2022 ONSC 2307

COURT FILE NO.: CV-19-631740 DATE: 20220413

ONTARIO SUPERIOR COURT OF JUSTICE

RE: UTILEBILL CREDIT CORPORATION, Plaintiff -and- EXIT IT CONTRACT CONSULTING INC., SIMCHA GOLDMAN and ERIC M. SABBAH, Defendants

BEFORE: FL Myers J.

COUNSEL: Brian N. Radnoff and Dylan E. Augruso, for the Defendant Eric Sabbah Pradeep Chand, for the Plaintiff

HEARD: April 6 and 12, 2022

Endorsement

The Motion and Outcome

[1] The defendant Eric Sabbah is a licensed paralegal. He moves to strike and dismiss the plaintiff’s claims against him for disclosing no reasonable cause of action and because it amounts to an abuse of the court’s process.

[2] The plaintiff sues Mr. Sabbah because he acts for numerous residential homeowners whom he tries to help avoid HVAC equipment rental contracts entered into with door-to-door salespeople retained by the plaintiff and other home services companies. The plaintiff alleges that, in conjunction with the other defendants, Mr. Sabbah has committed numerous tortious acts trying to help consumers escape their contractual obligations.

[3] For the reasons that follow the claims against Mr. Sabbah are dismissed without leave to amend with the exception of the claim for conspiracy. The plaintiff shall deliver particulars of the unlawful means that form the acts in furtherance of the conspiracy alleged against Mr. Sabbah. The plaintiff shall deliver the particulars within 30 days and without prejudice to Mr. Sabbah’s right to move again if so advised.

[4] As discussed below, the plaintiff relies on allegations of breach of confidence to support many of its causes of action. However, there is no plea of a cause of action for misappropriation of proprietary or confidential information itself.

The Review of Facts

[5] Rule 21.01(2) of the Rules of Civil Procedure, RRO 1990, Reg 194, provides that no evidence is permitted on a motion to strike a claim for disclosing no reasonable cause of action under Rule 20.01(1)(b). But evidence is admissible for a motion to dismiss a claim for amounting to an abuse of process under Rule 21.01(3)(d). The parties delivered evidence for the latter motion. I must keep straight therefore that the review of the reasonableness of the causes of action pleaded is confined to the statement of claim alone.

[6] For the purposes of the review of the reasonableness of the causes of action pleaded, I must accept the allegations pleaded as being true. There is no issue in this case about allegations that are incapable of proof or other such complexities. Mr. Sabbah submits that even if the plaintiff is able to prove the truth of everything that it pleads, it is plain and obvious that the plaintiff cannot succeed in obtaining judgment against him. In other words, he submits that the facts as pleaded do not set out a legal basis to sue.

[7] The task here is not to be overly technical. The statement of claim is to be read generously. Complexity and novelty are not bases to strike a claim at this stage. The “plain and obvious” standard is a difficult one to meet. It is perhaps another way to say that a claim is frivolous or that it simply cannot succeed no matter what is proven at trial someday.

[8] The plaintiff pleads that the defendant Exit It is in the “business of assisting customers of home services companies cancel service rentals and/or remove rental equipment in exchange for profit”.

[9] Para. 9 of the statement of claim pleads:

9. In furtherance of the above, Exit It has obtained confidential and private information regarding UCC's customers, including their address, contact information, equipment installed and rental agreements (the "Confidential Information") in place with UCC either independently, or through independent contractors, companies, and or individuals responsible for procuring consumer agreements from consumers on behalf of UCC.

[10] The plaintiff pleads that Mr. Sabbah is a paralegal. It then pleads:

10. Sabbah offers services to clients similar to Exit It, including inter alia: (a) Assisting customers of home services companies, including UCC, in the cancellation and rescission of rental agreements; (b) Assisting customers of home services companies in making complaints to [the Ministry of Government and Consumer Services]; (c) Negotiating and assisting customers in settlement of any rental contract dispute between UCC and the customer; and (d) Lodging disputes with Enbridge with respect to the rental agreements in order to receive a credit for amounts already paid to UCC through Enbridge's third party billing program.

