Court File and Parties

COURT FILE NO.: 17-60754 MOTION HEARD: 2018-06-19 REASONS RELEASED: 2018-06-25 SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

AMANDA MARTIN Plaintiff

- and-

THE CITY OF MISSISSAUGA, KIMBERLEY LESLIE, ROBERT LEVESQUE and GEOFF WRIGHT Defendants

BEFORE: MASTER M.P. McGRAW

COUNSEL: T. Gorsky, for the Defendant, The City of Mississauga P. Marshall and C. Kirewskie, for the Plaintiff

Reasons for Endorsement

I. Overview

[1] In this wrongful dismissal action, the Defendant The City of Mississauga (the “City”) brings a motion seeking leave to amend its Statement of Defence (the “Original Defence”). The proposed amendments relate to the City’s withdrawal of its allegation that the Plaintiff was terminated for just cause.

[2] The Plaintiff submits that the proposed amendments constitute a withdrawal of admissions and opposes the City’s motion. The Plaintiff also brings a cross-motion to: i.) compel the City to produce a third party investigation report (the “Report’) together with the name and contact information of the investigator; ii.) permit the Plaintiff to discover on the cause allegation and the investigation as set out in the Original Defence; and iii.) require the City to deliver its Affidavit of Documents within 30 days (the “Plaintiff’s Motion”).

[3] As with many pleadings motions, the issues underlying the Plaintiff’s opposition to the proposed amendments relate to discovery. The Plaintiff submits that the proposed amendments are a tactical ploy by the City to deprive her of discovery rights. This is reflected in the Plaintiff’s Motion where the Plaintiff seeks both the production of the Report and the right to discover on the investigation prior to the City delivering its Affidavit of Documents and examinations for discovery. Further, the City’s counsel has not yet reviewed the Report and advises that the Report may not be relevant to this action as it may be related only to the City’s investigation of other employees with no mention of the Plaintiff.

[4] Consistent with Rule 1.04 of the Rules of Civil Procedure and proportionality, significant case management was provided on both attendances with a view to resolving the real issues on these motions in order to allow the parties to proceed efficiently to discoveries. However, as set out below, minimal compromise was achieved and the motions proceeded.

II. The Parties and the Action

[5] The Plaintiff was employed as the Administrative Coordinator in the City’s Works, Operation and Maintenance Division from on or about April 15, 2014 until her termination on March 7, 2016. The individual Defendants are City employees.

[6] In her Fresh As Amended Statement of Claim issued on June 13, 2017 (original issued on March 1, 2017), the Plaintiff claims damages of $500,000 as against the City and the Defendant Geoff Wright for breach of contract, improper termination and wrongful and bad faith dismissal; $100,000 each for breach of her section 8 rights pursuant to the Canadian Charter of Rights and Freedoms (the “Charter”) and intrusion upon seclusion; and $500,000 in punitive damages. The Plaintiff claims $500,000 as against the Defendant Kimberley Leslie for harassment, defamation and intentional interference with contractual relations, and $100,000 in punitive damages, and $500,000 as against the Defendant Robert Levesque for sexual harassment and $500,000 in punitive damages.

[7] In the Original Defence, the City alleged, among other things, that the Plaintiff was dismissed for just cause as a result of, among other things, the improper disclosure of confidential information related to an investigation of other City employees in the Works, Operation and Maintenance Division.

[8] By letter dated January 23, 2018, the City’s counsel advised Plaintiff’s counsel that the City intended to withdraw its allegation of just cause termination and would be providing an amended Statement of Defence. On February 9, 2018, the City’s counsel wrote to Plaintiff’s counsel confirming the City’s withdrawal of its allegation that the Plaintiff was terminated for just cause, enclosing payment of the required amounts under the Employment Standards Act, 2000 (Ontario) and the Plaintiff’s employment contract and a draft Fresh As Amended Statement of Defence (the “Amended Defence”). The Plaintiff refused to consent to the Amended Defence.

