Docket: CACV203 2 The Saskatchewan Financial Services Commission Appellant (Defendant) - v. -, 2014 SKCA 78

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2014 SKCA 78 Date: 2014-07-24 Between: Docket: CACV203 2 The Saskatchewan Financial Services Commission Appellant (Defendant) - and - Brian Norvel Mallard Respondent (Plaintiff) - and - Mutual Fund Dealers Association of Canada/Association Canadienne des Courtiers de Fonds Mutuels and Shaun Devlin Defendants Between: Docket: CACV2033 Mutual Fund Dealers Association of Canada/Association Canadienne des Courtiers de Fonds Mutuels and Shaun Devlin Appellants (Defendants) - and - Brian Norvel Mallard Respondent (Plaintiff)

- and - The Saskatchewan Financial Services Commission Defendant Coram: Richards C.J.S., Lane and Herauf JJ.A. Counsel: Gordon J. Kuski, Q.C. and Philip J. Gallet for The Saskatchewan Financial Services Commission James D.G. Douglas and Caitlin R. Sainsbury for Mutual Fund Dealers Association of Canada/Association Canadienne des Courtiers de Fonds Mutuels and Shaun Devlin Naheed Bardai for Brian Norvel Mallard Appeal: From: 2010 SKQB 468 Heard: October 26, 2011; remanded May 1, 2014 Disposition: Appeals allowed Written Reasons: July 24, 2014 By: The Honourable Chief Justice Richards In Concurrence: The Honourable Mr. Justice Lane The Honourable Mr. Justice Herauf

Richards C.J.S. [ 1 ] Mr. Mallard commenced an action in 2010 against the Saskatchewan Financial Services Commission (the “Commission”) and the Mutual Fund Dealers Association of Canada (the “MFDA”). One of the allegations made by Mr. Mallard was that the Commission and the MFDA had committed the tort of unlawful interference with economic relations. Paragraphs 33 to 39 of his statement of claim read as follows: 33. The Defendants acted in bad faith and interfered with Mr. Mallard’s economic interests by delaying Mr.

Mallard’s registration, receiving and holding the Misappropriated Documents, and pursuing a public investigation based on unsworn statements of a disgruntled former employee motivated by revenge. 34. The interference of the Defendants was by illegal means and conduct, particulars of which are set out above. 35. The Defendants were aware of Mr. Mallard’s business relationships as they were in possession of documents pertaining to such relationships. The Defendants’ interference was intentional and resulted in the loss of clients. 36.

The conduct of the Defendants has resulted in considerable damage and economic loss to Mr. Mallard, including, but not limited to: (

a) the loss of clients; (

b) an inability to earn an income through the sale of mutual funds during the period in which Mr. Mallard’s registration was unreasonably delayed; (

c) legal costs associated with responding to the inquiries of the Defendants, which inquiries were aimed at “ getting ” Mr. Mallard; (

d) costs associated with recovering the Misappropriated Documents in the possession of the Defendants and others as the Defendants failed to take steps to recover the confidential information of investors, notwithstanding complaints made by Mr. Mallard; and (

e) costs associated with stopping the dissemination of the Unsworn Confidential Transcript as the Defendants failed to take such steps. 37. The unlawful actions of the Defendants are without justification.

38. The SFSC and MFDA are liable for the conduct of their employees, servants and agents, including, Mr. Pankratz, Mr. Mitchell and the Defendant, Mr. Devlin. Further or in the alternative, the SFSC is liable for the conduct of its agent, the MFDA and those working for the MFDA as the SFSC delegated its authority to the MFDA. 39. Mr. Mallard states that the loss and damage he sustained was caused and/or materially contributed to by the conduct of the Defendants. [ 2 ] The Commission and the MFDA brought applications in the Court of Queen’s Bench to strike these paragraphs from Mr. Mallard’s claim.

They did so on the basis that they did not disclose a cause of action. In this regard, they relied on certain decisions to the effect that an essential element of the tort of interference with economic relations is the commission of an unlawful act against a third party. The Chambers judge dismissed the applications to strike on the basis that the law on this point was unsettled. [ 3 ] The Commission and the MFDA then appealed to this Court.

Our decision, released at the end of 2011, dismissed the appeals on the ground that the Chambers judge had correctly found the law to be unsettled and thus not sufficiently clear to warrant striking Mr. Mallard’s claim because it disclosed no cause of action. See: 2011 SKCA 150 , 345 D.L.R. (4th) 103. [ 4 ] The Commission and the MFDA then applied for leave to appeal to the Supreme Court of Canada. They did this in early 2012. [ 5 ] In the meantime, the Supreme Court was dealing with an appeal which raised some basic questions about the tort of unlawful interference with economic relations.

