CITATION: L.E. DiPierdomenico Pharmacy v. Williams, 2017 ONSC 75

COURT FILE NO.: CV-15-22904

DATE: 20170112

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: L.E. DiPierdomenico Pharmacy Professional Corporation operating as the Belle River Pharmacy, Plaintiff

AND:

Gerald Charles Williams and Denise Ann Williams, Defendants

AND BETWEEN:

Gerald Charles Williams and Denise Ann Williams, Plaintiffs by Counterclaim

AND:

L.E. DiPierdomenico Pharmacy Professional Corporation and Luigi Emilio DiPierdomenico, Defendants by Counterclaim

BEFORE: King J.

COUNSEL: Rodney M. Godard, for the Plaintiff, Defendant by Counterclaim

Steven Pickard, for the Defendants, Plaintiffs by Counterclaim

HEARD: December 5, 2016

ENDORSEMENT

[1] This is a motion made by the plaintiff L.E. DiPierdomenico Pharmacy Professional Corporation operating as the Belle River Pharmacy (“plaintiff” or “L.E.D. Pharmacy”) to amend the statement of claim in this matter and add four additional defendants: Paul Charles Drouillard (“Drouillard”), Timothy Brady (Brady), Francesco Vella (“Vella”) and Nancy Rogers (“Rogers”) (collectively the “proposed defendants”).

ISSUE

[2] The issue on this motion is whether the plaintiff is entitled to amend its original claim and add additional causes of action pursuant to rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

BACKGROUND

[3] The initial claim in this matter was made by the plaintiff L.E.D. Pharmacy against the defendants Gerald Charles Williams and Denise Ann Williams (the “Williams defendants”) with respect to a commercial property located at 190 Chisolm Street in Belle River, Ontario (the “property”). From 2010 onwards L.E.D. Pharmacy occupied the premises pursuant to an oral lease on which it operated a pharmacy. As well, the plaintiff was eventually involved in the operation of medical offices on the leased premises.

[4] At all material times, L.E. DiPierdomenico (“LD”) was the operating mind of the plaintiff.

[5] LD claims that he had been verbally assured by the defendants that L.E.D. Pharmacy would not be removed from the property without generous, fair and reasonable notice. LD claims this assurance was reaffirmed before his company expended significant amounts on construction of medical offices at the leased property in 2012.

[6] On or before October 1, 2015, the defendants gave L.E.D. Pharmacy notice to vacate the premises by October 31, 2015.

[7] L.E.D. Pharmacy commenced this action on October 29, 2015. The claim sought:

i) An interim and permanent order preventing the defendants from removing the plaintiff from the subject premises;

ii) In the alternative, damages for $750,000 for “breach of the equitable doctrine of promissory estoppel and/ or negligent misrepresentation”; and

iii) Punitive damages, interest and costs.

[8] L.E.D. Pharmacy did not vacate the premises on the notice date of October 31, 2015.

[9] On November 24, 2015, the parties appeared before Justice R. Pomerance with respect to an application for an interim injunction made by the plaintiff to prohibit the Williams defendants from removing them from the property and a cross-motion filed by the Williams defendants for a declaration that L.E.D. Pharmacy vacate and an order for exclusive possession of the property.

[10] The application for an injunction was dismissed. As well, Pomerance J. declared the plaintiff had no right to continue in possession and granted the Williams defendants a writ of possession effective November 30, 2015.

[11] Specifically it was ordered, inter alia, that, “In the circumstances, it is appropriate to grant the defendant’s application of a Declaration and Writ of Possession, without prejudice to the plaintiff to pursue his outstanding claim” (emphasis added).

[12] The plaintiff has commenced a separate action against the proposed defendants (Court File No. CV-16-23828). There is no dispute between the parties that the second action can proceed independently of this action. However, this motion is to determine whether the Williams defendants on this action can be joined with the proposed defendants on the basis of an alleged conspiracy to commit a tort against the plaintiff.

