Reasons for Judgment of the Honourable Mr. Justice Hall:

[1]         This is an appeal from the judgment of the Honourable Mr. Justice Cohen pronounced December 19, 2001.  The decision can be found at [2001] B.C.J. No. 2700.  The respondent, E.B., a former pupil of a residential school, commenced an action in 1996 claiming damages for sexual assault against the appellant and an individual named Mathew Williams.  Williams, who was slightly older than the respondent, had also been a pupil at the school.  The appellant, the Order of the Oblates of Mary Immaculate in the Province of British Columbia, ("the Oblates"), filed third party proceedings against the Attorney General of Canada who in turn, filed fourth party proceedings against the appellant and the Roman Catholic Bishop of Victoria.

[2]         The respondent, now aged about 53, was a student at the Christie Residential School located at Kakawis on Meares Island, between 1956 and 1965.  In his amended Statement of Claim, the respondent alleged that in the period from 1957 until 1962, he had been sexually assaulted on several occasions by Martin Saxey, an employee of the appellant during those years.  He further alleged that he had been sexually assaulted by the defendant Williams on one occasion at the school between 1957 and 1959.  As a result of a number of procedural orders made prior to trial, the only issues dealt with at the trial before Cohen J. were the issues of liability and damages as between the respondent E.B. and the Oblates.  Proceedings involving the other parties were adjourned to be either resolved by agreement or, failing such agreement, to be tried at a later date.  Because Martin Saxey died about ten years prior to the commencement of these proceedings, he was not a named party in these proceedings.  The proceedings against the defendant Mathew Williams were ordered severed from this trial.  Mathew Williams was called as a witness at this trial by the plaintiff to testify about the conditions at Kakawis forty to fifty years ago.  Williams acknowledged in his evidence that on one occasion, he had sexually assaulted the respondent, E.B., at the school premises.  The testimony of Williams presented a very negative account of his experience at the school.

[3]         The trial before Cohen J. proceeded over fifteen days on various dates between February 19 and August 3, 2001.  The case advanced by the respondent against the Oblates asserted two bases for liability.  The first was direct liability based on negligence and the second was vicarious liability, or liability without fault, based on what was argued to be the responsibility of the employer Oblates for the wrongful acts of its employee Saxey.  On December 19, 2001, Cohen J. delivered judgment finding the appellant vicariously liable for what he found to be a number of sexual assaults committed by Saxey against the respondent.  Cohen J. found the respondent to be a credible witness and accepted his account of the assaultive behaviour of Saxey.  The respondent was awarded damages, being $150,000 for general damages, $80,000 for loss of past earning capacity, and $3,400 on account of future care costs.  The trial judge held that, since he had concluded that the Oblates were vicariously liable for the wrongful acts of Saxey, it was not necessary for him to determine whether or not liability in negligence should be found against the Oblates.  The Oblates filed an appeal to this Court from both the finding of liability and the awards of damages made to E.B.

The Background Facts

[4]         The respondent resided as a small child with his siblings and parents in a relatively remote area on the west coast of Vancouver Island.  He and his family were residents of Queen’s Cove at Esperanza Inlet, some distance north of Meares Island.  Meares Island is located in Clayoquot Sound off the west side of Vancouver Island.  Christie Residential School was located on Meares Island, about four miles by water from Tofino, a town located at the end of the highway that traverses Vancouver Island.  During the years that the respondent was at the school, Tofino was the location of the hospital and general store that serviced local people and people living on nearby Meares Island.  The school had a boat or boats that afforded the means of transportation between Tofino and the school on Meares Island.

[5]         The appellant is a Catholic missionary order comprised of priests, (clergy), and brothers, (lay persons), that was founded in France in the early part of the 19^th century.  Being a missionary order, it followed the trade routes into the Canadian and American west after 1850.  Members of the order came to British Columbia roughly coincident in time with the establishment of trading posts by the Hudson’s Bay Company.

[6]         Although the Oblates had been active in British Columbia for quite some time prior to 1900, the Christie Residential School at Kakawis was initially established around the turn of the century by another Catholic order, the Benedictines.  The school took its name from an individual who was, at that time, the Catholic Bishop of Vancouver Island.  Unlike the situation with some other residential schools, it appears that throughout its existence, the Christie school was always owned by one or other of the religious orders of the Catholic church.  From its inception and up to the date when the facilities ceased to be used as a residential school in 1971, the Christie school operated as a residential educational facility for aboriginal children who came there as students from different locations on the west coast of Vancouver Island.  Until approximately 1938, the school had been operated by the Benedictine order of priests and nuns.  At that time, the Benedictine order found itself unable any longer to sustain the premises financially.  The appellant Oblates were approached and agreed to take over the continuing operation of this school.  Oblate priests and brothers were thereafter in charge of the school.  Some Benedictine nuns, however, continued to teach and care for children at the school premises until about 1959.  At that time, the Benedictine nuns found they could no longer carry on because of a lack of resources.  An American order of nuns based in Los Angeles, California was enlisted to take over the duties formerly performed at the school by the Benedictine nuns.  The Christie school eventually ceased to be a residential school facility in 1971 when new school premises were built at Tofino.  After this, the facility was utilized as a care and counselling centre.  The respondent and his elder and younger siblings were in attendance at the school as residential school pupils in the 1950s and the 1960s.

[7]         During the time material to this case, it appears that the education and social functions of the school were under the direction of the Oblate priests and brothers and whichever order of nuns were responsible for the education, supervision and care of the children attending the school.  The Federal Government contributed with a per capita grant to assist in sustaining the fiscal operations of Christie school.  Statutory provisions contained in successive versions of the Indian Acts provided that Canada could enter into agreements with parties to operate school facilities and school attendance was compulsory under the statutory regime.  Residential schools were required to adhere generally to the provincial curriculum and were subject to inspection by local education officials.  It appears from the evidence that, although the buildings were getting on in age and the growing enrolment strained the school facilities, it was perceived by those conducting inspections at the school that there was enthusiasm on the part of the teaching staff and the students.  The academic performance of students was viewed as being quite positive.

