SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-13-1230-00
DATE: 2014 06 26

RE: PRADEEP GAUR, APT FLOW TECHNOLOGY INC. and 2081706 ONTARIO v. DIPTI DATTA, UTPAL DATTA, INGE DATTA and M&I POWER TECHNOLOGY INC.

BEFORE: EMERY J

COUNSEL:
J. David Keith, for the Plaintiffs
Constance Olsheski, for the Defendants, Utpal Datta, Inge Datta and M&I Power Technology Inc.

HEARD: March 20, 2014

ENDORSEMENT

[1] The defendants Utpal Datta, Inge Datta and M&I Power Technology Inc. bring this motion under Rule 21.01(1)(b) for an order to strike out the amended statement of claim or to dismiss the action as against them for failing to disclose no reasonable cause of action. Alternatively, they seek an order to strike out all or part of the amended statement of claim as against them as a pleading that is frivolous and vexatious and abuse of the process of the court or otherwise contrary to the rules of pleading under Rules 21.01(3)(d), 25.06 and 25.11 of the Rules of Civil Procedure.

[2] In order to make sense of the allegations contained in the amended statement of claim, it is necessary to set out how various individuals relate to the defendant M&I Power Technology Inc. (“M&I Power”). As two or more parties or corporations have a similarity of names, I shall use an identifier without intending to seem overly familiar or disrespectful to their interests in this litigation.

[3] First, it is important to know that the defendant Dipti Datta of (“Dipti”) was the “registered chairman” of the defendant M&I Power until he left the company in 2009. The plaintiff Pardeep Gaur (“Pardeep”) succeeded him as the president of M&I Power until he departed the company in March 2012. The defendant Utpal Datta (“Pal”) is currently the president of M&I Power. Pal and the defendant Inge Datta (“Inge”) are married to each other, and are both currently directors of M&I Power.

[4] It is also important for the purpose of this motion to know that Dipti is not represented by the counsel defending Pal, Inge and M&I Power in this action. Dipti did not appear personally or through counsel on the motion.

[5] Pardeep is described in the amended statement of claim as the former president of M&I Power and is now the director of both plaintiffs APT Flow Technology (APT) and 2081706 Ontario Inc. (“208”).

[6] Finally, it is important to know that this action is one of two proceedings between the parties. M&I Power commenced an action against Pradeep, APT and 208 in Court File No. CV-12-5725 on October 29, 2012, well before this action was started on March 21, 2013. Pradeep and his companies have defended the action and Pradeep has brought a counterclaim in Court File No. CV-12-5725.

[7] The plaintiffs seek $1 million in damages from Dipti, Pal and Inge for publishing defamatory words to third parties about them, and $1,500,000 in damages against all defendants for intentional interference with economic relations. The plaintiffs base their claim for intentional interference with economic relations against Pal, Inge and M & I Power on the same documents that contain the alleged defamatory words.

[8] The plaintiffs also seek $100,000 for punitive, aggravated and exemplary damages and an interlocutory and permanent order enjoining the defendants from publishing or broadcasting defamatory words in the future.

The Amended Statement of Claim

[9] The plaintiffs allege the following conduct against the defendants in the amended statement of claim to support their claim for defamation in paragraph 7 as follows:

7. On or about July 5, 2012, in July 11, 2012 and on such further dates as the Plaintiff is currently unaware, the Defendants, falsely and maliciously published of and concerning the Plaintiff personally and in the way of his office, profession, calling, trade or business the following defamatory words:

(a) Pradeep’s nefarious activities;

(b) he has no qualms about deceiving;

(c) unprofessional conduct;

(d) coward;

(e) cheater;

(f) fraudster;

(g) despicable individual;

(h) he’s by birth the cheater;

(i) dishonest human being;

(j) misfit;

(k) poor money manager;

(l) wife beater; and,

(m) crook.

[10] The plaintiff (singular), presumably Pradeep, goes on to allege that the words referred to in paragraph 7 were published by way of emailed correspondence to a third-party business associate. Pradeep alleges that the defamatory words published by the defendants and the innuendo arising from them are false, and were maliciously published by the defendants knowing they were false or with careless disregard as to whether they were true or not. He alleges that he has suffered damage to his reputation personally and to his profession, calling, trade or business. He goes on to allege that as a result of this defamation, he has suffered and will continue to suffer damages for which the defendants are liable.

