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Punitive Damages Award Overturned

A decision released by the Court of Appeal yesterday addresses the principles of punitive damages.

In Cable Assembly Systems Ltd. v. Barnes, 2019 ONCA 1013, the Court of Appeal noted that punitive damages should only be awarded on an exceptional basis for “malicious, oppressive and high-handed misconduct that offends the court’s sense of decency”.

Further, punitive damages are only to be awarded where compensatory damages are inadequate to accomplish the objectives of retribution, deterrence, and condemnation.

The Court of Appeal referred to the Supreme Court of Canada’s decision in Whiten v. Pilot Insurance Co., 2002 SCC 18, wherein it was stated “[c]ompensatory damages also punish. In many cases they will be all the ‘punishment’ required”.

The case in issue involved a defamation action. The Court of Appeal overturned the trial judge’s award of $75,000 in punitive damages, stating that the general damages awarded by the trial judge were adequate to achieve the objectives of retribution, deterrence and condemnation in the circumstances of the case.

Therefore, even where a defendant’s conduct is reprehensible and worthy of sanction, punitive damages are not the norm since compensatory damages also punish.