[8]         While the direct care of the children and the educational functions were performed by religious personnel, the nuns and the Oblates, other operations associated with the physical operation of the school were in the hands of First Nations personnel mostly recruited from adult relatives of the children attending the Christie school.  For instance, male and female relatives of the respondent were engaged to perform maintenance duties at the school during the time E.B. was at the school.  A considerable number of persons were engaged by the Oblates to perform the various tasks necessary for the satisfactory operation of the school.  Several of these lay employees, including Martin Saxey and the aforementioned relatives of the respondent, resided on the school property.

[9]         Saxey, the individual who was alleged by the respondent to have regularly assaulted him, was a member of the Cheeleshat Band, a band living at a reserve on Kyuquot Sound on the west coast of the island.  In 1951, when Saxey was aged about 35, he was found guilty of manslaughter and sentenced to a prison term.  He and another man from the reserve had quarrelled over some property and the other man was shot by Saxey.  It appears that by 1954 Saxey had been granted parole and was then living and working at the Christie school.  I would infer from the evidence that, perhaps because of tensions at Kyuquot engendered by the homicide, it was felt that it would be better for him not to live at the Kyuquot reserve.  He was given employment by the Oblates and worked as a baker at the school.  In addition to his baking duties, he would often operate the school boat, unloading freight or transporting people to the mainland.  He also performed general maintenance jobs about the property.  He and his wife had a large family.  Several of their children attended school at Christie Residential School before and after he had been convicted of the homicide in 1951.  There is reference in the evidence to the fact that in the 1960’s one of his grandchildren was in attendance at the school.  His son, Martin Saxey, Jr., was a classmate of E.B. at the school.  E.B. said he became aware after he left the school that Saxey had been found guilty of a homicide.

[10]    The religious personnel who were called as witnesses by the appellant at the trial indicated that to their observation Saxey was a good employee and a willing worker.  There was no evidence that any personnel at the school during the relevant time detected any untoward behaviour of Saxey concerning E.B. or any of the other pupils who were in attendance at the school.

[11]    Although there were a number of parents and relatives of pupils who attended the school working at the school premises, there was evidence that it was not the practice for there to be a great deal of interaction between the lay staff and the children.  It appears to have been a standing general rule that the pupils were not to be in or about the residential premises of those lay staff who resided at the school.  A school principal from the 1960’s who testified said that generally children would not be permitted to work in areas like the kitchen or the bakery, because in those areas there were hot appliances and some machinery that could present a hazard to children.  The respondent testified that on occasion he had observed female students working at the bakery during the time of Saxey’s tenure as baker.  He did not suggest that he ever had participated in such activity.

[12]    Saxey resided in an upstairs room of a building located on the school premises.  An adjacent upstairs room was at times occupied by Mr. Williams who was employed as a boat builder at the school.  Some downstairs residential premises were occupied by individuals who E.B. referred to as his grandparents.  However, the evidence is unclear as to whether these persons were his grandparents or simply older relatives who were his cousins.

[13]    E.B. testified that around 1957 when he was in his second year as a pupil at the school, Saxey began luring him to his room by promising to give him candy.  He said that when he went up to the room he was sexually assaulted by Saxey.  He testified that over the course of several years up until about 1962 Saxey continued to lure him to his room on the promise of giving him candy and performed numerous sexual assaults upon him.  E.B. did not bring this conduct of Saxey to the attention of anyone at the school.  Although his relatives resided in close proximity to Saxey, the respondent apparently never complained to them about any misconduct by Saxey.  It was, as I noted, never suspected by any personnel at the school that Saxey was engaged in molesting any students.  Witnesses who testified at trial on behalf of the appellant said they had no suspicions of any wrongdoing because to their observation Saxey seemed to be a fine person and a diligent employee.  Those witnesses who could recall E.B. testified that he was perceived as a happy and satisfactory student with no particular problems.  Given the times when these witnesses were at Christie school, these recollections were probably of events after 1960.

[14]    The respondent graduated from Christie school in 1965.  Thereafter, he briefly attended a secondary school facility located at Mission on the mainland of British Columbia.  His stay at Mission was only a matter of a few months and afterwards he returned to the Zeballos area near Esperanza Inlet, the area where he had been born and raised.  He soon commenced work in the logging industry but that employment was interrupted by an injury and he was off work for some time.  Generally over the years, he was engaged in work related to forestry.  Commencing in about 1970, he began to have difficulties with the law and he was subject to several periods of incarceration.  He testified that he had mentioned something about his prior sexual abuse to a lawyer acting for him around the end of the 1970s.  This presumably would be a lawyer acting for him in one of the criminal cases.  E.B. did not report the behaviour of Saxey in any detailed way prior to his interaction with police officers around 1995.  Members of the RCMP were then investigating cases of possible abuse at residential schools throughout the country.  Subsequently, E.B. engaged in considerable discussion about the assaults with various health professionals, some of whom testified at trial.

[15]    Saxey died around 1986 and was thus not available at the time when the allegations of assault first came to be made in any detail by E.B.  As I noted above, the trial judge found the respondent was a credible witness and he accepted that a number of sexual assaults had occurred as described by him.  He found vicarious liability against the appellant, holding it was liable as an employer for the actions of Saxey.  Consequent upon this finding of liability, he awarded damages to E.B. as described above.  Because of his finding on vicarious liability, the issue of alleged negligence on the part of the Oblate defendants was not addressed by the trial judge because he did not find it necessary to do so.  Therefore, this appeal raises for consideration in this Court only the issue of the vicarious liability of the Oblates for what Saxey did to E.B.