[13] The four proposed defendants are described as follows:

i) Timothy Brady – A pharmacist who owned and operated a pharmacy in Essex County with Vella. Brady and Vella were the alleged purchasers of the property from the defendants.

ii) Francesco Vella – A pharmacist who owned and operated a pharmacy in Essex County with Brady. Vella and Brady were the alleged purchasers of the property from the defendants.

iii) Paul Charles Drouillard – A Registerd Nurse and employee of the plaintiff. It is alleged he intended to become an employee of the pharmacy Brady and Vella allegedly planned to operate on the property after purchase.

iv) Nancy Rogers - An employee of the plaintiff and assistant to the physicians that worked at the property for L.E.D. Pharmacy. She allegedly intended to become an employee of the pharmacy Brady and Vella intended to operate.

[14] The proposed agreement of purchase and sale of the property from the defendants to Brady and Vella allegedly occurred after the Williams defendants had rejected an offer on the property made by the plaintiff.

POSITIONS OF THE PARTIES

i) Plaintiff

[15] The plaintiff claims that during the process leading up to the hearing of the motion before Pomerance J. it became aware that the proposed defendants “had an involvement in the events leading up to the Plaintiff being put out of possession of its commercial premises.” More specifically, the plaintiff claims these facts predominantly constitute a cause of action of the tort of conspiracy against both the Williams defendants and the proposed defendants. The essence of the claim is that there was a conspiracy to “convert and assume LE’s pharmacy operation and business so as to injure LED.”

[16] The plaintiff relies on rules 5.04(2), 26.01 and 26.02 of the Rules of Civil Procedure:

5.04(2) At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

26.02 A party may amend the party’s pleading,

(a) without leave, before the close of pleadings, if the amendment does not include or necessitate the addition, deletion or substitution of a party to the action;

(b) on filing the consent of all parties and, where a person is to be added or substituted as a party, the person’s consent; or

(c) with leave of the court.

[17] More specifically, the plaintiff asserts that since the original pleading can be amended without prejudice to the Williams defendants that cannot be compensated by costs, or an adjournment, are mandatory given the use of the word “shall” in Rule 26.01. Accordingly, the amendment must be granted as the facts as pleaded give rise to a legally viable cause of action.

ii) Defendants

[18] The defendants assert that rule 5.04(2) is paramount in this instance as the plaintiff is seeking to add parties. This rule uses the discretionary term “may” and, in this instance the court should exercise such discretion not to grant leave to amend, particularly as they submit the amended pleadings do not disclose a viable cause of action as against the defendants.

ANALYSIS

[19] For the reasons that follow, the motion is dismissed. I find that the amended pleadings do not disclose a viable cause of action as against the Williams defendants with respect to the claim of a conspiracy with one or more of the proposed defendants to commit a tort that injured the plaintiff.

[20] Plaintiff’s counsel meticulously demonstrated to the court that the impediments to granting a motion pursuant to this rule are easily satisfied. That is, there is nothing before the court to demonstrate that any prejudice to the defendants cannot be compensated by costs, or an adjournment.

[21] However, that is not the end of the analysis. The plaintiff must also satisfy the court that the Fresh Amended Statement of Claim discloses on its face an additional viable cause of action as against the defendants. On my review, it does not.

[22] The original Statement of Claim asserts that the Williams defendants failed to give the plaintiff reasonable notice of its intention to terminate an oral lease. The Fresh Amended Statement of Claim alleges that the Williams defendants conspired with the four individual proposed defendants to unlawfully:

i) Remove the plaintiff from the leased premises for the purpose of “passing off” a new pharmacy as the successor to the plaintiff;

ii) Appropriate patient and prescription record files of the plaintiff;

iii) Intentionally interfere with the contractual relations of the plaintiff at the leased premises; and

iv) Interfere or unlawfully acquire the benefits of contracts the plaintiff had with its employees, a medical doctor and a chiropractic doctor at the leased premises.

