CITATION: Mammoliti v. Niagara Regional Police Service, 2007 ONCA 79
DATE: 20070207
DOCKET: C45097 and C45123
COURT OF APPEAL FOR ONTARIO
GILLESE, JURIANSZ and LaFORME JJ.A.
B E T W E E N :
C45097
PASQUALE MAMMOLITI
Luigi De Lisio for the appellant
Plaintiff (Appellant)
- and -
CHIEF OF THE NIAGARA REGIONAL POLICE SERVICE GARY NICHOLLS, THE NIAGARA REGIONAL POLICE SERVICES BOARD, THE NIAGARA REGIONAL POLICE SERVICE, ERNEST CLAYTON, LOUANN SCHENCK, STEVE MACLEOD and GREG MACDONALD
Terry Marshall for the respondent
Defendants (Respondents)
Heard: September 22, 2006
A N D B E T W E E N :
C45123
ANDREW ADAM FERRI
Angelo P. Fazari for the appellant
Plaintiff (Appellant)
- and -
ALLAN H. ROOT, PATRICIA VADDACCHINO, NIAGARA REGIONAL POLICE SERVICES BOARD, LOUANN SCHENCK, GREG MACDONALD and THE TORONTO DOMINION BANK
Sara Blake for the respondents Allan H. Root and Patricia Vaddacchino
Terry Marshall for the respondents Niagara Regional Police Services, Louann Schenck and Greg MacDonald
Defendants (Respondents)
Heard: September 22, 2006
On appeal from the judgment of Justice John E. Sheppard of the Superior Court of Justice dated February 24, 2006, with reasons reported at [2006] O.J. No. 710.
LaFORME J.A.:
[1] The Niagara Regional Police Services Board, the Chief of Niagara Regional Police Service, the Niagara Regional Police Service, Ernest Clayton, Steve Macleod, Louann Schenck and Greg MacDonald (collectively, the “NRPD”) and Allan Root and Patricia Vaddacchino (collectively, the “Crown Attorneys”)[^1] each moved for summary judgment under Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The motions judge granted both motions and dismissed the claims against all the respondents with costs. Pasquale Mammoliti and Andrew Ferri both appeal. Their appeals were heard together.
OVERVIEW
[2] Ferri, through a company he owned, entered into an agreement with the Toronto-Dominion Bank (the “TD Bank”) to purchase a building in Welland, Ontario. Thereafter, he retained Mammoliti to assist him in the clean up of the purchased property, which was carried out prior to closing. As a result of this clean up, events occurred that gave rise to both Ferri and Mammoliti being charged by the NRPD with the criminal offences of extortion and theft.
[3] Subsequent events resulted in all charges against Ferri and Mammoliti being dismissed or withdrawn. Each of them then commenced independent civil actions against the NRPD, the Crown Attorneys, and the TD Bank[^2] seeking damages for malicious prosecution, false arrest, false imprisonment, negligence and breaches of the Canadian Charter of Rights and Freedoms.
[4] The motions judge, in my view, erred when he dismissed the claims of Mammoliti and Ferri against the NRPD and the Crown Attorneys for malicious prosecution, negligence, and breaches of the Canadian Charter of Rights and Freedoms. In all other respects the motion judge correctly dismissed their claims. Consequently, for the reasons set out below, I would allow portions of the appeals of both Mammoliti and Ferri.
BACKGROUND
(i) The Criminal Proceedings.
[5] Ferri is the President of Universal Management Consultants Inc. On March 12, 1997, on behalf of his company, he proposed an Agreement of Purchase and Sale with the TD Bank to purchase 55-57 East Main Street, in Welland, Ontario. The Agreement of Purchase and Sale contained the following clause: “The Vendor agrees to remove all bank records and files stored in the building prior to closing”.
[6] This clause was subsequently crossed out by the TD Bank and the following clause was inserted: “The Purchaser accepts the building in an ‘as-is’ condition”. The transaction was scheduled to close on May 30, 1997.
[7] There appears to be some disagreement about whether the transaction actually closed on Friday, May 30, 1997 or on Monday, June 2. Whichever it is, it is of no legal significance to this appeal.
[8] Sometime in April 1997, Ferri retained the services of Mammoliti to enter the building and remove approximately 2,000 banker boxes that had been left there by the TD Bank. Mammoliti removed the boxes one to two weeks later, over the course of two to three visits to the premises.
[9] On May 13, 1997, the TD Bank became aware that bank files had been taken out of the building by Ferri in advance of the closing date. Contact was then made by the bank to Ferri in connection with the bank files.
[10] On or about May 15, 1997, the TD Bank and Ferri discussed the return of the files in exchange for compensation to Ferri for his labour and storage costs in an amount around $500 and a release from the TD Bank protecting him from lawsuits or damages. The TD Bank agreed in principle to Ferri’s request, and completed the real estate transaction on June 2, 1997 notwithstanding that compensation and a release were not complete, and that the bank files had not yet been returned.
[11] Until June 6, 1997, Ferri and the TD Bank, through their respective lawyers, continued to negotiate the issues of compensation and release for the bank files. However, on June 6, 1997, Ferri’s lawyer advised the TD Bank that they should now deal directly with Mammoliti, who had possession of the bank files.
[12] The TD Bank then contacted Mammoliti and requested the return of its files. Conversation ensued about how much the bank would pay for the return of the files, resulting in Mammoliti asking for $500,000. Following this phone conversation, the TD Bank contacted the Niagara Regional Police Service.
[13] From June 11 through June 16, 1997, conversation occurred between Mammoliti or his lawyer, representatives of the TD Bank and the Niagara Regional Police regarding the bank files. Mammoliti’s lawyer informed the bank that Mammoliti was treating the situation as an abandonment of the files and that the bank should negotiate on this basis.
[14] On June 13, 1997, the TD Bank learned that Mammoliti allegedly told a customer that he had read the customer’s file. Mammoliti’s lawyer advised the TD Bank that Mammoliti was in possession of the files and would not return them unless the bank purchased them from him. In response, the TD Bank advised that Ferri and Mammoliti would be responsible for any damages the bank suffered as a result of the alleged breach of confidentiality. The TD Bank also spoke with the Fraud Office of the Welland Police detachment and subsequently met with them.
[15] On June 19, 1997, the investigation of the TD Bank’s complaint was assigned to the respondents, Detective Greg MacDonald and Detective Louann Schenck, of the Niagara Regional Police Service. That same day, they met with the branch manager of the TD Bank to discuss the matter.
[16] On June 23, 1997, the respondent, Crown Attorney Allan Root and Detectives Schenck and MacDonald agreed that Ferri should be charged with theft and possibly conspiracy, and that Mammoliti should be charged with extortion and possession of property obtained by crime.
[17] On June 26, 1997, Detectives Schenck and MacDonald placed Mammoliti under arrest for extortion and possession of property obtained by crime, with a value exceeding $5,000.
[18] On July 3, 1997, during a meeting with Detectives MacDonald and Schenck, Ferri’s lawyer produced the entire real estate file. Ferri was charged on July 9, 1997 with attempted extortion and theft over $5,000.
[19] Sometime in January 1998, Crown Attorney Root assigned the matter to the respondent, Assistant Crown Attorney Patricia Vaddacchino. On February 11, 1998, Ferri was charged jointly with Mammoliti with attempted extortion and theft over $5,000. At the time the police charged Ferri and Mammoliti, Root was aware that Ferri had not demanded $500,000 and that Mammoliti had possession of the documents.
[20] The preliminary hearing for Ferri and Mammoliti began on June 4, 1998, continued on August 12 and 13, 1998 and concluded on December 16, 1998. Ferri was committed for trial on the charge of theft over only, and Mammoliti was committed for trial on both extortion and theft over. The following events then ensued:
• January 5, 2000: Matheson J., of the Superior Court of Justice, quashed the order committing Ferri on the charge of theft, and upheld the order committing Mammoliti on theft and extortion. That order was not appealed.
• November 14, 2000: The charges against Mammoliti were withdrawn upon certain conditions, one of which was that he return the TD Bank’s files.
[21] This concluded the criminal proceedings that gave rise to the civil actions subsequently commenced by Ferri and Mammoliti. To complete the background, I will very briefly outline the civil proceedings brought by both Ferri and Mammoliti.
(ii) The Civil Proceedings.
[22] On August 2, 2000, Ferri commenced an action against the TD Bank, the Crown Attorneys and the NRPD, seeking damages for malicious prosecution, false arrest and imprisonment, and Charter breaches.
