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Damages - Punitive Damages (3). Truong v. Jeweler’s Mutual Insurance Company
In Truong v. Jeweler’s Mutual Insurance Company (Ont CA, 2024) the Ontario Court of Appeal dismissed a jewelry insurer's appeal, here where a central issue was whether the insured actually owned the stolen jewels.
Here the court addresses the appellant's argument that the trial court erred in it's treatment of punitive damages, which turn on the issue of bad faith:[4] The trial judge found in favour of the respondents and awarded them $502,100 as compensatory damages for the loss of the jewellery. He also awarded a further $45,000 as punitive damages. He was of the view that the respondents never should have been put to the proof of their pre-Policy ownership of the jewellery because Jeweler’s Mutual accepted the respondents’ ownership when it issued the Policy – a policy it admitted had not been the result of any material misrepresentation. By not paying, and defending, on the basis that once there was a loss the respondents had to prove pre-Policy ownership, Jeweler’s Mutual attempted to impose an obligation on the respondents that would not have been reasonably expected by an insured and arrogated unto itself an un-bargained for right, in bad faith.
[5] Jeweler’s Mutual does not challenge, on appeal, the trial judge’s findings that the respondents owned the jewellery and that it was stolen from them as they alleged. It asserts, however, that there was no legal basis for an award of punitive damages, and that the compensatory damages were assessed on an incorrect principle.
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[7] The trial judge did not err in awarding punitive damages. Whether an insurer’s handling of a claim amounts to bad faith depends, in each case, on the facts. Deference is owed to such a finding absent legal error. In my view, no such error has been shown. It was open to the trial judge to find that Jeweler’s Mutual had accepted that the respondents owned the jewellery when it issued the Policy and that Jeweler’s Mutual acted in bad faith by investigating the claim, refusing to pay and defending the action through trial, on the basis that the respondents’ pre-Policy ownership of the jewellery remained in question.
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[37] In Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3, the Supreme Court explained that a decision as to whether an insurer acted in bad faith rendering it liable for punitive damages is a contextual one, revolving around the facts of the particular case: at para. 72. The question in each case is whether the denial of insurance coverage was the result of the overwhelmingly inadequate handling of the claim or the introduction of improper considerations into the claims process: at para. 71. At para. 63 the court stated:In Whiten, this Court set out the principles that govern the award of punitive damages and affirmed that in breach of contract cases, in addition to the requirement that the conduct constitute a marked departure from ordinary standards of decency, it must be independently actionable. Where the breach in question is a denial of insurance benefits, a breach by the insurer of the contractual duty to act in good faith will meet this requirement. The threshold issue that arises, therefore, is whether the appellant breached not only its contractual obligation to pay the long-term disability benefit, but also the independent contractual obligation to deal with the respondent’s claim in good faith. On this threshold issue, the legal standard to which Sun Life and other insurers are held is correctly described by O’Connor J.A. in 702535 Ontario Inc. v. Lloyd’s London, Non-Marine Underwriters (2000), 2000 CanLII 5684 (ON CA), 184 D.L.R. (4th) 687 (Ont. C.A.), at para. 29:The duty of good faith also requires an insurer to deal with its insured’s claim fairly. The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and to the decision whether or not to pay the claim. In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner. It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy. This duty of fairness, however, does not require that an insurer necessarily be correct in making a decision to dispute its obligation to pay a claim. Mere denial of a claim that ultimately succeeds is not, in itself, an act of bad faith. [38] Jeweler’s Mutual’s submission that an insured must have an insurable interest in the property at the time of the loss is correct. But it does not follow that in the context of this case Jeweler’s Mutual was engaged in good faith handling of the claim in refusing payment, up to the end of trial, on the basis that the respondents did not prove pre-Policy ownership. It is one thing to question whether an insured who owned property at the time of the Policy thereafter disposed of or encumbered it before the alleged loss occurred, affecting the existence or extent of their insurable interest at the time of the loss. It is quite another to challenge whether the insured ever owned the property at the time it obtained the Policy.
[39] In this case, there is no suggestion with any air of reality to it that the respondents had disposed of or encumbered the jewellery at some point between the issuance of the Policy and the theft. This was not the focus of Jeweler’s Mutual’s investigation, its questioning of the respondents, or its challenge to the credibility of their claim at trial. Rather, the focus was the alleged absence of proof that the respondents ever owned the jewellery.
