Court File and Parties

COURT FILE NO.: CV-15-536526 MOTION HEARD: 20170511 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Renzo Villa, Moving Party Plaintiff AND: Association of Professional Engineers of Ontario, Responding Party Defendant

BEFORE: Master Jolley

COUNSEL: P. Dollak, Counsel for the Plaintiff D. Wong and J. Marton, Counsel for the Defendant

HEARD: 11 May 2017

Reasons for Decision

[1] The plaintiff has brought an action against his former employer, the Association of Professional Engineers of Ontario, for wrongful dismissal. He brings this motion to amend his statement of claim to claim moral and/or aggravated damages, punitive damages and special damages.

[2] The defendant pleads that the plaintiff was terminated for cause. It alleges that the plaintiff provided engineering services to the public without a Certificate of Authorization and that he acted in a conflict of interest.

[3] In addition to being an employee of the defendant, the plaintiff, as a professional engineer, is also subject to its professional regulatory process. The defendant takes the position that the same grounds that support the termination for cause also support the complaint it made to the discipline committee concerning the plaintiff and the resulting professional misconduct hearing.

[4] The plaintiff wishes to amend his statement of claim to allege that the defendant breached his contract of employment by commencing a campaign of bad faith against him both during and after his employment. As noted in the grounds for the plaintiff’s application for judicial review which the defendant filed in these proceedings, and which has since been abandoned, the plaintiff alleges that the defendant took these steps against him as a reprisal for certain actions he took while employed at the Association.

[5] The plaintiff alleges that, as part of that campaign, the defendant brought an unwarranted disciplinary proceeding against him and harassed him by taking various steps in the course of that disciplinary investigation and proceeding. In the context of his wrongful dismissal action, he wishes to amend his statement of claim to allege that the defendant’s bad faith campaign against him has resulted in stress, anxiety, frustration, mental distress, embarrassment, loss of reputation and loss of enjoyment of life in support of his aggravated damages claim.

[6] While the defendant does not object to the amendments sought to the prayer for relief, including the claim for moral, aggravated and punitive damages, it does object to certain of the proposed additions on the basis that they amount to an abuse of process.

[7] The defendant has consented to the addition of certain new paragraphs alleging bad faith in relation to a meeting with the plaintiff while he was employed (paragraph 6.1) and also in relation to the demand for reinstatement and the position the defendant allegedly took with Service Canada (subparagraphs 6.2(a), (b)). It objects to the additional paragraphs 6.2(c), (d), (e) and (f) that raise issues concerning the discipline process itself, such as the selection of the investigator, the scope of the Registrar’s order, which the plaintiff characterizes as a warrant, that the defendant sought and obtained, and ultimately the referral of the complaint to a hearing.

[8] The plaintiff does not seek a stay or any other form of relief in respect of the discipline hearing but claims aggravated and punitive damages in respect of his employer’s conduct in filing and pursuing the complaint. The defendant argues these amendments amount to a collateral attack on the disciplinary proceedings. It further argues that a finding in court on these allegations would circumvent and interfere with the discipline proceedings.

The Law

[9] On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. (Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194).

[10] Although that is the general rule, there is no absolute right to amend pleadings. An amendment to pleadings should not be permitted where the amendment, if originally pleaded, would have been struck. (Marks v. Ottawa, 2011 ONCA 248 at paragraph 19).

[11] It is clear that an employer’s post termination conduct may give rise to a claim for moral damages. (Doyle v. Zochem Inc., 2017 ONCA 130 at paragraph 13).

Analysis

[12] The defendant argues that the proposed amendments amount to an abuse of process and takes the position that the plaintiff must deal with these issues exclusively in the course of the discipline hearing.

[13] It argues that it is abusive for a party to challenge administrative decisions other than through an appeal or judicial review and that allowing these allegations to proceed would circumvent the appropriate review mechanism. It also alleges the proposed amendments are a collateral attack. It concedes that the plaintiff would be permitted to later amend his claim to include these allegations if and when there is a finding on them by the discipline tribunal.

[14] There are three immediate difficulties with this argument. First, there is no guarantee that the discipline proceedings will proceed to a full hearing. If the hearing does not proceed and if the plaintiff is correct in his contention that his employer used that disciplinary process to retaliate against him in bad faith for actions he took as an employee, he will not have the opportunity to make that argument before the discipline panel. Nor will he be able to make the argument in this proceeding unless the amendments are permitted.

[15] Second, a decision of the discipline committee may well not make any determination on the good faith or bad faith or the employer in taking the actions it did as the motive of the employer is arguably not before it and therefore irrelevant. However, that bad faith component is critical to the plaintiff’s claim for punitive damages in his civil action.

