H.L. v. Canada (Attorney General)

SUPREME COURT OF CANADA

Citation: H.L. v. Canada (Attorney General), 2005 SCC 25

Date: 20050429

Docket: 29949

Between:

H.L.

Appellant

Attorney General of Canada

Respondent

‑ and ‑

Attorney General for Saskatchewan

Intervener

Coram: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

Reasons for Judgment:

(paras. 1 to 155)

Reasons dissenting in part:

(paras. 156 to 346)

Reasons dissenting in part:

(paras. 347 to 348)

Fish J. (McLachlin C.J. and Major, Binnie and Abella JJ. concurring)

Bastarache J. (LeBel and Deschamps JJ. concurring)

Charron J.

Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.

______________________________

h.l. v. canada (attorney general)

H.L. Appellant

Attorney General of Canada Respondent

and

Attorney General for Saskatchewan Intervener

Indexed as: H.L. v. Canada (Attorney General)

Neutral citation: 2005 SCC 25.

File No.: 29949.

*Hearing: May 13, 2004.

*Present: Iacobucci, Major, Bastarache, Binnie, LeBel, Deschamps and Fish JJ.

**Rehearing: 2004: December 13; 2005: April 29.

**Present: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

on appeal from the court of appeal for saskatchewan

L brought an action for sexual battery against S and the federal government for acts that had occurred 20 years earlier when L was about 14 years old. S, who worked on a reserve for the federal government, sexually abused L on two occasions. L left school when he was about 17 years old, without completing the eighth grade. He was unable to retain meaningful employment between 1978‑1987. During that time, he drank heavily, was incarcerated frequently and relied on social assistance to meet his needs. Between 1988‑2000, he worked sporadically. The evidence given by L and two experts witnesses satisfied the trial judge that L’s poor employment record between 1978‑1987 was attributable to his alcoholism, emotional difficulties, and criminality, which were in turn attributable to the sexual abuse perpetrated by S. He found as well that L’s sporadic work record between 1988‑2000 was consistent with the emotional difficulties described by the experts in their assessments of the psychological effects of sexual abuse. The trial judge maintained L’s action against S and the federal government, since he found that the criteria for the imposition of vicarious liability on the government had been met. He awarded L non‑pecuniary damages, pecuniary damages for loss of past and future earnings and pre‑judgment interest. With respect to L’s claim for loss of future earnings, in the absence of specific evidence in this regard, the trial judge relied inferentially on the evidence relating to L’s past earning capacity. The Court of Appeal dismissed the federal government’s appeal as it related to vicarious liability and to the award for non‑pecuniary damages, but allowed the appeal in relation to pecuniary damages and pre‑judgment interest. The Court of Appeal set aside the award for pecuniary damages for loss of past and future earnings on the ground that, on its assessment of the evidence, the evidence fell short of proving the loss. Leave to this Court was granted by the Court of Appeal, pursuant to s. 37 of the Supreme Court Act, to clarify the correct standard of review applicable to the Saskatchewan Court of Appeal.

Held (Bastarache, LeBel, Deschamps and Charron JJ. dissenting in part): The appeal should be allowed in part. The trial judge’s award of pecuniary damages for loss of past earnings is restored, but the award must be reduced to reflect the time L spent in prison and the social assistance he received during the period covered by the award.

Per McLachlin C.J. and Major, Binnie, Fish and Abella JJ.: In Saskatchewan, as elsewhere in Canada, a trial judge’s primary findings of fact and inferences of fact are only reviewable on appeal on a standard of palpable and overriding error. The Court of Appeal Act, 2000, in particular s. 14, did not create for Saskatchewan an appellate court radically different, in powers and purpose, from its counterparts in the other provinces. To the contrary, an examination of both the 2000 Act and its predecessors, their legislative history, and their judicial interpretation in this Court and by the Saskatchewan Court of Appeal itself all lead to the conclusion that the 2000 Act did not change the standard of review applicable in Saskatchewan to appellate review on questions of fact: the appeal is a review for error, and not a review by rehearing. Courts of appeal in Canada, absent an express legislative instruction to the contrary, cannot disregard the governing principle of appellate intervention on questions of fact. They may make their own findings and draw their own inferences, but only where the trial judge is shown to have committed a palpable and overriding error or made findings of fact, including inferences of fact, that are clearly wrong, unreasonable, or unsupported by the evidence. A court of appeal cannot substitute for the reasonable inference preferred by the trial judge, an equally, or even more, persuasive inference of its own. These principles are consistent with this Court’s recent decision in Housen.

In this case, the Saskatchewan Court of Appeal reversed the trial judge on six points: (1) qualification of the experts, (2) causation, (3) mitigation, (4) incarceration, (5) collateral benefits, and (6) loss of future earnings. The Court of Appeal erred in interfering with the trial judge’s findings on the first three issues because it applied the wrong standard and improperly substituted its own opinion of the facts for that of the trial judge. The trial judge, however, made “palpable and overriding errors” on the last three issues. His finding that S’s sexual abuse of L caused his loss of income due to imprisonment is both contrary to judicial policy and unsupported by the evidence. L’s lack of gainful employment caused by his imprisonment resulted from his criminal conduct, not from his abuse by S or from the alcoholism. The award for loss of past earnings should thus be reduced to reflect the time L spent in prison. The trial judge also erred in not deducting from the same award the social assistance payments L had received during the relevant period. The trial judge’s failure to make such deduction constitutes a severable error of principle. Finally, the trial judge’s award for loss of future earnings must be set aside. The finding that a person has had emotional and substance abuse problems which in the past have impacted on his earning capacity is not in itself a sufficient basis for concluding on the balance of probabilities that this state of affairs will endure indefinitely.

