ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-464349

DATE: 2014/07/10

BETWEEN:

Ontario Consumers Home Services Inc.

Plaintiff

– and –

EnerCare Inc., EcoSmart Home Services Inc., EcoSmart Energy Savings Corp., Direct Energy Marketing Limited, Stephen Wells, Patricia Carraretto, Tom Cooper, Shannon Miranda and Tanya Faulds

Defendants

Kevin D. Toyne and Pradeep Chand, for the Plaintiff/Respondent

Stuart Svonkin, Mark Klaiman, Paul Le Vay, Barry Kuretzky and Jennifer Wu, for the Defendants/Moving Parties

HEARD: June 5, 2014

A.J. O’MARRA J.:

[1] The defendants move to strike out the statement of claim of the plaintiff as failing to disclose a reasonable cause of action under Rule 21.01(1) (b); the allegations are scandalous, frivolous and/or vexatious, and otherwise an abuse of the court process, Rules 21.01(3) (d) and 25.11; and for failing to conform to the rules of proper pleadings, pursuant to Rule 25.06 of the Rules of Civil Procedure.

[2] In the statement of claim the plaintiff alleges five causes of action against the corporate and individual defendants: 1) civil conspiracy, 2) unlawful interference with economic interests, 3) trespass to property/chattels, 4) trespass to land, and 5) misappropriation of confidential information (breach of confidence). The plaintiff seeks damages of $10,000,000, jointly and severally against all defendants, and an accounting and disgorgement of the revenues and profits of each defendant.

[3] The principal allegation against the defendants is that they caused the attachment of GPS tracking devices, to a number of the plaintiff’s service vehicles in order to track the location of the plaintiff’s customers and potential customers. Further, it is alleged that the information obtained was then used by the defendants to contact the plaintiff’s customers to dissuade them from contracting with the plaintiff and contract with them, thereby interfering with the plaintiff’s economic interests.

[4] The plaintiff, Ontario Consumers Home Services Inc. (OCHS), is a home service company that, among other things, rents hot water heaters to residential homes. OCHS is a competitor to the defendants, Direct Energy Marketing Limited (Direct Energy) and EnerCare Inc. (EnerCare). EcoSmart Home Services Inc. and EcoSmart Energy Saving Corp. (EcoSmart) are Direct Energy Service providers through EnerCare. Individual defendants, Tom Cooper, vice president, sales and marketing, Shannon Miranda, marketing coordinator and Tanya Faulds, marketing manager are employees of EnerCare. Stephen Wells and Patricia Carraretto are directors of EcoSmart.

The Claim

[5] The plaintiff claims that since March 2012 it has experienced an increase in the cancellation of its customer contracts, and “a dramatic increase in the number of prospective customers who refused to listen to the presentations made by its sales people”.

[6] About mid-June, 2012, OCHS received a call from a former EcoSmart employee to advise them that they were under surveillance. OCHS examined several of its vehicles and discovered GPS tracking devices on two of them.

[7] The plaintiff alleges that EnerCare, EcoSmart and Direct Energy arranged for OCHS’s vehicles to be tracked by a motion activated GPS unit by a private investigation firm, which in turn reported the information as to the duration the vehicles were in motion as well as the location of each stop the vehicle made. The information was then reported by EcoSmart to EnerCare.

[8] The statement of claim states the following:

26. At a lunch meeting attended by a representative of the (investigation) firm and Mr. Cooper, Mr. Cooper directed the firm to report only to EcoSmart and to bill EcoSmart.

27. Mr. Wells and Ms. Carraretto arranged for the resulting information to be delivered, reported and/or accessible to EnerCare. This information is confidential and proprietary to OCHS (the “confidential information”).

28. At the direction of Mr. Wells and/or Ms. Carraretto, EcoSmart and the firm shared the confidential information with Ms. Miranda, Ms. Faulds and Mr. Cooper at EnerCare. In addition to providing access to the confidential information by the firm’s servers, the firm’s private investigators reported directly to Ms. Miranda.

29. The confidential information was misappropriated and used by Direct Energy, EnerCare and EcoSmart to target areas where OCHS’s sales people have been working in an effort to persuade customers to cancel their contracts with OCHS and remain with Direct Energy.