[23] On November 27, 2000, Mammoliti commenced an action against the TD Bank and the TD Bank personnel seeking damages for wrongful imprisonment and malicious prosecution.
[24] On May 10, 2001, Mammoliti commenced an action seeking damages for malicious prosecution, negligence, and Charter breaches but only against the NRPD.
[25] On October 9, 2002, the TD Bank brought a motion for summary judgment dismissing the claims of Ferri and Mammoliti against them.
[26] On November 19, 2002, Matheson J. dismissed the TD Bank’s motion, finding a need for a trial on the claims of malicious prosecution, false arrest and false imprisonment.[^3] His reasons, articulated at para. 25, are as follows:
(i) There is an issue with respect to what the conversations were between the defendants and the plaintiffs. Did [Mammoliti] demand the $500,000 in a threatening manner or was he joking? Did Mammoliti ask for his costs of moving and storing?
(ii) Did Ferri put his brother-in-law up to the telephone call to a bank official, or was it also a prank?
(iii) There is an issue as to whether the defendants acted with malice towards the two plaintiffs.
(iv) Did the defendants act in a reasonable manner in reporting this incident to the police, rather than start a civil action?
(v) Did [the TD Bank] personnel put undue pressure on the Niagara Regional Police Service to lay criminal charges?
[27] Although there is argument about whether the TD Bank’s summary judgment motion was on behalf of all the defendants named in both actions, I am satisfied it was not. The record makes it clear that it was only on behalf of the TD Bank, and both Mammoliti and Ferri not only appreciated this fact, but also accepted it. Moreover, the reasons of Matheson J. clearly demonstrate that the claims against the Crown Attorneys and the NRPD were not considered by him. I will say more about this below.
[28] On January 21, 2005, the Crown Attorneys and NRPD moved for summary judgment dismissing the claims against them by Mammoliti and Ferri. The motions were heard by Sheppard J. over three days. On February 24, 2006, the motions judge released his decision granting the motions and dismissing the claims by Mammoliti and Ferri against “all the defendants”.
ISSUES
[29] The appellants submit that the issues in these appeals arise from numerous errors made by the motions judge. When the issues are fully considered, they can be summarized as follows:
(1) Did the motions judge’s decision to grant summary judgment conflict with the decision made by Matheson J. on November 19, 2002, dismissing the TD Bank’s motion on the same facts, in the same proceedings?
(2) Did the motions judge properly apply the law and decide the issues of evidence on a motion for summary judgment, principally as it applies to the torts of malicious prosecution, false arrest and false imprisonment?
ANALYSIS
[30] I will examine the issues in the order set out above. In my analysis of the first issue, namely the effect of the decision of Matheson J., I will also address another matter that was raised in oral argument on these appeals. Specifically, in his reasons the motions judge held that the claims by Mammoliti and Ferri were dismissed “against all the defendants named in [their actions]”. This, of course conflicts with the decision of Matheson J. who dismissed the TD Bank’s prior motion for summary judgment.
(i) The decision of Matheson J.
[31] As I noted above, the decision of Matheson J. dealt exclusively with the actions of Mammoliti and Ferri against the TD Bank. The Crown Attorneys and the NRPD subsequently brought their own motions for summary judgment, which motions were decided by Sheppard J. The TD Bank was given notice of these motions but did not appear.
[32] The order made by Sheppard J. can bind only the Crown Attorneys and the NRPD for the same reasons the order made by Matheson J. can bind only the TD Bank: Rule 20 permits each defendant to bring his or her own independent motion for summary judgment dismissing all or part of the claim against him or her and each defendant’s motion is to be decided independently and on its own merits. This is not an uncommon practice.
[33] Moreover, the formal order of Sheppard J. – which is the subject of this appeal – clearly establishes that only the claims against the Crown Attorneys and NRPD are dismissed. In my view, nothing turns on the overly broad language used by Sheppard J.
[34] More importantly, Mammoliti and Ferri argue that the decision of Matheson J. renders the matters before Sheppard J. res judicata. However, as I have detailed above, the parties in each motion were different, as were the issues and the relevant material facts. In these circumstances the doctrine of res judicata has no application.
[35] For the same reasons, there is also no abuse of process. I would, therefore, dismiss this ground of appeal.
(ii) Malicious prosecution and the remaining claims
[36] Sheppard J. held that the claims of Ferri and Mammoliti – except for malicious prosecution - are barred by s. 7(1) of the Public Authorities Protection Act, R.S.O. 1990, c. P.38. I will deal first with the claims for malicious prosecution and then return to the issue of the application of the Public Authorities Protection Act.
(a) Malicious prosecution
[37] Although these appeals are in respect of all the claims dismissed by the motions judge, the central issue for consideration – as generally accepted by all the parties – is his treatment of the “malicious prosecution” claims. That is, was he correct in respect of the law and how he applied it, and were there genuine issues of material facts requiring a trial?
[38] It is important to keep in mind throughout these reasons that the paramount theory of both Mammoliti and Ferri is that the NRPD and Crown Attorneys were improperly using their offices to assist the TD Bank in the recovery of its files. In doing so, they assert that the offices and authority of the NRPD and Crown Attorneys were used to facilitate criminal proceedings in connection with a matter they knew was purely civil.
[39] In considering the claims for malicious prosecution, the motions judge correctly approached his examination by separately considering the roles played by the NRPD and the Crown Attorneys. Relying on Nelles v. Ontario, 1989 CanLII 77 (SCC), [1989] 2 S.C.R. 170 at 192-93 (S.C.C.) he correctly set out the four part test that Mammoliti and Ferri were each required to satisfy to successfully prove their claims of malicious prosecution against the NRPD and the Crown Attorneys, namely:
The impugned prosecution must have been initiated or continued by the defendant;
The proceedings must have terminated in favour of the plaintiff;
The proceedings must have been instituted without reasonable and probable grounds; and,
The defendant must have acted out of malice or for a primary purpose other than that of carrying the law into effect.[^4]
[40] The motions judge dismissed Ferri’s claim for malicious prosecution against the Crown Attorneys after finding that Ferri failed to satisfy the first element of the above test with respect to his claim. He also dismissed Ferri’s claim against the NRPD upon finding that Ferri failed to satisfy the third and fourth elements. Finally, the motions judge dismissed Mammoliti’s claim for malicious prosecution against the NRPD after concluding that the second, third and fourth elements were not satisfied.
[41] In my view, the motions judge erred in respect of each of his conclusions. I propose to demonstrate the errors made by the motions judge by examining the four elements of Nelles in their order.
Element one (prosecution initiated by the defendant)
[42] As noted, the only reliance on element one by the motions judge was in connection with his dismissal of Ferri’s claim against the Crown Attorneys. The motions judge found that the Crown Attorneys did not initiate the prosecution within the meaning of the Nelles test because they had no role in laying the charges against Ferri notwithstanding that the NRPD consulted Root for legal advice.
[43] In response to the Ferri motion, the Crown Attorneys expressly - and correctly in my view - conceded that the first two elements of malicious prosecution had been met. Paragraph 55 of the factum filed by the Crown Attorneys on the motion succinctly sets out their position:
For purposes of the motion, the Crown defendants concede that the first two elements of the tort of malicious prosecution are satisfied: the police initiated the proceedings and the Assistant Crown Attorney continued the prosecution; and it was terminated in favour of the plaintiff.
[44] Thus, with respect to Ferri’s malicious prosecution claim against the Crown Attorneys, the motions judge ought to have found that elements one and two of the Nelles test had been established. I would therefore allow this ground of appeal. My conclusion here, however, does not fully answer Ferri’s appeal.
[45] No doubt as a result of his finding on the first element, no analysis was undertaken by the motions judge in connection with the second, third and fourth elements in Ferri’s claim. Accordingly, it will be necessary for me to do so.
Element two (proceedings terminate in favour)
[46] As I just concluded, the second element of Nelles was satisfied by Ferri because of the concession made by the Crown Attorneys. The following discussion on element two, therefore, will be in connection with Mammoliti’s claim against the NRPD.
[47] In the opinion of the motions judge, the criminal charges against Mammoliti could not be said to have terminated in Mammoliti’s favour because they were resolved pursuant to a settlement. At para. 29 of his reasons, he concluded as follows:
In my view, [the second element] contemplates that the charges are withdrawn without conditions or the accused is discharged upon a verdict of not guilty. A settlement does not fulfill this requirement….
