Court File and Parties

CITATION: 2251239 Ontario Inc. et al. v. Fast & Quick Financial Services Inc. et al., 2015 ONSC 1779

COURT FILE NO.: CV-13-479471

DATE: 20150327

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2251239 Ontario Inc. and Ahmad Abdul-Hamid, Plaintiffs

AND:

Fast & Quick Financial Services Inc., Momentum Infotech Ltd., Momentum Infotech Inc., Nirpreet Thind a.k.a. Nirpreet Singh Thind and Sattinder Singh, Defendants

BEFORE: Carole J. Brown, J.

COUNSEL: Shahzad Siddiqui, for the Plaintiffs

Scott E. Hamilton, for the Defendants

HEARD: March 10, 2015

ENDORSEMENT

[1] The moving party defendants bring this motion for an Order:

a. dismissing the statement of claim on the grounds that it is plain and obvious that the statement of claim does not disclose a reasonable cause of action, is an abuse of process and/or is issue estopped against some or all of the defendants; and

b. alternatively, for an Order striking certain paragraphs of the statement of claim on the grounds that it is plain and obvious that some paragraphs in the statement of claim do not disclose a reasonable cause of action and lack particularity against the defendants.

[2] At the outset of the motion, the plaintiff conceded the following:

a. that paragraphs 23 through 25 of the statement of claim, alleging breach of fiduciary duty, should be struck as there is no breach of fiduciary duty applicable to the facts and issues in this action;

b. that the defendants, Momentum Infotech Inc., Momentum Infotech Ltd. and Singh should be struck; and

c. that as regards the allegations of conspiracy set forth at paragraphs 26 through 28 of the statement of claim, they should be struck with leave to amend.

[3] As regards the moving parties' grounds as set forth at paragraph 1(b), concerning lack of particularity, I advised counsel that as regards particulars, the proper approach would be a Demand for Particulars, and not a motion to strike.

The History of These Proceedings

[4] This action was commenced on May 1, 2013 by issuance of the statement of claim. The plaintiffs seek damages in the amount of $600,000 for alleged breach of contract, breach of fiduciary duty, loss of opportunity, deceit, misrepresentation, conspiracy and unjust enrichment as regards purchase of a truck wash business from the corporate defendant, for which the individual plaintiff provided a personal guarantee registered on his home.

[5] A previous action had been brought by Fast & Quick as against the defendants on December 12, 2011 for non-payment of rents pursuant to a sublease in relation to the said truck wash. As regards that action, default judgment was obtained against the individual plaintiff, Ahmad Abdul-Hamid , on the guarantee in the amount of $50,101.50.

[6] In this regard, the moving parties allege that the action should be struck as it is an abuse of process, given the previous action brought by Fast & Quick and the default judgment obtained against the individual plaintiff. Having read the statements of claim in both actions, I do not find that they relate to the same matters, the action commenced in 2011 involving a sublease, and the action in 2013, which is currently before this Court involving, in essence, a purchase and sale of the truck wash. While there may be some overlap, I do not find that there is an abuse of process as regards the entire action which would justify striking of the entire action.

[7] However, it is clear that portions of the statement of claim, as presently pleaded, should be struck on the grounds that they are either not tenable at law, or not supported by pleadings of the material facts regarding the essential elements of the tort pleaded.

Rule 21.01(1)(B): The Law

[8] Pursuant to Rule 21.01(1)(b), a party may move before a judge 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.

[9] The test for determining whether a pleading should be struck is whether, assuming the facts as stated in the statement of claim can be proved, it is plain and obvious that no reasonable cause of action is disclosed. The pleading should not be struck if there is a chance that the plaintiff may succeed. Neither the 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 should the relevant portions of the statement of claim be struck.

[10] The test for striking a statement of claim at the pleadings stage is stringent, with a difficult burden for the defendant to meet. The statement of claim is to be read generously to allow for drafting deficiencies. If the claim has some chance of success, it must be permitted to proceed. The threshold for sustaining a pleading is not high.