[9] The parties first appeared before me on May 23, 2018. As Plaintiff’s counsel understood the attendance to be for the purpose of scheduling, and the City needed to file additional materials to respond to the Plaintiff’s Motion, I granted an adjournment. As it was immediately apparent that the underlying issues related to discovery, case management was provided and counsel had discussions outside of Court in an attempt to resolve the disputed issues. These efforts were unsuccessful.

III. The Law and Analysis

[10] Rule 26.01 of the Rules of Civil Procedure states:

“On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”

[11] Amendments should be presumptively approved unless they would result in prejudice that cannot be compensated by costs or an adjournment; they are shown to be scandalous, frivolous, vexatious or an abuse of the court's process; or they disclose no reasonable cause of action (Andersen Consulting v. Canada (Attorney General) at para. 37, 2001 CarswellOnt 3139 (C.A.)).

[12] Master MacLeod (as he then was) summarized the test for leave to amend pleadings under Rule 26.01 at paragraphs 19-22 of Plante v. Industrial Alliance Life Insurance Co., 2003 CarswellOnt 296:

“(a) The amendments must not result in irremediable prejudice. The onus of proving prejudice is on the party alleging it unless a limitation period has expired. In the latter case, the onus shifts and the party seeking the amendment must lead evidence to explain the delay and to displace the presumption of prejudice: [citations omitted]

(b) The amended pleading must be legally tenable. It is not necessary to tender evidence to support the claims nor is it necessary for the court to consider whether the amending party is able to prove its amended claim. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success. For this purpose amendments are to be read generously with allowance for deficiencies in drafting: [citations omitted].

(c) The proposed amendments must otherwise comply with the rules of pleading. For example, the proposed amendments must contain a "concise statement of material facts" relied on "but not the evidence by which those facts are to be proved" (rule 25.06(1)), the proposed amendments are not "scandalous, frivolous or vexatious" (rule 25.11(b)), the proposed amendments are not "an abuse of the process of the court" (rule 25.11(c)), the proposed amendments contain sufficient particulars -- for example, of fraud and misrepresentation (rule 25.06(8)).”

[13] The Court of Appeal has provided the following guidance with respect to non-compensable prejudice:

i.) there must be a causal connection between the non-compensable prejudice and the amendment such that the prejudice must flow from the amendments and not somewhere else;

ii.) the non-compensable prejudice must be actual prejudice, ie. evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment and specific details must be provided;

iii.) non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial (1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42 at para. 25; Andersen at paras. 34 and 37).

[14] The prejudice referred to under Rule 26.01 is prejudice to a party’s rights in prosecuting the action (Godoy v. 475920 Ontario Ltd. (2007), 52 C.P.C. (6th) 149).

[15] The Plaintiff submits that since the proposed amendments constitute a withdrawal of admissions, Rule 51.05 of the Rules of Civil Procedure supersedes Rule 26.01 (Antipas v. Coroneos, [1988] O.J. No. 137). Rule 51.05 states:

“An admission made in response to a request to admit, a deemed admission under rule 51.03 or an admission in a pleading may be withdrawn on consent or with leave of the court.”

[16] I recently considered and summarized the law with respect to the withdrawal of admissions in Baca v. Tatarinov, 2018 ONSC 1307. The Divisional Court has defined an admission as “an unambiguous deliberate concession to the opposing party” (Griffiths v. Canaccord Capital Corp., [2005] CarswellOnt 6610 (Div. Ct.) at para. 19).

[17] In Yang (Litigation Guardian of) v. Simcoe (County), 2011 ONSC 6405, G.P. DiTomaso J. stated the following at paragraph 46:

“Generally, admissions in a pleading are made boldly and baldly and they are, in general, specific and identifiable as admissions. An admission contemplated by rule 51 is one that is an unambiguous deliberate concession to a position taken by the defendant. An admission contemplated by rule 51 occurs when the plaintiff admits that a set of facts were posed by the defendant is correct. An admission must be an intentional concession to the other side and not simply the result of the words chosen in the claim. A factual pleading made in error cannot fairly be characterized as a deliberate admission.”

