Court of Appeal for Ontario

Date: 2022-04-12 Docket: C68415

Brown, Paciocco and Sossin JJ.A.

BETWEEN

John Hall Plaintiff (Respondent/Appellant by way of cross-appeal)

and

Regional Municipality of Niagara Police Services Board, Steven Magistrale, David Biggar, Shawn Donovan and General Motors of Canada Company Defendants (Appellants / Respondents by way of cross-appeal)

Counsel: Eugene G. Mazzuca and Rafal Szymanski, for the appellants/respondents by way of cross-appeal Peter I. Waldmann and Cizan Suliman, for the respondent/appellant by way of cross-appeal

Heard: March 16, 2022, by video conference

On appeal from the judgment of Justice Linda M. Walters, dated April 21, 2020, with reasons at 2020 ONSC 241, and on cross-appeal from the ruling on costs, dated August 14, 2020, with reasons at 2020 ONSC 4867.

Reasons for Decision

[1] The appellants Regional Municipality of Niagara Police Services Board (“the Board”) and Detective Steven Magistrale (“Det. Magistrale”) were found liable to the respondent, John Hall, for $686,216.92 in damages for false arrest, negligent investigation, and malicious prosecution. The action against two other named defendants was dismissed and the action against General Motors of Canada Company (“GM”) was settled out of court.

[2] The civil suit arises out of a police investigation resulting in the arrest of Mr. Hall for attempted theft of a copper bar from the GM assembly plant in St. Catharines, Ontario, contrary to s. 463 (d) of the Criminal Code, R.S.C. 1985, c. C-46. Mr. Hall was acquitted at trial.

[3] The appellants allege the trial judge made a number of factual and legal errors in her judgment in the civil suit which warrant intervention by this court.

[4] The respondent cross-appeals and challenges the trial judge’s calculation of costs in his favour.

[5] For the following reasons, we dismiss both the appeal and the cross-appeal.

Background Facts

[6] In the evening of December 21, 2009, the GM plant on Glendale Ave. in St. Catharines, Ontario, experienced an electrical outage caused by a flash explosion in an electrical cabinet. After ruling out other possible causes, the investigative team concluded that the outage was the result of an arc flash explosion which could have been caused by a person attempting to remove a copper bar from the electrical cabinet. This theory was consistent with earlier incidents of copper being stolen from the Glendale plant.

[7] GM referred the matter to the police, and Det. Magistrale eventually became the lead detective in the police investigation. His investigation led to the arrest of Mr. Hall, who was a security guard with Securitas, a company which was contracted to provide security at the Glendale plant.

[8] Mr. Hall was on duty at the time of the incident and had physical symptoms afterwards, which Det. Magistrale understood as consistent with Mr. Hall’s involvement in the incident.

[9] Mr. Hall was terminated from his employment following the incident.

[10] The criminal trial took place over eight days before Wilkie J. in July 2012. In his reasons, Wilkie J. stated that, while a “close case,” he was left with a “sliver of doubt” as to whether Mr. Hall was the person responsible for the attempted theft of the copper bar and thus found Mr. Hall not guilty.

[11] Mr. Hall launched his civil action in July 2014.

[12] The trial took place over 16 days in May and August 2019.

Proceeding Below

[13] The trial judge found Det. Magistrale liable for malicious prosecution (and the Board, in turn, liable for the actions of its officer).

[14] Applying the test as set out by McIntyre J. in Nelles v. Ontario, [1989] 2 S.C.R. 170, at p. 204, the trial judge considered the four elements of malicious prosecution which must be established by the plaintiff:

1. The proceedings must have been initiated by the defendant;
2. The proceedings must have terminated in favour of the plaintiff;
3. The plaintiff must show that the proceedings were instituted without reasonable cause; and
4. The defendant was actuated by malice.

[15] In this case, the first two elements were not contested. The trial judge’s analysis focused on the latter two elements.

