DIVISIONAL COURT FILE NO.: 315/09
(CV-08-363327)
DATE HEARD: 20090924
SUPERIOR COURT OF JUSTICE - ONTARIO
DIVISIONAL COURT
RE: TIRECO, INC., Plaintiff
-and-
YHI (CANADA) INC., Defendant
-and-
DIVISIONAL COURT FILE NO.: 316/09
(CV-08-363326)
DATE HEARD: 20090924
RE: TIRECO, INC., Plaintiff
-and-
168406 CANADA INC. operating as FASTCO CANADA, Defendant
BEFORE: Justice D. Aston
COUNSEL: Teresa Dufort, for the Plaintiff
Patrick J. Cotter, for the Defendant
E N D O R S E M E N T
[1] The Defendants in these two actions brought motions under Rule 21.01(1)(b) to strike out the Statements of Claim as disclosing no reasonable cause of action. The issues in both actions are identical.
[2] On July 2, 2009, Stewart J. dismissed the motions. The Defendants now move for leave to appeal. The test for granting leave is set out in Rule 62.02(4) which reads as follows:
Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[3] I need not set out the facts or the nature of the allegations in the Statement of Claim as they are set out fully in the reasons of Stewart J.
[4] To successfully advance a claim for inducing breach of contract the Plaintiff must plead, amongst other things:
(i) That the Defendants’ conduct was intended to cause Nankang to breach its contract with the Plaintiff; and
(ii) That the Defendants’ conduct actually caused Nankang to breach that contract.
[5] Counsel for the Defendants submits that the pleading does not specifically allege the Defendants induced Nankang to breach its contract, nor does it plead that the Defendants and Nankang even communicated with one another, or that the tires were acquired from Nankang. Nor is there an allegation that Nankang acted on any inducement from the Defendants.
[6] Justice Stewart read the Statement of Claim as including an allegation the Defendants did induce and cause Nankang to breach its contract with the Plaintiff by “directly or indirectly” obtaining tires from Nankang and reselling those tires after the Defendants knew of the Plaintiffs’ Exclusive Distribution Agreement. The motions judge considered the authorities on the issues before her and in particular the statement by the House of Lords in OBG Ltd. v. Allan, [2007] UKHL 21 at para. 192. The elements of intent and inducement are established where it is alleged that a defendant engaged in contractual relations with a third party that, to its knowledge, are incompatible with the third party’s obligations to the plaintiff.
[7] While describing the allegations as an “arguably inelegant and skeletal articulation” the motions judge found that the necessary elements of the tort could fairly be implied or read into the other specifics pleaded. In my view it would have been preferable for the Plaintiff to have made more specific allegations but I do not have good reason to doubt the correctness of the motions judge in her interpretation of the allegations or the sufficiency of those allegations. Nor is her decision in conflict with another decision, as that part of the Rule 62.02(4)(a) test has been interpreted.
[8] With respect to the tort of intentional interference with economic relations, the motions judge correctly identified the elements of the tort and in particular the requirement for “unlawful means”. I would agree with counsel for the Defendants that there is no allegation of unlawful means if the tort of inducing breach of contract does not qualify under that element of the intentional interference tort. . The motions judge’s conclusion on the intentional interference with economic relations tort is consistent with the Ontario Court of Appeal’s decision in Correia v. Canac Kitchens, 2008 ONCA 506, [2008] O.J. No. 2497 at paras. 102 to 104, 107. The scope of the doctrine of “unlawful means” is not fully defined as yet and the tort remains “a tort of uncertain ambit”, such that “unlawful means” can include acts which an alleged tort feasor “is not at liberty to commit”. Justice Stewart held that it was not “plain and obvious” that the “unlawful means” element of the tort of intentional interference with economic relations could not be satisfied by conduct that is otherwise distinctly tortuous. I agree, and in my view there is no reason to doubt the correctness of that conclusion.
[9] I find that Justice Stewart applied the correct principles from the jurisprudence under Rule 21.01(1)(b) that:
(i) The Statement of Claim is to be read generously with allowances given for any inadequacies due to drafting deficiencies.
(ii) Matters of law that are not fully settled in the jurisprudence should not be disposed of on a Rule 21.01(1)(b) motion at an early stage of the proceedings before a Statement of Defence has been delivered and before discovery has taken place.
(iii) It matters not that a defendant may have a very strong defence or that the plaintiff’s case appears weak.
(iv) Actions should be dismissed only in circumstances where it is “plain and obvious” that, even if the version of facts put forward in the Statement of Claim is accepted as true, the Statement of Claim does not disclose a reasonable cause of action; and
(v) It must be demonstrated plainly that the action is certain to fail.
[10] Whether the Statement of Claim is amended or not, it is clearly open to the Defendants to plead that they did not induce a breach of contract or cause Nankang to breach its contract.
[11] Contrary to the submission of the Defendants, the decision of the motions judge does not establish any new law or new test or conflict with other jurisprudence. It simply permits this action to survive at the pleadings stage.
[12] It seems to me significant in considering the public importance of the issues and the desirability of consideration by a full panel of the Divisional Court that the outcome of this motion did not dismiss the actions based on pleading but simply allowed those actions to go forward. There is nothing being decided at this stage that is important to the public. There is no development of the law occurring as a consequence of the decision of the motions judge and no decision has been made on the merits of the case. The decision to date simply permits the action to proceed to the next stage. In the commercial marketplace nothing has become “permissible” by allowing these actions to proceed. There is only the possibility of an outcome that would have broad commercial implications.
[13] The disposition at this stage does not foreclose the possibility of a motion for summary judgment under Rule 20 at a later stage in this proceeding. However, it would be premature to dismiss the Plaintiff’s claims at this stage.
[14] The motions are therefore dismissed. The Plaintiffs are entitled to costs fixed in the amount of $5,000 inclusive of GST and disbursements and payable forthwith. The Defendants are jointly and severally responsible for payment of the costs.
The Hon. Mr. Justice D. Aston
DATE RELEASED: October 5, 2009
DIVISIONAL COURT FILE NO.: 315/09 and 316/09
DATE HEARD: 20090924
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TIRECO, INC., Plaintiff
-and-
YHI (CANADA) INC., Defendant
-and-
TIRECO, INC., Plaintiff
-and-
168406 CANADA INC. operating as FASTCO CANADA, Defendant
BEFORE: Justice D. Aston
COUNSEL: Teresa Dufort, for the Plaintiff
Patrick J. Cotter, for the Defendant
ENDORSEMENT
Aston J.
DATE RELEASED: October 5, 2009