COURT OF APPEAL FOR ONTARIO
CITATION: Hoang v. Mann Engineering Ltd., 2020 ONCA 808
DATE: 20201216
DOCKET: C68186
Doherty, Lauwers and Miller JJ.A.
BETWEEN
K. Matthew Hoang
Plaintiff (Appellant)
and
Mann Engineering Ltd., Aris Building Technologies, Cartwright Management, Mann Enterprises, Wu Ventures, Hay Solar Ltd., and Gigajoule Research and Development Ltd. (carrying on business as the “Mann Group”)
Defendants (Respondents)
K. Matthew Hoang, appearing in person
Ted Flett and Daniel Hassell, for the respondents
Heard: December 3, 2020 by video conference
On appeal from the order of Justice B. Glustein of the Superior Court of Justice, dated November 4, 2019, reported at Hoang v. Mann Engineering Ltd., 2019 ONSC 6383.
By the Court:
I
[1] The appellant sued the respondents (“Mann Engineering”) in negligence. Mann Engineering moved for summary judgment. The appellant brought a cross-motion for summary judgment. The motion judge allowed the motion and dismissed the appellant’s action. He dismissed the cross-motion.
[2] The appellant appeals from that order asking that the judgment dismissing his claim be set aside and that he be granted summary judgment. The appellant also seeks leave to appeal the costs order made by the motion judge. We dismiss the appeal, grant leave to appeal the costs order and dismiss that appeal.
II
[3] The appellant used to work for Mann Engineering. He sued Mann Engineering for wrongful dismissal in 2011. The claim was dismissed in 2014 and Mann Engineering was awarded costs in the amount of $76,866.19. The long chronology of the appellant’s attempts to appeal from the judgment dismissing his action is summarized in the reasons of the motion judge: Hoang v. Mann Engineering Ltd., at para. 11.
[4] Mann Engineering commenced garnishment proceedings in March 2016. They issued a requisition of garnishment to the appellant’s employer pursuant to r. 60.08(4) and sought to examine the appellant in aid of execution. The garnishment proceedings stalled as the appellant made various efforts to appeal the dismissal of his action. Those efforts came to their ultimate end in January 2017.
[5] In December 2016, Mann Engineering brought a motion in the garnishment proceedings seeking three things:
• an order requiring the appellant’s employer (the “employer”) to garnish his wages (the “garnishment order”);
• an order requiring the employer to pay in full the appellant’s debt pursuant to r. 60.08(17) (the “enforcement order”); and
• an order requiring the appellant to attend for examination in aid of execution.
[6] Mann Engineering had not previously sought an enforcement order against the employer. An enforcement order could only be made if the employer had not served and filed its garnishee statement. Mann Engineering had been served with a garnishee statement, but the employer had apparently not filed that statement with the court.
[7] To this stage in the garnishee proceedings, the employer had not been separately represented. The appellant appeared and spoke for himself and his employer. Mann Engineering’s request for an enforcement order against the employer potentially, significantly altered the focus of those proceedings. Under the enforcement order, the employer could be required to pay the entire debt.
[8] Mann Engineering’s motion was heard in late December 2016. Once again, the employer was not separately represented. The appellant appeared and made submissions referable to both his and the employer’s position. In her brief endorsement, dated January 11, 2017, the master made no reference to any enforcement order against the employer. She indicated the employer was prepared to garnish the appellant’s wages and that, as the appeal process was now concluded, the garnishment could proceed. In the endorsement, the master indicated “order to go as asked”.
[9] Counsel for Mann Engineering prepared a draft order. At counsel’s request, the master dispensed with the requirement that the appellant approve the content of the order. The order issued as drafted by counsel for Mann Engineering. It included an enforcement order requiring the employer to pay to Mann Engineering the entire amount of the judgment debt owed by the appellant.
[10] The motion judge, after reviewing the transcripts of the proceedings before the master, and the terms of the endorsement, was satisfied the order should not have contained a term requiring the employer to pay the debt (the enforcement order): Hoang v. Mann Engineering Ltd., at para. 41. We see no reason to interfere with that finding. Not only was the endorsement silent about the enforcement order, counsel for Mann Engineering, during his submissions before the master on the motion, appeared to abandon the request for an enforcement order, focussing instead on the garnishee order. In his submissions, counsel argued the garnishee order would work no financial hardship on the employer.
