2014 NBCA 48, 2014 NBCA 48

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 6-13-CA NEW BRUNSWICK REAL ESTATE ASSOCIATION APPELLANT ASSOCIATION DES AGENTS IMMOBILIERS DU NOUVEAU-BRUNSWICK APPELANTE - and - - et - LARRY ESTABROOKS RESPONDENT LARRY ESTABROOKS INTIMÉ New Brunswick Real Estate Association v. Estabrooks, 2014 NBCA 48 Association des agents immobiliers du Nouveau- Brunswick c.

Estabrooks, 2014 NBCA 48 CORAM: The Honourable Justice Larlee The Honourable Justice Robertson The Honourable Justice Bell CORAM : l’honorable juge Larlee l’honorable juge Robertson l’honorable juge Bell Appeal from a decision of the Court of Queen’s Bench: December 18, 2012 Appel d’une décision de la Cour du Banc de la Reine : le 18 décembre 2012 History of Case: Historique de la cause : Decision under appeal: 2012 NBQB 407 Décision frappée d’appel : 2012 NBBR 407 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: September 24, 2013 Appel entendu : le 24 septembre 2013

Judgment rendered: July 17, 2014 Jugement rendu : le 17 juillet 2014 Reasons for judgment by: The Honourable Justice Larlee Motifs de jugement : l’honorable juge Larlee Concurred in by: The Honourable Justice Robertson Souscrit aux motifs : l’honorable juge Robertson Dissenting reasons by: The Honourable Justice Bell Motifs dissidents : l’honorable juge Bell Counsel at hearing: For the appellant: John D. Townsend, Q.C. and Trisha E.M. Gallant LeBlanc For the respondent: G. Robert Basque, Q.C. Avocats à l’audience : Pour l’appelante : John D. Townsend, c.r., et Trisha E.M. Gallant LeBlanc Pour l’intimé : G.

Robert Basque, c.r. THE COURT The appeal is allowed with costs. The judgment of the Court was delivered by LARLEE, J.A. [ 1 ] This is an appeal from a decision of a judge of the Court of Queen’s Bench, dated December 18, 2012, in which he determined that the appellant, the New Brunswick Real Estate Association (NBREA), had maliciously prosecuted the respondent, Larry Estabrooks, with respect to a written complaint. In appealing the finding of liability for the quasi-criminal tort of malicious prosecution against Mr. Estabrooks, the NBREA relied on a number of grounds of appeal.

I find it necessary to deal with only one of those grounds: that which questions whether the trial judge made an error of law in applying the requisite legal test for malicious prosecution and the larger issue of whether a claim for malicious prosecution should be permitted against a provincial self-regulating governing body such as the NBREA.

[ 2 ] For the following reasons, I am of the view that the appeal should be allowed. First, in my opinion, the discipline committees of self-regulating provincial professional associations cannot be sued by way of - and cannot be found liable for - the tort of malicious prosecution. Second, even if the tort were available in such circumstances, on the present facts, the case has not been made out. I.

The Context [ 3 ] The allegation of the tort of malicious prosecution arose on January 14, 2002, when the former NBREA Registrar/Executive Director, Louise McSheffrey, received a written complaint from a member of the Board of Directors of the NBREA against Mr. Estabrooks, dated January 11, 2002. [ 4 ] At the time of the complaint, Mr. Estabrooks was the president of NBREA, and the complaint lodged by the Board member was that Mr.

Estabrooks allegedly breached his fiduciary duties by disclosing on his personal website confidential information relating to the NBREA, which he had learned in his capacity as president, and by refusing to comply with a Board motion directing him to provide a letter of apology to a fellow Board member. [ 5 ] The complaint and discipline process of the NBREA is set out in The New Brunswick Real Estate Association Act , S.N.B. 1994, c. 115 (the Act ).

The Complaints Committee, established in s. 20(1), is comprised of three members: a member of the Board, appointed by the Board, who serves as Chairperson; a member of the NBREA, appointed by the Board; and a non-member of the NBREA, appointed by the Minister of Justice and Consumer Affairs. [ 6 ] Under s. 21(1) of the Act , upon receipt of a written complaint filed with the Registrar, the Complaints Committee must first ensure that the member against whom the complaint has been made receives a copy of the complaint and has an opportunity to respond.

Then it is required to consider and investigate the conduct or competence of the member. Its task is to consider whether there is sufficient information to reasonably support a complaint of professional misconduct or incompetence. I reject the notion the NBREA put forward in its submission that this is akin to a criminal preliminary hearing because, according to s. 21(2) of the Act , it is not required to hold a hearing or give a member an opportunity to make oral submissions before making a decision. [ 7 ] In this case, the Registrar provided Mr.

Estabrooks with a copy of the complaint and gave him at least two weeks to respond to it. As a result of potential conflicts of interest, the Complaints Committee chairperson, another member and the alternate member were replaced. On September 25, 2002, the newly constituted Complaints Committee met and decided to send the complaint to the Discipline Committee, as it was empowered to do pursuant to s. 21(3) (

a) of the Act . On November 21, 2002, in a revised decision, the Complaints Committee confirmed that it was only the second part of the complaint that was being forwarded to the Discipline Committee: the refusal on the part of Mr. Estabrooks to write a letter of apology. The Complaints Committee did not consider the first part of the complaint to be within its jurisdiction. [ 8 ] The Discipline Committee, created under s. 22 of the Act , consists of five members, four members of the NBREA appointed by the Board and one person, not a member of the NBREA, appointed by the Minister.

When directed by the Complaints Committee, it is obligated to hear and determine the allegation of professional misconduct or incompetence against a member ( s. 23(1) (

a) of the Act ) . [ 9 ] On January 14, 2003, the Discipline Committee held a hearing and found Mr. Estabrooks had engaged in professional misconduct. Mr. Estabrooks appealed this decision to the Court of Queen’s Bench pursuant to s. 25(1) of the Act , and a judge of the Court allowed the appeal, finding that the complaint was one relating to governance and, therefore, the Discipline Committee did not have jurisdiction to hear it. [ 10 ] On January 12, 2009, Mr. Estabrooks sued the NBREA for malicious prosecution. The trial lasted three days. Mr. Estabrooks and a Board member testified on his behalf.

The NBREA called the Registrar. [ 11 ] The judge rendered a 44 page, 167 paragraph decision concluding that the NBREA was liable for the quasi-criminal tort of malicious prosecution against Mr. Estabrooks. One hundred and five paragraphs of the decision were direct reproductions (cut and pasted) from the Pre-Trial and Post-Trial Briefs submitted by the parties, the vast majority being from the respondent. Of the remaining 62 paragraphs, 23 dealt with contentious issues.

II. Grounds of Appeal [12] The NBREA relies on three grounds of appeal: 1. That the trial judge’s recital of the written submissions as his reasons for judgment is cogent evidence that a reasonable person,apprised of all the relevant circumstances would conclude that he failed to come to grips with the issues and decide them impartially andindependently, which necessitates a new trial; and, alternatively; 2.

That the trial judge made errors of law relating to the law of vicarious liability, whether the requisite legal test for maliciousprosecution had been met and in interpreting those provisions of the Act relating to the role of the Registrar in relation to complaints; and 3. That the trial judge made various palpable and overriding errors of fact and mixed law and fact when drawing an adverse inference ofmalice or improper purpose against the Registrar. III.

The Issue [13] The appellant argues that the trial judge was induced into making three serious errors in lawbecause he made the procedural error of cutting and pasting large parts of the respondent’s written submissions (the NBREA goes so faras to argue that because of this we cannot rely on any part of this decision). For the purposes of this appeal, I do not find it necessary toengage in an analysis of the structure of the trial judge’s decision. In my opinion, that issue is of secondary importance.

The moresignificant issue is that the trial judge erred in law in his determination of the extent to which the tort of malicious prosecution in civilproceedings applies to provincial self-regulating disciplinary committees, and that he erred in law and in mixed law and fact in applyingthe test to the particular facts of this case. [14] With respect to the appellant’s first ground of appeal, I will limit my comments to the following:trial judges should be aware that it is desirable that they express their conclusions in their own words.

