Bahadar v Real Estate Council of Alberta, 2021 ABQB 395

Court of Queen’s Bench of Alberta Citation: Bahadar v Real Estate Council of Alberta, 2021 ABQB 395 Date: 20210519 Docket: 1901 03119 Registry: Calgary Between: Zafar Bahadar Plaintiff/Respondent - and - Real Estate Council of Alberta, Bob Myroniuk, Drew Saly, Cheryl Ann Rumpel, Field Law LLP, Gregory Sim, Lily Nguyen and Jason J. Kully Defendants/Appellants _______________________________________________________ Reasons for Decision of the Honourable Madam Justice C. Dario _______________________________________________________ I.

Introduction [ 1 ] The Appellants, the Real Estate Council of Alberta (“ RECA ”), Bob Myroniuk, Drew Saly, and Cheryl Ann Rumpel , who at all material times were employees of RECA (collectively, the “ RECA Defendants ”), and Field Law LLP (“ Field ”), Gregory Sim, Lily

Nguyen and Jason J. Kully, who at all material times were employees of Field (collectively, the “ Field Defendants ”), are defendants to an action commenced by the Respondent, Zafar Bahadar. Mr. Bahadar claims the Appellants are liable for malicious prosecution in respect of an investigation (the “ Investigation ”) and subsequent conduct proceedings taken by RECA against him. Field was counsel hired by RECA to prosecute the misconduct allegations against Mr. Bahadar. [ 2 ] The Appellants sought to strike all or a portion of Mr. Bahadar’s lengthy Statement of Claim pursuant to Rule 3.68(2)(

b) on the grounds that it disclosed no reasonable claim against them . Master Prowse dismissed the application finding that “ the defendants have not met the high onus on them to establish that there is no reasonable prospect that Bahadar’s claim will succeed”: Bahadar v Real Estate Council of Alberta , 2019 ABQB 633 at para 6 . II. Issues [ 3 ] The question before me is whether the Master erred in declining to strike all or a portion of the Statement of Claim. More specifically, the Appellants raise three issues: (

a) Did the Master err in finding that malicious prosecution could apply to a provincial self-regulating body? (

b) Did the Master err in determining that the allegations in the Statement of Claim could establish the tort of malicious prosecution? (

c) Did the Master err in failing to strike the defamation claim and other allegedly irrelevant aspects of the Statement of Claim? III. Factual Background [ 4 ] On an application to strike, the applicant is precluded from submitting evidence: Rule 3.68(3). With limited exceptions, for purposes of the application, the Court assumes that the allegations in the Statement of Claim are true: Olson Lemons LLP v Kearl , 2012 ABQB 95 at para 28 .

This Court previously has set out some exceptions to this general principle: G renon v Canada Revenue Agency , 2016 ABQB 260 (“ Grenon QB ”) at paras 32 - 34 , varied on other grounds Grenon v Canada Revenue Agency , 2017 ABCA 96 (“ Grenon CA ”) , leave to appeal to SCC refused [2017] SCCA No 184. Thus, the only facts I am to consider on this application are those in the Statement of Claim and the relevant legislation. [ 5 ] Certain facts are undisputed.

RECA is a statutorily-established body that, inter alia , sets and enforces standards of conduct for the real estate industry and the business of its members to promote industry integrity and to protect against, investigate, detect and suppress industry related mortgage fraud : Real Estate Act , RSA 2000, c R-5 (the “ Act ”, being the version in force between 2010 and 2015) now RSA 2000 c R-15, s. 3 and 5 . At all material times, Mr.

Bahadar was a real estate associate/agent registered with RECA. [ 6 ] On September 23, 2009, RECA received a written complaint from a third party (the “ Complainant ”) about verbal advice the Respondent allegedly had given her in August 2007 regarding purchasing and obtaining a mortgage for a house (the “ Complaint ”). Pursuant to s. 38 of the Act , subject to limited exceptions (see s.38.1(1)), RECA was obligated to initiate an investigation. RECA appointed the Defendant Ms. Rumpel to conduct that investigation. [ 7 ] Ms. Rumpel prepared a “Final Report” dated December 6, 2011, alleging that Mr.

Bahadar had orchestrated some kind of mortgage fraud. [ 8 ] Thereafter, the matter lay dormant until October 2015, when RECA retained the Field Defendants to prosecute Mr. Bahadar in a conduct p roceeding. The Defendant Ms. Saly, RECA’s general counsel, provided instructions to the Field Defendants. The Defendants Mr. Sim and Ms. Nguyen prepared the Notice of Hearing in respect of the conduct proceeding. [ 9 ] On August 20, 2018, in support of the conduct proceeding, Ms. Rumpel swore an affidavit prepared by Mr. Sim (the “ Rumpel Affidavit ”). Mr.

Bahadar alleges that the Rumpel Affidavit contains statements that are false or misleading or are not based on Ms. Rumpel’s personal knowledge. [ 10 ] A disciplinary hearing was held on October 25, 2018 (the “ Disciplinary Hearing ”), by which time, RECA had been handling the Complaint for more than nine years and the allegations therein were more than 11 years old. The Defendant Mr. Kully argued on behalf of RECA that Mr. Bahadar had contributed to this delay. The hearing panel found that there had been inordinate delay, resulting in “significant legal prejudice” to Mr.

Bahadar and granted a permanent stay of proceedings. The merits of the Complaint were not adjudicated and RECA did not appeal the stay decision. [ 11 ] Mr. Bahadar filed the Statement of Claim on March 4, 2019. The RECA Defendants filed a Statement of Defence on May 7, 2019. The Field Defendants have not filed a Statement of Defence pending the outcome of this Appeal. IV. Standard of Review [ 12 ] All parties agree that the standard of review on an appeal from a Master is correctness, but they advocate different

approaches. The RECA Defendants argue that an appeal from a Master is a de novo hearing and this Court can determine the matterafresh without deference. The Respondent argues that a Master’s decision should not be disturbed unless there is a clear error in theinterpretation of the law, a palpable and overriding error of fact, or some other appropriate reason to vary the decision: Infante v Dzogov,2016 ABQB 41 at para 19. [13] This issue has received considerable judicial attention and the confusion appears to stem from comments by Côté, JAin Bahcheli v Yorkton Securities, 2012 ABCA 166 at para 3.