[48] The charges against Mammoliti were withdrawn by the Crown Attorneys and Mammoliti argues that this fact by itself is sufficient to satisfy the requirement that the prosecution must have terminated in his favour. The NRPD relies on the case of Bond v. Ontario, [2002] O.J. No. 3499 at para. 26 (S.C.J.) to assert that where there is a bargain or some accommodation to dispose of criminal charges – as was the case with respect to the withdrawal of the charges against Mammoliti - the second element of the Nelles test will not be met. A brief summary of the settlement to which the NRPD refers will be helpful.
[49] Mammoliti was committed to trial after a preliminary hearing. All charges against him, however, were subsequently withdrawn by the Crown on the eve of trial on the following conditions:
(a) He surrender the documents to a place inaccessible to the TD Bank and Mammoliti for their safe-keeping; and,
(b) He commence legal proceedings against the TD Bank within 30 days.
[50] I presume the conditions were met given that the charges against Mammoliti were withdrawn at the request of the Crown Attorneys, and have not yet been reinstated. What then is the legal effect of the settlement in the context of this case?
[51] In Romegialli v. Marceau, 1963 CanLII 134 (ON CA), [1964] 1 O.R. 407 (C.A.) this court held that a withdrawal of the charges or stay of proceedings will constitute a favourable termination of the proceedings. At the commencement of the trial in Romegialli, and in the absence of the accused, the Crown prosecutor requested that the charge be withdrawn. The court granted the request without prejudice to the prosecution proceeding at a later date. It is to be noted that the withdrawal of the charges in Romegialli was not the result of an agreement with the accused person, but rather, the result of a unilateral decision made by the Crown.
[52] Other jurisprudence has held that a compromise or settlement between parties that has the effect of concluding a prosecution will not amount to “termination” for the purpose of maintaining an action for malicious prosecution: Baxter v. Gordon Ironsides & Fares Co. (1907), 13 O.L.R. 598 (Div. Ct.). More recent cases have held that a prosecution is not terminated in favour of an accused person where the charges against that person are withdrawn after he or she enters into a peace bond or pays an amount to charity: Bond, supra; see also Hunt v. Ontario, [2004] O.J. No. 5284 (S.C.J.).
[53] Merely finding such an arrangement, agreement or compromise, however, should not, in my view, end the court’s analysis of an action for malicious prosecution. For several reasons, which are not intended to be exhaustive, I believe there should be a further analysis into the underlying reasons on the part of the Crown and police for entering into such an arrangement, agreement or compromise.
[54] First, the underlying policy of the tort of malicious prosecution is to allow recovery in situations where the Crown or police acted outside the scope of the duties of their office. Thus, the Crown or police could avoid scrutiny by simply entering into an agreement, arrangement or compromise with an accused person, no matter how trivial, before withdrawing the charges against that person. This would have the effect of completely undermining the purpose of the tort.
[55] Second, it will almost always be the case that the Crown and police will be proceeding from a position of strength. The accused person, who believes he or she was the subject of a malicious prosecution, would effectively be giving up his or her right to sue even in the clearest of cases in exchange for his or her freedom, to avoid the stigma of a criminal conviction, or perhaps, to avoid the costs of a trial.
[56] If the police or Crown, for example, are found to have entered into a settlement for the purpose of avoiding a civil action for malicious prosecution, the settlement, or underlying purpose thereof, might well amount to evidence relevant to the issues of reasonable and probable cause and malice. Thus, there is, as I said earlier, a need for the court to engage in further examination of arrangements, agreements or compromises and their relevance to the second element of the Nelles framework.
[57] In this case, the Crown Attorneys agreed to withdraw the charges against Mammoliti with, among other things, a view to prescribing a time limit within which Mammoliti could commence legal proceedings against the TD Bank. I presume, as is usual in such circumstances, that the agreement with Mammoliti was discussed with the NRPD prior to its being implemented and the charges being withdrawn. In any case, the underlying purpose of the settlement and the role of the NRPD are matters for a trial.
[58] In the circumstances of this case, the NRPD cannot rely on the Crown Attorneys’ agreement with Mammoliti, which resulted in the charges being withdrawn, to now assert that the prosecution did not terminate in Mammoliti’s favour. Given the agreement’s express acknowledgement of Mammoliti’s intention to initiate legal proceedings against the TD Bank, allowing the police to use the agreement to avoid those very proceedings would undermine the purpose of the tort of malicious prosecution. In addition, without commenting on the purpose underpinning the agreement between the Crown Attorneys and Mammoliti, to find that the agreement precludes Mammoliti from pursuing a claim for malicious prosecution against the police would effectively sanction the holding out of potentially untenable bargains by the police or Crown during negotiations with an accused person.
Element three (absence of reasonable and probable cause)
[59] In connection with this element of Nelles, I will first examine Mammoliti’s claim against the NRPD, followed by Ferri’s claim against the NRPD, and conclude with Ferri’s claim against the Crown Attorneys.
[60] In most jurisdictions in Canada, this element is a question of law. The standard was defined in Nelles, supra, at 193, and confirmed in Proulx, supra, at para.10:
This test contains both a subjective and objective element. There must be both actual belief on the part of the prosecutor and that belief must be reasonable in the circumstances. The existence of reasonable and probable cause is a matter for the judge to decide as opposed to the jury.
[61] In Ontario, however, whether there was an absence of reasonable and probable cause in claims of malicious prosecution is not a question of law. Section 108(10) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that in an action for malicious prosecution, the trier of fact must determine whether or not there was reasonable and probable cause for instituting the prosecution. This has been the law in Ontario since 1985[^5], but this court was not directed to it on these appeals. Indeed, it appears that s. 108(10) has rarely been drawn to the court’s attention.[^6]
[62] In any case, the trier of fact in a malicious prosecution action in Ontario is required to decide element three of the Nelles test. Reasonable and probable cause is defined in Nelles, supra, at 193, citing Hicks v. Faulkner (1878), 8 Q.B.D. 167 at 171, Hawkins J., as:
[A]n honest belief in the guilt of the accused based upon a full conviction, founded [upon] reasonable grounds, of the existence of a state of circumstances, which, assuming them to be true, would reasonably lead any ordinarily prudent and cautious man, placed in the position of the accuser, to the conclusion that the person charged was probably guilty of the crime imputed.
[63] The motions judge therefore had to determine whether, on the available evidence, there was a triable issue with respect to whether the NRPD and the Crown Attorneys had met the standard, both subjectively and objectively. Put another way, the issue to be examined by the motions judge was whether there existed a state of circumstances, which if true, would reasonably lead an ordinarily prudent and cautious person, in the position of the NRPD and Crown Attorneys, to conclude that Mammoliti and Ferri were probably guilty of the crimes they were charged with.
[64] The circumstances to be considered includes those existing at the time when the NRPD initially charged Mammoliti with extortion and possession of stolen property, as well as those existing later on when they continued to act on the belief that he committed the offences of extortion and theft: see Chartier v. Attorney General (Quebec), 1979 CanLII 17 (SCC), [1979] 2 S.C.R. 474 (S.C.C.); Oniel v. Metropolitan Toronto Police Force (2001), 2001 CanLII 24091 (ON CA), 195 D.L.R. (4th) 59 (Ont. C.A.), leave to appeal to S.C.C. refused, [2001] S.C.C.A. No. 121. In other words, the NRPD had a continuing duty to investigate and to examine the evidence, including exculpatory evidence, after the charges had been laid.
[65] The rule that the police have a continuing duty to investigate, including a duty post‑arrest to examine potentially exculpatory evidence that comes to their attention, also applies to Ferri on the two occasions he was charged, which I discuss below.
[66] It will be recalled that on June 26, 1997, Mammoliti was charged with extortion and possession of stolen property with a value exceeding $5,000. On July 9, 1997, Ferri was charged with attempted extortion and theft over $5,000. Then on February 11, 1998, they were each charged with attempted extortion and theft over $5,000.
[67] To have properly charged Mammoliti with extortion, the NRPD required reasonable belief that Mammoliti intended to obtain money from the TD Bank by threatening the bank with its own files. Further, the NRPD needed reasonable belief that Mammoliti had no reasonable justification for such conduct. For the theft charge, the NRPD required reasonable belief that Mammoliti took the bank’s files – either fraudulently or without colour of right – with the intent to, among other things, deprive the TD Bank of its property in the files. And, for the possession of stolen property charge, the NRPD needed reasonable belief that Mammoliti knew that all or part of the property was stolen. The same requirements underpin the charges the NRPD laid against Ferri.