If they decide to cut and pastelarge portions of parties’ submissions they will be scrutinized in accordance with the Supreme Court of Canada’s decision of Cojocaru v.British Columbia Women’s Hospital and Health Centre, 2013 SCC 30, [2013] S.C.J. No. 30 (QL), to determine if the incorporation issuch that a reasonable person would conclude that the judge did not put his or her mind to the issues and decide them independently andimpartially.

If so, the judgment can be set aside: “[t]he onus is on the person challenging the judgment to rebut the presumption withcogent evidence showing that a reasonable person apprised of all the relevant circumstances would conclude that the judge failed tocome to grips with the issues and decide them impartially and independently” (para. 22).

As noted by McLachlin C.J. for a unanimousCourt, extensive copying is to be discouraged, but lack of originality does not, in and of itself, rebut the presumption of judicialimpartiality and integrity (para. 36). [15] The approach that I take in this appeal is to zero in on the tort of malicious prosecution: does itapply in these circumstances, and, if so, has the test been met? More specifically, was the four-part test in Nelles v. Ontario, (SCC), [1989] 2 S.C.R. 170, [1989] S.C.J. No. 86 (QL) met in interpreting those provisions of the Act relating to the role of theRegistrar in relation to complaints? IV.

Standard of Review [16] In Godin v. Star-Key Enterprises and Carquest Canada, 2006 NBCA 91, 305 N.B.R. (2d) 180,this Court stated that the starting point of any appellate analysis is always the identification of the standard of review applicable to eachquestion raised on appeal: […] As Drapeau, C.J.N.B. pointed out in Roy v.

Doucet (2005), 288 N.B.R. (2d) 12, 2005 NBCA 84 at para. 13, “[t]he merits of theappellant’s appeal stand to be assessed through the prism of the particular standard that governs the review on appeal of each questionraised.” [para. 7] The standard of review is determined on the basis of the type of question that must be resolved on appeal. For pure questions of law, thebasic rule with respect to the review of a trial judge’s findings is that an appellate court is free to replace the opinion of the trial judgewith its own, i.e. the standard of correctness: Housen v.

Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8. Questions of mixedfact and law involve applying a legal standard to a set of facts. With respect to standard of review, such matters lie along a spectrum(para. 36). Where, for instance, an error with respect to a finding can be attributed to the application of an incorrect standard, a failure to

consider a required element of a legal test, or similar error in principle, such an error can be characterized as an error of law and will also be subject to a standard of correctness: Housen v. Nikolaisen , at para 36 ; Doiron v. Haché , 2005 NBCA 75 , 290 N.B.R. (2d) 79 , at para. 70 , per Richard J.A.; and LeBlanc v. Fundy Drywall Ltd. and Allain , 2014 NBCA 2 , 414 N.B.R.(2d) 339 , at para. 12 , per Quigg J.A. V. Analysis and Decision [ 17 ] At the outset it must be noted Mr. Estabrooks did not plead vicarious liability. Nor did he join individuals in the malicious prosecution action.

Neither the complainant, the lawyer who handled the complaint, nor the Registrar, is named as a party, so in the case at bar, the allegation of malicious prosecution was made solely against the NBREA. This raises the question of whether the NBREA can be found guilty of the quasi-criminal tort of malicious prosecution for things it did as a corporation. Is there direct tort liability against a corporation, or must it be established through the corporate actor by way of the vicarious liability mechanism?

I will address this issue when discussing the particular application of the Nelles test to the case at bar. [ 18 ] The tort of malicious prosecution has existed for centuries. As Lord Sumption explains in Crawford Adjusters and others v.

Sagicor General Insurance (Cayman) Limited and another , [2013] UKPC 17 , [2013] 4 All ER 8 , a Privy Council Appeal from the Cayman Islands Court of Appeal, it arose for a particular purpose: [The tort] arose out of the peculiarity of English legal history that until the creation in the 1830s of the first public police forces with prosecuting powers, almost all prosecutions were private prosecutions. They were brought by private individuals, generally the victims, or occasionally by public officers in their personal capacity.

The private prosecutor nevertheless brought his indictment in the name of the Crown, and performed an essentially public function. The fact that the state’s coercive powers were invoked by a private individual, who controlled both the initiation and conduct of the proceedings, gave rise to frequent abuse, which was a constant preoccupation of the law from the thirteenth to the nineteenth centuries. It led to the early development of the tort of conspiracy, one of the first torts to be recognised in English law.

Originally statutory, but subsequently developed by the common law in the course of the fourteenth and fifteenth centuries, the essential features of the early tort of conspiracy was the combination of two or more persons falsely and maliciously to indict or appeal another person of treason or felony: see Holdsworth, A History of English Law , 2nd ed, viii (1937), 378- 379, 385, and the citation from March’s Actions for Slander at p 385n 5 . It was not available for the malicious prosecution of civil actions. [para. 136] [ 19 ] John G.

Fleming, in The Law of Torts , 9th ed. (New South Wales: The Law Book Company Ltd., 1998) describes the tort of malicious prosecution in this way: 1. Malicious prosecution The tort of malicious prosecution is dominated by the problem of balancing two countervailing interests of high social importance: safeguarding the individual from being harassed by unjustifiable litigation and encouraging citizens to aid in law enforcement.

On one side, it needs no emphasis that the launching of scandalous charges is apt to expose the accused to serious injury, involving his honour and self-respect as well as his reputation and credit in the community. Malicious prosecution, therefore, bears close resemblance to defamation, both being infringements of essentially the same complex of interests on the part of the plaintiff.

On the other side, however, is the competing interest of society in the efficient enforcement of the criminal law, which requires that private persons who co-operate in bringing would-be offenders to justice, no less than prosecutors, should be adequately protected against the prejudice which is likely to ensue from termination of the prosecution in favour of the accused. Moreover, there exist other sanctions against misconducting informants.

So much weight has been attached to this consideration that the action for malicious prosecution is held on tighter rein than any other in the law of torts . [...] Thus, malicious prosecution has remained a distinct cause of action which in several particulars, notably in the allocation of the burden of proof and the functions between judge and jury, affords greater protection to private persons who initiate criminal proceedings than is accorded by conditional privileges to publish defamation. [pages 673-674] [Emphasis added.] [ 20 ] At common law, the Crown was wholly immune from civil liability, including actions for malicious prosecution.

This state of affairs endured until the mid-twentieth century, when Canadian governments began to adopt Crown liability legislation. These statutes gave rise to a divergence of opinion over whether the immunity from civil liability historically afforded Crown prosecutors should continue: Miazga v. Kvello Estate , 2009 SCC 51 , [2009] 3 S.C.R. 339 , at para. 43 . The Supreme Court of Canada resolved the debate in Nelles . In that landmark decision, it determined that Attorneys General and Crown Attorneys

would no longer enjoy absolute immunity from suits for malicious prosecution and set out the requisite standard for Crown liability under the pre-existing four-part test ( Miazga , at para. 4 ). [ 21 ] In Nelles , a nurse had been charged with the murder of four infants and was discharged on all counts at the conclusion of the preliminary inquiry.

She then brought an action against the Crown in right of Ontario, the Attorney General for Ontario, and several police officers, alleging that the Attorney General and his agents, the Crown Attorneys, counselled, aided and abetted the police in charging and prosecuting her and that the Attorney General and the Crown Attorneys were actuated by malice.

Lamer J. (as he then was), noted how difficult it would be for a plaintiff to succeed in a malicious prosecution claim against an Attorney General or Crown Attorney, but concluded that public trust and confidence in the impartiality of prosecutors, and the principle of equality under the law, favoured the abolition of the absolute immunity (paras. 45-56). Justice L’Heureux-Dubé, in dissent, upheld the immunity claim.

She based that opinion on authority and the public good, holding that strong policy reasons existed for granting Attorneys General and Crown Attorneys immunity from prosecution for actions taken in the proper exercise of their powers (para. 95). However, the message from the Court is loud and clear.

