Ciavarella v. Schwartz, 2014 ONSC 416

COURT FILE NO.: CV-12-469868

DATE: 2014-09-19

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MICHAEL CIAVARELLA, FIRESTAR CAPITAL MANAGEMENT CORPORATION, GILDA CIAVARELLA and AIDEN CIAVARELLA / Plaintiffs

AND:

RANDY SCHWARTZ, MICHAEL MITTON, JANET MITTON, JOHN SLITER, DON PANCHUCK, DEAN BUZZA, BEN SOAVE, CRAIG HANNAFORD, DOUG GRADY, LARRY TRONSTAD, GREG GARD, STEVE J. PERROW, OFFICER BENSIMHON, OFFICER P.S. COSTELLO, GREG MURPHY, TIMOTHY DELL’ANNA, WAYNE KIDD, HENRY TSO, BILL ELLIOT, DIANE SMART, BRAD DESMARAIS, SHAWNE BROWNRIGG, IAN POPE, KEVIN HARRISON, JOHN SCHMIDT, STEVE SAUNDERS, GABE DIVITO, JOHN ROSKAM, LOUISA CHRISTIANSON, STEPHANIE SACHSSE, TRACEY ROSS, TERRY DENSMORE, LISA SCHMID, ARRYN KETTER, DAVID A. BROWN, DAVID WILSON, HOWARD WETSTON, MICHAEL WATSON, TOM ATKINSON, BRIAN BUTLER, JOANNA FALLONE, GEORGE GUNN, KAREN MANARIN, LORI TOLEDANO, LESLIE LUCIANI, AMANDA DOWNS, LARRY MASCI, TOM ANDERSON, MEHRAN SHAHVIRI, JOHN CARSON, SCOTT MCBRIDE, JOHN DOUGLAS, JUDY COTTE, HUGH CRAIG, ONTARIO SECURITIES COMMISSION, ATTORNEY GENERAL FOR ONTARIO, pursuant to section 8 of the Ministry of the Attorney General Act, standing in the place of Crown Counsel, Randy Schwartz, Allison Wheeler and Matthew Asma in relation to the malicious prosecution of MICHAEL CIAVARELLA, ONE UNKNOWN AGENT OF THE ATTORNEY GENERAL FOR ONTARIO, HER MAJESTY THE QUEEN IN THE RIGHT OF ONTARIO, ATTORNEY GENERAL OF CANADA is pursuant to section 23 (I) of the Crown Liability and Proceedings Act liable for the actionable conduct of the RCMP DEFENDANTS, ROYAL CANADIAN MOUNTED POLICE, JACQUES FLEURRANT, BRENT MOORE, JOHN FABELLO, CHARLES (CHUCK) PERRY, JAMES HUNTER, JASON (CHAK) NG, ALISTAIR M. CRAWLEY / Defendants

BEFORE: Justice Edward P. Belobaba

COUNSEL: Sara Blake for the defendant Randy Schwartz and the defendants described in the title of proceedings as, “ATTORNEY GENERAL FOR ONTARIO, pursuant to section 8 of the Ministry of the Attorney General Act, standing in the place of Crown Counsel, Randy Schwartz, Allison Wheeler and Matthew Asma in relation to the malicious prosecution of MICHAEL CIAVARELLA, ONE UNKNOWN AGENT OF THE ATTORNEY GENERAL FOR ONTARIO, HER MAJESTY THE QUEEN IN THE RIGHT OF ONTARIO.”

Fatema Dada for the defendants Her Majesty the Queen in Right of Ontario and John Carson, and Her Majesty the Queen in Right of Ontario and Steve J. Perrow.

Freya Kristjanson for the defendants Ontario Securities Commission and David A. Brown, David Wilson, Howard Wetston, Michael Watson, Tom Atkinson, Brian Butler, Joanna Fallone, George Gunn, Karen Manarin, Lori Toledano, Leslie Luciani, Amanda Downs, Larry Masci, Tom Anderson, Mehran Shahviri, Judy Cotte and Hugh Craig.

