Court File and Parties
COURT FILE NO.: CV-17-75-00 DATE: 20180920
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
772694 ONTARIO LIMITED o/a TFP STAIRS AND RAILINGS/OAKWOOD CLOSETS Plaintiff – and – KEVIN GURNSEY, CLIFFORD PERRY and 2543727 ONTARIO LTD. o/a PREMIER STAIRS AND RAILINGS Defendants
Counsel: Kurt R. Pearson, for the Plaintiff Carol F. Q. Mackillop and Kate Kahn, for the Defendants
HEARD at Kingston: 4 September 2018
MEW J.
REASONS FOR DECISION
(Motion to Strike)
[1] The plaintiff moves to strike certain portions of the statement of defence and counterclaim delivered by the defendants, Clifford Perry and 2543727 Ontario Ltd. o/a Premier Stairs and Railings (the “Responding Parties”). The impugned portions are said to be either untenable in law, irrelevant to the causes of action pleaded or offensive, scandalous, vexatious and false.
[2] The Responding Parties do not dispute that the allegations made by them are salacious. But they arise in the context of a counterclaim which asserts wrongful dismissal and harassment amounting to a breach of Mr. Perry’s human rights for which the appropriate relief includes moral damages, general damages, punitive damages and special damages.
[3] The impugned portions of the pleadings are, they say, relevant to the causes of action asserted and the remedies claimed.
Background
[4] The plaintiff, TFP Stairs and Railings/Oakwood Closets (“TFP”) is a manufacturer and installer of commercial and residential staircases and railings. The owners of TFP are David Cole and his brother Chris Cole. Their respective spouses, Sharon Cole and Yvonne Cole, also work for TFP. At the times material to the matters pleaded, Sharon Cole was the human resources manager of TFP.
[5] Clifford Perry was hired by TFP in 2013 as a field consultant. He was promoted to the position of general manager in 2014.
[6] Mr. Perry’s employment was terminated by TFP on 3 February 2016. He subsequently started his own business in direct competition with the plaintiff.
[7] Litigation ensued. The plaintiff accused the defendants of soliciting the plaintiff’s customers. In the case of Mr. Perry, it was alleged that this was in breach of non-competition and non-solicitation clauses in his employment contract. The plaintiff sought damages and injunctive relief.
[8] In July 2017, the Responding Parties delivered their statement of defence and counterclaim.
[9] A motion brought by the plaintiff for an interlocutory injunction was abandoned shortly before it was scheduled to be heard on 26 July 2017. After the motion was abandoned, there was a contested costs hearing which resulted in awards of costs of $16,000 to the Responding Parties and $20,000 to Mr. Gurnsey.
[10] At a case conference on 24 August 2017, a timetable for various steps in the action was set, including a deadline for the bringing of any pleadings motions. The plaintiff duly brought its motion to strike, returnable on 11 October 2017. The Responding Parties then delivered a notice of cross-motion, seeking contempt of court relief in respect of material which had been posted on the internet in April 2017, an apparent breach of an interim order made by this court in this proceeding.
[11] There were a number of adjournments of the motions. They were both finally heard by me on 4 September 2018. I dismissed the Responding Parties’ cross-motion for, inter alia, a declaration that the plaintiff was in contempt and gave oral reasons for my decision. I reserved judgment on the plaintiff’s motion to strike.
[12] For the reasons that follow, I allow the plaintiff’s motion.
Impugned Pleading
[13] As already alluded to, in the counterclaim, Mr. Perry claims against TFP for:
a. Damages for TFP’s alleged breach of Mr. Perry’s employment contract/wrongful dismissal; b. Damages for TFP’s alleged violations of Mr. Perry’s human rights pursuant to the Human Rights Code, R.S.O. 1990, c. H.19; c. Damages for TFP’s alleged breach of the duty of good faith and fair dealings in the manner of his termination; and d. Damages for TFP’s alleged defamation of Mr. Perry which is alleged to have occurred as a result of the internet postings on 4 April 2017.
[14] Also as already referenced, the heads of damages claimed include compensatory damages, punitive damages, moral damages and general damages.
