Court File and Parties
COURT FILE NO.: CV-16-564060 MOTION HEARD: 20170524 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Enercare Inc., Enercare Home and Commercial Services Limited Partnership and Enercare Solutions Limited Partnership, Plaintiffs AND: Home Services Energy Inc. and The HSE Group of Companies Inc., Defendants
BEFORE: Master Jolley
COUNSEL: S. Dhanju-Dhillon, for the moving party defendants B. Brammall, for the responding party plaintiffs
HEARD: 24 May 2017
REASONS FOR DECISION
Overview
[1] The plaintiffs (together, “Enercare”) allege that the defendants (together, “HSE”) have made various misrepresentations to Enercare’s customers and to the public and that, as a result, Enercare has lost customers to HSE. Enercare brings this action against HSE seeking $5,000,000 in damages and $1,000,000 in punitive damages as well as a permanent injunction, an accounting and an order of disgorgement of profits.
[2] HSE brings this motion for particulars of the allegations in the statement of claim. It has narrowed its demand to requesting particulars of the Enercare customers mentioned throughout the statement of claim to whom HSE is alleged to have made various misrepresentations. HSE alleges that it requires the names of the customers to whom it allegedly made the misrepresentations that Enercare alleges resulted in it losing those customers in order to plead. It also takes the position that the names are required as a condition of Rule 25.06(8) of the Rules of Civil Procedure.
[3] HSE also requests production of the contracts mentioned in the statement of claim pursuant to Rule 30.04(2) of the Rules of Civil Procedure.
Purpose of Particulars
[4] Particulars of a statement of claim allow a defendant to respond intelligently to the claim in its statement of defence. They further help to define the issues to be tried and to delineate the scope of discovery. (See International Nickel Co. v. Travelers Indemnity Co. [1962] O.J. No. 56 (C.A.) and Antonacci v. Great Atlantic & Pacific Co. of Canada Ltd. , [2000] O.J. No. 40 at paragraph 34, each cited in Pennyfeather v. Timminco Ltd. 2011 ONSC 4257 at paragraphs 59 and 60).
Was HSE required to file an affidavit in support of this motion and, if so, was the affidavit filed sufficient?
[5] HSE’s chairman swore an affidavit in support of this motion wherein he deposed that HSE required the identity of the customers to whom the alleged misrepresentations were made in order to respond to the statement of claim. He further deposed that HSE could not ascertain the identity of the customers based on the information provided in the claim.
[6] Enercare raises two issues with respect to HSE’s affidavit. First, it asks that the affidavit be struck as being argumentative, inflammatory or as containing expressions of opinion. Second, it argues that HSE’s bald allegation that it requires the names of the customers to plead is insufficient and should not be relied upon.
[7] Rule 25.06(8) of the Rules of Civil Procedure sets out the mandatory minimum level of pleading required where allegations of misrepresentation are made in a pleading and that Rule requires that full particulars be pleaded. An affidavit by the moving party deposing that the particulars are not within its knowledge and are necessary for pleading is not mandatory when the allegation in question is one of misrepresentation. (See Economical Insurance Co. v. Fairview Assessment Centre Inc. 2013 ONSC 4037 at paragraph 11 and D’Aguanno v. VIPR Industries Inc. 2010 ONSC 3369 at paragraph 7).
[8] An affidavit from HSE was required for the grounds relied on other than Rule 25.06(8) (Rule 25.10 of the Rules of Civil Procedure, for instance) and I find the defendant’s affidavit to be admissible for that purpose. The affidavit set out HSE’s demand for particulars and Enercare’s response. I agree that it did not state why HSE did not have the information but I also accept that HSE cannot know from the pleading which contracts and customers are in issue and which are not or whether Enercare is challenging all the contracts HSE has entered into and every conversation at the locations referenced by Enercare in its statement of claim.
[9] To the extent the affidavit expressed opinion, it was either appropriate (opinion that HSE required the particulars to plead) or its commentary was not prejudicial.