Gina Scarcella and James Gorham for the defendants the Attorney General of Canada, the Royal Canadian Mounted Police, John Sliter, Don Panchuck, Dean Buzza, Ben Soave, Craig Hannaford, Doug Grady, Larry Tronstad, Greg Gard, Officer Bensimhon, Officer P.S. Costello, Greg Murphy, Timothy Dell' Anna, Wayne Kidd, Henry Tso, Bill Elliot, Diane Smart, Brad Desmarais, Shawne Brownrigg, Ian Pope, Kevin Harrison, John Schmidt, Steve Saunders, Gabe Divito, John Roskam, Louisa Christianson, Stephanie Sachsse, Tracey Ross, Terry Densmore, Lisa Schmid and Arryn Ketter.

Kate Broer for the (HSBC) defendants Charles (Chuck) Perry, Jacques Fleurant, Brent Moore and James Hunter

Shara Roy and Jonathan Laxer for the defendant John Fabello

Jeffrey Larry and Lindsay Scott for the defendant Jason Ng

Megan Marrie for the defendant John N. Douglas

Erin Pleet for the defendant Alistair Crawley

Michael Ciavarella in person for the individual plaintiffs

No one appearing for the plaintiff Firestar Capital Management¹

HEARD: August 25 and 28, 2014

ENDORSEMENT

Ten Motions to Strike Pleadings and Dismiss Actions

1Almost ten years ago, Michael Ciavarella and his capital management firm were caught up in a stock fraud investigation that was eventually resolved when Mr. Ciavarella entered into a settlement agreement with the Ontario Securities Commission and the criminal charges against him were stayed. Mr. Ciavarella believes that he was the victim of a “tunnel-vision” investigation that cost him his career and reputation and “ruined his life.”

2Mr. Ciavarella has sued 67 defendants that he says were directly or indirectly involved in the “vendetta” against him.² His 173-page statement of claim names federal and provincial crown attorneys, police officers, securities regulators, bankers and investment advisors, forensic accountants and lawyers in private practice. It alleges a wide array of tortious wrong-doing, including malicious prosecution, negligent investigation, abuse of public office, false arrest and imprisonment, intimidation, intentional infliction of mental suffering, breach of fiduciary duty and conspiracy. The total compensation claim is in the hundreds of millions of dollars.

3In the ten motions before me, 64 of the 67 defendants³ ask that the pleadings be struck without leave to amend and the actions against them be dismissed. Although there are some differences in the moving parties’ submissions, the core arguments in each case are the same: abuse of process, no reasonable cause of action and failure to plead material facts.

4The ten motions are brought by the following defendants:

1. The Attorney General of Ontario and Crown attorneys Randy Schwartz, Allison Wheeler and Matthew Asma;

2. Her Majesty the Queen in right of Ontario and John Carson (an expert witness retained by Crown counsel);

3. Her Majesty the Queen in right of Ontario and Det. Sgt. Steve Perrow (an OPP police detective);

4. The Ontario Securities Commission and 17 named individuals;

5. The Attorney General of Canada, the RCMP and 30 named individuals;

6. Charles (Chuck) Perry, Jacques Fleurant, Brent Moore and James Hunter (HSBC employees);

7. John Fabello (an HSBC Securities Inc. outside legal counsel);

8. Jason Ng (a former HSBC Securities Inc. investment advisor);

9. John Douglas (a forensic accountant retained by the RCMP);

10. Alistair Crawley (the individual plaintiffs’ former lawyer).

5During the course of the hearing, Mr. Ciavarella agreed that some of the defendants are protected by statutory or witness immunity and should not have been sued. He also acknowledged that his root complaint against most of the defendants and the main reason for the lawsuit is that he was the target of a malicious prosecution. Mr. Ciavarella thus consented to an order dismissing the action as against the three Crown attorneys and Her Majesty the Queen in right of Ontario on the basis of statutory immunity,⁴ and as against John Carson, Det. Sgt. Steve Perrow, John Douglas and his associate Scott McBride, on the basis of witness immunity⁵. Mr. Ciavarella also agreed to dismiss the actions against the four HSBC defendants, Charles (Chuck) Perry, Jacques Fleurant, Brent Moore and James Hunter, and his former lawyer Alistair Crawley, because they were not involved in the alleged malicious prosecution. However, he insisted that the other defendants must remain in the action.

