Court File and Parties

COURT FILE NO.: CV-15-534821 DATE: 20160425 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

GARY WATSON Plaintiff – and – TROJANONE LTD., MARK HARRISON and GRAHAM LEE Defendants

Counsel: Lia Moody for the Plaintiff Peter-Paul E. Du Vernet for the Defendants

HEARD: April 19, 2016

PERELL, J.

REASONS FOR DECISION

[1] In an employment law action commenced as a simplified procedure, although for amounts in excess of the monetary limits for a simplified procedure, Gary Watson sues TrojanOne Ltd., his former employer, Mark Harrison, who is TrojanOne’s President and CEO, and Graham Lee, who is TrojanOne’s Chief Creative Officer. Mr. Harrison and Mr. Lee move to have the action against them struck out and dismissed.

[2] Mr. Watson commenced his action on August 20, 2015. The Defendants have yet to deliver a Statement of Defence. On September 3, 2015, the Defendants served a Demand for Particulars with approximately 100 questions. On September 18, 2015, Mr. Watson provided a Response to Demand for Particulars. Some questions were answered with others refused with the explanation that the question was improper as a fishing expedition or as a request for evidence. The Defendants took the position that the Response was inadequate, and despite further particulars later being provided, the Defendants persist in demanding still more particulars.

[3] Messrs. Harrison’s and Lee’s motion to strike is a variant of the well-worn pleadings motion argument that when the plaintiff’s cause of action (which in the immediate case is a constructive dismissal claim) is against a corporation (which in the immediate case is a corporate employer), the plaintiff does not have a claim against the officers of the corporation (which in the immediate case are Messrs. Harrison and Lee).

[4] This venerable argument is based on the law associated with the separate legal status of a corporation from its owners and managers and with the Rule from Said v. Butt, [1920] 3 K.B. 497. At common law, the officers of a corporation are not liable for what they do within their authority and on behalf of their corporation, but subject to the Rule in Said v. Butt, they are liable to the plaintiff in an action against the corporation, if there is some conduct on the officer’s part that is either tortious in itself or that is independent misconduct from that of the corporation: Normart Management Ltd. v. West Hill Redevelopment Co. (1998), 37 O.R. (3d) 97 (C.A.); ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 26 O.R. (3d) 481 (C.A.); Schembri v. Way, 2012 ONCA 620.

[5] The Rule in Said v. Butt concerns the tort of inducing breach of contract, and the rule is that in the absence of separate conduct which is mala fide and against the best interests of the corporation, a corporate officer or employee may not be sued for inducing breach of contract where a claim for breach of contract is available against the corporation: Hino Motors Canada Ltd. v. Kell, 2010 ONSC 1329 at para. 23.

[6] Thus, an officer of a corporation can be separately liable, if the officer engaged in his or her own tortious conduct or for his or her own purposes independent of the purposes of the corporation; however, the pleading against the officer of a corporation must address specifically the cause of action asserted against the officer and explain why he or she is being sued separately from the corporation: Schembri v. Way, supra at paras. 29-32.

[7] I shall set out the pleadings that focus on Messrs. Harrison’s and Lee’s conduct below. Before doing so, I foreshadow to say that my reading of the Statement of Claim does not reveal any reason to strike out the claim against them. As I read Mr. Watson’s Statement of Claim, TrojanOne is being sued for breach of an employment contract, but Messrs. Harrison and Lee are not being sued for the tort of inducing the breach of that employment contract; rather they are being sued for misconduct on their own part that is either tortious in itself or is independent misconduct from that of the corporation. As pleaded, Messrs. Harrison’s and Lee’s conduct was within the scope of their employment, for which TrojanOne is responsible, and Messrs. Harrison’s and Lee’s conduct is also independently actionable.

