Bazley v Curry: The Supreme Court of Canada Decision That Defined Vicarious Liability for Institutional Abuse in Healthcare and Therapeutic Settings

Most legal precedents address what happened. A small number address why it should matter, and those are the ones that reshape entire areas of law. Bazley v Curry is one of the latter. The case did not involve a physician, a hospital, or a medication. It arose from the abuse of a child in a residential care facility. But the principle it established (that an institution can bear legal responsibility for harm caused by an employee it did not negligently hire and could not have anticipated would cause harm) has reached deep into Canadian institutional liability law, and into the law governing hospitals, psychiatric facilities, psychotherapy practices, and every other setting in which vulnerable people are placed under the authority and care of trusted professionals.

This article explains what Bazley v Curry decided, how Justice McLachlin’s unanimous judgment established the enterprise risk test for vicarious liability, why it matters for institutional healthcare liability in Canada, and where the current limits of the doctrine sit.

What Is Vicarious Liability and Why Was It Unsettled Before Bazley?

The Basic Concept

Vicarious liability is the legal doctrine under which one party (typically an employer or organization) is held responsible in law for the wrongful acts of another party (typically an employee), even though the organization committed no fault of its own. It is a form of strict liability. The organization may have done everything right: hired carefully, supervised attentively, and dismissed the wrongdoer immediately upon discovery of misconduct. None of that is a defence. If the conditions for vicarious liability are met, the organization bears the legal consequences of its employee’s wrong.

As Justice McLachlin opened her unanimous judgment in Bazley: “It is tragic but true that people working with the vulnerable sometimes abuse their positions and commit wrongs against the very people they are engaged to help. The abused person may later seek to recover damages for the wrong. But judgment against the wrongdoer may prove a hollow remedy.” The wrongdoer may be deceased, insolvent, uninsured, or simply unable to pay meaningful compensation. The doctrine of vicarious liability exists so that this practical reality does not leave the victim without recourse.

The Legal Landscape Before 1999

Before Bazley, the governing test for vicarious liability in Canada derived from the traditional Salmond test, which held that an employer is vicariously liable for an employee’s act if it was either authorized by the employer, or so connected to an authorized act that it could be characterized as an improper mode of performing that authorized act. As chambers judge Lowry J. described the test at the BC Supreme Court level: “An employee’s wrongful conduct is said to fall within the course and scope of his or her employment where it consists of either (1) acts authorized by the employer or (2) unauthorized acts that are so connected with acts that the employer has authorized that they may rightly be regarded as modes (although improper modes) of doing what has been authorized.”

This test worked reasonably well for straightforward workplace misconduct. It broke down, however, when applied to intentional and deeply personal wrongs like sexual abuse. A pedophile’s abuse of a child in his care cannot be characterized as an improper mode of bathing or tucking children into bed. The acts are not just unauthorized; they are categorically contrary to everything the institution stands for. Yet the victim’s harm is real and often catastrophic, and the perpetrator may be unable to pay. The traditional test produced inconsistent results across Canadian courts: some found organizations liable, others did not, and the reasoning on both sides was strained.

Bazley v Curry was decided precisely to correct this. Justice McLachlin, writing for a unanimous court, set out a principled framework for determining when an organization is vicariously liable for the intentional wrongdoing of an employee, grounded explicitly in policy as well as the Salmond test.

The Facts: A Residential Care Worker, a Vulnerable Child, and an Institution That Did Not Know

The Children’s Foundation and Its Mission

The Children’s Foundation was a non-profit organization. It operated two residential care facilities for the treatment of emotionally troubled children between the ages of six and twelve. As substitute parent, it practised what McLachlin J. described as “total intervention” in all aspects of the lives of the children it cared for. The Foundation authorized its employees to act as parent figures for the children. It charged them to care for the children physically, mentally and emotionally. The employees were to do everything a parent would do, from general supervision to intimate duties like bathing and tucking in at bedtime. The children in the Foundation’s care were entirely dependent on the Foundation and its staff.

