Lorraine Mastropietro v. John Mastropietro, 2020 NLSC 15

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Mastropietro v. Newfoundland and Labrador (Education) , 2020 NLSC 15 Date : February 3, 2020 Docket : 200401T3209 Between: Lorraine Mastropietro and John Mastropietro Plaintiffs And: the minister of the department of education as represented by her majesty the queen in right of newfoundland and labrador Defendant Before: Justice Vikas Khaladkar Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: January 31, 2020

Summary: The Plaintiffs applied, pursuant to Rule 17A of the Rules of the Supreme Court, 1986 , to have their claim heard by way of a

summary trial. The Plaintiffs claim is for misfeasance in public office. That tort requires the Plaintiffs to prove that there was deliberate unlawful conduct in the exercise of public functions and that such conduct was likely to injure the Plaintiffs. In addition, the Plaintiffs must prove that the tortious conduct was the legal cause of their injuries and that the injuries suffered are compensable in tort law. The material presented – before any assessment of the reliability of the evidence and before considering any issue of credibility – does not support a fair determination by way of

summary adjudication. Since the tort requires proof amounting to dishonesty or bad faith on the part of the decision-makers, the Court will inevitably be asked to assess the veracity of the witnesses and to make findings of their honesty, reliability and credibility. A

summary trial

procedure is not an appropriate forum for such an exercise. The Application is dismissed with costs in the cause. Appearances: William A.F. Hiscock and Allison S. Conway Appearing on behalf of the Plaintiffs Justin S.C. Mellor and Mark P. Sheppard Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Hyrniak v. Mauldin, 2014 SCC 7; Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317 (Nfld. S.C. (T.D.)); Hutchings v. Power, 2020 NLSC 7; L.H.E. v. D.A.E., 2019NLCA 66; Dalley v. Northern Arm (Town), 2016 NLTD(G) 68; Odhavji Estate v.

Woodhouse, 2003 SCC 69 ACTS CONSIDERED: Private Training Institutions Act, R.S.N.L. 1990, c. P-25 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D REASONS FOR JUDGMENT Khaladkar, J.: INTRODUCTION [1] The Plaintiffs claim that the then Minister of Education, Roger Grimes, his agents and employees (the “Department”) engagedin deliberate and unlawful conduct in their official, public roles and were aware that this conduct was unlawful and that it was likely toharm the Plaintiffs’ interests and the interests of the Plaintiffs’ company. [2] At all times material, the Plaintiffs were owners and operators of Newfoundland Career Academy Ltd., a private school thatoperated 15 campuses throughout the Province of Newfoundland and Labrador, Ontario and Nova Scotia. [3] The Plaintiffs’ claim arose as a result of the Province of Newfoundland and Labrador introducing a new system for thedisbursement of student loans in September, 1997.

Prior to the change, it was the practice of the Department to disburse the entireacademic year’s student loan to students at the beginning of the first semester. Unfortunately, the practice resulted in some studentsreceiving their student loans and, immediately thereafter, leaving their academic programs – with the attendant loss to the student loanprogram.

The Department, therefore, moved to a semester by semester funding model – one in which the students would receive theirloans for each semester at the beginning of the semester. [4] The Plaintiffs say that as a result of the change in the method of payment, their school was put under intense financial pressureand became unable to meet its financial obligations as they became due.

No other private colleges were so affected. [5] In 1998, the Plaintiffs’ company voluntarily provided the Department with its financial records – with a view to underscoringtheir need to revert to the status quo ante, in terms of a funding model. As a result of the disclosure, the Department concluded that thePlaintiffs’ company had financial problems that could not be solved by reverting back to the old system of student disbursements.