[40] Nor do I agree that the trial judge was bound to consider Jeweler’s Mutual’s conduct to arise from a reasonable interpretation of the Policy because its proof of loss provisions contemplated substantiation of the inventory of the property lost, or because of its right under the Policy to require additional information. The question was not how those provisions operate in theory, but whether Jeweler’s Mutual’s conduct was justified by a reasonable interpretation of them given the factual context of this case. The requirement for substantiation did not specify any consequence if a particular form of substantiation was unavailable, and the right to additional information was limited by the terms of the Policy to information that Jeweler’s Mutual might “reasonably require”.
[41] The particular factual constellation in this case was that Jeweler’s Mutual accepted that the respondents had obtained the Policy without making any misrepresentation. I do not accept the argument that the application for insurance was agnostic on the question of whether the jewellery the respondents were seeking to insure was theirs. The application referred to it as “my jewelry”, and the information the respondents were asked to provide about it (who wears it, how is the respondents’ residence safeguarded, what precautions are taken when travelling) was all consistent with their ownership of the jewellery. The application confirmed that the respondents had not withheld any facts that would be material to the risk. It would undoubtedly have been material to the risk the insurer was being asked to undertake if the respondents were seeking to insure jewellery in which they had no interest. They would have made a material misrepresentation if they did not own the jewellery and applied to insure it as “my jewelry”.
[42] It follows that it was open to the trial judge to find that Jeweler’s Mutual, by accepting that there had been no misrepresentation, had accepted when it issued the Policy that the respondents owned the jewellery at the time. It was also open to him to interpret the terms of the Policy as not requiring substantiation of an already accepted matter – pre-Policy ownership – and to consider demands for further information and documentation to prove pre-Policy ownership to go beyond information that it could “reasonably require”.
[43] I also do not accept Jeweler’s Mutual’s characterization of how it handled the claim as simply asking questions. The trial judge properly characterized Jeweler’s Mutual’s conduct as being premised on an unjustifiable interpretation of the Policy that persisted through trial. Before litigation, Jeweler’s Mutual responded to the claim by questioning the respondents, and requiring them to point out where they purchased the jewellery and to provide substantiation. Its defence through to the end of trial challenged the respondents’ honesty about whether they ever owned the jewellery. I agree with the respondents that Jeweler’s Mutual, while not directly alleging misrepresentation, implicitly suggested that the respondents had sought to insure and claim for jewellery they never owned, an assertion which is suggestive of fraud.
[44] The trial judge’s conclusion as to whether Jeweler’s Mutual breached its duty of good faith in the way it dealt with the respondents’ claim was drawn from “a thorough review of the relevant evidence” about how the claim was handled and the basis on which it was defended. Absent legal error (which is not present) or palpable or overriding error of fact (which is not argued) his finding of bad faith is entitled to deference: Fidler, at paras. 73-75.
[45] Accordingly, I reject this ground of appeal. . Konstan v. Berkovits
In Konstan v. Berkovits (Ont CA, 2024) the Ontario Court of Appeal comments on aggravated and punitive damages in the defamation context:[115] Aggravated and punitive damages may be awarded for defamation if the defendant’s conduct has been high-handed and oppressive: Hill, at paras. 190, 196. Aggravated damages are compensatory: Plester v. Wawanesa Mutual Insurance Co. (2006), 2006 CanLII 17918 (ON CA), 269 D.L.R. (4th) 624, 213 O.A.C. 241 (C.A.), at para. 62, leave to appeal refused, [2006] S.C.C.A. No. 315; McIntyre v. Grigg (2006), 2006 CanLII 37326 (ON CA), 83 O.R. (3d) 161, at para. 50. By contrast, punitive damages are designed to signal the court’s disassociation with the defendant’s conduct: Whiten v. Pilot Insurance, 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 94. For a court to award aggravated damages, a plaintiff must prove that the defendant had “actual malice” in making the defamatory remarks: Hill, at para. 190.
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[118] Citing Rogacki v. Belz, (2004) 2004 CanLII 21439 (ON CA), 243 D.L.R. (4th) 585, at para. 44, Jack argues that malice means “acting out of spite or ill will”. He therefore argues that the trial judge’s finding that Harold acted out of ill will necessarily means that actual malice was proved.
