SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: CV-10-3822-00
DATE: 2014-06-02
RE: Quest Management Services Inc. and Quest Management Systems Inc. v. Quest Management Systems, A Division of 1281068 Ontario Inc. and Eileen Shewen
BEFORE: Barnes, J.
COUNSEL:
Bayo Odutola, Sepal Bonni, for the Defendants
John Gray, for the Plaintiffs
HEARD: December 16, 2013
E N D O R S E M E N T
INTRODUCTION
[1] Quest Management Systems Inc. (“plaintiff”) seeks an adjournment of its motion seeking an injunction restraining Quest Management Systems and Eileen Shewen (“defendants”) from making use of the business name Quest Management Systems or “any licenses thereof”.
[2] Quest Management Systems (“defendant”) seeks an order to strike certain paragraphs of the statement of claim, or in the alternative, an order requiring the plaintiffs to provide particulars as set out in the notice of motion.
[3] The plaintiffs seek leave to amend their statement of claim.
[4] Upon reading the material filed and hearing submissions of counsel, this court orders as follows:
(i) the plaintiffs’ request for an adjournment is denied and the plaintiffs’ motion for injunctive relief is dismissed;
(ii) paragraphs 11 and 13 of the affidavit of Peter Merrill dated October 30, 2013 constitute admissions made by the plaintiffs. The plaintiffs are not granted leave to withdraw these admissions;
(iii)portions of the plaintiffs’ statement of claim are struck with leave to amend;
(iv) the plaintiffs shall provide the defendants with the particulars set out in their notice of motion by June 20, 2014;
(v) the plaintiffs shall file an amended statement of claim by July 15, 2014. Should the plaintiffs fail to comply with the July 15, 2014 deadline, the plaintiffs’ statement of claim is struck with prejudice;
(vi) the parties shall file a joint timetable for the conduct of this matter by July 15, 2014;
(vii) should the parties fail to agree on a joint timetable, each party shall file a proposed timetable with the court by July 15, 2014; and
(viii) If the parties cannot agree on costs, they shall submit a two page costs outline to this court by July 15, 2014.
BACKGROUND FACTS
[5] This is an action for alleged trademark infringement, passing off and unlawful interference with economic interests. The companies carry on the same type of business activities throughout the Province of Ontario.
[6] The plaintiff carried on business as sole proprietor from 1991-2000 under the name Quest Management Services.
[7] In August of 2000 the plaintiff incorporated the business Quest Management Services Inc.
[8] In 2006, the plaintiff stopped using the name Quest Management Services, acquired the domain name www.questmanagementsystems.com and incorporated Quest Management Systems Inc. carrying on business as Quest Management Systems. In 2004 the plaintiff registered the business name “Quest Management Systems” for a period of five years.
[9] Mr. Peter Merrill is the principal of Quest Management Systems Inc. (“plaintiff”) and Ms. Shewen is the principal of Quest Management Systems (“defendant”).
[10] The defendants have not provided much information about their business; however, in an affidavit dated October 20, 2013, Mr. Merrill states that on February 9, 1998, that the defendant, Ms. Shewen, incorporated 1281068 Ont. Inc. and carried on business as Quest Management Systems.
[11] In October, 2010, the plaintiffs filed a statement of claim asserting rights in the unregistered trade-mark/business name “Quest Management Systems”. The plaintiffs claim damages in the amount of $100,000, and aggravated, punitive and exemplary damages of $50,000.
ISSUES
[12] This case raises these broad issues:
(a) Should the plaintiffs be granted an adjournment of the motion seeking injunctive relief?
(b) Should the plaintiffs’ statement of claim be struck for failure to plead material facts?
(c) Do paragraphs 11 and 13 of the Merrill affidavit constitute an admission? If the answer is yes, should the court grant the plaintiffs leave to withdraw this admission?
(d) Should the plaintiffs be granted leave to amend the statement of claim?
ADJOURNMENT OF INJUNCTION MOTION
[13] The plaintiffs seek to adjourn its motion seeking an injunction restraining the defendants from making use of the business name Quest Management Systems “or any licences thereof”.
[14] The plaintiffs seek an adjournment to cross-examine the defendants to obtain evidence to support the application for injunctive relief. Thus the plaintiffs have brought a motion before having a basis to bring it and for the sole purpose of conducting a fishing expedition, i.e. cross-examine the defendant to see if there is a basis for seeking the injunctive relief. The plaintiffs may not frame the statement of claim for the purpose of probing or searching for the cause of action at a discovery: Lysko v. Braley (2006), 2006 11846 (ON CA), 79 O.R. (3d) 721 (C.A.).