Despite the absence of an absolute immunity, it will be very difficult to succeed in a malicious prosecution claim against an Attorney General or Crown Attorney. [ 22 ] In Nelles , the Supreme Court defines and circumscribes the action of malicious prosecution in this manner: There are four necessary elements which must be proved for a plaintiff to succeed in an action for malicious prosecution:

a) the proceedings must have been initiated by the defendant;

b) the proceedings must have terminated in favour of the plaintiff;

c) the absence of reasonable and probable cause;

d) malice, or a primary purpose other than that of carrying the law into effect. [para. 42] For an application of the test, the reader is referred to Proulx v. Quebec (Attorney General) , 2001 SCC 66 , [2001] 3 S.C.R. 9 and Miazga . [ 23 ] It is the last two requirements that have posed the greatest difficulties. The third element requires the defendant to prove a negative, the absence of reasonable and probable grounds for initiating the proceedings.

The fourth, proof of malice or an improper purpose, is in my view the most difficult requirement, and I will focus on it in my analysis of the application of the test to the case at bar. As defined by Lamer J., the plaintiff must establish that the Attorney General or Crown Attorney “perpetrated a fraud on the process of criminal justice and in doing so … perverted or abused his office and the process of criminal justice” (para. 45).

In Proulx , Iacobucci and Binnie JJ., speaking for the majority, noted 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” (para. 35).

In Miazga , the Supreme Court’s latest pronouncement on malicious prosecution, the Court noted 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” (para. 51). Put this way, it is easy to understand why public policy does not require immunity for such conduct and to see that it is unlikely that claims for malicious prosecution will be successful. [ 24 ] The tort of malicious prosecution also requires proof that the plaintiff suffered damage as a result of the prosecution itself.

Actual injury is required: Fleming, at page 686. Thus, the action is confined to those types of prosecutions which rob the plaintiff of her or his liberty or damage her or his reputation or pecuniary interests: Lee v. Hopegain International Holdings Inc ., [1997] B.C.J. No. 1633 (S.C.) (QL) at para. 94 , citing Butterfield v. Butterfield , [1993] B.C.J. No. 2770 (S.C.) (QL) . [ 25 ] While the availability of the tort of malicious prosecution was somewhat expanded by Nelles , it remains largely restricted to cases involving criminal prosecutions.

Fleming notes that efforts to extend the action to wrongful civil proceedings have encountered “anything but enthusiastic response” (page 675). The remarks of Lander J. in Norman v. Soule , [1991]

B.C.J. No. 2061 (S.C.) (QL), serve as an example of this judicial reluctance: Courts in both Canada and the U.K. have cast doubt upon the sustainability of actions in malicious prosecution arising out of a civilaction. […] The Courts should be just as reluctant to countenance reliance [on] malicious prosecution in civil suits as they are to permitits use in criminal matters. […] Public policy favours this approach. [P]laintiffs might be discouraged from pursuing their legal rights if they were to believe thatfailing to prove their case could give rise to liability in malicious prosecution.

This chilling effect on prosecutions is the main argumentfor routinely denying its use to individuals who are acquitted in criminal law prosecutions (save in exceptional cases, e.g. the SusanNelles case). Furthermore, since many defendants are disgruntled at being sued, the Courts might be expected to be deluged with claimsof this sort, thereby interfering with their handling of more urgent matters.

For these and other reasons the Courts have required defendants who have been unfairly harmed to come within the protection of the lawof defamation instead. […] To summarize, malicious prosecution exists almost exclusively in the realm of the wrongful bringing of criminal charges where themotivation to do so is malicious. A like cause of action in civil proceedings is extremely rare. The Courts are more prone to viewvindication in a civil proceeding as the antidote to the poison of an unsubstantiated claim or to see a wronged defendant's remedy inslander. [Emphasis added.] [26] Lewis N.

Klar, in Tort Law, 5th ed. (Toronto: Carswell, 2012), writes that malicious prosecutionis intended to provide a remedy for damages suffered by a person as a result of having been unjustifiably prosecuted. It is not, he says,intended that “every unsuccessful legal action instituted against a person should result in a malicious prosecution claim merely becausethe defence of the action caused the person sued inconvenience or expense” (page 68).

He further notes that whether an action formalicious prosecution can be brought in cases of ordinary civil proceedings is still somewhat of an “open question”, but “the weight ofauthority seems to be against it” and Canadian authorities have generally adopted a restrictive approach (page 69). [27] Generally, statutory professional organizations have been held not liable for damages for theerroneous exercise of judgment in quasi-judicial matters, providing they have acted bona fide and without malice: James T. Casey, TheRegulation of Professions in Canada, loose-leaf, (Toronto: Carswell, 1994), at 11-32.

Not long after Nelles, however, courts were invitedto extend the scope of malicious prosecution even further, from criminal prosecutions to “civil” prosecutions in the context ofprofessional disciplinary proceedings: Stoffman v. Ontario Veterinary Association, (ON SC), [1990] O.J. No. 1151(H. Ct. J.) (QL)). Based on that decision, some Canadian courts have been willing to allow actions for malicious prosecution in suchcircumstances, though the onus on the plaintiff remains high.

The Supreme Court has not yet had the occasion to clarify whether there isan absolute privilege for participants in a professional discipline process (Casey, at 11-36). [28] In the case at bar, Mr. Estabrooks suggests that the NBREA can be held liable for maliciousprosecution for the acts committed by those involved in its professional discipline process.

The NBREA submits that the existing legaltest for malicious prosecution, as expressed by the Supreme Court in Nelles in a prosecutorial context, is difficult to apply to provincialself-regulating professional associations that have statutory complaints and discipline processes. [29] The trial judge framed the question as: Is a claim for malicious prosecution admissible against aself-regulating body such as the NBREA?

He answered in one short paragraph: Case law in Canada supports the view that actions in malicious prosecution can be taken against self-regulating professions such asNBREA. [para. 28] [30] He goes on to explain that:

Disciplinary proceedings are quasi-criminal and self-regulating bodies have authority to impose sanctions up to and including exclusionfrom their practicing bodies. Therefore proceedings undertaken under false pretences, or maliciously, are actionable. [para. 29] [31] As this is a case of first impression for this Court, a review of the existing authorities is in order.The trial judge finds support for this proposition in Benalcazar v. Tahtadjian, [1997] O.J. No. 4498 (Ct.

J.) (QL), which was a sixparagraph endorsement by a judge of the Ontario Court of Justice, General Division, affirming a trial judge’s decision in which thepatient of a dentist made a complaint of professional misconduct against him shortly after the dentist sued the patient for unpaidprofessional services in a small claims action. The dentist sued the patient in nuisance. The Court found in the endorsement the tort wasthat of malicious prosecution, not nuisance, and that such an action could be based on proceedings before a disciplinary body. In that casethe judge states: I rely on Stoffman v.

Ontario Veterinary Association (1990), (ON SC), 73 O.R. (2d) 737 (Div. Ct.) as authority for theproposition that an action for malicious prosecution does not have to be based on a prior criminal prosecution but may also be based onproceedings before a disciplinary body.

I also rely on that case for the proposition that in such an action the plaintiff can recover the costof defending himself in the disciplinary proceedings. [para. 5] [32] In Stoffman, a preliminary motion was made seeking dismissal of a malicious prosecution actionagainst a professional association on the basis that it enjoyed absolute immunity from such a suit on policy grounds. Stoffman was aveterinary surgeon and a member of the Ontario Veterinary Association.

A complaint was lodged against Stoffman with the Associationafter a dog which was being boarded with his animal hospital was lost while being taken for a walk and subsequently found dead. TheAssociation decided not to refer the matter to the Council of the Association for a disciplinary hearing, but after the dog’s owners laid asecond complaint, the matter was reviewed by the Executive Committee, which met with the owners in the absence of Stoffman anddecided to proceed with a disciplinary hearing. Stoffman was charged with unprofessional conduct.

He was found not guilty after a fulldisciplinary hearing and sued the Association for damages for malicious prosecution. The trial judge held there were policy reasons whysuch an action should not lie against a self-regulating professional association for disciplinary proceedings against one of its members.The action was dismissed. Stoffman appealed, and the appeal was allowed. [33] To my knowledge, the only prior authority on point was McCarthy v. Barter (1895), 15 C.L.T.198 (N.W.T. S.C.), a judgment of the Supreme Court for the Northern Alberta Judicial District.