[23] The Fresh Amended Claim alleges that the Willams defendants entered into an agreement with the proposed defendants to sell them the property in issue. The Williams defendants entered into this agreement to sell to the proposed defendants Brady and Vella after receiving an offer from the plaintiff to purchase the property, which they rejected. The offer they received from the proposed defendants following the rejection of the plaintiff’s offer was for an amount higher than the plaintiff offered. This demonstrates that the Williams defendants were trying to do exactly what they had a legal right to do – sell the property to a bona fide third party purchaser for value at the highest achievable price, at the earliest date possible.

[24] During the hearing of the motion, I questioned counsel for the plaintiff to explain what it is alleged the Williams defendants did on the face of the pleadings beyond allegedly agreeing to sell the property to a bona fide third party purchaser for value? Counsel was unable to provide any further actionable explanation of the defendants’ conduct.

[25] There is no evidence in the pleading upon which to base an assertion that the Williams defendants were involved in a conspiracy to commit a fraud with respect to the sale of their own property.

[26] Whatever the intentions and actions of the proposed defendants were vis-à-vis the plaintiff, there is nothing in the pleadings asserting that the Williams’ defendants were doing anything more than selling the property. The assertion that “they knew or ought to have known the intentions of the proposed defendants is not, in and of itself, actionable in a conspiracy claim.” That a building being used as a pharmacy might be sold to a bona fide third party who has exactly the same use intended for the property is hardly unusual and certainly not, in and of itself, conspiratorial.

[27] As well, the plaintiff asserts that on October 31, 2015 the Williams defendants attempted to remove inventory and chattel property of the plaintiff into an “unsafe storage bin.” That the owner of a property might be trying to facilitate clean and vacant possession of that building on the day notice given to a commercial tenant to vacate has expired is not, in and of itself, tortious and/or conspiratorial, particularly when that tenant has refused to leave the premises. It does not give rise to a claim of a conspiracy with a prospective purchaser of the property. There is no claim, for example, that they improperly converted any property owned by the plaintiff’s to themselves, or to any of the proposed defendants.

LEGAL AUTHORITIES

[28] The defendants rely on the case of Brookfield Financial Real Estate Group Ltd. v. Azorim Canada (Adelaide Street) Inc., 2012 ONSC 3818. I find the analysis conducted by Justice D. M. Brown to be persuasive. In particular, at para. 23:

I adopt, as succinctly summarizing the legal principles applicable to motions to amend pleadings, the following passages from Morden and Perell, The Law of Civil Procedure in Ontario, First Edition.

The rule is mandatory and amendments must be allowed unless the responding party can demonstrate prejudice that cannot be compensated by costs. The prejudice must arise as a result of the amendment and pre-existing prejudice unconnected to the amendment will not suffice…

With the exception of an amendment to plead a statute-barred claim, the onus of proving prejudice is on the party alleging it…

On a motion to amend a pleading, the court does not examine the factual merits of the proposed amendments or the moving party's motives for seeking the amendment, but it does examine whether as a matter of law, the amendment raises a tenable claim or defence and whether the proposed amendment has been properly pleaded in the sense of complying with the rules that govern pleadings, including sufficient particularity. Put somewhat differently, it makes little sense to grant an amendment that will immediately be challenged as legally unsound, and the court may inquire into the merits to ensure that the amendment is tenable in law and compliant with the rules of pleading. The case law establishes that proposed amendments are to be read generously with allowance for deficiencies in drafting…

Where an amendment to a pleading includes the addition of a party, then the court must also consider whether the joinder would satisfy the requirements of the Rules on the joinder of parties and claims…

[29] Furthermore, it is incumbent on a plaintiff to clearly plead the facts upon which it relies when making its claim. A claimant is not entitled to rely on the possibility (or the hope) that new facts may turn up as the litigation progresses: Brookfield, at para. 28. A claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses. The claimant may not be in a position to prove the facts pleaded at the time of the motion. It may only hope to be able to prove them. But plead them it must. The facts pleaded are the firm basis upon which the possibility of success of the claim must be evaluated. If they are not pleaded, the exercise cannot be properly conducted. It can be difficult to prove all of the facts underpinning an alleged conspiracy claim in the pleadings because, by its very nature, a conspiracy is intended to be hidden from the harmed party. However, there must a pleading of the basic claim.