[11] The employer became aware of the enforcement order in May 2017, when Mann Engineering brought a motion to vary the enforcement order to add other related corporate entities. On the return of that motion, Josef Ger, the president of the employer, filed an affidavit indicating the appellant had assumed responsibility for the garnishment proceedings. Mr. Ger alleged he had been misled by the appellant on many matters relating to the garnishment and certain information had been kept from him by the appellant. There was no evidence before the master challenging Mr. Ger’s assertions.
[12] Mr. Ger indicated the employer was prepared to comply with the garnishment order, but asked the master to set aside the enforcement order “as a nullity”. The master accepted the position put forward by the employer and set aside the enforcement order “on the basis of mistake”. She ordered the employer to garnish the appellant’s wages and she ordered costs in favour of Mann Engineering in the amount of $6,000, payable by the appellant and the employer on a joint and several basis.
[13] In her endorsement setting aside her previous order, the master was not critical of Mann Engineering for taking out the enforcement order, although when considering the quantum of costs, she did refer to “the defendant’s [Mann Engineering] own errors”. It is crystal clear the master set aside the enforcement order because she accepted Mr. Ger’s assertions that the employer had been kept in the dark and misled by the appellant.
[14] The master’s endorsement setting aside the enforcement order was made on September 12, 2017. The employer terminated the appellant’s employment about a month later.
[15] The appellant did not sue his employer for wrongful dismissal, but instead sued Mann Engineering in negligence for damages arising out of his dismissal.
[16] In his negligence claim, the appellant alleged, but for the improper obtaining of the enforcement order by Mann Engineering, his employer would not have come to the opinion the appellant had misled and lied to the employer throughout the garnishment proceedings and would not have fired him. Consequently, according to the appellant, Mann Engineering caused his dismissal.
[17] The appellant also alleged, that since his job was the source of his potential payment of the debt he owed to Mann Engineering, his employment was “an asset” to Mann Engineering. This, said the appellant, established the requisite relationship between the appellant and Mann Engineering necessary to impose a duty of care in the garnishment proceedings on Mann Engineering in respect of the appellant’s ongoing employment. Finally, the appellant alleged his termination was a reasonably foreseeable consequence of Mann Engineering’s obtaining of the enforcement order against the employer.
III
[18] Before addressing the arguments, it is important that to emphasize the appellant’s statement of claim advanced only a negligence claim. The motion judge treated the appellant’s claim as if it included a claim based on the tort of abuse of process. The motion judge found no triable issue in respect of either the negligence claim or the abuse of process claim.
[19] On appeal, the appellant stressed that he never pleaded the tort of abuse of process, did not intend to do so, and was not relying on any such claim. The appellant acknowledged he advanced only a negligence claim.
[20] In granting summary judgment on the negligence claim, the motion judge said, at para. 77:
I accept the submissions of the defendants that the duty of care upon which Hoang relies is not established on the evidence, and that even if a duty of care should be found to exist, the plaintiff has failed to establish causation between the breach and the loss of Hoang’s employment with RLCC.
[21] We are satisfied the appellant’s negligence action was properly dismissed on the basis the evidence did not give rise to a triable issue on the question of whether Mann Engineering, in the course of pursuing the garnishment proceedings, owed a duty of care to the appellant. Before we turn to that issue, we will briefly address three other arguments advanced by the appellant in his factum and in oral argument.
IV
[22] The appellant contends the motion judge misapprehended the evidence when the motion judge said, at para. 85:
Consequently, any error in the Enforcement Order, by granting relief that the defendants abandoned in the course of the hearing, cannot be seen as an intentional, overt act for an improper purpose. The enforcement term was consistent with the notice of motion, consistent with the submissions that no garnishee statement was filed by RLC, and consistent with Rule 60.08(17). [Emphasis added.]
[23] The appellant submits Mann Engineering did not “abandon” the enforcement order, but actively pursued it, going so far as to obtain a writ of seizure against the employer.