[119] Rogacki does not stand for the proposition that every act of ill will attracts an exceptional award of aggravated or punitive damages. The trial judge’s reasons show that he understood the principles underlying the award of aggravated or punitive damages. He found that actual malice had not been proved because Harold did not know and could not have known that Oziel fabricated the text messages. Although Harold took pleasure in bringing the fake messages to the attention of the local media, the trial judge effectively found that his act did not rise to the level of high handed and outrageous conduct necessary to attract aggravated damages. This finding was also sufficient to dispose of the claim for punitive damages. . Hoy v. Expedia Group, Inc.
In Hoy v. Expedia Group, Inc. (Div Court, 2024) the Divisional Court dismissed an appeal from a denial of a class action certification motion, here one grounded heavily in the Consumer Protection Act (CPA) 'misleading representations' provisions.
Here the court considers the potential for punitive damages under the CPA:Did the Motion Judge Err when he found that the claim for punitive damages did not satisfy the cause of action criterion?
[89] As acknowledged by the motion judge, punitive damages are available for breaches of the Consumer Protection Act. Section 18(11) expressly provides that a court may award punitive or exemplary damages in addition to any other remedy in an action commenced under section 18.
[90] However, the motion judge concluded that the plaintiffs’ claim exclusively for punitive damages (compensatory damages not having been claimed and the remedies of disgorgement and nominal damages having been found to be unavailable) was not legally tenable.
[91] That conclusion was informed by the motion judge’s review of the Supreme Court of Canada’s decision in Richard and in particular that court’s analysis of the Québec Consumer Protection Act, which he contrasted with the provisions of the Ontario Act.
[92] In Richard, the Supreme Court observed that the conditions for claiming punitive damages are approached differently by the common law and Québec civil law respectively. Whereas at common law, punitive damages can be awarded in any civil suit in which the plaintiff proves that the defendant’s conduct was “malicious, oppressive and high‑handed [such] that it offends the court’s sense of decency”, the Civil Code of Québec does not create a general scheme for awarding punitive damages and does not establish a right to this remedy in all circumstances. Rather, punitive damages can be awarded only where the law so provides.
[93] The Supreme Court held that, as a matter of statutory interpretation of the Québec Consumer Protection Act, CQLR c P-40.1, consumers can be awarded punitive damages even if they are not awarded contractual remedies or compensatory damages at the same time.
[94] That said, the Supreme Court observed that the purpose of an award of punitive damages under Québec’s Consumer Protection Act is to prevent conduct on the part of merchants and manufacturers in which they display ignorance, carelessness or serious negligence with respect to consumer’s rights and the merchant’s and manufacturer’s obligations to consumers under the Act and also to provide a recourse to consumers in response to merchants’ and manufacturers’ acts that are intentional, malicious or vexatious. The mere fact that a provision of the Consumer Protection Act had been violated was not enough to justify an award of punitive damages: the court was required to consider the whole of the merchant's conduct at the time of and after the violation.
[95] The objective of punitive damages in common law jurisdictions is described by Laurence David and Bruce Feldthusen in Halsbury's Laws of Canada - Damages, (II(3)(5)) at HAD-12 “Damages aimed at punishment, deterrence and denunciation” (2021 Reissue):Punitive (also called exemplary) damages are awarded against a defendant in exceptional circumstances. Punitive damages are awarded to punish the defendant (in the sense of retribution), to deter future wrongdoing by the defendant or others and to denounce the defendant’s conduct. Punitive damages are an important exception to the general common law rule that damages are awarded to compensate the victim, not punish the wrongdoer. This is because punitive damages focus on the defendant’s misconduct rather than the loss suffered by the plaintiff. Punitive damages are, moreover, “only to be awarded where compensatory damages are inadequate to accomplish the objectives of retribution, deterrence, and condemnation …”. [96] The question of whether, as a general proposition, punitive damages are available as a free-standing remedy in the absence of other remedies is not free from doubt. Professor Waddams, in The Law of Damages (Toronto: Canada Law Book, looseleaf) writes, at §11:9, that “exemplary damages may be awarded where the plaintiff has suffered no loss at all”. However, the authorities which he cites in support are all cases where the plaintiff also obtained either nominal damages (Johnston Terminals & Storage Ltd. v. Miscellaneous Workers' Wholesale & Retail Delivery Drivers & Helpers Union, Local 351, (1976) 1975 CanLII 933 (BC SC), 61 D.L.R. (3d) 741 (B.C.S.C.), Cousins v. Wilson, [1994] 1 N.Z.L.R. 463 (H.C.)) or injunctive relief (Cash & Carry Cleaners Ltd. v. Delmas (1973), 1973 CanLII 1232 (NB CA), 44 D.L.R. (3d) 315 (NB C.A.).