6Therefore, only five motions brought by the following defendants require adjudication:

1. The Attorney General of Ontario

2. The Ontario Securities Commission and 17 named individuals;

3. The Attorney General of Canada, the RCMP and 30 named individuals;

4. John Fabello (an HSBC Securities Inc. outside legal counsel); and

5. Jason Ng (a former HSBC Securities Inc. investment advisor).

7There is little doubt that the statement of claim is replete with problems and deficiencies. The question on each of the five remaining motions is whether the pleadings should be struck with or without leave to amend. That is, whether the action should be allowed to proceed in some fashion after the pleadings have been amended or be dismissed outright. For the reasons set out below, I have concluded that the actions as against the defendants in each of the five remaining motions are completely untenable and should be dismissed outright. The result is that only Michael Mitton and Janet Mitton will remain as defendants if the action continues.

Background

8Mr. Ciavarella was the president and a director of Firestar Capital Management, and an insider of a corporation called Pender International Inc.⁶ Firestar maintained accounts at HSBC Securities and HSBC Bank Canada. Ciavarella was the only person authorized to trade on the Firestar account at HSBC Securities and the only principal on the Firestar account at HSBC Bank Canada.

9Before the middle of October 2004, there was no active market for Pender shares. Beginning on October 14 and over the next 35 trading days, the price of Pender shares increased in value almost 4000 percent from $0.30 USD to $11.35 USD. Michael Mitton and others (not including Ciavarella) were buying and selling Pender shares in a circular pattern at ever-increasing volumes and prices. The “pump and dump” was conducted by Mitton, who used various accounts, including the Firestar accounts at HSBC. Ciavarella was acquainted with Mitton, who has been convicted of more than 100 counts of fraud, many of which involved securities fraud.

10In December 2004, the OSC froze the banking and trading accounts of Ciavarella and Firestar, issued a cease trade in Pender shares and commenced regulatory proceedings against Ciavarella, Firestar and Mitton.

11In September 2006, Mr. Ciavarella was arrested and charged by the RCMP with fraud, extortion and money laundering. The money laundering charges related to Firestar funds that had been delivered to a lawyer’s trust account and then paid out to co-accused Mitton. Ciavarella was released on bail with terms prohibiting him from trading in securities or acting as an officer or director of a public company. Ciavarella and his co-accused challenged the use of intercepted communications but did not succeed. Justice O'Marra dismissed the application in 2010, and allowed the wire-tap evidence to be admitted.⁷ The decision was not appealed. Ciavarella was represented throughout by experienced counsel.

12HSBC sued Mr. Ciavarella, Firestar and others for $3.2 million owing on the unauthorized purchase of Pender shares in trading accounts that had not been settled. HSBC obtained a default judgment. The motion to set aside was dismissed by Spence J.⁸ Justice Spence’s decision was upheld by the Court of Appeal in written reasons released in December 2008.⁹ The plaintiff’s application for leave to appeal to the Supreme Court of Canada was dismissed by that Court in June 2009.¹⁰

13In the HSBC action, the Court of Appeal underscored the following findings of fact made by Spence J.:

• Ciavarella was sophisticated and more than capable of managing his affairs;
• Ciavarella authorized HSBC to accept trading instructions from Mitton;
• Firestar (which Ciavarella alone controlled) received immediate confirmation of the trades;
• The trades were immediately confirmed to Ciavarella by phone at the end of each trading day and by mail;
• Ciavarella also received immediate confirmation of the trades through his online access to accounts to which he had sole access;
• Firestar promptly delivered cheques to HSBC in payment for the trades;
• Ciavarella had sole online access to review trading activity in the account, which he used on three separate occasions in the days immediately following the trades;
• Ciavarella made regulatory filings in the United States, reporting the trades and his beneficial ownership therein;
• Ciavarella knew about the trades in November 2004 but did not assert they were unauthorized by him until September 2007, when he moved to set aside earlier judgments.

