DATE: 20051003

DOCKET: C42787

COURT OF APPEAL FOR ONTARIO

RE:

LEWIS (CHIP) TAYLOR, CHIP TAYLOR, IN TRUST, JARED TAYLOR, ELGIN INVESTMENTS INC., and MEGA-C TECHNOLOGIES INC. (Plaintiffs/Appellants) –and- TAMBORIL CIGAR COMPANY, AXION POWER CORPORATION, RENE PARDO, MARVIN WINICK, KIRK TIERNEY, JOSEPH PICCIRILLI, RONALD BIBACE, ROBERT AVERILL, JAMES SMITH, JAMES EAGAN, THOMAS GRANVILLE, JOSEPH SOUCCAR, GLENN W. PATTERSON, CANADIAN CONSULTANTS BUREAU INC., ROBERT APPEL, HAROLD ROSEN, IGOR FILIPENKO, VALERI SHTEMBERG, YURI VOLFKOVICH, PAVEL SHMATKO, MICHAEL KISHINEVSKY, MEGA-C POWER CORPORATION (Nevada), MEGA-C POWER CORPORATION (Ontario), C AND T CO. INCORPORATED, TURITELLA CORPORATION, GARY BOUCHARD, FOGLER RUBINOFF LLP, NETPROFITETC INC., 503124 ONTARIO LTD., JOHN DOE CORPORATION, HAP INVESTMENTS LLC, INFINITY GROUP LLC, JAMES KEIM and BENJAMIN RUBIN (Defendants/Respondents)

BEFORE:

SIMMONS, LANG and ROULEAU JJ.A.

COUNSEL:

Fred A. Platt

for the appellants

Peter Wardle

for the respondents Gary Bouchard and Fogler Rubinoff

Helder Travassos

For the respondent Michael Kishinevsky

Nicole Salama

For the respondent Michael Kishinevsky

HEARD & RELEASED ORALLY:

September 29, 2005

On appeal from the judgment of Lax J. of the Superior Court of Justice, dated December 3, 2004 in the City of Toronto.

E N D O R S E M E N T

[1] We are not persuaded that Lax J. erred in finding that the appellants’ statement of claim failed to plead properly the claims for conspiracy, breach of fiduciary duty and breach of trust. With respect to conspiracy, we agree with the motion judge that the pleading does not provide the required particularity. Among other deficiencies, it does not plead the particulars of the relationship between these defendants and the other alleged conspirators. Indeed, it does not plead that these defendants are conspirators. It does not plead the precise agreement or provide a precise statement of the object of the conspiracy, and it does not plead with clarity and precision the overt acts at issue or the particular defendant who committed those acts. In addition, we are not persuaded that the motion judge erred in finding the pleading deficient with respect to the claims for breach of fiduciary duty and breach of trust.

[2] We do, however, find that the motion judge erred in refusing the appellants leave to amend. The circumstances in which leave to amend will be granted were canvassed in Indal Metals v. Jordan Construction Management Inc., [1994] O.J. No. 1616.

[3] As this court said in 1175777 Ontario Ltd. v. Magna International Inc. (2001), 9 C.P.C. (5th) 199 at 210, any tactical reasons behind the advancing of the pleading are “more properly policed with costs sanctions at later stages of a proceeding”. We are satisfied that this principle applies at this stage of this proceeding.

[4] In this case, we are of the view that this pleading does not contain a “radical defect incapable of being cured by amendment” to the extent necessary to deprive the appellant altogether of their right to litigate these issues. See Indal Metals, supra, para. 13.

[5] With respect to the motion for fresh evidence, we would dismiss that motion because no evidence is admissible in any event on a motion to strike under rule 21.01(1)(b).

[6] Accordingly, we would allow the appeal only to the extent of granting the appellants leave to amend to plead conspiracy, breach of fiduciary duty, and breach of trust. In our view, in the circumstances of this case, the appellants’ claims for “aiding and abetting”, assuming such causes of action exist, add nothing to any of their claims and are incapable of redemption. We do not give leave to amend those claims.

[7] Costs of the appeal and of the fresh evidence motion to counsel for Mr. Bouchard and Fogler Rubinoff fixed at $3,500.00 inclusive of G.S.T. and disbursements and to counsel for Mr. Kishinevsky fixed at $2,500.00 inclusive of G.S.T. and disbursements.