[15] The defendants are opposed to the plaintiffs’ motion. On the evidence before me, I conclude that this is nothing more than a fishing expedition. This motion is premature; therefore the plaintiffs’ motion for an adjournment is dismissed. In view of the plaintiffs’ concession that the purpose of the adjournment is to cross examine the defendant, to provide grounds for the motion, the motion itself is premature and is dismissed.
MOTION TO STRIKE
[16] General principles:
(i) A pleading must include a concise statement of the material facts on which the party relies: Rules of Civil Procedure, r. 25.06(1);
(ii) A statement of claim that contains irrelevant and bare allegations; attacks the integrity of the other party; is speculative or demonstrates a complete absence of material facts is scandalous; frivolous or vexatious: George v. Harris, 2000 Carswell Ont 1714 (S.C.), at para. 20; and
(iii) Where a statement of claim fails to disclose at least a minimum of the material facts in support of the claim, the claim may be struck for failing to comply with rule 25.06(1). A motion for particulars is appropriate when rule 25.06(1) has been complied with: Copland v. Commodore Business Machines Ltd. (1985), 1985 2190 (ON SC), 52 O.R. (2d) 586 (S.C.), at p. 589.
[17] The plaintiffs filed and served its statement of claim in October, 2010. On September 25, 2012, the defendants served a Demand for Particulars and Security for Costs in respect of the statement of claim. The plaintiffs delivered an Answer to the Demand for Particulars on October 5, 2012.
[18] On October 11, 2012, the plaintiffs served a Demand for Better Particulars.
[19] On November 14, 2013, the plaintiffs agreed to delete the plaintiff “Quest Management Services Inc.” from the style of cause.
[20] The adequacy of the plaintiffs’ Answer dated October 5, 2013, remains in dispute.
[21] The crux of the defendants’ argument on this motion to strike is that the plaintiffs’ statement of claim is deficient and fails to disclose a reasonable cause of action and therefore the plaintiffs cannot plead the pleadings in its current form.
[22] A statement of claim alleging an infringement or violation of a right should clearly set out the facts which identifies: (i) a defined right recognized in law and belonging to the plaintiff; and (ii) show that the defendant has encroached on that defined right: Dow Chemicals Co. v. Kayon, 1966 CarswellNat 48 (Ex. C.C.), at para. 27.
[23] This is a passing off action. The essential elements of such an action are:
(a) the existence of reputation or goodwill during the relevant time period. The component of “reputation or goodwill” include the existence of a distinctive trade name within the relevant field of activity;
(b) misrepresentation by the defendant resulting in the deception of the public into believing that there is a business reputation or connection between the parties. An important consideration is whether the defendant’s use of the trade name is likely to deceive the public; and
(c) the defendant’s misrepresentation has resulted in actual or will cause potential damage to the plaintiff.
See Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 33 (SCC), [1992] 3 S.C.R. 120 (S.C.C.); Balanyk v. University of Toronto, 1999 CarswellOnt 1786 (S.C.), at paras. 66-67.
[24] I have given careful considerations to the submissions of each of the parties on each argument advanced by the plaintiffs. I do not intend to repeat such argument; instead, I will outline my decision on each point raised.
i. Double Recovery
[25] The court cannot award both an accounting of profits and damages as relief in the same judgment: see Trade-marks Act, R.S.C., 1985, c. T-13, s. 53.2; 3925928 Manitoba Ltd. v. 101029530 Saskatchewan Ltd., 2005 FC 1465, at para. 16.
[26] Paragraph 18 of the statement of claim states:
The plaintiffs have suffered and will continue to suffer damages by reason of the defendants’ unlawful conduct. The plaintiffs are entitled to damages for these losses and are also entitled to an accounting from the defendants of all profits earned as a result of the unlawful passing off and infringing of the trade mark as well as an order requiring the defendants to disgorge to the plaintiffs all profits earned as a result of this conduct.
[27] The plaintiffs are entitled to plead the request for damages as an alternative to a request for accounting and then elect which relief is sought at trial: see 3925928 Manitoba Ltd. However, in this case the plaintiffs are seeking both remedies, not in the alternative but together.
