Punitive damage awards in Canada appear to be on the rise, with a number of significant punitive damage amounts awarded of late.

The following cases suggest a trend towards rising punitive damage awards:

  • Branco v American Home Assurance Co.1 Disability insurance case — $4.5 million in punitive damages awarded at the Saskatchewan Queen’s Bench level (currently subject to appeal).
  • Fernandes v Penncorp Life Insurance Co.2 Disability insurance case — $200,000 in punitive damages awarded at the Ontario Superior Court level.
  • Cinar Corporation v Robinson.3 Copyright infringement case — $500,000 in punitive damages awarded by the Supreme Court of Canada.

Pate Estate

The recent Ontario Court of Appeal decision in Pate Estate v Galway-Cavendish and Harvey (Township)4appears to further substantiate this trend.    

P was the township’s chief building official for almost 10 years when he was fired because of discrepancies with respect to building fees. The township turned some, but not all, information over to the police who reluctantly laid charges against P, but only after pressure from the township. At the criminal trial, P was acquitted of all charges.

Following his acquittal, P sued the township for wrongful dismissal, malicious prosecution and reputational injuries, and also sought punitive damages. The claim for wrongful dismissal succeeded and P received punitive damages of $25,000 based on the township’s conduct, which the trial judge described as “reprehensible.”

In 2011, P successfully appealed the claim for malicious prosecution and the quantum of the punitive damage award. The Ontario Court of Appeal referred the matter back to the Superior Court, which increased the punitive damage award to $550,000 and found the township liable for malicious prosecution. The township appealed to the Court of Appeal in 2013.

The Ontario Court of Appeal upheld the finding of malicious prosecution, and substituted a punitive damage award of $450,000, noting that it was a sum sufficient to satisfy the purpose of punitive damages (i.e. retribution, deterrence and denunciation). Although this punitive damage award constituted a reduction from the Superior Court amount, the decision is notable for its high punitive damage award rendered by an appellate court. It is also noteworthy that Lauwers J.A., writing for the dissent, would have maintained the higher $550,000 award.

The decision in Pate Estate is appellate court confirmation of what appears to be a trend towards increased punitive damage awards.

Take-away

Courts have wide discretion when imposing punitive damage awards. The modest punitive damage awards originally envisioned by the Supreme Court of Canada appear to be trending upward. Employers, insurers, and defendants generally should take note and be cognisant of this apparent trend in their dealings with opposing parties, both before and during litigation.