The Stoffman Court’s ultimate rationalewas that in view of the decision of the Supreme Court of Canada in Nelles, if an action for malicious prosecution can lie even against theAttorney General and his agents, there cannot be any policy reason why a professional disciplinary body should have absolute immunityfrom such suits. The Divisional Court further found that for an action for malicious prosecution to lie, it is not necessary for the“prosecution” to have been a criminal one.

A complaint which tended to slander Stoffman’s professional and personal characterconstituted the type of prosecution that could support an action for malicious prosecution. Further, Stoffman was put to the expense,aggravation and disturbance of retaining counsel and defending himself against having his professional career adversely affected. [34] Similarly in Griffin v. Summerside (City), 2008 PESCAD 14, [2008] P.E.I.J.

No. 46 (QL), acase in which charges were laid for breach of regulations in relation to the conduct of police officers, the majority comments: It is now well settled that professional disciplinary bodies and individuals with the authority to initiate proceedings before such bodies donot have immunity from suits for malicious prosecution. See: Stoffman v. Ontario Veterinary Association […].

The charges that wereinitiated and continued against Griffin by Arsenault for breach of the regulations in relation to the conduct of its police officers are, ineffect, charges relating to discipline. [para. 12] [35] In Khanna v. Royal College of Dental Surgeons of Ontario, (ON SC),[1999] O.J. No. 2311 (Sup. Ct. J.) (QL), allegations of professional misconduct on the part of the plaintiff dentist were referred to thedefendant College’s Discipline Committee for a hearing and disposition. One of the defendants, B, was the lawyer retained by theCollege to represent its interests in the disciplinary proceedings.

After a hearing, the Discipline Committee terminated the disciplinaryproceeding. The plaintiff brought an action against the College and B, among others, alleging breach of the duty of fairness and the rulesof natural justice, negligence, malicious prosecution, conspiracy, interference with economic relations, abuse of process and violations ofhis rights under the Canadian Charter of Rights and Freedoms. B brought a motion to strike out the statement of claim against him asdisclosing no reasonable cause of action. His motion was granted.

The Court found s. 38 of the Regulated Health Professions Act, 1991,S.O. 1991, c. 18 provides that no action for damages shall be instituted against the College or an agent of the College for

an act done ingood faith in the performance or intended performance of a duty or in the exercise or the intended exercise of a power under a healthprofession Act, or for any neglect or default in the performance or exercise in good faith of the duty or power. B was an “agent” of theCollege within the meaning of s. 38 in respect of all his contact with the plaintiff. There was no allegation in the statement of claim thatB did something outside of the prosecutorial process.

Section 38 provided immunity to B from any liability arising from the College’sprosecution unless the plaintiff could prove that B acted maliciously or in bad faith. Although the statement of claim contained several

allegations of bad faith or malice, mere allegations in the statement of claim were insufficient. Specific facts had to be alleged to supportthe claim. The claim did not plead facts which, if true, would satisfy a necessary element of the cause of action advanced to the extentthat it was based upon alleged bad faith or malice. [36] In the event the plaintiff did plead facts supporting his allegations of malice against B, he alsohad to plead some tortious conduct of B to support a claim for damages. There is no action in law for damages for breach of the duty offairness or breach of the rules of natural justice.

Since negligence implies an absence of intent, s. 38 of the Act was applicable to provideimmunity against the plaintiff’s claim for damages for negligence. The necessary elements of the torts of conspiracy, maliciousprosecution, interference with economic relations and abuse of process were not pleaded as against B. The Charter did not apply to B ashe was not a government actor. The statement of claim disclosed no reasonable cause of action against B. [37] On appeal, Khanna v. Royal College of Dental Surgeons of Ontario, (ONCA), [2000] O.J. No. 946 (C.A.) (QL), leave to appeal to SCC refused, [2000] S.C.C.A.

No. 244, in an endorsement, the Court statedthat although the case against the defendant [B] is framed in malicious prosecution, it was a novel case because it is brought against asolicitor who did not institute the disciplinary proceedings against the plaintiff but took over the prosecution and conducted it thereafteron behalf of the Royal College of Dental Surgeons until its unsuccessful termination. However, novelty is not a bar to an action at thepleading stage. In the majority’s view, the pleadings, if they can be proven, could constitute a case of malicious prosecution.

It is notclear if this matter ever actually went to trial. [38] In Alevizos v. Manitoba Chiropractors Assn., 2009 MBQB 116, [2009] M.J. No. 154 (QL),several allegations of professional misconduct on the part of a chiropractor were made to the Manitoba Chiropractors Association(MCA). An Inquiry Committee found that he had breached his professional obligations, but was not guilty of professional misconductand dismissed the charges against him. The MCA appealed to the Court of Queen’s Bench, which found, based on the factual findings ofthe Inquiry Committee, Alevizos must have been guilty of professional misconduct.

The Court of Appeal restored the finding of theInquiry Committee on jurisdictional grounds. Alevizos then launched an action against the MCA and its members for negligence,misfeasance in public office, civil conspiracy and malicious prosecution. The Court noted that “[t]here have been a number of caseswhere actions for malicious prosecution have been upheld against professional regulators similar to the MCA”, citing Stoffman, Khanna,and Bainard v. Toronto Police Services Board, [2002] O.J. No. 2765 (Sup. Ct. J.) (QL) (para. 64).

It applied the test in Nelles, butdetermined, on the facts, there was no malicious prosecution. The defendants had an honest belief that the proceedings needed to takeplace and, given the plaintiff’s apparent behaviour, had reasonable and probable grounds to proceed. [39] As noted by the Supreme Court in Nelles, the burden on the plaintiff in a claim for maliciousprosecution is “onerous and strict” (para. 52).

Though some courts are willing to allow that an action for malicious prosecution withrespect to professional discipline hearings is permissible, proving such claims on the facts can be difficult: Alevizos; Bainard; Roach v.Long, [2000] O.J. No. 3588 (Sup. Ct. J.) (QL); and Symington v. Halifax (Regional Municipality), 2011 NSSC 474, [2011] N.S.J. No.702 (QL). [40] What precedential value do these cases have?

I am not convinced that the law in Canada is nowsettled such that professional disciplinary bodies and individuals who initiate proceedings before such bodies do not have immunity fromsuits for malicious prosecution. The majority of the cases cited in support of this proposition cite Stoffman, a single case of the formerHigh Court of Justice, now the Supreme Court of Ontario, as authority. The proposition has received appellate consideration in only twoother jurisdictions, Nova Scotia and Prince Edward Island.

Of course even these views, though informative, are not binding on this court.Remember, also, that in this case the proceeding was commenced by a written complaint to the Registrar by another Association memberand it is the NBREA itself that is sued without vicarious liability having been pled. Indeed, one must question whether an action forvicarious liability can be sustained having regard to the fact the pleadings did not name individuals upon whom primary liability couldhave been sustained.

So, while I agree that the provincial self-regulating disciplinary bodies, like Crown prosecutors, should not be givenan absolute immunity from tortious liability for misuse of their power, that tortious liability should not be framed in maliciousprosecution. I am persuaded in this opinion by two English authorities. [41] These English cases were not cited to us, and do not appear to have been considered byCanadian courts, but they are informative of the state of the law in this area. In Gregory v.

Portsmouth City Council, [2000] UKHL 3,[2000] 1 AC 419, the question arose whether the tort of malicious prosecution is in law capable of extending to the malicious institutionof domestic disciplinary proceedings by a local authority against a counsellor. Lord Steyn, in concluding that the tort of maliciousprosecution does not extend to disciplinary proceedings, considered other torts, namely defamation, malicious falsehood, conspiracy, andmisfeasance in public office, which offer protection for the interests of an individual damaged by disciplinary hearings mounted withoutjustification and maliciously.

He also points out: 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. On the contrary,it has been stated by the House of Lords that this tort does not extend to disciplinary proceedings.

[…] Given that the tort has never in England been held to extend beyond legal proceedings the proposed development would be a radical reform. Moreover, it is significant that, counsel have been unable to find any decided cases in Australia, Canada, and New Zealand which extend the tort to disciplinary proceedings.