Justice Hollins of this Court aptly articulated the issue in Steer v ChicagoTitle Insurance Company, 2019 ABQB 318 at paras 8 and 10: With respect to my colleagues, I do not read Justice Cote’s words as saying that an appeal from the Master to our Court is anautomatically an appeal de novo but rather that the low threshold for the introduction of new evidence on appeal dooms the true “appealon the record” to be the exception rather than the rule.

Because appellants can amplify the record relatively easily and because thestandard of review is correctness which does not require deference to the Master’s decision, I agree that it looks less like an appeal on therecord and more like an appeal de novo. But it is not. …. In this case, there was no application to add new evidence to the record. The above discussion serves primarily to highlight theproblematic nomenclature of “de novo” which has taken root in these appeals.

It also means that I am not hearing the matter anew butrather determining whether or not, based on the record, the Master’s decision was correct. [14] My view on this remains as I set out in Bank of Montreal v Rajakaruna, 2014 ABQB 415 at para 22. Rule 6.14(3) is clearthat the appeal is on the record.

Where fresh evidence is adduced, however, the appeal judge can consider the new evidence and re-weigh all the evidence, in effect resulting in a de novo hearing. [15] In the present case, the Appellants have not and cannot make a fresh evidence application, so the appeal is on the record:Boyko v Boyko, 2021 ABQB 266 at Para 6.

Accordingly, it would be appropriate for me to proceed in the manner set out by the Court ofAppeal in HOOPP Realty Inc v Emery Jamieson LLP, 2020 ABCA 159 at para 41: Where an appeal from a master’s decision to a chambers judge involves the same record and the same submissions, it is not an error for achambers judge to summarily describe his or her analysis and conclusions with reference to the master’s decision if he or she otherwisefinds that it was correct in fact and law. In taking this approach, the chambers judge here did not defer to the masters’ (sic) decision orapply any other standard of review. V.

Law and Analysis [16] The onus on a party seeking to strike a statement of claim is high. The test is whether there is any reasonable prospect that theclaim will succeed, erring on the side of generosity in permitting novel claims to proceed: see HOOPP Realty Inc v Guarantee Co ofNorth America, 2015 ABCA 336 at para 13. The Appellants bear the burden of establishing that it is beyond doubt the claim will fail:Hunt v Carey Canada Inc, (SCC), [1990] 2 SCR 959 at paras 18, 20, 30, 33, and 47-48; and Tottrup v Lund, 2000ABCA 121 at paras 6-7.

In applying this test, the Court treats the allegations in the Statement of Claim as true: Tottrup at para 8; Clark vHunka, 2017 ABCA 346 at para 20. [17] At para 32 through 34 of Grenon (QB), I set out the following principles applicable to an application to strike: 1. The Court must assume the facts plead are true, but this assumption does not extend to bald allegations, to legal conclusions or tospeculations, absurdities, highly implausible statements or statements incapable of proof. 2. Making conclusory statements without evidence is an abuse of process and such statements should be struck. 3.

Improper reference to terms such as "maliciously" and "recklessly" also constitutes an abuse of process and such terms should bestruck unless they are relevant to the cause of action alleged. 4. Where a plaintiff's statement of claim includes contradictory facts that cannot both be true, such contradictory allegations neednot be accepted by the Court. 5. The Court is not obligated to assume that an alleged fact is true where that allegation is contrary to a statutory directive. 6.

There may be additional bases upon which the Court ought properly to reject a plaintiff’s allegations of “fact”; the categories arenot closed.

7. The Court should not be quick to dismiss novel claims. 8. The entire contents and context of a pleading must be considered and a minute, line-by-line analysis may not be appropriate. [18] In Grenon (CA) at paras 6 and 7, the Court of Appeal articulated similar principles: When applying the test under r 3.68(2)(b), the Court must accept the allegations of fact as true except to the extent the allegations arebased on assumptions or speculations or where they are patently ridiculous or incapable of proof.

Moreover, the Court must err on theside of generosity in applying the test and permit novel, but arguable, actions to proceed: R v Imperial Tobacco Canada Limited, 2011SCC 42 at paras 19-21; Ernst v EnCana Corp, 2014 ABCA 285 at para 14, aff’d 2017 SCC 1. That is consistent with the underlying philosophy of the Alberta Rules of Court, including that the rules are intended to be used toidentify the real issues in dispute and to facilitate the quickest means of resolving a claim at the least expense: r 1.2(2)(

a) and (b). … [19] In considering an application to strike a statement of claim, the Court must follow a two-step process. The Court must firstdetermine whether a pleading discloses no reasonable cause of action. Only if that is the case should the Court the determine which ofthe four Orders it should make: see Olson Lemons at para 35. [20] The Statement of Claim in this case is lengthy and the objections numerous. I will consider this application on the basis of theobjections raised by the Appellants, rather than by reviewing the Statement of Claim paragraph by paragraph.

a) Did the Master err in finding that malicious prosecution could apply to aprovincial self-regulating body? [21] The Master found that the law on whether malicious prosecution could apply to a provincial self-regulating body wasunresolved in Alberta and refused to strike Mr. Bahadar’s claim on that basis. For the reasons that follow, I find the Master was correctin this determination. [22] Mr. Bahadar argues that the predominant trend in Canadian jurisprudence supports allowing malicious prosecution claims toproceed against provincial self-regulating bodies.

He refers to the oft-cited comments in Stoffman v Ontario Veterinary Association(1990), (ON SC), 73 OR (2d) 737 at paras 13, 18 and 19: In view of the clearly stated opinion of the Supreme Court of Canada that an action for malicious prosecution can lie even against theAttorney General and his agents Crown Attorneys there cannot be any policy reason why a professional disciplinary body should haveabsolute immunity from such suits… . . . a complaint which tended to slander his professional and personal character and would constitute the type of prosecution that couldsupport an action for malicious prosecution… It is also a fact that the plaintiff was put to the expense, aggravation and disturbance of retaining counsel and to defend himself againstpotentially having his professional career adversely affected… [23] The RECA Defendants note that all of the cases considered by the Master were preliminary motions to strike and that there isno reported decision in which a public administrative body has been found liable for the tort of malicious prosecution. [24] The RECA Defendants argue that all these decisions were considered by the Court in New Brunswick Real EstateAssociation v Estabrooks, 2014 NBCA 48 (leave to appeal refused, [2014] SCCA No 404) in finding at para 40 that, while provincialself-regulating disciplinary bodies should not be given absolute immunity from tortious liability for misuse of their power, that tortiousliability should not be framed in malicious prosecution.

