphasis added.) [64] In Bennett, the Supreme Court of Canada upheld this Court’s decision that a diocese was vicariously liable for sexual assaultsperpetrated by one of its priests on young boys in his parish.

McLachlin C.J.C. explained that vicarious liability can be imputed to aprincipal, in that case a diocese, which was not an employer in the traditional sense: [17] … The doctrine of vicarious liability imputes liability to the employer or principal of a tortfeasor, not on the basis of the fault of theemployer or principal, but on the ground that as the person responsible for the activity or enterprise in question, the employer or principalshould be held responsible for loss to third parties that result from the activity or enterprise.

She reiterated the policy rationales of the doctrine: [20] … Vicarious liability is based on the rationale that the person who puts a risky enterprise into the community may fairly be heldresponsible when those risks emerge and cause loss or injury to members of the public. Effective compensation is a goal. Deterrence isalso a consideration.

The hope is that holding the employer or principal liable will encourage such persons to take steps to reduce therisk of harm in the future. … McLachlin C.J.C. also reiterated that the relationship between the tortfeasor and the entity must be sufficiently close, and the wrongfulact sufficiently connected to the conduct authorized by the “employer or principal”, to ensure that the twin policy goals are met. [65] Bromley also concerned vicarious liability for sexual abuse.

In Bromley the question was whether the Government ofNewfoundland and Labrador, as the operator of a provincial detention home for boys, was vicariously liable for sexual assaultsperpetrated by a volunteer priest on a boy while he was resident in the home. The priest had been authorized by the home to take theboy on overnight excursions where he had sexually abused him. [66] The trial judge dismissed the boy’s claim, saying that the priest was acting outside of the Government’s mandate to run thehome, and that the province could not be held liable for the priest’s criminal acts.

On appeal, this Court applied the law of vicariousliability set out by the Supreme Court of Canada in K.L.B. and Bazley, and ruled that the trial judge had erred in restricting his analysis tothe narrow confines of the priest’s status as a volunteer at the home, and more importantly, that the trial judge had erred by failing toappreciate that the priest was authorized by the home to take the boy on overnight outings and was thereby exercising delegatedauthority over him and specifically furthering the home’s “reward for good behaviour” program.

In the result, this Court determined thatthe close relationship between the priest and the Government detention home, evidenced by the priest exercising the Government’scustodial powers in furtherance of its custodial policies, was sufficient to justify the imposition of vicarious liability on the province forthe priest’s sexual abuse of the boy. [67] The Supreme Court of Canada addressed the doctrine of vicarious liability respecting abuse of children in institutional care inReference re Broome v. Prince Edward Island, 2010 SCC 11, [2010] 1 S.C.R. 360.

In a reference to the Prince Edward Island Court ofAppeal, the parties sought determination of whether the province of Prince Edward Island had legal duties to children who were residentin a privately-operated home. One of the questions posed was whether the province was vicariously liable for the acts or omissions ofthe Board of Trustees and staff of the home. [68] The Prince Edward Island Court of Appeal ruled that the province was not vicariously liable.

The Supreme Court of Canadaagreed, saying that the appellants had not established a sufficiently close relationship between the province and the home to warrant afinding of vicarious liability. The Court stated that having legislative authority over children and placing them in the home did not giverise to vicarious liability.

The Court highlighted the fact that the evidentiary record before them was quite limited and that as aconsequence, the scope of the reference was limited. [69] A precedent that bears on the issue of whether two or more entities are in a sufficiently close relationship with the wrongdoer that

could justify the imposition of vicarious liability on both entities is Blackwater v. Plint, 2005 SCC 58 , [2005] 3 S.C.R. 3 . The plaintiff in Blackwater was resident in a home for aboriginal children when he was sexually assaulted by a worker employed there. The plaintiff sued the employee as well as the United Church of Canada, which operated the home, and the Government of Canada, which had the statutory mandate to care for aboriginal children pursuant to the Indian Act , S.C. 1951, c. 29.