The Law – Applicable Legal Principles

[16]    In this case, the sole basis found for liability was vicarious.  The defendant Oblates were held to be liable to E.B. as the employer of the person found by the trial judge to be the abuser of the respondent.  As Kirby J. of the Australian High Court pointed out in a recent judgment of the Court in the case of New South Wales v. Lepore, [2003] HCA 4, the theory attracting liability to an employer for wrongs committed by an employee has varied over time.  He observed as follows at para. 299 of the judgment:

... The history of the imposition of vicarious liability demonstrates that the foundation for such liability has been uncertain and variable.  Initially, the responsibility of a person for wrongs committed by that person's wife or servants (or slaves) probably derived from medieval conceptions of property, and its incidents.  By the sixteenth century the common law of England had relieved an employer of liability for a servant's wrongs unless the employer had specifically commanded, or consented to, the act causing the wrong.  By the eighteenth century, the common law had changed again.  It reintroduced the notion of liability for a servant's wrongs on the basis of a fiction that such wrongs derived from an implied command of the employer.  Under this theory, the employer's liability was direct, not derivative.  Ultimately, the fiction of the "master's tort" was abandoned.  It was accepted that the employer's liability derived from the liability of the servant.

[17]    He went on to say at para. 301:

Vicarious liability in the law of torts is, above all, a subject fashioned by judges at different times, holding different ideas about its justification and social purposes, "or no idea at all" citing Williams, "Vicarious Liability and the Master's Indemnity", (1957) 20 Modern Law Review 220 at 231.

[18]    The applicable principles relevant to determining when vicarious liability should be found have been recently pronounced on by the Supreme Court of Canada in two cases that originated in this Province.  These cases are Bazley v. Curry, [1999] 2 S.C.R. 534 and Jacobi v. Griffiths, [1999] 2 S.C.R. 570.  Both cases involved defendant organizations that provided services for children.  In each case, what was at issue was the potential liability of the employer organization for acts of sexual assault committed against children by an employee.  The trial judge in his reasons referred extensively to these two cases, particularly the Bazley case.  He also commented on the trial decisions in the cases of G. (E.D.) v. Hammer (1998), 53 B.C.L.R. (3d) 89 (B.C.S.C.) and V.P. v. A.G. Canada and Starr (1999), 186 Sask. R. 161 (Sask Q.B.).  In the former case of G. (E.D.), Vickers J. decided against the imposition of vicarious liability on a school board in the case of a school janitor who had sexually assaulted a female pupil attending a non-residential school.  This trial decision was referred to with approval by Binnie J. giving judgment for the majority in the case of Jacobi, supra.  G. (E.D.) was appealed to this Court.  On the appeal, it was not contended, in light of the decision in Jacobi, that liability should be found on a vicarious basis but it was argued that the defendant school board should be found liable on what was argued to be the breach of a non-delegable duty resting on the school board to ensure the safety of students.  The legal theory underlying non-delegable duty was very extensively discussed in the comprehensive judgments given by several members of the Australian High Court in the case of Lepore, referred to supra.  A majority of this court dismissed the appeal brought on behalf of G. (E.D.).  The decision is reported at (2001), 86 B.C.L.R. (3d) 191.  Prowse J.A., in dissent, would have found liability against the board on the basis of non-delegable duty.  Mackenzie J.A., giving judgment for the majority, concluded it would not be appropriate to find liability on such a basis.  In the course of his reasons dismissing the appeal on liability, he said this at para. 75:

In my view, if a claim for vicarious liability must fail because, in the traditional language, the employee's tort was outside the course and scope of his employment then any claim for breach of a non-delegable duty of the employer equally must fail.  The rationale for breach of non-delegable duty is to extend liability for torts of independent contractors in appropriate cases where there would be vicarious liability if the independent contractor were an employee.  I do not think that vicarious liability and non-delegable duty should overlap to permit inconsistent results for the same tort by an employee.  The duplication of vicarious liability and non-delegable duty would create doctrinal confusion for no valid policy purpose.

[19]     G. (E.D.) has been appealed to the Supreme Court of Canada and judgment on the case is presently under reserve in that Court.  In the Saskatchewan case of V.P., a trial decision referred to by Cohen J., an administrator at a residential school who had assaulted a young person was found to have a range of duties that could suffice to support a finding of vicarious liability on the part of the employer Federal Government.

[20]    In the Bazley case, the Supreme Court of Canada unanimously held it was appropriate to impose vicarious liability on the employer service organization for harm caused to an infant by the sexual misconduct of its employee.  However, in the Jacobi case, a majority of the Supreme Court declined to impose vicarious liability on the employer club arising out of sexual misconduct committed by an employee against children using club facilities.

[21]    In the Bazley case, the defendant foundation operated residential care facilities which specialized in the treatment of children with emotional difficulties.  McLachlin J., (as she then was), gave the judgment of the Court upholding a finding of liability in Bazley.  She noted that the organization had authorized its employees to look after all aspects of the children's lives and to act generally as surrogate parents to the children in its care.  The employees performed duties of a parental character, including the general supervision of the children, as well as taking part in intimate tasks such as bathing and putting the children to bed.  Unfortunately, Curry, an employee hired to perform these tasks turned out to be a pedophile.  He took advantage of his position to commit acts of sexual assault on children in care including the Bazley child.  Curry was found out and his employment was terminated by the defendant.  Curry was later charged and convicted of several incidents of sexual assault, including some relating to the infant plaintiff, Bazley.  The employer was sued on the basis that it should be found to be vicariously responsible for the wrongful conduct of Curry who had been hired to look after the children.