Mr. Curry and the Abuse

The Foundation hired Mr. Curry, a pedophile, to work in its Vancouver home. The Foundation did not know he was a pedophile. It checked and was told he was a suitable employee. Into this environment came the child Patrick Bazley, young and emotionally vulnerable. As McLachlin J. described it: “Curry began a seduction. Over the months, step by subtle step, bathing became sexual exploration; tucking in in a darkened room became sexual abuse.”

Someone complained about Curry. The Foundation inquired and upon verifying that Curry had abused a child in one of its homes, immediately discharged him. Curry was subsequently convicted of 19 counts of sexual abuse, two of which related to Bazley. Curry died after the litigation commenced.

The Litigation and the Foundation’s Position

Bazley sued the Foundation for compensation for the injury he suffered while in its care. The Foundation’s defence was direct: it had committed no fault in hiring or supervising Curry, and was therefore not legally responsible for what he had done. The parties agreed to state a case to determine whether, assuming the Foundation was not, in fact, negligent, it was nonetheless vicariously liable for its employee’s tortious conduct.

The British Columbia Supreme Court (Lowry J.) found the Foundation vicariously liable. The British Columbia Court of Appeal upheld that decision. The Foundation appealed to the Supreme Court of Canada, which heard the case alongside its companion decision, Jacobi v Griffiths, 1999 CanLII 693 (SCC), involving a recreational club and a program director who had abused children under his charge. The two cases were decided on the same day with different outcomes, illuminating exactly where the line of liability runs.

The Decision: Justice McLachlin’s Enterprise Risk Test

Moving Beyond the Salmond Test Alone

Justice McLachlin wrote the unanimous judgment. She began by acknowledging the inadequacy of the Salmond test standing alone in cases like this. Whether sexual abuse by a childcare worker was or was not a “mode” of performing authorized care was a question the Salmond test could not answer without descending into fiction: the same facts could be characterized either way depending on the level of generality chosen. McLachlin J. was unsparing about this: “Important legal decisions should not turn on such semantics.”

What was needed was an explicit policy analysis. Vicarious liability, McLachlin J. reasoned, is a form of strict liability, imposed without fault on the part of the employer. To justify imposing such liability, it is not enough to trace a technical connection between an authorized and an unauthorized act. The court must ask whether the imposition of liability serves the underlying policy rationales that justify vicarious liability in the first place. Drawing on the work of tort scholar J.G. Fleming, she identified two such rationales:

• Providing a just and practical remedy for harm: “A person who employs others to advance his own economic interest should in fairness be placed under a corresponding liability for losses incurred in the course of the enterprise.” The victim, who is innocent, should have access to a solvent defendant who can meaningfully compensate them, not just the judgment against an individual wrongdoer who may be unable to pay.
• Deterrence of future harm: Organizations are in a position to design, supervise, and modify their operations to reduce the risk of employee misconduct. Holding them legally responsible for the consequences of those risks gives them a direct financial incentive to take that responsibility seriously. “Holding the employer vicariously liable for the wrongs of its employee may encourage the employer to take such steps, and hence, reduce the risk of future harm.”

The Two-Step Test

Having articulated the policy foundation, McLachlin J. set out the governing analytical framework as a two-step test:

Step One: Are there precedents from comparable cases that unambiguously determine whether this type of situation should attract vicarious liability? If existing cases clearly resolve the question on one side or the other, the court applies that precedent.

Step Two: If precedent does not provide a clear answer, determine whether vicarious liability should be imposed by reference to the broader policy rationales. The central question is whether there is a sufficient connection between the enterprise the employer created and the wrong the employee committed: specifically, whether the employer’s enterprise materially increased the risk of the employee’s wrongdoing.

McLachlin J. was explicit that purely incidental connections to employment would not suffice: “Incidental connections to the employment enterprise, like time and place (without more), will not suffice.” What is required is that the enterprise materially enhanced the risk, not merely provided a but-for context for the harm.