[68] It is well settled that on a motion for summary judgment, the role of the motion judge is limited to deciding whether a genuine issue exists as to material facts requiring a trial. Although this involves taking a hard look at the evidence presented, a motion judge should not attempt to find facts, assess credibility or decide questions of law. If there is an issue of credibility, it will be virtually impossible for the moving party to satisfy the requirements of Rule 20: 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), 1995 CanLII 1686 (ON CA), 21 O.R. (3d) 547 (C.A.); Irving Ungerman Ltd. v. Galanis, (1991), 1991 CanLII 7275 (ON CA), 4 O.R. (3d) 545 (C.A.).
[69] The motions judge was satisfied that Mammoliti’s request for $500,000 for the return of the bank’s files was sufficient to establish reasonable and probable cause for the police to charge him with extortion and theft. In other words, the motions judge considered nothing else in the circumstances relevant to the belief of the NRPD in Mammoliti’s probable guilt. Respectfully, I believe it was an error for the motions judge to conclude this issue as he did.
[70] In my view, the issue of reasonable and probable cause, and the motions judge’s analysis thereof, required a consideration of the entire constellation of facts and circumstances known to the NRPD at all relevant times. It is not apparent from the motions judge’s reasons that he engaged in such a consideration. Below I set out some of the additional relevant facts and circumstances known to the NRPD and which ought to have formed part of the motions judge’s consideration.
[71] In addition to Mammoliti’s request for $500,000 the NRPD – having received the real estate file from Ferri’s lawyer - can be said to have had knowledge of the information contained in various background statements received before Mammoliti and Ferri were charged. Consequently, among other things, the NRPD was, or is to be viewed as being aware, of the following:
• Pursuant to the purchase and sale agreement between Ferri and the TD Bank, TD Bank had the right to remove any of its records and files from the building prior to the closing date. Those files left behind could be seen to have been deemed worthless and not confidential, and thus left behind to be cleaned up by Ferri;
• On or about May 15, 1997, the TD Bank received a call from Ferri, who told the bank that he did not want any trouble and that he was holding the files in storage. Ferri said he would return the files to the TD Bank, but not until he got a release from the TD Bank protecting him from lawsuits or damages. Ferri indicated that he would contact his lawyer and get a release prepared for review by the TD Bank;
• Discussions were ongoing amongst Ferri, the TD Bank officials and their respective legal counsel at least until June 6, 1997. At this time Ferri advised the TD Bank that Mammoliti had the files and that the bank should deal directly with Mammoliti;
• Around June 9, 1997, the security department of the TD Bank contacted the NRPD. At this time, however, the TD Bank officials and legal counsel were engaged in conversations and corresponding with Mammoliti and his counsel. This continued until June 17, 1997;
• On June 13, 1997, the TD Bank received information that Mammoliti told an individual that he had read the person’s credit application file. The TD Bank officials then contacted the bank’s security department to emphasize the urgency of getting possession of the documents. The security department indicated that it would also contact the Welland police; and,
• Around June 23, 1997, the NRPD formed the opinion that the TD Bank was the victim of a theft and was now being extorted for the return of its property. On June 17, 1997, however, the TD Bank received a letter from a lawyer representing Mammoliti, wherein Mammoliti took the position that the files had been abandoned.
[72] It is in this context – or this state of circumstances - that the motions judge had to examine both the objective and subjective standard of care exercised by the NRPD and the Crown Attorneys. The question for him was whether, in these circumstances, a trier of fact could only reasonably find that an ordinarily prudent and cautious person, in the position of the NRPD, could conclude that Mammoliti was probably guilty of extortion and theft. Or, did the evidence allow for another inference, namely, that there was an absence of reasonable and probable cause? The answer in this case seems clear; the evidence on the motion does not allow for the sole inference that reasonable and probable grounds existed.
[73] In my opinion, the motion judge failed to consider and assess the totality of facts that were known to the NRPD on June 27, 1997, and again on February 11, 1998, including: (i) that given the purchase and sale agreement between Ferri and The TD Bank, Ferri had some – albeit an unclear right - to deal with the files; (ii) that Mammoliti had possession of the files, having been properly hired by Ferri to remove and store them; (iii) the identities and whereabouts of Mammoliti and Ferri were known to the police; and (iv) the names and addresses and contact information of lawyers representing both Mammoliti and Ferri.
[74] When the totality of the facts is considered, this evidence suggests that the constituent elements of the offences contemplated, and with which Mammoliti was subsequently charged, were almost entirely absent. Nevertheless, it appears that the NRPD failed to take, or even consider taking, reasonable steps to ensure that the necessary components of the offences existed. Indeed, there is a virtual absence of evidence that the NRPD made any attempt to interview either Mammoliti or his legal counsel. In my view, this operates against both a subjective and objective belief of reasonable and probable cause.
[75] All of the above, I conclude, needs to be examined and determined through the lens of a trial so that the evidence can be properly weighed and issues of credibility can be determined by a trier of fact. In the circumstances of this case, these functions cannot be properly conducted in a summary judgment setting in which the evidence relied upon is in the form of affidavit evidence.
[76] I turn next to Ferri’s claim against the NRPD and the third element of Nelles.
[77] I would rely upon my discussion of this issue above in connection with Mammoliti to demonstrate the motions judge’s error. In Ferri’s case, however, there are additional facts of which the NRPD had knowledge. For example, the NRPD knew that in a letter from a lawyer for the TD Bank to lawyers for Ferri and Mammoliti, as well as to Mammoliti, dated June 13, 1997, the TD Bank did not allege that the files had been stolen. As well, the NRPD was aware that Ferri had not demanded $500,000 and that Mammoliti had possession of the documents.
[78] My conclusion therefore is the same; that is, whether the NRPD had reasonable and probable cause to arrest and charge Ferri is a genuine issue for trial. The motions judge was wrong to decide this.
[79] Finally, in concluding my discussion on element three, I turn to the claim by Ferri against the Crown Attorneys.
[80] The subjective and objective belief of the Crown Attorneys as to whether reasonable and probable cause existed – as it is with the NRPD - is a question of fact that must be decided by a trier of fact. On the motion Ferri was therefore required to demonstrate that there is a triable issue regarding the Crown Attorneys belief in reasonable and probable cause.
[81] As I previously noted, in Ontario where a civil action is tried by a judge and jury, it is the jury who must decide whether reasonable and probable cause existed. Thus, if there are material facts in dispute that must be ascertained – such as, the facts upon which the Crown Attorneys acted, or the facts that pointed to Ferri’s innocence – those facts become matters for a trial.
[82] Ferri’s evidence is that Vaddacchino did not believe in the justice of the prosecution. Vaddacchino denies this. If Ferri’s evidence is accepted over that of Vaddacchino, a jury might reasonably decide that this amounts to an absence of belief in reasonable and probable cause: see for example Carroll v. Montsion et al. (1991), 1991 CanLII 11995 (MB KB), 74 Man. R. (2d) 63 (Q.B.). However, this requires a weighing of their respective evidence and an assessment of credibility. These functions cannot be achieved in a summary judgment motion.
[83] If the Crown Attorneys doubted the honesty of prosecuting Ferri, and failed to take reasonable steps to eliminate this doubt, they may then be considered to have failed to continue to hold a belief in reasonable and probable cause. This result would be possible even though the original accusation against Ferri had some foundation.
[84] In addition, there is evidence in this case that strongly pointed to Ferri’s innocence. For example, and as I have already noted, by January 1998, the Crown Attorneys knew: (i) that Ferri had not demanded $500,000 from the TD Bank; (ii) that Ferri had hired Mammoliti to remove the boxes from the building; and, (iii) that Ferri had permission to enter the property before closing for the purpose of taking measurements, getting estimates and to clean up “somewhat”.
[85] There are, in my view, triable issues with respect to the issue of whether the Crown Attorneys had reasonable and probable grounds on which to prosecute Ferri for theft and attempted extortion.
Element four (malice)
[86] The fourth element of malicious prosecution has been comprehensively addressed by the Supreme Court of Canada in both Proulx, supra, and Nelles, supra. The foundation of malice in a tort of malicious prosecution is essentially grounded in the use of one’s office for an improper purpose. Malice is an independent question of fact.
[87] Malice can also be found where a prosecutor decides to secure a conviction at all costs and conducts the case with tunnel-vision. Such a course of conduct could amount to a disregard for the rights of an accused person inspired by improper motives: Proulx, supra. In determining whether malice is present in any particular case, a court must consider “the totality of all the circumstances” of the case: Proulx, at para. 37. The motions judge’s task, therefore, was to decide if there was a triable issue in this regard.