[22]    In the Jacobi case, the defendant, Vernon Boys and Girls Club, was a non-profit enterprise.  It operated recreational programs for children.  Unlike the organization in the Bazley case, the club did not offer services of a parental nature to the children using its facilities.  The club had employed one Griffiths as a program director.  Two of the children utilizing the club facilities were the plaintiff Jacobi children, a brother and sister who resided in Vernon.  They may have been rather vulnerable because they had had a somewhat chaotic upbringing arising out of difficulties their mother experienced in marital break-ups and the consequences.  Griffiths coordinated after school activities for children using the services of the club.  He was required to supervise the children and in the performance of his duties he was expected to develop a degree of "rapport" with them.  Griffiths cultivated a relationship with both the 13 year old girl and her ll year old brother and after gaining their trust, he subjected them to sexual assaults.  He was found out and discharged from employment.  Later, he was charged, convicted and sentenced to a term of imprisonment for his assaultive conduct.  Thereafter, a lawsuit was brought against the club on behalf of the Jacobi children claiming damages for the sexual abuse by Griffiths.  The trial judge found that the club should be held vicariously liable for the wrongs of Griffiths.  This Court held against liability and allowed an appeal from the trial decision.  On a further appeal to the Supreme Court of Canada, that Court, by a majority, sustained the disposition that had been made in this Court.

[23]    In the course of his judgment, Cohen J. made extensive reference to the Bazley case and also referred to Jacobi.  McLachlin J., (as she then was), giving judgment in Bazley, noted that in deciding such a case, a Court should first determine whether the precedents "unambiguously determine on which side of the line between vicarious liability and no liability the case falls".  If that determination proves difficult, then the Court must go on to decide whether it would be appropriate to find vicarious liability in the individual case in light of the policy rationales underlying vicarious liability, liability without fault on the part of the employer.  Cohen J. quoted the following passage from para. 41 of the judgment in Bazley at para. 62 of his reasons:

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.

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]

[24]    He also noted this passage from para. 42 of the Bazley reasons:

Applying these general considerations to sexual abuse by employees, there must be a strong connection between what the employer was asking the employee to do (the risk created by the employer's enterprise) and the wrongful act. It must be possible to say that the employer significantly increased the risk of the harm by putting the employee in his or her position and requiring him to perform the assigned tasks. The policy considerations that justify the imposition of vicarious liability for an employee's sexual misconduct are unlikely to be satisfied by incidental considerations of time and place. For example, an incidental or random attack by an employee that merely happens to take place on the employer's premises during working hours will scarcely justify holding the employer liable. Such an attack is unlikely to be related to the business the employer is conducting or what the employee was asked to do and, hence, to any risk that was created. Nor is the imposition of liability likely to have a significant deterrent effect; short of closing the premises or discharging all employees, little can be done to avoid the random wrong. Nor is foreseeability of harm used in negligence law the test. What is required is a material increase in the risk as a consequence of the employer's enterprise and the duties he entrusted to the employee, mindful of the policies behind vicarious liability.

[emphasis in original]

[25]    He also adverted to this passage from the judgment of Binnie J. in the Jacobi case:

Therefore, 'mere opportunity' to commit a tort, in the common 'but-for' understanding of that phrase, does not suffice" to impose no-fault liability. The "janitor" cases, for example, illustrate that the creation of opportunity without job-created power over the victim or other link between the employment and the tort will seldom constitute the "strong connection" required to attract vicarious liability.

[26]    As will be seen, although the learned trial judge adverted to these comments of Binnie J., I do not consider he paid sufficient heed to the circumstance that, aside from opportunity, there was little else on which to base a finding of vicarious liability in this case.

[27]    Subsequent appellate decisions of Canadian and Commonwealth courts have commented on the principles enunciated by the Supreme Court of Canada in the cases of Bazley and Jacobi.  These decisions include the Australian case of Lepore, adverted to supra, the English case of Lister v. Hesley Hall Ltd., [2002] 1 A.C. 215 and a Saskatchewan case, Attorney General of Canada v. H.L. and Starr, [2002] S.J. No. 702, 2002 SKCA 131.

[28]    In Lister, the question for decision was characterized by Lord Steyn as being whether as a matter of legal principle the employers of the warden of boarding school premises, who sexually abused boys in his care, were vicariously liable for the torts of the employee.  Hesley Hall was a commercial enterprise, being a school and boarding annex which mainly dealt with children who had emotional and behavioural difficulties.  A man and his wife were employed as respectively, warden and housekeeper, to take care of the children at the facility.  The factual situation was thus described:

The warden was responsible for the day to day running of Axeholme House and for maintaining discipline.  He lived there with his wife, who was disabled.  On most days he and his wife were the only members of staff on the premises.  He supervised the boys when they were not at school.  His duties included making sure the boys went to bed at night, got up in the morning and got to and from school.  He administered pocket money, organised weekend leave, evening activities, and supervised other staff.  Axeholme House was intended to be a home for the boys and not an extension of the school environment.