[11] However, the pleadings must disclose a cause of action founded in law.

The Analysis

[12] As regards the allegations of breach of contract against Thind, a principal and/or directing mind of Fast & Quick, I find that the claim for inducing breach of contract brought against a corporate director or officer of the corporation cannot be maintained. A claim for inducement of breach of contract cannot proceed against a corporate director or employee where a claim for breach of contract lies against the corporation: ADGA Systems International Ltd. v Valcom Ltd., (1999), 1999 CanLII 1527 (ON CA), 43 O.R. (3d) 101 (C.A.) citing with approval Said v Butt [1920] 3 K.B. 497; Aspiotis v Coffee Time Donuts Inc., [1995] O.J. No. 419. Accordingly, the cause of action as regards Thind inducing breach of contract is to be struck without leave to amend. While the same allegation was made as against Singh, the plaintiff has conceded that the action as against Singh should be struck, and I do not not therefore have to determine that issue, other than to state that that allegation is also to be struck without leave to amend.

[13] As regards the allegations of unjust enrichment at paragraphs 29 and 30 of the statement of claim, the elements of that tort, namely an enrichment of one party; the corresponding deprivation of another party; and no juristic reason for the enrichment have not been pleaded, other than in bald terms. As a result, I order that paragraphs 29 and 30 be struck with leave to amend.

[14] As regards the allegations of loss of opportunity set forth at paragraphs 31 to 33, it is the position of the moving parties that the plaintiffs are actually pleading loss of the opportunity to profit from the business due to the alleged wrongful conduct of the defendants, which, at law, is a pleading of interference with economic relations. As such, it is the position of the moving parties that the elements of the tort of interference with economic relations have not been pleaded.

[15] Based on the pleading itself, it is difficult to determine whether the claim, which states that the plaintiffs "lost the opportunity to profit from the Business" is for lost opportunity or interference with economic relations. Paragraphs 31 to 33 should be amended to make this clear. If, indeed, the allegation is as suggested by the moving parties, namely interference with economic relations, the appropriate elements of that tort must be pleaded. If it is loss of opportunity, greater care should be had to outline the actual cause of action and allegations as against the defendant.

[16] I note that the factum of the plaintiffs was prepared and filed in large part as a factum regarding a "Motion for Summary Judgment" as regards the companion action, which was never appealed. There is no motion for setting aside the default judgment nor for summary judgment before this Court, and accordingly, I make no determination in that regard. In terms of shedding some light on the pleading as regards loss of opportunity, this is not addressed in the responding party's factum.

[17] In conclusion, I order that:

a. paragraphs 23 through 25 of the statement of claim, alleging breach of fiduciary duty, are to be struck as there is no breach of fiduciary duty applicable to the facts and issues in this action;

b. the defendants, Momentum Infotech Inc., Momentum Infotech Ltd. and Singh are to be struck, and any allegations as regards those parties specifically set forth in the statement of claim should be struck;

c. as regards the allegations of conspiracy set forth at paragraphs 26 through 28 of the statement of claim, they are to be struck with leave to amend.

d. the allegations as regards inducing breach of contract by the directing mind of Fast & Quick are to be struck without leave to amend;

e. the allegations as regards unjust enrichment set forth in paragraphs 29 and 30 of the statement of claim are to be struck with leave to amend; and

f. as regards loss of opportunity, paragraphs 31 to 33 are to be amended as indicated at paragraph 15 above.

Costs

[18] The parties have both provided their bills of costs. The moving party has been substantially successful in its motion and is entitled to costs. I note that included in the bill of costs of the moving party are the costs of motions held October 17, 2014 and December 11, 2014. However, in both of those motions, costs were awarded by the motions judge for a total amount for the two motions of $3,500 which amount remains outstanding. Those costs are to be paid by the plaintiffs forthwith. As regards today's costs, I award costs to the moving party on a partial indemnity basis in the total amount $7,500.

Carole J. Brown, J.

Released: March 27, 2015