Per Bastarache, LeBel and Deschamps JJ. (dissenting in part): In Saskatchewan, the nature of appellate review is by way of rehearing and not review for error. The grammatical and ordinary sense of the words used in ss. 13 and 14 of The Court of Appeal Act, 2000, as well as the object of the Act, the object of the specific legislative provisions that form the statutory framework for appeals, and the Act’s historical foundations, clearly lead to that conclusion. The Court of Appeal Act, 2000 is the only one among all of the statutes governing the powers of appellate courts in Canada that relieves the Court of Appeal of any obligation to adopt the view of the evidence taken by the trial judge and directs it to act on its own view of what, in its judgment, the evidence proves.

A number of Saskatchewan Court of Appeal cases also support the conclusion that the nature of appellate review in Saskatchewan is by way of rehearing. To the extent that there are cases from this Court and the Saskatchewan Court of Appeal that appear to conflict with this conclusion, they can be reconciled. In particular, in Housen, the mere fact that this Court did not, on an appeal from the Saskatchewan Court of Appeal, refer to The Court of Appeal Act but instead used a statement from a different province’s Court of Appeal that is in conflict with the clear language of the Act to define the role of the appellate court in Saskatchewan, demonstrates that Housen should not be used to understand the nature of appellate review in that province. Rather, the application of Housen as an authority should be limited to general standards of appellate review only.

Appellate review by way of rehearing is not a retrial or a de novo hearing. On an appeal by way of rehearing, the Court of Appeal is not limited to a review of the lower court’s decision and can form its own judgment on the issues and direct its attention to the merits of the case. This does not mean, however, that the Court of Appeal can ignore the trial judge’s findings. The special advantage of the trial judge calls for a measure of deference on the part of the Saskatchewan Court of Appeal when, pursuant to the direction in s. 14 of the Act, it is considering what the evidence proves. Factual findings that engage the special advantage of the trial judge will be accorded some deference and the Court of Appeal will only interfere and apply its own view of the evidence if the trial judge has committed a palpable and overriding error in his or her fact finding. Factual findings that do not engage the special advantage of the trial judge are not entitled to the same level of deference. The Court of Appeal will only interfere and apply its own view of the evidence if the trial judge has committed a simple error in his or her fact finding. In the case of inferences of fact, since a trial judge is in no better position than the Court of Appeal to draw inferences of fact from a base of fact properly established, the threshold that the Court of Appeal must pass before substituting its own inference of fact is reasonableness. Nevertheless, given the respect that is to be accorded to the office of the trial judge, in the cases of inferences of fact or of findings of fact that do not engage the special advantage of the trial judge, the Court of Appeal will presuppose that the trial judge has drawn reasonable inferences of fact or made factual findings free of error.

The Court of Appeal correctly applied the appropriate standard when it set aside the trial judge’s pecuniary damages award for both past and future loss of earnings, because the factual inferences on which the award was based were not reasonably supported by the evidence and were therefore not reasonable. Even if the more stringent standard set out in Housen applied here, the Court of Appeal’s decision would still be upheld. The trial judge’s findings were so unreasonable that they amounted to palpable error in the appreciation of the evidence and the inferences drawn. With respect to past loss of earnings, the trial judge’s first inference that S’s sexual abuse caused L’s alcoholism was based primarily on the general expert evidence. However, the expert witnesses in this case transcended their respective fields of expertise when they testified as to the etiology of alcoholism and the cause of L’s alcoholism in particular. Since the expert witnesses were not properly qualified to express opinions on this subject, their evidence in this regard is entitled to no weight, and L’s testimony as to the effect of S’s sexual abuse on his alcoholism could not, on its own, provide a sufficient evidentiary basis for the trial judge’s inference that S’s sexual abuse caused L’s alcoholism. The trial judge’s second inference that S’s sexual abuse caused L’s emotional problems which resulted in L losing employment income also lacks a sufficient evidentiary foundation. The evidence adduced at trial only demonstrated that L did not work between 1978‑1987 and worked only sporadically between 1988‑2000. It does not prove that L was wholly or largely unable to work because of his emotional problems. L’s sporadic work record, in itself, is as consistent with choosing not to work as with being unable to work. With respect to future loss of earnings, since it was not reasonable for the trial judge to conclude that L suffered a loss of employment income because of S’s sexual abuse, given the evidentiary gaps in the trial judge’s causal chain, it was likewise not reasonable for him to conclude that L will continue to suffer such a loss in the future.

Per Charron J. (dissenting in part): There is agreement with the majority’s analysis on the governing standard of review for appeals in Saskatchewan and the Court of Appeal thus erred in finding that the standard was other than that adopted by this Court in Housen. However, on application of the appropriate standard of review, the Court of Appeal was correct in setting aside the entire award for pecuniary damages. There is agreement with the minority that the same error informed the trial judge’s decision to award pecuniary damages in respect of both past and future loss of earnings. The trial judge found that there was a causal connection between the acts of sexual abuse and a lifelong inability to earn income. The evidence did not support this finding and, consequently, the award for loss of income, past and future, is unreasonable.

Cases Cited

By Fish J.