[29]    Eventually when the abuse committed by the warden came to light in the 1990s, he was charged and sentenced to seven years imprisonment for various offences involving the sexual abuse of his charges.  He had left his employment with Hesley Hall in 1982.  A lawsuit was commenced against the employers in 1997 and after a trial which took place in January 1999, the judge dismissed both the claims in negligence and the claims founded on what I might term the traditional basis for finding vicarious liability.  The trial judge relied on the previous judgment of the Court of Appeal in Trotman v. North Yorkshire County Council, [1999] L.G.R. 584.  In that case, the deputy headmaster of a special school was charged with the responsibility of caring for a handicapped teenager on a foreign holiday.  The headmaster committed sexual assaults against the teenager.  However, vicarious liability was not found against his employer, the Council.  As Lord Steyn noted in Lister, supra, the judgment of Butler-Sloss L.J. in Trotman illustrated the reasoning that had resulted in the finding against vicarious liability in that case:

...His position of caring for the plaintiff by sharing a bedroom with him gave him the opportunity to carry out the sexual assaults.  But availing himself of that opportunity seems to me to be far removed from an unauthorised mode of carrying out a teacher's duties on behalf of his employer.  Rather it is a negation of the duty of the council to look after children for whom it was responsible.  Acts of physical assault may not be so easy to categorise, since they may range, for instance, from a brutal and unprovoked assault by a teacher to forceful attempts to defend another pupil or the teacher himself.  But in the field of serious sexual misconduct, I find it difficult to visualise circumstances in which an act of the teacher can be an unauthorised mode of carrying out an authorised act, although I would not wish to close the door on the possibility.

[30]    In the Lister case, the trial judge had concluded in favour of a finding of vicarious liability because of the failure of the warden to report to the employer his wrongful intentions and the harmful consequences to the children.  That resulted in a finding of liability against the school from which finding it appealed to the Court of Appeal.  The judgments in the House of Lords noted that such a basis for finding liability, namely the failure of the warden to report his sinister intentions and conduct to his employer, had about it a very artificial quality.  The Court of Appeal, being bound by the previous judgment in Trotman, allowed the appeal because it did not accept the reasoning of the trial judge that the "failure to report" of the employee was a proper basis for finding vicarious liability.  The Court of Appeal had observed at para. 30:

The simple point in this case is that if wrongful conduct is outside the course of employment, a failure to prevent or report that wrong conduct cannot be within the scope of employment so as to make the employer vicariously liable for that failure when the employer was not vicariously liable for the wrongful conduct itself.

[31]    Lord Steyn, giving judgment in the House of Lords in Lister said this at para. 10:

Since the decision in the Court of Appeal the law reports of two landmark decision in the Canadian Supreme Court, which deal with vicarious liability of employers for sexual abuse of children, have become available: Bazley v. Curry (1999), 174 D.L.R. (4th) 45; Jacobi v. Griffiths (1999), 174 D.L.R. (4th) 71.  Enunciating a principle of "close connection" the Supreme Court unanimously held liability established in Bazley's case and by a 4 to 3 majority came to the opposite conclusion in Jacobi's case.  The Supreme Court judgments examine in detail the circumstances in which, though an employer is not "at fault," it may still be "fair" that it should bear responsibility for the tortious conduct of its employees.  These decisions have been described as "a genuine advance on the unauthorised conduct/unauthorised mode distinction": Peter Cane, "Vicarious Liability for Sexual Abuse" (2000) 116 LQR 21, 24.

[32]    All five members of the House of Lords who sat on the Lister appeal gave separate judgments.  In the event, all five of the Law Lords concluded that Trotman should be overruled and that vicarious liability for the acts of the warden ought to be found against the defendant employer, Hesley Hall Ltd.  The following passages from the judgment of Lord Clyde seem to me to be helpful in a consideration of the circumstances of the present case.  Lord Clyde said this at para. 48 of the judgment:

Cases which concern sexual harassment or sexual abuse committed by an employee should be approached in the same way as any other case where questions of vicarious liability arises.  I can see no reason for putting them into any special category of their own.  In the Scottish case Ward v. Scotrail Railways Ltd. 1999 SC 255 it appears to have been effectively conceded that the employee's conduct was not such as to attract a vicarious liability, but the judge held that in the circumstances the employee was indulging in an unrelated and independent venture of his own.  In light of the particular facts of the case the concession seems to have been soundly made.  The Canadian case of Bazley v. Curry 174 DLR (4th) 45 concerned vicarious liability for acts of sexual abuse carried out by an employee of a children's foundation who had been engaged to act as a parent-figure caring for emotionally troubled children in a children's home.  The careful and comprehensive discussion of the problem by McLachlin J. was presented in the context of policy considerations, but the essence of the decision seems to me to lie in the recognition of the existence of a sufficient connection between the acts of the employee and the employment.  This in turn was explored by reference to various factors by reference to which the strength of the connection can be established.  In that case vicarious liability was held to exist.  On the other hand in Jacobi v. Griffiths 174 DLR (4th) 71 vicarious liability was not established.  In that case the acts, with one minor exception, took place in the employee's home outside working hours and away from the club which was the principal place of employment.  That the club had provided an opportunity to establish a friendship with the children did not constitute a sufficient connection.  These two decisions seem to be consistent with the traditional approach recognised in this country.

[33]    Lord Clyde went on to observe on the application of the law to the facts of the case at para. 50:

I turn finally to the facts of the present case.  It appears that the care and safekeeping of the boys had been entrusted to the respondents and they in turn had entrusted their care and safekeeping, so far as the running of the boarding house was concerned, to the warden.  That gave him access to the premises, but the opportunity to be at the premises would not in itself constitute a sufficient connection between his wrongful actings and his employment.  In addition to the opportunity which access gave him, his position as warden and the close contact with the boys which that work involved created a sufficient connection between the acts of abuse which he committed and the work which he had been employed to do.  It appears that the respondents gave the warden a quite general authority in the supervision and running of the house as well as some particular responsibilities.  His general duty was to look after and to care for, among others, the appellants.  That function was one which the respondents had delegated to him.  That he performed that function in a way which was an abuse of his position and an abnegation of his duty does not sever the connection with his employment.  The particular acts which he carried out upon the boys have to be viewed not in isolation but in the context and the circumstances in which they occurred.  Given that he had a general authority in the management of the house and in the care and supervision of the boys in it, the employers should be liable for the way in which he behaved towards them in his capacity as warden of the house.  The respondents should then be vicariously liable to the appellants for the injury and damage which they suffered at the hands of the warden.