The RECA Defendants assert that Estabrooks is the leading case in Canada andsets out the proper position, which should be adopted by this Court. [25] I do not agree that Estabrooks settles the law in Canada. The New Brunswick Court of Appeal in Estabrooks, afterconsidering Stoffman and other cases, stated at para 40: ...I am not convinced that the law in Canada is now settled such that professional disciplinary bodies and individuals who initiateproceedings before such bodies do not have immunity from suits for malicious prosecution.

The majority of the cases cited in support ofthis proposition cite Stoffman, a single case of the former High Court of Justice, now the Supreme Court of Ontario, as authority. Theproposition has received appellate consideration in only two other jurisdictions, Nova Scotia and Prince Edward Island.

Of course eventhese views, though informative, are not binding on this court. [26] The Court went on at para 41 to refer to the English case of Gregory v Portsmouth City Council, [2000] UKHL 3, stating thattortious liability for provincial self-regulating disciplinary bodies should not be framed in malicious prosecution and that this tort shouldnot be extended beyond criminal proceedings in part because, under English law, it had never been so extended: In English law the tort of malicious prosecution has never been held to be available beyond the limits of criminal proceedings and specialinstances of abuse of civil legal process.

Specifically, it has never been extended to disciplinary proceedings of any kind. [Emphasisadded.]

[27] The Court concluded at para 58 that “...an action for malicious prosecution cannot lie against a provincial self-regulatingdisciplinary body for the actions taken by members of its disciplinary committee in the course of their duties.” [28] This finding in Estabrooks was followed by the British Columbia Supreme Court in Johar v College of Veterinarians ofBritish Columbia, 2020 BCSC 1085, saying at para 174, “As well, per Estabrooks, the tort is only available in criminal or quasi-criminal prosecutions.” This statement, however, was obiter as the Court found at para 175 that “...Johar’s claim for maliciousprosecution against all defendants is dismissed because it is statute barred.” [29] Contrary to the situation before the Court in Gregory, however, it would be inaccurate to suggest that, in Canada, the tort ofmalicious prosecution has never been extended to disciplinary proceedings of any kind.

Both before and after Estabrooks, the courts inAlberta and other Canadian jurisdictions have left open the possibility that the tort of malicious prosecution may be available beyondcriminal proceedings. In some of these cases, the courts have cited Stoffman; see, for example, Alevizos v Manitoba ChiropractorsAssociation et al, 2009 MBQB 116, Robson v Law Society of Upper Canada, 2016 ONSC 5579 at para 46, Griffin v City ofSummerside et al, 2008 PESCAD 14 at para 12, Benalcazar v Tahtadjian, [1997] OJ No 4498, O(

J) v Alberta, 2013 ABQB 693 atparas 40-56 (albeit indirectly), and Ali v Attorney General, 2019 ONSC 807. In Ali, the Court stated at para 53: I appreciate that the tort of malicious prosecution is most commonly brought in criminal prosecutions. However, the initiated"proceeding" need not be a criminal one. It is not a closed list.

This tort has been brought in professional disciplinary matters, childprotection cases, and bankruptcy proceedings. [30] In other cases, the courts have allowed malicious prosecution claims to proceed without reference to Stoffman; see, forexample, Estrin v Law Society of Alberta, 1995 ABCA 429 , [1995] 174 AR 379 (CA), Khanna v Royal College of DentalSurgeons of Ontario (2000), (ON CA), 47 OR (3d) 95 (CA), (leave to appeal refused [2000] SCCA No 244, DC vChildren’s Aid Society of Cape Breton Victoria, 2009 NSCA 73 and, more recently, Clark, in which the Court of Appeal assumedmalicious prosecution was available in respect of a disciplinary proceeding but struck the claim for failing to establish two of the fournecessary elements (much like in Estrin and in DC).

Almost 100 years prior to Stoffman, the Court in McCarthy v Barter (1895), 15CLT 198 (NWTSC) at p 199 found it was at least fairly open to argument that an action for malicious prosecution could lie incircumstances beyond criminal proceedings and the limited exceptions available at that time. [31] Contrary to the RECA Defendants’ position, I agree with the Master that the law in this area is not settled and that Mr.Bahadar’s claim is not bound to fail on this ground. [32] The RECA Defendants point to various policy concerns with extending the scope of malicious prosecution to a publicadministrative body’s disciplinary proceedings, as enumerated by the Court in Estabrooks at para 48.

They argue that this Court ispositioned to determine this issue and that the policy analysis in Estabrooks should convince this Court to adopt its reasoning andconclusion. [33] I agree that there are policy issues with applying this tort to self-regulating professional bodies. The Courts must find the rightbalance between two countervailing interests of high social importance: safeguarding the individual from being harassed by unjustifiablelitigation versus encouraging individuals to aid in enforcement of law and related standards by offering protection from correspondinglitigation: see Estabrooks at para 19.

While absolute immunity can encourage public trust and confidence in the impartiality of those inpositions of authority, public confidence could suffer if they are shielded from liability when they abuse their power, particularly wheresuch abuses affect an individual’s livelihood. There is good reason for the courts to take a cautious approach and to maintain a highhurdle in respect of this rare claim.

Courts should be at least as reluctant to permit malicious prosecution claims in civil suits as incriminal matters: Estabrooks at para 25. [34] These policy reasons combined with the strictness of the test may be why there has yet to be a successful claim of this type inCanada. On this appeal, however, it is not my function to evaluate those concerns. Rather, my role is to assess whether the Master erredin concluding that the law in Canada does not preclude such a claim.