The trial judge held that both Canada and the United Church were vicariously liable for the sexual abuse of the plaintiff by the employee on the basis that both entities operated the home as partners, and apportioned liability 75% to Canada and 25% to the United Church. [ 70 ] The Supreme Court of Canada upheld the trial judge’s decision, ruling that there is no principled reason why two entities cannot both be held vicariously liable for the same wrong.

Further, the Court upheld the unequal apportionment imposed by the trial judge, ruling that defendants may be more or less vicariously liable for a wrong, depending on their respective levels of supervision, direct contact, and control. [ 71 ] A trial court decision from this jurisdiction also touches on the issues raised in this case. In J.W.D.

Estate the question was whether vicarious liability ought to be imposed on the Government of Newfoundland and Labrador for a Christian Brother’s sexual assault of residents of Mount Cashel which took place between the 1940s and the early 1960s, before the Government’s Departments of Justice and Social Services were implicated in the abuse at Mount Cashel. [ 72 ] In J.W.D. Estate , the trial judge found that the relationship between the Government and the Brothers was not close enough to justify imposing liability on the Government.

In his decision, the judge referred to orphanages operating in the province, and in so doing, specifically commented on the relationship between the Archdiocese and Mount Cashel orphanage. At paragraph 15 he noted the Archbishop’s references to Mount Cashel as “our institution” in correspondence between the Archdiocese and the Government.

At paragraph 32 the judge stated, “Mount Cashel was privately operated and controlled by a non-governmental entity, namely the Christian Brothers organization and ultimately the Roman Catholic Church”, and at paragraph 69 he stated, “[m]anagement at Mount Cashel was entirely within the mandate of the Christian Brothers and the Roman Catholic Church”. [ 73 ] This decision respecting vicarious liability of Newfoundland and Labrador for sexual abuse of boys by the Brothers at Mount Cashel is not authority for finding liability against the Archdiocese in this case.

However, the court’s statements that the Christian Brothers and the Roman Catholic Church were responsible for Mount Cashel orphanage and its operations during the same time period of time as the time period involved in this case are of some interest. The Judge’s Characterization of Vicarious Liability [ 74 ] In this case, determining whether vicarious liability ought to be imposed on the Archdiocese required considering the closeness of its relationship with the Brothers at Mount Cashel, and the connection between the Brothers’ assigned tasks and their sexual assaults of the appellants.

The policies of fair compensation and deterrence will only be served if the close relationship and connection inquiries are positively determined. [ 75 ] On review of the judge’s decision, we conclude that he erred in his characterization of the doctrine of vicarious liability.

His focus on the doctrine of vicarious liability as generally involving an employment relationship, his failure to identify the fundamental question to be answered, his focus on control of day-to-day operations at the orphanage, and his comparison of the Archdiocese’s conduct with the Brothers’ conduct characterized the doctrine in a limiting way. His limiting characterization effectively caused him to apply the wrong law to the evidence. [ 76 ] The first step in determining whether vicarious liability ought to be imposed on an entity is setting out the legal standard for vicarious liability.

The judge described vicarious liability as liability without fault, found “where there is, generally, an employment relationship, or other relationship involving supervision and control over the tortfeasor” (para. 69). He noted the twin policies of compensation and deterrence that underlie the doctrine, and stated at paragraph 198: If one examines the policy reasons for imposing liability, the Supreme Court of Canada in the Bazley and Jacobi cases set out clear direction. It involves elements of control and direction of the enterprise, and the ability to pay damages.

The first, involving control, raises the question of who had most control over the perpetrators, and therefore had the most opportunity to curb tortious behavior. … (Emphasis added.) [ 77 ] The judge stated that the legal basis for vicarious liability had evolved from the Salmond test to the Bazley test and quoted Bazley respecting the principles to guide application of the doctrine to the evidence. He also discussed a number of cases where vicarious liability had been considered. [ 78 ] The judge’s description of vicarious liability is concerning.