30. Direct Energy, EnerCare and EcoSmart have used the confidential information to inappropriately target areas that OCHS’s sales people were going to visit in an effort to dissuade potential customers from listening to OCHS sales people. Direct Energy used the EcoSmart door-to-door sales people in these efforts in order to maintain an appearance of independence.

31. In taking the above-noted actions, the defendants have acted together with the intent to harm OCHS’s business. They have used unlawful means that they knew, or ought to have known, would cause injury to OCHS.

32. OCHS has suffered damages as a result of the defendant’s conspiracy, the full particulars of which will be provided prior to trial.

[9] The other causes of action, interference with economic interest, trespass to property and land, and misappropriation of confidential information are cited in paragraphs 33 to 35 of the statement of claim:

33. By using the confidential information to persuade customers to cancel their contracts with OCHS, remain with Direct Energy and to dissuade potential customers from listening to OCHS sales people, the defendants have used illegal means to intentionally interfere with OCHS’s economic interests.

34. In order to install the GPS tracking devices used to obtain the confidential information, the defendants must have trespassed onto OCHS’s property.

35 By improperly tracking OCHS’s vehicles, the defendants have misappropriated OCHS’s confidential information to OCHS’s detriment.

Applicable Rules

[10] Under Rule 21.01(1) (b), a court may strike out all or part of a pleading on the basis it “discloses no reasonable cause of action”. An order striking out a claim and dismissing all or part of a claim at the pleading stage should only be granted if it is “plain and obvious” that the claim discloses no reasonable cause of action (see Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959). The Court is to presume the facts as set out in the statement of claim are true and taken as proven. The threshold for sustaining a pleading challenged under Rule 21.01(1) is low, as it is under Rule 21.01(3) (d) where the statement of claim is challenged as being frivolous, or vexatious or otherwise an abuse of the court process. Such an order should be granted only in the clearest of cases.

[11] Under Rule 25 a statement of claim must contain a concise statement of all 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. Rule 25.06(8) provides that:

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.

[12] In Ballard v. Stavro, [1997] O.J. No. 3577 Epstein J., as she then was, relying on Divisional Court in Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1990), 1990 6611 (ON SC), 74 O.R. (2nd) 225 noted the following principles to be applied on a motion to strike a statement of claim:

a) The pleadings must disclose a cause of action founded in law. So long as this criterion is met, the novelty of the cause is of no concern;

b) In determining whether a cause of action exists, the material facts pleaded are to be taken as proved. However, this principle does not apply where the alleged facts are based on assumption or speculative conclusions which are incapable of proof;

c) If the facts, taken as proved, disclose a reasonable cause of action, that is, one with some chance of success, then the action may proceed; and

d) The statement of claim must be read as generously as possible, with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies.

[13] In Balanyk v. University of Toronto, 1999 14918 (ON SC), [1999] O.J. No. 2162 (SCJ) Cameron J. observed that in assessing the adequacy of pleadings under Rules 21.01, 25.06 and 25.11 the purpose of the rules must be born in mind. The pleadings must:

a) Define clearly and precisely the questions in controversy between the litigants;

b) Give fair notice of the precise case which is required to be met and the precise remedy sought; and

c) Assist the court in its investigations of the truth of the allegations made. (See National Trust Co. v. Furbacher, [1994] O.J. No. 2385 at paras. 9 and 10).

[14] The defendants argue that there are three reasons which the statement of claim must be struck in its entirety.

[15] First, the statement of claim does not allege material facts that support each claim made by the plaintiff.

[16] Second, the defendants that they do not know the case that they are to meet. The fundamental rules of pleading require that the pleadings are to frame the issues in a clear and concise manner for the parties and the court. The pleadings are to put the parties on notice as to the case they have to meet. Each corporate and individual defendant has made a demand for particulars. However, most of the responses by the plaintiff have been that “the information is within the knowledge of the defendants” or “the particulars requested are not required by the Rules of Civil Procedure”. Such responses are inadequate and do nothing to allow the defendants to prepared responsive statements of defence.

[17] Third, insofar as the individual defendants are concerned, the plaintiff has not provided any material facts to support any personal liability alleging the individual defendant committed a separate tort or act outside the scope of his or her employment.

[18] I shall deal with each cause of action cited in the statement of claim in turn.