[18] In Nguyen v. Rare Elm Home Corp., [2006] CarswellOnt 7982, Master Glustein (as he then was) held at paragraphs 21-23 and 25-26:

“21 However, the fact that the initial claim assumed (or even pleaded) that the assignment agreement was valid is not an "admission" in law. In Hughes v. Toronto-Dominion Bank, [2002] O.J. No. 2145 (Mast.), the plaintiff pleaded that there was a personal guarantee in place, but later sought to amend the pleading to allege that he did not intend the documents at issue to be a personal guarantee. Master MacLeod held that the initial pleading was not an admission and, after a review of the leading cases, adopted the following definition (at para. 10):

• I adopt the definition of an admission as being an unambiguous deliberate concession to the opposing party. [emphasis added]

22 Carnwarth J. of the Divisional Court adopted the same definition in Griffiths v. Canaccord Capital Corp., [2005] O.J. No. 4897. In that case, the plaintiff initially sought damages for wrongful dismissal and for a higher purchase price for his Canaccord shares than that paid by Canaccord. The plaintiff sought to amend the claim to plead that he was entitled to retain ownership of the Canaccord shares. Carnwarth J. reversed the decision of the Master who held that the amendment had the effect of withdrawing the plaintiff's "admission" that he was obligated to sell his shares. Carnwarth J. held that "the existing pleadings relating to the Canaccord shares do not constitute unambiguous deliberate concessions in response to Canaccord's pleadings" (at paras. 18-20).

23 In the present case, the allegations as to the validity of the assignment agreement in the initial claim are not unambiguous deliberate concessions to positions taken by the defendants.

25 In the proposed claim, the plaintiffs' pleading that the assignment was not valid does not "withdraw" any pleading from the initial claim. In both claims, the fact pleaded is that the plaintiff signed the assignment agreement. Upon review by new counsel, the plaintiffs now plead that such an assignment required consent, as has already been pleaded by Rare Elm. There is no "concession" to a position taken by the defendants.

26 Subsequent counsel must be free to modify the legal theory of a case, depending on the facts they discover, whether through pleadings, at discovery, or at trial. If a party seeks to withdraw statements that are concessions, the test in Antipas must be met. However, as in this case, if new counsel seeks to recast the claim based on an existing document that both parties (the plaintiffs and Pham) agreed was signed, this cannot constitute a withdrawal of an admission.”

[19] A party requesting leave to withdraw an admission must establish that: i.) the proposed amendment raises a triable issue; ii.) the admission was inadvertent or resulted from wrong instructions; and iii.) the withdrawal will not result in any prejudice that cannot be compensated for in costs (Metro Ontario Real Estate Ltd. v. Hillmond Investments Ltd., 2017 ONSC 3518 at para. 4). If there is a triable issue, a party should be able to withdraw an admission upon furnishing a reasonable explanation for the change of position (Metro at para. 4).

[20] At paragraphs 4(e) and 22 of the Original Defence, the City alleges that it terminated the Plaintiff’s employment for cause. At paragraph 16 of the Amended Defence the City states:

“Although the City initially terminated the Plaintiff’s employment for cause, it has since withdrawn the allegation and has notified the Plaintiff that her termination of employment is on the basis of without just cause”.

[21] Having reviewed the Amended Defence and considered the relevant factors and circumstances, I conclude that the City’s proposed amendments do not constitute a withdrawal of admissions. In my view, the City’s allegation in the Original Defence that the Plaintiff was terminated with just cause is not an unambiguous deliberate concession to any position taken by the Plaintiff. In asserting that the Plaintiff was terminated with just cause, the City was not making a “concession” or admitting that a set of facts posed by the Plaintiff was correct. To the contrary, the City was disputing the Plaintiff’s allegation that she was wrongfully terminated by alleging in response that she was terminated for just cause. As such, the City’s allegation is not an admission and the proposed amendment, though a withdrawal, is not a withdrawal of an admission.