Applied: Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33; M.B. v. British Columbia, [2003] 2 S.C.R. 477, 2003 SCC 53; refered to: Lensen v. Lensen, [1987] 2 S.C.R. 672; Tanel v. Rose Beverages (1964) Ltd. (1987), 57 Sask. R. 214; Athey v. Leonati, [1996] 3 S.C.R. 458; Markling v. Ewaniuk, [1968] S.C.R. 776; Kosinski v. Snaith (1983), 25 Sask. R. 73; R. v. W. (R.), [1992] 2 S.C.R. 122; Assicurazioni Generali SpA v. Arab Insurance Group, [2003] 1 W.L.R. 577; Stein v. The Ship “Kathy K”, [1976] 2 S.C.R. 802; Beaudoin‑Daigneault v. Richard, [1984] 1 S.C.R. 2; Geffen v. Goodman Estate, [1991] 2 S.C.R. 353; Toneguzzo‑Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114; Hodgkinson v. Simms, [1994] 3 S.C.R. 377; Schwartz v. Canada, [1996] 1 S.C.R. 254; Harrington v. Harrington (1981), 33 O.R. (2d) 150; Pelech v. Pelech, [1987] 1 S.C.R. 801; Board of Education of the Long Lake School Division No. 30 of Saskatchewan v. Schatz (1986), 49 Sask. R. 244; Sisson v. Pak Enterprises Ltd. (1987), 64 Sask. R. 232; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Knight v. Huntington (2001), 14 B.L.R. (3d) 202, 2001 SKCA 68; Bogdanoff v. Saskatchewan Government Insurance (2001), 203 Sask. R. 161, 2001 SKCA 35; Brown v. Zaitsoff Estate (2002), 217 Sask. R. 130, 2002 SKCA 18; Janiak v. Ippolito, [1985] 1 S.C.R. 146; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748.

By Bastarache J. (dissenting in part)

Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33; Fox v. Percy (2003), 214 C.L.R. 118, [2003] HCA 22; Kourtessis v. M.N.R., [1993] 2 S.C.R. 53; Farm Credit Corp. v. Valley Beef Producers Co‑Operative Ltd. (2002), 223 Sask. R. 236, 2002 SKCA 100; Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84, 2002 SCC 3; Hallberg v. Canadian National Railway Co. (1955), 16 W.W.R. 538; Taylor v. University of Saskatchewan (1955), 15 W.W.R. 459; Audergon v. La Baguette Ltd., [2002] E.W.J. No. 78 (QL), [2002] EWCA Civ 10; Gray v. Turnbull (1870), L.R. 2 Sc. & Div. 53; Bigsby v. Dickinson (1876), 4 Ch. D. 24; Coghlan v. Cumberland, [1898] 1 Ch. D. 704; Montgomerie & Co. v. Wallace‑James, [1904] A.C. 73; Mersey Docks and Harbour Board v. Procter, [1923] A.C. 253; Benmax v. Austin Motor Co., [1955] A.C. 370; Coventry v. Annable (1911), 19 W.L.R. 400, aff’d (1912), 46 S.C.R. 573; Greene, Swift & Co. v. Lawrence (1912), 2 W.W.R. 932; Miller v. Foley & Sons (1921), 59 D.L.R. 664; Messer v. Messer (1922), 66 D.L.R. 833; Monaghan v. Monaghan, [1931] 2 W.W.R. 1; Kowalski v. Sharpe (1953), 10 W.W.R. (N.S.) 604; Tarasoff v. Zielinsky, [1921] 2 W.W.R. 135; Matthewson v. Thompson, [1925] 2 D.L.R. 1211; French v. French, [1939] 2 W.W.R. 435; Wilson v. Erbach (1966), 56 W.W.R. 659; Tanfern Ltd. v. Cameron‑MacDonald, [2000] 1 W.L.R. 1311; Assicurazioni Generali SpA v. Arab Insurance Group, [2003] 1 W.L.R. 577; S.S. Hontestroom v. S.S. Sagaporack, [1927] A.C. 37; Whitehouse v. Jordan, [1981] 1 All E.R. 267; Laurentide Motels Ltd. v. Beauport (City), [1989] 1 S.C.R. 705; St‑Jean v. Mercier, [2002] 1 S.C.R. 491, 2002 SCC 15; Warren v. Coombes (1979), 142 C.L.R. 531; Workmen’s Compensation Board v. Greer, [1975] 1 S.C.R. 347; Toneguzzo‑Norvell (Guardian ad litem of) v. Burnaby Hospital, [1994] 1 S.C.R. 114; Lensen v. Lensen, [1987] 2 S.C.R. 672; Board of Education of the Long Lake School Division No. 30 of Saskatchewan v. Schatz (1986), 49 Sask. R. 244; Tanel v. Rose Beverages (1964) Ltd. (1987), 57 Sask. R. 214; Sisson v. Pak Enterprises Ltd. (1987), 64 Sask. R. 232; Knight v. Huntington (2001), 14 B.L.R. (3d) 202, 2001 SKCA 68; Bogdanoff v. Saskatchewan Government Insurance (2001), 203 Sask. R. 161, 2001 SKCA 35; Brown v. Zaitsoff Estate (2002), 217 Sask. R. 130, 2002 SKCA 18; Underwood v. Ocean City Realty Ltd. (1987), 12 B.C.L.R. (2d) 199; R. v. Mohan, [1994] 2 S.C.R. 9; R. v. Marquard, [1993] 4 S.C.R. 223; Parker v. Saskatchewan Hospital Assn., [2001] 7 W.W.R. 230, 2001 SKCA 60; Athey v. Leonati, [1996] 3 S.C.R. 458; State Rail Authority of New South Wales v. Wiegold (1991), 25 N.S.W.L.R. 500; M.B. v. British Columbia, [2003] 2 S.C.R. 477, 2003 SCC 53.

By Charron J. (dissenting in part)

Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33.

