Court of Appeal for Ontario

Date: 2018-01-23 Docket: C63162

Judges: Simmons, Roberts and Nordheimer JJ.A.

Between

Danilo Ceballos Plaintiff (Appellant)

and

DCL International Inc. and George Swiatek Defendants (Respondents)

Counsel

Danilo Ceballos in person

Jaime VanWeichen and Heidi LeBlanc, for the respondents

Heard: January 15, 2018

On appeal from the judgment of Justice Sidney Lederman of the Superior Court of Justice sitting without a jury, dated December 5, 2016.

Reasons for Decision

[1] The appellant appeals from the order of the motion judge that struck out his claim against the individual respondent, George Swiatek.

[2] The appellant was employed by DCL International Inc. He was first laid off from his employment and then subsequently his employment was terminated. Both of these actions were taken by way of letters signed by Mr. Swiatek, in his capacity as the President and Chief Executive Officer of DCL.

[3] In his statement of claim, the appellant essentially alleges that the reason given by DCL for his termination, namely, economic downturn, was false. In other words, it was made up as an excuse to fire him. The appellant alleges that his employment was wrongfully terminated as a reprisal for his workplace injury claim.

[4] The respondents brought a r. 21 motion to dismiss the appellant's entire action on the basis that it was statute-barred, and that the claim against Mr. Swiatek disclosed no reasonable cause of action. The motion judge determined that the discoverability of the appellant's claims against DCL was a triable issue. However, the motion judge dismissed the claim against Mr. Swiatek on the basis that the appellant had not pleaded sufficient grounds that would take Mr. Swiatek's actions outside of the scope of his duties and responsibilities as an officer of DCL so as to possibly attract personal liability.

[5] The appellant submits that the motion judge erred in failing to find that he pled allegations of tortious conduct on the part of Mr. Swiatek that would, if proven, found individual liability against him.

[6] It is helpful to set out the standard of review on appeal and the test that the motion judge had to apply in determining whether the appellant's statement of claim disclosed a reasonable cause of action against Mr. Swiatek.

[7] The standard of review on the appeal from the dismissal of a claim as disclosing no reasonable cause of action on a r. 21 motion is correctness: Grand River Enterprises Six Nations Ltd. v. Canada (Attorney General), 2017 ONCA 526, at para. 18.

[8] On a motion to strike for failure to disclose a reasonable cause of action, the Supreme Court has identified the test to be whether the claim has no reasonable prospect of success: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17; Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at paras. 14-15; Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at p. 980.

[9] Turning to the statement of claim, the appellant asserted that he injured himself at work. However, he says that various employees disputed that claim and began to harass him at work. At paragraphs 61 and 62, the appellant alleges that Mr. Swiatek and the company were part of an unlawful means conspiracy to terminate his employment. Paragraphs 63 and 64 of the statement of claim are titled "Corporate Veil". At para. 63, the appellant pleads that Mr. Swiatek had "wide powers and control over the company" and "not only aided and abetted the misconduct of others in the company" but also "provided the misleading reason himself for my termination" and engaged in an unlawful means conspiracy. Relying on 642947 Ontario Ltd. v. Fleischer, 56 O.R. (3d) 417 (C.A.), at para. 68, which addresses piercing the corporate veil, the appellant asserts that Mr. Swiatek "is directly liable for the misconduct perpetrated against" him.

[10] There is no question that, if sufficiently and adequately pleaded, allegations of conspiracy, fraudulent misrepresentation and other tortious conduct may form the basis of a reasonable cause of action against an officer or a director of a corporation: see, for example, 1175777 Ontario Ltd. v. Magna International Inc., [2001] O.J. No. 1621 (C.A.).

[11] However, to invoke those exceptions that permit the piercing of the corporate veil, the claim must be specifically pleaded. As Carthy J.A. said in ADGA Systems International Ltd. v. Valcom Ltd., 43 O.R. (3d) 101 (C.A.), at para. 39:

The operative portion of this paragraph is the final sentence which confirms that, where properly pleaded, officers or employees can be liable for tortious conduct even when acting in the course of duty. [Emphasis added.]

[12] Bald or vague assertions of intentional tortious conduct are insufficient to defeat a r. 21 motion. The pleading of intentional torts must meet a stringent standard of particularity, that is, they must be pleaded with "clarity and precision": Lysko v. Braley, 79 O.R. (3d) 721 (C.A.), at para. 144.

[13] In this case, we are of the view that the motion judge correctly struck out the claim against Mr. Swiatek as disclosing no reasonable cause of action against him. There is no proper and sufficient pleading of the necessary elements of a specific and separate tortious act by Mr. Swiatek, necessary to give rise to personal liability on his behalf. It is plain and obvious that the claim, as baldly pleaded, cannot succeed.

[14] The appeal is dismissed. The respondents are entitled to their costs of the appeal fixed in the amount of $4,500 inclusive of disbursements and HST.

"Janet Simmons J.A."

"L.B. Roberts J.A."

"I.V.B. Nordheimer J.A."