I find that Estabrooks does not definitively settle the law and I seeno reviewable error in the Master’s conclusion. [35] Further, some of the policy considerations weighed by the Court in Estabrooks were particular to the statute in question andthe rules of that jurisdiction or were otherwise inapplicable to the circumstances before me. That Court’s concern about prolonginglitigation is eclipsed by the nine-year conduct proceedings in this case. The Court was concerned that malice is difficult to prove, but thelaw in Alberta is clear that this is not grounds for striking a claim.

And while that Court posited that allowing malicious prosecutionclaims would stifle volunteerism for professional associations, the defendants in the present case are paid employees. Even had I thediscretion to decide on this issue at this time, it would not be appropriate for me to engage in that kind of exercise with the limitedsubmissions and evidence before me in this proceeding. An assessment of that kind would require further evidence and should beundertaken at trial or, at minimum, at a trial of the issue.

b) Did the Master err in determining that the allegations contained within theStatement of Claim could establish the tort of malicious prosecution? [36] A trilogy of cases from the Supreme Court of Canada has established four elements of malicious prosecution: Nelles vOntario, (SCC), [1989] 2 SCR 170, Proulx c Quebec (procureur général), 2001 SCC 66 and Miazga v Kvello Estate,2009 SCC 51. Those elements are:

a) The prosecution must be initiated by the defendant or the defendant must be actively instrumental in setting the prosecution inmotion.

b) The prosecution must have been resolved in favour of the plaintiff.

c) There is an absence of reasonable and probable cause.

d) The defendant has acted with malice. [ 37 ] The Supreme Court has made clear that there is an onerous and strict burden on a malicious prosecution claimant to prove each element of the test: Nelles para 50, 52 . A wrongful prosecution without “much more” will not support a claim for malicious prosecution. See Nelles at para 42 ; Proulx at para 8 . [ 38 ] Malicious prosecution remains a rare action with a high evidentiary threshold.

T he majority in Proulx noted at para 35 that a suit for malicious prosecution must be based on “more than recklessness or gross negligence … [I]t requires evidence that reveals a willful and intentional effort on the Crown’s part to abuse or distort its proper role within the criminal justice system.” I n Miazga , the Supreme Court noted at para 51 that the tort will provide a remedy when a Crown prosecutor’s actions are “so egregious that they take the prosecutor outside his or her proper role as minister of justice.” [ 39 ] Similar evidence of willful and intentional effort to abuse or distort a proper role in disciplinary proceedings is required to succeed in this claim.

That said , on the application to strike, the Appellants bear the burden of establishing that there is no reasonable prospect that the claim will succeed, that it is beyond doubt that it will fail: Clark at para 20 and HOOPP at para 13. [ 40 ] The Appellants argue that many of the paragraphs of the Statement of Claim should be struck for various reasons and that, without them, Mr. Bahadar cannot establish the requisite elements of the claim with the result that the entire claim should be struck. A. Preliminary Issues

i) Ad hoc Crown Prosecutors [ 41 ] Two issues lend themselves to preliminary determination. First, at para 16 of the Statement of Claim, Mr. Bahadar states the following: At all material times, Sim directed and instructed Nguyen and Kully. Further, each of Sim, Nguyen and Kully functioned as ad hoc Crown Prosecutors and were subject to the Crown Prosecutors’ Manual governing Alberta Crown Prosecutors (the “Crown Prosecutors Manual”). [ 42 ] He reiterates this characterization at other points in the Statement of Claim.

At para 57, he states the following: At all material times, Sim, Nguyen and Kully functioned as ad hoc Crown Prosecutors.

As such, they knew or ought to have known full well about their ethical duties as set out in the Crown Prosecutors Manual, including the duties of remaining objective throughout every stage of a prosecution, only pursuing prosecutions in respect of which there are reasonable and probable grounds to believe the outcome will be a conviction, moving prosecutions forward on a timely and diligent basis, and exercising prosecutorial discretion consistent with the public interest. [ 43 ] In his brief, Mr. Bahadar argues that this allegation must be presumed correct for purposes of the striking application.

He acknowledges that the Field Defendants were retained by the Executive Director and that they are not agents of the Crown, but asserts that they “have provided no legal authority to suggest that this precludes them from being characterised as ad hoc Crown Prosecutors or precludes them from being subject to the Crown Prosecutors Manual.” In oral submissions, Mr. Bahadar argues that this position is justified because the Field Defendants were performing a prosecution role under the Act at an administrative disciplinary hearing with statutory sanctions.

No further argument or case law was provided as to how that might alter the role of counsel. [ 44 ] With respect, this is the kind of bald allegation to which I referred in Grenon QB . Given that it is acknowledged the Field Defendants were retained by RECA and that RECA is not a Crown agent, Mr. Bahadar’s characterization of the Field Defendants as ad hoc Crown Prosecutors goes beyond a mere allegation of fact.

In Grenon QB at para 26 , I quoted as follows from Hovsepian v Westfair Foods Ltd , 2001 ABQB 700 at para 28 : While the Plaintiffs state that all allegations in the Claim must be taken as proved, the Defendants propose two limits on that principle: (1) bare allegations with no facts need not be taken as proved; and (2) speculative facts or those incapable of proof need not be taken as proved. In my view, the Defendants are correct on both points. [ 45 ] Moreover, Mr.

Bahadar’s assertion that the Field Defendants were subject to the duties set out in the Crown Prosecutors Manual is not so much a fact as a legal conclusion. As the Field Defendants note in their brief, a conclusion is not a material fact; Al- Ghamdi v Alberta , 2017 ABQB 684 at paras 116-119 . I am not required, for purposes of this appeal, to assume that conclusion is correct and there are no further facts, arguments or other basis in either the Statement of Claim or Mr. Bahadar’s submissions to substantiate it.