[97] Assuming that a claim for punitive damages alone is an available remedy at common law, a limiting factor is the requirement of s. 18(11) of Ontario’s Consumer Protection Act, when read in conjunction with s. 18(2). Section 18(11) provides that a court may award exemplary or punitive damages in addition to any other remedy in an action commenced under section 18. Where, as in the present case, rescission by a consumer who has entered into an agreement after or while a person has engaged in an unfair practice, is not possible, section 18(2) limits the remedies available to a consumer to recovery of the amount by which the consumer’s payment under the agreement exceeds the value that the goods or services have to the consumer, or to recover damages, or both.
[98] To similar effect, section 100 of the Ontario CPA provides that if a consumer successfully brings an action under the Act, the court, when ordering that the consumer recover the full payment which he or she is entitled to under the Act, may in addition to such order, award exemplary or punitive damages.
[99] The motion judge underlined, as we have, the words “in addition to”. Although he did find that the availability of damages under section 18(2) was a prerequisite to being able to recover punitive damages, the Plaintiffs argue that the motion judge’s interpretation of the Act was too narrow. Section 18(1) provides that “any remedy” is available to respond to an unfair practice, “including damages”. As a matter of statutory interpretation, the Plaintiffs say that remedies other than compensatory damages are implicitly available, thus giving courts broad discretion to craft a remedy appropriate to the circumstances. Indeed, in Richard, at para. 146, the Supreme Court adopted a previous interpretation of the provision in section 49 of the Charter of Human Rights and Freedoms, CQLR c C-12, that in case of unlawful and intentional interference with any right or freedom recognised by the Charter, a tribunal may, in addition, condemn the person guilty of it to punitive damages, as meaning:... that a court can not only award compensatory damages but can “in addition”, or equally, as well, moreover, also (see the definition of “en outre” in Le Grand Robert de la langue française (1986), vol. 6), grant a request for exemplary damages. The latter type of damages is therefore not dependent on the former. [100] As already referred to, the Plaintiffs, citing the Court of Appeal’s decision in Ramdath, at para. 98, argue that the language of section 18(2), read together with the availability of punitive and exemplary damages provided for by section 18(11), gives ‘a court “complete flexibility to award whatever damages would be appropriate at common law” including the restitutionary measure’.
[101] Ramdath concerned the propriety of making an award of aggregate damages at the trial of a class action. The Court of Appeal rejected arguments that the damages of class members, who were students enrolled in a post-graduate course in International Business Management, could only be assessed on an individual basis and could not be aggregated. Pursuant to an agreed-upon formula approved by the trial judge, all class members would be entitled to damages.
[102] In our view, Ramdath provides no assistance on the issue of whether, in a consumer protection action, a claim for punitive damages, absent a claim for compensatory damages or availability of the remedies of disgorgement and nominal damages, is legally tenable.
[103] While accepting the principle that consumer protection legislation should be “interpreted generously in favour of consumers”, we reject the argument that the motion judge’s application of the clear language of the statute amounted to a “reading down” of the remedies available to consumers under the CPA. Interpreting remedial legislation in a manner that furthers the important policy objective of protecting consumers and providing redress for unfair practices does not give courts liberty to ignore the entire context of the statutory scheme.
[104] That is what the motion judge did. In interpreting and applying the statute, he followed the admonition of the Supreme Court in Richard that even if a free-standing remedy of punitive damages is available in law, the pleaded facts must be capable of supporting such a claim, concluding, at para. 177:... the Plaintiffs claim for punitive damages is based on no more than the pleaded fact that the Defendants may have breached the unfair practices provisions of the Ontario Consumer Protection Act, 2002 and the comparable provisions from the other provinces and territories. However, as the Supreme Court pointed out, there must be something more than a breach of the Consumer Protection Act for an award of punitive damages. [105] The Plaintiffs’ statement of claim pleads in support of their claim for punitive damages that the Defendants have been the subject of unfair consumer practices proceedings brought by regulators in the United Kingdom, the European Union and Australia.