[22] The Plaintiff has not referred me to any case law which supports the proposition that an allegation of the kind made by the City constitutes an admission and/or that its withdrawal engages Rule 51.05. Having concluded that the proposed amendments do not constitute a withdrawal of admissions, I further conclude it is unnecessary for me to consider the relevant case law under Rule 51.05 and I decline to do so.

[23] Turning to Rule 26.01, I conclude that there are no issues with respect to the legal tenability of the proposed amendments or compliance with the Rules of pleadings and the Plaintiff made no submissions in this regard. Therefore, the only factor I must consider is whether the Plaintiff would suffer any actual prejudice as a result of the proposed amendments.

[24] The Plaintiff submits that if leave is granted, it will be open to the City to refuse to answer questions on examinations for discovery related to the investigation, the Report and the reasons for her dismissal including bad faith termination. The Plaintiff asserts that this will likely lead to a refusals motion thereby substantially increasing the costs of this action while delaying the trial. The Plaintiff also argues that the proposed amendments would deprive the Plaintiff of her right to know why she was terminated.

[25] I reject the Plaintiff’s submissions for numerous reasons. The City concedes that that if the amendments are permitted, the reasons for the Plaintiff’s dismissal including bad faith termination will remain relevant to this action. The City states it will not refuse to answer questions related to cause to the extent to which they are relevant to bad faith termination, subject to proportionality, privilege or any other proper basis for refusal.

[26] Further, as set out above, the Report and the corresponding investigation may relate to City employees other than the Plaintiff. In this regard, the City has agreed to review the Report, and advise within 7 days if the City takes the position that it is relevant and producible or if it otherwise asserts privilege over the Report. In addition, the Plaintiff’s arguments that granting leave will delay the trial, lengthen the proceedings, increase costs and/or possibly result in a refusals motion does not constitute actual, non-compensable prejudice as defined by the Court of Appeal. The Plaintiff will have the opportunity to deliver a Reply and conduct examinations for discovery on the Amended Defence in the normal course with the benefit of the City’s Affidavit of Documents and productions. This includes discovery on bad faith termination, the primary area of concern expressed by the Plaintiff. Therefore, in my view, the Plaintiff would not lose any opportunities in the conduct of this action if leave is granted.

[27] The Plaintiff also relies on Pagliuca v. Paolini Supermarket Ltd., [2013] O.J. No. 653 (C.A.) which the Plaintiff submits stands for the proposition that actual prejudice can arise if the effect of a pleading amendment is to allow damages to be determined on a different basis than that on which the liability issue was founded. In my view, Pagliuca, which was decided under Rule 51.05, is distinguishable from the present case. In that case, the applicants sought to withdraw an admission that an undisputed right of way existed across their property. The court held that withdrawing the admission would cause actual prejudice given that it had been before the court for over 12 years in 2 related actions, 1 of which was decided and confirmed on appeal on the basis of the admission of the undisputed right of way. That is not the case here, where I have concluded that the proposed amendments do not constitute admissions, there has been no adjudication of any issues and the Plaintiff is advancing numerous grounds of liability including bad faith termination, harassment, breach of contract and the Charter, intrusion upon seclusion and intentional interference with contractual relations which will remain after the amendments.

[28] The Plaintiff also relies on Phillips v. Disney, [2018] O.J. No. 833, another decision under Rule 51.05. In Phillips, Boswell J. states that the Court must determine whether the amendments are meritorious or “whether they are nothing more than a tactical move that will tend to hinder, delay or frustrate the course of justice” (Phillips at para. 25). Again, this case is distinguishable given that it was decided under Rule 51.05, and, in any event, I am not satisfied that the proposed amendments are exclusively a tactical move being made for the purpose of hindering, delaying or frustrating the Plaintiff’s action.