[16] The trial judge recognized that in the case of malicious prosecution involving a police investigation, a key question is whether the police officer responsible for the arrest had reasonable and probable grounds for the arrest. The trial judge also highlighted the subjective and objective aspects of reasonable and probable grounds.

[17] The trial judge found that Det. Magistrale lacked objective reasonable and probable grounds given the incomplete and improper investigation against Mr. Hall and the challenges with the circumstantial evidence gathered in that investigation.

[18] Further, the trial judge found that Det. Magistrale was not credible with respect to his assertion that he believed he had reasonable and probable grounds for the arrest. Therefore, she found that Det. Magistrale lacked subjective reasonable and probable grounds as well.

[19] With respect to malice, the trial judge found that Det. Magistrale acted with an improper purpose in the prosecution of Mr. Hall. She found that after the Crown and the defence inaccurately answered a question posed by the criminal trial judge, Det. Magistrale did not meet his obligation of notifying the Crown of the correct answer, which would have assisted Mr. Hall in his defence. The trial judge also found that Det. Magistrale engaged in inappropriate conduct in “high fiving” a Crown witness, and that inaccuracies in his police notes and testimony went beyond carelessness and amounted to deliberate falsehoods.

[20] In light of these findings, the trial judge concluded that Det. Magistrale, and by extension the Board, were liable to Mr. Hall for malicious prosecution.

[21] The trial judge also found that the appellants were liable for negligent investigation and false arrest.

[22] With respect to damages, the trial judge fixed the general damages at $50,000. She found that special damages of $178,484.55 were appropriate in light of Mr. Hall’s legal fees to defend himself on the criminal charges and to obtain disability benefits from his own insurer. The trial judge fixed Mr. Hall’s past loss of income at $395,777.

[23] In light of her other findings, the trial judge did not address the Charter claim.

[24] After comparing the bills of costs of the parties, and applying the principles in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the trial judge awarded costs against the appellants in the amount of $275,000, inclusive of fees and disbursements.

Analysis

[25] The appellants raise various grounds of appeal which may be organized into three main categories.

[26] First, the appellants argue that the trial judge misapplied the law relating to reasonable and probable grounds in the context of malicious prosecution.

[27] Second, the appellants argue that the trial judge misapplied the law relating to malice in the context of malicious prosecution.

[28] Third, the appellants argue that the trial judge erred in her award of damages.

[29] Finally, the respondent cross-appeals against the trial judge’s award of costs.

[30] Each issue is addressed in turn.

(1) The trial judge made no reversible error in finding that Det. Magistrale lacked reasonable and probable grounds for the arrest

[31] In order to have reasonable and probable grounds to arrest, an arresting officer must subjectively believe they have reasonable and probable grounds on which to base the arrest, and those grounds must be justifiable from an objective point of view: R. v. Storrey, [1990] 1 S.C.R. 241, at pp. 250-51.

[32] The question of whether there are reasonable and probable grounds to arrest rests on the trial judge's factual findings, which are entitled to deference on appeal. However, the trial judge's ultimate ruling that those facts were insufficient to constitute reasonable and probable grounds is reviewable on a correctness standard: R. v. Shepherd, 2009 SCC 35, [2009] 2 S.C.R. 527, at para. 20.

[33] As indicated, the trial judge found that Det. Magistrale lacked both subjective and objective reasonable and probable grounds for the arrest of Mr. Hall.

[34] The trial judge’s conclusion that Det. Magistrale lacked subjective reasonable and probable grounds was based on her assessment of Det. Magistrale’s credibility. She stated, at para. 114, “Magistrale’s assertions that he subjectively believed he had probable grounds to arrest are not credible. How else can one explain the discrepancies, exaggerations, inaccuracies, and an outright lie in Magistrale’s written reports and affidavits.”

