Malicious Prosecution of Disciplinary Allegations

Whether and when regulatory staff and prosecuting counsel can be sued for malicious prosecution has always been unclear. The recent case of Bahadar v Real Estate Council of Alberta, 2021 ABQB 395 (CanLII), continues that uncertainty.

After the practitioner’s discipline hearing for allegations related to mortgage fraud was stayed for undue delay, the practitioner sued regulatory staff and the prosecuting lawyers for malicious prosecution. In permitting the claim to proceed to trial, the Court indicated as follows:

  • It remains unclear whether the tort of malicious prosecution, usually arising in criminal prosecutions, is even available for professional misconduct prosecutions. The Court left that issue to the trial judge.
  • There were sufficient pleadings of the staff and legal counsel involvement in initiating and continuing the proceedings to leave that issue for the trial judge.
  • There is sufficient ambiguity as to whether a permanent stay of proceedings by the discipline committee for delay amounted to a disposition in favour of the practitioner so as to leave that issue for the trial judge.
  • There were sufficient facts pleaded as to the quality of the evidence before the regulator and the inordinate delay that the issue of whether the regulator and their legal counsel had reasonable cause to pursue the prosecution should be left to the trial judge.
  • The test as to what constitutes malice in such a prosecution remains unclear. The Court stated: “In my view, spite, ill-will or a spirit of vengeance combined with a willful and intentional effort on a prosecutor’s part that abuses or distorts his proper role within the disciplinary system will satisfy the definition of malice.” While the practitioner had to plead particulars of malice, the Court acknowledged that it was difficult to do so without having an opportunity to examine the defendants. The Court held that the allegations that the regulatory staff and legal counsel had mislead about the reasons for the delay in prosecution and failing to provide exculpatory evidence to process participants was sufficient at this early stage.

The Court emphasized that at this point in the proceeding it was required to accept the practitioner’s factual pleadings as true. If the practitioner could not prove them at trial, the claim would fail.

The one issue clarified by the Court was that prosecutors in disciplinary proceedings are in a different position than Crown prosecutors. They represent a client (the regulatory body) and are not held to the same standards of independence as Crown prosecutors.

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