[28] The plaintiffs are clearly seeking both damages and an accounting. As noted in 3925928 Manitoba Ltd, there is no basis in law for such a remedy. Therefore, paragraph 18 of the statement of claim is struck.
ii. Likeness
[29] In paragraphs 1(a)-(c), 13, 14 and 15, the plaintiffs are seeking relief on the basis of exploitation of the names Quest Management Systems or any “likenesses” thereof.
[30] Demonstrating the distinctiveness or unique character of the trade mark is an essential component of passing off actions: CSI Core Specialties Inc. v. Sonoco Ltd, 2001 FCT 801 (F.C.T.D.), at para. 11.
[31] The word “likeness” therefore introduces an unacceptable lack of precision or distinctiveness: see CSI Core Specialties Inc. Both parties agree. Accordingly, all references to “likeness” are struck.
iii. Partial Identification of Trade mark
[32] The defendants assert that paragraph 12 of the statement of claim discloses no cause of action. Paragraph 12 states:
When 1281068 Ontario Inc. states carrying on business in on about 2001, a name search conducted by the defendants would have revealed the name “Quest Management” by the plaintiffs.
[33] I have already referred to the need for precision in identifying a trade mark. The whole point of precision and distinctiveness is that when a party claims to own a trade mark that trade mark must be clearly identified in order to prevent unauthorized use. In this case, reference to “Quest Management” is reference to a partial trade mark. It is “Quest Management Systems” that is in dispute. Simply put, a partial trade mark is not a trade mark at all.
[34] The word “systems” shall be placed after the word “management” in paragraph 12.
iv. Infringement
[35] The term “infringement” is defined in s. 20 of the Trade-marks Act for registered trademarks:
- (1) The right of the owner of a registered trade-mark to its exclusive use shall be deemed to be infringed by a person not entitled to its use under this Act who sells, distributes or advertises wares or services in association with a confusing trade-mark or trade-name, but no registration of a trade-mark prevents a person from making
(a) any bona fide use of his personal name as a trade-name, or
(b) any bona fide use, other than as a trade-mark,
(i) of the geographical name of his place of business, or
(ii) of any accurate description of the character or quality of his wares or services,
in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the trade-mark.
[36] As set out in Section 20 of the Trade-mark Act, registered trademarks create defined legal rights for the owner. An unregistered trade mark owner has no such defined legal right.
[37] Both parties agree that this dispute is over an unregistered trademark therefore, the plaintiffs’ use of the terms “infringement”, “exclusive rights” in paragraph 15, and “infringing of a trade mark” in paragraph 18 is to assert a cause of action which is not available to them. Those words are struck from the statement of claim on consent.
v. “Injury to Business Reputation and Goodwill”
[38] Paragraph 17 of the statement of claim reads:
In particular, the plaintiffs have and will continue to be injured in their business reputation and goodwill because clients will wrongly associate the defendant’s business with the plaintiffs’ business. Furthermore, the plaintiffs will suffer loss of clients and business to the defendant by reason of the defendants’ passing off, in breach of the plaintiff trade mark.
[39] Section 22(1) of the Trade-marks Act makes it clear that an unregistered trade mark owner does not have a cause of action stemming from the alleged interference, erosion and diminution of goodwill - in effect “injury to business reputation and goodwill”: Copperhead Brewing Co. v. John Labatt Ltd., [1995] F.C.J. No. 668 (F.C.), at paras. 26-28.
[40] The plaintiffs rely on 560779 Ontario Inc. (c.o.b. Carey Industries) v. Carey, 2013 ONSC 5607, in defence of their position that this is a permissible pleading. However, in Carey Industries the court was considering whether an injunction should be granted. Carey Industries was not assessing whether a particular pleading was sufficient or available in law.
[41] Paragraph 17 reveals no cause of action and is struck.
vi. Failure to Plead Material Facts
[42] Paragraphs 11 to 18 allege the tort of passing off but fail to plead the material facts in support of the tort.
[43] The plaintiffs rely on paragraphs 5, 6 and 7 of the statement of claim as the material facts in support of the element of the “existence of reputation and goodwill” at the relevant time.
[44] Paragraph 5:
From August, 2000 to April, 2006 the plaintiff, Quest Management Services Inc. carried on business as a provider of ISO 9000 and ISO 14000 consulting services.
[45] Paragraph 6:
On September 10, 2004, the plaintiff, the Quest Management Services Inc. registered the business name Quest Management Systems for a period of 5 years.
[46] Paragraph 7:
On April 13, 2006, the plaintiff Quest Management Systems Inc. was incorporated and since that time, it has carried on business as a provider of consulting services for ISO 14000 and other ISO Management Systems under the name and style of Quest Management Systems.