11. In furtherance of the above, Sabbah has obtained, independently, from Exit It or independent contractors, companies, and or individuals responsible for procuring consumer agreements from individuals on behalf of UCC, the Confidential Information.

[11] The gravamen of the facts pleaded is that Exit It has illicitly obtained confidential information concerning the plaintiff’s customers. Exit It solicits the customers to try to get them out of their contracts for a fee of $3,000. It directs the illicitly contacted plaintiff’s customers to retain Mr. Sabbah. Mr. Sabbah received the plaintiff’s confidential information from Exit It or others.

[12] According to the plaintiff’s evidence, Mr. Sabbah advertises himself as a paralegal who regularly commences claims against home services companies and assists clients who have breached or are looking to breach their agreements with home services companies.

[13] Mr. Sabbah is said to have commenced some 300 claims in Small Claims Court on behalf of his clients against the plaintiff alone. At least one of the claims against the plaintiff has already succeeded. That judgment was upheld by the Divisional Court in Utilebill Credit Corp. v Apex Home Services Inc., 2021 ONSC 4633. Many of the other claims have resulted in settlements.

[14] On August 26, 2021 at a settlement conference for four of the cases in Small Claims Court in Toronto, Deputy Judge Hashby ordered Mr. Sabbah to provide a list of the 100 or so claims that he had brought in Toronto for customers of the plaintiff. The Deputy Judge ordered that a case conference before the Administrative Deputy Judge could be held after the list was provided.

[15] The Deputy Judge also adjourned all future settlement conferences in any of the matters.

[16] Mr. Chand submits that this was a serious censure of Mr. Sabbah as the Deputy Judge stayed the actions being unreasonably brought. I do not read it that way. The Deputy Judge appears to have been conducting case management to bring all the related claims together so the parties did not have to appear at 100 separate case conferences. Mr. Sabbah provided the list of cases within the time frame required.

[17] Mr. Chand points to no evidence to support his submission of fact that there was a stay of any of the actions or that the Deputy Judge censured Mr. Sabbah or that he commented at all on the quality of the claims Mr. Sabbah had brought for his clients.

Conversion

[18] The tort of conversion is the civil equivalent of theft. It involves taking of tangible goods in violation of the plaintiff’s exclusive right of possession of its goods.

[19] Mr. Radnoff submits, rightly, that the allegedly confidential information pleaded cannot be information that is exclusive to the plaintiff. That is, the customers know their own names, addresses, contact information, equipment installed, and rental agreements.

[20] I asked Mr. Chand whether there is any information pleaded over which the plaintiff claims exclusivity. He submitted that the contents of the parties’ agreements contain information that is exclusive to the plaintiff. Ignoring that this is probably a submission of evidence, it also cannot be correct. The contracts pleaded are bilateral agreements. The customers have to have them too. There is no pleading of any particular property or information that the customers and their agents have no right to possess as a matter of law.

[21] Mr. Radnoff submits that the tort of conversion only deals with the taking of tangible goods and not intangible information. Mr. Chand relies on the BC Supreme Court decision in Canivate Growing Systems Ltd. v. Brazier, 2020 BCSC 232 for the proposition that the tort of conversion also lies where intangible goods such as data are allegedly taken.

[22] Mr. Chand submitted that the BC case had not been considered in any Ontario case. Prior to that stark submission, Mr. Radnoff had already taken me to the decision of Perell J. in Del Giudice v. Thompson, 2021 ONSC 5379. Justice Perell commented on the BC decision as follows:

[172] First, the tort of conversion does not apply to information, intellectual or intangible property. Such property does not entail a right of possession.

[173] There are torts or legal remedies that do apply to provide remedies for the misappropriation and misuse of intellectual property that do not involve the notion of possession or tangible property; for example, there is breach of confidence (discussed later in these Reasons for Decision). However, advancing a claim for conversion is a non sequitur in the circumstances of the immediate case. Information is not a type of property within the ambit of the tort of conversion which is for tangible, not intangible, property. The misuse of private information might be amenable to a breach of confidence, but that is a misuse of information not a conversion of it.