(emphasis added)

[34]    In the course of his judgment, agreeing that the appeal should be allowed and liability found against Hesley Hall, Lord Millett said this at para. 70:

... precise terminology is not critical.  The Salmond test, in either formulation, is not a statutory definition of the circumstances which give rise to liability, but a guide to the principled application of the law to diverse factual situations.  What is critical is that attention should be directed to the closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae.  This is the principle on which the Supreme Court of Canada recently decided the important cases of Bazley v. Curry 174 DLR (4th) 45 and Jacobi v. Griffiths 174 DLR (4th) 71 which provide many helpful insights into this branch of the law and from which I have derived much assistance.

[35]    In the case of H.L. v. Canada (Attorney General), [2002] S.J. No. 702, a companion case to the trial judgment of V.P., which was commented on by the trial judge in this case, the Saskatchewan Court of Appeal dealt with a case involving a federal employee, Starr, described as a "Residence Administrator" who was employed on Gordon's Indian Reserve in Saskatchewan.  The Federal Government operated an elementary school and a student residence at the Reserve.  When the plaintiff, a former resident of the Reserve, was in his early teens, he was sexually assaulted by Starr.

[36]    In addition to performing duties at the residence, Starr, with the approval of officials in the government department where he worked, undertook the organization of several programs of extracurricular activity for students at the school and residence as well as for other children living on the Reserve.  H.L. lived at home and attended a day school.  He was not a student at the school, nor did he live at the residence.  However, since he lived on the Reserve, he took part in a boxing program that was conducted at the residential school premises after school hours by Starr.  Starr maintained his office in the residence and ran the boxing program in a gymnasium attached to the school.  During the participation of H.L. in this boxing program, Starr assaulted him.  The trial judge found the defendant government vicariously liable for the assaults by Starr on an application of the reasoning in the Bazley case.  The judge held that what the government authorized Starr to do in respect of his employment had a sufficient nexus to the wrongful conduct to render the government vicariously liable to the plaintiff H.L.

[37]    On appeal, although the damages that were awarded at trial to H.L. were ordered to be substantially reduced, the finding of vicarious liability made against the government employer was sustained.  Although the plaintiff has taken steps to seek leave to appeal to the Supreme Court of Canada from the decision of the Saskatchewan Court of Appeal to reduce damages, no steps appear to have been taken by the defendant government to appeal from the decision on liability affirmed by the Saskatchewan Court of Appeal.

[38]    After extensive commentary on Bazley and Jacobi, Cameron J.A. narrated how Starr, with the approval of the government department, took a leading role in providing activities of a social and recreational nature to young people at the Reserve.  Given his official duties, Starr came to occupy a position of power, influence and trust on the Reserve.  After setting up the boxing club for youths in 1970, he became a central force in the club, serving as a facilitator, organizer and one of the coaches.  After 1975, Starr ran the club out of the school gymnasium.  Although the school principal had control of the gymnasium premises during school hours, after hours it was under the control of Starr for his wide ranging community activities including the boxing club.  Members of the boxing club gathered in the gymnasium several times a week for practice.  Starr selected club members to participate in tournaments in the province and outside the province.  Starr on occasion would travel to tournaments with the boys.  On occasion, H.L. was selected to go to boxing tournaments.  Sometimes Starr would give boys, including H.L., a ride home from boxing practices.  On two occasions, once at the gymnasium after practice and once at his private office in the residence after a practice, Starr sexually molested H.L.  H.L. did not immediately tell anyone of those incidents.  Eventually however, it was discovered in 1984 that Starr was a pedophile who had molested many boys over the years.  When the government found out about this activity, Starr was promptly discharged from his employment.

[39]    Many years later, H.L. sued Starr and the Federal Government claiming damages on account of the assaults.  Cameron J.A. said this about the connection between what Starr did in his employment and his tortious behaviour beginning at para. 152 of the judgment:

He was never a mere boxing coach, or cadet master, or pow-wow dancing instructor, or whatever.  He was at all times, and in every respect, the local embodiment of all the power and authority of the enterprise as a whole (with the exception of that of the school principal, whose comparatively limited role ended each day after school and at the end of the school term).  Nor was he a mere volunteer.  He undertook to do what he did in relation to the boxing and other clubs as an outgrowth of his official duties, even as a sanctioned extension of some of those duties.  And his having done so reflected well on him in the Department's assessments of his job performance.  As the trial judge noted, the defendant Starr himself testified that "the implementation of the extracurricular activities by means of, inter alia, the boxing club was an integral part of his duties and not something he undertook as a community volunteer 'after work hours'" (at para. 40).

Nor, as the incident in the defendant Starr's private office demonstrates, did his job-related opportunities to abuse his power stop at the door of the gymnasium or end in public settings.  They extended to his private office, with its aura of authority and respect and occasion, especially when considered with the sensibilities of a child in mind.  And his was the power to command attendance, if for no other reason than his was the power to assess performance and grant or withhold reward.

[40]    The Court concluded that it was easy for Starr by reason of his position and power generally and in relation to the boxing club and its activities specifically, to take advantage of a youngster like H.L. in a secure and private setting.  The Court concluded as follows at para. 158:

... the enterprise may be said in general to have created a significant risk of employee sexual impropriety with children.  And, in the case of the defendant Starr, the risk may be seen to have been appreciably enhanced, given the role he was allowed to assume, with its all-pervasive powers and opportunities, and the vulnerability of the youngsters.

