Court File and Parties
2021 ONSC 1316
COURT FILE NO.: CV-20-114-00 DATE: 2021-02-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Thunder Bay Multi-Trades Inc. Plaintiff
Mr. J. Lester, for the Plaintiff
- and -
Hupe Manufacturing Ltd. Defendant
Mr. R. Johns, for the Defendant
HEARD: November 20, 2020, via video conference at Thunder Bay, Ontario
Madam Justice T. J. Nieckarz
Decision On Motion
OVERVIEW:
[1] Each party has motions before the Court related to the Defendant’s Statement of Defence and Counterclaim.
[2] The Plaintiff’s motion seeks to strike out portions of the Statement of Defence and Counterclaim on the basis that the impugned portions of the pleading:
a. disclose no cause of action and should be struck pursuant to Rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194 (the “Rules”); and
b. are scandalous, frivolous and/or vexatious and should be struck pursuant to Rule 25.11(b).
[3] The Defendant seeks a dismissal of the Plaintiff’s motion and leave of the Court pursuant to Rules 26.01 and 26.02 to amend its pleading to incorporate the essential elements of an abuse of process claim.
BACKGROUND:
[4] This litigation started as a Small Claims Court action commenced by the Defendant for payment of two invoices related to the repair of equipment owned by the Plaintiff. The total value of the claim, including interest, was $6,951.34.
[5] The dispute arose over a loader that the Plaintiff delivered to the Defendant for transmission repairs. The Plaintiff claims that the Defendant agreed to repair the loader for $7,500 and have the repairs completed by November 1, 2017.
[6] The Defendant acknowledges having received the loader for repair. The Defendant denies the Plaintiff’s allegations as to the agreed upon cost of the repairs or date for completion. The Defendant takes the position that it was clear with the Plaintiff that the repairs could not be completed until the Spring of 2018.
[7] The Defendant pleads that it disassembled the loader to assess the problem. The loader was an older model, and the Defendant claims it had serious rust issues. It became evident to the Defendant that it was not worth the cost to repair the equipment, and the Plaintiff was advised accordingly. Despite this, the Plaintiff insisted that the loader be repaired. The Defendant incurred costs associated with ordering parts but was clear that the work could not be completed until 2018.
[8] The Defendant pleads that in July of 2018 the Plaintiff sent a dozer for repair by the Defendant. The dozer was repaired, and the Defendant issued an invoice for the cost of the repairs. A stand-off ensued in which the Plaintiff refused to pay for the dozer until the loader was repaired as agreed, and the Defendant refused to work on the loader while the outstanding dozer invoice remained unpaid.
[9] When it became evident that neither party was willing to budge in their positions, the Defendant rendered a further account for the work performed to date on the loader, terminated the business relationship between the parties, and commenced the Small Claims Court action. The Plaintiff defended the action and advanced its own claim against the Defendant for conversion. The Plaintiff claimed that the Defendant wrongfully refused to return the loader, and in doing so caused the Plaintiff to suffer damages in the amount of $40,000. The Plaintiff reduced its’ claim to $25,000 to comply with the monetary limit of the Small Claims Court.
[10] Subsequently, the Plaintiff determined that its damages were greater than originally estimated. The Plaintiff claimed that because of the Defendant’s wrongful conversion of its equipment, it was forced to purchase a similar loader at a cost of $71,000 to replace the loader so that customer commitments could be fulfilled. The Plaintiff also claims punitive damages.
[11] Pursuant to the Order of the Honourable Mr. Justice Newton dated February 6, 2020, the Plaintiff’s claim pertaining to the loader was transferred to the Superior Court of Justice to proceed under the Simplified Rules. The Defendant’s claim pertaining to the dozer remained in Small Claims Court and has since been resolved.
[12] In this action pertaining to the loader, the Plaintiff pleads that it made repeated demands for the Defendant to return the equipment, but the Defendant refused and prevented the Plaintiff from recovering it. The Defendant denies this and pleads that it offered to allow the Plaintiff to recover possession of the loader in October 2018. The Defendant claims that the within action has no merit and is being used solely to further the Plaintiff’s threat to “bury” the Defendant in court. The Defendant has advanced a counterclaim for various relief, including punitive damages in the amount of $50,000.
ANALYSIS:
[13] The Plaintiff’s request to strike portions of the Statement of Defence and Counterclaim, and the Defendant’s request to amend its pleading are intertwined, such that it is difficult to consider one of the issues in isolation.
Striking a pleading pursuant to Rule 21.01(1)(b):
[14] Rule 21.01(1)(b) of the Rules gives a judge discretion to strike out a pleading if it discloses no reasonable cause of action.
[15] Where the portion being struck is a distinct purported cause of action, Rule 21.01(1)(b) permits the striking of less than the entire pleading: Deep v. Ontario, 2004 ONSC 14527 at para. 36, aff’d 2005 CarswellOnt 1265 (ON CA).