[11] In paragraph 15, the plaintiffs claim that the defendants “acted in concert” when Dipti published the defamatory words. In the alternative, the plaintiffs allege that Dipti was acting as agent for Pal and Inge when he published the defamatory words, or in the further alternative the plaintiffs allege that Dipti was acting on behalf of M&I Power when he published those defamatory words.

[12] Pradeep alleges in the amended statement of claim that these words were published as a consequence of the breakdown of the employment relationship between himself and his former employer, M&I Power. He alleges that the defendants intended to injure him by undermining his professional reputation and were retaliatory in nature. Pradeep pleads that by undermining his professional reputation, the defendants sought to interfere with the ability of all plaintiffs to secure contracts and to develop opportunities. He alleges that as a result of such lawful interference, the plaintiffs have been unable to secure additional contracts and business activity.

[13] The Plaintiffs further allege that the defendants have also induced a breach of contract, although this claim is not at all clear.

[14] As one might expect, counsel for Pal, Inge and M&I Power served a demand for particulars on counsel for the plaintiffs. In fact, counsel for the moving defendants served a form of a demand for particulars on five separate occasions. The two demands relevant to this motion were the first demand for particulars dated April 24, 2013, and the second demand for particulars dated May 8, 2013.

[15] The demand for particulars dated April 24, 2013, required that the plaintiffs provide particulars of the defamation alleged in paragraph 7 of the initial statement of claim. The particulars demanded were to include what words were uttered on July 5, 2012 by whom, to, by what method of publication and production of documents by which such statements were published. The same particulars were demanded for the defamation alleged in paragraph 7 of the statement claim said to have been published on July 11, 2012. Each demand for particulars required the plaintiffs to provide particulars of the publication alleged in paragraph 8 of the statement of claim with respect to those defamatory words.

[16] The plaintiffs served a response to demand for particulars in which they gave the following response to the particulars required with respect to the defamatory words allegedly published on July 5, 2012:

Answer: Dipti Datta uttered the Defamatory Words. The Defamatory Words include those identified in paragraph 7(a)-7(c). The remainder of the particulars are identified in paragraph 8 of the statement of claim.

[17] With respect to the particulars required as to the defamatory words allegedly published on July 11, 2012, the response to demand for particulars stated as follows:

Answer: Dipti Datta uttered the Defamatory Words. The Defamatory Words included those identified in paragraph 7(a), 7(d)-7(m). The remainder of the particulars are identifying in paragraph 8 of the statement of claim.

[18] The response to this demand for particulars contained the following answer to the particulars requested regarding the publication alleged in paragraph 8 of the statement of claim:

Answer: The particulars requested regarding the publication of the Defamatory Words alleged in paragraph 8 of the statement of claim are provided for in paragraph 7 and 8 collectively.

[19] The demand for particulars dated May 8, 2013 again required the details of such particulars requested as to whom, by what method of publication and the production of the documents by which statements were published. The further response to demand for particulars dated June 7, 2013 served by counsel for the plaintiffs repeated the same answers as before to the demand for particulars relating to paragraphs 7 and 8 of the statement of claim.

[20] I consider the demand for particulars and any response to demand for particulars referenced above as materials properly considered on a motion under Rule 21.01(1)(b). Particulars may be requested under Rule 25.10 as particulars of an allegation in the pleading of an opposite party. Being particulars of an allegation in the pleading of an opposite party seems to me to incorporate any particulars provided by a response into an allegation that is found in the pleading and therefore becomes part of that pleading. I also note that Rule 48.03 includes a copy of any demand or order for particulars of a pleading and the particulars delivered in response as necessary contents in a trial record. In my view, the demand for particulars and any response is intended to provide the trial judge with the material facts alleged as an extension of the pleadings.

[21] The plaintiffs amended the statement of claim on March 4, 2014 to add further allegations in paragraphs 7, 8(a) and 8(b) relating to an email that Pal sent to two other individuals, Mr. Ram Patodia and Mr. Debu Bhattacharya on March 22, 2013. I question the appropriateness of amending the statement of claim in the face of an obvious challenge to the propriety of a statement of claim against individuals who had served numerous demands for particulars as of the date the amendments were made. That said, the amendments to the statement of claim make reference to an email from Pal dated March 22, 2013 stating that Pradeep had:

(a) misled his employer; and

(b) misappropriated sizable M&I funds.

ANALYSIS

[22] Under Rule 21.01(2)(b), no evidence is admissible on this kind of motion. Therefore, I must decide this part of the motion without regard to any affidavit filed by the moving party or by any responding party with respect to any other part of the motion.