[174] The Plaintiffs relied on the British Columbia decision Canivate Growing Systems Ltd. v. Brazier, where Justice Baker found the Defendants liable for breach of fiduciary duty, passing off, and conversion, but not breach of trademark, and where she stated at paragraph 71:

71. In the electronic age in which we live, I find that it would be incongruous if conversion were limited to physical goods, or tangible chattels. In the case at bar, the defendant exerted exclusive control over Canivate’s website as soon as he removed administrative control of canivate.com from the company. The defendant held the only key to the website which was critical to operations of the company and prevented Canivate from using its website and email addresses. I find that a modern conception of conversion must include wrongful interference with intangible goods, such as electronic data, websites and email.

[175] Justice Baker’s decision dealt with a case in which the plaintiff had personal information that he owned and controlled – his business’s web page domain name, the business’s web page, and the email account for his commercial business. The element of control was something akin to possession of those business assets. There is nothing remotely like that element of control over a person’s name which is normally put out in the world to be used. Thus, apart from the fact that I am not bound by Canivate Growing Systems Ltd., it is distinguishable from the immediate case and does not detract from the law that does bind me that conversion does not sound in the circumstances of the immediate case. [Notes omitted. Underlining in the original. Bolded emphasis added.]

[23] Mr. Chand had no submissions to make on this case once reminded of it.

[24] I agree with Perell J. (as I am required to do. See: Duggan v. Durham Region Non-Profit Housing Corporation, 2020 ONCA 788). Claiming that Mr. Sabbah converted goods over which the plaintiff had a right of exclusive possession in reference to the names, contact details, and contracts entered into by Mr. Sabbah’s clients is a legal non sequitur.

[25] It cannot be conversion for clients to retain lawyers and paralegals to review their contractual rights in Ontario. People are entitled (if not required by law) to give their names, contact details, and copies of their contracts to their legal advisors.

[26] This is not to say that the plaintiff has no claim if the defendants are alleged to have stolen its proprietary information. But that is not the tort of conversion. The information referenced in the statement of claim is not information over which the plaintiff can claim exclusive possession.

Unlawful (Intentional) Interference with Economic Interest

[27] The plaintiff pleads:

15. The Defendants' conduct constitutes unlawful interference with UCC's economic and contractual interests. The Defendants intentionally interfered with UCC's customer relationships through unlawful means by encouraging the cancellation of contracts, the removal of rental equipment and threatening legal proceedings. The Defendants have determined to interfere, and, if possible, destroy the contractual relations between UCC and its customers with a view towards destroying the business of UCC.

16. The Defendants' conduct has been directed at third parties, namely, customers of UCC, with the intent of injuring UCC's business, property, interests and rights and interfering with the third parties contractual relations with UCC. The Defendants' conduct has therefore caused and continues to cause financial losses and injury, including a loss of customers, contracts and revenue to UCC.

[28] As pleaded the claim cannot succeed. The plaintiff alleges that Mr. Sabbah unlawfully encouraged the plaintiff’s customers to cancel their contracts. Put another way, Mr. Sabbah provided legal advice to his clients that their contracts with the plaintiff may be voidable and not binding upon them.

[29] There is nothing illegal in a lawyer or paralegal advising a client that he, she, or it has claims to avoid a contract.

[30] In addition, the proof of the claim necessarily intrudes on the legal advice given. The plaintiff cannot prove that Mr. Sabbah encourages his clients to cancel their contracts without inquiring as to the discussions between them.

[31] In Hedary Hamilton PC v. Dil Muhammad, et al., 2013 ONSC 4938, Morgan J. found that a claim against a lawyer for the opposite party for unlawful interference was an abuse of process:

[18] In fact, the communications between the Muhammad Group and Schorr would be privileged, and neither disclosable nor actionable, even if the Muhammad Group had, after consulting him, opted not to retain Schorr at all. See R. v. Littlechild, 1979 ABCA 321, [1979] A.J. No. 56, [1980] 1 W.W.R. 742 (C.A.), at para. 20.