[106] As already noted, the record discloses that in the United Kingdom and the European Union, Expedia Group, Trivago and the Bookings Group entered into undertakings with the regulators to refrain from engaging in practices similar to those pleaded by the Plaintiffs in the Ontario action. In Australia, proceedings were brought against Trivago in the Federal Court of Australia by the Australian Competition and Consumer Commission alleging misleading or deceptive conduct under the Australian Consumer Law. The Federal Court found Trivago liable for breaches of the Australian Consumer Law (Australian Competition and Consumer Commission v. Trivago N.V. [2020] FCA 16) and imposed injunctive relief and a fine of AUD $44.7 million (Australian Competition and Consumer Commission v. Trivago N.V. (No 2) [2022] FCA 417).
[107] The motion judge continued, at para. 178:In the immediate case, there is no pleading beyond the allegations of breaches of the legislation. The circumstance that there were regulatory proceedings in Australia, the United Kingdom, and the European Union are no more than doubling down on the allegations of breaches of the legislation in the Statement of Claim, and it remains to be determined whether the conduct in Canada is the same or different than in Australia and the United Kingdom and it even remains to be determined whether the regulatory proceedings elsewhere are relevant given that the statutes and the jurisprudence may be different. [108] Although more germane to the issue of preferable procedure, it is noteworthy that in the Australian Trivago case, which was prosecuted by a regulator, the court considered it “necessary for the purposes of specific and general deterrence to fix penalties that are far greater than the profit Trivago earned from its contravening conduct” and that Australian consumers had suffered loss and damage estimated at approximately AUD $30 million. By contrast the Plaintiffs in the present case do not assert compensatory loss or damage.
[109] To be capable of supporting a claim for punitive damages, the allegations made against the defendants which are grounded on the foreign regulatory proceedings, must amount to high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour: Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595 at para. 36
[110] In support of its claim for punitive damages, the Statement of Claim pleads that:102. This Court should order the Defendants to pay substantial exemplary and punitive damages. The Defendants' conduct was high-handed, malicious and reprehensible, and it departs to a marked degree from the standards expected of the most used and trusted online travel websites.
103. The Defendants consistently and repeatedly made the Advertising Practice Claims, which were false, misleading, deceptive, and unconscionable. The Defendants continued to do so (in whole or part) even after they agreed in other jurisdictions to cease engaging in these unfair and deceptive practices. A substantial exemplary and punitive damages award is appropriate to deter the Defendants and other travel metasearch and OTAs from engaging in this predatory and abusive conduct. [111] It is not sufficient to simply recite in a pleading the words that are required to advance a claim for punitive damages. Courts must look beyond the labels used by parties and determine the true nature of the claim pleaded. At the pleadings stage, this requires a determination of whether, assuming the verity of all of the plaintiff’s factual allegations, the pleadings could possibly support the plaintiff’s legal allegations: Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, per McLachlin J. at para. 84. A similar approach is warranted at the certification stage in a class proceeding.
[112] We agree with the motion judge’s conclusion that what amounts to little more than a bare allegation that the Defendants may have breached the unfair practices provision of the Ontario Consumer Protection Act, without more, is insufficient to meet the punitive damages requirement for misconduct that is high-handed, malicious, arbitrary or highly reprehensible. The factual allegations that regulatory proceedings, in other jurisdictions, under different statutes, resulting in one adverse adjudicated outcome against one of the defendants in Australia, and undertakings not to engage in certain conduct given to EU and UK regulators by some of the Defendants, do not address the issue of how the Defendants’ conduct in respect of Plaintiffs seeking redress under Canadian consumer protection legislation amounted to the exceptional circumstances that, if proven, would justify an award of punitive damages.
[113] Accordingly, we agree with the motion judge that the Plaintiffs’ claim for the remedy of punitive damages does not satisfy the cause of action criterion. . Baker v. Blue Cross Life Insurance Company of Canada
In Baker v. Blue Cross Life Insurance Company of Canada (Ont CA, 2023) the Court of Appeal considers the appellate SOR applying to an award of punitive damages, here in the context of long-term disability insurance litigation before a jury:B. ANALYSIS
(1) Punitive Damages Award
(a) Standard of Review
[14] During his oral submissions, counsel for Blue Cross submitted that the appropriate standard of review when considering a jury’s award of punitive damages on appeal is correctness. This submission was not in Blue Cross’ factum, and counsel conceded that it finds no support in Canadian jurisprudence. It is unpersuasive. However, it is essential to consider the standard of review before examining the evidence in the instant case.