[35] Her finding that Det. Magistrale lacked objective grounds was based on her conclusion that the circumstantial case against him was insufficient. This conclusion was buttressed by Det. Magistrale’s concession that prior to interviewing Mr. Hall he did not have reasonable and probable grounds to arrest him. After closely examining the interview the trial judge concluded that “nothing” occurred during the interview to furnish additional grounds. In contrast to Det. Magistrale’s submission that he had a strong circumstantial case against Mr. Hall, the trial judge found that there was a “very weak” circumstantial case. She added, at para. 67, “I cannot even find that a crime was committed, let alone that all the evidence pointed to the commission of any offence by Hall.”

[36] In arguing that the trial judge erred in concluding that reasonable and probable grounds for the arrest of Mr. Hall was lacking, the appellants focus on the trial judge’s conclusion that the objective ground for arrest was insufficient. Specifically, they argue that the trial judge erred by focusing mistakenly on Det. Magistrale’s failure to exhaust all avenues of investigation, contrary to this court’s decision in Tremblay v. Ottawa (Police Services Board), 2018 ONCA 497, 48 C.C.L.T. (4th) 1. The appellants also argue that the trial judge erred by failing to consider the whole of the evidence available at the time of the appellant’s arrest and by failing to consider or to give due weight to the criminal proceeding as a whole, including the criminal trial judge’s decision to acquit Mr. Hall on a “sliver of doubt” and the prosecutors’ decision to proceed with the prosecution.

[37] We need not decide whether any of these alleged errors occurred because the subjective and objective components of the reasonable and probable grounds test are conjunctive. Both the subjective and objective elements must be satisfied for reasonable and probable grounds to exist: Nelles v. Ontario, [1989] 2 S.C.R. 170, at p.193. As explained, the trial judge’s decision that Det. Magistrale lacked the requisite subjective grounds is a credibility finding. This credibility finding is entitled to deference. Given this finding that Det. Magistrale lacked subjective reasonable and probable grounds for the arrest, we see no basis for disturbing the trial judge’s conclusion with respect to the third element of the test for malicious prosecution.

[38] This ground of appeal is dismissed.

(2) The trial judge made no error in finding that Det. Magistrale acted on the basis of malice

[39] The appellants argue that the trial judge erred in concluding that Det. Magistrale acted for improper purposes sufficient to meet the test for malice as the fourth element of the test for malicious prosecution.

[40] The trial judge based her conclusion on the following facts: (1) Det. Magistrale failed to intervene in the criminal trial to correct flawed evidence that was put to the judge; (2) Det. Magistrale and one of the GM witnesses for the prosecution were seen giving each other a “high five” outside the courtroom at the criminal trial; and (3) Det. Magistrale deliberately lied in his characterizing of the evidence of Mr. Gatti, a key witness at trial.

[41] Turning to the first finding, the appellants argue that Det. Magistrale had no duty to intervene in the criminal trial on the issue of whether something one of witnesses, Dr. Zimakas, could not recall was in the record before him. It was in fact there, in a report by Det. Magistrale. Det. Magistrale knew that Dr. Zimakas had that information in front of him as he testified but did not advise Crown counsel, defence counsel or the court of this fact during the trial.

[42] Det. Magistrale had included the correct information in a report dated February 8, 2011, which was provided to defence counsel. According to the appellants, the police are under no duty to interrupt a trial to correct evidence, and Det. Magistrale’s failure to do so was not improper.

[43] In making her finding, the trial judge relied on expert evidence regarding the duty of a police officer in these circumstances and drew an inference that Det. Magistrale remained silent in order to aid the prosecution’s case. Such an inference was available on the record, and we see no error in the trial judge’s reliance on this inference.

[44] With respect to the “high five,” the trial judge relied on evidence from defence counsel, whose veracity she had no reason to doubt. She not only drew an adverse inference from this concerning conduct, but from Det. Magistrale’s subsequent denial of it. These inferences were available on the record.