[30] I find that there is no such pleading beyond an assertion that the defendants had knowledge of the nature of the business of its tenant, the plaintiff, and that of the proposed defendants and they somehow conspired with the proposed defendants to harm the plaintiff by agreeing to sell to the property to Brady and Vella.

[31] Furthermore, the pleading must allege damages flowing from the tortious conspiracy that are separate and distinct from those suffered as result of the tort itself: Jevco Insurance Co. v. Pacific Assessment Centre Inc., 2015 ONSC 7751, 128 O.R. (3d) 518, at para 28. There are no such facts contained in the pleading.

[32] The new claim asserts that the Williams defendants conspired to commit a tort by making a bona fide agreement to sell a building they owned to the proposed defendants. Had the proposed transaction actually closed, the doctrine of merger would clearly apply in this instance.

[33] The plaintiff relies on the decision of the Ontario Court of Appeal in Tran v. University of Western Ontario, 2015 ONCA 295. In that case the Court of Appeal upheld the decision of the Superior Court Justice in dismissing the claim as disclosing no reasonable cause of action. The appeal was allowed on the limited basis that it was an error not to grant the plaintiff leave to amend the claim. The court relied on the decision of Labrosse J.A. in Normart Management Ltd. v. West Hill Redevelopment Co. (1998), 1998 CanLII 2447 (ON CA), 37 O.R. (3d) 97 (C.A.) and stated the following at para. 21:

In Normart, at p. 104, this court held that a statement of claim alleging conspiracy should:

[D]escribe who the several parties are and their relationship with each other. It should allege the agreement between the defendants to conspire, and state precisely what the purpose or what were the objects of the alleged conspiracy, and it must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy; and lastly, it must allege the injury and damage occasioned to the plaintiff thereby.

[34] Even if I accept that the amended pleading describes the parties and their relationship and satisfies the allegation of the conspiracy, I find that the pleading does not satisfy the other required elements:

i) It does not specify what the object of the conspiracy of the Williams defendants is other than the sale of their property;

ii) It doesn’t assert the overt acts the Williams defendants purportedly committed in furtherance of the conspiracy outside of this proposed sale; and

iii) It doesn’t allege what injury and damage the plaintiff suffered by the Williams defendants proposed sale of their own property following termination of the oral lease.

[35] I am unable to conclude that a claim alleging a legal owner of a property is participating in a conspiracy with a prospective bona fide third party purchaser for value to commit a tort against an existing tenant to whom it has given notice to vacate (even if that notice was not legally sufficient) can succeed in any circumstance, particularly when there is a court order granting that owner exclusive possession of the property.

CONCLUSION

[36] On my review of the materials, the claim against the Williams defendants for residual damage relief, as permitted by the order of Pomerance J. does not require the inclusion of any of the proposed defendants as parties.

[37] Conversely, and perhaps more importantly for the purposes of this motion, the claim against the proposed defendants does not require the inclusion of the defendants as parties.

[38] For all of these reasons, I find that the Fresh Amended Statement of Claim does not prima facie disclose a bona fide cause of action of the tort of conspiracy as against the Williams defendants. Accordingly, the motion is dismissed.

COSTS

[39] In the event the parties cannot agree on costs, submissions are to be filed by the defendants within seven (7) days following confirmation that there is no agreement and responding submissions from the plaintiff should be filed thereafter within seven (7) days.

“Original signed and released by George W. King”

George W. King

Justice

Date: January 12, 2017