Statutes and Regulations Cited

Alberta Rules of Court, Alta. Reg. 390/68, rr. 518(c), (e).

Civil Procedure Rules (U.K.), 2002, vol. 1, r. 52.11(1).

Constitution Act, 1867, ss. 92(13), (14).

Court of Appeal Act, R.S.B.C. 1996, c. 77, s. 9(2).

Court of Appeal Act, R.S.M. 1987, c. C‑240, s. 26(1), (2).

Court of Appeal Act, R.S.S. 1930, c. 48, s. 8.

Court of Appeal Act, R.S.S. 1978, c. C‑42, s. 8.

Court of Appeal Act, S.S. 1915, c. 9, ss. 8, 9.

Court of Appeal Act, 2000, S.S. 2000, c. C‑42.1, ss. 7(2)(a), 12, 13, 14, 16.

Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 134(1)(a), (4)(a).

Courts of Justice Act, R.S.Q., c. T‑16, s. 10.

Indian Act, S.C. 1951, c. 29.

Interpretation Act, 1995, S.S. 1995, c. I‑11.2, ss. 10, 35.

Rules of the Supreme Court, 1883 (U.K.), Order 39, Order 58, rr. 1, 4.

Supreme Court Act, R.S.C. 1985, c. S‑26, s. 37.

Supreme Court Act, R.S.P.E.I. 1987, c. 66, ss. 56(1)(a), (4)(a).

Authors Cited

Andrews, N. H. “A New System of Civil Appeals and a New Set of Problems”, [2000] Cambridge L.J. 464.

Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.

Hohfeld, Wesley Newcomb. Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays, ed. by W. W. Cook. New Haven: Yale University Press, 1923.

Jolowicz, J. A. “Court of Appeal or Court of Error?”, [1991] Cambridge L.J. 54.

Jolowicz, J. A. “The New Appeal: re‑hearing or revision or what?” (2001), 20 C.J.Q. 7.

New Oxford Dictionary of English. Oxford: Clarendon Press, 1998, “palpable”.

Perell, Paul M. “The Standard of Appellate Review and the Ironies of Housen v. Nikolaisen” (2004), 28 Advocates’ Q. 40.

Royer, Jean‑Claude. La preuve civile, 3^e éd. Cowansville, Qué. : Yvon Blais, 2003.

Saskatchewan. Legislative Assembly. Debates and Proceedings (Hansard), 1st Sess., 24th Leg., June 7, 2000, pp. 1625‑26.

Sullivan, Ruth. Sullivan and Driedger on the Construction of Statutes, 4th ed. Markham, Ont.: Butterworths, 2002.

Zuckerman, Adrian A. S. Civil Procedure. London: LexisNexis UK, 2003.

APPEAL from a judgment of the Saskatchewan Court of Appeal (2002), 227 Sask. R. 165, 287 W.A.C. 165, [2003] 5 W.W.R. 421, [2002] S.J. No. 702 (QL), 2002 SKCA 131, affirming in part a decision of the Court of Queen’s Bench (2001), 208 Sask. R. 183, [2001] 7 W.W.R. 722, 5 C.C.L.T. (3d) 186, [2001] S.J. No. 298 (QL), 2001 SKQB 233, and supplementary reasons (2001), 210 Sask. R. 114, [2001] 11 W.W.R. 727, [2001] S.J. No. 478 (QL), 2001 SKQB 233. Appeal allowed in part, Bastarache, LeBel, Deschamps and Charron JJ. dissenting in part.

E. F. Anthony Merchant, Q.C., Eugene Meehan, Q.C., and Graham Neill, for the appellant.

Roslyn J. Levine, Q.C., and Mark Kindrachuk, for the respondent.

Barry J. Hornsberger, Q.C., for the intervener.

The judgment of McLachlin C.J. and Major, Binnie, Fish and Abella JJ. was delivered by

Fish J. —

I. Introduction

1 This appeal turns on the applicable standard of appellate review on questions of fact in Saskatchewan, and on the application of that standard by the Court of Appeal in this case. Our concern is with all of the facts, and nothing but the facts: with facts proved directly and with facts inferred, but not with questions of law or questions of mixed law and fact.

2 Legislatures may fix by statute the powers of the appellate courts they are constitutionally authorized to create. The Legislative Assembly of Saskatchewan has done so, most recently in The Court of Appeal Act, 2000, S.S. 2000, c. C-42.1 (“2000 Act”).

3 The 2000 Act did not enlarge materially the powers previously vested in the Saskatchewan Court of Appeal. Nor did it purport to modify at all the manner in which those powers have been exercised for nearly half a century.

4 More particularly, the 2000 Act did not change the standard of review applicable in Saskatchewan to appellate intervention with respect to findings of fact. The criteria that govern the exercise by the Court of Appeal of its statutory powers in this regard remain unchanged. Like other appellate courts across the country, it may substitute its own view of the evidence and draw its own inferences of fact where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearly wrong, unreasonable or unsupported by the evidence.

5 This standard of appellate review is subject, of course, to statutory exceptions. It does not apply where the legislature has expressly provided otherwise. Nothing in the 2000 Act reflects any such intention or has any such effect. It sets out the powers of the Court of Appeal in considerable detail; in other Canadian jurisdictions, equivalent powers are conferred in more general terms. As we shall see, however, the 2000 Act neither bestows on the Court of Appeal for Saskatchewan unique powers of appellate intervention on questions of fact nor ordains their exercise in a manner that, within Canada, is exclusive to Saskatchewan.

