A recent ruling from the King’s Bench for Saskatchewan struck claims of bad faith and negligent investigation against the City of Saskatoon in a wrongful dismissal lawsuit filed by a former employee of SaskTel Centre.
The court found that her statement of claim did not disclose a reasonable cause of action against the City, which had been named as a defendant alongside SaskTel Centre and its former CEO, W.L.
Background
M.H. was employed by SaskTel Centre from 2010 to 2021, initially as Assistant Financial Controller, before being promoted to Financial Controller in 2012. The plaintiff alleged that her employment became untenable due to the conduct of W.L., who was SaskTel Centre’s CEO during her time there. M.H. claimed that W.L. interfered with her duties, undermined her position, and created a toxic work environment that eventually led to her constructive dismissal.
In addition to claims against W.L. and SaskTel Centre, M.H. also named the City of Saskatoon as a defendant, alleging that it, as the owner of SaskTel Centre, was liable for “bad faith conduct” and “negligent investigation.”
The City sought to strike these claims on the basis that they did not constitute a reasonable cause of action and were frivolous, scandalous, or vexatious.
Plaintiff’s allegations
M.H.’s primary allegations against SaskTel Centre and W.L. involved claims of workplace harassment and improper conduct. She asserted that W.L. diminished her role by removing her comments from meeting minutes, instructed her to alter records, and used company funds for personal expenses. She further claimed that the CEO’s actions led to a reduction in her hours and income without a corresponding decrease in her duties.
M.H. also alleged that, after she took a medical leave due to work-induced stress, W.L. breached her privacy by disclosing her medical information to a third party. According to her statement of claim, the defendants failed to take any action to address her concerns, which were raised anonymously with SaskTel Centre’s Board of Directors and human resources personnel.
M.H.’s claim against the City of Saskatoon centred on the argument that the City, as owner of SaskTel Centre, was responsible for the damages arising from her constructive dismissal. She alleged that in May 2019, she attempted to report W.L.’s behaviour to an ombudsman for the City. M.H. claimed that no action or investigation followed this report, which she argued amounted to negligence and bad faith.
Court’s findings
Justice R.W. Elson found that the claims against the City were not substantiated by material facts sufficient to disclose a reasonable cause of action. Regarding the claim of bad faith conduct, the court noted that while bad faith might be relevant in certain contexts, such as wrongful dismissal claims directly involving an employer, M.H. had failed to demonstrate how the City, which was not alleged to be her employer, had any duty or obligation to act in this case.
“There is no recognized cause of action for stand-alone bad faith conduct,” the court stated, emphasizing that allegations of bad faith must be tied to another form of culpable conduct, such as breach of contract or defamation, to result in liability. Furthermore, the court found that M.H.’s allegations were vague and did not provide sufficient detail to support the claim. “Allegations of bad faith are very serious and cannot be taken lightly. They require something more than the bald assertion pleaded in this statement of claim,” Justice Elson said.
With respect to the claim of negligent investigation, the court similarly found that M.H. had not adequately pleaded the existence of a duty of care between the City and herself. The court highlighted that the tort of negligent investigation is typically confined to cases where the investigator has a formal, legal obligation to investigate, such as police officers or regulatory bodies. M.H.’s assertion that the City’s ombudsman failed to investigate her complaint did not meet the necessary threshold to establish such a duty.
“There are no pleaded material facts to support the assertion of liability against the City for the alleged failure to investigate,” the court ruled. “The City’s ownership of SaskTel Centre does not, in itself, create a close and direct relationship sufficient to establish a duty of care.”
For more information, see Hollinger v SaskTel Centre, 2024 SKKB 178 (CanLII).