[19] The point, of course, is an elementary one for legal process. The right to confidentiality in discussions with legal counsel is necessary in order to actualize the right to counsel itself.

[20] Indeed, every counsel consulted by one side in a legal dispute does what Schorr is accused of doing here. If, for example, the Heydary firm were to review its current list of active litigation files -- i.e., those that have not amicably settled -- it would [page782] doubtless find that in each of those cases it advised its own clients to either sue or defend against the opposing side's lawsuit. Providing the client with such adversarial advice is not actionable by the adversary. As the Divisional Court has put it, "[o]rdinarily, to state the obvious, the interests of opposing litigants are in conflict" (Geo. Cluthe Manufacturing Co. v. ZTW Properties Inc. (1995), 23 O.R. (3d) 370, [1995] O.J. No. 4897 (Div. Ct.), at p. 380 O.R.).

[21] Solicitor-client privilege not only protects client confidentiality, it is what prevents every action from spawning a new action against opposing counsel. Without this protection, there would be an "endless relitigation of disputes" (Al-Kandari v. J.R. Brown & Co., [1988] 1 All E.R. 833, [1988] 1 Q.B. 665 (C.A.), at p. 835 All E.R.). As Lord Halsbury stated in Bullivant v. Attorney General for Victoria, [1901] A.C. 196 (H.L.), at p. 200 A.C., the rule is necessary for "the perfect administration of justice . . . as a principle of public policy".

[22] Far from being an actionable wrong, it was Schorr's duty as a lawyer "to advance his client's interest and not to protect those of the opposite party in the negotiations or dealings that he is engaged in" (Lubarevich v. Nurgitz, 1996 CarswellOnt 1530 (Gen. Div.), at para. 11). For this reason, courts have often found it to be "an abuse of process to sue opposing counsel, under the guise of any cause of action, for their conduct of a case" (Royal Bank of Canada v. Tehrani, 2009 CarswellOnt 5134 (S.C.J.), at para. 19).

[32] In Crown Crest Financial Corp. v. Sabbah, 2019 ONSC 7114, Perell J. dealt with a claim much like this one brought against Mr. Sabbah by one of the plaintiff’s competitors. At para. 48, Perell J. dismissed most of the claim as an abuse of process. He held a claim, “against a lawyer or paralegal that in its essence is about the advice the lawyer or paralegal gave his or her clients for court proceedings is not available to Crown Crest”.

[33] Mr. Chand declined my invitation to provide submissions on Justice Morgan’s decision. He sought to distinguish Crown Crest because in this case, he submits, the unlawful conduct was the receipt of confidential information by Mr. Sabbah prior to his retainer by each of his clients. Mr. Chand submitted expressly that in Crown Crest, there was no issue of receipt of customer names or confidential information by Mr. Sabbah prior to his giving advice to the plaintiff’s customers.

[34] The actual statement of claim pleaded by Crown Crest in that case included the following paragraphs:

13. Sabbah, or a third party acting in concert or a joint plan with Sabbah, obtained confidential and sensitive business records belonging to Crown Crest, by unlawful means, to determine the identities of the Small Claims Plaintiffs. These records include information regarding the Small Claims' Plaintiffs addresses and names, and the terms of their Agreements with Crown Crest.

14. In or about 2018, the Small Claims Plaintiffs were solicited by Sabbah or an affiliated third party or organization, and pressured or induced to commence the Small Claims Actions, for Sabbah's own gain. Sabbah will share in any recovery from the Small Claims Actions.

15. Sabbah falsely and for his own gain misrepresented to the Small Claims Plaintiffs that the Agreements were unlawful and/or that they could recover a windfall if they commenced the Small Claims Actions. As a result, Crown Crest was served with the 14 plaintiffs' claims in the Small Claims Actions in or about February and March 2019, each of which alleges that the Agreements are not valid and seeks damages as a result.

[35] At para. 51 of Crown Crest, Perell J. held:

[51] …It appears that privacy torts were committed before Mr. Sabbah entered into a licensed paralegal and client relationship with the claimants in the Small Claims Court actions.

