Wednesday, November 20, 2013

Pate v. Galway-Cavendish and Harvey: Yet Another Chapter

Mr. Pate was wrongfully dismissed in March 1999.  Yes, you read that correctly:  This was nearly fifteen years ago.

And the litigation's still going.  Mr. Pate has since passed away, but his Estate carries on.

I've commented about the case several times in recent years, with fulsome descriptions of the facts, which are linked below.  But for the purpose of this entry, allow me to say simply that Mr. Pate was treated very unfairly:  A new supervisor accused him of having defrauded the Township, fired him and pressed criminal charges when he refused to resign, and then withheld exculpatory evidence from the police.  Nonetheless, Pate was acquitted, and sued in wrongful dismissal and malicious prosecution.

The Background

At trial in 2009, Pate was awarded wrongful dismissal damages, but the 'malicious prosecution' claim was dismissed, and the trial judge felt that he was constrained to a very modest award of punitive damages of $25,000.

In April 2011, the Court of Appeal allowed Pate's appeal, for a new trial as to malicious prosecution and punitive damages.  I described that decision here.

In November 2011, Justice Gonsolus awarded $550,000 in punitive damages.  (My commentary here.)

And in December 2012, Justice Gonsolus released his decision on malicious prosecution, finding that the cause of action was made out, and awarding the nominal damages (and costs) agreed upon by the parties.  (My commentary here.)

Earlier this month, the Court of Appeal released its decision on the appeals from those two decisions.  It's a long decision, with a strong dissent.

The New Court of Appeal Decision

Put briefly, the Court was unanimous in agreeing with the trial judge's disposition of the malicious prosecution action, but divided on the issue of punitive damages.  The majority concluded that the trial judge had failed to consider whether or not a lower punitive damage award would satisfy the objectives of punitive damages, and that the award was too high.  In particular, the Court considered the facts of this case to be roughly comparable to the facts of an earlier case, McNeil, where $500,000 had been awarded, and notwithstanding that the trial judge considered the conduct in this case to be worse than that in McNeil, the majority disagreed.  (Food for thought:  Doesn't this constitute a question of mixed fact and law, attracting appellate deference?)  The majority accordingly held that the $550,000 award was excessive, and reduced it to $450,000.

This is a surprising result.  There are certain types of damages that are not 'exact sciences', where there may be a range of reasonable results, and so long as the trial judge's conclusion does not stand outside that range, the appellate courts are reluctant to 'tinker'.  (Consider the Minott v. O'Shanter case, where the Ontario Court of Appeal considered the reasonable notice period to be a little on the high end, but found that correcting it would amount to "unwarranted tinkering".  Likewise, in the Whiten v. Pilot Insurance case, which stands as the leading case on punitive damages and the high watermark for reprehensible misconduct, the Supreme Court of Canada restored a jury award of a million dollars in punitive damages despite clearly considering it to be at the very high end of the reasonable range.)  For the Court of Appeal to say that $550,000 is clearly too high, but to find that the reasonable award is $450,000...suggests that the trial judge's award was no so unreasonable in the first place.  (To be fair, the Court of Appeal points out that $50,000, being the difference between McNeil and the trial judge's award, isn't chump change.  True - $50,000 or $100,000 is a great deal of money.  But in this case, it isn't exactly a difference of scale.)

Sean Bawden, in his blog, has raised concerns with the Court of Appeal's characterization of the purpose of the compensatory damages.  I fully agree with his comments on the topic:  The Court was right to consider that punitive damages need to bear in mind the scope of compensatory damages for which the defendant is already liable, but to suggest that compensatory damages are in any way intended to my humble opinion it is a distortion of the law.

The Dissent

Justice Lauwers, in a well-considered 181-paragraph decision, considered the trial judge to have gotten it right, or at least close enough.  He candidly states that, if he were in the trial judge's shoes, he wouldn't have characterized the case as worse than McNeil...but he considers the two cases to be very similar, and doesn't think that the difference between $550,000 and $500,000 warrants appellate intervention.

Justice Lauwers also noted the agreement by the parties on nominal malicious prosecution damages, reading the agreement as an implicit recognition that a finding of liability on malicious prosecution could support the plaintiff in responding to the appeal - already commenced at that point - of the punitive damages award.  (This was exactly the observation I made in the last paragraph of my December 2012 entry.)  The majority appears to disagree with Justice Lauwers' treatment of the malicious prosecution agreement, finding that a subsequent finding on a separate retrial "cannot save an otherwise irrational and excessive punitive damages award."

Is this the End?

After nearly 15 years of litigation for Mr. Pate and his family, including a criminal trial, a civil trial, two appeals, and two re-trials, at present it looks to me that Mr. Pate's overall take - including all damages and costs - is in the ballpark of $800,000.  But is it over?  What's next?

There's really only one thing to do:  Either party might apply for leave for appeal to the Supreme Court of Canada.  I doubt the Supreme Court would be interested in the malicious prosecution issue, but they might take the opportunity to comment on punitive damages.  A strong dissent at the Court of Appeal never hurts an application for leave.

Stay tuned.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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