The Five Factors for Sufficient Connection

On the question of whether a sufficient connection exists, McLachlin J. identified five factors for courts to consider in cases involving intentional torts by employees (para. 41 of the judgment). These are not a checklist; they are guidance toward the central question of whether the enterprise materially increased the risk of the wrong:

• (a) The opportunity the enterprise afforded the employee to abuse power: Did the structure of the employment, the setting, or the duties give the employee unusual access, authority, or opportunity to commit the wrong? An employer who places an employee in prolonged intimate contact with a vulnerable person (alone, for extended periods, with authority over their most private routines) has materially contributed to the opportunity for abuse.
• (b) The extent to which the wrongful act may have furthered the employer’s aims: Was the wrong embedded in the performance of the tasks the employee was engaged to perform? This factor does not require that the employer benefited from the wrong, only that the wrong was connected to the work itself.
• (c) The extent to which the wrongful act was related to friction, confrontation, or intimacy inherent in the enterprise: Some workplaces inherently involve emotional intensity, physical contact, or authority over vulnerable individuals. Where the enterprise itself creates these conditions, the risk of their misuse is a foreseeable consequence of the employer’s design choices.
• (d) The extent of power conferred on the employee in relation to the victim: Greater power creates greater risk. “The more an enterprise requires the exercise of power or authority for its successful operation, the more materially likely it is that an abuse of that power relationship can be fairly ascribed to the employer.”
• (e) The vulnerability of potential victims to wrongful exercise of the employee’s power: The law recognizes that children, residents of care facilities, patients in psychiatric treatment, and people in therapeutic relationships are especially susceptible to abuse precisely because of the relationship the institution creates with them. Greater vulnerability strengthens the connection between the enterprise’s design and any harm that results.

As to how these factors apply specifically to sexual abuse, McLachlin J. stated the governing test clearly: “The test for vicarious liability for an employee’s sexual abuse of a client should focus on whether the employer’s enterprise and empowerment of the employee materially increased the risk of the sexual assault and hence the harm.” The test must not be applied mechanically but with sensitivity to the policy considerations of fair compensation and deterrence.

Applying the Test to the Children’s Foundation

On the facts before it, the Supreme Court found the connection between the Foundation’s enterprise and Mr. Curry’s abuse to be clear and strong. At paragraph 58 of the judgment:

“The opportunity for intimate private control and the parental relationship and power required by the terms of employment created the special environment that nurtured and brought to fruition the sexual abuse. The employer’s enterprise created and fostered the risk that led to the ultimate harm.”

The Foundation had placed its employee in a setting of total parental authority over children aged six to twelve who were emotionally troubled and dependent. It had authorized and required him to engage in the most intimate aspects of their daily care: bathing, bedtime routines, nighttime supervision. It had created an environment in which physical proximity to vulnerable children during their most private moments was not only permitted but mandated. The Foundation’s enterprise materially increased the risk that a person with predatory intentions would find, in that setting, precisely the opportunity and access they sought.

The Foundation had not known Curry was a pedophile. It had acted immediately when it discovered the abuse. None of that changed the analysis. Vicarious liability is not about the employer’s fault. It is about the employer’s enterprise and the risk that enterprise created.

Rejecting the Non-Profit Exemption

The Foundation argued that non-profit organizations operating in the public interest should be exempt from vicarious liability. McLachlin J. dismissed this argument directly. From the perspective of the innocent victim, the Foundation’s meritorious purpose did not diminish the reality that “its institution, however meritorious, put the respondent in the intimate care of Mr. Curry and in a very real sense enhanced the risk of his being abused.” As between the victim and the institution that created and managed the risk, it was fairer that the institution bear the legal responsibility.

The suggestion that victims must remain remediless for the greater benefit of charitable organizations was, in McLachlin J.’s words, “crass and unsubstantiated utilitarianism.” The Court left it expressly to the legislature, not the courts, to consider whether statutory relief should be granted to limit non-profit organizations’ legal exposure, if Parliament or provincial legislatures determined that appropriate.

The Companion Case: Jacobi v Griffiths, and Why It Came Out Differently

Decided on the same day under the same framework, Jacobi v Griffiths, 1999 CanLII 693 (SCC), [1999] 2 SCR 570, reached a different conclusion on liability, and understanding why illuminates where the Bazley test draws its line.

In Jacobi, a program director at a recreational children’s club had sexually abused children in his charge. The abuse took place primarily at the employee’s private home and during recreational outings, not within a residential care setting. The Supreme Court found no vicarious liability on a 4-3 majority.

