Court File and Parties
COURT FILE NO.: CV-11-418458 COURT FILE NO.: CV-11-431798 COURT FILE NO.: CV-11-438785
DATE: 20130305
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: The Dominion of Canada General Insurance Company (Plaintiff) and MD Consult Inc. o/a Toronto Regional Medical Assessment Centre, MD Assessment Consult Inc., Pacific Assessment Centre Inc. a.k.a. Pacific Rehab & Therapy Inc., 2171713 Ontario Inc. o/a Fairview Assessment Centre Inc., Ancaster Rehab, Universal Injury Rehabilitation Centre, Assessment Direct and Human health Clinic, Traffic Law Advocate (E.E,) Professional Corporation, Danny Grossi, Vitali Tourkov, Abram Zilber, Evgeni Evdassin, Fairview Assessment Centre Inc., Alexander (also referred to as Alexandre) Lobatch (Defendants)
AND RE: Co-operators General Insurance Company, HB Group Insurance Management Limited and Coseco Insurance Company (Plaintiffs) and Pacific Assessment Centre Inc a.k.a. Pacific Rehab & Therapy Inc., Fairview Assessment Centre Inc., 2171713 Ontario Inc., Century Diagnostic & Assessment Centre Inc., M.D. Consult Inc. o/a Toronto Regional Medical Assessment Centre, M.D. Assessment Consult Inc., Vitali Tourkov, Alexandre Lobatch, Abram Zilber, Pavlo Tsysar, Danny Grossi and Yaniv Tamsout (Defendants)
AND RE: State Farm Mutual Automobile Insurance Company (Plaintiff) and Pacific Assessment Centre Inc. a.k.a. Pacific Rehab & Therapy Inc., Fairview Assessment Centre Inc., 2171713 Ontario Inc., M.D. Consult Inc. o/a Toronto Regional Medical Assessment Centre, M.D. Assessment Consult Inc., Traffic Law Advocate (E.E.) Professional Corporation, Vitali Tourkov, Alexandre Lobatch, Abram Zilber, Danny Grossi, Evgeni Evdassin, Yaniv Tamsout, Alla Lobatch and Dan Sut (Defendants)
BEFORE: Justice Beth Allen
COUNSEL: Ian Gold and Sarah Jones, for the Plaintiffs State Farm Mutual Automobile Insurance Company, Dominion of Canada General Insurance Company, Co-operators General Insurance Company, HB Group Insurance Management Limited and Coseco Insurance Company
James McReynolds, for the Defendants Pacific Assessment Centre Inc. a.k.a. Pacific Rehab & Therapy Inc., Fairview Assessment Centre Inc, Vitali Tourkov, Alexander Lobatch, Yaniv Tamsout and Alla Lobatch
No one appearing, for the Defendants 2171713 Ontario Inc., M.D. Consult Inc. o/a Toronto Regional Medical Assessment Centre, M.D. Assessment Consult Inc., Traffic Law Advocate (E.E.) Professional Corporation, Abram Zilber, Danny Grossi, Evgeni Evdassin and Dan Sut
HEARD: January 29, 2013
ENDORSEMENT
A. THE PARTIES
[1] The Defendants Pacific Assessment Centre Inc. (“Pacific”), Fairview Assessment Centre Inc. (Fairview), Vitali Tourkov (“Tourkov”), Alexandre Lobatch (“Lobatch”), Yaniv Tamsout (“Tamsout”) and Alla Lobatch (“A. Lobatch”) (collectively, the “Moving Defendants”) bring motions under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike out the claims of the plaintiff insurance companies, State Farm Mutual Automobile Insurance Company (“State Farm”), The Dominion of Canada General Insurance Company (“Dominion”) and Co-operators General Insurance Company and related companies (“Co-operators”) (collectively, the Plaintiff Insurers”).
[2] The Plaintiff Insurers are jointly represented by one law firm as are the Moving Defendants. The statements of claim of the individual Plaintiff Insurers are essentially similar and so for simplicity, issues are largely dealt with together. Where there is a difference in a statement of claim that is pertinent to the determination on this motion, that difference will be addressed.
