Court File and Parties

Court File No.: CV-12-00453029
Date: 20131024
Superior Court of Justice - Ontario

RE: Doriana Silva, Plaintiff

– AND –

Avid Dating Life Inc. c.o.b. Ashley Madison and as Ashleymadison.com, Avid Life Media Inc. and the Career Foundation, Defendants

Before: E.M. Morgan J.

Counsel:
Matthew P. Maurer, for the Defendants/Appellants, Avid Dating Life Inc. c.o.b. Ashley Madison and as Ashleymadison.com, Avid Life Media Inc.

Paul Dollak, for the Plaintiff/Respondent

Heard: October 18, 2013

Endorsement

[1] The Defendants/Appellants, Avid Dating Life Inc. c.o.b. Ashley Madison and as Ashleymadison.com and Avid Life Media Inc. (the “Appellants”), appeal from the Order of Master Dash dated June 4, 2013. Although the Master’s endorsement addressed a number of different issues with respect to the Statement of Claim, the only ruling under appeal is in respect of the Master’s refusal to strike out certain words in paragraphs 57(c) and (d) of the pleading issued by the Plaintiff/Respondent (the “Respondent”).

[2] To make a long story short, the Respondent’s claim relates to workplace injuries that she alleges incurred as a result of the repetitive strain of excessive computer keyboarding while working for the Appellants. Her injuries, of course, occurred not because of what she was typing but because of how much she was typing. One does not suffer a more severe repetitive strain injury by inputting, for example, pleadings while working at a law office than one does by inputting recipes while working at a cook book publisher. All else being equal, the subject matter of the typing is, strictly speaking, irrelevant to the injury.

[3] In the present action, however, all else is not pleaded as being equal. A large portion of the Statement of Claim is devoted to describing what it was that the Respondent was inputting and how that keyboarding related to the Appellants’ business. Her allegation is that her job entailed concocting phony profiles of alluring females and inputting these profiles into the Appellants’ online dating service in order to attract male subscribers. She describes this task in such detail that it is only at paragraph 51 of the Statement of Claim that one finds the subheading “Causes of Action” and the Respondent’s actual legal points are made.

[4] In the course of those parts of his endorsement that are not being appealed, the learned Master reviewed much of this pleading. He struck out some portions of it and left in others. The overall results of the ruling were mixed for the parties. The Master removed certain phrases he described as being scandalous or as pleading evidence, while he allowed other phrases to remain in the pleading as being relevant to the claim. At paragraph 4 of his endorsement, the learned Master summed up the claim succinctly:

…the main thrust of the action – excessive typing. The excess typing were of the numerous false claims. Had Respondent known the conduct was improper, she could have stopped and avoided injury.

[5] The phrases in the Statement of Claim at issue in this appeal appear in paragraph 57 of the Statement of Claim. It is in this section that the Respondent sets out her claim in “waiver of tort”.

[6] The Appellants complain that subparagraph 57(c) alleges that the Appellants required the Respondent to engage in conduct that was, inter alia, “an unethical or unfair business practice”. They further complain and that subparagraph 57(d) alleges that the Appellants failed to educate the Respondent in respect of, inter alia, “ethical issues” and so she was not in a position to question the “ethics” of the assignment to create the false profiles and to thereby refuse to do the work. They want these references to ethics struck from the pleading.

[7] The thrust of the Appellants’ appeal is that “ethics” and “unethical practice” – when divorced from law and illegality – are not capable of legal proof and should not be subjected to legal debate. They contend that the Master erred in allowing these phrases to remain in the pleading, and that the effect of this error will be to sidetrack the action into a fruitless debate over business ethics rather than over legal rights and wrongs.

[8] It is not clear at this point whether the Respondent will succeed in her claim, but that is not the question on a pleadings motion. Master Dash accurately described the Statement of Claim, correctly ascertained the causes of action and the facts relevant thereto, and ensured that the facts and the descriptions contained therein were closely related to the matters being claimed. He was careful to eliminate gratuitous allegations and phrases that were inflammatory and did not advance the position being pleaded; at the same time, he allowed those allegations and phrases that were necessary to describe the factual context in which the injuries were sustained and the allegedly wrongful gains of the Defendants took place.

[9] Waiver of tort continues to be controversial as a ground for a damages claim. It certainly involves allegations of wrongdoing, Haddad v Kaitlin Group Inc., [2008] OJ No 5127 (SCJ), but the specific contours of the wrongdoing leading to this tort, or to this remedy, are still being worked out by the courts. As Blair J.A. described it in Aronowicz v. EMTWO Properties Inc., 2010 ONCA 96, at para 80:

Waiver of tort is a restitutionary remedy. There is considerable controversy over whether it exists as an independent cause of action at all or whether it is "parasitic" in the sense that it requires proof of an underlying tort and – since a tort requires damage – proof of harm to the Plaintiff. By invoking waiver of tort, a Plaintiff gives up the right to sue in tort but seeks to recover on the basis of restitution, claiming the benefits the wrongdoer has derived from the wrongful conduct regardless of whether the Plaintiff has suffered damages or not.

[10] While some courts have debated the question as one of law that does not require a full factual record, Anderson v St. Jude Medical Inc., 2012 ONSC 3660, at para 587, courts have more generally taken the position that “whether waiver of tort is an independent cause of action should be resolved in the context of a factual background of a more fully developed record”. Serhan Estate v. Johnson & Johnson (2006), 2006 20322 (ON SCDC), 85 OR (3d) 665 (Div Ct), at para 69, leave to appeal to SCC dismissed, [2006] SCCA No. 494. A pleadings motion is not the place to dismiss an embryonic cause of action or to determine in a final way what its ingredients might be. Neither the novelty of the claim nor the potential for the Appellants to mount a credible defense should bar the pleading of it at this stage. Hunt v Carey Canada Inc., 1990 90 (SCC), [1990] 2 SCR 959, at para 33.

[11] A number of fundamental questions remain unclear in establishing a claim under the rubric of waiver of tort: “[o]ne is whether all the elements of an actionable tort must be proven – including a loss or injury; the other relates to the torts – or the tortious circumstances – in which the election between the remedies will be available.” Heward v Eli Lilly & Co. (2007), 2007 2651 (ON SC), 47 CCLT (3d) 114, at para 28. Whatever else one can say about waiver of tort, Master Dash was eminently correct in stating in paragraph 3 of his endorsement that it is still “an emerging and unsettled cause of action”.

[12] The essential component of the waiver of tort claim, and the element that makes the waiver claim different than an ordinary tort claim, is that damages are based not on the extent of the loss suffered by the Respondent from her injury, but on the benefit derived by the Appellants from the Respondent’s injury. Accordingly, the nature of the Appellants’ business and the way in which they profit therefrom is in issue.

[13] Whether that makes the Appellants’ business practices and business ethics relevant is still a matter to be worked out; however, the Respondent perceives the workplace created by the Appellants as being oppressive and unethical, and she contends that it is this atmosphere that is the connection between her injuries and the Appellants’ profits that is so crucial to the waiver of tort theory of damages. The references to ethics are more descriptive than legally operative per se, but they are certainly a component of the overall claim. To strike the impugned words of paragraphs 57(c) and (d) from her Statement of Claim would be to cut off a line of legal inquiry that at this early stage she is entitled to pursue.

[14] Master Dash was therefore correct in leaving the impugned words in the pleading. The appeal is accordingly dismissed.

[15] The parties may make written submissions as to costs. I would ask that these be sent directly to me within two weeks of the date of this endorsement.

Morgan J.

Date: October 24, 2013