[88] The principle submission of Mammoliti and Ferri is that the TD Bank together with the Crown Attorneys and the NRPD, acted against them to protect the bank’s negligence. They submit that there was competing evidence respecting this issue that was before the motions judge, which he erroneously weighed and assessed for the purpose of making credibility findings. I agree.
[89] At para. 12 of his reasons, the motions judge found that the facts which resulted in the charges being laid “amount to a litany of mutual errors in judgment and misunderstanding of fact, even law”. He was correct in this assessment, but he once again failed to properly consider these mutual errors and misunderstandings within the context of the totality of all the circumstances of the case.
[90] There is evidence from Ferri that during the preliminary hearing, he heard Vaddacchino state that, “…she didn’t know what she was doing here, this was a civil matter and should not be in the criminal courts”. His further evidence is that he heard her say that she was forced to take on the file and pressured by the TD Bank to proceed with the matter.
[91] The motions judge, however, simply accepted the evidence of Vaddacchino - that she was not pressured by the TD Bank - in contrast to the evidence of Ferri and notes made by Vaddacchino. In other words, he made credibility findings and weighed the evidence – matters he was not to do in the context of a summary judgment motion.
[92] In my view, this alone is sufficient for the motions judge to have concluded that a triable issue is present regarding the element of malice. However, there are other considerations, which I think it is useful to comment briefly on.
[93] The evidence discloses that Vaddacchino and Root were made aware of Ferri’s position through his counsel, prior to the charges being commenced. The NRPD attempted a “sting” operation against Mammoliti in order to recover the files for the TD Bank. Root was aware of this sting operation and, in fact, supported it. While this by itself may be of marginal probative value, it is nevertheless some evidence that tends to support the position that both NRPD and the Crown Attorneys were motivated by the TD Bank’s desire to retrieve its files.
[94] Finally, proceeding with a prosecution in a case where there is no reasonable and probable cause may not of itself constitute malice, but it is certainly evidence from which an inference of malice can be drawn in an appropriate case. Proceeding without reasonable and probable cause is contrary to the law and demands a credible explanation, failing which the inference of malice can be drawn. Here I would rely on my discussion above as to why reasonable and probable cause is a triable issue in this case.
[95] For all these reasons, I would allow the appeals of both Mammoliti and Ferri in connection with their respective claims for malicious prosecution. The claim for malicious prosecution by Ferri against the NRPD and Crown Attorneys, and the claim by Mammoliti against the NRPD should proceed to trial.
[96] I will now speak to the remaining issues on these appeals.
Section 7(1) of the Public Authorities Protection Act
[97] At para. 16 of his reasons, the motions judge held that “The claims for damages, except for malicious prosecution, are circumscribed by s. 7(1) of the Public Authorities Protection Act”. In my view, he was correct but only with respect to the tort claims for false arrest and false imprisonment; not with respect to the claims for negligence, as I will explain below.
[98] Given that the tort of malicious prosecution represents the very limited exception to what is otherwise complete prosecutorial immunity for Crown Attorneys, the following portions of my decision will apply only to the NRPD. Further, these reasons will only address Mammoliti’s claim for negligence because Ferri did not advance such a claim. I presume that in pleading negligence, Mammoliti intended to refer to the NRPD investigation.
(b) False arrest and imprisonment
[99] Subsection 7(1) of the Public Authorities Protection Act provides that no action lies against a public authority “unless it is commenced within six months next after the cause of action arose, or, in the case of continuance of injury or damage, within six months after the ceasing thereof”.
[100] For Mammoliti the matter began on June 26, 1997, when he was arrested. The respondents continued with the prosecution until November 14, 2000, when the charges against him were withdrawn. Mammoliti’s Statement of Claim was issued on May 10, 2001. It is Mammoliti’s position that the damages continued from June 26, 1997.
[101] In Ferri’s case, the matter began on July 9, 1997, when the charges were laid against him. The respondents continued with the prosecution of him until the certiorari application on January 5, 2000. Ferri’s Notice of Action was issued on July 5, 2000, and his Statement of Claim was subsequently issued on August 2, 2000. He also submits that the damages continued from July 9, 1997, up to and including January 5, 2000.
[102] I agree with the NRPD that if there are reasonable and probable grounds to arrest, there is no false arrest or false imprisonment. However, as I have already concluded, reasonable and probable cause in this case is an issue for trial. And, although this may be evidence of whether or not there was a false arrest or false imprisonment, the test for these torts is at the date of the arrest and imprisonment: Nicely v. Waterloo Regional Police (Chief of Police) (1991), 1991 CanLII 7338 (ON SC), 2 O.R. (3d) 612 at 618 (Div. Ct.).
[103] Where there is no continuation of the act which caused the damage - as here, where Ferri and Mammoliti were released - there is no “continuance of injury or damage” as that phrase is used in s. 7 of the Public Authorities Protection Act: Nicely, supra, at 619-620.
[104] The motions judge therefore correctly dismissed Ferri’s and Mammoliti’s claims for false arrest and false imprisonment pursuant to the Public Authorities Protection Act. I would dismiss this ground of appeal.
(c) Negligence
[105] Pursuant to this court’s decision in Hill v. Hamilton-Wentworth Regional Police Services Board (2005), 2005 CanLII 34230 (ON CA), 76 O.R. (3d) 481 (C.A.), leave to appeal granted, [2005] S.C.C.A. No. 511, the standard of care issue which underpins the tort of negligent investigation by police in Ontario is defined as whether the NRPD conducted their investigation in the same manner that would be undertaken by a reasonable police officer in the same circumstances.
[106] An analysis of this tort involves two aspects related to police conduct, with the second aspect bearing particular importance in this case. First, did the NRPD initially have reasonable and probable grounds to believe that Ferri and Mammoliti committed the offences for which they were charged? Second, did the NRPD continue to have reasonable and probable grounds to believe that Ferri and Mammoliti committed the offences for which they continued to be charged? See Hill, supra, at para. 132.
[107] Thus, the timeline to be examined respecting the issue of any NRPD negligent investigation extends at least until the charges against Ferri were dismissed on January 5, 2000 and those against Mammoliti were withdrawn on November 14, 2000. I would rely on my analysis and conclusions above with respect to reasonable and probable cause in the context of malicious prosecution to decide this issue. There are material issues to be tried with respect to whether the NRPD met the required standard of care in all the circumstances of this case. The matter should therefore proceed to trial.
(d) Charter claims
[108] Liability for a constitutional tort, such as under ss. 6 and 7 of the Charter as claimed here by Ferri and Mammoliti, requires wilfulness or mala fides in the creation of a risk or course of conduct that leads to damages. Proof of simple negligence is not sufficient for an award of damages in an action under the Charter: McGillivary v. New Brunswick (1994), 1994 CanLII 4465 (NB CA), 116 D.L.R. (4th) 104 at 108 (N.B.C.A.), leave to appeal refused, [1994] S.C.C.A. No. 408.
[109] As I have previously concluded, this case alleges conduct that amounts to malicious prosecution, which, given the requisite requirement of malice, is beyond mere negligence. And, as I have already said, this case requires a trial on the issue of malice, which in my view could potentially satisfy the element of bad faith required to support an action under the Charter. Accordingly, this claim by Ferri and Mammoliti must proceed to trial for the same reasons as those given for malicious prosecution.
CONCLUSION
[110] The claims of Ferri and Mammoliti against the NRPD for malicious prosecution and for ss. 6 and 7 Charter breaches shall be allowed to proceed to trial. Likewise, Ferri’s claim against the Crown Attorneys for ss. 6 and 7 Charter breaches and malicious prosecution should proceed to trial. Finally, Mammoliti’s claim against the NRPD for negligent investigation and malicious prosecution should also proceed to trial. I would dismiss the balance of each of their appeals.
DISPOSITION
[111] I would allow the appeals of Ferri and Mammoliti in part. Specifically, I would set aside the judgment of the motions judge in respect of the claims for malicious prosecution, Charter breaches and negligence, but I would dismiss the appeals in connection with the claims for false arrest and false imprisonment. Finally, given that Ferri and Mammoliti were substantially successful on their appeals, I would award each of them their costs fixed as follows:
• Ferri is entitled to costs of $5,000 inclusive of disbursements and GST from each of the NRPD and the Crown Attorneys; and,
• Mammoliti shall receive costs of $5,000 inclusive of disbursements and GST from the NRPD.
[112] In addition, I would fix costs for the summary judgment motion at $3,500 for Ferri and $2,500 for Mammoliti. Such costs are also inclusive of disbursements and GST.