[47] These paragraphs are descriptive in nature and fail to plead any material facts to demonstrate the existence of goodwill and reputation.
[48] The plaintiffs rely on paragraphs 9, 10, 11, 14 and 19 to illustrate misrepresentation by the defendants.
[49] Paragraphs 9, 10, 11 and 14 contain a chronological description of a sequence of events such as dates of incorporation; dates when the various businesses commenced; and the duration of such business action without providing any material facts illustrating any of the essential component of passing off action.
[50] Paragraph 11 of the statement of claim currently written erroneously refers to “Quest Management Systems” instead of “Quest Management Services”. This is a clerical error which must be corrected.
[51] The facts referred in paragraph 19 indicate an expression by the defendant Ms. Shewen of a willingness to cease using the name Quest Management Services. It is not an admission of misrepresentation nor can such an admission be inferred.
[52] Paragraphs 14 and 15 are conclusory statements that the use of the name “Quest Management Systems” by the defendants is an illustration of the passing off essential element of deception. These statements are conclusory and do not constitute material facts illustrating any of the essential elements of passing off.
[53] The plaintiffs rely on the affidavit filed by Peter Merrill to supplement the statement of claim. An affidavit is not a pleading and cannot be considered in this analysis. Moldaver J.A. stated in Andersen Consulting v. Canada (Attorney General) (2001), 2001 8587 (ON CA), 150 O.A.C. 177 (Ont. C.A.), at para. 34:
[T]he law is clear that unless the facts alleged are based on assumptive or speculative conclusions that are incapable of proof, they must be accepted as proven and the court should not look beyond the pleadings to determine whether the action can proceed.
[54] The facts as pleaded are presumed to be true. However, such a presumption does not convert conclusory statements which do not qualify as material facts into material facts in support of the action.
vii. Actual or Potential Damage
[55] The plaintiffs’ statement of claim must include at least the minimum material facts necessary to demonstrate that deception by the defendants have caused actual or may cause potential damage to the plaintiffs. In effect that the defendants have engaged in action that constitutes an unlawful interference with the plaintiffs’ economic interests.
[56] The constituent elements of such a claim are:
(1) an intention to injure the plaintiff;
(2) an illegal or unlawful interference with the plaintiff’s business or livelihood; and
(3) a demonstration that the plaintiff has suffered economic loss or related injury: Lineal Group Inc. v. Atlantis Canadian Distributors Inc. (1998), 1998 4248 (ON CA), 42 O.R. (3d) 157 (C.A.), at para. 6.
[57] The plaintiffs rely on paragraphs 11, 19(a), 20, 22 and 23 of the statement of claim. All of these paragraphs, with the exception of 19(a) are descriptive and conclusory statements which, when accepted as true, do not constitute material facts in support of the Lineal Group Inc. criteria. The facts described in paragraph 19(a), do not constitute an admission of unlawful interference with the plaintiffs’ economic interests and such an inference cannot reasonably be made on that statement alone. The affidavit of Peter Merrill is not a pleading and cannot be considered in this analysis.
[58] I have found statement of claim deficiencies in these areas: the claim for double recovery; use of the word “likeness”; improper pleading of a claim to a “partial trademark; unavailability of “infringement” as a cause of action; no material facts to illustrate “injury to business reputation and goodwill and a general failure to plead material facts in support of the elements of a passing off action. For all these reasons, paragraphs 5, 6, 7, 9, 11, 20, 22 and 23 of the statement of claim are struck.
PARAGRAPHS 11 AND 13 OF THE MERRILL AFFIDAVIT - AN ADMISSION?
[59] A few days after oral argument was completed, the plaintiffs made a second request for leave to amend their statement of claim and put forth some reworded paragraphs. The practical effect of this is that the plaintiffs seek to withdraw the sworn statements made in paragraphs 11 and 12 of the Merrill affidavit, sworn October 30, 2013.
[60] Paragraphs 11-12 of the Merrill affidavit reads:
On April 13, 2006 the plaintiff Quest Management Systems Inc. was incorporated and since that time, it has carried on business as a provider of consulting services for ISO 9000, ISO 14000 and other Management Systems under the name and style Quest Management Systems.[emphasis added]
Quest Management Services Inc. assigned or transferred its goodwill, including the name; Quest Management Systems to Quest Management Systems Inc. Quest Management Systems Inc. also transferred its business to Quest Management Inc. and ceased carrying on business. Quest Management Services Inc. was named as a plaintiff in this proceeding as the plaintiffs, solicitor….was unaware of the transfer of the business to Quest Management Systems Inc. as described above. [Emphasis added.]