14Indeed, the Court of Appeal said this about the submission that Mr. Ciavarella did not know about or authorize the “pump and dump” trades:

The most significant problem the appellants face … is that their claim that they did not know about or authorize the impugned trades came late in the day. The first opportunity Ciavarella had to complain that he did not know about or authorize the trades was on November 24, 2004. Neither his correspondence that day, nor his 2005 affidavit in response to the OSC investigation, which put the trades in issue, makes any mention of this claim. In fact, everything Ciavarella was saying, until he swore his September 2007 affidavit, was consistent with his having known about and authorized the share purchases. ¹¹

15Meanwhile, Mr. Ciavarella’s lawyers were working to resolve the regulatory and criminal proceedings. The joint resolution of the criminal prosecution and the OSC proceeding was mediated by McMahon J. Ciavarella was represented by two counsel, one who represented him in the prosecution and the other who represented him and his company in the OSC proceeding. The resolution agreed to by Ciavarella, the OSC and Crown counsel was that Ciavarella would agree to the OSC Order and then Crown counsel would stay the prosecution.

16On May 17, 2011, Mr. Ciavarella entered into a settlement agreement with the OSC admitting all of the facts contained therein. In particular, Ciavarella admitted that he was negligent in failing to monitor his accounts, that his lack of diligence allowed the Firestar account at HSBC to be used to manipulate the share price of Pender securities, and that his failure to adequately monitor his accounts was contrary to the public interest under provincial securities law.

17As part of the settlement with the OSC, Ciavarella agreed to a five-year trading ban and a five-year prohibition on serving as an officer or director of a public company. He also agreed to make a “consent” payment of $100,000. In accordance with the settlement agreement, Ciavarella consented to the OSC Order that was approved and issued and, the next day, on May 18, 2011, Crown counsel stayed the criminal prosecution.

18Mr. Ciavarella commenced this action in December 2012.

Analysis

19In the five motions that remain, the moving parties ask that the actions against them be dismissed in their entirety for the following reasons: they do not disclose a cause of action; they amount to an abuse of process; they are completely lacking in material facts and are therefore frivolous and vexatious; and they are statute-barred by the applicable limitations period.

20I agree that the actions should be dismissed in their entirety but, in my view, it is sufficient to base this decision on one of the first two reasons, cause of action or abuse of process. The action against the Attorney General of Ontario is dismissed because the only viable claim, malicious prosecution, is not available on the facts herein – the proceedings were not terminated in the plaintiff’s favour. The actions against the OSC defendants, the federal defendants, John Fabello and Jason Ng are dismissed for abuse of process – each of these actions is an attempt to re-litigate issues that were settled in prior regulatory, criminal and civil proceedings.

21I will explain each of these conclusions in more detail.

(1) The Attorney General’s motion and malicious prosecution

22The Attorney General is immune from suit for all torts pleaded in the statement of claim, except for the tort of malicious prosecution.¹² In order to succeed on a claim for malicious prosecution, the plaintiff must prove four things: the proceedings were initiated or continued by the defendant; the proceedings were terminated in favour of the plaintiff; the absence of reasonable and probable grounds for the prosecution; and malice, or a primary purpose other than that of carrying the law into effect.¹³

23Counsel for the Attorney General argues that none of these prerequisites are satisfied. In my view, it is sufficient to focus only on the second prerequisite: whether the proceedings were terminated in favour of the plaintiff. And here it is obvious that the criminal proceedings were not terminated in favour of the plaintiff. As this court noted in Romanic v. Johnson:¹⁴

Where the evidence establishes that the Crown agreed to withdraw the criminal charges as part of a good faith compromise settlement, and where there was some legitimate remedial step or other bona fide quid pro quo from the accused (e.g. plead guilty to some of the pending charges or included offences, enter a peace bond, make restitution to the victims, make a charitable contribution, etc.), the disposition will not be viewed as one made in favour of the accused.¹⁵