[36] It is apparent that the receipt of allegedly confidential information by Mr. Sabbah prior to his formation of his relationships with the plaintiff’s customers was pleaded and was very much a fact that was before Perell J. and which formed part of his analysis. Despite that alleged illegality, Perell J. found that the claim that Mr. Sabbah encouraged his clients to cancel their agreements with plaintiff was an invasion of the protected privileged sphere.

[37] In addition, in A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 the Supreme Court of Canada held that to claim unlawful interference, the defendant must be alleged to have committed an illegal act to a third party. That means, in this context, that something illegal must have been done by Mr. Sabbah to his clients that then injured the plaintiff. This directly requires an inquiry into the relations and discussions between the paralegal and his clients.

[38] It follows that no claim lies for intentional interference with economic interests in this case.

Inducing Breach of Contract

[39] The exact same issue arises in pleading the tort of inducing breach of contract. I agree with Justice Perell’s analysis of this tort in Crown Crest:

[29] The same public policy rationale should apply to the circumstances of the immediate case where a claim against a legal representative is made for allegedly inducing his or her client’s breach of contract by giving misleading legal advice. In the immediate case Crown Crest pleads in paragraph 15 of its Statement of Claim that Mr. Sabbah falsely misrepresented, i.e., gave fallacious advice, to the Small Claims claimants that the Agreements were unlawful and/or that they could recover a windfall if they commenced the Small Claims Actions.

[30] Removing the allegedly unlawful way that Mr. Sabbah recruited his clients, what he did in the immediate case is what lawyers often do, which is to advise clients about their rights under a contract and to take instructions to bring or defend legal proceedings.

[31] It cannot be the case that a lawyer’s or licensed paralegal’s providing legal advice about a contract is an inducement to breach a contract, but more to the point, the same public policy grounds that apply to a negligence claim should apply in the circumstances of the immediate case, which are, practically speaking, not much different from the circumstances of a negligence claim against an adversary’s legal representative. In either case, the possibility of a claim interferes with lawyer and client relationships and disrupts the loyalty that a lawyer owes to his or her client. The possibility of a claim by a litigant against the lawyer acting for his adversary because of the advice that the lawyer gives his or her client would make the adversary system unworkable.

[32] The potential embarrassment to the administration of justice of an action for inducting breach of contract based on the representation and legal advice of a lawyer or licensed paralegal is demonstrated by Balagula v. Ontario Consumers Home Services. (In the immediate case, there are 14 pleaded Small Claims Court actions that are analogous to the Balagula case.)

[33] The defendant in the Balagula case is one of the HVAC vendors noted in paragraph 4 of Crown Crest’s Statement of Claim. Crown Crest is the successor in interest to Ontario Consumers Home Services. In the Balagula case, Justice Conway dismissed Ontario Consumers Home Services appeals from a Small Claims Court judgment awarding Mr. Balagula $17,334.09, plus costs of $2300.

[34] Regardless of the outcome in the Balagula case, which is to say that regardless of whether or not Mr. Balagula had been successful, it would be a collateral attack on the judgment reached in the case to sue the lawyer or paralegal that advised Mr. Balagula about his contract with Ontario Consumers Home Services.

[40] Mr. Chand focuses on Justice Perell having removed from his analysis “the allegedly unlawful way that Mr. Sabbah recruited his clients” in para [30] of Crown Crest above. However, as discussed with unlawful interference, that fact does not bear on the essential elements of the nominate tort pleaded. Moreover, Perell J. allowed for the alleged unlawful solicitation elsewhere in his reasons such as para. 51 quoted above. As noted at the outset of this Endorsement, the plaintiff in this case does not advance a cause of action for misappropriation of its confidential or proprietary information.

[41] Accordingly no claim for inducing breach of contract lies in this case.

Injurious Falsehood

[42] For this tort to be claimed, a defendant must have made an untrue statement. Mr. Chand submits that the statement that is allegedly untrue is Mr. Sabbah’s advice to his clients encouraging them to breach their contracts or telling them that they were entitled to do so. It is immediately apparent that with this cause of action too, the plaintiff seeks to invade the privileged relationship between client and legal advisor.

