Abuse of Process (Tort)

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Date Retrieved:	2024-04-19
CLNP Page ID:	1825
Page Categories:	[Tort Law]
Citation:	Abuse of Process (Tort), CLNP 1825, <56>, retrieved on 2024-04-19
Editor:	Sharvey
Last Updated:	2021/12/07

Tractor Supply Co. of Texas v. TSC Stores LP, 2009 FC 154 (CanLII)

[25] Tractor Supply submits that the tort of abuse of process can only succeed if it can be proven both that: (1) the party initiated the legal process for a purpose other than it was designed to serve; and (2) the party has committed some definite, overt act in furtherance of that purpose, apart from commencement of the impugned proceeding.

[26] The requirement for an overt act to further an alleged improper purpose has resulted in the tort of abuse of process only succeeding in very rare circumstances. In Ontario, Tractor Supply submits that the requirement of an overt act has been strictly adhered to in order to prevent the misuse of the action. There must be, according to Atland Containers Ltd. v. Macs Corp. Ltd. et al. (1974), 1974 CanLII 864 (ON SC), 17 C.P.R. (2d) 16 at 19-20, a “definite act or threat in furtherance of such a purpose,” otherwise, “every plaintiff would be open to such a claim.”

[27] Tractor Supply says that both elements of the two-part test for the tort of abuse of process are also required in the Federal Court and that the Federal Court is only entitled to find a tort of abuse of process where there is both an improper purpose and a definite act or threat to further that purpose. See Amsted Industries Inc. v. Wire Rope Industries Ltd. (1988), 23 C.P.R. (3d) 541, Levi Strauss & Co. v. Timberland Co. (1997), 74 C.P.R. (3d) 49 (F.C.T.D.), and Levi Strauss.

[28] For this reason, Tractor Supply says that TSC’s pleading of abuse of process must fail. TSC alleges that the improper purpose is to lower the value of its business in the context of a takeover bid. However, TSC does not plead that Tractor Supply committed any overt act to further this purpose. An essential element of the cause of action has not been pleaded. Hence, the pleading should be struck: Robin Hood Multifoods Inc. v. Maple Leaf Mills Inc. (1997), 1997 CanLII 4754 (FC), 72 C.P.R. (3d) 234 at 236 (F.C.T.D.) and Prior v. Canada, [1989] F.C.J. 903 (F.C.A) (QL).

[29] Further, Tractor Supply distinguishes the procedural defence of abuse of process from the tort of abuse of process. As a procedural defence, abuse of process allows the Court to control the misuse of the judicial system, where, for example, a party commences multiple actions in respect to one dispute. However, the tort of abuse of process applies only where a party has an improper motive and commits an overt act, and requests compensation.

Oei v. Hui, 2020 BCCA 214 (CanLII)

[17] As a starting point in considering whether the amended notice of civil claim before us, absent the claim of knowing falsity, satisfies the requirement to plead a collateral and improper purpose, I ask whether the judge decided this issue.

[18] The judge began his consideration of the tort of abuse of process by discussing the meaning of the words “collateral and improper purpose”. He correctly observed that the tort of abuse of process was less broad than abuse of process under Rule 9‑5(1)(d), and he referred to cases concerning the procedural fault of abuse of process: Chernen v. Robertson, 2014 BCSC 1358; Flavelle v. Mahood (1980), 1980 CanLII 488 (BC SC), 25 B.C.L.R. 236 (S.C.), aff’d (1981), 1981 CanLII 478 (BC CA), 33 B.C.L.R. 10 (C.A.); Wang v. British Columbia Medical Association, 2010 BCCA 43; and Behn v. Moulton Contracting Ltd., 2013 SCC 26, including this disjunctive statement in Flavelle at 242:

A pleading is an abuse of process if made knowing there is no factual basis for the allegations made or if made for some improper collateral purpose.

[19] The judge then moved to a discussion of the parties’ positions on the scope of the elements of the tort. The Concord parties contended before him that a collateral and improper purpose is one that is independent of or unrelated to that which they could achieve in the underlying litigation if successful; they said a concocted action is not tortious so long as the plaintiff’s purpose falls within the ambit of the litigation. The Oei parties contended that the essence of the tort is misuse or perversion of the court process. They said that in British Columbia the need to prove a collateral and improper purpose is entangled with the questionable “overt act” requirement, and unclear.

[20] The judge held that the tort requires a collateral and improper purpose. He then said:

[24] Second, I consider that the Defendants seek to unreasonably constrain the ambit of what can constitute an improper purpose or a purpose that is “collateral” to the action for the tort of abuse of process. It is the content of that requirement that is at issue on this application.

[25] It is clear that there are various inevitable incidents or consequences of litigation. These include, inter alia, delay, cost, potential embarrassment, difficulty in securing financing and a chilling effect on those who would otherwise do business with the party who has been sued. Such matters are not actionable and cannot ground a claim for abuse of process.

[26] I consider, however, that a different result may ensue, where a plaintiff commences an action, based on what it knows to be a fiction, for the very purpose of achieving these same consequences and in order to coerce the party that has been sued. Such purposes are “collateral” to the action and constitute both a misuse and a perversion of the court’s processes.

[Emphasis added.]

[21] The judge next reviewed the jurisprudence and observed that many of the cases followed a trial and focused on the acts or conduct of the alleged tortfeasor, unlike the application before him which simply concerned the pleadings. He concluded:

[44] Once again the incidental and natural consequences of a properly commenced action, such as delay and cost, can satisfy the “improper” or “ulterior” purpose requirement of the tort if an action is advanced on the basis of material facts that are known to be false and where, the very object of the action is to create such cost or delay for the purpose of exerting economic pressure, or otherwise coercing, a defendant. Such an object or strategy can/would constitute a misuse and perversion of the court’s processes and would, I consider, properly ground an action for abuse of process.

…

[47] ... Furthermore, I do not consider that it is “plain and obvious”, or “perfectly clear”, or “absolutely beyond doubt” that the Plaintiffs’ action cannot succeed. This is so for several reasons. First, I consider that there is some uncertainty in this jurisdiction, in relation to the requirements of the tort of abuse of process. Second, I consider that the natural incidents of an action that is properly commenced can, in different circumstances, take on a different character. Thus, I consider that the “improper” or “extraneous purpose” element of the tort of abuse of process can be made out in circumstances where a plaintiff knowingly advances a “baseless” claim for the purpose of i) creating or manufacturing the incidents of litigation that I have described ii) to coerce a defendant into an agreement.

[48] In particular, I do not consider that is plain and obvious that an action for specific performance, that is commenced by a plaintiff on facts that the plaintiff knows to be false, and that is commenced for the purpose of both inhibiting or constraining the ability of a defendant to develop its land and to compel or coerce the defendant to negotiate with that plaintiff, does not support an action for abuse of process.

[Emphasis added.]

[22] It appears to me from these passages that the judge did not decide whether the amended notice of civil claim, stripped of the allegation of knowing falsity, sufficiently pleads the first Fleming element. That is, he did not decide whether the pleadings in the current action, other than the plea of knowingly false allegations, pleaded a collateral and improper purpose. I will set that issue aside, and first address the other possibility identified in my para. 16 above, that the plea of knowing falsity, by itself, can satisfy the requirement for a plea of a collateral and improper purpose. I will then return to the matter of the sufficiency of the plea, stripped of its knowing falsity allegation, for purposes of the first Fleming element.