6 In my respectful view, the Court of Appeal departed from the applicable standard in this case.

7 I would therefore allow the appeal in part, with costs, as explained in the reasons that follow.

II. Overview

8 This matter reaches us, exceptionally, with leave granted by the Court of Appeal itself, pursuant to s. 37 of the Supreme Court Act, R.S.C. 1985, c. S‑26: (2003), 238 Sask. R. 167, 2003 SKCA 78. In reversing the trial judge, the Court of Appeal felt empowered by its governing statute to “rehear” the case. Speaking for the Court of Appeal on the leave application, Bayda C.J.S. acknowledged that a very different standard — “review for error” — had been held applicable in “the recent majority decision of the Supreme Court of Canada in Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235”. “Both conclusions”, said the Chief Justice, “cannot be right” (para. 11). I agree, of course, and, in my respectful view, it is the standard applied by the Court of Appeal — the “rehearing” standard — that is wrong.

9 I shall deal later with the difference between the majority and minority reasons in Housen. For present purposes, it will suffice to mention that this Court in Housen was unanimous on the issue that concerns us here: All nine Justices agreed that the standard of appellate review on questions of fact in Saskatchewan is review for error and not review by rehearing. They agreed as well that findings of fact by the trial judge will be disturbed on appeal only for errors that can properly be characterized as palpable and overriding.

10 It was not contended in Housen, either in the Saskatchewan Court of Appeal or in this Court, that the standard of appellate review in Saskatchewan differed significantly from the prevailing standard elsewhere in Canada. And none of the parties found it necessary or useful to refer in their written or oral submissions in this Court to the 2000 Act or its predecessors. This should not be thought surprising. On second reading, the Minister of Justice assured the Legislative Assembly of Saskatchewan that Bill 80 which, upon its adoption, became the 2000 Act

... doesn’t change the jurisdiction of the Court of Appeal in any way, it simply restates the historical jurisdiction of the court in a way that can be understood by users of the Act.

(Saskatchewan Hansard, June 7, 2000, at p. 1626)

11 Moreover, the Saskatchewan Court of Appeal, both before and after the coming into force of the 2000 Act, had consistently held that a trial judge’s findings of fact can be set aside only where palpable and overriding error is shown. It affirmed and reiterated that principle well before this Court’s judgment in Housen, and even before Lensen v. Lensen, [1987] 2 S.C.R. 672. Thus, for example, in Tanel v. Rose Beverages (1964) Ltd. (1987), 57 Sask. R. 214 (C.A.), Bayda C.J.S. stated that the palpable and overriding standard had been followed by the Saskatchewan Court of Appeal “for a long time and most certainly since [1960]” (p. 218).

12 Lensen, also an appeal from Saskatchewan, was decided under the predecessor to the 2000 Act. This Court dealt specifically in that case with the governing provision of the Saskatchewan statute, but laid down a uniform norm for appellate courts across the country.

13 As we shall see, the decisive provisions of the 2000 Act are identical in substance to the corresponding provisions of the Act it replaced. This underlines the present relevance of the Court of Appeal’s decisions prior to November 1, 2000, when the current Act came into effect. And it reflects the legislative intention, mentioned earlier, not to “change the jurisdiction of the Court of Appeal in any way” (Saskatchewan Hansard, at p. 1626).

14 Finally, I agree that the powers of the Saskatchewan Court of Appeal are set out in its constituent statute in greater detail than is the case in most other provinces. Greater detail in an empowering statute, however, does not invariably signal a legislative intent to confer broader powers. Often, the opposite is true. In any event, the 2000 Act must be read in the light of this Court’s jurisprudence — and appellate decisions in Saskatchewan itself — immediately prior to its adoption. Neither the text of the Act nor its legislative history indicates a departure from the principles set out in those cases.

15 In short, I am not at all persuaded that the 2000 Act was intended to create for Saskatchewan an appellate court radically different, in powers and purpose, from its counterparts in the other provinces. Nothing in the record before us, in the relevant provisions of the Act, or in the Court of Appeal’s own earlier appreciation of its proper role suggests to me that it has now been invested with a general jurisdiction to “rehear” trials — that is, to apply a “rehearing” standard when it reviews judgments at trial.

16 To a significant extent, that is what it did here. In my respectful view, it improperly substituted its own opinion of the facts for that of the trial judge. The court evidently viewed with skepticism the trial judge’s conclusions regarding the damages suffered by H.L. as a direct result of Mr. Starr’s proven misconduct. Doubt as to the soundness of the trial judge’s findings of fact, however, is not a recognized ground of appellate intervention.

17 I would therefore allow the appeal in part and restore the trial judge’s award for past loss of earnings, except where the errors imputed to him are indeed “palpable and overriding”.

III. The Facts and Judgment at Trial

18 H.L., a former resident of Gordon First Nation Reserve, brought an action for sexual battery against William Starr and the Government of Canada for acts that had occurred some twenty years earlier: 208 Sask. R. 183, 2001 SKQB 233. Mr. Starr was employed at that time by the federal Department of Indian and Northern Affairs (“the Department”) as Residence Administrator of the Gordon Student Residence on Gordon First Nation Reserve.

19 With the approval of the Department, Mr. Starr had organized various extracurricular activities for the students and other children living on the Reserve. It was through one of these activities, an after-school boxing club, that Mr. Starr came into contact with H.L. H.L. was then about 14 years old. Mr. Starr sexually abused H.L. on two occasions by subjecting him to acts of masturbation and to requests for sexual favours.

20 H.L. testified that Mr. Starr’s assaults had a profound and enduring impact. He felt “ashamed” and “dirty”, and was afraid to tell anyone what had happened, because he thought no one would believe him. He “tried to find a way to get out of going to school because [he] didn’t want to be around anybody”, and “had a hard time concentrating because it was on [his] mind”.

