Action an abuse of process

Ex-employee not entitled to bring action against a co-worker whose report resulted in her termination

In 1992 North York General Hospital dismissed nurse Ilona Disher. Her dismissal was precipitated by a report made by a co-worker, Theresa Kowal, to the hospital’s director of nursing expressing concerns about Ms. Disher’s behaviour. Following receipt of Ms. Kowal’s report, the hospital investigated Ms. Disher’s conduct and as a result terminated her, alleging that Ms. Disher had improperly administered and documented narcotics.

As a result of the dismissal Ms. Disher brought an action against the hospital claiming damages for wrongful dismissal and mental distress. In the course of this litigation the hospital produced two copies of a memorandum from Ms. Kowal. Ms. Disher brought an action against Ms. Kowal alleging falsehood and intentional interference with economic relations and intimidation.

The wrongful dismissal action was settled in November 1999 and the action against the hospital was dismissed. Ms. Disher, an employee of 15 years, received 21 months’ salary as compensation. Ms. Disher signed a release but the settlement did not include the action against Ms. Kowal.

Ms. Kowal brought a motion seeking to have the action against her dismissed as an abuse of process because of non-compliance with the deemed undertaking rule in the rules of civil procedure. Ms. Disher brought a motion in the action against the hospital seeking leave to use a document obtained in that proceeding and information derived therefrom in the action against Ms. Kowal.

The deemed undertaking rule was enacted for the protection of privacy for the party compelled to produce information in the course of the discovery process during litigation. The rule provides that parties to an action and their counsel are deemed to undertake not to use evidence or information received during the discovery process for any purposes other than for the proceeding in which the evidence was obtained.

In other words Ms. Disher could not use evidence obtained during discovery in her wrongful dismissal action as evidence in the action against Ms. Kowal. However in certain circumstances the Court can order that the rule does not apply. The Court must be satisfied in those cases that the interests of justice outweigh any prejudice that would result to a party who disclosed the evidence.

The hospital opposed the motion brought by Ms. Disher, arguing that granting leave to Ms. Disher to use the memorandum in the Kowal action would be prejudicial.

First the hospital settled the first action without acknowledging fault. The hospital feared it would be drawn back into the Kowal action and required to relitigate many of the same factual issues.

Second was concern for the chilling effect among other employees that may result from use of these documents in an action against Ms. Kowal.

The hospital has a legal obligation to investigate complaints of professional misconduct or incompetence of health care professionals. As well nurses have a professional obligation to report misconduct by other nurses. The hospital was concerned that if an employee who provided information in confidence about another employee’s incompetence or misconduct faced a lawsuit for defamation subsequent to this information being disclosed by the hospital in a wrongful dismissal action, there was a danger that employees would not be forthcoming to report incompetence or misconduct. This cooperation by employees was critical to the hospital in carrying out its investigations.

In response Ms. Disher argued that the injustice to her outweighed any possible prejudice to the hospital.

The Court accepted the hospital’s position that there was prejudice to the hospital from disclosure of the memorandum. Even though the hospital had settled the wrongful dismissal action, disruption to its operations was inevitable if the action against Ms. Kowal proceeded. That action would require involvement of the hospital’s employees. The Court also accepted that there was a risk that other employees would be reluctant to provide information to their employer if that information disclosed by the employer in the course of litigation could be used against them in a legal action.

The Court dismissed Ms. Disher’s motion for relief from the deemed undertaking rule. Because the action against Ms. Kowal was based on the information obtained in contravention of the deemed undertaking rule, the action was held to be an abuse of process and was permanently stayed.

For more information:

Disher v. Kowal, Ontario Superior Court of Justice, Docket Nos. 94-CQ-48910CM, 92-CU-55639, Oct. 30/01.

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