[61] The plaintiffs now wish to amend the statement of claim to include a number of paragraphs including:
Right after Quest Management Systems Inc. was incorporated in 2006, Quest Managements Services Inc. assigned the goodwill in the Quest, Quest Management Services and Quest Management Systems Inc. and Quest Management Systems has continued to use those names to the present.
[62] The proposed amendment is clearly inconsistent with paragraphs 11 and 12 of the Merrill affidavit. According to rule 26.01, a court shall grant a party’s request for leave to amend unless it results in non-compensable prejudice to the other party.
[63] The defendants argue that the contents of the Merrill affidavit constitute an admission which cannot be withdrawn without leave of the court.
[64] Rule 51.05 permits an admission made in a pleading in response to a request to admit or a deemed admission under rule 51.03 to be withdrawn on consent or with leave of the court.
[65] If these affidavit paragraphs constitute admissions then the practical effect of the amendments is to withdraw those admissions. In circumstances where the effect of an amendment will result in the withdrawal of an admission, rule 51.05 takes precedence over rule 26.01. See Petrasovic Estate v. 1496348 Ontario Ltd. (c.o.b. Honest Lawyer Restaurant), 2012 ONSC 4897, at paras. 16-18; Antipas v. Coroneos (1988), 1988 10348 (ON SC), 26 C.P.C. (2d) 63 (Ont. H.C.).
[66] The Court of Appeal in Marchand (Litigation guardian of) v. Public General Hospital Society of Chatham (2000), 2000 16946 (ON CA), 51 O.R. (3d) 97 (C.A.), at para. 77, described how a formal admission may be made:
(1) a statement in pleadings;
(2) failure to respond to pleadings;
(3) by oral statement by counsel at trial;
(4) by agreement of counsel/ letter exchanged by counsel before trial; or
(5) in response a request to admit.
[67] Marchand adopts a broad and purposive interpretation to Rule 51.05. In effect, a party makes an admission by engaging in conduct that unequivocally communicates to the other party that a fact is not in dispute. Applying the Marchand criteria, a statement made under oath is an admission. Therefore the statements in paragraphs 11 and 12 of the Merrill affidavit constitute an admission and are captured by Rule 51.
[68] The party seeking to withdraw an admission must satisfy the test articulated in Antipas v. Coroneos and referred to with approval by the Court of Appeal in Szelazek Investments Ltd. v. Orzech, 1996 490 (ON CA):
(1) the admission must be inadvertent or the product of wrong instructions;
(2) withdrawing must not cause prejudice that cannot be remedied by costs; and
(3) the proposed amendment must raise a triable issue.
[69] In this case, I do not find the admissions to have been inadvertent. The history of these proceedings indicates that these facts have always been the facts the plaintiffs intended to rely on. The statement of claim was filed in 2010; the Merrill affidavit was sworn on October 30, 2013 and it was filed in these proceedings; during oral argument both parties specifically relied on paragraphs 11 and 12 of the Merrill affidavit.
[70] It is apparent that the Merrill affidavit and its contents had been given serious and ongoing consideration by the plaintiffs. In this case, the plaintiffs appear to be tailoring their case to fit the aftermath of oral argument; have filed a statement of claim lacking material facts; and were slow in answering particulars. Under all these circumstances this court cannot accept an inadvertence that arises only after oral argument during which the substance of the admissions were repeatedly considered and relied on by both parties.
[71] Although the action is still at an early stage, the defendants are prejudiced because the plaintiffs made admissions in their written and oral submissions which the defendants relied on. The admissions related to a crucial element of the passing off action.
[72] The plaintiffs maintained the admissions even after it was apparent that the admissions formed a crucial component of the defendants’ defence. The defendants’ case would be severely prejudiced by the withdrawal of the admissions and such prejudice cannot be alleviated by a costs order.
[73] The withdrawal of the admissions will raise a triable issue. The Merrill affidavit clearly indicates that the plaintiffs stopped carrying on business as Quest Management Services Inc. on April 13, 2006; incorporated Quest Management Systems Inc. on that same date; and transferred its goodwill, including the name Quest Management Systems, to Quest Management Systems Inc. A withdrawal of the admissions raises the triable issue of whether the plaintiffs ever ceased carrying on business under the name Quest Management Services, which is a crucial issue in the passing off action.