While the modern tort books published in these countries almost universally criticise the rule, or apparent rule, precluding actions for malicious prosecution in civil proceeding, there is no hint of any development of the boundaries of the tort beyond legal proceedings, or any call for such a development: see Fleming, The Law of Torts 9th ed., (1998), pp. 673-688; Balkin, Law of Torts, 2nd ed. (1996), pp. 709-723 (Australia); Klar, Tort Law, 2nd ed., (1996), pp. 55-61 (Canada); Todd, The Law of Torts in New Zealand, (1997), pp. 980-1002.

The absence of such authority in Commonwealth countries with legal systems more akin to ours than the United States system may justify an initial scepticism as to the need and feasibility of such a reform. [ 42 ] Lord Steyn concludes: So far I have looked at the matter from the point of view of Mr. Gregory's allegations. But a broader approach is required. One must consider the generality of cases of groundless disciplinary proceedings.

For my part the existence of closely related torts, which protect individuals subjected to unwarranted and malicious […] disciplinary proceedings, destroys the simplistic case that there is no alternative remedy. Indeed, it makes it unnecessary and undesirable to make the extension of the tort malicious prosecution advocated by counsel. If the existing protection afforded to such victims by other torts is shown by the experience of the courts to be inadequate a better solution may be the development of other torts, such as the Court of Appeal undertook in Khodaparast v. Shad .

For these reasons I would hold that the tort of malicious prosecution does not extend to disciplinary proceedings. […] I am not persuaded that the general extension of the tort to civil proceedings has been shown to be necessary if one takes into account the protection afforded by other related torts. I am tolerably confident that any manifest injustices arising from groundless and damaging civil proceedings are either already adequately protected under other torts or are capable of being addressed by any necessary and desirable extensions of other torts.

Instead of embarking on a radical extension of the tort of malicious prosecution I would rely on the capacity of our tort law for pragmatic growth in response to true necessities demonstrated by experience. [ 43 ] In Crawford , a 2013 Privy Council case, the issue was whether the scope of the tort of malicious prosecution should be extended to civil proceedings. In 2005, hurricane Ivan made landfall on the Cayman Islands and caused severe damage to property, including a development of 35 residential units in six two-story blocks on the shore, insured by the respondent, Sagicor General Insurance. Mr.

Paterson was a chartered surveyor resident of the Cayman Islands and was the local adjustor for Sagicor. Frank Delessio was its senior vice president. It is clear he wanted to ruin Mr. Paterson: in July 2005 he said he intended to drive Mr. Paterson out of business and destroy him financially. He set about his mission in a determined fashion, engaging lawyers, having private investigators carry out surveillance of his intended victim, meeting a senior police officer about possible criminal activity on Mr. Paterson’s part and issuing proceedings against him alleging fraud and conspiracy.

Delissio also caused an immensely damaging

article concerning the allegations made against Mr. Paterson in the proceedings to be published in the local press. [ 44 ] It was not in dispute that the action brought by Sagicor and the publication of the

article caused enormous damage to Mr. Paterson’s professional reputation and that his business suffered hugely. Days before the trial, the plaintiffs discontinued and Mr. Paterson was allowed to amend his counterclaim against Sagicor for malicious prosecution and/or abuse of process. The trial judge dismissed the action on the basis the present state of the law did not allow extension of the tort to civil proceedings. He fixed the amount of professional losses suffered by Mr. Paterson at CI $1.3m. He also found if Mr.

Paterson had been able to maintain an action for abuse of process or malicious prosecution, damages of CI $35,000 would have been awarded for the distress, hurt and humiliation that he suffered. His decision was confirmed on appeal. On appeal to the Privy Council, for the majority, Lord Wilson, in granting the relief sought, summarized the conclusions he drew with respect to malicious civil prosecutions: (

a) For my part, I am convinced that the common law originally recognised that the tort of malicious prosecution extended as much to that of civil as to that of criminal proceedings. (

b) But the early availability of an order for costs in favour of a successful defendant of civil proceedings often disabled him from proving the damage required by the tort, which for that reason, as well as for others, became – in practice – mainly focussed on criminal proceedings.

[…] (

e) Insofar as the rationale for the tort of malicious prosecution is the inability of a successful defendant to sue a claimant for defamation in respect of allegations made maliciously in legal proceedings, it applies as much to civil as to criminal proceedings. (

f) In that (as Lord Steyn suggested in the Gregory case: see para 37 (

b) above) a distinctive feature of the tort is that the defendant has abused the coercive powers of the state, it applies as much to civil as to criminal proceedings. There is no principle behind a redefinition of the distinctive feature as being an abuse of the coercive powers of the state only in criminal proceedings: that would be to generate a delineation of the contours of the tort in line only with what the draftsman of the redefinition subjectively preferred. (

g) Irrespective of the malice which may prompt assertions made in a defence and of the damage which may thereby be done to another person, it may be that defendants, like witnesses, cannot be said to be abusing the coercive powers of the state. They may therefore be beyond reach of the tort and their immunity may remain absolute. But I would leave this point open, as, albeit with a different emphasis, does Lord Kerr at paras 111-113. (

h) If no tort other than malicious prosecution is available to remedy the sort of wrong done to Mr. Paterson, Lord Steyn’s observations in the Gregory case form no impediment to its recognition. On the contrary, they encourage it. (

i) A tort of malicious prosecution of civil proceedings should enable a claimant to recover damages for foreseeable economic loss beyond out-of-pocket expenses. (

j) The arguments of policy against restoration of a general tort of malicious prosecution of civil proceedings are worthy of respect but they are insufficiently strong to override the rule which has first claim. Perhaps also they fail to allow for the height of the hurdles which, as Lord Kerr explains in paras 109 and 110, confront a claimant in establishing, or even mounting an arguable case, not only that the defendant’s action lacked reasonable cause but that he prosecuted it maliciously. (

k) It might be possible to limit the ambit of the tort of malicious prosecution to civil proceedings of which the basis was an allegation which might have been the subject of a criminal charge. […] But, provisionally, I would oppose the introduction of that potentially troublesome distinction and would deprecate, as illogical, the denial of a remedy for damage done to the victim of a malicious prosecution, brought without reasonable cause, of any action irrespective of its basis. (

l) In that, as Lady Hale points out at para 84, control of abuse of legal proceedings is particularly well-suited to development in judge- made law, courts in future will need to monitor whether today’s reinstatement of a remedy for abuse of civil proceedings by their malicious prosecution is itself productive of abuse and, if so, to make any necessary adjustments to its effect. [para. 78] [ 45 ] The majority in Crawford are all of the view that when it can be demonstrated that where the court’s procedures do not provide an adequate remedy (as was the case for Mr.

Paterson) there can be no logic in preventing the person who suffered the harm from using this tort to recover. Lady Hale concluded that bringing a civil claim which is known to be “bad” and results in damage to the defendant’s reputation, person, liberty, property or finances, comes within the scope of the tort of malicious prosecution (para. 90). While this rationale appears to be perfectly logical and acceptable for certain exceptional commercial cases, surely, except for the occasional rare case, other torts, not grounded in the criminal law, are more apt.

Torts such as abuse of process or defamation may be more appropriate. However, for the purposes of this appeal I do not have to analyze their applicability because the question here is whether the tort of malicious prosecution has any application to disciplinary proceedings by provincial self-regulating professional associations. [ 46 ] The dissenting opinion of Lord Sumption in Crawford offers a way of analyzing the issue in question. It should be noted that the test our Supreme Court sets out in Nelles is almost identical to that of the English jurisprudence (except for the second element).

The English test is described in Clerk & Lindsell on Torts , 20th ed. (UK: Sweet & Maxwell Ltd., 2010), as follows: In an action for malicious prosecution the claimant must show first that he was prosecuted by the defendant, that is to say that the law was set in motion against him by the defendant on a criminal charge; secondly, that the prosecution was determined in his favour; thirdly that it was without reasonable and probable cause; fourthly, that it was malicious. [para. 16-09]

[ 47 ] Lord Sumption makes four points I find convincing: (1) malicious prosecution is an anomalous tort intended to constrain the arbitrary exercise of the powers of public prosecuting authorities or private persons exercising corresponding functions and makes no sense in cases where no such public function is involved; (2) the law is settled in this area and there is no good reason to extend the scope of the tort; (3) the precise ambit of the tort, if extended to civil proceedings of a private nature would be both uncertain and potentially very wide; and (4) there are real concerns about the practical consequences of any extension of the law in this area which would offer litigants an occasion for prolonging disputes by way of secondary litigation.