[43] Accordingly no claim for injurious falsehood lies in this case.

Conspiracy

[44] At paras. 21 and 22 of the statement of claim, the plaintiff pleads:

21. The Defendants' conduct constitutes unlawful conspiracy. In taking steps to wrongfully transmit, posses, store and disclosure Confidential Information, with the specific purpose of using that Confidential Information to encourage UCC customers to cancel their rental agreements, the Defendants have engaged in concerted action. Exit It and Sabbah have wilfully shared this Confidential Information.

22. The Defendants were motivated to conspire for the predominant and common purpose of using the Confidential Information for their own purposes and to their own benefit. The conduct has at all times been directed at UCC, when the Defendants knew or ought to have known that as a result of their conspiracy, UCC would suffer damage and loss. The particulars of this damage and loss are to be further particularized at trial, and include the loss of revenue, harm to UCC's goodwill, competitive advantage, reputation and ability to sell its book of business.

[45] Mr. Radnoff’s complaints with these paragraphs is that they fail to plead adequate particulars to make out a valid claim.

[46] The plaintiff pleads a conspiracy by unlawful means. It cannot be a conspiracy to injure because the first sentence of para. 22 specifically pleads the answer to that branch of the tort. (By definition, it is not a conspiracy to injure a third party where a defendant is acting in its own economic self-interest as pleaded).

[47] A conspiracy by unlawful means requires a plea of the unlawful means by which the conspiratorial agreement was carried out. The plaintiff pleads concerted action with a definitive purpose. It does not plead an agreement per se. But generously read, one is implicit.

[48] The allegedly unlawful acts in furtherance of the conspiracy pleaded are, “to wrongfully transmit, posses, store and disclosure Confidential Information.” But the statement of claim does not identify what each defendant is alleged to have done that was unlawful. If he just received calls from people who wanted to retain him, I am doubtful that this tort will lie. The plaintiff must have some idea of what it alleges Mr. Sabbah did that constitutes the unlawful means in furtherance of the alleged conspiratorial agreement. Otherwise, it may not have a basis to sue for this tort.

[49] Mr. Chand submits that the plaintiff cannot possibly know the details of a conspiracy among the defendants. That is true. But if the plaintiff wants to sue for a conspiracy, it needs to be able to articulate particulars of allegations of fact that meet the requisite elements of the tort. Rules 25.06(8) and 25.10 do not apply a very high burden of detail on the pleader. But there is a burden to be met. The plaintiff must be able to articulate what each defendant is alleged to have done that constitutes the requisite elements of the tort pleaded.

[50] The current pleading is bald and conclusory. It does not differentiate among the defendants. In my view it does not provide any or adequate detail of the requisite allegations to properly put Mr. Sabbah on notice of what he is alleged to have done wrong.

[51] Accordingly, the plaintiff is ordered to provide particulars of the unlawful means that form the acts in furtherance of the conspiracy alleged against Mr. Sabbah. The plaintiff shall deliver the particulars within 30 days without prejudice to Mr. Sabbah’s right to move again if so advised.

Consumer Protection Act and the Collection and Debt Settlement Services Act

[52] The plaintiff alleges that Mr. Sabbah violated the statutory rights of his clients by making misleading consumer representations to them and in offering his clients debt settlement services without being registered to do so.

[53] Mr. Chand was unable to provide any basis in fact or in law to support a submission that the plaintiff has rights under either statute to advance a cause of action for things done by Mr. Sabbah to his clients. The clients may have rights. Mr. Chand could not articulate how the plaintiff could be entitled to enforce those rights.

[54] I agree with Mr. Chand that, at the pleadings stage, standing should be assessed from the same perspective as a review of the reasonableness of causes of action pleaded. Standing should not be decided unless it is plain and obvious that the plaintiff cannot succeed even if the facts alleged are true on generous reading. I am satisfied that is the case here. There is no basis for the plaintiff to be entitled to advance any statutory rights of action of Mr. Sabbah’s clients. As Mr. Chand had none to submit either, I conclude that these claims must be struck and dismissed.

