Root: Malicious Prosecution Gets its Day in Court?

In the 1989 landmark case of Nelles v. Ontario, [1989] 2 S.C.R. 1, the Supreme Court questioned the value of an absolute immunity for Crown Prosecutors and Attorneys General from civil actions for malicious prosecution. Reversing a strongly deferential approach to prosecutorial discretion, the SCC determined that such absolute immunity was not justified, for it worked to bar truly wronged citizens from seeking warranted Charter redress. In coming to this determination, however, Justice Lamer was careful to note in his conclusion that such a recognition did not represent open season on prosecutors. Rather, there exists a number of significant hurdles to a successful malicious prosecution case that help protect prosecutors from ungrounded actions:

[T]he inherent difficulty in proving a case of malicious prosecution combined with the mechanisms available within the system of civil procedure to weed out meritless claims is sufficient to ensure that the Attorney General and Crown Attorneys will not be hindered in the proper execution of their important public duties.

In order to succeed in demonstrating malicious prosecution, four elements must be met: (a) the impugned prosecution must have been initiated or continued by the defendant; (b) the prosecution must have terminated in favour of plaintiff; (c) the prosecution must have been initiated by the defendant without reasonable and probable cause; and (d) the defendant must have acted out of malice or for a primary purpose other than that of carrying the law into effect.

On first blush this test seems abundantly straightforward, dependent primarily on a simple investigation of the facts. Yet, when applied to the messy web of criminal and civil procedures that frequently form the foundation of a malicious prosecution case, things can become rather unwieldy. This certainly seems to be the case with Allan H. Root, et al. v. Andrew Adam Ferri, et al. (31972), which on Thursday was denied leave to appeal by the SCC.

The Facts
On March 12, 1997, Andrew Ferri proposed to enter into an agreement with the Toronto Dominion Bank (TD Bank) to purchase a Wellington, Ontario building owned by the bank. The suggested Agreement of Purchase included the following clause: “The Vendor agrees to remove all bank records and files stored in the building prior to closing.” This clause was subsequently crossed out by an officer of the vendor and replaced accordingly: “The Purchaser accepts the building in an ‘as-is’ condition.”

The purchase was originally scheduled to close on May 30, 1997, but was extended to June 2. Issue arose concerning how this alteration was to affect the roughly 2000 boxes of confidential bank client information stored within the building. While Ferri was permitted to enter before closing so as to get measurements and conduct preliminary clean up, the question of the boxes was never explicitly resolved.

Ferri hired Pasquale Mammoliti to assist in the clean up. Mammoliti was instructed by Ferri to enter the building and remove the boxes. Mammoliti subsequently placed the boxes in storage. All this was done prior to the closing of the real estate transaction. On May 13, TD Bank realized what had occurred and contacted Ferri in this regard. On May 15, Ferri requested and TD agreed in principle that, in return for the files, the bank would compensate Ferri for $500 in labour and storage fees, as well as provide Ferri with a release protecting him from any subsequent lawsuit.

Details of this deal were negotiated until June 6, at which time Ferri suddenly advised TD Bank that he did not have control of the files, and that the Bank should now deal directly with Mammoliti. The Bank contacted Mammoliti, who informed them that he considered the files to have been abandoned, and should the bank wish to recover them, they would need to be purchased. Mammoliti’s asking price was $500,000.

While Mammoliti insists that this figure was a joke, the bank believed they were being extorted and immediately contacted Niagara Regional Police, who initiated investigation and subsequent prosecution of the two men. After a dizzying whirlwind of motions, and withdrawn and dismissed criminal charges, Ferri and Mammoliti commenced separate civil proceedings against a number of parties for malicious prosecution including the Niagara Regional Police Department and Crown Attorneys, Alan Root and Patricia Vaddacchino. It was both Ferri and Mammoliti’s position that the NRPD and the Crown Attorneys had improperly used their offices and authority to facilitate a criminal proceeding concerning a matter that they knew was entirely civil in nature.

At the Superior Court of Justice
From the beginning, Justice Sheppard of the Ontario Superior Court recognized the complexity of the now-joined civil case:

I shall now review the facts which resulted in the charges being laid. It would be an understatement to say they amounted to a litany of mutual errors in judgment and misunderstanding of fact, even law. (para. 12).

After untangling this bevy of errors, Justice Sheppard proceeded to apply the facts of the case to the Nelles test in an uncomfortably strict fashion. Such an approach permitted him to neatly dispose of the issue by granting summary judgment to all defendants including Root and Vaddachino. According to the motions judge, Ferri’s claim for malicious prosecution against the Crown Attorneys warranted dismissal because it failed to satisfy the first element of the Nelles test. Specifically, he found that, outside of offering legal advice to police, the Crown Attorneys played no role in the laying of criminal charges. The judge also dismissed Ferri’s claim against the NRPD upon determining that Ferri failed to satisfy the third and fourth grounds of the Nelles test: absence of reasonable and probable cause, and malice. In the words of Justice Sheppard at para. 33:

In my view, the money demand by Mammoliti constituted reasonable and probable cause for the police to charge Mammoliti and then charge Ferri because Ferri was the purchaser of the property and hired Mammoliti to do the clean up and remove the boxes.

Justice Sheppard then proceeded to dismiss Mammoliti’s claim for malicious prosecution against the NRPD by concluding that Mammoliti had not satisfied the second, third and fourth elements of the Nelles test. Ultimately, in the eyes of the motion judge, neither Ferri nor Mammoliti had presented any genuine issue for trial.

Court of Appeal for Ontario
As might be expected, Mammoliti and Ferri sought an appeal of the motion judge’s dismissal. In a 2-1 decision written by Justice of Appeal LaForme, the Ontario Court of Appeal suggested that the greatest errors in judgment were perhaps those perpetrated by Justice Sheppard, himself. In Justice LaForme’s own words:

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. (para. 41).

The Court of Appeal noted that the Crown Attorneys had, in fact, conceded the first two elements of the tort of malicious prosecution, insofar as the police had initiated the prosecution, the Crown Attorneys continued the prosecution, and the prosecution had ultimately ended in favour of the plaintiff.

Moreover, whereas the motions judge had determined that the charges against Mammoliti could not be said to have terminated in his favour because they were withdrawn pursuant to a settlement (to return the files), Justice LaForme considered the withdrawal of charges in and of itself to be sufficient for the second element of the Nelles test.

Regarding the third element of the test, absence of reasonable and probable cause, Justice LaForme detailed at length a number of factors in relation to both Ferri and Mammoiti that had been left unconsidered by the motions judge, and which ought to have led him to conclude the need for evidence to be fully examined at trial. These factors included among other things:

(a) the fact that, given the Agreement of Purchase between Ferri and the bank, Ferri did have some right (albeit an unclear one) to deal with the files; (b) Mammoliti had possession of the files after having been properly hired by Ferri to remove and store them; (c) Mammoliti had taken the position that the files had been abandoned; and (d) both Ferri and Mammoliti had engaged in varying degrees of negotiation with the bank regarding the return of the files.

Finally, in terms of the fourth element of the test, malice, Justice LaForme clarified that the principal submission of Ferri and Mammoliti was that the bank had pressured the NRPD and the Crown Attorneys to act in the way they did so as to protect the bank’s own negligent behaviour. Here, once again, Justice LaForme determined that important factual evidence and matters of credibility had been inappropriately weighed and cast aside by the motions judge.

In the end, the Court of Appeal determined that Ferri’s claim of malicious prosecution against the Crown Attorneys, as well as the claim of both Ferri and Mammoliti against the NRPD, deserve to have their day in court.