Punishment may not be imposed in a civilized community without a justification

Punishment may not be imposed in a civilized

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Punishment may not be imposed in a civilized community without a justification in law. The only basis for the imposition of such punishment must be a finding of the commission of an actionable wrong which caused the injury complained of by the plaintiff. [Emphasis added.] This view, McIntyre J. said (at p. 1106), "has found approval in the Restatement on the Law of Contracts 2d in the United States", which reads as follows: Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is also a tort for which punitive damages are recoverable. [Emphasis added.] Applying these principles in Vorvis, McIntyre J. stated, at p. 1109: Each party had the right to terminate the contract without the consent of the other, and where the employment contract was terminated by the employer, the appellant was entitled to reasonable notice of such termination or payment of salary and benefits for the period of reasonable notice. The termination of the contract on this basis by the employer is not a wrong in law and, where the reasonable notice is given or payment in lieu thereof is made, the plaintiff -- subject to a consideration of aggravated damages which have been allowed in some cases but which were denied in this case -- is entitled to no further remedy ... . [Emphasis added.] Wilson J., with whom L'Heureux-Dubé J. concurred, dissented. She did not agree "that punitive damages can only be awarded when the misconduct is in itself an 'actionable wrong'". She stated, at p. 1130: [page639] In my view, the correct approach is to assess the conduct in the context of all the circumstances and determine whether it is deserving of punishment because of its shockingly harsh, vindictive, reprehensible or malicious nature. Undoubtedly some conduct found to be deserving of punishment will constitute an actionable wrong but other conduct might not. 79 In the case at bar, Pilot acknowledges that an insurer is under a duty of good faith and fair dealing. Pilot says that this is a contractual duty. Vorvis, it says, requires a tort. However, in my view, a breach of the contractual duty of good faith is independent of and in addition to the breach of contractual duty to pay the loss. It constitutes an "actionable wrong" within the Vorvis rule, which does not require an independent tort. I say this for several reasons.
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Page 25 of 44 Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 80 First, McIntyre J. chose to use the expression "actionable wrong" instead of "tort" even though he had just reproduced an extract from the Restatement which does use the word tort. It cannot be an accident that McIntyre J. chose to employ a much broader expression when formulating the Canadian test. 81 Second, in Royal Bank of Canada v. W. Got & Associates Electric Ltd., [1999] 3 S.C.R. 408, at para. 26, this Court, referring to McIntyre J.'s holding in Vorvis, said "the circumstances that would justify punitive damages for breach of contract in the absence of actions also constituting a tort are rare" (emphasis added). Rare they may be, but the clear message is that such cases do exist. The Court has thus confirmed that punitive damages can be awarded in the absence of
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