Abuse of Process

[55] Mr. Radnoff submits that regardless of whether any causes of action are properly pleaded, this action should be dismissed under Rule 20.01(3)(d) as an abuse of process. He advances two reasons.

[56] First, he submits that on its face this claim is brought for an improper purpose to punish Mr. Sabbah for creating a practice that helps his clients assert that the plaintiff’s contracts are voidable. In support he submits that it is an abuse to attack a legal representative for an adverse party in litigation. He submits that it is abusive to aim a claim at privileged advice. He submits that this lawsuit is a collateral attack on the various claims in the Small Claims Court. To support that submission he notes that Mr. Chand asks me to stay all of the claims while this action proceeds.

[57] Mr. Radnoff submits that this claim is intimidation and harassment of the clients’ representative to prevent the clients from continuing their Small Claims Court actions.

[58] I note here as well that on the evidence (that is admissible for this analysis), Mr. Radnoff asked Mr. Chand to provide particulars of any allegations against Mr. Sabbah that he stole the plaintiff’s information. Mr. Chand did not respond.

[59] Mr. Radnoff’s second basis for terminating this lawsuit for abuse of process is that the unchallenged evidence of a customer is that the plaintiff tricked him to disclose his retainer agreement with Mr. Sabbah. The plaintiff has then pleaded information from the retainer in this proceeding.

[60] The customer swears:

9. In or about late October, 2019, a representative of Utilebill, Frank, contacted me by telephone and advised me that Mr. Sabbah was "under investigation". Frank did not provide his last name to me. Frank further advised me that Utilebill might lower the payments that I allegedly owed to Utilebill if I provided documents to Utilebill. Frank requested that I send a copy of my retainer agreement with Mr. Sabbah to him at frank@utilebill.com, which I did on October 16, 2019.

10. Following my communications with Frank, I did not hear from Utilebill. Utilebill never reduced my payments to it. On or about November 23, 2019, I called Mr. Sabbah to advise him about my discussion with Frank. Mr. Sabbah asked me to send him any written correspondence I had with Frank. Attached as Exhibit D is a copy of an email from me to Mr. Sabbah showing my email to Frank on October 16, 2019, and explaining why I provided my retainer agreement with him to Utilebill.

11. I provided a copy of my retainer agreement with Mr. Sabbah to Utilebill because of Frank's misrepresentations that Mr. Sabbah was under investigation and Utilebill would lower my payments. I would not have done so if I knew that Utilebill and Frank were trying to use it to gain leverage over or attack Mr. Sabbah.

[61] Mr. Chand submits that this evidence is not correct. But there is no denial in the plaintiff’s evidence and Mr. Chand did not cross-examine on it. Mr. Chand was unable to provide any basis for me to reject this evidence. Moreover when I asked if this evidence amounts to impropriety, he expressly declined to make any submission.

[62] In response to the submission that this action amounts to an abuse of process under Rule 21.01(3)(d), Mr. Chand refers to the decision of the Court of Appeal in Harris v. GalaxoSmithKline Inc, 2010 ONCA 872. That case sets out the elements of the tort of abuse of process. It is not relevant to the issues raised by Mr. Radnoff under Rule 21.

[63] I am not yet prepared to stop this action. While the plaintiff has not found one yet, it may be able to plead a cause of action. The plaintiff has yet to plead what, if anything, Exit It or Mr. Sabbah did wrong in identifying the plaintiff’s customers. I have granted leave for the plea of unlawful acts in furtherance of a conspiracy. That may or may not work. It may be that there are other causes of action available depending on what facts the plaintiff is able to plead.

[64] As to the customer’s retainer, I am not sure that he was tricked as much as he accepted a monetary offer. Is he complaining now because the plaintiff was unethical or because it did not reduce his bills as promised? I don’t know if the customer is party to a voidable contract or if he has buyers’ remorse for making a poor agreement that he regrets in retrospect.