Civil Conspiracy

[19] There are two types of civil conspiracy recognized in Canadian law, 1) “unlawful conspiracy” in which the defendant’s conduct is unlawful, it is directed against the plaintiff, and the defendant knows in the circumstances that injury to the plaintiff is likely to result, and 2) “conspiracy to injure” in which the means used by the defendant may be lawful or unlawful and the predominant purpose of the defendant’s conduct is to cause injury to the plaintiff. (See Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, [2011] O.J. No. 2786 at para. 24 citing Canada Cement Lafarge v. B.C. Lightweight Aggregate, 1983 23 (SCC), [1983] 1 S.C.R. 452 at p.47).

[20] It is unclear as to which type of civil conspiracy the plaintiff alleges in its statement of claim, however, for the purpose of the motion both are assumed to be pleaded.

[21] To allege unlawful conspiracy material facts must be pleaded in support of the following elements:

a) The defendants must act in combination, that is, in concert, by agreement or with a common design;

b) Each defendant’s conduct must be unlawful and in furtherance of the conspiracy;

c) The defendants’ acts must be directed towards the plaintiff;

d) The defendants should have known that in the circumstances injury to the plaintiff would likely result; and

e) Each defendant’s conduct causes injury to the plaintiff.

[22] To make out a claim for conspiracy to injure the plaintiff must plead material facts as outlined with respect to an unlawful conspiracy. However, the overt act(s) of each defendant need not be unlawful, but the predominant purpose of each defendant must be to inflict harm on the plaintiff as noted by Moldaver J.A. (as he then was) in Harris v. Glaxosmithkline Inc., [2010] ONCA 827 at para. 39.

[23] The defendant’s predominant purpose must be to inflict harm on the plaintiff. It is not enough if the harm is the collateral result of acts pursued predominantly out of self-interest. The focus is on the actual intent of the defendant and not the consequences that the defendant either realized or should have realized would result.

[24] To plead civil conspiracy a statement of claim must state with precision and clarity material facts as to:

a) the parties to the conspiracy and their relationship of one to the other;

b) the agreement between or amongst the defendants to conspire, including particulars as to the time, place and mode of agreement;

c) the precise purpose or object of the conspiracy;

d) the overt acts alleged to have been done by each of the alleged conspirators in pursuance and furtherance of the conspiracy, including the time, and place and nature of the acts; and

e) the injury and damage caused to the plaintiff as a result of conspiracy.

[25] Conspiracy is an intentional tort and a serious allegation as such the material facts must be pleaded with heightened particularity. In Ballard v. Stavro, the court stated at para. 31:

Under Rule 25, a statement of claim must contain a concise statement of all the material facts on which a party relies for the claim. The issues in dispute must be sufficiently identified as to enable the parties to plead a response without having to speculate. Where this minimum level of disclosure is not satisfied, the pleading is irregular. In certain circumstances, it may be appropriate to grant leave to amend or order that particulars be granted. In others the pleading is ordered to be struck. In an action such as this where there are serious allegations of conspiracy, the level of disclosure of material facts is required to be higher.

[26] It is insufficient to simply “lump some or all of the defendants together into a general allegation that they conspired”. (See Penson Financial Services Canada Inc. v. Connacher, [2010] O.J. No. 2114 at para. 15; Normart Management Ltd. (1998), 1998 2447 (ON CA), 37 O.R. (3rd) 97 (OCA), and J.G. Young and Son Ltd. v. Tec Park Ltd., [1999] O.J. No. 4066 at 451. )

[27] Further, it was noted in J.G. Young and Sons, that the plaintiff is under a heavy burden as a consequence of seeking to plead such a serious cause of action as that of conspiracy. In Balanyk v. University of Toronto, at para. 29 Cameron J. stated:

If the plaintiff does not, at the time of the pleading, have knowledge of the facts necessary to support the cause of action, then it is inappropriate to make the allegations in the statement of claim.

[28] In reading the statement of claim generously and as a whole together with responses to the defendant’s demand for particulars the necessary material facts in support of a claim of civil conspiracy are lacking in six respects:

1. There are no material facts which support the allegation of an agreement. There are no particulars as to the time, place or mode of agreement amongst the alleged co-conspirators.

2. There is no particularization of the precise purpose of the conspiracy. OCHS alleges that in taking the “above-noted actions, the defendants have acted together with the intent to harm OCHS’s business. They used unlawful means that they knew, or ought to have known, would cause injury to OCHS” (para. 31 Statement of Claim). It is a conclusory statement as opposed to one of material fact.