[23] Rule 21.01(1)(b) reads as follows:

WHERE AVAILABLE

To Any Party on a Question of Law

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. R.R.O. 1990, Reg. 194, r. 21.01 (1).

and the judge may make an order or grant judgment accordingly.

[24] The test for a motion under Rule 21.01(1)(b) is well known. An order to strike out a pleading or to dismiss an action for disclosing no reasonable cause of action should be granted only if it is “plain and obvious” the action as pleaded is certain to fail. That test has consistently been applied since it was articulated by the Supreme Court of Canada in Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 SCR 959 (SCC) as follows:

33 Thus, the test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it "plain and obvious" that the plaintiff's statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be "driven from the judgment seat". Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. Only if the action is certain to fail because it contains a radical defect ranking with the others listed in Rule 19(24) of the British Columbia Rules of Court should the relevant portions of a plaintiff's statement of claim be struck out under Rule 19(24)(a).

[25] In Nash v. Ontario, 1995 2934 (ON CA), [1995] 27 O.R. (3d) 1, also [1995] O.J. No. 4043, the Court of Appeal expanded the basis on which to determine a Rule 21 motion by saying:

11 …On a motion to strike out a pleading, the court must accept the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof, and must read the statement of claim generously with allowance for inadequacies due to drafting deficiencies…

[26] Rule 21.01(1)(a) requires the court to make a prior determination of law raised by the pleadings if that determination “may dispose of all or part of the action, substantially shorten the trial, or result in a substantial saving of costs”. The same principles or tests apply whether the motion is brought under Rule 21.01(1)(a) or (b). Both involve a consideration of the legal principles relating to the civil wrong alleged against any defendant that apply to allegations of fact set out in the pleadings: Toronto Dominion Bank v. Deloitte Haskins & Sells (1991), 1991 7366 (ON SC), 5 O.R. (3d) 417 (Gen. Div.) and MacDonald v. Ontario Hydro, 1995 10628 (ON SC), [1995] O.J. No. 3048 (Div. Ct.). These subrules are particularly effective when there is a discrete question of law that can be determined in isolation from contested issues of fact, rather than legal issues that may be intertwined with factual matters in dispute.

[27] I consider the two emails from Dipti Datta to Saurabh@TritonSynergies.org on July 5, 2012 and July 11, 2012 described in paragraphs 7 and 8 of the amended statement of claim to be incorporated into the plaintiffs pleading and therefore subject to scrutiny for the purpose of this motion. Documents that are specifically referenced in a pleading are taken to be incorporated into the pleading by reference: see paragraphs 29 to 35 in McCreight v. Canada (Attorney General), 2013 ONCA 483, and paragraph 3 in Web Offset Publications Ltd. v. Vickery.

[28] Looking at the email dated July 5, 2012, several things become apparent:

1. As disclosed in the request for particulars, it is written by Dipti Datta. Pal, Inge and M&I Power are not even shown as receiving copies.

2. The email was written to Saurabh. There is no identifier as to what position Saurabh holds in the receiving company.

3. Dipti appears to be writing on an unsolicited basis, suggested by the words “having waited several months to receive a response from your end…”.

4. The first mention of Pal is found in the words “Recently, I have been approached by Pal and Inge asking me to look into this matter, as I am planning to visit India…”. There is no description about what “this matter” involves, or how it relates to Pal and Inge.

5. The email refers to the recipients “rather unpleasant relationship with Pal, since he did not pay you the promised monthly expenses as per the agreement.” This would suggest that any communication from Pal would have little effect on Saurabh, even if made by Pal.

6. The email describes how “they have also furnished me the names of projects consisting of six companies and I have been wondering if I should contact them directly to make them aware of Pradeep’s nefarious activities on those projects…”. This refers to the communication according to Dipti between him and Pal or him, Pal and Inge, without any extension to a third-party.

7. The email from Dipti where he states that “I have been wondering if I should contact them directly” are expressions of Dipti Datta’s thoughts about Pradeep and his character. There is no attribution to Pal, Inge or M&I Power with respect to these thoughts, let alone comments made by them.

[29] In my view, there is no allegation or fact to support the Plaintiffs’ pleading that Pal or Inge acted “in concert” or “collectively” with Dipti in writing this email or importing those words to Saurabh.

[30] It is equally compelling that Dipti describes himself at the end of that email as CEO for M&I Power Tech (Cdn), Inc. This is not the defendant M&I Power Technology Inc. in which Pal and Inge are directors. Dipti does not even write this email in any capacity related to M&I Power.