[15] The plaintiff challenges the following particulars of “significant stress and anxiety” pleaded in paragraph 19 of the statement of defence and counterclaim:
- Clifford [Perry] was subjected to significant stress and anxiety in his role as General Manager of TFP, as a result of the following issues: (a) David [Cole], Chris [Cole], Sharon [Cole] and Yvonne [Cole] frequently consumed alcohol in the office to intoxication and operated vehicles under the influence of alcohol; (b) Chris was prohibited from driving as a result of an impaired driving conviction, and Clifford was required to drive him to various sales calls; (e) On at least one (1) occasion, Chris brokered a deal with a local drug dealer to perform work at his residence, using TFP employees and resources in exchange for cash and cocaine; (g) Clifford witnessed Chris’ possession of illegal drugs in the workplace, including cocaine; (h) Clifford was impeded in his employment by attempting to deal with Chris while he was under the influence of cannabis in the workplace; (i) Several TFP employees complained to Clifford that other TFP employees were smoking cannabis in the workplace; (l) Clifford was made aware that Sharon engaged in several extra-marital affairs with TFP employees during his employment with TFP, and Clifford was a witness to one of these affairs; (m) Clifford was subjected to frequent arguments between David, Chris, Sharon and Yvonne, including incidents where David degraded Sharon in front of TFP’s employees; (n) David and Sharon requested that Clifford convince Yvonne to come back to work following her frequent absences and discourage her from ending her relationship with her spouse, Chris, and (o) Sharon disclosed to Clifford that David was likely the father of one of Yvonne’s children, as David had an extra-marital affair with Yvonne while she acted as a babysitter for David and Sharon’s family.
[16] The plaintiff also seeks to have paragraphs 21 and 60 of the statement of defence and counterclaim struck out in its entirety. Those paragraphs allege sexual harassment in violation of the Human Rights Code:
During his employment with TFP, Clifford was sexually harassed by Sharon over the course of several months prior to his dismissal, the details of which are as follows: (a) Sharon often sent Clifford nude or partially nude pictures of herself, wherein her breasts and genitals were exposed, several of which are in Clifford’s possession; (b) Sharon frequently approached Clifford’s desk at TFP’s workplace, exposed her genitals to him and requested that he engage in sexual intercourse with her; (c) Sharon requested that Clifford engage in sexual intercourse with her in the file room at TFP’s office, stating that nobody would catch them and that she had done this before with other TFP employees; and (d) Sharon frequently requested that Clifford go on lunches with her to “fool around” and stated that she knew of locations where they could engage in sexual intercourse.
Clifford was sexually harassed by Sharon, as outlined above in the Statement of Defence, in violation of the Code, for which he is entitled to additional damages.
Discussion
[17] Rule 25.06(1) of the Rules of Civil Procedure provides that pleadings “shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved. “Material” facts include facts that establish the constituent elements of a claim or defence. But a fact that is not provable at trial or that is incapable of affecting the outcome is immaterial and therefore, ought not to be pleaded. And, importantly, in the context of the present claim, a pleading of fact will be struck if it cannot be the basis of a claim or defence and is designed solely for the purpose of atmosphere or to cast an opposing party in a bad light. See generally, Paul M. Perell and John W. Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis, 2017) at p.491-492; Canadian National Railway Co. v. Brant (2009) 96 O.R. (3d) 734 at paras. 27-30 (S.C.J.).
Stress and Anxiety Claim
[18] The plaintiff argues that the allegations contained in paragraph 19 of the Responding Parties’ statement of defence should be struck out pursuant to Rule 25.11. Although a number of the aspects of that rule were referred, the focus was on Rule 25.11(b) which permits the court to strike out or expunge all or part of a pleading, with or without leave to amend, on the ground that the pleading is scandalous, frivolous or vexatious.
[19] The allegations contained in paragraph 19 of the statement of defence and counterclaim are said by the defendants pleading to be relevant to Mr. Perry’s claim that he was subjected to significant stress and anxiety while serving as the plaintiff’s general manager.