21 H.L. testified that he had never even “touched” alcohol before the assaults occurred, but began consuming excessive amounts shortly thereafter, when he was 15 or 16 years old. Alcohol provided an “escape” from his recurring thoughts about the sexual assaults. “[M]y way of dealing with it”, he said, “was to go out and get drunk”. That is why he “started drinking at a young age and became addicted to alcohol”.

22 Because he had difficulty concentrating and was by then “already into alcohol pretty bad”, H.L. left school when he was about 17 years old, without completing the eighth grade. H.L. characterized the sexual abuse perpetrated by Mr. Starr as the most traumatic event of his life.

23 Both H.L. and Canada called witnesses who were qualified as experts in assessing the psychological effects of sexual abuse. Both experts had tested H.L. and interviewed him extensively. Canada’s expert, Dr. Arnold, adverted to factors other than H.L.’s sexual abuse by Mr. Starr that had, in his view, contributed to H.L.’s addiction to alcohol. He noted, in particular, that H.L. had grown up in a home that modelled alcohol abuse and violence. Dr. Arnold concluded, however, that Mr. Starr’s sexual abuse of H.L. was a “specific triggering event” that led to H.L.’s abuse of alcohol.

24 Asked whether H.L. would have become an alcoholic in any event, Dr. Arnold stated: “He may have had vulnerability, but except for the exposure to the sexual abuse, may not have developed a substance abuse problem. So I have to be careful when I say that, the risk is there, but except for that triggering event it may not have occurred. We don’t know.” Invited to elaborate, Dr. Arnold added:

What we have [here] is an individual who has a risk because of his upbringing, so he’s — he has a risk and a vulnerability. If specific stressful life events come along and he’s exposed to them, such as sexual abuse, he is at more risk than someone who doesn’t have that history of vulnerability.

25 H.L.’s expert, Mr. Stewart, testified that H.L. was primarily traumatized by the sexual abuse perpetrated by Mr. Starr, which could be linked to his withdrawal and drinking problems:

[T]hey certainly coincide with his abuse, and again research would indicate that substance abuse ... is a direct result of being abused, so with other interviews and assessments and people that I’ve seen in therapy that have undergone sexual abuse, they find it extremely difficult to concentrate ...

26 Mr. Stewart explained that some “resilient” children are able to “shrug off” sexual abuse, with the benefit of a strong home and family life and the opportunity to disclose the abuse in a safe manner. Children who have been abused by a trusted authority figure, on the other hand, are more adversely affected.

27 The trial judge, Klebuc J., accepted the evidence of H.L. and the experts. He found that the sexual assaults committed by Mr. Starr caused H.L. to suffer enormous humiliation, self‑blame and loss of self‑worth, to lose interest in his education, in part due to his inability to concentrate, and to develop alcoholism.

28 Klebuc J. recognized that H.L. had a dysfunctional home life. He found, however, that no divisible injury could be attributed to it; nor was it a “necessary cause” of H.L.’s injuries. There was no evidence that H.L. suffered from a “crumbling skull”, or pre-existing condition that would have led to his losses regardless of the sexual battery (see Athey v. Leonati, [1996] 3 S.C.R. 458, at paras. 34-36). Rather, if H.L. was particularly vulnerable, this amounted to a “thin skull”, within the meaning of Athey, exonerating neither Canada nor Mr. Starr from their liability for the consequences.

29 H.L. was unable to retain meaningful employment between 1978 and 1987 (the “first period”). During that time, he drank heavily and was incarcerated frequently. He relied on social assistance to meet his needs. Between 1988 and 2000 (the “second period”), he worked sporadically.

30 H.L. testified that his inability to maintain steady employment was attributable to his abuse of alcohol, manifested by extensive and recurring periods of indulgence.

31 The impact of the sexual assaults on H.L.’s ability to maintain steady employment was addressed as well by the experts. Dr. Arnold, for example, testified to the “chain of events” set into motion by the sexual abuse perpetrated by Mr. Starr. He stated that this “triggering event” led to alcohol and school problems, a loss of confidence in the school system, and a diminished “work ethic”, which Dr. Arnold defined as H.L.’s “ability to hold work and be able to regularly show up and those kinds of things”. Dr. Arnold explained that sexual abuse by an authority figure, both generally and in H.L.’s specific circumstances, could lead to distrust of authority figures, including teachers, police, employers, judges, doctors, and medical care workers.

32 Similarly, Mr. Stewart testified that the sexual abuse would cause H.L. to have negative self-esteem, a poor self-image and a lack of confidence. These personality traits, he added, detrimentally affect one’s ability to secure and maintain employment.

33 The evidence given by H.L. and the experts satisfied Klebuc J. that H.L.’s poor employment record during the “first period” was attributable to his alcoholism, emotional difficulties, and criminality, which were in turn attributable to the sexual abuse perpetrated by Mr. Starr. He found as well that H.L.’s sporadic work record during the “second period” was consistent with the emotional difficulties described by the experts in their psychological assessments.

34 In the result, Klebuc J. maintained H.L.’s action against Mr. Starr and the Government of Canada. He found that the criteria for the imposition of vicarious liability on Canada had been met, and awarded H.L. a total of $80,000 in non‑pecuniary damages, $296,527.09 in pecuniary damages and $30,665 in estimated pre‑judgment interest.

35 The non‑pecuniary damages included $60,000 for the losses and injuries, including emotional distress, that H.L. had suffered — and would continue to suffer — as a consequence of Mr. Starr’s abuse, and aggravated damages of $20,000.