Are particulars required in this instance?
[10] Where misrepresentation is alleged, Rule 25.06(8) of the Rules of Civil Procedure provides that the pleading shall contain full particulars. A consistent line of cases has held that a pleading of misrepresentation must set out the elements of the misrepresentation including “when, where, how, by whom and to whom it was made”; or, put another way, “when the particular incident occurred, what was alleged to have been said, by whom and to whom” (Lana International Ltd. v. Menasco Aerospace Ltd. , [1996] O.J. No. 1448 at paragraph 21, emphasis added; Economical Insurance, above at paragraphs 18 and 19).
[11] There is a ground between material facts and evidence where particulars fall. Particulars are separate from evidence and are to enhance the material facts. A pleading can survive a motion to strike but still require particulars in order to permit a party to plead. As noted in Copland v. Commodore Business Machines Ltd. (1985) , 52 O.R. (2d) 586, “It is only when the minimum level of material fact disclosure has been reached, that the pleadings becomes regular. Thereafter, the discretionary remedy of “particulars” under rule 25.10 of the Rules of Civil Procedure becomes available, if the party seeking particulars can qualify for the relief under the provisions of that rule.” Here the minimum level of material facts is in not issue and this is not a motion to strike the claim as a result of that failure. What is in issue is the need for particulars of those material facts. On this basis, the case of Enercare v. Ontario Consumers Home Services Inc. CV-15-533553 (8 February 2016) is distinguishable. In that case, the court refused the defendant’s motion to strike a statement of claim for failing to meet the pleadings threshold of Rules 21.01(1)(b) and 25.11 of the Rules of Civil Procedure. The pleading survived the motion to strike and whether it required particulars was not before the court.
[12] In the statement of claim, Enercare alleges the following with respect to customers:
- paragraph 5 – HSE has been deliberately unclear … when interacting and communicating with Enercare (including former Direct Energy) customers;
- paragraph 6 – HSE has been telephoning Enercare (including former Direct Energy) customers and making a variety of false and misleading statements;
- paragraph 7 – in order to schedule appointments with Enercare customers, HSE has made false and misleading statements;
- paragraph 8 – HSE has gone directly to the door of the Enercare customers’ homes and attempted to gain access based on false and misleading statements;
- paragraph 9 – once HSE gained access to the homes of Enercare customers, it made further false and misleading statements;
- paragraph 10 – HSE has made misrepresentations to Enercare customers on the streets specifically set out in this paragraph such as “Brown Street in Barrie”;
- paragraph 12 – Enercare customers have provided descriptions of the HSE representatives who attended at their homes, as set out in this paragraph;
- paragraph 13 – customers who were misled into signing contracts with HSE were told when they attempted to cancel those contracts that there was a complex cancellation process or a significant cancellation fee;
- paragraphs 21 and 25 – HSE misled Enercare customers, entered their homes on a pretext or misrepresentation and Enercare lost customers as a result of that misconduct;
- paragraph 23 – HSE caused a breach of the contracts between Enercare and its customers; and
- Paragraph 26 – HSE used misrepresentations to gain access to the homes of Enercare customers and caused those customers to end their contracts with Enercare.
[13] While the statement of claim does provide particularity as to the “when, how and by whom”, it does not provide information as “to whom” these representations were allegedly made.
[14] It is not the case that Enercare does not have the names of the customers it says it lost and the names of at least some of the customers to whom it says HSE made its representations. Its position is that the names are not necessary for HSE to plead. Leaving aside the decision above that Rule 25.06(8) of the Rules of Civil Procedure requires this information to be provided, the statement of claim alleges, for instance, that HSE made misrepresentations to Enercare customers on Brown Street in Barrie. HSE may have approached 20 houses on “Brown Street in Barrie”, to use the example above. It is entitled to know, in order to narrow the issues, which individual or house on Brown Street is in issue or whether Enercare is alleging that the misrepresentation was made to every person that HSE visited on Brown Street and that every contract entered into with a resident on Brown Street was a result of misrepresentations by HSE.