[16] In determining a Rule 21.01(1)(b) motion, the party pleading has the benefit of an assumption that the facts as pleaded are true or capable of being proven: Deep v. Ontario, at para. 35.
[17] In paragraph 41(d) of the Statement of Defence and Counterclaim, the Defendant claims:
41(d) Punitive damages in the amount of $50,000 as against the Plaintiff arising from the Plaintiff’s malicious, outrageous and high-handed conduct in withholding payment for the Defendant’s repairs to the Plaintiff’s dozer without justification and in commencing the within Superior Court action in an effort to coerce the Defendant to comply with the Plaintiff’s unreasonable demands.
[18] The Plaintiff claims that the Defendant is seeking damages against the Plaintiff for bringing a claim. I agree that this is not a known cause of action in law. A party cannot sue another party for suing them: Royal Bank of Canada v. Central Canadian Industrial Inc., 2006 ONCA 715 at para. 1. Unless the foundation for the Defendant’s punitive damages claim is a recognized cause of action, it must be struck.
[19] The Defendant argues that the claim is for abuse of process, a known tort and cause of action in law.
[20] The Defendant indirectly acknowledges drafting deficiencies in the pleading in seeking to amend the Statement of Defence and Counterclaim. The Defendant argues that the amended Statement of Defence and Counterclaim pleads the constituent requirements of abuse of process and therefore paragraph 49(d) of the amended pleading (formerly paragraph 41(d) of the original pleading) should not be struck.
[21] The Plaintiff denies that paragraph 41(d) may be saved by the amendments to the pleading proposed by the Defendant. The Plaintiff denies that the requisite elements of the tort of abuse of process have been pleaded in the amended pleading. That being the case, the Plaintiff argues that the claim discloses no cause of action and the paragraph should be struck.
If the pleading is amended, will this save the offending provisions?
[22] Rules 26.01 and 26.02 of the Rules require the Court to grant leave to amend a pleading at any stage of an action on terms, unless prejudice would result that could not be compensated for in costs or by an adjournment.
[23] The mandatory wording found in Rule 26 is subject to the more detailed three-part test set out in Plante v. Industrial Alliance Life Insurance Co., 2003 ONSC 64295 at para. 21:
a. The proposed amendment must not result in irremediable prejudice to the opposite party;
b. Assuming the facts as plead are true, the proposed amended pleading must be legally tenable; and
c. The amendment must otherwise comply with the rules of pleading.
[24] To comply with the rules of pleading, the proposed amendments must be a concise statement of material facts relied on, must not be scandalous, frivolous or vexatious, must not be an abuse of process and must contain sufficient particulars: Plante v. Industrial Alliance Life Insurance Co., at para. 21(c).
[25] Any fact that can have any effect in determining the rights of the parties may be pleaded. What is not permissible in a pleading is any alleged fact that is wholly immaterial and can have no effect on the result of the litigation: Osborne v. Non-Marine Underwriters, Lloyd’s London, 2003 ONSC 49900 at paras. 13 & 14.
[26] Portions of a pleading that are irrelevant, argumentative or inserted solely for colour should be struck out as scandalous: George v. Harris, 2000 ONSC 16869 at para. 20. It stands to reason that a proposed amendment should be refused on this basis.
[27] The Plaintiff consents to the amendments in paragraphs 11, 12, 29, 30, 31 and 32. These amendments pertain to the defence of the Defendant’s claims. I agree with the parties that these amendments are appropriate.
[28] The disputed amendments are as follows:
Prior to commencement of the Small Claims Court action the Defendant spoke to the representative of the Plaintiff, Allan Malanych, by telephone and told him that, if the bills were not paid, the Defendant would have no choice but to commence a Court action to recover payment.
In response to the Defendant’s notification the Plaintiff’s representative threatened that the Plaintiff would “bury” the Defendant in Court.
The overstated value of the loader and the Plaintiff’s claim seeking that amount of damages for conversion of the Plaintiff’s loader was the first step by the Plaintiff in employing the process of the Court to gain its illegitimate goal of obtaining the Defendant’s work at the Plaintiff’s determination of a “fair price” and on the Plaintiff’s timetable.
The Plaintiff’s application to move the proceeding into the Superior Court, with the added cost and complexity of the Superior Court over the Small Claims, was the second step in the Plaintiff’s campaign to use the Court process for illegitimate purposes.
49(d) Punitive damages in the amount of $50,000.00 as against the Plaintiff arising from the Plaintiff’s malicious, outrageous and high-handed conduct in withholding payment for the Defendant’s repairs to the Plaintiff’s dozer and loader without justification, in threatening to bury the defendant in Court, in setting the conditions under which the Defendant would be obliged to complete the repairs to the loader and in commencing the within Superior Court action in an effort to coerce the Defendant to comply with the Plaintiff’s unreasonable demands. [proposed amended portion underlined]
[29] The Plaintiff argues that the proposed amendments do not comply with the rules of pleadings and should not be permitted. Specifically, the Plaintiff argues that even with these amendments, the basic elements of the tort of abuse of process are not properly plead. This being the case, these proposed amendments serve no purpose to advance the defence of the Defendant or the other claims. They serve no purpose other than to add colour and this renders them scandalous.
