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Misfeasance in Public Office
Published in the April 2010 issue of Litigation Notes - View Article
The Ontario Court of Appeal dismisses an appeal by a lodging home from a trial judge’s decision holding that City officials did not abuse their powers in issuing an order to comply, in connection with various by-law violations.
The St. Elizabeth Home Society operates a retirement home in Hamilton, Ontario known as the St. Elizabeth Villa. The Villa is licensed under a City of Hamilton by-law as a “second level lodging house”. In 1994 a former director of nursing at the Villa and several health care aides sent letters to the Public Health Department of the Regional Municipality of Hamilton/Wentworth (“Region”), the Licensing Department of the City of Hamilton (“City”) and to the Villa’s Board of Directors alleging widespread substandard care at the Villa. The Board of the Villa retained an independent consultant who delivered a report strongly criticizing many of the health care practices at the Villa.
In December of 1994 the City of Hamilton and the Region issued an Order to Comply requiring the Villa to address a number of the violations. Over the next several months the Villa took steps to address the problems.
In April of 1995 the existence of the Order to Comply was leaked to a local newspaper, the Hamilton Spectator, resulting in a number of articles on the Villa. In 1996 and 1997 the Ontario Coroner held an inquest into the deaths of 5 Villa residents. In December of 1996 in the middle of the inquest, the Villa commenced action against the Region and the City. Five years later, in 2001, the Statement of Claim was amended to allege defamation, abuse of public office, abuse of power, negligence, interference with economic relations and conspiracy, all in connection with the Order to Comply.
After a 142 day trial, the Villa’s action was dismissed in its entirety and costs of $2.3 million were awarded to the City and $1.9 million to the Region. The Villa appealed all of the findings but the Ontario Court of Appeal chose to consider only two grounds of appeal, namely whether the trial judge had erred in finding that the officials of the Region and the City had committed misfeasance in public office and whether the costs award was too high. On the subject of misfeasance in public office, the Court of Appeal dismissed the appeal, finding that the officials were more than justified in issuing the Order to Comply based on the evidence available to them. There was clear evidence that the Villa had admitted residents who properly belonged in a nursing home instead of in a second level lodging home. There was also evidence of various substandard practices, including the recycling of food.
On the issue of costs, the Court of Appeal reduced the costs awarded by the trial judge. The trial judge had awarded the Defendants costs on a substantial indemnity basis from the date of an offer to settle. While rule 49 of the Rules of Civil Procedure provides for substantial indemnity costs to be awarded to a Plaintiff in circumstances where an offer to settle is made and the Plaintiff recovers that amount or more at trial, the same does not apply to an offer to settle made by a Defendant. The award was therefore reduced to partial indemnity costs throughout. In addition, the Court of Appeal felt that the trial judge had erred in awarding separate sets of costs to solicitors for both the Region and the City, when the Region had been amalgamated with the City part way through the litigation. As a result, the interests of the two Defendants had merged and their cross-claims against each other became irrelevant. While finding that the two sets of solicitors had not necessarily duplicated their efforts in all respects, the Court of Appeal nevertheless reduced the costs award by a further 25%.
St. Elizabeth Home Society v. Hamilton, 2010 ONCA 280 (CanLII)