B. BACKGROUND
[3] The Plaintiff Insurers issued statements of claim against the Moving Defendants on various dates in 2011 seeking relief as follows:
• Dominion seeks $500,000 in damages for fraud, fraudulent misrepresentation, conspiracy and/or unjust enrichment; and $5,000,000 for aggravated/or punitive damages;
• Co-operators seeks $2,000,000 in damages for fraud, fraudulent misrepresentation, conspiracy and/or unjust enrichment; $5,000,000 for aggravated and/or punitive damages;
• State Farm seeks $8,000,000 in damages for fraud, fraudulent misrepresentation, conspiracy and/or unjust enrichment; $8,000,000 for conspiracy; and $5,000,000 for aggravated and/or punitive damages.
[4] The three actions have been brought in relation to insurance claims made by the Moving Defendants for medical treatment and assessments allegedly rendered starting in 2010. The defendant companies are treatment and assessment centres and the individual defendants were at the relevant times either directors or signatories of the defendant companies.
[5] The Plaintiff Insurers allege the Moving Defendants were involved in a conspiracy involving making fraudulent treatment and assessment claims with the Plaintiff Insurers.
C. THE LAW ON STRIKING OUT PLEADINGS
1. General Principles
[6] This court in Aristocrat, infra, spoke of the importance of the role of pleadings in guiding litigation:
The importance of pleadings cannot be overemphasized. They define the issues in dispute. They give notice to the other side of the case to be met. They inform the court of the matters in issue. They provide a permanent record of the issues raised in deciding the action so as to prevent further litigation upon the same matters already judicially determined. They also play a key role in defining the scope of discovery [Aristocrat Restaurants Ltd. (c.o.b. Tony’s East) v. Ontario, [2003] O.J. No 5331, at paras.76-77, (Ont. S.C.J.)].
[7] Rules 21 and 25 provide direction on the drafting of pleadings, on when it is appropriate to strike out a claim and on when it is appropriate to allow amendments to pleadings.
[8] Rule 21.01(1)(b) allows a party to ask the court to strike out a pleading that discloses no reasonable cause of action.
21.01 (1) A party may move before a judge,
(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,
and the judge may make an order or grant judgment accordingly.
2. Pleadings as to Fraud or Misrepresentation
[9] Rule 25.06 contains special requirements for the content of pleadings in fraud, misrepresentation, breach of trust, malice and intent:
25.06 (1) Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.
(8) Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.
[10] Courts have recognized the seriousness of an allegation of fraud in holding that when pleaded, the plaintiff has an obligation to demonstrate a genuine factual basis for such an allegation. [Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997), 37 O.R. (3d) 50 QL, at para. 13, (Ont. G.D.)]
3. Grounds for Striking Out Pleadings
[11] Rule 25.11 sets out the grounds on which all or part of a pleading may be struck out and permits a pleading that is struck out to be amended.
25.11 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,
(a) may prejudice or delay the fair trial of the action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the court.
[12] The basic principles that guide a determination whether to strike out pleadings are well known:
• the allegations of fact must be accepted as proven unless patently ridiculous or incapable of proof;
• the moving party must show it is "plain and obvious", and beyond doubt the plaintiff cannot succeed;
• the statement of claim must be read generously allowing for inadequacies due to drafting deficiencies;
• the court must assume all the facts pleaded are true;
• the plaintiff has the onus of ensuring their pleadings satisfy the rules governing pleadings drafting;
• if the minimum level of material fact is not reached the appropriate remedy is to strike out the pleading;
• only in the clearest of cases should a pleading be struck out; and
• the test that must be satisfied by the moving party is onerous and relief granted only when it is without doubt the claim will not succeed.