[15] As in many cases where the defendants are insurance companies, or they insure named defendants, Blue Cross served a jury notice. Insurance companies often seek to have cases tried by juries. The thinking behind this strategy is that a jury may be more inclined than a judge to decline to award damages or, at least, will likely award less damages than a judge. A plaintiff who chooses a jury is making an opposite assessment. At its essence, then, the choice of a civil jury is a strategy that aims to improve a party’s odds of achieving a favourable outcome. In making that choice, a party is also taking certain calculated risks. The first and most obvious risk is that the jury might render a verdict more generous to the other side than a judge would. A second risk – one that arises if the jury’s verdict is unfavourable – is that an appellate court has less scope to interfere than it would with a judge’s reasons. It is this second risk that I will discuss next.
[16] Because juries do not provide reasons, an appellate court generally has a more limited basis to interfere with their verdicts. We are not in a position where we can carefully scrutinize the jury’s chain of reasoning. That is why, generally, appellate courts take a deferential approach to reviewing jury verdicts. In explaining the rationale underlying this approach, I can do no better than to cite the comments of Chief Justice Laskin in his dissent in Wade v. C.N.R., 1977 CanLII 194 (SCC), [1978] 1 S.C.R. 1064, at pp. 1069-1070:Appeal Courts do not fine-comb jury answers but accord them the respect of a common sense interpretation even where there may be some ambiguity in the answers. ... It is always timely to be reminded that juries do not write reasons for judgment, and their answers must be taken against the background of the evidence from which they are entitled to select, without manifesting their selection, what is credible, what is significant, what is persuasive to them. It is very often easy for an appellate Court, in the leisurely scrutiny of the transcript, to find significance in pieces of evidence to contradict jury findings, and in so doing to usurp the jury’s function. What an appellate Court may believe from a reading of the transcript may be the very things which a jury disbelieved or believed in part only. It is one thing to interfere with a jury’s verdict where there is simply no evidence to support its findings or to support a critical one; it is a different thing, and not to be encouraged, to interfere with its findings where there is evidence, however slight, on which they may be based, but where because of offsetting evidence a question of credit and weight arises. These are matters for the jury alone. [17] Despite the foregoing, the role of an appellate court is different when it comes to reviewing an award of punitive damages. These damages are not at large, and consequently, it has been held that courts have greater scope to interfere with such awards. The leading cases on this point are Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 and Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, which provide guidance regarding the appropriate standard of review.
[18] In discussing appellate review of punitive damages awards, Cory J. in Hill, at para. 197, stated:[C]ourts have a much greater scope and discretion on appeal. The appellate review should be based on the court’s estimation as to whether the punitive damages serve a rational purpose. In other words, was the misconduct of the defendant so outrageous that punitive damages were rationally required to act as deterrence? [19] This rationality test applies to whether an award of punitive damages should be made and to the issue of its quantum: Whiten, at para. 101. The focus is on whether the award is the product of reason and rationality, and the question is “whether the court’s sense of reason is offended rather than on whether its conscience is shocked”: Whiten, at para. 108.
[20] Regarding the quantum of a punitive damages award, in Whiten, Binnie, J. built on the dicta from Hill, stating, at para. 107:In Hill ... Cory J., while emphasizing the overriding obligation of rationality, also recognized that the jury must be given some leeway to do its job. The issue of punitive damages, after all, is a matter that has been confided in the first instance to their discretion. Thus, to be reversed, their award of punitive damages must be “so inordinately large as obviously to exceed the maximum limit of a reasonable range within which the jury may properly operate” (para. 159). Putting these two notions together, the test is whether a reasonable jury, properly instructed, could have concluded that an award in that amount, and no less, was rationally required to punish the defendant’s misconduct. [21] Although the standard of review is different when it comes to a punitive damages award compared to other jury damages awards, in considering whether the jury’s decision is the product of reason and rationality, this court is faced with the same realities described by Chief Justice Laskin. We must consider the evidence before the jury without knowing with precision what weight it gave to it, what it found to be credible, what it thought was most relevant, and what it drew from the failure of a party to provide evidence. Thus, by necessity, we cannot conduct the type of detailed review that we undertake when reviewing a judge’s reasons for decision. Instead, we must consider whether there was an evidentiary basis that would rationally lead to a punitive damages award and, if so, whether the quantum awarded was also rationally connected to the evidence and the purposes of punitive damages. It is this review of the evidence that I will turn to next.
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