[8] For present purposes, which include determining the motion to strike and also the request for particulars, the pertinent paragraphs of the Statement of Claim are paragraphs 1-5, 9-12, 15-22, and 40-42, which state:

1. The plaintiff claims against the defendants or any of them: (a) $100,000.00 for damages for wrongful dismissal during the applicable notice period; (b) $10,000.00 for damages for the loss of group benefits during the applicable notice period, the particulars of which will be provided prior to or at trial; (c) $50,000.00 for damages for breach of contract; (d) $100,000.00 for damages for breach of the Ontario Human Rights Code, R.S.O. 1990 c. H.19, and/or the Occupational Health and Safety Act, R.S.O. 1990, c. 0.1, for bullying, harassment and the creation of a poisoned work environment; (e) $50,000.00 for damages for breach of the defendants' common law duty to act honestly in the performance of their contractual obligations owed to the plaintiff; (f) $10,000.00 for damages for mental distress; (g) $250,000.00 for aggravated and punitive damages;

The Parties

2. The plaintiff, Gary Watson ("Gary"), is 51 years of age. Gary and his family reside in the City of Oakville, in the Province of Ontario.

3. The corporate defendant, TrojanOne Ltd. (the "defendant" or "TrojanOne"), is a company incorporated pursuant to the laws of Ontario. TrojanOne is primarily engaged in the business of, inter alia, marketing and public relations, and has its headquarters in Toronto, Ontario. The defendant is a national enterprise, with offices in both Montreal, Quebec and Vancouver, British Columbia.

4. The individual defendant Mark Harrison is the President and CEO of TrojanOne. The individual defendant Graham Lee is the Chief Creative Officer of TrojanOne.

Background

5. Gary commenced employment with the defendant on or about August 11, 2014. He was employed in the executive capacity of Executive Creative Director, reporting directly to the defendant's President. ….

Harassment and Creation of Poisoned Work Environment

9. In or around October 2014, shortly after Gary had commenced employment, he began to be subjected to a pattern of harassing and bullying conduct by the defendant's senior management, Mark Harrison ("Harrison") and Graham Lee ("Lee").

10. Gary states, and the fact is, that from October 2014 to on or about June 3, 2015, the individual defendants engendered a poisoned work environment by making racially insensitive, homophobic and sexist remarks, and by engaging in abusive and harassing behaviour, which included but was not limited to the following: (a) October 2014 - Gary was approached by Harrison, who said, "I heard you shit the bed at Mattel", or words to that effect, in reference to a client meeting a day earlier. When Gary asked Harrison if he had read the presentation deck, Harrison threatened him. (b) November 2014 - In a leadership team meeting, Gary queried why the defendant did not have a standardized template for presentations. In response to Gary's reasonable question (a question which, Gary states, he was required to ask in his executive position), Lee berated Gary in front of the leadership team, asking: “'What fucking right do you have to come in here after 3 months and start criticizing our decks?" Lee then launched into an abusive and intimidating tirade. (c) Late November 2014 - During a one-on-one meeting with Harrison that was completely unrelated to Gary or Gary's performance as Executive Creative Director, Harrison advised Gary that one of his former clients at a previous agency had warned Harrison from touching Gary with a ''ten foot pole". (d) Late 2014 - During a discussion on a Nissan project, Harrison made the comment, "Everyone knows Asians can't drive", or words to that effect, with an Asian employee in attendance. (e) January 2015 - During a status meeting with senior staff, the Creative Traffic Manager (who is Jewish) advised that she was able to save money on an industry award show. Harrison responded, in front of senior staff, that that was "very Jewish" of her. (f) Early February 2015 - During a status meeting with senior staff, Harrison berated an employee for not having changed his voicemail from the one that he was using over the holiday period, stating "Change your fucking voicemail", or words to that effect. With respect to the fact that this employee had mentioned that he was away with his girlfriend over the holiday period, Lee remarked that he only did so in order to ensure that those who called knew he ''wasn't gay''. (g) In a team meeting with several women present, Harrison said "I'm Jewish in the front and black in the back", referring to his genitalia.