[Toronto Dominion Bank v. Deloitte, Haskins & Sells (1991), 5 O.R. (3d) 417, at 419, (Ont. Gen. Div.); Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at 978-980, (S.C.C.); Web Offset Publications Ltd. v. Vickery (1999), 43 O.R. (3d) 802.), at 803, (Ont. C.A), leave to appeal ref'd (2000), [1999] S.C.C.A. No. 460 (S.C.C.); Abdool v. Anaheim Management Ltd. (1995), 21 O.R. (3d) 453, at p. at 469, (Ont. S.C.J. (Div. Ct.); Morrison v. Partington, [2005] O.J. No. 3176, [2005] O.T.C. 659 (Ont. S.C.J.); and [Air Canada v. WestJet Airlines Ltd. (2004), 72 O.R. (3d) 669, at para. 6, (Ont. C.A.)]].
4. Leave to Amend Pleadings
[13] The exercise of authority under Rule 25.11 denies the litigant a full trial on the merits of their claim. Courts have therefore cautioned that the discretion to strike out pleadings should be used sparingly and only in the clearest of cases. Material facts must be taken as true unless it is plain and obvious they are incapable of belief and must be read as generously as possible [[Wernikowski v. Kirkland, Murphy & Ain, [1999] O.J. No. 482, 50 O.R. (3d) 124 (Ont. C.A.)]](https://www.canlii.org/en/on/onca/doc/1999/1999canlii3822/1999canlii3822.html); leave to appeal to the S.C.C. denied [2000], S.C.C.A. No. 98 (S.C.C.)].
[14] A motion to strike is not a motion for particulars. The question in a motion to strike is not as to whether the plaintiff has provided the necessary or desired details of the claim, but whether there is a “radical defect”, as described by Wilson, J in Hunt v. Carey, supra, such that the underlying cause of action is not sustainable on the facts of the pleading as drafted [United Canadian Malt Ltd. v. Outboard Marine Corp. of Canada (2000), 48 O.R. (3d) 352, at para. 8 (Ont. S.C.J.)].
[15] On deciding when leave to amend should be allowed, applying a rule similar to Ontario’s rule, the British Columbia Supreme Court held leave to amend the claim will be granted unless, assuming the facts as stated in the statement of claim can be proved, it is “plain and obvious” that the [claim] discloses no reasonable cause of action, taking into consideration that it is only in the clearest cases that a pleading will be struck out as disclosing no reasonable claim [British Columbia (Civil Forfeiture) v. Vo, 2012 BCSC 1476 (B.C.S.C.)].
D. ANALYSIS
1. Claims in Fraudulent Misrepresentation
[16] The essential elements of fraudulent misrepresentation that must be set out in a pleading are:
(a) the misrepresentation complained of was made by the defendant;
(b) the misrepresentation is false;
(c) the defendant knew when making the statement, it was false or was recklessly uncaring whether it was true or false; and
(d) the representation induced the plaintiff to act to their prejudice.
[Corfax, supra, at para. 13; see also Balanyk v. University of Toronto, [1999] O.J. No. 2126 (QL), at para. 56, (Ont. S.C.J.)].
[17] A claim against employees, officers or directors of a corporation is only sustainable at law if it discloses a basis for attaching liability against these individuals in their personal capacities and the constituent elements of the tort are pleaded. If the claim alleges specific conduct of the employee, officer, or director in their personal capacity, the claim against the individuals will not be struck out [United Canadian Malt, supra, at para. 14 and Aird v. Harmony House of Kirkland Lake, [2001] CarswellOnt, 2694 at paras. 19, 21, 25 and 28, (Ont. S.C.J.)].
[18] The Moving Defendants submit the claims in fraudulent misrepresentation against the individual defendants must be struck out for being based on bald allegations. They also assert the claims against the individual defendants lack particulars as to any representation alleged to have been made by any individual defendants.
[19] The Moving Defendants make the further submission that the claims against the individual defendants are improper for reason that they relate solely to the causes of action against the corporate defendants. They rely on an Ontario Court of Appeal decision in Normart, infra, in which a claim in breach of contract was brought against a corporate defendant and individual directors and officers. The court found the plaintiffs had not raised claims against the individual defendants that were independent of the breach of contract claim against the corporation. The court was concerned with principals of the corporations being added to the litigation by virtue only of the claims against the corporation for which they are signatories.