“H.S. LaForme J.A.”
“I agree E.E. Gillese J.A.”
JURIANSZ J.A. (Dissenting):
Introduction
[113] I have read the careful reasons of LaForme J.A., but find that I cannot agree with his conclusion that it was not apparent that the respondents did not have reasonable and probable grounds to prosecute the appellants. On the view of the facts I take, the actions of the appellants had a character not apparent in LaForme J.A.’s reasons and lead me to conclude the appeals should be dismissed entirely.
[114] In my view, the appellants’ actions for malicious prosecution were properly dismissed because there was no genuine issue for trial regarding the third and fourth steps of the Nelles test. The Supreme Court’s judgment in Nelles, supra, establishes a four-step legal test for malicious prosecution. I agree with LaForme J.A.’s finding that elements 1 and 2 of the Nelles test are satisfied on the facts in Ferri’s case, and that in Mammoliti’s case element 1 is satisfied and there is a genuine issue for trial as to element 2. I disagree, however, with LaForme J.A.’s conclusion that steps 3 and 4 of the Nelles test are satisfied in both cases and will explain my reasons more fully, below. These reasons also lead to the conclusion that the appellants’ actions for negligence and Charter breaches should also be dismissed. I agree, for the reasons given by LaForme J.A. that the actions for false arrest and false imprisonment were properly dismissed.
Malicious Prosecution
[115] For convenience I set out steps 3 and 4 of the Nelles test:
(3) The proceedings must have been instituted without reasonable and probable grounds; and
(4) The defendant must have acted out of malice or for a primary purpose other than that of carrying the law into effect.
[116] I discuss first whether the respondents had reasonable and probable grounds to prosecute the appellants, as this is fundamental to the analysis of the other issues.
The Essential Facts
[117] There is one fact I regard as especially illuminating. After removing approximately 2,000 boxes of confidential documents from the TD Bank (the “Bank”) building, Ferri placed them in storage. If Ferri had removed the documents under the innocent and misguided belief he was cleaning out the building, he would have had Mammoliti take them to a dump for disposal. Instead, he placed the documents in storage.
[118] With this in mind, I offer the following account of the essential facts, which differs from the account set out by LaForme J.A. only in tone. I add detail to certain events and highlight some of the evidence the respondents had when they initiated and continued the prosecution of the appellants.
[119] By agreement dated March 12, 1997, Ferri, through his business Universal Management Consultants Inc., contracted to purchase a property in Welland from the Bank. Though the building was unoccupied, the branch at that location having closed, a great many documents remained stored there. In his offer to purchase the property, Ferri had included the clause: “The Vendor agrees to remove all bank records and files stored in the building prior to closing.” The responsible Bank official, Robert Deutschmann, had crossed out this clause and inserted the clause: “The Purchaser accepts the building in an ‘as is’ condition”. The transaction, originally scheduled to close on May 30, 1997, closed on June 2, 1997.
[120] Prior to closing, the Bank gave Ferri permission to enter the building in the following terms: “O.K. to get measurements, estimates and cleanup somewhat with Realtor opening up.” [Emphasis added.]
[121] A couple of weeks prior to closing, Ferri hired Mammoliti to remove approximately 2,000 banker boxes of confidential records that the Bank was storing in the building and moved them into storage. Ferri told no one at the Bank that he intended to remove the boxes or that he had done so. Until Bank staff went to the building on May 13, 1997 to sort through the documents and remove those the Bank did not wish to leave in the building when the transaction closed, no one was aware they had been taken. Even the real estate agent who had let Ferri into the building on several occasions under the above permission did not know the boxes had been taken. He could remember only one occasion when he had left Ferri unattended in the building and then only for a short period of time.
[122] After the Bank began making inquiries about the missing documents, Deutschmann received a call from Ferri on May 15, 1997. Deutschmann’s Will Say Statement that he provided to the police states that Ferri had called, “indicating that he had our Bank files. He also said that he did not want any trouble and that he was holding them in storage.” Ferri went on to demand a release of liability, an indemnification agreement in case of a suit by the Bank’s clients, and money to cover the costs he incurred in moving and storing the documents. Over the next week, Deutschmann “followed up a number of times with Mr. Ferri but … did not receive a call back.” Deutschmann then called the lawyer who had represented Ferri in the real estate transaction, who reiterated Ferri’s position that he would return the files if given a release and money to cover his expenses. On May 30, 1997 the lawyer indicated Ferri wished to deal with the form of the release prior to dealing with costs, but indicated the costs “were now estimated at the $4,000 level.”
[123] After a release and confidentiality agreement had been prepared, and the Bank was ready to proceed, Deutschmann phoned the lawyer to request a copy of the invoices to support Ferri’s claim for costs. The lawyer did not return Deutschmann’s phone call, and after Deutschmann made several more efforts to reach him, the lawyer sent him a fax on June 6, 1997 indicating that the Bank should deal directly with Mammoliti.
[124] According to Deutschmann’s statement, he called Mammoliti and told him that Bank wanted its files returned. Deutschmann’s statement continues:
He asked me how much we were willing to pay for his files. … He said, ‘I want a half a million dollars. My price is going up if I don't hear back from you by next Tuesday (June 10) and if we can’t settle I will sell your files.’ I asked him to repeat the amount. He confirmed the half a million dollar figure.
[125] Needless to say, it would be reasonable to consider that the documents, even if relating to old transactions, were of enormous value to the Bank in terms of goodwill and the maintenance of its clients’ confidence in the security of their financial information.
[126] On June 9, 1997, the day before the June 10 deadline, the Bank called the police who indicated they would contact Mammoliti. Later that day, a lawyer phoned Deutschmann “who said he was calling regarding the files on behalf of Mr. Mammoliti, however, he was not formally representing Mr. Mammoliti. He asked for clarification. … [He] said he would talk to Mr. Mammoliti and get back to us [the Bank].” On June 11, 1997, the lawyer phoned back and “stated that Mr. Mammoliti was treating the situation as an abandonment of files where he had an ownership interest and that we should negotiate on this basis.” On June 12, 1997, Mammoliti left a message for the Bank’s security officer, who had been trying to reach him, that he would communicate with the Bank only through the lawyer.
[127] On June 13, 1997, a customer (Mr. Tellier) phoned the branch manager to express concern that Mammoliti had seen his mortgage application file. When the police interviewed Tellier, they learned he was Ferri’s brother-in-law.
[128] Mammoliti was arrested on June 26, 1997 for extortion and possession of property obtained by crime, with a value exceeding $5,000.
[129] On July 3, 1997, Ferri’s lawyer, in an obvious effort to persuade the Crown not to charge his client, wrote to Crown Attorney Root. The letter expressed the opinion that “it was reasonable for the purchaser to begin to remove the files and records as part of its permission to ‘cleanup somewhat’”. The letter from Ferri’s lawyer noted, “At no time during the negotiations with the vendor did I or my client, ever assert a claim for ownership of the records and files.” The letter stated that Ferri had wished to be reimbursed for his expenses and indicated, “In an earlier conversation with the vendor I had requested the sum of approximately $4,600.00 dollars.” Finally, the lawyer’s letter remarked, “The purchaser advised me that his costs would include out of his pocket expenses for manpower, truck rental, storage that was leased on a month to month basis requiring a full month’s notice to terminate and legal fees for the ongoing negotiations.”
[130] Crown Attorney Root was not persuaded by the letter and Ferri was charged on July 9, 1997 with attempted extortion and theft over $5,000. Then on February 11, 1998, Ferri and Mammoliti were jointly charged with attempted extortion and theft over $5,000. The Crown proceeded only on the last indictment.
[131] Counsel for Crown Attorneys Root and Vaddacchino questioned whether Ferri’s real estate file had actually been produced to the respondents. However, there is no dispute that they were aware of the file’s contents, a matter the record makes clear. I have proceeded on the basis that the respondents were aware of all the information in the real estate file upon which the appellants rely.
Element Three – Reasonable and Probable Grounds
[132] The first issue is whether the totality of the information the respondents had or could reasonably obtain at the time provided them with reasonable and probable grounds to consider that the appellants had committed the offences of theft over $5,000 and attempted extortion.
[133] The appellants submit that knowledge of the negotiations that led to the Agreement of Purchase and Sale (the “Agreement”), the permission given to Ferri to “cleanup somewhat”, and Ferri’s later position that Mammoliti had possession and control of the files should have made the respondents realize they lacked reasonable and probable grounds to institute and continue the prosecution against the appellants together or individually.