[24] The appellant misunderstands the reference in para. 85 of the motion judge’s reasons. The motion judge referred to Mann Engineering abandoning the claim for an enforcement order “in the course of the hearing”. The motion judge was referring to the submissions made by counsel for Mann Engineering, in which he appeared to abandon any request for an enforcement order, focussing instead on the garnishment order and the order requiring the appellant to attend for examination. We do not read the comment by the motion judge, at para. 85, as speaking to Mann Engineering’s actions after the enforcement order was obtained.
[25] In addition, even if there is a misapprehension of the evidence in para. 85, that misapprehension does not assist the appellant. At para. 85, the motion judge is analyzing the abuse of process claim which he took as implicit in the appellant’s statement of claim. In particular, the motion judge was addressing the requirement of an overt act designed to further some improper purpose. The appellant has made it clear he does not advance a claim based on the tort of abuse of process. Any misapprehension of the evidence by the motion judge in the context of his abuse of process analysis has no effect on the motion judge’s dismissal of the negligence claim.
[26] The appellant next argues the motion judge erred in speculating as to the cause of the appellant’s termination. He contends there is no evidence to support the motion judge’s finding the appellant was fired for “surreptitious conduct”. The appellant further contends Mann Engineering never made that assertion, indicating instead it had no evidence as to the cause of the appellant’s termination.
[27] Mann Engineering’s statement of defence puts in issue the cause of the appellant’s termination. The statement of defence alleges the appellant’s actions caused his own termination. There was evidence before the motion judge from which it could be inferred the employer’s belief the appellant had acted dishonestly throughout the garnishment proceedings was the reason for his dismissal.
[28] Judges on summary judgment motions are permitted to draw reasonable inferences: r. 20.04(2.1). Not all reasonable inferences are, however, appropriately drawn in any given summary judgment motion. It depends on the record and the issues. As we are disposing of the appeal on the duty of care issue, we need not decide whether an inference as to the cause of the appellant’s dismissal by his employer was appropriately made on this evidentiary record.
[29] In his third argument, the appellant submits the motion judge wrongly indicated the tort of abuse of process applied only if the appellant showed Mann Engineering owed a duty of care to the appellant.
[30] The tort of abuse of process is premised on an improper use of the civil justice process. The concept of a duty of care has no role to play in the abuse of process analysis. Although the motion judge accurately identified the elements of the tort, at para. 72, later in his reasons he wrongly indicated a duty of care was also an element of an abuse of process claim (e.g. see para. 81).
[31] Assuming the motion judge erred in law in describing the elements of the tort of abuse of process, that error cannot advance the appellant’s appeal. As indicated above, the appellant does not advance a claim based on the tort of abuse of process. Any misstatement of the elements of that tort by the motion judge could not prejudice the appellant.
V
[32] We now come to the duty of care issue. To succeed on the negligence claim, the appellant had to show Mann Engineering owed him a duty of care while pursuing their garnishment remedies. For the purpose of determining whether the existence of a duty of care raised a triable issue on this record, we will assume:
• Mann Engineering should not have included an enforcement order in the draft order produced to, and eventually signed by, the master in January 2017; and
• the enforcement order was at least one of the reasons the employer fired the appellant.
[33] The appellant submits, because his job was “an asset” to Mann Engineering, in that it was a potential source of the payment of the appellant’s debt, Mann Engineering owed the appellant a duty of care in respect of that “asset”. In effect, the appellant contends, a judgment creditor, who is seeking to realize on a judgment through garnishment proceedings, owes a duty of care to the debtor to take all reasonable steps to avoid causing harm to the debtor’s ongoing employment. The appellant acknowledges the duty of care he describes is an entirely novel one. Neither the specific duty, nor any analogous one has ever been recognized in the Canadian law of negligence.
[34] When a plaintiff advances a negligence claim based on a novel duty of care, the courts determine whether that duty exists using a two-step process. The first step looks to the nature of the relationship between the plaintiff and the defendant and the foreseeability of the harm caused. These two factors, both of which address proximity, taken together determine whether a prima facie duty of care is established: 168872 Ont. Inc. v. Maple Leaf Foods Inc., 2020 SCC 36, at paras. 30-31; Cooper v. Hobart, 2001 SCC 79, at paras. 22, 30-32.
