A Saskatchewan employee’s attempt to hold a city government liable for negligent investigation in her constructive dismissal case has been firmly rejected by the province’s Court of Appeal.
The court dismissed M.H.’s appeal against an earlier ruling that struck out claims against the City of Saskatoon, reinforcing the limitations on who can be sued in workplace investigation disputes.
The case centered on M.H.’s allegations of constructive dismissal from her employment at SaskTel Centre, where she initially named three defendants: SaskTel Centre, its former CEO, and the City of Saskatoon.
Investigation complaint falls flat
M.H. specifically claimed the City engaged in “bad faith conduct” and “negligence and negligent investigation,” arguing it owed her a duty of care to investigate a complaint she had made to the City’s ombudsman.
However, the Court of Appeal upheld the lower court’s finding that M.H.’s pleadings failed to establish the necessary legal relationship between her and the City to support her claims.
“The Chambers judge struck the claim against the City on the basis that it failed to disclose a prima facie duty of care on the part of the City relative to the claims for negligence and negligent investigation,” the court noted.
In its analysis, the court confirmed the ruling that the pleaded facts regarding “the City’s ownership of SaskTel Centre and its ombudsman’s meeting with the plaintiff were not facts capable of establishing the kind of ‘close and direct relationship’ required for a legal duty of care to be imposed.”
No separate liability for investigation in dismissal cases
The appeal decision reinforces a crucial point for HR professionals and employment lawyers: even if an employer relationship could have been established, it wouldn’t create additional liability for negligent investigation in this context.
The court stated that “even if she could establish that the City was her co-employer, by virtue of its ownership of SaskTel Centre, an employer or co-employer could not be found discretely liable for the tort of negligent investigation in the context of a wrongful dismissal action.”
Instead, the court confirmed that any moral damages for flawed investigations in employment cases would be confined to those available under established Canadian employment law precedents in Wallace v United Grain Growers Ltd. and Honda Canada Inc. v Keays.
Multiple grounds of appeal rejected
M.H. had challenged the lower court ruling on four grounds:
- Failing to apply the correct test to strike a claim
- Misapprehending facts pleaded in the claim
- Violating the rule of audi alteram partem (right to be heard)
- Refusing to grant leave to amend deficient pleadings
The Court of Appeal systematically dismissed each argument.
On the first ground, the court rejected M.H.’s contention that analyzing duty of care improperly required her to negate the City’s defences. Instead, the court clarified that “the existence of a duty of care is not a defence against a negligence claim; it is an integral element of an allegation of negligence.”
The court found the lower court judge had correctly applied the Anns/Cooper test, which requires a plaintiff to demonstrate that “the harm complained of is a reasonably foreseeable consequence of the alleged breach” and “there is sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care on the defendants.”
No procedural fairness concerns
The court also dismissed M.H.’s procedural fairness arguments, clarifying that while the lower court cited cases not relied upon by the parties, this did not constitute a procedural error.
“It is not a breach of procedural fairness for a judge to rely on authorities not specifically referred to by the parties when those authorities are relevant to an issue already raised with the parties,” the court explained.
A breach of audi alteram partem would require raising entirely new legal issues without giving parties an opportunity to respond – which didn’t occur in this case.
No opportunity to amend pleadings
Finally, the court upheld the lower court’s refusal to allow M.H. to amend her deficient pleadings.
Though M.H. hadn’t formally requested an amendment, the lower court judge had still considered whether to exercise discretion to permit one. The appeal court found no error in the conclusion that “because the material facts upon which a cause of action against the City could be established were so deficient, an amendment would be inappropriate.”
For more information, see Hollinger v SaskTel Centre, 2025 SKCA 40 (CanLII).