36 The pecuniary damages were determined as follows. Klebuc J. was satisfied that the appellant would have been able and willing to work, but for his emotional difficulties and resulting dependence on alcohol. Relying on Statistics Canada data submitted on consent, Klebuc J. estimated that H.L. would have worked as a construction or agricultural labourer 25 weeks annually, during the “first period” (1978-87), earning a total of $27,150.

37 Klebuc J. found that H.L. would have maintained full‑time employment in automotive repair during the “second period” (1988-2000). Relying here again on Statistics Canada data, he applied the median rate of $330 per week for all persons engaged in the repair and overhaul of motor vehicles. He discounted this amount by a 20 percent contingency factor to reflect H.L.’s vulnerability to job loss due to his limited education and cut off this branch of the award at the date of a back injury suffered by H.L. After deducting the income actually earned by H.L., Klebuc J. estimated a residual loss in earnings of $90,187.09 for the period.

38 Klebuc J. then considered H.L.’s claim for loss of future earnings and, in the absence of specific evidence in this regard, relied inferentially on the evidence relating to H.L.’s past earning capacity. He estimated H.L.’s future income, but for Mr. Starr’s misconduct, at no less than $17,160 annually, and deducted H.L.’s average earnings in the past to arrive at an annual income loss of $12,533 for the remainder of H.L.’s projected working life.

IV. The Court of Appeal

39 The Court of Appeal dismissed Canada’s appeal as it related to vicarious liability and to the $80,000 award for non‑pecuniary damages, but allowed the appeal in relation to the pecuniary damages and pre‑judgment interest. H.L.’s cross‑appeal was dismissed except as it related to $6,500 in damages for future care: (2002), 227 Sask. R. 165, 2002 SKCA 131.

40 Writing for the court, Cameron J.A. noted that the appeal and cross‑appeal were based on s. 7(2)(a) and s. 13 of the 2000 Act. In his view, these provisions embody a legislative choice for an unlimited right of appeal, embracing every component of the decision at trial that engages s. 13 of the 2000 Act.

41 Cameron J.A. accepted the binding authority of Lensen, which was based on s. 8 of The Court of Appeal Act, R.S.S. 1978, c. C‑42 (“1978 Act”). Cameron J.A. acknowledged that s. 14 of the 2000 Act, which replaced s. 8, differed in syntax but not in substance from its predecessor. He noted that Lensen had been applied by the Saskatchewan Court of Appeal on innumerable occasions to limit the broad power of appellate review under s. 14 and its predecessor on issues of credibility. A trial judge’s assessment of credibility, he said, cannot be interfered with on appeal in the absence of palpable and overriding error.

42 Cameron J.A. was of the opinion, however, that no such limit governs inferences of fact and questions of mixed fact and law. This, he said, was the traditional view adopted by the Saskatchewan Court of Appeal, as evidenced by Markling v. Ewaniuk, [1968] S.C.R. 776, applied in Kosinski v. Snaith (1983), 25 Sask. R. 73 (C.A.).

43 Cameron J.A. acknowledged that a set of uniform national standards governing appellate review has evolved in Canada for inferences of fact and questions of mixed fact and law, but considered that Housen had extended the measure of appellate deference traditionally associated with findings of credibility to other components of the decision at trial. In his view, this trend toward increased deference required reconsideration, especially for Saskatchewan, where the right of appeal and the powers of the court to act on that right are set out in the 2000 Act.

44 Cameron J.A. regretted that the general standard of appellate review had shifted from appeal by way of rehearing, which he viewed as traditional in Saskatchewan, to the more deferential standard of review for error.

45 Cameron J.A. suggested that Housen underscores the divide between the current standards of judicially limited appellate review and the broad appellate power granted by the Saskatchewan legislature.

46 On the merits of the appeal, Cameron J.A. concluded that the award for pecuniary damages lacked an evidentiary foundation and therefore could not stand. He found the following errors in the trial judge’s awards of $117,337.09 for loss of past earning capacity and $179,190 for loss of future earning capacity:

1. The trial judge erred in failing to consider the plaintiff’s duty to mitigate.

2. The trial judge did not take into account the extent to which the defendant Mr. Starr’s wrongful acts contributed to the loss of earnings. He ought to have had regard for the possibility that H.L. would have been unable to cope with his alcohol-related problems irrespective of the sexual assault by Mr. Starr.

3. The trial judge awarded H.L. damages for loss of earning capacity while H.L. was incarcerated. In this regard, Cameron J.A. found that the trial judge had erred in attributing the plaintiff’s criminal behaviour to the wrongdoing of Mr. Starr.

4. The trial judge did not address the issue of whether the social assistance benefits received by H.L. constituted offsetting collateral benefits.

47 Acting on its own view of the evidence, the Court of Appeal held that H.L. had not established that he was wholly or largely unable to work because of the sexual abuse by Mr. Starr. In its view, the evidence simply proved that H.L. did not work during the first period (1978 to 1987) and worked only sporadically during the second period (1988 to 2000). An inference that Mr. Starr’s abuse caused H.L.’s reduced earning capacity would require more convincing evidence than was adduced in this case. The court found that H.L.’s sporadic work record was, in itself, as consistent with choice as with disability.

48 Finally, the court recalled that expert witnesses can provide opinion evidence only on matters within their recognized field of expertise. Beyond that, their opinion evidence is inadmissible and, if admitted, entitled to no weight. According to the Court of Appeal, the two expert witnesses in this case were allowed to “roam at large” and to express opinions that they were not qualified to give.