Abuse of Process:
[30] The Defendant claims that this action was commenced by the Plaintiff solely to force the Defendant to repair the loader at a price dictated by the Plaintiff and on the Plaintiff’s schedule. The Defendant claims that this constitutes an abuse of process.
[31] The test for abuse of process is difficult to meet and only arises in unusual cases. An abuse of process claim requires the following essential elements to be pleaded and supported by material facts:
a. the pleading party has been subjected to a legal process;
b. this has been done predominantly for an indirect, ulterior, collateral, or improper purpose;
c. some definite act or threat has been made in furtherance of such illegitimate purpose; and
d. some measure of special damage has been suffered.
McArthur v. McArthur and Harman, 2019 ONSC 7232 (Div. Ct.) at paras. 20 and 21, and Deep v. Ontario, at para. 75.
[32] At this stage I am mindful that I am not to determine the merits of the claim, but merely ascertain whether the essential elements of abuse of process have been pleaded. I find that they have not. I agree with the Plaintiff that the Defendant has failed to plead any special damages that have been suffered as a result of the alleged abuse of process.
[33] The Defendant claims that the special damages pleaded is the claim he has advanced for the unpaid invoice for repairs to the loader. This invoice is based on an established hourly rate and is calculated based on the number of hours spent to troubleshoot the machine.
[34] The unpaid invoice does not represent damages suffered as a result of the alleged abuse of process. The Plaintiff refused to pay the invoice before the action was even commenced. The Defendant’s claim for the sum of $1,482.42 on account of the unpaid invoice is a claim based in contract, as set out in the Statement of Defence.
[35] In light of the foregoing, I find as follows:
a. That paragraph 41(d) of the Statement of Defence and Counterclaim shall be struck as disclosing no reasonable cause of action; and
b. The amendment sought in paragraph 49(d) of the Amended Statement of Defence and Counterclaim does not save the impugned provision.
c. The Defendant’s failure to plead the essential elements of abuse of process renders the amendments sought to paragraph 39, 40, 43, 45 and 49(d) inappropriate on the basis that they offend the rules of pleading. They disclose no reasonable cause of action, they are irrelevant to the defence and properly advanced counterclaim and add nothing more than colour to the pleading.
Should paragraph 38 be struck?
[36] The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document, is scandalous, frivolous or vexatious: Rule 25.11(b) of the Rules.
[37] Paragraph 38 of the Statement of Defence and Counterclaim (paragraph 46 of the proposed amended pleading) reads:
38 The Defendant states that the Plaintiff has chosen the course of action which it has followed in a brazen attempt to intimidate the Defendant into giving up its completely meritorious claim for payment for services rendered.
[38] The Plaintiff argues that paragraph 38 should be struck pursuant to Rule 25.11(b) of the Rules for the following reasons:
a. It does not add anything that has any effect in determining the rights of either party involved in the action and is therefore irrelevant; and
b. It serves no purpose other than to try to portray the Plaintiff in a negative light; it is nothing more than colour, and is scandalous, frivolous and/or vexatious.
[39] The Defendant argues that this paragraph is important to the allegation of abuse of process. Having found that the pleading, even as proposed to be amended does not successfully plead abuse of process, I agree with the Plaintiff that this paragraph serves no purpose other than colour.
ORDER:
[40] It is therefore ordered that:
a. On consent, the Defendant is granted leave to deliver an amended Statement of Defence and Counterclaim incorporating paragraphs 11, 12, 29, 30, 31 and 32 of the proposed pleading;
b. Leave is denied for the proposed amendments to paragraphs 39, 40, 43, 45 and 49(d);
c. Paragraphs 38 and 41(d) of the original pleading shall be struck;
d. The foregoing is without prejudice to the right of the Defendant to seek leave for further amendments to the Statement of Defence and Counterclaim to plead the tort of abuse of process or otherwise; and
e. The Plaintiff is the successful party on these motions and is prima facie entitled to its costs. If the parties are unable to agree as to quantum:
i. The Plaintiff shall deliver written submissions within 30 days limited to five pages, double-spaced;
ii. The Defendant shall deliver written submissions within 15 days of receipt of the Plaintiff’s submissions, limited to five pages, double-spaced; and
iii. Reply submissions shall be delivered within 5 days of the Defendant’s submissions and shall be limited to two pages, double-spaced.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz
Released: February 19, 2021
2021 ONSC 1316 COURT FILE NO.: CV-20-114-00 DATE: 2021-02-19 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Thunder Bay Multi-Trades Inc. Plaintiff - and - Hupe Manufacturing Ltd. Defendant DECISION ON MOTION Nieckarz J. Released: February 19, 2021 /lvp