A Lawsuit Isn’t Always The Best Revenge: JCPC Rules That The Tort Of Malicious Prosecution Is Now Available For Civil Litigants

In a recent decision, the Judicial Committee of the Privy Council ruled for the first time that the tort of malicious prosecution is available in the context of civil proceedings. In most jurisdictions, including Canada, the current view is that malicious prosecution is only available against the Attorney General or Crown prosecutors following criminal proceedings instituted for an improper purpose.

Background

The result was driven by the peculiar facts of the case. Mr. Paterson was a chartered surveyor resident in the Cayman Islands. He was appointed by Sagicor to act as a loss adjuster for a claim for property damage caused by Hurricane Ivan.

About one year after Mr. Paterson began work on the reconstruction project, Mr. Delessio joined Sagicor as Senior Vice President. Mr. Delessio was known for having an aggressive personality. He and Mr. Paterson had had previous run-ins and were not fond of each other (for example, in 2001, Mr. Paterson had inquired of the Cayman Immigration Department whether Mr. Delessio held a valid work permit, and Mr. Delessio had found out about the inquiry).

Mr. Delessio became concerned that there was a serious deficiency in the documentation to support payments which had been made to the contractors on Mr. Paterson's recommendation. Mr. Delessio fired the contractors and stated that he intended to drive Mr. Paterson out of business and to destroy him professionally.

Mr. Delessio hired a loss adjuster to review Mr. Paterson's work, but instructed the adjuster not to speak to the contractors, the engineers or Mr. Paterson about the work. The adjuster's report concluded that the contractor had overcharged Sagicor and that this had been approved by Mr. Paterson. Sagicor commenced an action against Mr. Paterson and the contractors, alleging deceit, conspiracy and misrepresentation.

Mr. Delessio then planted an article in the press about the allegations against Mr. Paterson and the contractors. Days before the trial, the plaintiffs discontinued the action and judgment was entered in favour of Mr. Paterson and the contractors. Mr. Delessio committed suicide in early 2009.

The case under appeal arose as a result of the trial of Mr. Paterson's counterclaim for damages against Sagicor. The trial judge found that:

Mr. Delessio knew that the adjuster's report was not a proper basis for the allegations of fraud and conspiracy; although Mr. Delessio had noticed some issues that might have objectively seemed suspicious, it...