[74] The plaintiffs have failed to satisfy two of the three components of the test and therefore are denied leave to withdraw the admissions.
LEAVE TO AMEND
[75] In response to the defendants’ motion to strike, the plaintiffs seek leave to amend the statement of claim, and to correct any deficiencies the court may find. This request to amend was made during the argument of the motion and should be distinguished from the request to amend made post oral argument.
[76] The defendants submit this motion should be denied because the plaintiffs do not have “clean hands”, and failed to respond to the defendants’ request for particulars until the motion was argued causing unnecessary delay and expense. The defendants submit that should leave be granted, the plaintiffs should be prohibited from pleading any new material facts.
[77] Rule 26.01 of the Rules of Civil Procedure governs. It states that an amendment shall be granted by the court, unless prejudice will result that cannot be compensated for by costs or an adjournment.
[78] This provision uses mandatory language, and the courts have adopted a liberal approach to interpreting the Rule. Typically, leave is granted unless prejudice would result that could not be compensated for by costs or an adjournment.
[79] Recently, the Court of Appeal in Marks v. Ottawa (City), 2011 ONCA 248, at para. 19, explained:
Although the general rule is that amendments are presumptively approved, there is no absolute right to amend pleadings. The court has a residual right to deny amendments where appropriate: Daniele v. Johnson (1999), 1999 19921 (ON SCDC), 45 O.R. (3d) 498 (Div. Ct.) at paras. 11-15. Further, I would agree that the proper factors to be considered are those first set out in Simrod v. Cooper, [1952] O.W.N. 720 (H.C.J. Master) at p. 721, aff'd at p. 723 (H.C.J.), and quoted with approval in Vaiman v. Yates (1987), 1987 4345 (ON SC), 60 O.R. (2d) 696 (H.C.J.) at p. 698, which can be summarized as follows:
• An amendment should be allowed unless it would cause an injustice not compensable in costs.
• The proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious.
• No amendment should be allowed which, if originally pleaded, would have been struck.
• The proposed amendment must contain sufficient particulars.
[80] In King’s Gate Developments Inc. v. Drake (1994), 1994 416 (ON CA), 17 O.R. (3d) 841 (C.A.), the defendants sought to make extensive amendments to their statement of defence on the eve of trial. The amendments would have required further production, discovery and adjournment of the trial. However, on appeal the decision to grant the amendment was upheld. Despite the fact that unfairness and prejudice to the plaintiff was manifest, the Court held that there was no non-compensable prejudice.
[81] In Ou v. Ferring Inc., 2010 ONSC 1534 (Div. Ct.) the divisional court refused the motion to amend the defence and cross claim to plead that the defendant was an employee of the co-defendant. In that case, the trial was scheduled, original pleading and evidence on discovery were inconsistent with the new position, and co-defendant had conducted its defence and delivered expert’s report based on original pleading.
[82] In King, the amendment was sought on the eve of trial. The crux of that decision was that there was no non-compensable prejudice thus leave to amend was granted.
[83] Unlike in King, in Ou leave to amend was refused under similar circumstances. The court concluded at para. 9, “[t]o allow the Appellants to amend their pleading at this stage because their new counsel has decided to change the Appellants' strategy in the case would cause the Hospital prejudice that cannot be compensated for in costs.”
[84] In this case, unlike in King and Ou, this request to amend is occurring very early in the process: a statement of defence has not been filed and discoveries have not been conducted. I conclude that any prejudice suffered by the plaintiffs can be alleviated by a cost award. Therefore, the plaintiffs are permitted to amend the statement of claim but not to file an amended statement of claim inconsistent with the admissions contained in paragraphs 11 and 12 of the Merrill affidavit of October 30, 2013.
*PARTICULARS*
[85] The parties have come to an agreement on the issue of particulars. Thus, there is no need for me to deal with this issue.
CONCLUSION
[86] These are my reasons for orders I have previously articulated.
Barnes, J.
DATE: June 06, 2014
COURT FILE NO.: CV-10-3822-00
DATE: 2014-06-02
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Quest Management Services Inc. And Quest Management Systems Inc. v. Quest Management Systems, A Division of 1281068 Ontario Inc. and Eileen Shewen
BEFORE: Barnes, J.
COUNSEL: Baayo Odutola, Sepal Bonni, for the Defendants
John Gray, for the Plaintiffs
ENDORSEMENT
Barnes, J
DATE: June 02, 2014