3. With respect to the conspiracy to injure claim there is no pleading that the predominant purpose of the conspiracy, or conspirators acting together were motivated predominantly to injure OCHS as opposed to advancing a commercial self-interest.

4. The plaintiff in its statement of claim fails to identify with any specificity the overt act of each of the defendants in furtherance of the conspiracy, but rather simply lumps all defendants, corporate and individuals together.

5. The plaintiff has cited a series of independently actionable acts and then added an allegation that the defendants conspired to commit the acts. Any unlawful acts that are independently actionable cannot support a claim of civil conspiracy. In this instance the allegations concerning the GPS surveillance also forms the basis for the claims of unlawful interference with economic interests, trespass and breach of confidence.

6. The plaintiff has failed to plead material facts that would establish, if proven, that the alleged conspiracy caused it to suffer damages distinct from those caused by the other claims alleged. There are no pleadings of material facts of separate harm or damage that flowed from the conspiracy alleged.

[29] The pleadings of conspiracy which simply restate legal principles and bald, or speculative conclusions rather than alleging material facts must be struck as failing to disclose the cause of action.

[30] Each of the defendants, as noted earlier, made demands for particulars as to: a) the nature of the relationship between the various defendants, b) the overt acts allegedly committed by the defendants, c) the loss of business as allegedly suffered by OCHS as a result of each cause of action and, d) the quantum of damages claimed as a result of each cause of action.

[31] In response, with respect to the claim of conspiracy the plaintiff to each request in turn wrote:

a) As to the nature of the relationship between the various defendants, the plaintiff’s response was that the facts “are within the knowledge of the defendants”.

b) With respect to overt acts committed by each defendant, the plaintiff’s response was that the facts “are within the knowledge of the defendants” and that some of the particulars requested “are not required by the Rules of Civil Procedure”.

c) With respect to the loss of business suffered by the plaintiff it replied “the requested particulars are not required by the Rules of Civil Procedure”.

d) As to the $10,000,000 in damages it replied that the claim is against the defendants jointly and severally in respect to the five causes of action.

[32] I am satisfied that the pleading of civil conspiracy is defective and that it does not plead material facts as to the agreement, overt acts alleged to have been done by each of the alleged co-conspirators in pursuance and in furtherance of the conspiracy, or with respect to conspiracy to injure that the predominant purpose of each defendant was to inflict harm on the plaintiff. The pleading of conspiracy as such fails to meet the requirements for the cause of action and must be struck.

[33] Counsel for the plaintiff argued strenuously that its response to particulars did not mean that particulars were not available. If such is the case it is unfortunate that the plaintiff was reticent to provide them. However, in South Holly Holdings Ltd. v. Toronto Dominion Bank, 2007 ONCA 456, [2007] O.J. No. 2445 at para. 6 the Court of Appeal emphasized that “a litigant’s pleadings should not lightly be struck without leave to amend.” It should only be denied in the “clearest of cases”. Where deficiencies may be cured by appropriate amendments and without prejudice to the defendants leave should be granted. There is no evidence of prejudice to the defendants. Accordingly, leave is granted to amend the pleading to correct the deficiencies with particulars, if available, bearing in mind the higher requirement of disclosure for an intentional tort.

Intentional Interference with Economic Interests

[34] Intentional interference with economic interests, like civil conspiracy is an intentional tort and it must be pleaded with “full particulars”. A plaintiff, to advance a claim of intentional interference with economic interest, must plead material facts that, if proven, would establish the following elements:

1. An intention to injure the plaintiff;

2. The interference with the plaintiff’s economic interests must be by unlawful means;

3. The unlawful means are directed at a third party who has an actionable claim based on the defendant’s conduct or would have a claim if it suffered a loss as a result of that conduct;

4. The defendant’s conduct results in economic loss to the plaintiff (see A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, [2014] SCJ No. 12 (SCC) at paras. 5, 23, 24, 26, 28, 37, 42-49, 74, 76).