While the Court ought not strike novel claims prematurely, something further was required to maintain this claim. What would suffice in each case will depend upon the particular facts, but in this case, I have nothing upon which to rely. [ 46 ] I recognize that the Master did not make this finding. There is no reference to the issue in his decision; perhaps he did not turn his attention to it. Nevertheless, as the above-cited paragraph from Infante indicates, a Master’s decision should not be disturbed on appeal unless there is a clear error in the

interpretation of the law, a palpable and overriding error of fact or some other appropriate reason to vary the decision . In my view, in the absence of some further basis to ground it, Mr. Bahadar’s assertion that the Field

Defendants are ad hoc Crown Prosecutors is unsustainable, which provides an appropriate reason to vary the Master’s decision on this point. [ 47 ] Accordingly, I find it appropriate to strike those portions of Mr. Bahadar’s Statement of Claim that refer to this allegation. These are as follows: 1. That portion of paragraph 16 reading “Further, each of Sim, Nguyen and Kully functioned as ad hoc Crown Prosecutors and were subject to the Crown Prosecutors’ Manual governing Alberta Crown Prosecutors (the “Crown Prosecutors Manual”).”; 2. In paragraph 43(d), the words “and ad hoc Crown Prosecutors”; 3.

In paragraph 44(e), the words “i.e. the ad hoc Crown Prosecutor”; 4. The entirety of paragraph 57. [ 48 ] The Appellants further argue that since the Field Defendants could not be both ad hoc Crown prosecutors and retained to represent RECA and/or the Executive Director, these claims are inconsistent and contradictory. They assert that the Court has discretion to reject both claims: Grenon (QB) at para 32. No one, however, disputes that the Field Defendants were retained to represent RECA and/or the Executive Director.

While the Court has discretion to reject incompatible and contradictory claims, it ought not reject claims that are not in dispute even if a contradictory allegation may be struck. There is no basis to strike the portion of the claim referring to the Field Defendants being retained to represent RECA and/or the Executive Director. ii) Statutory Protections [ 49 ] Second, the Appellants argue that certain statutory provisions obviate all or part of Mr. Bahadar’s claim. They submit that the claim, or parts thereof, that are unavailable in light of these statutory provisions should be struck.

These provisions relate to statutory immunity and limitations periods. [ 50 ] The Appellants argue that the statutory immunity set out in s 78 of the Act defeats the entirety of Mr. Bahadar’s claim. That immunity, however, applies only to “any act done in good faith in the performance or intended performance of any duty or the exercise or intended exercise of any power under the Act , the regulations, the bylaws or the rules,” or to “any neglect or default in the performance or exercise in good faith of the duty or power”. This immunity, premised as it is on good faith, provides no protection if Mr.

Bahadar is able to establish malice. [ 51 ] The Appellants acknowledge that s 81(4) of the Act permits a prosecution within three years after an alleged offence, but not thereafter. They argue that since a rule violation is not an enumerated offence under the Act , the proceeding in this case was not a “prosecution” with the result that RECA was subject to no time limitation in investigating, initiating or concluding the conduct proceedings.

They refer to my statement in Grenon (QB) at para 32 that “The Court is not obligated to assume that an alleged fact is true where that allegation is contrary to a statutory directive”. I am well positioned to find that this is an inappropriate extension of the statement in Grenon (QB) . The provision of the Income Tax Act at issue in that case deemed tax assessments to be valid unless varied or set aside. Therefore, I found that the Court was not obliged to, and indeed could not, accept a contrary assertion in a statement of claim. The provision in question here is quite different.

Even assuming, without deciding, that conduct proceedings are not a prosecution under the Act and that the limitation period does not apply, it does not follow that pursuing a conduct proceeding following inordinate delay cannot give rise to a claim for malicious prosecution. Such a claim is not precluded by the inapplicability of the limitation period and is not bound to fail on that basis. [ 52 ] I turn now to the four elements of the test for malicious prosecution. The Appellants take the position that Mr. Bahadar’s claim is doomed to fail on all four elements.

B) Initiating Proceedings [ 53 ] The Appellants argue that Mr. Bahadar cannot establish that they initiated the proceedings against him. They assert that the Executive Director of RECA, Mr. Myroniuk, was obligated under s 38 of the Act to commence an investigation after receipt of the Complaint. In my view, this does not necessarily defeat Mr. Bahadar’s claim.

Section 38.1(1) of the Act gives the Executive Director some discretion to refuse to investigate a complaint where, inter alia , there is insufficient evidence of a breach (see Real Estate (Ministerial) Regulation , Alta Reg 113/1996, s. 21 ). In addition, s 39.1 of the Act gives the Executive Director full discretion as to whether to commence a disciplinary hearing. [ 54 ] For their part, the Field Defendants argue that, under the Act , only the Executive Director has the power to decide whether to commence a proceeding.

Thus, they argue, this element of the test has not been met with respect to any of the other Appellants. [ 55 ] Mr. Bahadar asserts that each of the Appellants was actively instrumental in commencing and/or continuing the proceedings against him. He notes that the Court in Estabrooks held that merely forwarding a complaint to the complaints committee was not sufficient involvement on the part of the registrar to meet the test. In contrast, he points to the extent of Ms. Rumpel’s involvement.

He alleges that she was the investigator, that she prepared the report intended to convince the Executive Director to take proceedings and that she swore a false affidavit in opposition to his stay application. Mr. Bahadar asserts that, as Executive Director, Mr. Myroniuk had full control over the initiation and continuation of the conduct proceedings, though he delegated some duties and functions to Ms.

Rumpel, Ms. Saly, and the Field Defendants. He alleges that Mr. Sim and Ms. Nguyen, as legal counsel to the Executive Director, with the assistance of Ms. Saly as internal counsel, prepared the Notice of Hearing that commenced the Disciplinary Hearing.

I do not accept the Appellants’ assertion that it is contradictory to assert that more than one person was involved in preparation of this notice, or that the client directing counsel precludes counsel recommending and advising the client of a course of action. [ 56 ] The Supreme Court of Canada held as follows in Miazga at para 53 : …it is only those who were “actively instrumental” in setting the law in motion that may be held accountable for any damage that results...

As against a Crown prosecutor, the initiation requirement will be satisfied where the defendant Crown makes the decision to commence or continue the prosecution of charges laid by police, or adopts proceedings started by another prosecutor: Clerk & Lindsell on Torts (19th ed. 2006), at p. 979; J. G. Fleming, The Law of Torts (9th ed. 1998), at p. 677. [Emphasis added.] [ 57 ] Miazga pertained to a criminal matter.