[35] At the second step, the court looks to residual policy considerations existing outside of the relationship between the defendant and plaintiff, which warrant negativing the prima facie duty of care established at the first step: Cooper v. Hobart, at paras. 37-39.
[36] We are satisfied there is no prima facie duty of care. The evidence does not establish the requisite proximity between the appellant and Mann Engineering. There is no relationship between them other than the relationship of a judgment creditor using the garnishment proceeding in an effort to realize on the debt owed by a judgment debtor. That relationship has played out in the context of ongoing litigation initiated by Mann Engineering in an effort to recover the debt owed to it by the appellant. The adversarial relationship inherent in the litigation process is antithetical to the kind of relationship that gives rise to a duty on one party to take reasonable care not to interfere with the legitimate interests of the other party. There is nothing in the relationship that could justify placing an obligation on Mann Engineering to take reasonable steps to protect the appellant’s ongoing employment from any possible negative consequences flowing from Mann Engineering’s conduct of the garnishment proceedings.
[37] The appellant’s description of his ongoing employment as “an asset” to which Mann Engineering looked for recovery of its debt does not advance the proximity analysis. However one chooses to describe the appellant’s employment, the nature of the relationship engaged on this evidence remains exactly the same. Mann Engineering, the judgment creditor, is trying to collect its debt from the appellant, the judgment debtor, through garnishment proceedings. Nor does the fact Mann Engineering improperly obtained an enforcement order against the employer alter the nature of the relationship between Mann Engineering and the appellant. Mann Engineering’s misstep in the course of the garnishment proceedings cannot create a duty of care owed to the appellant. Mann Engineering’s error would be significant in determining whether Mann Engineering fell below the standard of care, if in fact a duty of care had existed.
[38] While we are satisfied the nature of the relationship between Mann Engineering and the appellant in the context of the garnishment proceedings precludes the existence of any duty of care, we also see no basis in the evidence for a finding the type of harm allegedly caused to the appellant was reasonably foreseeable to someone in the position of Mann Engineering: Rankin v. J.J., 2018 SCC 19, at paras. 24, 26, 53. On the evidence, there was no basis upon which Mann Engineering knew, or ought to have known, its actions would cause the employer to believe the appellant had misled the employer throughout the garnishment proceedings. Without that knowledge, it was not reasonably foreseeable the employer would fire the appellant after Mann Engineering obtained the enforcement order. Consequently, the kind of damage alleged by the appellant was not a reasonably foreseeable consequence of obtaining the enforcement order.
[39] We add one additional comment. Although we do not reach the second step of the duty of care analysis, policy considerations point strongly away from recognizing the duty of care advanced by the appellant. Access to the civil courts to assert claims and enforce judgments is fundamental to the operation of our justice system. Potential liability in negligence, based on a duty of care owed by a plaintiff to a defendant, must surely discourage plaintiffs from using the court process to advance claims and enforce judgments. Tort law, and specifically the tort of abuse of process, protects against the improper use of the civil justice process. Policy considerations do not favour extending that protection to negligence-based claims.
[40] We hold the motion judge correctly determined there was no triable issue on the question of whether Mann Engineering owed a duty of care to the appellant in the circumstances revealed by the evidence. The action was properly dismissed.
[41] The appeal is dismissed.
VI
[42] The appellant also seeks leave to appeal the costs order made by the motion judge. He relied on his written submissions. We have considered those arguments. None warrant intervention by this court. Leave to appeal costs is granted, but the appeal is dismissed.
VII
[43] Mann Engineering shall file submissions as to costs on the appeal within 10 days of the release of these reasons. The submissions shall not exceed 5 pages. The appellant shall file his submissions within 10 days of receipt of the respondents’ submissions. The appellant’s submissions shall not exceed 5 pages.
Released: “DD” “DEC 16 2020”
“Doherty J.A.”
“P. Lauwers J.A.”
“B.W. Miller J.A.”