24In other words, if the criminal prosecution is discontinued as a result of a bona fide agreement or arrangement, a complaint of malicious prosecution cannot materialize:

[I]f a prosecution is abandoned by the complainant … this will constitute a favourable termination of the proceedings from the point of view of the plaintiff, thereby entitling him to sue for malicious prosecution. That will not be the case however, if the abandonment of the prosecution is the result of a compromise or arrangement between the complainant and the accused.¹⁶

25The plaintiff, represented by experienced legal counsel, entered into a settlement agreement with the OSC. The settlement agreement imposed significant sanctions – a five-year trading and public company ban, as well as a $100,000 monetary payment. There was clear quid pro quo. Indeed, the plaintiffs admit in their statement of claim that the OSC settlement was a “precondition” to the Crown staying the criminal charges. This is also clear from the email that Mr. Ciavarella’s lawyer sent to McMahon J., the OSC staff and Crown counsel seven days before the OSC settlement agreement was executed:

As a result of ongoing discussions between staff for the OSC and counsel for Mr. Ciavarella we believe we have a resolution to the proceedings before the Commission. That resolution will be presented to the Commission for approval at an in camera session … It is our understanding that, assuming the resolution negotiated with staff is approved, the Crown will withdraw all criminal charges forthwith.

26Tracking the language in Romanic v. Johnson, “it simply cannot be said, as a matter of law, that this disposition of the criminal charges was ‘in favour’ of the plaintiff.”¹⁷ In my view, the plaintiff has no chance of succeeding on his malicious prosecution claim. Given that this is the only viable action that can be brought against the Attorney General, it follows that the action against the Attorney General must be dismissed.

(2) The four remaining motions and abuse of process

27As already noted, I am dismissing the actions against the OSC defendants, the federal defendants, John Fabello and Jason Ng for abuse of process.

28The courts rely on the abuse of process doctrine to prevent needless re-litigation of issues and other abuses of the judicial system.¹⁸ A claim that constitutes a collateral attack on an existing, final judicial decision is an abuse of process.¹⁹

29The claims against the OSC defendants, the federal defendants, John Fabello and Jason Ng are an abuse of process because they attempt to re-litigate the facts agreed to in the settlement agreement and the judicial findings in the criminal proceedings and the HSBC civil action.

30At root is Mr. Ciavarella’s claim that he did not know about and was not legally responsible for the trading activities in his accounts and that the settlement agreement with the OSC was an “unconscionable and untenable bargain”. The plaintiff is alleging malicious prosecution and other tortious wrong-doing based on the premise that he was not responsible for the trading of Pender shares in his own HSBC accounts. This is inconsistent with the facts that were agreed to in the OSC settlement agreement and the judicial findings in the HSBC civil action as noted above.²⁰

31The OSC defendants add the following. The action against the OSC defendants is a collateral attack on numerous administrative orders and judgments that were never appealed or were affirmed on appeal, including the OSC Order approving the settlement agreement, the OSC temporary cease trade orders and the OSC freeze directions, which were continued by this court.

32The federal defendants add the following. The action seeks to re-litigate factual determinations made by O’Marra J. in his Order of April 1, 2010 wherein he refused to exclude the wiretap evidence. Justice O’Marra found that the RCMP reasonably believed that Ciavarella was acting in concert with the named targets of the judicially authorized wiretaps. He also found that the intercepted communications obtained by the RCMP through a valid judicial authorization were reliable evidence of Ciavarella’s participation in a share price manipulation scheme. The findings made by O’Marra J. are formally incorporated into the pleading at paragraph 30(h)(1) of the statement of claim, which reads as follows: “the plaintiffs rely on the findings of Justice O’Marra made on April 1, 2010”.

