Oz Merchandising Inc. v. Hartill et al., 2014 ONSC 1101

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO: 12-55404 and 12-55405
DATE: 2014-03-10

RE: Oz Merchandising Inc., Plaintiff Ottawa Court File No. 12-55404

AND:

Bruce Hartill and West Ottawa Soccer Club Inc., Defendants.

AND RE: Oz Merchandising Inc., Plaintiff Ottawa Court File No. 12-55405

AND

West Ottawa Soccer Club Inc., Defendant

BEFORE: Honourable Justice Timothy Ray

COUNSEL:
Stephen Victor, Counsel for Oz Merchandising Inc.
Eric Lay, Counsel for Bruce Hartill
Shawn O’Connor, Counsel for West Ottawa Soccer Club Inc.

HEARD: February 18, 2014 at Ottawa

ENDORSEMENT

1The plaintiff seeks an order:

a. for consolidation or for an order that actions 12-55404 and 12-55405 be tried together;

b. adding Omur Sezerman as a plaintiff and amending the Statement of Claim to add a claim alleging damages and particulars for defamation as against Hartill in action 12-55404;

c. adding a claim for damages to the Statement of Claim as against West Ottawa Soccer Club (WOSC) for breach of its duty of good faith in action 12‑55405;

d. amending the Statement of Claim in action 12-55405 to add a number of additional paragraphs; and

e. costs.

2Action 12-55404 was commenced in September 2012 claiming damages of approximately $500,000 against WOSC and its former employee Hartill. A sister action, 12-55405, was commenced the same day against only WOSC. Oz was in the business of renting time and facilities for soccer at its indoor facility. WOSC had entered into an agreement to rent its facilities pursuant to an agreement. At the time, Hartill was an employee of Oz and had negotiated the agreement with WOSC. A term of Hartill’s employment agreement with Oz contained a non-solicitation and a non-competition provision after termination of his employment.

3In both actions, Oz seeks damages arising out of Hartill’s departure from it and his employment with a competitor, as well as WOSC’s alleged breach of its agreement to rent facilities from Oz. It appears that Hartill left Oz for employment with a competitor, and that WOSC terminated its arrangement with Oz in favour of a new agreement with the competitor.

4For the reasons that follow, the relief for an order that the actions be tried together is granted. However the amendment claiming damages for defamation and for damages for breach of the duty to act in good faith is dismissed; and the amendment adding certain paragraphs is granted in part.

[5]

Trial Together

In actions 12-55404 and 12-55405 the parties were in agreement for an order that they be tried together. Discoveries have taken place, however in light of Oz’s motion to amend its pleadings and add a plaintiff, consolidation is not appropriate at this time. Furthermore, it is more appropriate for the trial judge to deal with the manner and order of presentation of the evidence. He or she may be invited to make other orders about the conduct of the trial. The issues may be more defined by then. An order is therefore to go that both actions be listed for trial one after the other. This order should be included in the trial record when the trial records are passed.

[6]

Defamation Claim (Action 12-55404)

In action 12-55404, OZ seeks to add Omur Sezerman as a plaintiff in order to assert a claim for damages for defamation, and to add the following paragraphs to his proposed Fresh Amended Statement of Claim:

2. The Plaintiff, Omur Sezerman, claims as against the Defendant, Bruce Hartill, damages in the sum of $50,000.00.

3. In or around December 2012, OZ learned that Hartill was making defamatory statements to third parties, including specifically to clients of Oz, which statements included allegations that Sezerman mistreated Oz staff.

4. Oz complains of these statements and states that the statements complained of were false and defamatory of Oz, as well as of Sezerman, in their natural and ordinary meaning, including their implied meaning, and were spoken with malice.

5. These statements were intended to damage and disparage the reputation of Oz and Sezerman, and these statements did damage and disparage the reputation of Oz and Sezerman.

6. As a result of Hartill’s statements, a number of Oz clients have chosen to leave the Oz Dome.

7The pleading is so devoid of particularity that it would not survive a motion to strike. The proposed claim must therefore fail. Since Sezerman is proposed to be added for the purpose only of the defamation action, then that part of the relief must fail also. It is not for the plaintiff to embark on a fishing expedition to see if the particulars can be obtained. Either Oz and Sezerman are aware of the defamatory statements or they are not. The proposed pleading suggests they are not. The only evidence produced on this motion was a copy of a letter from a ‘Shannon Rampton’ addressed to OZ who after voicing a number of complaints as being her reason for leaving for the competitor said “Last, but not least, we did not appreciate the way Omar treated his staff.”