[134] In my view this position does not withstand scrutiny.
[135] In approaching this analysis I take a different view of the legal effect of the Agreement. I cannot agree that the Agreement gave Ferri even an “unclear” right to deal with the files. It is a basic proposition of real estate law that chattels are not included in a conveyance of real property: see Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, s. 15(1); Lichty v. Voigt (1977), 1977 CanLII 1402 (ON SC), 17 O.R. (2d) 552 (Co. Ct.); Stack v. T. Eaton Co. (1902), 4 O.L.R. 335 at 338 (Div. Ct.). An “as is” clause, such as the one in this case, does not convey title to any chattels as it applies only to the freehold: see Weitzner v. Herman, [2000] O.J. No. 906 (S.C.J.). For greater clarity, the Agreement did contain a list of the chattels being conveyed. The boxes of documents were not included on the list.
[136] Further, even if one accepts that the course of negotiations gave Ferri the subjective belief that the Bank intended to abandon the files in the building being conveyed, Ferri had no reason to believe he acquired any property interest in anything before the transaction closed. We must remember that these boxes were removed from the Bank’s premises well before closing.
[137] Consequently, as I see it, the claim that Ferri had a credible and reasonable belief that he had the right to remove the documents prior to closing must be based, not on the Agreement, but on the permission he was given to enter the building and perform a minor cleanup. This seems to be Ferri’s position. It is worth recalling that Ferri’s lawyer in his letter to Root dated July 3, 1997 emphasized that Ferri never claimed any ownership interest in the files and that “it was reasonable for the purchaser to begin to remove the files and records as part of its permission to ‘cleanup somewhat’”.
[138] The respondents could reasonably regard the appellants’ claim that the documents were removed as part of a minor cleanup as not credible. In my view, an ordinarily prudent and reasonable person would have a hard time believing that consent given by a seller to a purchaser to “cleanup” a building “somewhat” before closing the transaction could be understood as permitting the surreptitious removal of some 2,000 banker boxes of confidential documents. It may be inferred from Ferri’s demand of a release and indemnification agreement that he realized the boxes contained sensitive client information.
[139] This, however, is not the most striking discrepancy between the appellants’ position and reasonable expectations. Even supposing we understand the consent to perform a minor cleanup in the far-fetched way proposed by the appellants, a reasonable person would expect that once the boxes were cleaned out they would be taken to a dump for disposal rather than being placed in storage. The fact the appellants’ placed the boxes in storage is post-offence conduct which is highly probative of their state of mind when they removed the boxes from the building. Incurring the cost of storage is consistent only with an intention to keep the documents for some future purpose. Absent any explanation, the respondents could reasonably consider that the trier of fact would conclude that the appellants intended to use the documents in the way they in fact did use them – to demand money from the Bank for their return.
[140] In my view, it would have been necessary for Ferri to testify at a criminal trial that he believed the consent he was given to “cleanup somewhat” permitted him to remove approximately 2,000 boxes of documents which contained, as he seems to have realized, sensitive client information. Under cross-examination he would have had to explain why he placed the boxes in storage. If there was an explanation, it was not provided to the respondents.
[141] On cross-examination, Ferri could also have been expected to be asked about the inconsistency of his eventual position that Mammoliti had possession and control of the files with his initial position that he had the documents in storage and had incurred expenses removing them. Ferri would have had to explain how Mammoliti came to have possession and control of the files that Ferri first claimed to have in storage and the ability to return. Ferri would also have had to explain why, even after he told the Bank to deal with Mammoliti, he still refused to disclose the location where he had the files stored.
[142] The respondents were justified in taking the view that the trier of fact would have to believe Ferri’s testimony on all of these points. As no explanations were provided to them, the Crown Attorneys could not be expected to conclude that Ferri’s position was credible.
[143] While Ferri did not personally make the demand for $500,000, there was much circumstantial evidence that Mammoliti and he were acting in concert. Both Ferri and his lawyer had made clear that it was Ferri who had incurred expenses to have the files removed and stored. Ferri had hired Mammoliti. The Bank customer who phoned the Bank shortly after the deadline imposed by Mammoliti had expired to complain that someone had seen his personal bank records was Ferri’s brother-in-law. Ferri did not disclose where he had stored the files when he directed the Bank to deal with Mammoliti, thus making possible Mammoliti’s demand for $500,000. Based on the totality of circumstances, the respondents could therefore reasonably take the view that the evidence, if accepted, would establish that the appellants had committed the acts necessary to support the charges.
[144] Ferri’s final position that Mammoliti controlled the files, without any explanation of his change from his initial position that “he was holding the files in storage”, would rightly be viewed by the Crown Attorneys as an attempt of one accused to shift responsibility to a co-accused.
[145] As far as Mammoliti is concerned, the respondents had only one version of the conversation in which Mammoliti demanded $500,000 from the Bank. That was Deutschmann’s version, which is set out above. That version clearly established that Mammoliti was threatening the Bank and raised the question to whom Mammoliti intended to sell the files if the Bank did not meet his price.
[146] Mammoliti’s version as set out in his affidavit cannot be considered in assessing whether the police had reasonable and probable grounds to prosecute him because it was not available to them at the time. As Mammoliti exercised his right to silence, the respondents could not know that Mammoliti would eventually claim his demand for $500,000 was a joke. On the information the respondents had, unless Mammoliti had some lawful justification for making the demand, the offence would be made out.
[147] The lawful justification claimed by Mammoliti is what he expressed to the Bank through a lawyer on July 11, 1997 and maintained thereafter: the Bank abandoned its files and he had an ownership interest in them.
[148] The respondents knew that as a matter of fact the Bank had not abandoned the files. The Bank had the files stored in a building that it still owned when Mammoliti removed them. Bank staff had gone to the building on May 13, 1997 to remove the files before the transaction closed only to discover them gone, a fact the appellants’ ignore in their letters to the Crown Attorneys. The claim that the files had been abandoned as a matter of fact was not open to Mammoliti.
[149] Mammoliti’s claim, like that of Ferri, must ultimately be based on the consent to “cleanup somewhat” the Bank gave to Ferri. This claim suffers from the same frailties. The appellants had no hint of an explanation why Mammoliti, if he had been hired to clean out the building, would place the rubbish he removed in storage. The fact that he placed the material he “cleaned out” in storage undermines the credibility of his claim. His subsequent conduct makes evident that Mammoliti was not an unwitting contractor hired by Ferri, although he never suggested he was.
[150] Mammoliti’s position may be regarded as inculpating Ferri. The ownership interest Mammoliti claimed in the files could only have derived from Ferri, who according to his counsel never claimed an interest in the files. Mammoliti’s position suggests that in the dealings between the two of them, Ferri did purport to have the right to deal with the files. The Crown Attorneys could regard the inconsistency in Ferri’s and Mammoliti’s positions as a matter that would further undermine their credibility and which they would be called upon to address in cross-examination at trial.
[151] The determination of whether the respondents had reasonable and probable grounds to prosecute the appellants must be made on the basis of the information the respondents had at the time or could have obtained by reasonable inquiry. New facts that the appellants may offer now are not relevant in determining if the respondents had reasonable and probable grounds at the time: see Nelles, supra, at 193. The appellants have not identified any additional information they say the respondents should have obtained. Rather, their argument is that the respondents ignored or refused to draw proper conclusions from the information that the appellants provided to them.
[152] On the summary judgment motion, the task of the motion judge was to determine if there was a genuine issue for trial about whether the respondents, on the closed body of information that was reasonably available to them at the time, had reasonable and probable grounds for prosecuting the appellants.
[153] The standard that applied to the Crown Attorneys in continuing the prosecution of Ferri may be somewhat higher than that which applies to the police in laying the charges. There had to be sufficient evidence for the Crown Attorneys to believe that guilt could properly be proved beyond a reasonable doubt. As the Supreme Court said in R. v. Proulx, 2001 SCC 66, [2001] 3 S.C.R. 9 at para. 31:
To say that a prosecutor must be convinced beyond a reasonable doubt of an accused person’s guilt before bringing charges is obviously incorrect. That is the ultimate question for the trier of fact, and not the prosecutor, to decide. However, in our opinion, the Crown must have sufficient evidence to believe that guilt could properly be proved beyond a reasonable doubt before reasonable and probable cause exists, and criminal proceedings can be initiated.