[15] An analysis of the inducing breach of contract cause of action leads to the same conclusion that the customers’ names are to be provided. Enercare must prove a valid contract between itself and a customer as the first element of the tort and also plead that HSE had knowledge of the contract and that it committed an intentional act to cause a breach of that contract. HSE is entitled to know who the contracting party is in order to respond to this allegation. The same can be said for the injurious falsehood and intentional interference with contractual relations causes of action.
[16] Enercare argues that it is more appropriate to wait until discoveries to provide these customers’ names so that they are protected by the deemed undertaking. Given the names are required to meet the “full particulars” test of a misrepresentation pleading, it is not appropriate to wait until discoveries to provide that information. Had there been a full and particular pleading, those names would have been included in the statement of claim as issued.
[17] Without the names of the recipients of the misrepresentations being provided, I find that the statement of claim does not meet the requirement of Rule 25.06(8) of the Rules of Civil Procedure. Further, the names are needed to define clearly and precisely the issues, to give fair notice of the precise case which HSE must meet and the precise remedies sought and assist the court in its investigation of the truth of the allegations made, as noted in Balanyk v. University of Toronto , [1999] O.J. No. 2162 at paragraph 27. The names of the customers will also narrow the issues so that both parties can produce a proper affidavit of documents. Without this information, HSE would be unable to determine which of its contracts it must list and produce.
[18] As was done in Lana International v. Menasco Aerospace, above, paragraph 38(65), I order Enercare to provide the “to whom”, i.e. names of the customers referenced in the statement of claim paragraphs noted above.
Inspection of documents
[19] HSE also seeks inspection of the contracts referred to in the statement of claim, relying on Rule 30.04(2) of the Rules of Civil Procedure which provides that a party who serves on another party a request to inspect documents is entitled to inspect any document that is not privileged and that is referred to in the other party’s pleading. The statement of claim references both contracts between HSE and former Enercare customers (paragraph 13) and lost contracts between Enercare and its customers (paragraphs 17, 21, 23, 25 and 26).
[20] The reference to contracts in paragraph 13 is to the contracts signed by Enercare’s former customers and HSE. It does not reference a document in Enercare’s possession, control or power as required by Rule 30.04(2) of the Rules of Civil Procedure. This can be contrasted to the contracts that Enercare says it had with its customers who then terminated those contracts and contracted with HSE instead. This is not a generic reference to contracts. It relates to contracts with its former customers that are in the possession, control or power of Enercare and, indeed, forms the basis of its $5,000,000 damages claim.
[21] I agree with the comments of Belobaba, J. in Mask v. Silvercorp Metals Inc. 2014 ONSC 4161 at paragraph 21 that the court has discretion to limit production based on relevance, proportionality, privilege, prejudice and timeliness and also to delay production, where appropriate, to a later stage of the litigation and I have considered each of those factors. I find, in this case, that they do not support a limited or delayed right of inspection. Enercare has not filed responding materials to indicate that the production sought would be overly onerous or overly time consuming. Further, it did not set this out as a reason for refusing the production request in its response to request to inspect documents. It has presumably assembled these documents in order to plead as it has and in order to assess its claim for damages. Similar to the disclosure of the customers’ names above, I find that HSE is not able to properly respond to the claim and know which contracts are in issue without their production. If production were refused, the result would be a bald denial which would do nothing to clarify both the liability and the damages issues.
[22] I order that the contracts referenced in paragraph 13 need not be produced. However, the “lost contracts” between Enercare and its former customers referenced in paragraphs 17, 21, 23 and 26 are to be produced within 20 days of this decision.
Costs
[23] The parties have agreed that costs should be fixed at the all-inclusive sum of $7,500 payable to the successful party. As such, Enercare shall pay costs in that amount to HSE within 30 days of this order.