Lord Sumption explains: First, and fundamentally, the distinction between civil proceedings and criminal prosecutions is neither arbitrary nor unsatisfactory. Malicious prosecution is in modern conditions an anomalous tort . It was devised to meet a particular social problem, associated with the private prosecution of crime, which hardly exists today. It would be eccentric to enlarge the anomaly by extending liability to civil proceedings to which it has never previously applied.

The tort is an exception to two well-established principles of English law, namely the principle that things done and said in the course of legal proceedings are absolutely immune from civil liability, and the principle that malice does not make an otherwise lawful act tortious. These exceptional features of the tort of malicious prosecution are justifiable only because the tort of malicious prosecution is a form of misfeasance in public office. It is a tool for constraining the arbitrary exercise of the powers of public prosecuting authorities or private persons exercising corresponding functions.

A malice-based tort makes no sense in the context of private litigation where the plaintiff is not exercising any public function. Nor is there any justification in that context for making a further substantial inroad into the immunity from civil liability for things said and done in the course of legal proceedings. Secondly, within the last few years, the House of Lords has held in Gregory v Portsmouth City Council [2000] AC 419 that the tort of malicious prosecution does not (with immaterial exceptions) extend beyond the abuse of criminal proceedings, and has declined to expand its scope.

The House’s refusal to expand the scope of the tort so as to embrace civil proceedings other than disciplinary proceedings was obiter. However, there are dicta and dicta. The application of the tort to the abuse of civil proceedings was decided in Gregory because it was important to settle it: see Lord Steyn at p 432F-G. It had been fully argued both in the Court of Appeal and in the House, and the answer given at both levels was as carefully considered as any ratio decidendi .

Schiemann LJ’s dissenting judgment in the Court of Appeal, which raised all of the points which are now urged upon the Board, was rejected. Nothing has changed since 2000 to undermine the authority of the Committee’s statement of the law. No considerations have been urged upon the Board to suggest that the common law of the Cayman Islands on this point should differ from that which applies in England and will continue to apply in England, at least until the point reaches the Supreme Court.

There are no features of the present case which distinguish it from Gregory except that one is bound to have more sympathy for Mr. Paterson. The conduct of Mr. Delessio, for which the respondent is vicariously liable, was appalling. But the respondent was nevertheless entitled to defend the counterclaim on the basis of the common law as the House of Lords had so recently declared it, and Henderson J and the Court of Appeal were both entitled and bound to apply it. Litigants are entitled to a measure of stability and predictability in this relatively well-trodden area of law.

Third, the precise ambit of the tort, if it extends to civil proceedings of a private nature will be both uncertain and potentially very wide. The Board would have created a new malice-based tort the gist of which is the malicious initiation of baseless proceedings in a manner which damages the reputation of the victim. But if that is to be the essence of the tort, then it ought in principle to apply to the malicious abuse of disciplinary proceedings, the very proposition which the House of Lords was not prepared to accept in Gregory.

Logically, it would also apply to any factual case advanced in civil proceedings which maliciously and baselessly discredited another party, including a case advanced by a defendant or a third party. Logically it would extend to cases where the action was not maliciously brought but the plaintiff gave malicious evidence, or indeed to a case where a witness who was neither the plaintiff nor the directing mind and will of the plaintiff gave malicious evidence. In the case presently before the Board, the particular abuse consisted in the introduction of a baseless allegation of fraud.

But if the tort is extended to the conduct of civil proceedings, there is nothing in logic to suggest that liability can be limited to such cases. Finally, there are real concerns about the practical consequences of any extension of the law in this area which would offer litigants an occasion for prolonging disputes by way of secondary litigation. It is no answer to these concerns to say that the bar can be set so high that few will succeed. Malice is far more often alleged than proved. The vice of secondary litigation is in the attempt. Litigation generates obsession and provokes resentment.

It sharpens men’s natural conviction of their own rightness and their suspicion of other men’s motives. It turns indifference into antagonism and contempt. Whatever principle may be formulated for allowing secondary litigation in some circumstances, for every case in which an injustice is successfully corrected in subsequent proceedings, there will be many more which fail only after prolonged, disruptive, wasteful and ultimately unsuccessful attempts. [paras. 145-148] [Emphasis added]. [ 48 ] In New Brunswick, the tort of malicious prosecution has always been treated in a restrictive fashion.

Rule 46.01 of the Rules of Court , which permits civil trial by jury, sandwiches malicious prosecution between the torts of malicious arrest and false imprisonment, a grouping that surely has overtones of criminality. If we accept Lord Sumption’s statement that the tort of malicious prosecution is an anomalous tort, devised to meet a particular social problem, if it is to have any application to a situation like the one at bar, the test set out in Nelles will have to be redefined.

This is because the process begins in a disciplinary procedure before a provincial self-regulating professional body by the receipt of a written complaint by a member of the Association or a member of the public – not a Crown actor. In Miazga , the Supreme Court adopted a cautionary approach to extending the scope of

malicious prosecution: Given that the tort of malicious prosecution predates the development of our contemporary system of public prosecutions, courts must take care not to simply transpose the principles established in suits between private parties to cases involving Crown defendants without necessary modification.

While the elements of the four-part test for malicious prosecution are identical no matter the parties, the contours of the tort in an action against the Attorney General or his agents must be informed by the core constitutional principles governing that office. [para. 44] I would adopt a similar attitude with respect to expanding the scope of the tort to the disciplinary proceedings of provincial self- regulating professional associations.

The policy concerns I have are: the resulting prolongation in litigation which cannot benefit any association or its members, the fact that malice is easy to allege but difficult to prove in this context, and, finally, and more practically, these complaint and disciplinary committees are frequently made up of volunteer members who give their time pro bono to the associations. How willing would they be to act if they knew they might have to defend themselves against a malicious prosecution suit? VI. Application to this Case A.

Primary and Vicarious Liability [ 49 ] The existing jurisprudence is inconsistent with respect to whether natural persons and/or an association or other body corporate were specifically named as parties or whether vicarious liability was explicitly plead. For example, in Stoffman , the veterinarian sued the Association directly – no individuals were named, and the Association was held liable. There was no mention of vicarious liability. In Griffin , both natural persons and the City of Summerside were sued.

One of the natural persons was held directly liable, and the city was held vicariously liable for his actions. In Khanna , natural persons and the Royal College of Dental Surgeons were named. The defendant B, the lawyer retained by the College for the purpose of prosecuting Khanna, was described as an “agent” of the college. Neither of the Khanna decisions mentions vicarious liability. In Alevizos , the Association and several natural persons were named.

On the facts, none were found liable, but the natural persons were described as “the instruments or individuals involved in instituting the proceedings against Alevizos on behalf of the MCA”. Vicarious liability was not specifically mentioned. [ 50 ] In the case at bar, Mr. Estabrooks did not join individuals in the malicious prosecution action; he failed to identify and join one or more "actors" for whom the NBREA could have been held vicariously liable. Neither the complainant nor the lawyer who handled the complaint is named as a party.

The Registrar does not fit the bill as she had no say in the prosecution of the complaint against Mr. Estabrooks. This leaves only one possibility: a general conspiracy perpetrated by those involved in the processing and adjudication of the complaint.

In brief, the failure to identify one or more tortfeasors was fatal to the action, irrespective of the fact that vicarious liability was not pled. [ 51 ] If individuals had been named they would have been shielded, if they had acted in good faith, by the statutory framework set out in s. 32 of the Act , which provides: No action lies against members, officers or directors of the Association, the Board, or any committees of the Association for anything done in good faith pursuant to the provisions of this Act or the by-laws or the Real Estate Agents Act or delegated or assigned by the Minister to the Association pursuant to the Real Estate Agents Act .

If, however, any of these parties acted maliciously, they would lose the protection of s. 32, and the Association could, consequently, be open to a claim of vicarious liability. [ 52 ] This Court has repeatedly emphasized the importance of pleadings, which formally define the issues at play and the parties’ respective positions. The point was most recently reiterated by Drapeau, C.J.N.B. and Deschênes, J.A., in Gay et al. v. Regional Health Authority 7 and Dr. Menon , 2014 NBCA 10 , [2014] N.B.J.