[35] Shaw J. in AGFA Inc. v. Partners Prepress, [2006] O.J. No. 3373 (SCJ) observed at para. 36:

The pleading of intentional interference with economic relations is an intentional tort that requires full particulars. As noted in Lysko v. Braley (supra), the strict pleading requirements relating to a plea of conspiracy apply equally to a plea of intentional interference with economic relations. The particulars must set out with clarity and precision each of the overt acts which are alleged to have been done in furtherance of the intentional interference with economic relations

[36] Rule 25.06(8) requires that where intention is alleged the pleadings must contain full particulars. In the statement of claim it is alleged that the defendants by using confidential information to persuade customers to cancel contracts with OCHS, remained with Direct Energy and to dissuade potential customers from listening to OCHS sales people the defendants used illegal means to intentionally interfere with OCHS’s economic interests.

[37] In A.I. Enterprises, Cromwell J. observed that the tort of causing loss by unlawful means is available in three party situations in which the defendant commits an unlawful act against a third party and that act intentionally causes economic harm to the plaintiff. The conduct would be “unlawful” if it was actionable by the third party or would have been actionable if the third party had suffered loss as a result of the defendant’s unlawful act. It is a tort that creates a type of “parasitic” liability in a three party situation. It permits a plaintiff to sue a defendant for economic loss resulting from the defendant’s unlawful act against a third party. Cromwell J. cited, as he described it, an old case as an example at para. 24 of the decision:

The defendant, the master of a trading ship, fired its cannons at a canoe that was attempting to trade with its competitor, the plaintiff’s trading ship, in order to prevent it from doing so. The defendant was held liable, Lord Kenyon being of the opinion that these facts supported an action: Tarleton v. M’Gawley (1793), Peake 270, 170 E.R. 153. The plaintiffs were able to recover damages for the economic injury resulting from the defendant’s wrongful conduct toward third parties (the occupants of the canoe) which had been committed with the intention of inflicting economic injury on the plaintiffs.

[38] In this situation, the defendants argue that this is not a situation where the actions of the defendants, as alleged, would give rise to a civil cause of action by the third party (the customers) or would do so if the third party (customers) had suffered loss as a result of the conduct.

[39] The plaintiff has not alleged facts that would establish wrongful acts were directed against a third party, that the third party as a result of wrongful acts had an actionable claim or would have if it had suffered a loss, or how any wrongful acts directed at the third party, the customers caused a specific or concrete economic loss to the plaintiff.

[40] Even accepting that there were wrongful acts committed there is nothing alleged that the third party (the customers) had an actionable cause or would have if it suffered a loss. The only wrongful acts referenced in the statement of claim are alleged to have been directed against OCHS and not third parties (customers). An essential element of the cause of action is lacking. There is no canoe in this claim as counsel for EnerCare aptly put it in submissions.

[41] The acts alleged do not support a claim for unlawful interference with economic interest. There is no cause of action pleaded. The cause of action will be struck without leave to amend.

Prejudicial and Irrelevant Allegations

[42] In this instance, the corporate defendants seek to have struck paragraphs 4, 16-19 as citing irrelevant allegations. Portions of the claim should be struck for offending Rule 25.11(b) under which a pleading may be struck if it is “scandalous, frivolous or vexatious”.

[43] In Rare Charitable Research Reserve v. Chaplin, [2009] 49639 (SCJ) D.M. Brown J. stated at para. 22 the following, which is apposite here:

Finally, the facts pleaded in a statement of claim or defence must relate to the elements of the claim or defence. Portions of a pleading that are irrelevant, argumentative, speculative inserted merely for colour, or that constitute bare allegations or unfounded and inflammatory attacks on the integrity of a party are treated as scandalous and struck out under Rule 25.11(b) as offending the basic principles of pleading: George v. Harris, [2000] O.J. No. 1762 (SCJ) para. 20. So, too, unnecessary historical recitation which is irrelevant to the cause of action or defence in issue should be struck: Lac Des Mille Lacs First Nation v. Canada (Attorney General), [2002] O.J. No. 1977 (SCJ), para. 51.

The whole point of these restraining rules is to keep pleadings focused on their major purpose – to identify the key issues in dispute and the material facts relating to those issues. Put another way, counsel should strive to write a pleading as a short story, not as an effort to match the length of war and peace.

[44] Paragraph 4 alleges a history of the corporate predecessors and various restructurings that led to the current corporate entities, Direct Energy and EnerCare. None of the predecessors are parties to the action. The paragraph is irrelevant and has no connection to the causes of action advanced or relief sought in the statement of claim.