The critical distinction was the nature of the enterprise. The recreational club did not create conditions of intimate, total parental authority over vulnerable children in the way the residential care Foundation did. The director’s job did not give him the degree of physical proximity, comprehensive power, or intimate control that was required by Mr. Curry’s position. The enterprise had not materially increased the risk of sexual abuse in the same way.

Together, Bazley and Jacobi illustrate the test’s boundary: it is not enough that an organization employs someone who has access to vulnerable people. What matters is whether the organization designed a role that created the specific conditions of power, intimacy, and dependency that made the harm materially more likely. For the full analysis of the Jacobi decision, including the three-justice dissent, see the companion article in this series.

Why Healthcare Institutions Are Directly Affected by Bazley

The Enterprise Risk Framework in Healthcare Settings

Bazley v Curry did not arise in a hospital or clinic. But its application to healthcare institutions follows directly from the principle McLachlin J. articulated. Healthcare settings (hospitals, psychiatric facilities, residential care homes for persons with disabilities, addiction treatment centres, psychotherapy clinics, and long-term care facilities) share with the Children’s Foundation precisely the features that attracted liability in Bazley: they create environments of intimate authority, they place vulnerable people in dependent relationships with care providers, and they deliberately empower their employees to have physical and psychological access to those people that members of the general public do not have.

The question that Bazley requires courts to ask in any institutional healthcare claim involving employee misconduct is not whether the institution knew about the misconduct, but whether the institution’s enterprise materially increased the risk of it. In many healthcare settings, the honest answer is yes.

Hospitals and Employed Staff

A teaching hospital employing residents and interns bears vicarious liability for their negligent acts in the course of their employment, without the need to establish separate fault in hiring or supervision. The enterprise risk analysis supports this clearly: a teaching hospital creates precisely the conditions in which residents exercise medical authority over patients, often with limited supervision and under significant time pressure.

The boundary is important. Staff nurses, residents, interns, and other directly employed hospital personnel attract clear vicarious liability for their employing institution. Physicians who hold hospital privileges but are not employees of the hospital (the independent contractor model that governs most attending physicians in Canada) do not attract vicarious liability in the same way. The hospital’s enterprise did not create their professional relationship with patients in the same direct sense.

Psychiatric Institutions and Residential Mental Health Settings

Residential psychiatric settings share the defining features that drove the Bazley analysis: patients are admitted in states of acute psychological vulnerability; the institution authorizes staff to have physical access to patients’ bodies and personal spaces during intimate moments including toileting, bathing, dressing, and nighttime routines; the institution creates a relationship of total dependency for the duration of admission; and staff members hold formal authority over significant aspects of the patient’s daily life, medication, and movement within the facility.

A psychiatric institution that employs staff who commit sexual misconduct, physical abuse, or other wrongs against patients does not escape vicarious liability by demonstrating that it conducted background checks and was unaware of the employee’s predatory nature. The Bazley question is whether the enterprise created the conditions for the harm. In a residential psychiatric setting designed on a total-care model, the answer will almost always be yes.

Psychotherapy and the Therapeutic Relationship

The therapeutic relationship in psychotherapy creates one of the most explicit power asymmetries in any professional context. Patients disclose their deepest vulnerabilities. Therapists hold positions of trust, authority, and emotional significance that are deliberately cultivated as part of the therapeutic work. The transference dynamic is not incidental to therapy; it is a recognized clinical phenomenon with which trained therapists are expected to work responsibly.

A clinic that employs a therapist and creates the conditions of the therapeutic relationship (the private office, the regular intimate sessions, the cultivated trust and power asymmetry) has created an enterprise that materially increases the risk of the abuse of that power. Where a therapist employed in that setting commits sexual misconduct, the Bazley analysis supports holding the institution vicariously liable. This runs alongside, not in replacement of, regulatory consequences before professional disciplinary bodies.

Long-Term Care, Disability Services, and Elder Care

Long-term care facilities and disability service organizations sit in perhaps the closest factual proximity to the Children’s Foundation on the Bazley spectrum. Their residents are physically and often cognitively vulnerable; they are entirely dependent on staff for their most intimate daily needs; they are often isolated from family; and the institution authorizes staff to provide intimate personal care, such as bathing, toileting, dressing, and assisting with sleep, in settings that are essentially private.