No. 117 (QL) at para. 25 , citing Local 772 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada v. The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada and the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 325 and Hughes and Wood , 2013 NBCA 33 , 404 N.B.R. (2d) 332 .

[53] Pleadings must also contain some degree of specificity. In Craig Manufacturing Ltd. v.Davidson, 2009 NBCA 42, 345 N.B.R. (2d) 359, Deschênes J.A. summarizes the importance of Rule 27.06(10) (Rules of Pleading –Applicable to All Pleadings, Claim for Relief) to which this Court gives a strict

interpretation: Our Court has dealt with the importance of Rule 27.06(10) on a few occasions in recent times and, as expected, its dictates have beenfollowed in the courts below. In McLaughlin v. Levesque (2008), 337 N.B.R. (2d) 283, [2008] N.B.J. No. 386 (QL), 2008 NBQB 329,Lavigne J. provides a succinct enunciation of the key principles that inform the

interpretation and application of that Rule: Rule 27.06(10) of the New Brunswick Rules of Court reads as follows: Where a pleading contains a claim for relief, the nature of the relief claimed shall be specified. Particulars of damages need only bepleaded to the extent that they are known at the date of the pleading, but further particulars shall be filed and served forthwith after theybecome available and, in any event, not later than the date of entry for trial.

It is trite law to suggest that pleadings govern the issues between the parties, and as such, are designed to prevent surprise at trial andavoid “trial by ambush”. Each party must give his opponent all information that is necessary to prevent surprise at trial. This ensures thatthe parties know the case to be met. Courts in New Brunswick seem to apply Rule 27.06(10) strictly. In the case of Smith v. Agnew (2001), 2001 NBCA 83 , 240N.B.R. (2d) 63; 622 A.P.R. 63; 2001 NBCA 83, our Court of Appeal discussed Rule 27.06(10).

Drapeau J.A. (as he then was) stated atparagraph 5: As a general rule, special damages will not be awarded at trial unless particulars have been pleaded or provided in a Statement ofParticulars. Rule 27.06(10) of the Rules of Court provides that particulars of damages must be pleaded to the extent that they are known.It also enjoins the party seeking relief to file and serve particulars of damages forthwith after they become known and, in any event, nolater than the date of entry for trial. See Myshrall v.

Vu (1994), (NB KB), 156 N.B.R. (2d) 241 (Q.B., Stevenson, J.),at para. 39. (...) Pleadings are crucial to the determination of the issues in a case as well as the determination of the relief to be given to the litigant. Aswas noted by Robichaud J. in Delphinium Ltée et al. v. 512842 N.B. Inc. et al. (2006), 2006 NBQB 346 , 307 N.B.R. (2d) 284;795 A.P.R. 284; 2006 NBQB 346, at paragraph 243: Our Court of Appeal strongly recommends and urges trial judges to insist on compliance with the Rules of Court. In Smith v.

HumanRights Commission (N.B.) et al. (1999), (NB CA), 217 N.B.R. (2d) 336, Drapeau, J.A. (as he then was) frames thisrecommendation as follows at paragraph 19: Experience has shown that respect for the jurisdictional framework created by the Rules of Court and compliance with its proceduraldictates serve the best interests of justice. Indeed, conformity with the Rules of Court invariably produces a winnowing of the chaff fromthe grain and, in turn, helpful clarity is brought to the questions submitted to the court for resolution. Focused and insightful decisionsinvariably follow.

The end product is better justice for all. However, very recently, Chief Justice Drapeau in Chiasson v. Chiasson (2008), 2008 NBCA 11 , 326 N.B.R. (2d) 282; 838A.P.R. 282; 2008 NBCA 11, at paragraph 33, stated the following: Particulars of special damages must be provided in the Statement of Claim or in a Statement of Particulars (see Rule 27.06(10) of theRules of Court; Desjardins v. Theriault (1970), (NB KB), 3 N.B.R. (2d) 260, [1970] N.B.J. No. 130 and Michaud v. J.Clark And Sons Ltd. (1980), (NB KB), 31 N.B.R. (2d) 98 (Q.B.), [1980] N.B.J. No. 160).

The respondent did notcomply with this pleading requirement, but his pre-trial brief contains particulars of his claim for past loss of earning capacity and theappellant did not object to the production of evidence on this issue at trial. It follows that compensation for this loss was not precluded(see Harvey Foods Ltd. v. Reid (1971), (NB CA), 3 N.B.R. (2d) 444 (C.A.), [1971] N.B.J. No. 28, and Smith v.Agnew, para. 5).

In the present case, the defendant did not object to the production of evidence for the special damages that were claimed and detailed inthe plaintiff’s pre-trial brief even though particulars, as required by Rule 27.06(10), had not been provided. However, the disputed itemswere not claimed or detailed in the pre-trial brief and the defendant did object to the production of evidence related to these disputeditems at trial. When the importance of the rules of pleading is discussed, the statement of Drapeau J.A. (as he then was) in Parlee v.

McFarlane(1999), (NB CA), 210 N.B.R. (2d) 284; 536 A.P.R. 284 (C.A.), at paragraph 33, is often relied upon: It is commonplace that trial by ambush has no place in our modern system of justice. The rules of pleading enunciated in rule 27 of theRules of Court are designed to ensure that the relevant issues are raised, and that no party is taken by surprise. The importance ofpleadings cannot be underemphasized. They define the issues not only for the parties, but for the judge as well.

Indeed, I cannot fathom asituation where a trial judge could properly decide the case before him or her on a basis not raised in the pleadings or at trial. The underlying reasons for being specific in one’s pleadings are no longer matters for debate (see Desjardins et al. v. Côté et al., 2006NBCA 81 , [2006] N.B.J. No. 328; 304 N.B.R. (2d) 40; 788 A.P.R. 40 (C.A.)). A case such as the present one highlights theimportance of Rule 27.06(10).

Had the particulars been provided on the day the case was entered for trial, or even when specificallyrequested in July 2008, we would not be in this predicament. (paras. 21-28) [para. 14] [54] In the present case, the trial judge acknowledged that the Plaintiff’s Statement of Claim does notidentify specific people whose actions would have engaged the defendant’s liability (para. 72). He is, therefore, left with a vague andnon-specific allegation.

The original Statement of Claim features the following allegation: “The Plaintiff’s claim against the defendant isfor damages suffered by the Plaintiff as a result of the Defendant’s malicious prosecution of the Plaintiff”. [55] The trial judge relied on London Drugs Ltd. v. Kuehne & Nagel International Ltd., (SCC), [1992] 3 S.C.R. 299, [1992] S.C.J. No. 84 (QL), for the proposition that Mr. Estabrooks did not have to plead vicariousliability because it is in fact the NBREA that prosecuted Mr.

Estabrooks, and it is the NBREA that is answerable for the treatment of Mr.Estabrooks by the NBREA’s employees and volunteers. I am of the view that London Drugs does not stand for that proposition: in it, theemployees were named as parties and vicarious liability was pled. It was a case dealing with a tort claim arising in a contract situation,and, while La Forest J., in dissent, examined extensively the law with respect to the vicarious liability regime, I am not convinced thatcase has any application to the case at bar.

However, the trial judge concluded it was not necessary to plead vicarious liability, nor toname the individuals for whose actions the NBREA may have been responsible. He states: The Executive-Director, the Registrar or the Complaints and Discipline Committees are all offices or bodies created by statute. Thepeople occupying those functions act not as individuals, but as extensions of the NBREA. [para. 24] The trial judge further pointed out that the failure to plead vicarious liability could have been resolved by the NBREA seekingparticulars. I disagree.

How can a question of law be resolved by saying the NBREA can ask for particulars, and how can the NBREA befound liable on the basis of vicarious liability which the trial judge says does not have to be pled? The problem with this approach is thatwithout naming individuals who can be found primarily responsible and then without pleading vicarious liability it is almost impossibleto attribute malice to the NBREA or establish that it had an improper purpose through the actions of the Registrar. In this case, there isno bridge or link between the actions of the Registrar and those of the NBREA.