11. In addition to the above, Gary states, and the fact is, that his role as Executive [Creative Director] was consistently undermined by Harrison, who regularly belittled him in front of senior agency personnel.

12. On account of the poisoned and hostile work environment that Gary was forced to work within, Gary began to suffer from severe anxiety and depression, for which he sought and received medical treatment and therapy.

Constructive Dismissal

15. The harassing, insensitive and illegal conduct of the defendant's senior management culminated in the events of June 3, 2015. Gary was a witness to a boardroom meeting, although not participating directly, where several other TrojanOne employees, including Lee and the Creative Traffic Manager, were seated around a table. At one point in the meeting Lee threatened those around the table that "I like to beat people down until they leave". Gary was appalled by this. As a direct result of spending the previous 9 months in an increasingly poisoned and hostile work environment, Gary sent a private text message to the Creative Traffic Manager questioning the appropriateness of Lee's comment. Lee managed to read this private message and charged towards Gary's desk. He purposely got as physically close to Gary as possible yelling "If you have something to say to me, say it to my face you little fucking prick". When Gary requested that they go somewhere private to speak, Lee replied "I am fed up with your fucking bullshit" and walked away. This altercation took place in front of a number of employees that reported directly to Gary.

16. As a result of this public altercation in which Gary was physically threatened and verbally abused, Gary was unable to continue working and was forced by the defendants' conduct to take a leave of absence immediately for medical reasons.

17. Gary states, and the fact is, that the events of June 3, 2015, coupled with the poisoned and hostile work environment created by the individual defendants over the prior 9 months of Gary's employment, clearly demonstrated that TrojanOne no longer intended to be bound by its contract of employment with Gary.

18. Gary pleads that the defendant failed to adequately prevent and/or respond to harassment in the workplace, and that, in fact, the poisonous work environment was perpetuated by the very individuals charged with keeping the workplace free from harassment. On account of the fact that these individuals were also Gary's direct superiors, Gary felt increasingly uncomfortable, anxious and distressed as a result of their actions. After 9 months of harassing and hostile behaviour culminated in being publicly berated and sworn at in front his peers and subordinates, Gary no longer believed that a future employment relationship was tenable.

19. Gary therefore pleads that the defendants' actions and omissions as described above contravened essential terms of his employment, resulting in a constructive dismissal.

20. Gary pleads that [at] all material times the individual defendants were acting within their capacity as agents of the corporate defendant. Accordingly, TrojanOne is vicariously liable for damages caused to Gary by their misconduct. In the alternative, if the individual defendants or either of them was acting outside the scope of their duties and responsibilities for the corporate defendant, then Gary pleads that they are individually liable for any damages caused to him by their misconduct.

21. Gary specifically pleads that there were no terms of employment, express or implied, which allowed the defendants to treat Gary in the way that they did, including their creation, tolerance, and/or exacerbation of bullying and a toxic work environment.

22. As a result of the conduct of the defendants, as described above, it became impossible for Gary to continue his employment and he had no choice but to treat his employment as being terminated.

Aggravated and Punitive Damages

40. Gary pleads that the defendants' outrageous conduct constitutes a separate actionable wrong which is deserving of censure. The defendants treated Gary in a malicious, high-handed, arrogant and contemptuous manner. Gary pleads that the defendants' deliberate creation and condonation of a poisoned work environment merits an award of punitive damages by this Honourable Court.

41. As such, Gary claims for aggravated and punitive damages in the amount of $250,000.00.

42. Gary has taken, and continues to take, diligent steps to mitigate his damages. However, to date, Gary remains under medical care and has been unable to secure new employment.