The Bazley enterprise risk test applies with full force in these settings. An institution operating a long-term care facility whose staff member abuses a resident cannot escape vicarious liability by showing it did not know. If the institution’s design materially increased the risk of the abuse, the institution bears the legal consequences.

The International Reach of the Decision

The impact of Bazley v Curry extended beyond Canada. In 2001, the House of Lords in England and Wales decided Lister v Hesley Hall Ltd [2001] UKHL 22, involving sexual abuse of children by a warden at a boarding school. The House of Lords cited Bazley v Curry with approval, adopting the sufficient connection approach that McLachlin J. had articulated and moving away from the more rigid traditional Salmond test. The enterprise risk framework has since influenced vicarious liability jurisprudence across multiple common law jurisdictions.

The Current Limits of the Bazley Principle

Bazley v Curry established that organizations can be vicariously liable for the intentional wrongs of their employees where the enterprise materially increased the risk of those wrongs. It does not establish unlimited institutional liability. Several limiting principles constrain the doctrine:

• The enterprise must materially increase the risk, not merely provide opportunity: McLachlin J. was clear that “mere opportunity” in the but-for sense does not suffice: “the enterprise and employment must not only provide the locale or the bare opportunity for the employee to commit his or her wrong, it must materially enhance the risk.” The Jacobi decision illustrates this clearly.
• Independent contractors are treated differently from employees: The employment relationship, or a sufficiently close relationship that resembles employment in the relevant respects, must exist. Practitioners who operate with a degree of professional independence that prevents the close enterprise connection Bazley requires may not attract vicarious liability against the institution they work within.
• The test is not mechanical: McLachlin J. directed that the test must be applied with sensitivity to the policy considerations of just compensation and deterrence, not as a checklist. Courts must assess whether holding the institution liable would, on the specific facts, serve those goals.
• Coincidental wrongs do not engage the doctrine: Where an employee commits a wrong essentially independent of the employment relationship, unconnected to the authority, access, or power the institution conferred, the employer is not vicariously liable. No subsequent Supreme Court of Canada decision has retreated from the Bazley framework, and Canadian courts continue to apply the McLachlin two-step test and the five-factor analysis across a wide range of institutional settings.

Conclusion: A Case That Changed Who Answers for Institutional Harm

Bazley v Curry did not create vicarious liability. That doctrine has existed in the common law for centuries. What it did was explain it: clearly, honestly, and in terms that have proven durable across more than two decades and multiple jurisdictions. Justice McLachlin’s enterprise risk framework, her explicit grounding of a no-fault liability doctrine in the policy goals of just compensation and deterrence, and her direct rejection of the argument that charitable organizations should be insulated from the consequences of the risks their programs create, transformed what had been a technically awkward doctrine into a principled and practically powerful tool for holding institutions accountable.

In the context of medical malpractice and institutional healthcare law, Bazley v Curry stands for one of the most important propositions in the field: an institution which creates the conditions for harm cannot escape responsibility for that harm simply by demonstrating that it did not authorize or know about the individual act. The enterprise it designed, the authority it conferred, and the vulnerability it placed in the hands of its employees are its own choices. When those choices facilitate harm to the people the institution was meant to protect, the law holds the institution responsible.

For anyone involved in litigation arising from harm in a hospital, a psychiatric facility, a long-term care home, a residential treatment setting, or a psychotherapy practice, Bazley v Curry is one of the foundational building blocks of any serious institutional claim.

Quick Reference: Bazley v Curry

Case Details

• Citation: Bazley v Curry, 1999 CanLII 692 (SCC), [1999] 2 SCR 534
• CanLII: https://canlii.ca/t/1fqlw | File No.: 26013
• Decided: June 17, 1999 | Heard: October 6, 1998
• Judgment: McLachlin J. (unanimous)
• Present: L’Heureux-Dubé, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie JJ.
• On appeal from the Court of Appeal for British Columbia