The Appellants argue that merely continuing an action is insufficient to satisfy the first element of the test in the present context, relying on Estabrooks at para 40 and that Court’s conclusion that an action for malicious prosecution cannot lie against a provincial self-regulating disciplinary body . Our Court of Appeal, however, in Clark at para 26 adopted the wording from Miazga in a disciplinary hearing context, noting “only those who were ‘ actively instrumental’ in initiating the prosecution” would be subject to a malicious prosecution claim.

It further held that it remains an open issue whether the actions of independent counsel to a professional tribunal are sufficient to meet the “initiation” element of malicious prosecution. This bolsters my view that Estabrooks did not definitively settle the law on the application of this tort. [ 58 ] While the Court found on the facts of Clark that counsel’s role was insufficient (counsel had not been retained and was not in any way involved in the decision to commence the proceedings against Clark) , the facts alleged in the present case are materially different. Mr.

Bahadar alleges that the Field Defendants were retained to represent the Executive Director for the purpose of advancing the Complaint to the Disciplinary Hearing and provided legal advice including recommending, advising and approving of prosecution of the Complaint. [ 59 ] I find that Mr. Bahadar has plead sufficient facts in the Statement of Claim with respect to the conduct of each of the Appellants that his claim that each of them was instrumental in commencing and/or continuing the conduct proceedings is not bound to fail.

Whether those assertions are accurate and whether the facts, if proven, are sufficient to establish this element of the tort are determinations for a later day. [ 60 ] Accordingly, I find that the Master was correct to find the Appellants have not established it is beyond doubt that the claim will fail due to this element of the test.

C) Resolved in Favor of Plaintiff [ 61 ] The Appellants assert that the Master did not address either this or the third element of the malicious prosecution test. They argue that since the hearing panel permanently stayed the proceedings, the matter was never adjudicated and Mr. Bahadar cannot show that it was resolved in his favour. [ 62 ] None of the parties was able to provide a case directly on point.

Case law examples provided where the plaintiff was found to meet the second part of the test were limited to: a finding of wrongful conviction of the accused ( Best v Lancaster , 2015 ONSC 6269 at para 73 ); a stay of the prosecution ( Gordon v Canada , 2019 FC 853 at para 252 ); an acquittal ( Jordan v Alberta (Minister of Justice and Solicitor General) , 2013 ABQB 160 at para 14 ); prosecutions which have ended in the withdrawal of charges due to lack of evidence ( Turton v Hanson , 2016 ABQB 343 at para 150 ); and the withdrawal of charges due to an abuse of process by the complainant ( Ferreira v Marcos , 2014 ONSC 1536 at para 54 ).

In each of those circumstances, the matter was found to be determined in the plaintiff’s favour. In contrast, the fact that some charges were dismissed but others remained was not sufficient to find the plaintiff met this element of the test ( Brummell v Williams , 2014 ONSC 5733 , at paras 15 , 18). [ 63 ] While similar in some respects to a stay of prosecution, there appears to be no authority clearly stating that a permanent stay of proceedings either meets or fails the second element of the test. Thus, this is correctly characterized as a novel claim.

Again, the onus in this striking application is on the Appellants and the Court must err on the side of permitting novel, arguable claims to proceed: Knight v Imperial Tobacco , 2011 SCC 42 at para 21 . [ 64 ] Although I have my own views on whether this element is satisfied, it will be up to the trial judge hearing this matter to determine whether, in all of the circumstances, it would be just to allow a disciplinary body to be absolved of liability in malicious prosecution by deferring a matter for almost a decade, including where the investigation has been publicly announced on the RECA website during that period. [ 65 ] I find that the permanent stay of proceedings could be sufficient to satisfy this element of the claim and the Master was correct in finding that the claim is not bound to fail due to this element of the test.

D) Absence of Reasonable and Probable Cause [ 66 ] A claimant in malicious prosecution must establish that there was no reasonable and probable cause for pursuing the prosecution. This test imports both subjective and objective elements. The prosecutor must have a subjective belief that there is reasonable and probable cause and that belief must be reasonable in the circumstances : Nelles at para 44 .

Significantly, however, on a strike application, the claimant is not obligated to prove the absence of reasonable and probable cause, but must only provide some particulars in support of this assertion: Al-Ghamdi at para 118 . Again, the Appellants must establish that there is no reasonable prospect that Mr. Bahadar’s claim will succeed. [ 67 ] The Appellants cite Al-Ghamdi at para 114 and submit that Mr. Bahadar’s Statement of Claim makes bald assertions and broad conclusory statements that cannot be proven or supported by the facts and should therefore be struck. In particular, they argue that

Mr. Bahadar relies on the Complainant’s lack of credibility, but assert that the Complainant was not found to be unreliable or lacking in credibility. This is unhelpful. Since the Disciplinary Hearing did not proceed, there naturally was no finding by the Hearing Panel. Whether Ms. Rumpel found the Complainant credible is not of assistance given that her findings are part of what is in question in this claim. Further, Mr.

Bahadar has plead various alleged facts on which a court could make an assessment of this issue, including a specific example of the Complainant’s alleged perjury and reference to documents that could be produced at trial. I reject the Appellants’ argument that Mr. Bahadar’s statements are merely bald assertions. These statements must be read in context of the entire Statement of Claim and not parsed paragraph by paragraph to determine whether something is a bald assertion.

A trial court may conclude that these assertions have not been proved or are not sufficient in light of evidence proffered by the Appellants, but that is not a determination to be made on an application to strike. [ 68 ] Further, Mr. Bahadar has plead that the inordinate delay in this matter contributed to an absence of reasonable and probable cause and cited numerous alleged facts in support of this assertion. The Appellants did not address this issue and, consistent with the Master’s decision, I find, have not established that Mr. Bahadar’s pleading is bound to fail.

E) Malice [ 69 ] The Appellants argue that Mr. Bahadar’s Statement of Claim does not show that they acted with malice. The level of specificity required to support a claim of intentional wrongdoing appears to be somewhat greater than for other claims. At para 31 of Clark, the Court of Appeal described the requirement as follows: …While a court is generally entitled to rely on the contents of the pleading in assessing whether it establishes a reasonable claim, an exception to that rule exists in the case of allegations of bad faith or malice.