He referred to vicarious liability pertaining “generally” to employment relationships, although he acknowledged it could be imposed in other contexts. However, he emphasized the employment relationship and included the fact that the Archdiocese did not employ the Brothers or any orphanage staff in his reasons for dismissing the plaintiffs’ claim. His comments in this regard suggest that he apparently considered an employment relationship to be fundamental to a finding of vicarious liability.

An employment relationship is not fundamental to vicarious liability, as Bromley and Bennett tell us . [ 79 ] The judge’s reference to “relationships involving supervision and control over the tortfeasor” is also concerning. It is a limiting description. While it is so that an entity can be found vicariously liable for a wrongdoer’s actions when an entity had actually exercised supervision and control over the wrongdoer, liability can also ensue when the entity is shown to have authority over the wrongdoer such that is had the responsibility to exercise supervision and control over the wrongdoer.

This is how the policy of deterrence assists in determining whether vicarious liability ought to be imposed. Ascribing responsibility to the Archdiocese for the Brothers’ wrongful conduct could give effect to the policy of deterrence, if the Archdiocese was in a position to reduce the wrongs by efficient organization and supervision ( Bazley , at para. 32 ), and could have taken steps to reduce the risk of harm to the appellants ( Bennett , at para. 20 ).

The judge’s description of vicarious liability failed to take account of this policy and as will be seen, this failure caused him to focus on whether the Archdiocese was actually supervising and controlling the day-to-day activities of the Brothers at Mount Cashel, which in turn led him to conclude that the Archdiocese was not liable for the Brothers’ wrongful conduct.

[ 80 ] As well, the judge did not identify the salient questions to be answered when applying the doctrine to the evidence. The first is whether the Archdiocese and the Brothers enjoyed a sufficiently close relationship as to make a claim for vicarious liability appropriate. The second is whether the Brothers’ sexual assaults of the appellants were sufficiently related to the conduct authorized by the Archdiocese.

The answers to these questions depended on whether the Archdiocese, through the establishment of Mount Cashel and delegating the care of the boys to the Brothers, had authority over how the Brothers cared for the boys and whether it maintained that authority throughout the course of its relationship with the Brothers during the time the appellants were resident there; and whether there was a significant connection between the Archdiocese’s creation or enhancement of the risk of harm associated with the Brothers’ care of the boys at the orphanage and its materialization. [ 81 ] The judge’s statements which compared levels of responsibility between an entity and a wrongdoer in a vicarious liability analysis are not correct.

Determining closeness and connection in the context of the policies of compensation and deterrence does not require that an entity be found to be more or less at fault than a wrongdoer. In other words, it is not an “either/or” determination. In this case it was not a question of whether the Archdiocese had more control over the Brothers at Mount Cashel than the Brothers at Mount Cashel did over themselves.

The issue was whether the relationship between the Archdiocese and the Brothers at Mount Cashel who committed the wrongs, as well as the connection between the Brothers’ assigned tasks and the sexual assaults they committed, were sufficient to justify the imposition of vicarious liability. [ 82 ] That said, there is support in the jurisprudence for comparing degrees of liability between two entities which may both be vicariously liable. However, this comparison goes to apportionment between entities who have each been found vicariously liable. Such a comparison does not go to imposition of vicarious liability.

Apportionment of vicarious liability as between Canada and the United Church is what occurred in Blackwater , and could have occurred in this case if the judge had found both the Christian Brothers Institute Inc. and the Archdiocese vicariously liable. The Judge’s Analysis of the Evidence [ 83 ] The judge did not find a precedent in Canadian law “for the imposition of liability on a diocese in similar circumstances”. To the extent that the judge’s comment could be interpreted as meaning that such a precedent must involve a diocese in order to be applicable, that is not the case.