[154] I am satisfied there was sufficient evidence for the respondents to believe guilt could properly be proved beyond a reasonable doubt. The appellants had removed the Bank’s property from a building the Bank owned and demanded money for its return. The information that the appellants suggest exculpated them is fraught with improbabilities and contradictions discussed above and summarized below:
Any claim by the appellants that the Agreement gave them some right to remove the documents before closing was wrong in law;
The claim by the appellants that the surreptitious removal of approximately 2,000 boxes of documents known to contain financial information about the Bank’s customers was permitted by the consent they received to “cleanup somewhat” was not credible;
Placing the documents in storage was fundamentally inconsistent with the appellants’ claim that they were removed as part of a cleanup;
Deutschmann’s version of Mammoliti’s demand for $500,000 or he would begin selling the documents was not contradicted; and
There was ample circumstantial evidence upon which the trier of fact would find that Ferri and Mammoliti were acting in concert.
[155] I see no basis upon which the respondents were bound to accept the information provided by appellants’ counsel as establishing that there was a reasonable doubt their clients were not guilty of the charges. While appellants’ counsel contended vigourously that their clients were given permission to remove the files as part of a minor cleanup, they did not provide the respondents with any information to make that claim plausible. Counsel did not provide statements from the appellants that they did in fact honestly and sincerely believe they had the right to remove the documents. Nor did they address the fundamental inconsistency of placing documents considered rubbish in storage. They did not indicate what the appellants planned to do with the stored documents. They did not offer the respondents any alternative version of the conversation with Deutschmann in which Mammoliti demanded $500,000 from the Bank or he would begin selling the documents. Ferri’s lawyers did not attempt to reconcile Ferri’s assertion that he incurred expenses for manpower, truck rental, and continuing storage with his position adopted after June 6, 1997 that he did not have possession or control of the files. Nor did Ferri’s counsel account for why Ferri did not disclose the location where he had stored the documents after he took the position that he really was not involved.
[156] The lawyer’s letter dated June 11, 1997 to the Bank on behalf of Mammoliti indicated that Mammoliti claimed the Bank had abandoned the files and asserted his ownership of them. It does not explain how files being stored by the Bank in a building owned by the Bank should be considered abandoned and does not address how Mammoliti came to own them. Moreover, while the letter claims Mammoliti had control of the documents, it did not explain what had changed from the time Ferri had indicated he had them in storage and could return them. Mammoliti provided no information during the course of the prosecution about how he, a contractor hired by Ferri completely uninvolved in the real estate transaction, came to have ownership of the documents.
[157] In short, the appellants’ lawyers provided the respondents with contentions but no evidence to bolster the credibility of their clients. The facts provided the respondents with abundant reason to doubt the credibility of positions advanced on behalf of the appellants. In addition to the matters reviewed above, the police knew that Ferri had previously been convicted of a fraud in the amount of $9,000,000 for which he later was pardoned. The respondents do not seek to rely on this information, but in my view they could have taken it into consideration as it was evidence relevant to credibility that might have become admissible at trial.
[158] The respondents could not through further investigation discover answers to these questions. The respondents did meet with and listen to appellants’ counsel and consider the information they put forward. However, as I see it, and with due respect to the views of others, the respondents, on the totality of the information the respondents possessed during the course of the prosecution, were justified in believing they possessed sufficient evidence to prove guilt beyond a reasonable doubt.
[159] I would therefore conclude that on the objective standard the respondents had reasonable and probable grounds to initiate and proceed with the prosecution against the appellants.
[160] I would also take a different view of the evidence regarding whether the respondents subjectively believed they had reasonable and probable grounds to prosecute the appellants.
[161] In my view, the evidence did not raise a genuine issue for trial as to whether Crown Attorney Vaddacchino subjectively believed she had the requisite reasonable and probable grounds. In her affidavit and on her cross-examination, Vaddacchino swore she believed she had sufficient evidence to prosecute Ferri. Ferri’s affidavit, where he was required to put his best foot forward, does not seem to me to contradict Vaddacchino’s claims. The evidence he filed, in my view, only raised the question of whether Vaddacchino, a contract Crown Attorney unsure if the Attorney General would pay the costs of defending her from the civil law suits with which the appellants were menacing her, may have preferred that the case be dealt with civilly. Victims can bring civil actions to address the subject matter of many, if not most criminal prosecutions. The fact that the Bank could have brought a civil action against the appellants does not affect whether the respondents had reasonable and probable grounds to prosecute them. I do not regard evidence that might suggest Vaddacchino may have preferred that the case be dealt with civilly to in any way undermine the evidence before the motion judge that she believed she had reasonable and probable grounds to initiate and continue the criminal prosecution.
Element Four – Malice
[162] The appellants filed evidence that they say suggests the respondents prosecuted them because they were pressured to do so by the Bank. The Bank complained to the police, refused the appellants’ entreaties to withdraw its complaint, and made clear it wished the appellants prosecuted. This does not, to me, constitute evidence that raises a genuine issue as to whether the respondents misused their criminal law power by prosecuting the appellants. Victims of crime may be expected to, and do in fact, pressure the authorities to enforce the criminal law against those who have injured them by criminal conduct. The fact the Bank refused to withdraw its complaint and wished the police to continue the prosecution does not raise a genuine issue for trial as to whether the respondents acted with malice.
[163] I would not place any significance on the fact that the police attempted to recover the files from Mammoliti. The appellants call this a failed “sting operation” and cite it as confirmation that the police were misusing their power to assist the Bank in getting the documents back. I see nothing sinister in this. Attempting to recover stolen property is clearly a proper role of the police. In this case, recovery of the documents was very much in the public interest as the financial information of a great many people was at risk. As Mammoliti had threatened to sell the files, it was urgent for the Bank to recover them as soon as possible and reduce the potential that they might fall into the hands of “identity fraudsters”.
[164] My analysis of Ferri’s attempt to undermine the subjective belief of Crown Attorney Vaddacchino disposes of the argument that she acted with malice.
[165] I would find there is no genuine issue for trial as to whether the respondents acted with malice against the appellants.
Negligence and Charter Breaches
[166] My analysis of the evidence and my conclusion that the police had reasonable and probable grounds to initiate and continue the prosecution of the appellants leads to the finding that there are no genuine issues for trial as to whether the police met the required standard of care in all the circumstances of this case.
[167] As LaForme J.A. sets out, liability for a constitutional tort under ss. 6 and 7 of the Charter requires wilfulness or mala fides in the creation of a risk or course of conduct that leads to damages. Mere negligence is not sufficient to succeed on this ground: see McGillivary, supra, at 108. Malice, on the other hand, may be sufficient to satisfy the bad faith requirement. As I have concluded, there is no genuine issue for trial on the issue of malice and in this case there is no other basis for establishing bad faith. I would conclude that the appellants’ claim for Charter damages was properly dismissed.
False Arrest and False Imprisonment
[168] For the reasons given by LaForme J.A., I agree that the actions for false arrest and false imprisonment were properly dismissed.
Conclusion
[169] For these reasons, I would dismiss the appeals entirely.
RELEASED:
“FEB -7 2007” “R.G. Juriansz J.A.”
“EEG”
[^1]: Although I refer to the four named police officer respondents, the Chief of the Niagara Regional Police Service and the Niagara Regional Police Services Board as the NRPD, note that Ferri has claimed only against two of the named police officers. Consequently, when I refer to the NRPD in relation to any of Ferri’s claims, I am referring only to the three police parties against whom he claims.
[^2]: As discussed herein, the TD Bank was unsuccessful on its similar summary judgment motion heard in October 2002. The TD Bank has not appealed this decision.
[^3]: Mammoliti v. Toronto Dominion Bank, [2002] O.J. No. 4747 (S.C.J.).
[^4]: See also Proulx v. Quebec (Attorney General), 2001 SCC 66, [2001] 3 S.C.R. 9 (S.C.C.).
[^5]: On January 1, 1985, the Ontario legislature repealed the Judicature Act, wherein section 66 provided that in actions of malicious prosecution, the judge must decide the question of whether or not there was reasonable and probable cause for the prosecution. The Judicature Act was replaced by the Courts of Justice Act, which came into force in two phases. Section 121(10) (now, s. 108(10)) of the Act came into force on January 1, 1985, the second phase. See also, Todd Archibald & Randall Echlin, Annual Review of Civil Litigation, 2005 (Toronto: Carswell, 2006) at 9.
[^6]: For an excellent discussion of this third element as it applies in Ontario, see the decision of Dambrot J. in Wilson v. Toronto (Metropolitan) Police Service, [2001] O.J. No. 2434 (S.C.J.), affirmed (2002), 2002 CanLII 4770 (ON CA), 156 O.A.C. 374 (C.A.).