[20] The court pointed out that because corporations are merely inanimate legal machinery, incapable of entering into an agreement, directors perform the signatory and other functions on the corporation’s behalf. The court held this is not a sufficient basis on which a claim of breach of contract can be brought against a director.
It is well established that the directing minds of corporations cannot be held civilly liable for the actions of the corporations they control and direct unless there is some conduct on the part of those directing minds that is either tortious in itself or exhibits a separate identity or interest from that of the corporations such as to make the acts or conduct complained of those the directing minds.
[21] For the following reasons, Normart is clearly distinguishable from the case before me.
[22] State Farm’s statement of claim pleads Tourkov was the director of Pacific, Lobatch was the director of Fairview and Tamsout was a de facto manager and signatory of Fairview. It makes specific allegations of fraud against the individual defendants in 18 paragraphs and sets out the facts in support.[^1]. Similarly, Dominion’s statement of claim pleads Tourkov was the director of Pacific and Lobatch was the director of Fairview and also sets out the facts to support the allegations of fraudulent misrepresentation against those individual defendants in 18 paragraphs.[^2] Likewise, Co-operators pleads Tourkov was the director of Pacific, Lobatch a director of Fairview and Tamsout a de facto manager of Fairview and makes specific allegations of fraudulent misrepresentation against them in 29 paragraphs.[^3]
[23] In particular, State Farm[^4], Dominion[^5] and Co-operators[^6] allege the individual defendants submitted to them and continue to submit false and/or fraudulent treatment plans, assessment requests and invoices that include requests for assistive devices and services that the doctors, who are purported to have signed the documentation, never recommended. They further allege the individual defendants set up the corporate defendants to act as agents for the individual defendants for the purpose of submitting false/fraudulent documentation and in so doing, held out the corporate defendants as legitimate treatment providers.
[24] The Plaintiff Insurers further allege in relation to the named doctors that fraudulent treatment plans, assessment requests and invoices for treatment and services were submitted, by one, some or all of the individual defendants under the corporate defendants’ names. The documentation submitted was purported to have been signed by doctors who never worked at a corporate defendant and/or who never recommended the assistive devices allegedly recommended. Attached to each statement of claim are appendices containing documents the Plaintiff Insurers allege contain evidence of fraudulent invoices for treatment and devices and associated payments by the Plaintiff Insurers. The names of assessment centres and the doctors are identified and Tamsout is named as the authorized signatory.
[25] It is clear in law that employees, officers and directors are to be held responsible for their tortious conduct even if that conduct is directed in a bona fide manner in the best interests of the corporation, except in relation to the tort of inducing breach of contract [Said v. Butt, [1920] 3 K.B. 497 applied in United Canadian Malt, supra, at para. 9; Aird v. Harmony House, supra, at para. 22; and Adga Systems International v. Valcom Ltd. (1999), 168 D.L.R. (4th) 351, at para.18, (Ont. C.A.)]. The Court of Appeal has further held that when an employee, officer or director acts in a fraudulent manner, that individual is not acting in the best interests of the corporation and can no longer be protected by the corporate veil. Employers, officers and directors under these circumstances can be held personally liable for their tortious acts including fraudulent misrepresentation [Kepic v. Tecumseh Road Builders (1987), 18 C.C.E.L. 218, para. 10, (Ont. C.A.)]. I agree with the Plaintiff Insurers that activities directed at raising revenues for the corporate defendants through fraudulent means are clearly not in the interests of the corporate defendants.
[26] I accept that the Plaintiff Insurers have adequately pleaded facts that make up the constituent elements of fraudulent misrepresentation through setting out the facts of actions they allege the individual defendants engaged in using the corporate defendants as agents to facilitate their fraudulent schemes. The prejudice to the Plaintiff Insurers in being presented with and paying fraudulent and/or false claims is obvious.