A diocese is the same as any other entity for the purposes of applying the doctrine of vicarious liability. It is the closeness of the relationship between the entity – whether a diocese or not, and in this case the Archdiocese – and the wrongdoer – whether an employee or not, and in this case the Brothers at Mount Cashel – that determines whether it is appropriate to impose vicarious liability on the entity. [ 84 ] We agree that there is no precedent that would conclusively decide this case.

Precedents are almost always fact-based, and especially so when they involve human relationships and the behavior that informs them. It would therefore be rare to find a case with facts similar enough to this one that would qualify as a conclusive precedent providing an answer to the issues raised in this case.

But that does not mean that there are no precedents which set out legal principles that are directly applicable to this case. [ 85 ] The judge went on to consider the plaintiffs’ arguments respecting the closeness of the relationship between the Archdiocese and the Brothers, first focusing on the argument that Mount Cashel orphanage was a joint venture. At paragraph 90, he acknowledged the relationship between the Archdiocese and the Brothers at Mount Cashel, saying: “There does not appear to be any doubt that the support of the diocese was critical to the establishment of Mount Cashel”.

However, he rejected the argument that Mount Cashel was a joint venture of the Archdiocese and the Brothers. He distinguished Blackwater, noting that in that case , Canada had a statutory duty to care for the resident aboriginal children and the United Church had significant operational control over the residential home. He said at paragraph 103: To apply the reasoning in Blackwater I would have to find there was close collaboration between the Archdiocese and the Brothers which would have been sufficient to create the relationship where a joint venture could be determined.

In my view, the evidence presented did not disclose that kind of relationship. He concluded at paragraph 106 that “… apart from involvement in the launching of the orphanage in the 1890’s, the role of the Archdiocese was limited to a supportive one”. [ 86 ] The judge’s characterization of the Archdiocese’s role in the launching of Mount Cashel as “involvement” and thereafter as “supportive” seriously minimizes the relationship between the Archdiocese and the Brothers at Mount Cashel.

There was ample evidence that the Archdiocese (formerly the Diocese) not only established Mount Cashel, but that it played an ongoing role in administering, servicing, operating, and financially supporting it. [ 87 ] The role of the Diocese in launching Mount Cashel orphanage was central to its establishment. The Diocese took the initiative to establish an institution for disadvantaged boys of the Roman Catholic denomination, and Bishop Howley invited Christian Brothers to come from Ireland for the purpose of staffing it. The Brothers did not invite themselves to St.

John’s – they came to staff a denominational orphanage for these boys to fulfill the Diocese’s social and religious objectives. [ 88 ] Much was made by the Archdiocese of the BIS involvement in the Brothers coming to Mount Cashel. The evidence, composed of newspaper reports of meetings, suggests that the BIS, through the Bishop, was involved in encouraging Christian Brothers to come to Newfoundland to teach earlier in the 19th century. There was a newspaper

article which referred to the BIS having invited the Bishop to chair the 1897 organizational meeting of Bishops, clergy, and prominent citizens at which Bishop Howley announced he would give over the Howley home and estate for the purpose of establishing an orphanage. However, there was no evidence of BIS involvement in the Brothers coming to Newfoundland to staff Mount Cashel or in the establishment of the orphanage. Neither does the evidence suggest that the Christian Brothers themselves, individually or through their Institute in Ireland, had the initiative, or the wherewithal, to come to St.

John’s to open an orphanage. In this regard, the Brothers who staffed Mount Cashel were no different in status than persons who staffed other denominational orphanages. The fact that the Archdiocese sought to staff its orphanage by inviting a group of Brothers from Ireland to do so does not permit the Archdiocese to divest itself of responsibility for the Brothers who once arrived, were furthering the Archdiocese’s religious and social objectives. In short, the Archdiocese established Mount Cashel and assigned the task of caring for

the resident boys to the Brothers who agreed to come here for that purpose. [ 89 ] The Archdiocese argued that Canon Law fettered the authority of the Archdiocese over the Brothers at Mount Cashel, because the Christian Brothers were an Order of Pontifical Rite, which meant that they reported directly to the Vatican rather than to the Archdiocese, and that the Archbishop had no right of visitation at the orphanage and no authority to get involved in its operations. The judge found that while Canon Law does not determine civil law responsibility, it can define relationships within the Church.