[29] Accordingly, I conclude that the Plaintiff has not established that she would suffer non-compensable prejudice if leave is granted. Based on my consideration of the factors and circumstances above, I conclude that it is appropriate in the circumstances that the City be granted leave to amend its Original Defence in the form of Amended Defence filed.

[30] With respect to the Plaintiff’s Motion, as set out above, the City’s counsel has agreed to review the Report and advise the Plaintiff regarding its position on production within 7 days. The Report will then be listed on Schedule “A” to the City’s Affidavit of Documents and produced; listed on Schedule “B” as a document over which the City asserts privilege; or the City may take the position that it is not producible because it is not relevant to the Plaintiff’s action.

[31] Notwithstanding the City’s agreement to provide its position on the Report within 7 days and prior to the delivery of its Affidavit of Documents, the Plaintiff insists that she is entitled to an order now compelling its production together with the name and contact information for the investigator. The Plaintiff’s arguments in support of this request again relate to her right to know why she was terminated and to receive information with respect to the termination of her employment. While she is entitled to this information because it is relevant to her action, the issue is one of timing, specifically, whether she is entitled to documentation and information now, before the City has delivered its Affidavit of Documents and before examinations for discovery.

[32] In my view, the order sought by the Plaintiff is premature and disproportionate given that the City has not yet taken a position and may ultimately agree to produce the Report within 7 days, rendering such an order moot. Even if the City ultimately takes the position that the Report is not producible due to relevance, privilege or some other grounds, the Plaintiff is not entitled to an order in advance compelling its production. Production at this time would be contrary to the long-held principle that production and inspection will only be ordered at this stage where the documents are essential for the purposes of pleading (Hong Kong (Official Receiver) v. Wing (1986), O.R. (2d) 216 (H.C.). While the Plaintiff submits that production of the Report “may” assist with any Reply she delivers, this is not sufficient to justify production at this stage.

[33] The Plaintiff also cites her numerous attempts to obtain the Report and information regarding the investigation through correspondence between counsel and the delivery of a Demand For Particulars and Request to Inspect in which the information was refused on the basis that it constituted evidence not required for pleading. Again, this does not give rise to an entitlement to production at this stage of these proceedings. Any questions related to the Report, the investigation or the City’s positions can be addressed on examinations for discovery after the City provides its position, Affidavit of Documents and productions.

[34] Accordingly, having considered the relevant factors, I decline to order the City to deliver the Report and the information regarding the investigator.

[35] For similar reasons, I also decline to grant an order permitting the Plaintiff to discover on the cause allegation and investigation as requested. In my view, any such relief is premature. Again, the City will provide its position regarding the Report which will in turn determine its position on the investigation, the City will deliver its Amended Defence and produce its Affidavit of Documents, the Plaintiff may file a Reply and the parties will proceed to examinations for discovery. The parties should complete their discussions on a discovery plan which may assist in defining the scope of discoveries. Questions can be posed on examinations for discovery and answers and positions taken accordingly. As set out above, the City has already agreed that bad faith termination, the primary area of concern expressed by the Plaintiff, remains relevant in this action.

[36] Finally, although the City advises that it is in the process of reviewing documents and preparing its Affidavit of Documents, I am satisfied that that it is reasonable in the circumstances to set a deadline for its delivery. In my view, the City should do so within 45 days.

IV. Disposition

[37] Order to go as follows:

i.) the City is granted leave to amend its Original Defence in the form of the Amended Defence;

ii.) the City shall advise the Plaintiff regarding its position with respect to the production of the Report within 7 days;

iii.) the City shall serve its Affidavit of Documents on the Plaintiff within 45 days.

[38] If the parties cannot agree on the costs of this motion, they may file written costs submissions not to exceed 3 pages (excluding costs outlines) with me through the Hamilton Trial Coordinator on or before August 15, 2018.

Released: June 25, 2018 Master M.P. McGraw