[45] Finally, Det. Magistrale’s mistaken summary of Mr. Gatti’s evidence – that Mr. Gatti had seen Mr. Hall washing his face in the washroom after the incident – was described by the trial judge, at para. 145, as “a deliberate attempt to tailor the evidence” against Mr. Hall.

[46] We see no error in this finding, nor in the trial judge’s conclusion in light of these findings that Det. Magistrale’s prosecution of Mr. Hall was motivated by an improper purpose sufficient to meet the threshold of malice with respect to liability for malicious prosecution.

[47] This ground of appeal is dismissed.

(3) The trial judge did not err in the award of damages

[48] The parties spent little time on the issue of damages in their oral submissions. In the appellants’ written submissions, they argue the trial judge erred in awarding special damages. Specifically, the appellants contend that the trial judge’s award of special damages in the amount of $106,603 to Mr. Hall to compensate for the cost of his challenge to the denial of disability benefits was beyond any connection to actions of the appellants.

[49] The appellants submit that the trial judge failed to distinguish between the costs of the prosecution of Mr. Hall and the costs of the disability benefits dispute. The disability benefits dispute, they submit, was too remote to constitute a basis for special damages in this action.

[50] The trial judge found that expenses compensated by the special damages, both those related to the prosecution itself and those related to the disability benefits dispute, would not have been incurred but for the malicious prosecution. This finding is entitled to deference and we would not disturb it.

[51] The appellants also take issue with the damages for lost income, as they argue Mr. Hall’s termination was not connected to his arrest and prosecution.

[52] The trial judge found that there was no evidence for why Mr. Hall would be terminated by his employer, Securitas, but for the charge against him from this incident. We see no basis to interfere with this finding.

[53] This ground of appeal is dismissed.

The cross-appeal and the trial judge’s award of costs

[54] The respondent as appellant in the cross-appeal appeals against the award of costs on the basis of the trial judge’s comparative approach to the determination of costs.

[55] The plaintiff had sought $611,393.36 in costs. The defendants had suggested that $182,322.56 plus disbursements and a 15 percent gross-up would be a reasonable amount. The trial judge considered the bills of costs of each party and properly considered the criteria under r. 57.01 of the Rules of Civil Procedure.

[56] According to the respondent as appellant in the cross-appeal, the trial judge should not have compared in-house counsel rates of the Board with the rates of Mr. Hall’s counsel.

[57] We would not give effect to this argument.

[58] The trial judge did not simply compare the costs sought by each party. She accepted that the plaintiff would be expected to claim higher costs than the defendants. Nonetheless, she found the hours claimed in Mr. Hall’s bill of costs to be excessive, especially in light of the fact that the issues in the trial were not complex.

[59] The respondent as appellant in the cross-appeal also claims that the trial judge neglected to include the harmonized sales tax (“HST”) in her calculation of the costs award. The trial judge stated that the $275,000 in costs was “inclusive of fees and disbursements.” There is no basis to conclude that she did not intend HST to be counted within this inclusive language, especially as the other costs figures cited in her judgment as the amounts sought by each party also included HST along with other fees and disbursements.

[60] The discretion afforded to trial judges in determining costs is broad. An appellate court will only interfere with a costs award where the judge making the award committed an error in principle or the costs award is clearly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

[61] We see no error in the approach taken or in the result reached by the trial judge in this award of costs.

Disposition

[62] For the reasons given above, both the appeal and the cross-appeal are dismissed.

[63] The respondent is entitled to costs on the appeal.

[64] The respondent submitted that he would be seeking $54,542.61, all-inclusive, in costs for the appeal.

[65] We must also consider that the appellants, as respondents by way of cross-appeal, were successful on the cross-appeal. They submitted that they would be seeking approximately $4,350.50 on the cross-appeal.

[66] Taking the success of the parties and their submissions with respect to costs in mind, we fix those costs in favour of Mr. Hall at $50,000, all-inclusive.

“David Brown J.A.”

“David M. Paciocco J.A.”

“L. Sossin J.A.”