[27] I am required to take the facts as pleaded as true and not expect the Plaintiff Insurers to have provided all the necessary or desired details of the claim. The question is whether there is a “radical defect” in the pleading and whether it is without a doubt that the claim will not succeed. The answer to both of those inquiries is positive. I find the pleadings sufficiently satisfy the requirements for fraudulent misrepresentation under Rule 25.06(8).
[28] I therefore do not grant the Moving Defendants’ request for an Order to strike out State Farm’s, Dominion’s and Co-operator’s claims in fraudulent misrepresentation.
E. CLAIMS IN CONSPIRACY
[29] To claim damages for conspiracy the statement of claim must plead:
a) that there was an agreement between two or more persons to perform specific acts to injure the plaintiff;
b) that the defendant acted in furtherance of that agreement;
c) and either:
i. the predominant purpose of the defendant’s conduct was to cause the plaintiff injury; or
ii. the conduct of the defendant is unlawful and directed towards the plaintiff (alone or with others) and in the circumstances that the defendant should have known that injury to the plaintiff is likely to occur, and it does, and the result is injury even if the predominant purpose is not to cause injury; and
d) that the plaintiff was injured as a result of the conspiracy.
[30] State Farm[^7], Dominion[^8] and Co-operators[^9] plead that some or all of the individual defendants set up Pacific and Fairview for the sole or dominant purpose of performing unlawful acts contrary to the Insurance Act, R.S.O. c. I-8 and Regulations and the Criminal Code. The Plaintiff Insurers plead, among other things, that some or all of the individual defendants falsely represented to the Plaintiff Insurers that assistive devices were recommended by doctors that were not, and further plead that the individual defendants submitted false and/or fraudulent invoices causing the Plaintiff Insurers to pay for services and devices not provided causing them to sustain damages.
[31] The Moving Defendants submit the conspiracy claims should be struck out on the basis of the merger doctrine. That doctrine applies where there is an allegation that a tort has been committed when there is also an allegation that the defendants conspired to commit that same tort [Normart, supra, para.16]. The Moving Defendants assert the Plaintiff Insurers improperly claimed both that the individual defendants conspired to commit fraudulent misrepresentation and at the same time plead the individual defendants committed the tort of fraudulent misrepresentation.
[32] The Moving Defendants rely on Hunt v. Carey for its observation that it is arguable that if one succeeds under a distinct nominate tort against an individual defendant, then an action in conspiracy should not be available against that defendant [Hunt v. Carey, supra, at para. 57].
[33] However, the Supreme Court’s commentary did not end with that observation. The court went on to say that it is far from apparent that a mere allegation by a plaintiff that the defendant committed other torts precludes a pleading in conspiracy. The quandary presented by the Moving Defendants’ position is posed by the Supreme Court:
It seems to me that one can only determine whether the plaintiff should be barred from recovery under the tort of conspiracy once one ascertains whether he has established that the defendant did in fact did commit the other alleged torts. And while on a motion to strike we are required to assume that the facts as pleaded are true, I do not think that it is open to us to assume that the plaintiff will necessarily succeed in persuading the court that these facts established the commission of the other alleged nominate torts. Thus, even if one were to accept the appellants’ (defendants’) submission that “[u]pon proof of the commission of the tortious acts alleged” in para. 20 of the plaintiff’s statement of claim “the conspiracy merges with the tort”, one simply could not decide whether this “merger” had taken place without first deciding whether the plaintiff had proved that the other tortious acts had been committed [Hunt v. Carey, at para. 57].
[34] It is the Plaintiff Insurers’ position based on that further observation that plaintiffs can plead nominate torts and conspiracy separately but the authority to determine which tort(s) have been established rests with the trial court on a full record.
[35] I agree with the Plaintiff Insurers’ position. Graye v. Filliter, infra, was cited by the Moving Defendants, which case I find is distinguishable from Hunt v. Carey and the case before me. In Graye, the set of facts pleaded in relation to conspiracy were the same as those pleaded with respect to the nominate tort and no special damage claim was made in relation to conspiracy [Graye v. Filliter 1997 CarswellOnt5335 (O.C.J. (Gen. Div.)].