And, a prejudice accrues to the NBREA in trying todefend the action because of the failure to name individuals and to plead vicarious liability. [56] In Gay et al., a doctor and a hospital were named defendants in a class action suit involvingsystemic negligence. Among the representative plaintiffs’ claims was a plea of vicarious liability. Though the pleadings were “far from amodel of clarity”, the majority was willing to infer, by a generous reading of the Amended Statement of Claim, that the particulars of theclaim against the doctor provided a basis for the hospital’s vicarious liability (para. 74).

I agree that pleadings should be read generously,but generosity has its limits. Unlike Gay et al., the plaintiff in this case did not plead vicarious liability poorly – he did not plead it at all.And, because Mr.

Estabrooks chose not to name any individuals as parties, it is not possible to draw any inferences from the particularsof the claims against those involved in the professional disciplinary process (the Executive-Director/Registrar, or the members of the Complaints and Discipline Committees) to support a claim of primaryresponsibility for the tort of malicious prosecution and by extension vicarious liability against the NBREA. [57] I conclude, putting aside the issue of vicarious liability, Mr.

Estabrooks had to name theindividuals who allegedly acted with malice in order to make out the specific malice requirement of the tort of malicious prosecution in

the action against the NBREA. In failing to do so, the action should have failed, and the resulting appeal should be allowed. B. The test in Nelles [ 58 ] As stated above, it is my view that an action for malicious prosecution cannot lie against a provincial self-regulating disciplinary body for the actions taken by members of its disciplinary committee in the course of their duties. However, should I be in error on that point, I offer the following analysis of the trial judge’s application of the test in Nelles .

It is my view that, though he may have selected the correct test, he applied it incorrectly. [ 59 ] Let me focus on the first and fourth of the elements of the test, which is where I am of the view the trial judge is in error. Recall that the first element requires that the plaintiff demonstrate that the pleadings were initiated by the defendant. This element identifies the proper target of the suit, as only those who are “actively instrumental” in setting the prosecution in motion should be held accountable for any resulting damage: Miazga , at para. 53 .

The trial judge began his analysis by saying that the first two elements are not in dispute. He clearly misunderstood the position of the NBREA because, throughout the trial, and in its pre- and post-trial briefs, it put in issue the argument that the first element had not been met: it focused on who initiated the complaint. Its position was the NBREA did not initiate the process, an individual member did by letter of complaint. Any member of the public at large (including a fellow Association member) is permitted by statute to make a written complaint against a realtor for misconduct or incompetence.

Further, the NBREA’s position was that there are a number of players involved in the process, and, once the process begins, no player has much discretion. In accordance with s. 21(1) of the Act , once in receipt of a complaint, the Registrar is duty bound to bring the complaint to the Complaints Committee. That Committee decides whether to direct the Discipline Committee to hear and determine the complaint. There is no analysis by the trial judge of the first element, and it clearly was in dispute.

This is an error in law. [ 60 ] The complaint was not initiated by the NBREA, but by an Association member in a written complaint. From a plain and ordinary reading of s. 21(1) it is clear that the Registrar, receiving a written complaint has no discretion to dismiss the complaint:

21(1) Upon receipt of (

a) a complaint in writing filed with the Registrar, […] the Committee shall consider and investigate the conduct or competence of any member of the Association, but no action shall be taken by the Committee under subsection (3) unless (

d) the member whose conduct or competence is being investigated has been given a copy of the complaint or resolution, or the substance of the matter being investigated, and given at least two weeks in which to submit in writing to the Committee any explanations or representations the member may wish to make concerning the matter; and (

e) the Committee has examined or has made every reasonable effort to examine available records and other documents relating to the complaint or matter under investigation. 21(1)

En cas de réception (

a) soit d’une plainte écrite déposée auprès du registraire […] Le comité des plaintes examine la conduite ou la compétence d’un membre de l’Association en fait enquête a ce sujet. Il ne peut prendre de mesures en vertu du paragraphe (3) que si les conditions suivantes sont remplies : (

d) le membre dont la conduite ou la compétence donne lieu à l’enquête a reçu une copie de la plainte ou de la résolution ou des éléments essentiels de la question faisant de l’enquête demandée et a disposé d’un délai de deux semaines au moins pour fournir par écrit au comité les explications ou observations qu’il désire lui communique à cet égard; (

e) le comité a examiné ou a déployé tous les efforts raisonnables pour examiner les documents disponibles concernant la plainte ou l’objet de l’enquête. [ 61 ] In rejecting the appellant’s submission that the Registrar of Complaints has no discretion and must automatically send a written complaint to the Complaints Committee the trial judge stated: This Court refuses to accept the above Defendant’s submissions as, if accepted, it could cause many unjustified and abusive, not to say ridiculous use of a disciplinary process that is in place for obviously good reasons and is a process that shall not be allowed to be turned into a parody and shall maintain a credibility before the public at large, with the Realtors and with the volunteers that serve on its committees. [para. 40] Regardless of the trial judge’s view concerning the discretion of the Registrar to forward the complaint, because it might result in too many frivolous complaints being brought forward, she was duty bound to follow the statute.

The complaint had to be forwarded to the Complaints Committee for consideration and investigation. She did not initiate the complaint and had no power to reject it at that stage. (The Registrar did admit on a question from the Court that she would not forward an absolutely frivolous complaint such as, “my husband works too hard”.) And, the fact that a judge of the Court of Queen’s Bench, on appeal from the Discipline Committee, later found the Discipline Committee had no jurisdiction to hear the complaint does not negate the fact that there was a written complaint that triggered the process.

It was the role of the Complaints Committee to stop it in its tracks if it had no merit rather than to forward it to the Disciplinary Committee. Thus, the first element has not been established. This failure to meet the first part of the test is, in and of itself, sufficient for the appeal to be allowed. [ 62 ] I turn now to the fourth and most crucial element of the test: malice. This element requires that the plaintiff demonstrate that there was malice, or a primary purpose other than that of carrying the law into effect. The burden of proving malice lies on the person alleging it: in this case, Mr. Estabrooks.

He had to establish that the NBREA acted for an improper purpose. To iterate what Lamer J. stated in Nelles : The required element of malice is for all intents, the equivalent of “improper purpose”. It has according to Fleming, a “wider meaning than spite, ill-will or a spirit of vengeance, and includes any other improper purpose, such as to gain a private collateral advantage”

(Fleming, op. cit., at p. 609).

To succeed in an action for malicious prosecution against the Attorney General or Crown Attorney, the plaintiff would have to prove both the absence of reasonable and probable cause in commencing the prosecution, and malice in the form of a deliberate and improper use of the office of the Attorney General or Crown Attorney, a use inconsistent with the status of “minister of justice”. [page194] In my view this burden on the plaintiff amounts to a requirement that the Attorney General or Crown Attorney perpetrated a fraud on the process of criminal justice and in doing so has perverted or abused his office and the process of criminal justice.

In fact, in some cases this would seem to amount to criminal conduct […] [para. 45]. [ 63 ] In Griffin , Jenkins C.J.P.E.I. (in dissent) explains further: In Proulx , L’Heureux-Dubé J. stated (in her dissent at para. 217) that the standard of deliberate and malicious use of one’s office is a high and clear one that calls for proof of subjective intent to act out of malice or with an improper purpose by perverting the power of the office, and that courts must avoid any

interpretation that leaves any room for uncertainty in application of the standard. Although her comments appear within a dissenting judgment, on reading the majority judgment it can be inferred that all the majority reasons also subscribe to that general direction. [para. 141] [ 64 ] Although there were a number of players in this discipline process, the trial judge focused his attention on the Registrar/Executive Director of the NBREA, who was not named as party in this dispute.

The trial judge stated he had “no difficulty in making and does make an inference of improper purpose by the NBREA via the actions of its Executive-Director” (para. 139). He takes exception to the fact that she made the decision to forward the complaint to the Complaints Committee; that she was called as a witness at the hearing before the Disciplinary Committee ( Quaere : Who else would have been called?); that she involved the Association lawyer in the entire process; and that she chose her friend as a member of the Complaints Committee.

In sum, he states that two of the key players, the Registrar and the complainant in this matter, “had ulterior motives, or improper purpose to have Mr. Estabrooks found guilty

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