Guidance on Definition of Bad Faith

Ever since the Supreme Court of Canada in Finney v. Barreau du Québec, [2004] 2 S.C.R. 17 suggested that some forms of negligence could constitute bad faith, regulators have struggled with the concept. The scope of “bad faith” is important as that is the hurdle that must be established before one can successfully sue a regulator for damages. In Salehi v. Association of Professional Engineers of Ontario, 2016 ONCA 438, Ontario’s highest court clarified how the Finney case fits in with the rest of jurisprudence. The context was an action for damages by a professional engineer who went through a fifteen-year registration process to demonstrate his competency to practise. In dismissing the claim, the Court described the criteria for suing a regulator as follows:

We agree with the motion judge that none of the acts the appellant complains of can be said to constitute bad faith. There was no evidence of malice or intent to harm on the part of the APEO, nor was there a fundamental breakdown in the orderly exercise of its authority or any abuse of power.

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