[36] The Plaintiff Insurers advance an argument that I accept. The claims in conspiracy are based on actions by the individual defendants that the Plaintiff Insurers allege are unlawful acts under the Insurance Act and Criminal Code and that while the unlawful acts in fraud arise from the same set of facts as their conspiracy claims, they are separate and different claims. That is, it is not the fact that the two claims are based on common facts that is determinative, but the theory of liability that attaches to the claim. Conspiracy is provable through establishing constructive knowledge while intention and inducement must be proved for the tort of fraudulent misrepresentation [Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, at paras. 37 and 38 (Ont. C.A.)].
[37] Whether the merger doctrine applies rests with a determination at trial on a full record. I am not in a position to determine this and will not strike out the claims in conspiracy on that basis.
[38] The Moving Defendants also submit the Plaintiff Insurers have improperly framed their conspiracy claims as breach of statute. The Moving Defendants cite authority for the proposition that there is no cause of action per se based upon an alleged breach of statutory duty and that the proceeding must be framed in negligence. On this view, the claims should be entirely stuck out on a motion to strike under Rule 21 [Saskatchewan Wheat Pool v. Canada, 1983 CarswellNat 92, at para. 42 (S.C.C.)].
[39] I accept the Plaintiff Insurers’ position that their pleadings in conspiracy in relation to provisions of the Insurance Act and Regulations do not raise claims in breach of statutory duty. The scope of the provisions reaches beyond the acts of an individual person or wrongdoer. This is reflected in the language in s. 439 “no person shall engage in any unfair or deceptive practice”, and in 447(2)(a.3), the language “everyone who, by deceit… defrauds the public or any person…” The Regulation covers “unfair or deceitful acts by or on behalf of a person.” The conduct described in those provisions does not sound in tort but are rather civil quasi-criminal offences. Similarly, s. 380(1) of the Criminal Code does not refer to a tortious act but rather refers to the criminal offence of obtaining property or money by fraud or false pretenses.
[40] The following excerpt from Agribrands, supra, addresses the issue of the sufficiency of pleadings in relation to claims in conspiracy that involve unlawful acts designated by statute:
It is clear from that jurisprudence that quasi-criminal conduct when undertaken in concert, is sufficient to constitute unlawful conduct for the purpose of the tort of conspiracy, even though that conduct is not actionable in a private law sense by a third party. The seminal case of Canada Cement LaFarge is an example. So too is conduct that is in breach of the Criminal Code, R.S.C. 1985. These examples of “unlawful conduct” are not actionable in themselves, but they have been held to constitute conduct that is wrongful in law and therefore sufficient to be considered “unlawful conduct” within the meaning of civil conspiracy.
[Agribrands, supra, at paras. 37 and 38]
[41] I find that the Plaintiff Insurers’ pleadings in conspiracy are sustainable on the facts pleaded. The Moving Defendants have not established without a doubt the conspiracy claims will not succeed at trial. I therefore will not strike out those claims.
1. Special Damages for Conspiracy
[42] There are also special considerations that come to bear with a damage claim in relation to conspiracy.
[43] The plaintiff is required to show the connection between the acts complained of and the damages claimed. If the claim fails to show that the acts complained of caused the injury, the cause of action cannot be made out. A damage claim cannot survive if it fails to provide material facts that link the various causes of action to the heads of damage claimed and if it is devoid of material facts to support the amount of damages claimed [Meditrust Healthcare Inc. v. Shoppers Drug Mart, [2004] O.J. No. 3966 (QL), at paras. 23 and 26, (Ont. S.C.J.)].