49 The Court of Appeal thus set aside the award of pecuniary damages on the ground that, on its assessment, the evidence fell short of proving the loss.

50 H.L. now appeals to this Court from the decision of the Court of Appeal.

V. Discussion

51 The appeal raises two main issues:

1. What is the correct standard of review by provincial appellate courts on questions of fact, and is that standard different for the Court of Appeal for Saskatchewan?

2. Did the Saskatchewan Court of Appeal misapply the governing standard to the trial judge’s findings of fact in this case?

A. The Applicable Standard of Review: Introduction

52 Fact finding in the litigation context involves a series of cerebral operations, some simple, others complex, some sequential, others simultaneous. The entire process is generally reserved in Canada to courts of first instance. In the absence of a clear statutory mandate to the contrary, appellate courts do not “rehear” or “retry” cases. They review for error.

53 The standard of review for error has been variously described. In recent years, the phrase “palpable and overriding error” resonates throughout the cases. Its application to all findings of fact — findings as to “what happened” — has been universally recognized; its applicability has not been made to depend on whether the trial judge’s disputed determination relates to credibility, to “primary” facts, to “inferred” facts or to global assessments of the evidence.

54 Nor has the standard been said to vary according to whether we are concerned with what Hohfeld long ago described as “evidential” or “constitutive” facts (see W. N. Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays (1923), at p. 32. Nor, put differently, has the standard been said to vary according to whether our concern is with direct proof of a fact in issue, or indirect proof of facts from which a fact in issue has been inferred.

55 “Palpable and overriding error” is at once an elegant and expressive description of the entrenched and generally applicable standard of appellate review of the findings of fact at trial. But it should not be thought to displace alternative formulations of the governing standard. In Housen, for example, the majority (at para. 22) and the minority (at para. 103) agreed that inferences of fact at trial may be set aside on appeal if they are “clearly wrong”. Both expressions encapsulate the same principle: an appellate court will not interfere with the trial judge’s findings of fact unless it can plainly identify the imputed error, and that error is shown to have affected the result.

56 In my respectful view, the test is met as well where the trial judge’s findings of fact can properly be characterized as “unreasonable” or “unsupported by the evidence”. In R. v. W. (R.), [1992] 2 S.C.R. 122, McLachlin J. (as she then was) explained why courts of appeal must show particular deference to trial courts on issues of credibility. At the same time, however, she noted (at pp. 131-32) that

it remains open to an appellate court to overturn a verdict based on findings of credibility where, after considering all the evidence and having due regard to the advantages afforded to the trial judge, it concludes that the verdict is unreasonable.

The statutory framework in criminal matters is, of course, different in certain respects. But as a matter of principle, it seems to me that unreasonable findings of fact — relating to credibility, to primary or inferred “evidential” facts, or to facts in issue — are reviewable on appeal because they are “palpably” or “clearly” wrong. The same is true of findings that are unsupported by the evidence. I need hardly repeat, however, that appellate intervention will only be warranted where the court can explain why or in what respect the impugned finding is unreasonable or unsupported by the evidence. And the reviewing court must of course be persuaded that the impugned factual finding is likely to have affected the result.

57 I find it helpful, in concluding on this point, to reproduce Professor Zuckerman’s summary of the governing principles in England:

As a general principle, an appeal court must not interfere with findings of fact made by the lower court for the simple reason that the judge who saw and heard the witnesses is better placed to assess their reliability and draw inferences from their testimony. An appeal court will interfere only if it concludes that no reasonable court could have reached such conclusions, or if the lower court failed to take crucial factors into consideration.

... It follows that, if the appeal court cannot conclude that the lower court’s inference from the primary facts was wrong, in the sense that it fell outside the range of inferences that a reasonable court could make, the appeal court should allow the lower court’s decision to stand. The nature of the appellate evaluation of the lower court’s decision will vary in accordance with the type of judgment that the lower court was called upon to make. But whatever the nature of the issues and however wide or narrow is the room for disagreement, the test remains the same: was the lower court’s decision wrong. ...

A decision will be wrong if it was founded on an incorrect interpretation of statute, or if it wrongly applied a legal principle, or if it was based on a plainly erroneous factual conclusion. ... Put another way, as long as the lower court’s conclusions represent a reasonable inference from the facts, the appeal court must not interfere with its decision.

(A. A. S. Zuckerman, Civil Procedure (2003), at pp. 765-68)

58 Moreover, procedural changes governing civil appeals in England that took effect in May of 2000 do not appear from subsequent decisions of the Court of Appeal to have altered substantially the previous approach to appellate review:

When the Court of Appeal heard appeals on questions of fact [under the old procedure] the court was essentially conducting a review of the findings made by the judge below ... . Our task [under the new regime] is essentially no different from what it was — we consider the judgment testing it against the evidence available to the judge and we ask, as we used to ask, whether it was wrong.

(Assicurazioni Generali SpA v. Arab Insurance Group, [2003] 1 W.L.R. 577, Ward L.J., at para. 195)

In determining whether or not the judgment appealed from was so “wrong”, whether under the new or the old regime,

the appeal court conducting a review of the trial judge’s decision will not conclude that the decision was wrong simply because it is not the decision the appeal judge would have made had he or she been called upon to make it in the court below. Something more is required than personal unease and something less than perversity has to be established. The best formulation for the ground in between where a range of adverbs may be used - “clearly”, “plainly”, “blatantly”, “palpably” wrong, is ... whether that finding by the trial judge exceeded the generous ambit within which reasonable disagreement about the conclusion to be drawn from the evidence is possible.