[41]    It was held that the defendant Starr's acts involving the plaintiff H.L. did not amount to isolated incidents or random acts but rather formed part of a pattern of enduring sexual abuse of the young people with whom he came to work so closely and over whom he possessed considerable authority by reason of his status and the way his employment was permitted to evolve.  Thus, the Court concluded that liability was properly imposed by the trial judge upon the defendant government for the wrongful conduct committed by its pedophile employee Starr.

[42]    The search for guiding principle in this area concerning imposition of vicarious liability upon an employer for wrongful conduct committed by an employee has been an often perplexing quest.  Lord Millet, at para. 69 of his judgment in Lister noted the following passage from the 1st edition of Salmond on Torts at pp. 83-84:

But a master, as opposed to the employer of an independent contractor, is liable even for acts which he has not authorised, provided they are so connected with acts which he has authorised, that they may rightly be regarded as modes – although improper modes – of doing them.

[43]    This reference was adverted to by the Privy Council in the case of Canadian Pacific Railway Company v. Lockhart, [1942] A.C. 591.  The employee repairman had to travel about to perform his duties.  In travelling about he was authorized to use a rail vehicle similar to a "speeder" on the tracks of the company or if going from one area of the city of Toronto to another, he was given tram tickets.  The company, for reasons of potential liability, prohibited employees from using their private automobiles to travel to work sites unless the vehicles were insured against public liability and property damage risks.  An employee used his non-insured car to travel from one work site to another and injured the infant plaintiff.  It was found at trial there was no negligence on the part of supervisors because this act of the employee was unusual and no other instances of such conduct were known to have occurred or been condoned.  The trial judge dismissed the action of the injured plaintiff, finding the driving unauthorized.  He found that his negligent activity, "even at a time when he was engaged in his master's business," did not visit liability on the employer railroad company.  The Ontario Court of Appeal sustained this decision by a majority.  The Supreme Court of Canada reversed and an appeal was taken to the Privy Council.  Lord Thankerton said at p. 599:

The general principles ruling a case of this type are well known, but, ultimately, each case will depend for decision on its own facts.  As regards the principles, their Lordships agree with the statement in Salmond on Torts, 9th ed., p. 95, namely: "It is clear that the master is responsible for acts actually authorized by him: for liability would exist in this case, even if the relation between the parties was merely one of agency, and not one of service at all.  But a master, as opposed to the employer of an independent contractor, is liable even for acts which he has not authorized, provided they are so connected with acts which he has authorized that they may rightly be regarded as modes—although improper modes—of doing them.  In other words, a master is responsible not merely for what he authorizes his servant to do, but also for the way in which he does it ....  On the other hand, if the unauthorized and wrongful act of the servant is not so connected with the authorized act as to be a mode of doing it, but is an independent act, the master is not responsible: for in such a case the servant is not acting in the course of his employment, but has gone outside of it."

[44]    The judgment of the Supreme Court of Canada finding liability against the employer was sustained by the Privy Council.

[45]    The Lockhart case, of course, was not a case of intentional or criminal wrongdoing but was a case of direct disobedience of the direction of the employer by the employee tortfeasor.

[46]    Another case from the 1940s decided in Australia, the case of Deatons Proprietary Ltd. v. Flew (1949), 79 C.L.R. 370 (H.C.) was a case of intentional wrongdoing by an employee.  A barmaid, apparently insulted by the comments of a drunken customer, threw a glass at the customer, causing him injury.  The barmaid had no supervisory duties and was held to have acted in sudden anger.  In that case, liability was not imposed upon the employer for the assault committed by the employee.  Deatons might be considered a case near the line dividing liability from non-liability.  I should also say that Jacobi, a case which resulted in a division of opinion amongst members of the Supreme Court of Canada, was a case where arguments for and against liability were neatly balanced.

[47]    In these cases where vicarious liability is being advanced by a plaintiff as the basis for a finding of liability against an employer, regard must be had to the circumstances of each case to decide where the line is to be drawn, if a principled basis is to exist for the imposition of such liability.  Lord Clyde observed in Lister at para. 40:

Salmon refers to the "course" of the employment and not the "scope" of the employment.  Both phrases are sometimes used interchangeably in the context of vicarious liability.  In so far as the liability on the employer arises through the scope of the authority which the employer has expressly or impliedly delegated to the employee, the latter expression may be preferable.

[48]    Binnie J. said this in Jacobi at p. 589:

The attribution of vicarious liability is not so much a "deduction from legalistic premises" as it is a matter of policy, as the Court observes in Bazley v. Curry, [1999] 2 S.C.R. 534, released concurrently (hereinafter "Children's Foundation"), at para. 26.  Nevertheless, as the court adds, "[a] focus on policy is not to diminish the importance of legal principle" (para. 27).

[49]    As to the general underlying principle supporting liability, McLachlin J. said this in Bazley at p. 559:

Reviewing the jurisprudence, and considering the policy issues involved, I conclude that in determining when an employer is vicariously liable for an employee's unauthorized, intentional wrong in cases where precedent is inconclusive, courts should be guided by the following principles:

(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.