[44] I have found with respect to the pleadings in fraudulent misrepresentation and conspiracy that the Plaintiff Insurers have sufficiently pleaded the material facts of those claims. They have pleaded the actions that gave rise to damages. Special damages are required to be pleaded specifically for conspiracy. Dominion and Co-operators have not done this but have rather claimed a global amount for both torts. State Farm has claimed special damages for conspiracy and has claimed the same amount for each tort. Whether it is appropriate for a plaintiff to plead the same damage amount for the nominate tort and the tort of conspiracy has been addressed by this court:
If, as is the situation in the case at bar, a plaintiff’s pleaded damages for negligence are the same as the special damages pleaded for civil conspiracy, I see no reason for striking out the pleading of the special damages. At the trial, it may come to pass the Plaintiff’s claim in negligence fails but their civil conspiracy claim might succeed based on some other wrongful act and the proof of the other constituent elements of the tort of civil conspiracy including special damages associated with civil conspiracy.
[Robinson v. Medtronic Inc., 2010 ONSC 1739, at paras. 10 and 13, (Ont. S.C.J.)]
[45] Dominion and Co-operators are required to amend their damage claims to include special damages for conspiracy.
F. CONCLUSION
[46] For all the reasons cited, I refuse the Moving Defendants’ motions to strike out the claims in fraudulent misrepresentation and conspiracy and require Dominion and Co-operators to amend their damage claims as specified.
G. COSTS
[47] I reserved my decision and at the conclusion of motion I requested the parties submit costs outlines.
[48] The Plaintiff Insurers were substantially successful at trial with the exception of Dominion and Co-operators being required to amend their damage claims. In accordance with the principle that costs follow the cause, I award them costs. The question of quantum of costs is to be determined. A recognized way to arrive at an amount of costs a party would reasonably expect to be awarded is to look at that party’s estimation of their own costs. This is a case in which partial indemnity costs are appropriate. The Moving Defendants’ figures for what they would reasonably expect to pay if unsuccessful are a relevant consideration.
[49] The Moving Defendants’ seek partial indemnity costs inclusive of disbursements and HST in the amount of $6,520. The Plaintiff Insurers’ partial indemnity costs inclusive of disbursements and HST are as follows: State Farm, $3,269.86; Dominion, $3,271.05; and Co-operators, $3,269.84. I find the costs sought by all parties to be reasonable, the Moving Defendants’ amount being greater based on having to prepare to respond to the submissions of three plaintiffs.
[50] Despite multiple parties on each side, I find counsel used the time judiciously which resulted in the proceeding taking less than the allotted time. There were some moderately complex issues, those being the applicability of the merger doctrine and the issue of claims of conspiracy in relation to statutorily designated unlawful acts. There were no novel issues.
[51] The Ontario Court of Appeal set down the principle that the objective of a determination on costs is to fix an amount the unsuccessful party is required to pay that is fair and reasonable rather than an amount reflecting the actual costs of the successful party. The quantum of costs allowed must be fair, within the reasonable expectations of the parties, and in accord with the principles set out by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291 (Ont. C.A.).
[52] I can see no reason to depart from the parties’ estimates of their costs. I therefore award costs to the Plaintiff Insurers in the total amount of $9,000 inclusive of disbursements and HST, $, 3000 payable to each of State Farm, Dominion and Co-operators, to be paid within thirty days of this Order.
H. ORDER
[53] Order accordingly.
Allen J.
Date: March 5, 2013
[^1]: paragraphs 7, 8 12, 13, 23, 24, 25 26, 34 36, 38, 40, 42, 44, 46, 48, 50 and 52. [^2]: paragraphs 8, 10a, 19, 20, 21, 22, 30, 33, 37, 42, 47, 51, 55, 59, 63, 65, 68 and 71. [^3]: paragraphs 7, 8, 12, 21, 22, 23, 24, 29, 31, 33, 35, 37, 39, 41, 43, 45, 47, 49, 51, 53, 55, 57, 59, 61, 63, 64, 66, 67 and 69. [^4]: Paragraphs 23, 24, 25 and 26 [^5]: Paragraphs 19 and 20 [^6]: Paragraphs 21, 22 and 23 [^7]: paragraphs 60 - 66 [^8]: paragraphs 76 - 81 [^9]: paragraphs 76 - 81