[45] Paragraphs 16 and 17 allege that Direct Energy was the subject of anti-competitive proceedings before the Canadian Competition Tribunal which resulted in a consent order that expired in February 2012. The proceedings referenced have been fully resolved and the order therefrom has been spent. The allegations, both temporarily and substantively contained in these paragraphs of statement of claim are entirely irrelevant and disconnected to the claims advanced in the action. It would appear the paragraphs have been included for colour and possibly to undermine the integrity of Direct Energy. In any event, they are irrelevant to the claims asserted.

[46] Paragraphs 18 and 19 allege that in February and March 2012 Direct Energy announced that it would unilaterally change the terms and conditions of its hot water rental contracts but then abandoned the plan and faced negative public and media reaction. These allegations, in the context of the claims advanced in the action are entirely irrelevant. They appear as well to have been inserted to cast Direct Energy in an unfavourable light and attack its integrity.

[47] I do not accept submissions of plaintiff’s counsel that paragraphs 4 and 16-19 are necessary background to the claims advanced. They amount to an unnecessary historical recitation irrelevant to the causes of action and will be struck.

Trespass to Property (Chattels and Land)

[48] The plaintiff’s claim with respect to trespass to property and land is set out at paragraph 34: “In order to install the GPS tracking devices used to obtain the confidential information, the defendants must have trespassed onto OCHS’s property.”

[49] Simply put the plaintiff’s claim is that the defendants attached GPS tracking devices surreptitiously to a number of its vehicles and obtained information therefrom.

[50] In Hudson’s Bay Company v. White, [1997] O.J. No. 307(Ont.Gen.Div.) Lederman J. at para. 8 referenced the criteria necessary for trespass to chattels:

In Clerk and Lindsell on Torts, 17th ed. (London: Sweet and Maxwell, 1995), at p. 705, the authors define trespass to chattels, or “trespass to goods”, as being concerned with “the direct, immediate interference with the plaintiff’s possession of a chattel”. Halsbury’s offers a similar definition at Vol. 45, para. 1491: “Trespass to goods is an unlawful disturbance of the possession of goods by seizure or removal, or by a direct act causing damage to the goods”.

[51] The defendants’ position with respect to trespass to property (chattels) is that the statement of claim does not contain an allegation that the devices found on the plaintiff’s motor vehicles interfered with the plaintiff’s possession or use of those motor vehicles.

[52] With respect to the claim of trespass to land Lederman J. in Hudson’s Bay at para. 9 states as follows:

Clerk and Lindsell define trespass to land, at p. 837, as consisting of “any unjustified intrusion by one person upon land in the possession of another”. Halsbury’s, Vol. 45, para. 1384 states that “every unlawful entry by one person on the land in possession of another is trespassed for which an action lies…

[53] The elements for the claim of trespass to land are set out by Crane J in Grace v. Fort Erie (Town), 2003 48456 (ON SC), [2003] O.J. No. 3475 (SCJ) at para.86:

The elements of trespass have been described as follows:

• Any direct and physical intrusion onto land that is in the possession of the plaintiff, (indirect or consequential interference does not constitute trespass).

• The defendant’s act need not be intentional, but it must be voluntary.

• Trespass is actionable without proof of damage.

• While some form of physical entry onto or contact with the plaintiff’s land is essential to constitute a trespass, the act may involve placing or propelling an object, or discharging some substance onto the plaintiff’s land can constitute trespass.

[54] The parties referred to a number of trespass cases involving a wide variety of circumstances, such as a motor vehicle towed and impounded, McGrath Auto World Inc. v. Primus Automobile Financial Services, [2010] O.J. No. 436; a vessel that sank after being attached (moored) to the plaintiff’s property preventing its movement and use, North King Lodge Ltd v. Gowlland Towing Ltd., [2005] B.C.J. 2485; a trespass that involved in part the depositing of a dead coyote on the hood of an owner’s truck, Fitzpatrick v. Orwin, 2012 ONSC 3492, [2012] O.J. No. 2731 (S.C.J.).

[55] However, neither party presented cases in which the interference alleged involved the placement or insertion of GPS tracking devices, which is not in and of itself indicative that it is plain and obvious that the claim must fail. Rather, in my view, it tends to lend itself to an acceptance that there is a novel aspect to the claim, even if the attachment or insertion of the device did not prevent use or movement of the vehicles, and de minimus damage. If proved it amounts to an intrusion and direct interference with the plaintiff’s property nonetheless.