33The federal defendants say that, if allowed to proceed, the action would be a collateral attack on the findings that were made by O’Marra J., findings that the plaintiffs themselves rely upon and incorporate into the statement of claim. This would constitute an abuse of the processes of this court.

34John Fabello adds the following. He and his firm Torys LLP acted as counsel to HSBC Securities, including on the civil action brought by HSBC Securities against Ciavarella and Firestar. Mr. Fabello says the action against him is a collateral attack on the HSBC decisions and the OSC settlement agreement. He also says that the pleading that he was jointly retained by HSBC Securities and the plaintiffs is an abuse of process because it will prejudice his ability to mount a defence. Mr. Fabello has a privileged relationship as counsel to HSBC Securities, a party not named in this proceeding, but nonetheless adverse in interest to the plaintiffs in the underlying proceedings. The privilege belongs to Mr. Fabello’s client, HSBC Securities, not to the plaintiffs. As a result, Mr. Fabello will be prejudiced by his inability to rely upon certain evidence to mount his defence, compounding the insurmountable problems posed by the pleadings.

35Jason Ng adds the following. He is a former employee of HSBC Securities and the former investment advisor to Firestar. The action against him is an abuse of process because it attempts to re-litigate findings made in the HSBC decisions and facts agreed to in the OSC settlement agreement. Mr. Ng says that it has been judicially determined that Ciavarella was liable for the trading debts in the HSBC accounts and that he has no triable defence in respect of his liability for the trading. Mr. Ciavarella cannot now commence a proceeding alleging a malicious prosecution and other wrongs based on the premise that he was not responsible for the trading of Pender shares in his own HSBC account. This runs counter to what has already been contractually agreed to or judicially decided.

Conclusion

36I agree with the submissions made by the OSC defendants, the federal defendants, John Fabello and Jason Ng.

37I have no difficulty concluding (1) that the action against the Attorney General of Ontario should be dismissed because the only viable cause of action, malicious prosecution, cannot succeed on the facts herein, and (2) that the actions against the OSC defendants, the federal defendants, John Fabello and Jason Ng should be dismissed for abuse of process.

Disposition

38The actions against Her Majesty the Queen in right of Ontario, Randy Schwartz, Allison Wheeler, Matthew Asma, John Carson, Steve J. Perrow, Charles (Chuck) Perry, Jacques Fleurant, Brent Moore, James Hunt, John Douglas, Scott McBride and Alistair Crawley are dismissed on consent.

39The actions against the Attorney General of Ontario, the Ontario Securities Commission and 17 named individuals, the Attorney General of Canada, the RCMP and 30 named individuals, John Fabello and Jason Ng are dismissed for the reasons stated above. Only Michael Mitton and Janet Mitton remain as defendants.

40The Ontario Attorney-General’s request that the title of the proceeding and the statement of claim be amended by deleting the names of the three Crown counsel who were wrongfully sued is rejected. It is sufficient, in my view, that the actions as against the Crown attorney defendants have been dismissed on consent. There is no further need, in a free society, to engage in historical revisionism and amend the pleadings as if this lawsuit never happened. I am confident that the three Crown counsel, indeed that all of the defendants who were wrongfully named in this misguided action, will understand that unfounded lawsuits are brought all too often and are sufficiently thick-skinned to get on with their lives.

41If the question of costs cannot be resolved by the parties, I would be pleased to receive brief written submissions from the ten moving party-defendants within 14 days and from the plaintiffs within 14 days thereafter.

Belobaba J.