[9] In an argument with which I agree, Mr. Watson submits that although the tort of intentional infliction of mental distress is not explicitly mentioned, all of the constituent elements are present; namely: (1) the defendant’s actions are flagrant and outrageous; (2) the defendant intends to harm the plaintiff or the defendant knows that his or her conduct will cause harm; and, (3) the plaintiff suffers a visible and provable illness: Piresferreira v. Ayote, 2010 ONCA 384; Correia v. Canac Kitchens, a division of Kohler Ltd., 2008 ONCA 506.

[10] In other words, Mr. Watson does indeed allege independent wrongdoing by Messrs. Harrison and Lee. The claim against them, therefore, should not be struck out.

[11] I turn now to the matter of the Defendants’ Demand for Particulars, and I shall use Demand 1 from the Demand for Particulars as an example of the nature of the Defendants’ request for particularization; visualize:

1. Paragraph 10 (a): To provide particulars in respect of the allegations at paragraph 10(a) of the Statement of Claim, including: (a) What specific actions and/or statements on the part of Mark Harrison does the Plaintiff allege constituted a threat against the Plaintiff; (b) The specific date(s), time(s) and location(s) of the aforementioned circumstances; (c) The names of the representatives of TrojanOne who were present during the alleged incident; and (d) Any other facts alleged to be supportive of paragraph 10(a) of the Statement of Claim.

[12] Similar demands for particulars are made for paragraphs 10(b), (d), (e), 11, 12, 13, 14, 26, 27, 29, 30, 31, and 32 of the Statement of Claim.

[13] An order for particulars is a discretionary order, and the court must be satisfied that the order is just in the circumstances of each case: Fairbairn v. Sage (1925), 56 O.L.R. 462 (C.A.) at 471 (C.A.). Particulars for pleadings are normally ordered only if: (a) they are not within the knowledge of the party demanding them; and (b) they are necessary to enable the other party to plead his or her response: Fairbairn v. Sage, supra; Physicians’ Services Inc. v. Cass, [1971] 2 O.R. 626 (C.A.).

[14] In exercising their discretion to order particulars, the focus is on the parties’ ability to plead a response and the court takes a realistic and pragmatic approach that recognizes that not every claim is capable of being pleaded with the same degree of particularity and that subsequent stages in the litigation may clarify and narrow the issues: Ontario v. Rothmans Inc., 2016 ONSC 59 at para. 84.

[15] The standard for particulars is the same for both ordinary actions and also actions governed by the rules for a simplified procedure: Big Green Property Services Ltd. v. Guelph Campus Co-operative (2005), 78 O.R. (3d) 775 (S.C.J.).

[16] A motion for particulars usually will not be granted unless the moving party deposes that the particulars are not within his or her knowledge and that they are needed to plead; however, a supporting affidavit is not required if the allegations are so general and bald that it is clear that particulars of them are necessary: Steiner v. Lindzon (1976), 14 O.R. (2d) 122 (H.C.J.); Ontario v. Rothmans Inc., supra.

[17] The Defendants have not deposed that they need particulars to plead, and since the allegations concern the conduct of Messrs. Harrison and Lee, they cannot say that the facts are outside their own knowledge. Put shortly, Messrs. Harrison and Lee have not made out a case for particulars. Most of the Defendants’ demands; for example, the requests for facts supportive of an allegation in the Statement of Claim, are a matter for examinations for discovery and are not a proper demand for particulars.

[18] The Defendants’ request for particulars should be dismissed.

[19] So far, I have not mentioned that the Defendants object to Mr. Watson’s claim as inappropriate for the simplified procedure because it exceeds the monetary jurisdiction for a simplified procedure claim. The answer to this objection is already found within Rule 76 of the Rules of Civil Procedure which makes the simplified procedure available in all cases subject to the defendant’s objection, in which case, the action will proceed under the normal rules. In any event, the Defendants’ objection has no bearing on the demand for particulars or their motion to strike the claims as against Messrs. Harrison and Lee.

[20] For the above reasons, I dismiss the Defendants’ motion with costs of $3,000, all inclusive.

Perell, J. Released: April 25, 2016