[56] In Bank of Nova Scotia v. Dunphy Leasing Enterprises Ltd., 1991 ABCA 351, [1991] 120 AR 241 at p.259 the Alberta Court of Appeal stated actual damage is not required:

Moreover, to recover damages for trespass to goods, a plaintiff is not required to prove actual damage: Leitch and Co. v. Leydon, [1931] AC 90, at 106 (HL). Liability flows from the act of trespass. G.H.L. Fridman, Q.C., in the Law of Torts in Canada, Vol. 1, at 7 (Toronto: Carswell, 1989), explains this principle in this way:

Trespass in all its forms is actionable per se, i.e. without the need for the plaintiff to prove he has sustained actual damage… [t]he absence of any requirement that damage must be shown before an action will lie is an important hallmark of trespass as contrasted with other torts. Torts which are actionable per se such as trespass attract damages at large.

[57] There are material facts alleged that the corporate defendants had knowledge of and involvement with the tracking devices, thereby meeting at a minimum the requirements of pleading trespass to chattels.

[58] The trespass to land pleading is speculative, as evidenced by use of the phrase “the defendants must have trespassed onto OCHS’s property” and is thereby deficient. The trespass to land pleading is struck. However, leave is granted to amend. The plaintiff should be given the opportunity to amend that aspect of the pleading by providing particulars.

Misappropriation of Confidential Information (Breach of Confidence)

[59] In paragraph 34 of the statement of claim it is alleged that the defendants by improperly tracking OCHS’s vehicles misappropriated OCHS’s confidential information to OCHS’s detriment.

[60] In Lysko v. Braley et al, 2006 11846 (ON CA), [2006] 79 O.R. (3rd) 721 at para. 17 the Court of Appeal stated that a claim for breach of confidence requires proof of three elements:

1. The information conveyed was confidential,

2. The information was conveyed in confidence, and

3. The confidential information was misused by the party to whom it was communicated to the detriment of the confider. (See also Lac Minerals v. International Corona, 1989 34 (SCC), [1989] 2 S.C.R. 574 (SCC)).

[61] The position of the defendants is that the information as to where the plaintiff’s motor vehicles attended and how long the vehicles were at specific locations was not confidential information. Rather, counsel submits it was public information, in the sense that the vehicles operated on public streets and attended openly to various locations. Anyone following the vehicles would have been able to obtain the information. Counsel contends that the threshold requirement that the information is confidential has not been met.

[62] The plaintiff contends that it is not public information. The information that was surreptitiously acquired was the information that identified its customers, potential customers and their residential locations, all of which was information conveyed to their drivers in confidence. It is alleged that the defendants misused the information to the plaintiff’s detriment.

[63] In B.W. International Inc. v. Thomson Canada Ltd., [1996] O.J. No. 2697 at para. 16 Kiteley J. referenced the description of the cause of action of a claim for breach of confidence as stated in Saltman Engineering Co. Ltd. et al v. Campbell Engineering Co. Ltd., [1963] 3 All E.R. 413 (CA) as follows:

If a defendant is proved to have used confidential information, directly or indirectly obtained from a plaintiff, without the consent, express or implied of the plaintiff, he will be guilty of an infringement of the plaintiff’s rights.

[64] In this instance, the facts presumed to be true are that the defendants obtained confidential information surreptitiously after which the plaintiff’s contract sales declined to its detriment. If proved, intrusive and unseemly means of espial were employed to obtain information at the expense of the plaintiff.

[65] In my view, reading the statement of claim generously and as a whole it is not plain and obvious that the claims of trespass to chattel and breach of confidence are doomed to fail. As such those causes of action shall not be struck.

Individual Defendants

[66] The individual defendants, Tom Cooper, Patricia Carraretto, Stephen Wells, Shannon Miranda, and Tanya Faulds submit that a $10,000,000 against them personally is frivolous and vexatious. In order for an employee or officer of a corporation to be found personally liable, there must be specific allegations of material fact that would support a finding of individual liability. The leading case is Scotia McLeod Inc. v. People’s Jewellers Ltd. (1995), 1995 1301 (ON CA), 26 O.R. (3rd) 481 (CA) in which the Court of Appeal explained:

The decided cases in which employees and officers and companies have been found personally liable for actions ostensibly carried out under a corporate name are fact specific. In the absence of findings of fraud, deceit, dishonesty or wanton authority on the part of the employees or officers, they are also rare. Those cases in which the corporate veil has been pierced usually involve transactions where the use of the corporate structure was a sham from the outset or was an afterthought to a deal which had gone sour. There is also a considerable body of case law wherein injured parties to actions for breach of contract have attempted to extend liability to the principals of the company by pleading that the principals were privy to the tort of inducing breach of contract between the company and the plaintiff…additionally there have been attempts by injured parties to attach liability to the principals of failed businesses through insolvency litigation. In every case, however, the facts giving rise to personal liability were specifically pleaded. Absent allegations which fit within the categories described above, officers or employees of limited companies are protected from personal liability unless it can be shown that their actions are themselves tortious or exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own. (Emphasis added)

[67] Also, where a plaintiff asserts personal liability of an individual defendant there is a heightened onus at the pleading stage. In Tran v. University of Western Ontario, 2014 ONSC 617, [2014] O.J. No. 407 (S.C.J.) E.M. Morgan J. noted at para. 16 the following:

[D]espite the fact that the onus in a Rule 21 motion is on the moving party to demonstrate that it is “plain and obvious” the claim must fail, Hunt v. T&NPLC, 1990 90 (SCC), [1990] 2 SCR 959, at para. 36, a party who pleads personal liability against the employees of a corporate defendant with which he has had dealings must satisfy a rather stringent test. As the Prince Edward Island Court of Appeal put it in Kay Aviation v. Rofe (2001), 2002 DLR (4th) 683 at para. 25, “[t]he minimum level of material facts in a statement of claim founded on causes of action against an officer, director or employee of a corporation with whom the plaintiff has contracted is very high.

[68] In order to give rise to personal liability the factual underpinnings to the claim must be specifically and sufficiently pleaded.

[69] In this matter, none of the individual defendants are alleged to have exhibited a separate identity or interest beyond their role as employee or director of the corporate defendants. There are no allegations in the statement of claim that any of the individual defendants engaged in any acts or conduct other than that said to have been done in their roles as employees or directors of the corporate defendants. There is no allegation that any of them acted outside the scope of his or her authority.

[70] It would appear, as noted in the circumstances of National Trust Co. v. Furbacher, [1994] O.J. No. 2384 that asserting a claim in the amount of $10,000,000 in which the individual defendants would be jointly and severally liable amounts to either tactical harassment or an inappropriate attempt to get discovery of senior personnel possibly for an impermissible fishing expedition. The claims of personal liability against the individual defendants are an abuse of process.

[71] The claims against all of the individually named defendants shall be struck.

Conclusion

[72] In summary:

1. The claim of civil conspiracy is struck due to the deficiencies in pleading the requisite elements, with leave to amend by providing particulars.

2. The claim of intentional interference with economic interests is struck as disclosing no cause of action, with leave to amend denied.

3. All claims against the individual defendants are struck for failing to plead any material facts that the individual defendants committed acts or that their conduct was “tortious or exhibited a separate identity or interest from that of the company so as to make the act or conduct complained of their own”.

4. Paragraphs 4 and 16-19 in the statement of claim are hereby struck as unnecessary to the narrative or providing context for the claims asserted and as irrelevant.

5. The claim of trespass to land is struck, with leave to amend to provide particulars.

6. It is neither plain nor obvious that the claims of trespass to property (chattels) and breach of confidence are doomed to fail, requiring the plaintiff to be driven from the judgment seat.

[73] In that the results are divided on the motion I make no order as to costs as between the plaintiff and corporate defendants. However, costs are awarded to the individual defendants against whom all claims are struck.

[74] If the parties are unable to agree as to costs then submissions may be made no more than four pages in length together with the bill of costs within 15 days of the release of the judgment and the response no later than 15 days thereafter.

A.J. O’Marra J.

Released: July 10, 2014

COURT FILE NO.: CV-12-464349
DATE: 2014/07/10

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Ontario Consumers Home Services Inc.

Plaintiff

– and –

Enercare Inc., Ecosmart Home Services Inc., Ecosmart Energy Savings Corp., Direct Energy Marketing Limited, Stephen Wells, Patricia Carraretto, Tom Cooper, Shannon Miranda and Tanya Faulds

Defendants

REASONS FOR JUDGMENT

A.J. O’Marra J.

Released: July 10, 2014