[31] In the email dated July 11, 2012 to which the plaintiffs refer in paragraphs 7 and 8 of the amended statement of claim, Dipti writes again to Saurabh without any indication that the email was copied to Pal, Inge or M&I Power. This email does not even attribute any conduct or communication to Pal, Inge or M&I Power. There is no suggestion in the pleading they even know of its making or existence. It only refers to a letter that Dipti received that was supposedly written by Saurabh addressed to Pal that Dipti considers to have been written by Pradeep.

[32] The entire case for the defamation claim against Pal, Inge and M&I Power because of words published by Dipti is based on these two emails. If Dipti Datte’s communication, comments and attributions in these emails seem confusing, it is because they are. What they are not are defamatory words for which Pal or Inge can be held accountable.

[33] The law relating to pleadings in a defamation action requires that all material facts be set out under Rule 25.06(1). To make a claim for defamation, pleadings are of particular importance and there are technical rules that must be met. In Laufer v. Bucklachuk, 1999 5073 (MB CA), [1999] 181 DLR (4th) 83 (Manitoba C.A.), the Manitoba Court of Appeal required the plaintiff to plead the full particulars of all the material facts necessary to support the cause of action. This requirement must be strictly complied with to allow the defendant to know the case he or she must meet, and for the trial judge to determine if the evidence at trial meets the necessary elements of the claim for any defence to it. A party will be bound by his or her pleadings.

[34] Pleadings must also be clear and concise in a defamation action: Hancock v. Kawartha Lakes This Week (2005) O.J. No. 2399, at paragraph 4. It has further been held that the litigation should focus on the actual issues in dispute, and not be cluttered by matters that are irrelevant, non-sustainable or peripheral to the claim: Foschia v. Conseil des Ecoles Catholigques, 2009 ONCA 499, at paragraph 35.

[35] In order to prove defamation against a particular defendant, a plaintiff must show on the balance of probabilities that:

(a) the statements were made to a third-party;

(b) the words contained an imputation which tends to lower the plaintiff in the estimation of right-thinking members of society generally; or to expose him to hatred, contempt or ridicule; and

(c) the words must be reasonably understood by others in a defamatory sense. : Khan v. Canada (Attorney General) 2009 CarswellOnt 905, at paragraph 26.

[36] It has been held in Lorch v. McHale, 2008 35685 (ON SC), [2008] O.J. No. 2807, affirmed at 2009 ONCA 161 that the mere fact individuals are copied on an email is an insufficient ground to bring an action for defamation against them. In this case, the emails from Dipti Datta dated July 5 and July 11, 2012 did not even copy Pal, Inge or M&I Power, let alone attribute any specific words to them. I therefore dismiss the action as against Pal, Inge and M&I Power as it relates to a claim flowing from those two emails.

[37] The Plaintiffs make a discrete claim against Pal based on the email dated March 22, 2013, described in paragraph 8(a).

[38] Paragraph 8(b) of the amended statement of claim states that the Defamatory Words contained in each of the correspondences currently known, indicate a concerted and collective effort by the defendants to defame him. That allegation is placed in paragraph 8(b), apparently to be read in the context of the email from Pal dated March 22, 2013.

[39] I do not accept the argument that the allegation at the end of paragraph 8(b) that the email dated March 22, 2013 extends the purported defamation in that email to the previous emails sent by Dipti. The email on March 22, 2013 must be considered in isolation to those previous emails as they relate to Pal. Since only Pal sent that email, there is no claim in respect of it against Inge or M&I Power.

[40] Where the email contains defamatory words from Pal about Pradeep, the pleading in paragraph 8(a) is deficient because Mr. Patodia is not described as knowing or having any relationship with Pradeep or the corporate plaintiffs. Mr. Bhattacharya is described as the managing director of the large international corporation including a Canadian subsidiary which were both potential clients of the plaintiffs. The amended statement of claim does not contain sufficient material facts to meet the pleading requirements of Rule 25.06(1) or the authorities governing the law of defamation. However, since the amended statement of claim alleges that Pal authored this email, the reference to it in paragraphs 7, 8 , 8(a), 8(b) and 15 are struck without prejudice to Pradeep’s ability to make those allegations against Pal with sufficient particulars as part of a counterclaim in action CV-12-5725.

[41] In view of my findings under Rule 21.01(1)(b), it is not necessary to make an order under the alternate grounds for the moti