[16] Third, and more fundamentally, the plaintiff cannot obtain the same relief in the disciplinary hearing even if he does make these bad faith arguments in that forum. If the plaintiff successfully raises these arguments at the discipline hearing, he might succeed in obtaining a stay or a dismissal of the complaint. However, he could not obtain employment-related damages such as he seeks here. If he is not permitted to raise these allegations here, he is precluded from an aggravated damages claim and potential award. Unlike Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, the discipline proceedings would not provide him with an adequate alternative remedy.

[17] Admittedly, there will be some overlap of the issues in the civil litigation and the discipline hearing, but that is already the case. Both hinge, in good part, on whether the plaintiff did work without a Certificate of Authorization, whether he acted in a conflict of interest and whether he breached his professional obligations.

[18] In a number of the cases relied on by the defendant, members of regulatory bodies brought civil actions claiming malicious prosecution and related torts and alleged they suffered embarrassment, interference with their economic relations and loss of reputation as a result of their regulator’s commencement of disciplinary action. While the plaintiff alleges that he has suffered similar damages in this case, he is not complaining of the actions of the Association in its regulatory capacity. He argues that the Association as his employer took these actions against him in breach of his employment contract and its implied terms of good faith and fair dealing and its duty of honest performance and used that disciplinary process to harass him and to cause him mental distress. While the issues do have some overlap, the focus is different. This amendment is not attacking the disciplinary proceedings per se but attacking his employer’s alleged bad faith use of those proceedings to harass or punish the plaintiff.

[19] The plaintiff does not make these allegations in support of a separate cause of action, as was the case in M.K. Engineering Inc. v. Plecash, 2014 ABQB 483, affirmed 2015 ABCA 311 but as material facts in support of aggravated damages in his wrongful dismissal action. They are part of the factual matrix he alleges was part of the wrongful termination of his employment.

[20] The defendant relies on the case of Frank v. Legate, 2015 ONCA 631 for the proposition that a claim that would improperly interfere with an ongoing disciplinary hearing is an abuse of process and should not be permitted. In that case the related civil claim was for malicious prosecution which, by its nature, required there to be have been an acquittal to proceed and the court found the claim to be premature. I also note that in that case, a civil claim for malicious prosecution was effectively precluded by the Regulated Health Professions Act, 1991, S.O. 1991, c. 18, section 36(3). The defendant did not point to a similar provision of its Act that would preclude such an action. Further, its position the plaintiff could proceed with these allegations after the conclusion discipline hearing, if he were successful there, suggests there is no such prohibition. The other reasoning for the finding that the Frank action was an abuse of process are not present here (action used for intimidation and to frustrate the discipline process, action compelling disclosure of privileged information, etc.).

[21] Lastly, I note the case of Turner v. Newfoundland and Labrador (Legal Aid Commission), [2014] N.J. 385. Turner was employed as a staff lawyer with the defendant Legal Aid Commission. He was terminated and his employer alleged just cause based on incompetence. On that same basis of incompetence, it filed a complaint with the Law Society. Turner alleged that that his employer filed the complaint in response to his recent role in organizing job action. The Law Society found that certain of the plaintiff’s work on certain of the files fell below the standard set by the Code and warranted sanction. He was reprimanded and ordered to pay costs.

[22] Such a finding did not preclude Turner’s civil action. The court held that the regulatory decision was relevant to but not determinative of Turner’s wrongful dismissal action. Despite the outcome at the Law Society, the court found that Turner had been wrongfully dismissed. Even though certain of the complaints had been made out at the Law Society, the court also found the employer Legal Aid Commission guilty of bad faith in respect of the allegations of incompetence and negligence that it made to the Law Society against Turner, which the court found to be a complete exaggeration. The court awarded Turner $30,000 in moral damages as a result.

[23] While there was overlap on the issues and even arguably contradictory findings between the Law Society regulatory hearing and the civil action, Turner was permitted to proceed and succeed with his civil action for wrongful dismissal and aggravated damages even in the face of the Law Society’s finding that he breached the Code. While I make no comment on his chance of success, Mr. Villa should at least be given the same opportunity to pursue those allegations of bad faith here.

Disposition

[24] I hereby grant the plaintiff leave to amend his statement of claim in accordance with Schedule “A” of the notice of motion.

[25] If the parties are unable to agree on the issue of the costs of this motion, they shall provide the court with submissions no more than 3 pages in length by 23 June 2017.

Master Jolley Date: 26 May 2017