In John Doe (G.E.B. #25) V. The Roman Catholic Episcopal Corporation Of St. John’s, 2020 NLCA 27, the Newfoundland and Labrador Court of Appeal has further clarified the test for vicarious liability in circumstances where a conventional employment relationship does not exist between a wrongdoer and its principal.
Briefly, the wrongdoer does not have to be an employee in the traditional sense: the total relationship of the parties is relevant to whether liability will be established. What is key to establishing vicarious liability is whether the principal was in a position to manage the risk posed by the conduct of the wrongdoer.
In this case, four boys living at Mount Cashel orphanage in St. John’s in the 1950s were sexually abused by five members of the Christian Brothers Institute Inc. (the “Brothers”). The Brothers were an organization tasked by the Roman Catholic Episcopal Corporation of St. John’s (the “Archdiocese”) with establishing and overseeing the orphanage. The orphanage was on property that was conveyed from a Bishop of the Archdiocese to the Brothers, in trust, for the express purpose of establishing an industrial home and orphanage. The conveyance provided that the property would revert to the Archdiocese if it ceased to be used for this purpose.
Operational funding for the orphanage came from several sources, including the Archdiocese. In 1999, the four boys claimed against the Archdiocese and the Brothers for damages resulting from the sexual abuse they suffered while living at the orphanage. The plaintiffs alleged that the Archdiocese was vicariously liable for the sexual abuse perpetrated by the Brothers as a result of the close relationship between the two organizations. The Archdiocese did not dispute that the sexual abuse had occurred. Instead, it argued that it was not vicariously liable for the actions of the Brothers.
In March 2018, Faour J. for the Supreme Court of Newfoundland and Labrador dismissed the plaintiffs’ claims against the Archdiocese because of a lack of evidence that there was a sufficiently close relationship between the Archdiocese and the Brothers to support a finding of vicarious liability. The plaintiffs appealed. The Court of Appeal of Newfoundland and Labrador, allowing the plaintiffs appeal, sets aside the trial judge’s decision, and determines that the Archdiocese is vicariously liable for the Brothers’ abuse.
The Court finds that the trial judge erred in his characterization of the doctrine of vicarious liability, particularly by limiting the doctrine to issues such as employment and control of day-to-day operations. By doing so, the trial judge misapplied the law to the facts at hand. The Court emphasizes the importance of considering all of the evidence, taken together, when determining whether vicarious liability is met in a case, and states that in this case, the trial judge failed to do so.
The Court lays out the well-established approach for determining whether a party is vicariously liable for the acts of a wrongdoer. First, a court must determine if any precedents conclusively decide the case. If so, the analysis ends. If no precedent exists, then a court must answer the following questions:
- does a sufficiently close relationship exist between the wrongdoer and the principal as to make a claim for vicarious liability appropriate?
- is the wrongful act of the wrongdoer sufficiently related to the conduct authorized by the principal to justify the imposition of vicarious liability?
If the answer to both is yes, then vicariously liability shall be imposed upon the principal.
When assessing the closeness of the relationship between the wrongdoer and the principal, the Court emphasizes that it is the total relationship between the parties that must be considered. A wrongdoer need not be an employee of the principal to impose vicarious liability on the principal. When assessing whether the wrongful act of the wrongdoer is sufficiently related to the conduct authorized by the principal, a court must consider whether the principal was in a position to manage the risk posed by the conduct of the wrongdoer.
In this case, the Court finds evidence to support the fact that the Archdiocese not only established the orphanage, but played an ongoing role in administering, servicing, operating, and financially supporting it. The Court is clear that the Archdiocese is not immunized from responsibility due to some internal structure of the Brothers – 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” (at para 90).
The Court makes clear in this case that an organization will be vicariously liable for the wrongful acts of a wrongdoer where a sufficiently close relationship exists between the wrongdoer and the organization and the wrongful acts are sufficiently related to the conduct authorized by the organization. It is not necessary that a wrongdoer be an employee of the organization in the traditional sense, but rather, it is the total relationship of the parties that will determine the proximity between the parties.
In the big picture, vicarious liability is a legal tool animated by twin policy objectives:
- Fairly compensating victims; and
- Deterring future harms.
It is applicable in cases where the principal has the power to shape the way the wrongdoer conducts its business or does their job. The power held by the principal, along with the control it may exert over the wrongdoer, is what underpins the fairness of allowing liability for behaviour the principal may not have known about and would not have approved.
By confirming that vicarious liability may be found outside the formal employment relationship, the Newfoundland and Labrador Court of Appeal speaks to the substance of this issue. Having found that the Archdiocese had the power to shape the way the Brothers operated the orphanage, the Court’s decision to impose vicarious liability supports the policy objectives of the vicarious liability doctrine.
The Archdiocese has applied to the Supreme Court of Canada for leave to appeal the Court’s decision.