While he was satisfied that the Archbishop would have an obligation to intervene respecting an allegation of abuse, he accepted that because the Order of Christian Brothers was an Order of Pontifical Rite, the Archdiocese had no authority to get involved in Mount Cashel’s operations. [ 90 ] While the Brothers, as members of an Order of Pontifical Rite, reported through their chain of command to their Provinces and the Vatican, and not the Archdiocese, that does not mean that the Archdiocese had no authority over how the Brothers at Mount Cashel were carrying out the work the Archdiocese assigned to them to do at the orphanage.

The Brothers’ Provinces or the Vatican were not exercising authority over the work the Brothers were doing at Mount Cashel. Rather, the Superiors of their Order exercised authority over them with respect to matters involving their internal governance, routines, vows and general well-being. The visitation reports and the evidence of Father Morrissey, a Canon Law expert tendered by the Archdiocese, explain this.

In any event, the internal structure of the Brothers’ Order does not immunize the Archdiocese from responsibility for the Brothers’ misconduct while they are carrying out work for the Archdiocese at the orphanage. The Archdiocese cannot simply install the Brothers and assign them work and then walk away, especially because the Archdiocese continued to exercise authority over the Brothers and take responsibility for the orphanage.

Piecemeal Assessment of the Evidence [ 91 ] The appellants argue that the judge approached the evidence supporting their arguments respecting the closeness of the relationship between the Archdiocese and the Brothers as though each argument were the sole determinant of vicarious liability. They maintain this piecemeal approach to the evidence was in error. [ 92 ] We agree that the judge erred by failing to assess the evidence as a whole when determining whether the legal standard of vicarious liability had been met.

While it may be that any one of the factors the judge considered would not, on its own, establish vicarious liability, that was not the question.

The question was whether all of the evidence taken together, considered in light of the twin policies, established whether the Brothers’ sexual assaults of the appellants were sufficiently related to their conduct authorized by the Archdiocese to justify the imposition of vicarious liability. [ 93 ] The judge considered much of the evidence the plaintiffs argued to support their position that the ongoing relationship between the Archdiocese and the Brothers at Mount Cashel was sufficiently close to support a finding of vicarious liability.

The plaintiffs maintained that the Archbishop was the ultimate Roman Catholic authority in the province and thereby had authority over the Brothers and the orphanage, that the public perceived that the Archdiocese controlled Mount Cashel, that the Archdiocese exercised authority over Mount Cashel by virtue of exercising significant control over its finances and fundraising and by acting on behalf of Mount Cashel in dealings with the government, that the Archdiocese was closely tied to Mount Cashel by virtue of its reversionary interest in the property on which it stood, and that internal church governance supported a close relationship between the Archdiocese and the Brothers at Mount Cashel. [ 94 ] The judge discussed these relationship arguments and determined that none was a basis for the imposition of vicarious liability on the Archdiocese.

Curiously, we note that the judge did not say that most of the factors he considered had no weight or no relevance. He simply said that each one on its own was not determinative of vicarious liability. [ 95 ] The Supreme Court of Canada recently considered the piecemeal approach to evidence in Salomon v. Matte-Thompson , 2019 SCC 14 . Salomon concerned a statement made by the Court of Appeal of Quebec in reversing the trial judge for assessing the trial evidence “through a distorting lens”.

At the Supreme Court of Canada, the appellant argued that the Quebec Court of Appeal had erred by employing the notion of a distorting lens as an analytical tool. In rejecting that argument, the Supreme Court

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