Court File and Parties
COURT FILE NO.: CV-16-561476 MOTION HEARD: 20170623 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Trindent Management Consulting Inc., Plaintiff AND: Carpedia International Ltd., Carpedia International Corporation, Peter Hryniak and Jordan de Lima, Defendants
BEFORE: Master Jolley
COUNSEL: James Heeney, Counsel for the Moving Party Plaintiff, Defendant by Counterclaim Peter W.G. Carey, Counsel for the Responding Party Defendants, Plaintiffs by Counterclaim
HEARD: 23 June 2017
Reasons for Decision
[1] The plaintiff brings this motion for particulars of two paragraphs of the defendants’ statement of defence and counterclaim.
[2] For the reasons given below, this motion is granted.
Background
[3] The plaintiff (“Trindent”) and the corporate defendant (“Carpedia”) are competitors in the field of management consulting. The added defendant by counterclaim Adrian Travis (“Travis”) worked for Carpedia from 2004 to 2008 and then left to start Trindent, where he is the president. The individual defendants worked for Trindent in the past and now work for Carpedia.
[4] Trindent sought and obtained an injunction against the defendants, on consent, requiring them to return to Trindent all confidential or proprietary information belonging to Trindent. In their amended defence and counterclaim, the defendants claim that Travis himself improperly took and then used confidential and proprietary information of Carpedia when he left to start Trindent. Trindent served a demand for particulars relating to those allegations. Carpedia responded that the information was within the knowledge of Trindent and Travis.
Issue and the Position of the Parties
[5] Are the particulars within the knowledge of Trindent and Travis and are they necessary to enable Trindent to plead?
[6] The defendants argue that the particulars are not necessary to enable Trindent to plead. They further take the position that Travis knows what confidential and proprietary information he took from Carpedia and used and does not need Carpedia to advise him what he took in order for Trindent to prepare a defence. Trindent’s request is disguised pre-pleading discovery.
[7] Travis states that he does not know what confidential and proprietary information is being referred to in the counterclaim and that Trindent requires those particulars to prepare a defence, to delineate the scope of productions and discoveries and, ultimately, the issues for trial.
Analysis
[8] The paragraphs of the defence and counterclaim in issue allege:
Paragraph 60: When Travis left Carpedia in 2008, he took with him confidential and proprietary Carpedia templates, presentations and documents which were instrumental to Carpedia’s business model and success. Part of the work product which Carpedia sells to its clients are various spreadsheets on topics ranging from key profit drivers, financial models, area workloads, process compression analysis, weekly project reporting, method changes, dashboards etc. Travis took these proprietary and confidential information and utilized them for his own purposes.
Paragraph 61: After Travis left Carpedia and set up Trindent in 2008, he not only used, but also replicated Carpedia’s work products, often by simply replacing the Carpedia logo with Trindent’s logo on these proprietary documents.
[9] In respect of paragraph 60, Trindent and Travis seek particulars, including identification of the templates, presentations and documents in question. In respect of the allegation in paragraph 61, the plaintiff seeks particulars including what work products of Carpedia Trindent replicated.
[10] Carpedia argues that the particulars are not necessary for Trindent to plead.
[11] Additionally, it argues that providing Trindent with this information at this stage effectively tips its hand as to what it knows about what Travis took. Instead, it argues that Travis should provide a listing of everything he took. From there, Carpedia will then advise what from that list it considers confidential. It also argues that it does not want to be restricted by its answer should it discover that additional confidential and proprietary information was taken.
[12] The problem with this approach is that if particulars are not provided, Travis will likely not provide a listing of “everything he took”. He will provide a blanket denial that he took anything confidential and will list nothing in his affidavit of documents on the basis that he has no confidential or proprietary information from Carpedia, as he has already deposed in his affidavit.
[13] 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. Since pleadings will form the parameters of documentary and oral discovery, as well as the evidence to be led at trial, particulars will be necessary to enable the various courts which will deal with the action as it works its way through to trial to understand what the issues are ( Caputo v. Imperial Tobacco Ltd. 1996 CarswellOnt 1300 at paragraph 8 ).
[14] If particulars are not provided, one expects that Trindent will simply deny those two paragraphs and will not list any documents relating to this allegation in its affidavit of documents. One can then anticipate a motion about the completeness of Trindent’s affidavit of documents at that stage. If Carpedia provides particulars, this will narrow the issues as Trindent may then respond to state either that Travis did not take the information in question or, alternatively, that he took the information particularized but takes the position that it is neither confidential nor proprietary to Carpedia.
[15] Carpedia is also concerned that if it provides particulars, Travis will tailor his response to conform to what Carpedia knows was taken and no more. It argues that only Travis knows what he took and what he replicated and that Carpedia can only infer what Travis took. This does not relieve Carpedia of the obligation to particularize what confidential or proprietary information it says Travis took. If it does not know what he took at this stage, it can respond accordingly. Carpedia’s position is much like that in Radulesco v. Toronto District School Board, 2004 CarswellOnt 9862 at paragraph 9, where Master MacLeod stated:
A plaintiff may not allege that the defendant appropriated something undefined and then argue that since the defendant stole property, the defendant knows perfectly well what the plaintiff means. The defendant must demonstrably know the particulars such as if the defendant has a copy of the document or has a full inventory of stolen property…. It is reasonable that a defendant not be entitled to delay defending by pretending he or she needs particulars if the defendant actually knows what the claim is about and can therefore craft a coherent defence. The defendant is however entitled to know what the plaintiff is claiming with the necessary degree of specificity.
[16] It was disconcerting to read the statement of claim by Trindent and note that its pleading of the theft of “confidential information” it alleges against Carpedia was as bald as that of Carpedia’s under attack here or perhaps more so. It also contains a pleading that the particulars of the conduct of the individual defendants in taking and using Trindent’s information was within the knowledge of those defendants. While I was tempted to deny Trindent’s motion on that basis, I expect that the result would be a pleading from Trindent as vague as the defence from Carpedia to the Trindent claim that simply states that the defendants have insufficient knowledge with which to plead to the vague confidential information allegations. Had Carpedia brought a motion for particulars of Trindent’s claim, it may well have succeeded.
Conclusion
[17] Carpedia shall provide particulars of the allegations in paragraph 60 and 61 of its defence and counterclaim on or before 24 July 2017. The plaintiff and defendants by counterclaim shall have 20 days from the date of receipt of the particulars to deliver their reply and defence to the counterclaim.
[18] While it is implied, it is open to Carpedia to expressly state that the particulars it is providing are based on its information to date and it reserves the right to expand those particulars if and when additional information becomes available.
[19] The moving party shall have its costs of the motion which I have fixed at $4,500 inclusive of HST and disbursements.