Footnotes

1. 1The plaintiff Firestar Capital Management is wholly owned and controlled by the plaintiff Michael Ciavarella. In February of this year, Mr. Ciaveralla terminated his legal counsel and filed a notice or intention to act in person. However, Firestar Capital is still represented by legal counsel because the latter’s motion to be removed from the record was “abandoned” just before the hearing of these motions. No responding material was filed by Firestar Capital and its legal counsel did not attend.
2. 2Michael Ciavarella’s wife Gilda and son Aiden are suing as family law claimants.
3. 3The defendants Michael and Janet Mitton, who were also targeted in the stock fraud investigation, are not involved in these motions. The defendant Scott McBride, who worked with forensic accountant John Douglas is also not a moving party but will be sheltered under the Douglas motion.
4. 4Ministry of the Attorney General Act, R.S.O. 1990, c. M. 17, s. 8(1); Marleau v. Brockville (City), 2014 ONSC 416, at para. 11.
5. 5Reynolds v. Kingston (Police Services Board), 2007 ONCA 166, at para 14: “The absolute immunity of parties and witnesses from subsequent liability for their testimony in judicial proceedings developed in early English cases and is well established at common law. Any communication, even perjured testimony, made in the course of a judicial proceeding, cannot serve as the basis for a suit in tort.” See also Samuel Manu-Tech Inc. v. Redipac Recycling Corp. (1999), 1999 3776 (ON CA), 38 C.P.C. (4th) 297 (C.A.), at paras. 19 and 20.
6. 6The facts set out in this section were agreed to in the OSC settlement agreement or can be found in the statement of claim. I am grateful to counsel for providing me with electronic copies of their facta, which made the writing of certain portions of this decision easier and faster.
7. 7R. v. Peluso, 2010 ONSC 1952.
8. 8HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation et al., Unreported decision of Spence J. (December 17, 2007).
9. 9HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation et al., 2008 ONCA 894.
10. 10Firestar Capital Management Corporation et al v. HSBC Securities (Canada) Inc., [2009] S.C.C.A. No.81, SCC File No. 33052 (June 25, 2009), 2009 33005.
11. 11Supra, note 9, at paras. 42-43.
12. 12Nelles v. Ontario, 1989 77 (SCC), [1989] 2 S.C.R. 170, at paras. 64-65; G.C. v. Ontario (Attorney General), 2014 ONSC 455 (S.C.J.); Thompson v. Ontario, 1998 7180 (ON CA), [1998] O.J. No. 3917, at paras. 44 and 54-58 (C.A.); Proceedings Against the Crown Act, R.S.O. 1990, c. P. 27, s. 5(6). Counsel for the federal defendants noted (correctly) that strictly speaking, one can sue the Attorney General for malicious prosecution and its related cousin, negligent investigation. I will continue to include the latter in my discussion of ‘malicious prosecution’ because both require that the criminal prosecution must have been terminated in favour of the plaintiff: Bilich v. Toronto Police Service, 2013 ONSC 1445, at paras. 49-50.
13. 13Miazga v. Kvello Estate, 2009 SCC 51, [2009] 3 S.C.R. 339, at paras. 53-56; Nelles v. Ontario, supra, note 12, at para. 42
14. 14Romanic v. Johnson, 2012 ONSC 3449, [2012] O.J. No. 2642 (S.C.J.), aff’d 2013 ONCA 23, [2013] O.J. No. 229 (C.A.)
15. 15Ibid., (S.C.J.) at para. 35. Here there is no evidence of any fraud, perjury, dishonesty or duress on the part of the OSC, police investigators or Crown counsel. There is no evidence that the OSC settlement agreement was reached for an improper purpose such as avoiding judicial scrutiny of a bad police investigation or a civil action for malicious prosecution.
16. 16G. H. L. Fridman, The Law of Torts in Canada, 3d ed. (Toronto: Carswell, 2010), at 813-14, citing Baxter v. Gordon Ironsides & Fares Co. (1907), 13 O.L.R. 598 (Div. Ct.) and Cockburn v. Kettle (1913), 1913 611 (ON CA), 12 D.L.R. 512 (C.A.).
17. 17Supra, note 14 (S.C.J.), at para. 56.
18. 18Canam Enterprises v. Coles, (2000) 2000 8514 (ON CA), 51 O.R. (3d) 481 (C.A), at para. 31, rev’d on other grounds 2002 SCC 63, [2002] S.C.J. No. 64; Cunningham v. Moran, 2011 ONCA 476, at para. 40.
19. 19Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, at paras. 37-38; Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, at para. 20.
20. 20Recall supra paras. 14-15.