[65] As Mr. Chand has seen and used the retainer agreement, assuming clients benefit from privilege in their relationships with paralegals, and that the privilege was not waived on the facts, the client may have remedies related to the abuse of his privileged information. That does not require the termination of the lawsuit before I truly know the equities.

[66] I am not yet prepared to draw so broad a conclusion of abuse of process at this time as Mr. Radnoff submits. But I do allow for the possibility in costs below.

Delay

[67] The plaintiff’s principal submission is that this motion has been brought too late and runs afoul of Rule 20.02. While that rule only speaks to assessing the consequence of delay in costs, I accept that the court should be and is very focused on moving actions forward with efficiency at this time.

[68] The plaintiff sent the statement of claim in March 2020. Mr. Radnoff accepted service right away. Mr. Radnoff says that he and Mr. Chand engaged in settlement discussions from October, 2020 to July, 2021. Mr. Chand expressly and clearly denied that he engaged in settlement discussions with Mr. Radnoff in and around that time.

[69] Mr. Radnoff says that once settlement discussions ended in July, he brought the motion to CPC in August, 2021 and the schedule was set.

[70] I asked Mr. Chand if the plaintiff suffered any prejudice by the delay. He submitted that the plaintiff had to wait for its claim to be advanced. He also submits that prejudice is not the issue. The defendant must move with alacrity under the rule.

[71] I do not subscribe to the view that the goal of achieving justice on the merits must always trump timeliness and efficiency. There are times when justice on the merits is unattainable precisely because the resolution takes so long or is so expensive that no matter what the outcome on the merits, the relief to the successful party will not provide much justice.

[72] This is not one of those cases however. Given the decisions of Morgan J. in Hedary Hamilton PC and of Perell J. in Crown Crest, the plaintiff knew or ought to have known that the bulk of its pleading was stillborn.

[73] Assuming, as I do, that the burden is on the defendant to show that its timing has not caused prejudice to the plaintiff, I find that it has made out its burden. The delay in this case is inconsequential. There is no hint of any loss of witnesses or documents.

[74] I do not decide whether Mr. Chand and Mr. Radnoff engaged in settlement discussions as alleged. Regardless, the plaintiff had it within its ability to compel the defendant to plead. The plaintiff is dominus litis and certainly could have brought the defendants to a case conference or applied for a case schedule had it wished to do so. So, if Mr. Chand was not discussing settlement throughout the months that Mr. Radnoff said were taken up with those talks, Mr. Chand provides no indication of what steps the plaintiff took to move the action along or to advise the defendants of any concerns about prejudice. I do not find that it was required to do anything. But its silence in the circumstances and its failure to identify any prejudice even now is a part of the facts in the mix.

[75] I do not find this to be an appropriate case in which to decline relief for delay under Rule 21.02. The impropriety of the bulk of the claims is not in doubt. Continuing them without any corresponding prejudice or reason to continue meritless claims is not in the interest of efficient, affordable, proportional civil justice.

Costs

[76] The principal issue in exercising the discretion to award costs is the determination of what is fair and reasonable. In light of the existence of clear and binding precedent against most of the causes of action pleaded, in my view costs ought to follow the event.

[77] Mr. Sabbah seeks his costs on a substantial indemnity basis. As I have not yet accepted his submission that this action is an abuse of process, I do not find that request apt yet.

[78] As I am unsure as yet whether the action is an abuse of process, I order costs payable on a partial indemnity basis for now. I am satisfied that the partial indemnity rates claimed and hours asserted by Mr. Radnoff and his colleagues are reasonable. Accordingly, the plaintiff is ordered to pay costs to Mr. Sabbah on a partial indemnity basis fixed in the amount of $15,000 all-inclusive.

[79] I make this order on the express condition that I reserve to the trial judge or to the judge who finally disposes of this action, the issues of whether in retrospect the action was always an abuse of process and, if so, whether the costs of this motion ought to be paid on a substantial or full indemnity basis. In either of those events, I fix the costs of Mr. Sabbah at $23,200 all-in on a substantial indemnity basis and $31,877.51 all-in on a full indemnity basis.

Date: April 13, 2022 FL Myers J