The Parties

• Appellants: The Children’s Foundation (non-profit residential care facility, British Columbia); the Superintendent of Family and Child Services; Her Majesty The Queen in Right of British Columbia
• Respondent: Patrick Allan Bazley (former resident; victim of employee abuse)
• Mr. Curry (the individual wrongdoer) died after the litigation commenced
• Interveners: Her Majesty The Queen in Right of Alberta; the Canadian Conference of Catholic Bishops; the United Church of Canada; the General Synod of the Anglican Church of Canada; Wunnumin Lake First Nation; William Richard Blackwater et al.; Barrie Caldwell, Samuel McNab and Glen Pelletier

The Facts

• The Children’s Foundation operated two residential care facilities for emotionally troubled children aged 6-12 in British Columbia
• It practised “total intervention”: employees acted as substitute parents in all aspects of children’s lives, including bathing and bedtime routines
• The Foundation hired Mr. Curry, a pedophile, to work in its Vancouver home; it did not know he was a pedophile and had checked — it was told he was a suitable employee
• Upon complaint and investigation, the Foundation immediately discharged Curry
• Curry was convicted of 19 counts of sexual abuse, two of which related directly to Bazley
• The parties stated a case on the assumption the Foundation was NOT negligent; vicarious liability was the only issue before the courts

Outcome

• Appeal dismissed; matter remitted to trial
• The Children’s Foundation was vicariously liable for Mr. Curry’s sexual abuse of Bazley despite committing no fault in hiring or supervising him

The McLachlin Two-Step Test

• Step 1: Do existing precedents clearly resolve whether this situation attracts vicarious liability?
• Step 2: If not, does the employer’s enterprise materially increase the risk of the employee’s wrongdoing? Apply the five factors below

The Five Factors (para. 41 of the judgment)

• (a) The opportunity the enterprise afforded the employee to abuse power
• (b) The extent to which the wrongful act may have furthered the employer’s aims
• (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

The Two Policy Rationales (J.G. Fleming, adopted by McLachlin J.)

• Providing a just and practical remedy for victims who would otherwise face a hollow judgment against an insolvent or deceased wrongdoer
• Deterring future harm by placing financial consequences on institutions that create enterprise risk, incentivizing safer organizational design

Key Passage from the Judgment (para. 58)

• “The opportunity for intimate private control and the parental relationship and power required by the terms of employment created the special environment that nurtured and brought to fruition the sexual abuse. The employer’s enterprise created and fostered the risk that led to the ultimate harm.”

What Is NOT Sufficient for Vicarious Liability

• Time and place alone: the mere fact a wrong occurred during working hours or on employer premises
• Mere opportunity in the but-for sense: the enterprise must materially enhance the risk, not merely provide background context
• A coincidental or random wrong essentially unconnected to the nature of the enterprise and the employee’s responsibilities

Application to Healthcare and Therapeutic Settings

• Hospitals are vicariously liable for negligent and intentional acts of employed residents, interns, nurses, and other directly employed staff
• Psychiatric facilities and residential mental health settings attract vicarious liability for staff misconduct arising from conditions of intimate authority the institution creates
• Long-term care and disability service facilities with total authority over vulnerable residents are subject to the full force of the Bazley enterprise risk analysis
• Psychotherapy clinics employing therapists in private sessions with psychologically vulnerable patients are within the Bazley framework when therapist misconduct occurs
• Independent contractor physicians with hospital privileges are treated differently from employed staff and may not attract vicarious liability against the hospital on the same basis

International Influence

• Cited with approval by the House of Lords in Lister v Hesley Hall Ltd [2001] UKHL 22 (England and Wales), which adopted the sufficient connection approach to reshape English vicarious liability law

Companion and Related Cases in This Series

• Jacobi v Griffiths, 1999 CanLII 693 (SCC), [1999] 2 SCR 570: decided the same day; no vicarious liability where the enterprise (recreational club) did not create the same conditions of intimate authority as in Bazley; see companion article in this series
• Donoghue v Stevenson [1932] AC 562: the foundational neighbour principle and duty of care underlying vicarious liability in care settings
• Ahmed v Stefaniu, 2006 CanLII 34973 (ON CA): duty of psychiatric institutions to third parties; related institutional liability framework
• Wenden v Trikha, 1991 CanLII 13111 (AB QB): foundational Canadian case on the duty of psychiatric institutions to foreseeable third-party victims