The claim raised an arguable legal issue regarding a professional association's duty to act in good faith
The Ontario Superior Court of Justice dismissed a motion to strike or stay a nurse's lawsuit, which alleged that the Registered Nurses' Association of Ontario (RNAO) acted in bad faith when handling her application for legal assistance.
The dispute arose after the nurse requested Legal Assistance Program (LAP) support to respond to allegations of professional misconduct before the College of Nurses of Ontario. LAP arranged for legal counsel on a limited retainer to assist with initial correspondence. However, RNAO denied further funding and informed the nurse that she could appeal the decision. Despite multiple requests for the reasons behind the denial, RNAO advised her that she would not receive a response until after her scheduled conduct hearing had already begun.
The nurse filed a lawsuit seeking $410,000 in damages, alleging that RNAO had a duty to act fairly and in good faith in reviewing her application and that its delay in providing reasons for the denial caused her significant distress. She later initiated a second action, seeking $4.41 million in damages against RNAO, its board, and specific officials, claiming abuse of office and further breaches of good faith.
RNAO filed a motion to strike the first lawsuit, arguing that it failed to disclose a reasonable cause of action and duplicated the second lawsuit. The Superior Court disagreed, ruling that the claim raised a novel but arguable legal issue regarding RNAO's duty to act in good faith. The court cited existing jurisprudence recognizing that discretionary decisions made in contractual or quasi-contractual relationships must be exercised reasonably and in good faith. While the court did not definitively establish that RNAO owed such a duty, it determined that the issue should proceed to trial rather than dismissing it at the pleadings stage.
RNAO also sought to stay or dismiss the first lawsuit under Rule 21.01(3)(c), which prevents duplicative litigation. The court acknowledged similarities between the two cases but found that the second action involved additional defendants and distinct legal claims. The judge noted that the proper approach might be consolidating the cases rather than dismissing the first claim.
Ultimately, the court denied RNAO's motion and encouraged the parties to consider procedural steps to minimize litigation costs and delays.