8While it is accepted as a general rule that amendments be presumptively approved, there is no absolute right, particularly when it is clear that if the amendment had been originally pleaded, it would not have survived a motion to strike.¹ Claims for defamation require a higher level of compliance with the requirement for particularity. For example, a plaintiff who does not know the exact words complained of must demonstrate that there was an utterance or writing from the defendant. A plaintiff must also show that the “emanation contained defamatory material of a defined character of and concerning the plaintiff.”²

9The plaintiff has failed to meet the bare minimum of a pleading for defamation, and the proposed amendment to action 12-55504 is dismissed.

[10]

Breach of Duty of Good Faith and Amendments (Action 12-55405)

In action 12-55405, Oz seeks to add as against WOSC a claim in the amount of $100,000 for breach of duty of good faith. It seeks to add a number of paragraphs in support of these additional claims, as well as additional allegations concerning the breach of contract claim.

11The Claim (paragraph 1(a)) currently claims damages in the amount of $174,354.00 for breach of contract. The amendment proposes to add paragraph 1(b) as a claim for damages for breach of duty of good faith.

12The claim for damages as proposed in paragraph 1(b) is dismissed. The law is well settled that a claim for breach of a duty of care in a contractual setting cannot stand alone but is subsumed within a claim for damages for breach of contract.³ The next issue is whether the proposed additional paragraphs are permitted to be added.

13While I accept that a good deal of the allegations in proposed paragraphs 13, 14, 15, and paragraphs 21, 22, 24, 25 and 26 offend the rule against pleading evidence in lieu of material facts, I am satisfied that the proposed paragraphs do not reach the level of embarrassing or irrelevant.

14The balance of the proposed amendments – paragraphs 30 through 33, 36 and 37 – are intended to support the proposed added claims. Whether or not the added claim is permitted, the plaintiff is required to plead only material facts and not the evidence to prove the material facts. The rule is to prevent prolixity, and to confine the pleading to a pleading to support the claims. A good portion of these paragraphs have taken on the tone of an opening or closing statement. I am told by counsel that a jury notice was served. It seems even more important that the pleading be properly drafted. The claim to add paragraphs 30 to 33 to the proposed amended statement of claim is therefore dismissed on the ground that it pleads evidence, and is embarrassing and immaterial.⁴

15The proposed paragraph 36, except for the final words “and has breached its duty to exercise its rights under the agreement honestly, fairly and in good faith”, is allowed. While it is not particularly well drafted, it appears to amplify the claim for breach of contract.

16The proposed paragraph 37 alleges breach of a duty by WOSC “to exercise its rights under the contract honestly, fairly and in good faith.” The plea is inconsistent with the principle that an independent claim for a breach of duty cannot stand alone and cannot be permitted to stand.⁵ The proposed paragraph 37 is therefore dismissed. The balance of the proposed amendments is not challenged by the other parties.

[17]

Summary

In summary, actions 12-55404 and 12-55405 are ordered listed for trial one after the other rather than consolidated. The claim to add a claim for $50,000.00 for defamation to action 12-55404 is dismissed. The claim in action12-55405, to add a claim in the amount of $100,000.00 for breach of duty of good faith, is dismissed. The proposed amendment to add paragraphs 13-15, and 21, 22, 24‑26, and 36 (in part) is allowed. The proposed amendment to add paragraphs 30‑33 and 37 is dismissed.

[18]

Costs

If the parties cannot agree on costs, they may make written submissions of two pages or less within 15 days, with a further 5 days for reply.

Honourable Mr. Justice Timothy Ray

Date: March 10, 2014

COURT FILE NO.: 12-55404

DATE: 2014-03-10

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: OZ Merchandising Inc., Plaintiff

AND:

Bruce Hartill and West Ottawa Soccer Club, Defendants

(Ottawa Court File No. 12-55404)

AND RE: Oz Merchandising Inc., Plaintiff

AND:

West Ottawa Soccer Club, Defendant

Ottawa Court File No. 12-55405

BEFORE: Honourable Justice Timothy Ray

COUNSEL: Stephen Victor, Counsel for OZ Merchandising Inc.

Eric Lay, Counsel for Bruce Hartill

Shawn O’Connor, Counsel for West Ottawa Soccer Club

Footnotes

1. 1Marks v. Ottawa (City), 2011 ONCA 248, at para. 19
2. 2Lysko v. Braley, 2006 11846 (ON CA), 79 O.R. (3d) 721 (ON CA), at para. 101
3. 3Jaffer v. York University, 2010 ONCA 654, at para. 49 (Karakatsanis J. A. as she then was)
4. 4Rule 25.06, Rules of Civil Procedure.
5. 5Note 3.