(emphasis added)

[50]    As I see it, the touchstone of liability in Bazley was the circumstance that the duties required of the employee both imparted authority to that employee and provided a high level of opportunity for just the sort of wrong that was done to the plaintiff child in care.  By contrast, the majority in Jacobi concluded against liability in that case because the abuser had "no job created authority to insinuate himself into the intimate lives of these children".  The duties and position of the employee in H.L. were held by the Saskatchewan Court of Appeal to fit within the parameters set out in Bazley and sufficed to found vicarious liability.  In the case of E.(D.G.), the offending employee was employed in a janitorial capacity at the school where the assaultive behaviour occurred.  This employee was found not to be employed in a capacity that should result in the imposition of vicarious liability on the defendant school board.  E.(D.G.), as I noted, was referred to with approval by Binnie J. in the Jacobi case.  Job related power and job related intimacy were noted in Jacobi to be significant factors militating in favour of the finding of vicarious liability in a case such as Bazley.  These are often seen to be hallmarks of a parental type of relationship.  Binnie J. observed at p. 609 of Jacobi:

I would not want to be taken as suggesting that creation of a parent-type relationship constitutes a precondition to vicarious liability in child abuse cases.  However, not only do the "parental" cases have a particular relevance to the facts of this appeal, they show how high the courts have set the bar before imposing no-fault liability.  I think Huddart J.A. was correct in this case in the B.C. Court of Appeal to emphasize job-created power as the most relevant source of "connectedness" (p. 7) to the present appeal.

[51]    Cases, of course, will throw up great variations of factual circumstances but it appears to me that the more closely an employment situation mimics a parental type relationship, the more likely it is that liability will be imposed on a vicarious basis.  The enhanced opportunity created by such a relationship, which I suppose could be said to have something in it of mentorship, will very often result in a finding of liability.  The enhanced potential created for wrongful conduct attracts the imposition of liability.  There is often in such cases a measurable risk created by the position and employment duties assigned by the defendant employer to the tortfeasor employee.

Application of the Law to the Present Case

[52]    The trial judge in the case at bar appeared to take the view that because the children at the residential school were advised to treat adults at the school with respect, that this somehow conferred an ability on Saxey to exert authority over the plaintiff and increased the risk that the plaintiff would be sexually assaulted by Saxey.  However, it must be noted that the position Saxey occupied at the school and his duties were very different from the positions and duties of the employees whose conduct was under consideration in the cases of Bazley, Jacobi, Lister and H.L., referred to supra.

[53]    In the case of Bazley, when it was in this Court (cited as B.(P.A.) v. Curry (1997), 30 B.C.L.R. (3d) 1), Hollinrake J.A., (Donald J.A. concurring), observed at p. 41 that there must exist a sufficient nexus between the duties of an employee and the wrongful conduct.  That raises for consideration the nature of the duties and power conferred upon, (or exercised with the consent of the employer, as in the cases involving the employee Starr), by the particular employee whose acts are relied upon as the foundation for a finding of vicarious liability against an employer defendant.

[54]    Saxey, in this case, was not part of the school administration and he was assigned no supervisory or child care duties respecting pupils at the school.  Those responsibilities were looked after by the religious personnel.  None of his employment duties had the remotest connection to dealing with the pupils at the school in any supervisory or parental fashion.  There was no job related requirement for him to establish any particular rapport with students as existed, for instance, in Jacobi.  His employment was not designed to provide opportunities for intimacy, the type of situation found to exist in Bazley.  I perceive no nexus in this case between the general employment duties of Saxey and the assaults that were found to have been committed on E.B.  Saxey, in my opinion, occupied a position quite comparable to that of the school janitor, Hammer, in the E. (D.G.) case.  Although the present case involves a residential school setting that perhaps would tend to enhance some risk of improper contact between students and staff because everyone was there for 24 hours every day, what occurred with respect to the plaintiff, E.B., had absolutely no connection to any duty that Saxey was required or authorized to perform on behalf of his employer, the appellant.  No authority had been conferred on Saxey to direct, care for or discipline the pupils.  I consider that these comments of Vickers J. in E.(D.G.), particularly the passage emphasized, are fairly applicable to Saxey's situation:

No matter which test is applied to the facts of this case, Ms. G. cannot succeed.  Mr. Hammer had no direct duties involving students.  In the performance of his duties as janitor, he was not assigned specific duties to care for and provide support to the children in the school.  Students, and in particular Ms. G., were not assigned to his care.  All that can be said to support a finding of vicarious liability is that Mr. Hammer was employed as a janitor at the school and his duties provided him with the opportunity to commit the wrongful acts.  In my view, that is insufficient to impose liability on the Board.

(emphasis added)

[55]    In my view, it can be appropriately observed in this case that the earlier precedents of the decided cases should be found to unambiguously point in the direction of not supporting a finding of vicarious liability against the appellant for the wrongful conduct of Saxey.  In my respectful opinion, the trial judge erred in this case in overemphasizing opportunity and in failing to have sufficient regard to a consideration of what were the general employment duties and responsibilities of Saxey.

[56]    The factual situations concerning the duties and positions of those employees whose activities resulted in findings of vicarious liability being made against an employer in cases such as Bazley that I have referred to above appear to me to be all quite distinguishable from the factual circumstances existing in the case at bar.  If Saxey, in his modest labouring position at Christie school, could be held to be an individual whose assaultive conduct should result in the imposition of vicarious liability on the appellant for such actions, then it is difficult to envisage any residential school situation involving intentional wrongdoing by an employee where such liability would not be imposed.  To conclude as the trial judge did here, that vicarious liability ought to be found in these circumstances would, in my respectful view, be to impose the duties of an insurer upon an employer in the position of the defendant.  I deduce from the comments of McLachlin J. found at p. 560 of Bazley that employers, however, are not to be treated as involuntary insurers responsible for every wrongful act committed by employees.

[57]    I am of the opinion that the finding of vicarious liability made against the appellant in this case should be set aside because the finding is not sustainable on the authorities.  Since the trial judge did not find it necessary to make any finding at the trial concerning the alternative basis for liability advanced by E.B., namely negligent conduct on the part of the appellant, I consider that this case should be remitted to the trial court for the resolution of that remaining issue.  I would therefore allow the appeal and remit the case for further proceedings in the trial court.  In light of the conclusion that I have arrived at concerning vicarious liability, it is not necessary for me to consider the arguments advanced by the appellant concerning damages.