TheDepartment concluded that the Plaintiffs’ company ought not to be allowed to register a new cohort of students for the 1998 academicyear because, in its opinion, the Plaintiffs’ company was no longer a viable business enterprise. The Department suspended thePlaintiffs’ company’s license, without notice, to register new students for the 1998 academic year. [6] The school was unable to make any financial arrangements that would allow it to continue in operation and, as a result, it

ceased its operations. background [7] The Plaintiffs’ position is that the Defendant, its employees or agents, in fact the Department as a whole, engaged in tortiousconduct amounting to misfeasance in public office when they took action not contemplated or permitted by the Private TrainingInstitutions Act, R.S.N.L. 1990, c. P-25.

The Plaintiffs allege that the Minister and/or agents and/or employees of the Defendant wereaware both that their conduct was unlawful and that it was likely to harm the interests of the Plaintiffs and their company or that theywere reckless or willfully blind as to the outcome. [8] The Plaintiffs must satisfy me, to overcome the threshold requirement of Rule 17A, that: a. The Minister and/or agents and/or employees of the Defendant were aware that their conduct was unlawful; AND b.

That the conduct of the Minister and/or agents and/or employees of the Defendant was likely to harm the interests of the Plaintiffsand their company. analysis [9] Rule 17A of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D, sets out in part the

summary trial procedure: 17A.01.

(1) A plaintiff or defendant may, after defence has been filed and at any time prior to the proceeding being placed on a trial list,apply to the Court with supporting affidavit material or other evidence for

summary trial seeking judgment on or dismissal of all or partof the claim in the statement of claim, as the case may be. [10] In Hyrniak v. Mauldin, 2014 SCC 7, Karakatsanis J., for the Court, explained that the

summary trial procedure was aproportionate, more expeditious and less expensive means to achieve a just result than going to trial. She instructed that

summaryjudgment rules ought to be interpreted broadly and in a manner that favoured proportionality and fair access to affordable, timely and justadjudication of claims. [11] Marco Ltd. v. Newfoundland Processing Ltd. (1995), (NL SC), 130 Nfld. & P.E.I.R. 317, 405 A.P.R. 317(Nfld. S.C. (T.D.)), a decision of Green, J. (as he then was) is the seminal case in this jurisdiction with respect to the application of therule. It stands for the following propositions: a.

The burden is on the Applicant to satisfy the Court that there is no “genuine issue for trial” or, if there is one, that the record beforethe Court enables the Court to find the facts necessary to decide the issue, and it would not be unjust to the Respondent to do so. b. Where the Plaintiffs are the Applicants, as is the case here, they must show that they have put forward an evidentiary basis for theclaim which, if considered alone, would prove each element of the cause of action. c.

Cross-examination on conflicting affidavits is allowed if a resolution is necessary to determine the ultimate outcome of the case.However, unlike cross-examination in a full trial, cross-examination on an affidavit would not be permissible for the purpose of attackingcredibility generally. If that is necessary, it is a good indication that the matter needs to be resolved at a full trial and without resort to thesummary trial procedures. [12] In Hutchings v. Power, 2020 NLSC 7, Orsborn, J. explained that, in the first instance, the applications judge is required toconsider whether a

summary trial process should be allowed. If this threshold is passed, the

summary trial will proceed and the judgewill, after hearing the matter, decide if indeed a fair and just adjudication is possible based on the

summary proceeding. [13] Orsborn, J. cited L.H.E. v. D.A.E., 2019 NLCA 66, a case that reaffirmed that Rule 17A contemplates a two-step process. Theanalysis begins with the threshold question, that is, “whether the case is appropriate for

summary adjudication”. L.H.E. confirms that itis appropriate to first address and decide the threshold issue. [14] As instructed by Orsborn, J. in L.H.E., the applications judge must ask whether the material presented – before any assessmentof the reliability of the evidence and before considering any issue of credibility – could potentially support a fair determination by way ofsummary adjudication. [15] In the words of Butler, J. (as she then was) in Dalley v.