It is insufficient to allege conclusions in these instances without describing the evidence that, if proven true, would establish these claims.

As this Court stated in Walton International Group Inc v Rockyview (Municipal District No 44) , 2007 ABCA 21 at para 12 , 32 MPLR (4th) 55 , “[a] bare allegation of bad faith, without any pleaded facts in support, and without some particulars , is inadequate: Tottrup ... at para. 11 .” This principle applies with equal force to claims of malice.” [Emphasis added.] [ 70 ] In Clark at para 32 , the Court of Appeal, citing GH v Alcock , 2013 ABCA 24 at para 58 , described the evidence required to be plead: Very briefly, this intentional tort [misfeasance in public office] requires proof of deliberate, unlawful conduct in the exercise of public functions and awareness that the conduct is unlawful and likely to injure the plaintiff....

Moreover, it is not sufficient for a statement of claim to merely make bald allegations that recite the basic elements of the tort in very general terms but fails to provide material facts sufficient to demonstrate an intentional wrongdoing by a specific public officer aimed at those who complain of the officer’s conduct. [ 71 ] At para 29 of his decision, the Master set out several of Mr. Bahadar’s allegations and found that, on the basis of these allegations, the Appellants had failed to establish that the claim had no reasonable prospect of success.

At para 30, he offered this clarification: To be clear, I am not ruling that the allegations from which I have just quoted (and must presume to be true) constitute malice. What I am ruling is that it is not clear that they do not constitute malice. In other words, in light of the allegations which are presumed to be true, there is a reasonable prospect that Mr. Bahadar’s claim will succeed. [ 72 ] The Appellants assert that the Master found, in essence, that Mr. Bahadar’s allegations, if proven true, could constitute malice, but not that they would constitute malice.

They argue that this is insufficient. [ 73 ] I disagree. In my view, the Appellants’ position is tantamount to saying that, to resist an application to strike, a party claiming bad faith or malice must provide sufficient evidence to effectively prove its claim. That is asking Mr. Bahadar to prove more than is necessary at this point and is contrary to the test for striking as established in the case law. Additionally, requiring a definitive conclusion risks placing the Master in the position of effectively prejudging the case.

In my view, the Court of Appeal’s reference in Clark to the need for “some particulars” is instructive in delineating the necessary level of specificity in the alleged facts. If the facts plead could make out the elements of malice, that is sufficient for the purpose of a striking application. [ 74 ] Relying on Clark , paras 31 and 32 , the Appellants also argue that Mr. Bahadar claim must fail as he has not plead any particulars of the improper purpose or motive of the Appellants sufficient to prove that the proceedings were undertaken for an improper purpose. Mr.

Bahadar counters that his pleadings need not particularize a clear improper motive or purpose, but need only provide a demonstration of an improper motive or purpose in the facts that are particularized. [ 75 ] In Nelles , the Supreme Court at para 52 noted: Therefore it seems to me that the "chilling effect" argument is largely speculative and assumes that many suits for malicious prosecution will arise from disgruntled persons who have been prosecuted but not convicted of an offence.

I am of the view that this "flood-gates" argument ignores the fact that one element of the tort of malicious prosecution requires a demonstration of improper motive or purpose ; errors in the exercise of discretion and judgment are not actionable. … [Emphasis added.] [ 76 ] In cases of malicious prosecution, it would be difficult in most cases for the aggrieved party to know the motivation behind the conduct of the prosecuting party at the pleadings stage.

Imposing an obligation to set out the particulars of the intent of the defendant before any questioning or disclosure occurs seems to be an insurmountable obstacle except in the rarest of instances. Where the particulars plead lead to a demonstration of an improper motive or purpose, those facts are sufficient to satisfy this component of the test. In this case, Mr.

Bahadar points to the suppression of evidence as well as the false statements in the Rumpel Affidavit as sufficiently demonstrating an improper motive or purpose. [ 77 ] Malice is difficult to define and has been the subject of some inconsistent descriptions. The Court of Appeal in Clark at para

32 described it as “ deliberate, unlawful conduct in the exercise of public functions and awareness that the conduct is unlawful and likely to injure the plaintiff”. The Supreme Court of Canada in Proulx at paras 34-35 stated that malice must be based on more than recklessness or gross negligence and requires evidence that reveals a willful and intentional effort on the Crown’s part to abuse or distort its proper role within the criminal justice system.

In Nelles at p 172, the Supreme Court stated that it requires not only “proof of an absence of reasonable and probable cause for commencing the proceedings, but also proof on an improper purpose or motive, a motive that involves an abuse or perversion of the system of criminal justice for ends it was not designed to serve and as such incorporates an abuse of the office of the Attorney General…”.

The Court in Estabrooks at para 70 adopted statements that malice requires something more than “the hasty formation of a belief in the guilt of a plaintiff based on unreasonably insufficient grounds” and that “[m] alice involves a primary purpose other than carrying the law into effect. It has a wider meaning than spite, ill-will, or a spirit of vengeance, and includes any other improper purpose”. I would state the matter slightly differently from Estabrooks .

In my view, spite, ill-will or a spirit of vengeance combined with a willful and intentional effort on a prosecutor’s part that abuses or distorts his proper role within the disciplinary system will satisfy the definition of malice. [ 78 ] For purposes of this fourth element of the test, it will be expedient to consider the RECA Defendants and the Field Defendants separately. [ 79 ] The allegations against the RECA Defendants include: making false and misleading statements, particularly in the Rumpel Affidavit that gave the impression the Executive Director had a reasonable excuse for not bringing the disciplinary proceedings on a timely basis ; pursuing the claim despite inordinate delay; concealing Mr.

Bahadar’s exculpatory evidence while presenting only the Complainant’s version; in the case of Mr. Myroniuk and Ms. Saly, putting Ms. Rumpel up to swearing a false affidavit and concealing from her two affidavits from Mr. Bahadar. [ 80 ] I find that these allegations are adequately particularized and, if true, potentially sufficient to make out malice. In other words, Mr. Bahadar’s malicious prosecution claim is not bound to fail as against the RECA Defendants in respect of this element of the test. [ 81 ] With respect to the Field Defendants, the allegations include: in the case of Mr.