As a result, it held the Commission’s and the MFDA’s applications for leave to appeal in abeyance. In a decision released on January 31, 2014, the Supreme Court confirmed that the tort was grounded on an unlawful action directed against, not the plaintiff, but a third party. See: A.I. Enterprises Ltd. v. Bram Enterprises Ltd. , 2014 SCC 12 , 366 D.L.R. (4th) 573. [ 6 ] On May 1, 2014, and in light of its decision in A.I.

Enterprises , the Supreme Court made the following order with respect to the applications for leave to appeal filed by the Commission and the MFDA: Pursuant to subsection 43 (1.1) of the Supreme Court Act , the case forming the basis of the applications for leave to appeal from the judgment of the Court of Appeal for Saskatchewan, Numbers CACV2032 and CACV2033, 2011 SKCA 150 , dated December 9, 2011, is remanded to the Court of Appeal for Saskatchewan for disposition in accordance with A.I. Enterprises Ltd. et al. v. Bram Enterprises Ltd. et al. , 2014 SCC 12 . [ 7 ] Mr.

Mallard, the Commission and the MFDA agreed that this Court should dispose of this matter, as per the Supreme Court’s direction, on the strength of written submissions alone. We have now received and reviewed all of those submissions. [ 8 ] The Commission and the MFDA submit that those parts of Mr. Mallard’s statement of claim dealing with unlawful interference with economic relations (paras. 33-39 inclusive) should be struck because of what the Supreme Court held in the A.I. Enterprises decision. Mr.

Mallard, while not expressly conceding that his pleadings in relation to unlawful interference with economic relations are defective, seeks an order allowing him to amend them. [ 9 ] In our view, paras. 33-39 inclusive of Mr. Mallard’s statement of claim do not disclose a cause of action relating to the tort of unlawful interference with economic relations. This is because they do not allege the commission of an unlawful act or acts against a third party. As a result, paras. 33-39 must be struck. [ 10 ] We are not inclined to authorize any particular amendment to the statement of claim.

However, given that the governing law has changed or been substantially clarified in the wake of A.I. Enterprises , Mr. Mallard should have leave, if it is required, to amend his statement of claim in relation to the cause of action in unlawful interference with economic relations. [ 11 ] We also conclude that the Commission and the MFDA are each entitled to costs in this Court. We come to this result because the Supreme Court has directed, in effect, that we remake our December 9, 2011 decision in light of its ruling in A.I. Enterprises decision. If A.I.

Enterprises had been available in 2011, we would have allowed the appeals of the Commission and the MFDA and awarded costs in their favour in keeping with standard practice. Similarly, if the Supreme Court had granted the Commission and the MFDA leave to appeal and then dealt with their appeals on the merits, it would have allowed those appeals and, presumably, just as it did with respect to the successful party in A.I.

Enterprises itself, awarded costs to them. [ 12 ] As a result, the Commission and the MFDA are entitled to costs in this Court, on the basis of column 2, with respect to the proceedings which culminated in our decision of December 9, 2011. (The costs award made in that decision, of course, no longer stands.) We are not inclined to award costs of any kind in connection with the most recent round of proceedings, i.e. those flowing from the Supreme Court’s decision of May 1, 2014 and leading to the decision we make today. [ 13 ] We also set aside the award of costs made in Mr.

Mallard’s favour in the Court of Queen’s Bench. We do so because, in that Court, the MFDA sought to strike both the part of the statement of claim dealing with interference with economic relations and a part of the claim dealing with the tort of abuse of public office. It failed on the latter front and thus, as between Mr. Mallard and the MFDA, there was divided success in the Court of Queen’s Bench. Accordingly, as concerns Mr. Mallard and the MFDA, there will be no award of costs for the Queen’s Bench proceedings.

As for the Commission, it sought to strike only that part of the statement of claim relating to unlawful interference with economic relations. It was ultimately successful in that regard and thus will have its costs in the Court of Queen’s Bench. [ 14 ] In the end, we order as follows: (

a) The appeals of the Commission and the MFDA are allowed and paras. 33-39, inclusive, of Mr. Mallard’s statement of claim are struck;

(

b) Mr. Mallard is granted leave, should it be required, to amend his statement of claim as it relates to the tort of unlawful interference with economic relations; (

c) Mr. Mallard shall pay costs in this Court, on column 2, to the Commission and the MFDA with respect to the proceedings which culminated in our decision of December 9, 2011; (

d) The decision of the Chambers judge with regard to costs is set aside. No costs are payable either by or to Mr. Mallard in relation to the MFDA’s application in the Court of Queen’s Bench. Costs are payable by Mr. Mallard to the Commission in relation to the Commission’s application in that Court; and, (

e) No costs will be awarded with respect to this decision. DATED at the City of Regina, in the Province of Saskatchewan, this 24 th day of July, A.D. 2014. “Richards C.J.S.” Richards C.J.S. I concur “Lane J.A.” Lane J.A. I concur “Richards C.J.S.” for Herauf J.A. (as per authorization)