Northern Arm (Town), 2016 NLTD(G) 68 at paragraph 21: … if an applicant had not presented an appropriate evidentiary basis for its position, the threshold would not be met and the respondingparty would have no evidentiary burden to meet. In such an event, the

Summary Trial Application would be denied. [16] The tort of misfeasance in a public office can arise in two ways. These have been characterized by the Supreme Court ofCanada as Category A and Category B. For the purposes of the instant case we are dealing with Category B – which involves a publicofficer who acts with knowledge both that she or he has no power to do the act complained of and that the act is likely to injure theplaintiff. The Plaintiffs must prove each of the tort’s constituent elements: Odhavji Estate v.

Woodhouse, 2003 SCC 69, paragraph 22. [17] Iacobucci, J. noted, at paragraph 23 of the Odhavji Estate case that there are two elements that must be proved: … First, the public officer must have engaged in deliberate and unlawful conduct in his or her capacity as a public officer. Second, thepublic officer must have been aware both that his or her conduct was unlawful and that it was likely to harm the plaintiff. Whatdistinguishes one form of misfeasance in a public office from the other is the manner in which the plaintiff proves each ingredient of thetort.

In Category B, the plaintiff must prove the two ingredients of the tort independently of one another. … [18] And, at paragraph 28 of his decision, Iacobucci, J. said:

… The requirement that the defendant must have been aware that his or her conduct was unlawful reflects the well established principle that misfeasance in a public office requires an element of “bad faith” or “dishonesty”. In a democracy, public officers must retain the authority to make decisions that, where appropriate, are adverse to the interests of certain citizens. Knowledge of harm is thus an insufficient basis on which to conclude that the defendant has acted in bad faith or dishonestly.

A public officer may in good faith make a decision that she or he knows to be adverse to the interests of certain members of the public.

In order for the conduct to fall within the scope of the tort, the officer must deliberately engage in conduct that he or she knows to be inconsistent with the obligations of the office. [ 19 ] In their evidence at the examinations for discovery conducted in this matter, both the Minister of Education, Roger Grimes, and the Deputy Minister of Education, Wayne Green, indicated that they believed that they had the authority for the actions that were taken by the Department of Education at the relevant time.

This evidence has the effect of negating the allegation that these individuals acted in bad faith – an essential element of the tort of misfeasance in a public office. I, as the applications judge, have no way of assessing this evidence to determine whether it should or should not be believed. The evidence of these two individuals, and the contrary position taken by the Plaintiffs, do not support a fair determination by way of

summary adjudication (Discovery Transcript of Roger Grimes, Mastropietro Affidavit, Exhibit G, pp. 126 150 and 179-180; Discovery Transcript of Wayne Green, Mastropietro Affidavit, Exhibit F, pp. 26, 34 and 51). [ 20 ] It is crucial to the Plaintiffs’ case that they be able to establish that the Minister, Deputy Minister or other decision-makers within the Department knew that their actions were unlawful and, therefore, that they were made in bad faith or were dishonest. It is not enough to show that the actions were unlawful, it must also be shown that the public officials knew that they were unlawful.

This presents a very high burden of proof. [ 21 ] It can be anticipated that the Court will be invited to make findings of credibility for, and against, Messrs.

Grimes, Green and perhaps other civil servants in relation to the veracity of their claim that that they did not know that their actions were unlawful. [ 22 ] Since the tort requires proof amounting to dishonesty or bad faith on the part of the decision-makers, and since two of the main decision-makers have denied any knowledge of wrongdoing, the Court will inevitably be asked to assess the veracity of the witnesses and to make findings concerning their honesty, reliability and credibility. This cannot be accomplished from transcripts of examinations for discovery and answers to interrogatories.

They will have to give their evidence in person so that their evidence can be properly assessed by the trial judge. [ 23 ] The

summary trial procedure is not appropriate in this case for the reasons noted. [ 24 ] In the result, the Application is dismissed. [ 25 ] This is an involved case and I do not fault the Plaintiffs for attempting to obtain relief under Rule 17A. Accordingly, the costs of the Application shall be in the cause. _____________________________ Vikas Khaladkar Justice