Sim, preparing a false affidavit to be sworn by Ms. Rumpel and participating in the concealment of Mr. Bahadar’s affidavits from her; in the case of Mr. Kully, making baseless arguments at the stay application with the intention of misleading the Hearing Panel about the Executive Director's prosecutorial delay; and, in respect of all of Mr. Sim, Ms. Nguyen and Mr. Kully, wilfully and in breach of their duties, perpetrating an obstruction and perversion of justice and of Mr.

Bahadar's right to a fair hearing, which brought RECA's administration of justice into disrepute. [ 82 ] I find that the facts alleged against Mr. Sim and Mr. Kully, if true, are potentially sufficient to ground a case for malice. The allegations against Ms. Nguyen specifically are weaker. On balance, however, I conclude that the “some particulars” standard has been met with respect to her as well. [ 83 ] Viewing the totality of the facts plead, I find that, if true, they are potentially sufficient to prove malice. Mr.

Bahadar alleges not merely involve the Appellants’ hasty formation of belief in guilt based on unreasonably insufficient grounds, but a persisting belief on seemingly questionable grounds during which various of the Appellants stepped beyond the bounds of their role in asserting positions that they knew or ought to have known were not true, seemingly to serve a purpose other than that granted by the Act , namely t o set and enforce standards of conduct for the industry in order to promote its integrity and to protect consumers: Act s. 5 (a) . [ 84 ] Accordingly, I find that the Master was correct in his conclusion that the Appellants have not shown that Mr.

Bahadar’s claim of malice has no reasonable prospect of success.

c) Did the Master err in failing to strike the defamation and other aspects of the Statement of Claim? [ 85 ] As stated above, this appeal is a review on the record. For the most part, the arguments before this Court closely tracked those made before the Master. Notably, however, none of the filed materials before the Master addressed striking the defamation claim or other aspects of the Statement of Claim. While it was raised in oral argument, the Appellants were clear that the “real fight” was with respect to the malicious prosecution claim. [ 86 ] Before me, the Appellants assert that Mr.

Bahadar has not met the requirements necessary to plead defamation. More precisely, he did not specify the publications and the defamatory words at issue. As such, they argue that all references to defamation should be struck from the pleadings. [ 87 ] I n Alberta, a defamation pleading must give particulars: R 13.7(f). In Arcelormittal Tubular Products Roman SA v Canadian Natural Resources Ltd , 2013 ABQB 578 , this Court noted that specificity is particularly important in pleadings for defamation actions.

At para 25, the Court held: …Defamation pleadings must contain the details of the publication including the words published by the defendant, the time, place and manner of publication, and to whom the publication was made, so as to provide the defendant with adequate notice of the specific occurrence constituting the wrong. … [ 88 ] While some of Mr. Bahadar’s allegations refer to defamation, the comments in question also may be relevant to the case for malice. Based on my review of the record, I find the Master was correct in declining to strike Mr.

Bahadar’s allegation that the items posted on the RECA website may have tended to lower his reputation in the eyes of a reasonable person and in concluding that this may be relevant to Mr. Bahadar’s argument that the Appellants’ conduct was malicious. As such, it is premature to strike references to defamatory statements. [ 89 ] Notwithstanding that one purpose of a strike application is to narrow the proceedings to the real issues in dispute, given the limited discretion I have in an appeal of this nature, and given the references to defamation will remain in for the purpose of the

malicious prosecution claim, it is for a future court to determine whether Mr. Bahadar’s allegations are sufficient to ground a claim in defamation. It will be necessary, inter alia , for that Court to determine whether referring to RECA’s own website publications pertaining to Mr. Bahadar are sufficient to meet the test set out in Arcelormittal Tubular of sufficient notice of the specific occurrence(

s) constituting defamation. [ 90 ] The Appellants also argued before the Master that references to negligence should be struck from Mr. Bahadar’s Statement of Claim. The Master concluded at para 6 that “the defendants have not met the high onus on them to establish that there is no reasonable prospect that Mr. Bahadar’s claim will succeed” and at para 35 that “[s]etting the borderline between negligence and malice in the specific facts of this case is something which a judge should do after hearing the evidence at trial”.

At para 33, he declined to undertake the exercise of expunging mere allegations of negligence, while leaving in allegations of malicious prosecution. [ 91 ] Before me, the Appellants asserted that references to negligence, gross negligence and willful blindness should be struck. This was not raised on the record before the Master other than in passing during oral submissions. As such, I decline to modify the Statement of Claim on this basis. I note that willful blindness is not a cause of action, but a legal determination.

Nevertheless, I note that conduct that falls short of expected standards, such as negligence, gross negligence or willful blindness, if borne out by the facts, may assist in establishing malice. VI. Conclusion [ 92 ] In the result, the following portions of Mr. Bahadar’s Statement of Claim are struck: 1. That portion of paragraph 16 reading “Further, each of Sim, Nguyen and Kully functioned as ad hoc Crown Prosecutors and were subject to the Crown Prosecutors’ Manual governing Alberta Crown Prosecutors (the “Crown Prosecutors Manual”).”; 2. In paragraph 43(d), the words “and ad hoc Crown Prosecutors”; 3.

In paragraph 44(e), the words “i.e. the ad hoc Crown Prosecutor”; 4. The entirety of paragraph 57. [ 93 ] In all other respects, I affirm the Master’s decision and decline to strike any other portions of the Statement of Claim. [ 94 ] In light of his substantial success, Mr. Bahadar is entitled to costs of this Appeal. If the parties are unable to agree on the costs amount, they may provide me with written submissions not to exceed 5 pages within 45 days of this decision. Dated at the City of Calgary, Alberta this 19 th day of May, 2021. C. Dario J.C.Q.B.A.

Appearances: Jasmin Dhaliwal for the Plaintiff/Respondent, Zafar Bahadar

David Pick for the Appellant RECA, Bob Myroniuk, Drew Saly, Cheryl Ann Rumpel Gavin Price for the Appellants Field Law LLP, Gregory Sim, Lily Nguyen and Jason J. Kully