When a Newfoundland jury awarded Wanda Young $849,400 last year for having been wrongly labelled a possible child abuser, it was vindication and compensation rolled into one.

"I'll never forget that moment as long as I live," Ms. Young said. "A jury of my peers had sat for three weeks hearing all the evidence. Justice had been totally served."

Until last month, that is, when justice appeared to veer off the rails. In a head-scratching ruling, the Newfoundland Court of Appeal effectively supported Ms. Young's case, but cancelled the monetary award against Memorial University. She was left with nothing but grief and mounting legal bills.

"For the first few hours, I was in total disbelief,"she said in an interview. "I was totally devastated."

And the university has applied to have Ms. Young repay its legal costs both from the trial and the appeal.

That bill would run into the hundreds of thousands of dollars.

Ms. Young, 33, also faces having to repay $318,000 she has received so far from the award.

"The bizarre and unusual events which led to her trial . . . concern matters of national interest," Gillian Butler, Ms. Young's lawyer, said. "Perhaps this brave young woman was destined to carry this case all the way to the Supreme Court of Canada to have . . . her reputation cleared not just locally, but nationally." Ms. Butler expects to seek leave to appeal to the Supreme Court soon.

From the age of 7, Ms. Young dreamed of working with abused children in rural Newfoundland. She was on her way to achieving that goal when, in 1994, a professor at Memorial University abruptly informed her she was a dud.

"I was totally demoralized," Ms. Young recalled. "I felt that all my dreams had all gone out the window. . . . I went out in my car and cried."

What she did not know at the time was that quotes she had appended to a class essay had been interpreted by concerned faculty as a cryptic cry for help from a closet child abuser.

It would be two years before she was confronted with the allegation, a period during which communications flew back and forth between Memorial faculty, police and child-welfare officials.

When she was finally asked about the reference in the essay, she was dumbfounded. "I just couldn't believe I had actually been accused of something I'd stood so strongly against," said Ms. Young, who is married with two stepdaughters.

She instantly identified the addendum as a first-person account written by an abuser, which she had culled from a British Columbia text. She was shattered to learn that, over two years, investigators had gone so far as to question mothers of children she had babysat.

"I still can't believe they did all that," she said. "I just couldn't believe that nobody had contacted me."

Memorial University declined to apologize, Ms. Butler said. Ms. Young sued for defamation and negligence, severe anxiety, lost income, insomnia, paranoia and depression.

In response, lawyers for Memorial argued that Ms. Young was a mediocre student who had little chance of making it as a social worker. They also said that faculty were protected from liability by a law encouraging people to report suspected child abuse.

The jury thought otherwise and sided with Ms. Young.

The university appealed the jury's ruling, arguing that the award had been unreasonable, disproportionate and out of synch with the evidence.

When the province's Court of Appeal threw it out, Ms. Butler was flabbergasted. Simply getting a civil jury trial in Newfoundland is extremely rare, she said. It is that much rarer for a civil jury award to be overturned. But to have such an award overturned by an appeal court panel split in three different directions is probably without precedent.

In her reasons for judgment, Madam Justice B. Gale Welsh said the jury lacked proper grounds to make an award. She also agreed the university and faculty enjoyed immunity from legal action under the Child Welfare Act. She concluded there should be no new trial.

Judge Welsh noted in passing that the fiasco had been avoidable. "The file was transferred from person to person, and office to office for more than two years, with little apparent regard for confidentiality," she noted disapprovingly.

Mr. Justice Denis Robert held the opposite view — wholeheartedly endorsing the jury's findings. "The trial judge made no errors of law," he said. "The jury's findings of negligence were supported by the evidence. The award of general damages was not wholly 'out of proportion.' The other awards were supported by the evidence." Because he supported the verdict and award, he did not call for a new trial.

Mr. Justice Malcolm Rowe occupied a middle ground. He felt that the university did enjoy immunity in respect to reporting possible abusers. At the same time, he said a new jury ought to be assembled to consider whether the university's subsequent actions in deterring Ms. Young from staying in her program were negligent.

"In my view, the plaintiff should not be denied her day in court, which she will if this case cannot be heard," Judge Rowe concluded.

The upshot? Two of the three judges felt that Ms. Young had a genuine case to be tried. Yet she lost both her award as well as the possibility of a new jury hearing her case.

The legal anomaly set Ms. Young and Ms. Butler reeling. According to law, Ms. Butler said, the bar is quite sensibly set extremely high when it comes to overturning jury awards. Awards are impregnable unless they are "so plainly unreasonable and unjust as to satisfy the court that no jury reviewing the evidence as a whole and acting judicially could have reached it.

"In light of this test, Ms. Young was, naturally, extremely disappointed and has been under enormous stress," she said. "My client started her legal action in 1998 and . . . she put her complete faith in the judicial system.

"It is hard to deal with a situation where you have decisions that are as unusual as this."

After her university life was upended, Ms. Young has worked in a succession of office jobs and contract positions. She is currently on a short-term contract in the client-services section of the provincial Labour and Employment Ministry.