COURT FILE NO.: CV-17-585752
DATE: 20180613
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Design Home Gift and Paper Inc., Plaintiff
AND:
Catherine Puzzolo Stingi, Miranda Stingi and Myles Davies, Defendants
BEFORE: Pollak J.
COUNSEL: Brendan Clancy, for the Plaintiff
C. McGoogan, for the Defendants
HEARD: March 28, 2018
ENDORSEMENT
[1] This is a motion to strike the defendant Catherine Stingi's Statement of Defence without leave to amend, and a motion for default judgment against her.
[2] The Defendant admits that she misappropriated money that she lost by gambling at a casino.
[3] Her defence is that she was “stressed” as a result of the Plaintiff’s demand that she assist the Plaintiff in the commission of fraudulent acts.
[4] The Plaintiff submits that the Statement of Defence should be struck in its entirety without leave to amend on the ground that it is plain and obvious that the Defence cannot succeed.
[5] If the Statement of Defence is struck without leave to amend, the Defendant submits that it is entitled to default judgment on the basis of the allegations made in the Statement of Claim.
[6] The Plaintiff moves pursuant to rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that a pleading may be struck out on the ground that it discloses no reasonable cause of action or defence.
[7] On this motion, the facts in the pleading are assumed to be true.
[8] The Plaintiff must show that it is “plain and obvious” that the Statement of Defence discloses no reasonable cause of action and should be struck out.
[9] The Plaintiff argues that the defence that the alleged pressure by the Plaintiff caused the Defendant’s stress, causing her to misappropriate funds, plainly and obviously cannot succeed. Stress cannot be a viable defence to an intentional tort such as fraud. The Defence must therefore be struck out for failing to disclose a reasonable defence to the Plaintiff’s Claim.
[10] Further, the Plaintiff relies on Rule 25.11 to argue that the Statement of Defence may prejudice or delay the fair trial of the action; is scandalous, frivolous or vexatious; or, is an abuse of process.
[11] The Plaintiff relies on the case of Jevco Insurance Co. v Pacific Assessment Centre Inc., 2014 ONSC 2244, 120 O.R. (3d) 43, aff’d 2015 ONSC 7751, where it was held that if a party pleads that another party has been convicted of a criminal offence, or that another party's conduct would result in such a conviction, and such pleading is irrelevant to the issues in the Claim, it should be struck on the basis that it is scandalous. The Plaintiff focuses on paragraphs 6 to 14 of the Defence where it is alleged that the Plaintiff and its principal engaged in insurance and tax fraud. It is submitted that such misconduct is not relevant with respect to the misappropriation of funds by the Defendant. Rather, it is alleged that the pleading is designed to embarrass the Plaintiff and its principal and/or conduct prolonged and potentially abusive discoveries.
[12] The Defendant’s position is that her misconduct was the result of mental distress caused by the Plaintiff's insistence that she assist its principal in committing numerous acts of fraud. She submits that mental injury has been recognized by the Supreme Court of Canada in the case of Saadati v. Moorhead, 2017 SCC 28, [2017] 1 S.C.R. 543. Her defence is one of provocation. She alleges that the Plaintiff's own misbehaviour caused her misappropriation – that is, psychological distress inflicted on the Defendant by the Plaintiff may be a defence. In Ontario presently, the defence of provocation to an intentional tort is recognized with respect to the Plaintiff's claim for punitive damages: Landry v. Patterson (1978), 1978 CanLII 1635 (ON CA), 22 O.R. (2d) 335 (C.A.). Further, if her acts were solely the product of a psychiatric disorder, they would not be voluntary. There is no right of action for any tort, whether one of intention, negligence, or strict liability, unless the act of the tortfeasor is voluntary: Buckley v. Smith Transport Ltd., 1946 CanLII 77 (ON CA), [1946] O.R. 798 (C.A.).
[13] Particulars of these acts of fraud by the Plaintiff, wherein the Defendant was involved against her will, had to be included in the defence. She argues that her misconduct is a direct result of the Plaintiff’s own misconduct. The Defendant therefore submits that this Action should not be determined at the pleadings stage.
[14] She submits that the acts of the Plaintiff which provoked her wrongdoing are central to her defence. However, I find that the particulars in the Defence are focused on the Plaintiff’s illegal acts, instead of on the Plaintiff’s alleged acts in causing the Defendant’s stress.
[15] I agree with the Defendants’ submission that it is not “plain and obvious” that the Defence cannot succeed, but I do find that the particulars are focused improperly on the Plaintiff’s alleged fraudulent acts instead of the alleged acts of the Plaintiff which have caused the mental injury to the Defendant. I find that paragraphs 6 to 14 of the Defence should be struck with leave to amend the Defence within thirty days of this order.
Costs
[16] If the parties are unable to agree on costs, they may make brief written submissions to me no longer than three pages in length. The Plaintiffs’ submissions are to be delivered by 12:00 p.m. on June 22, 2018, and the Defendants’ submissions are to be delivered by 12:00 p.m. on June 29, 2018. Any reply submissions are to be delivered by 12:00 p.m. on July 5, 2018.
Pollak J.
Date: June 13, 2018