[20] During the course of argument, counsel for the Responding Parties pointed out that the plaintiff was not moving to strike paragraph 20 of the statement of defence and counterclaim which pleads:
- As a result of the stress caused by these incidents, and the incidents of sexual harassment outlined herein, Clifford [Perry] was prescribed medication for high blood pressure and sleeping medication.
[21] Counsel for the plaintiff responds to this by noting that the plaintiff does not seek to strike every subparagraph of paragraph 19 – just the allegations said to be scandalous, frivolous or vexatious (or otherwise improper). However, he concedes that, logically, the words “and the incidents of sexual harassment outlined herein” in paragraph 20 should also be expunged if the subparagraphs of paragraph 19 and 21 alleging sexual harassment are struck, but through oversight this had not been requested.
[22] Facts which are material facts and, thus, relevant, cannot, the Responding Parties argue, be scandalous, frivolous and vexatious, even though they may be discomforting. In that regard, each of the allegations of intoxication, association with drugs, extra-marital affairs and other sexual matters, and exposure to frequent arguments, are said to be relevant to Mr. Perry’s claims of stress and anxiety.
[23] The plaintiff, while acknowledging that a pleading cannot be “scandalous” if it is relevant, relies on the statement of R.A. Blair J.A. in Quizno’s Canada Restaurant Corp. v. Kileel Developments Ltd., 2008 ONCA 644, at para. 15 that:
15 A court may strike out portions of a pleading, even where the allegations are relevant, if the applicant can establish that they are of marginal probative value and their probative value is outweighed by their prejudicial effect. Before doing so, a judge must balance the rights of the parties on the particular facts of the case and must consider carefully the extent to which the particulars attacked are necessary to enable the defendant to prove its case and their probative value in establishing that case: see Clement v. McGuinty (2001), 18 C.P.C. (5th) 267 (Ont. C.A.), at paras. 21-24; Asper v. Lantos (2000), 51 O.R. (3d) 215 (Div. Ct.), at paras. 18-20; Lee v. Globe & Mail (The) (2001), 52 O.R. (3d) 652 (Ont. S.C.J.), at paras. 11 and 14. Where the allegations in question are relevant and material, however, the court should exercise this power with considerable caution, in my view.
[24] As I look at the impugned subparagraphs of paragraph 19, there are passages which, taken in isolation, might not be regarded as scandalous. But taken in context and as a whole, the very firm impression is that the allegations are inserted solely to shock and embarrass.
[25] Furthermore, the pleading and the affidavit of Mr. Perry offer little clue as to how the alleged conduct and events actually caused stress and anxiety. Take, for example, the allegations that Mr. Perry witnessed the possession of illegal drugs in the workplace or his awareness that an individual was engaged in extra-marital affairs with other employees. Mr. Perry may not have approved of such behaviour. But there is no explanation of how that resulted in stress and anxiety sufficient to support a claim for damages for breach of his contract of employment.
[26] With respect to all of the impugned subparagraphs of paragraph 19 generally, while counsel for the Responding Parties argued that they constitute allegations of behaviour and events that caused Mr. Perry “significant stress and anxiety”, in the absence of any other allegations or evidence of injury, counsel’s bare assertions by way of argument are not enough.
[27] Furthermore, I simply do not accept that the matters pleaded are asserted in good faith.
[28] Even if I am wrong in my conclusions so far, I find that the probative value of the impugned subparagraphs of paragraph 19 is marginal at best and greatly outweighed by the prejudicial effect of the words pleaded.
[29] I would, accordingly, accede to the request to strike the impugned subparagraphs of paragraph 19 of the statement of defence and counterclaim.
Sexual Harassment
[30] The plaintiff challenges paragraphs 21 and 60 of the statement of defence and counterclaim of the Responding Parties by reference to both Rule 25.11 and to Rule 21.01(1)(b), which permit the court to strike out a pleading on the ground that it discloses no reasonable cause of action or defence.
[31] The assertion made by the Responding Parties is that the examples of sexual harassment inflicted on Mr. Perry by Sharon Cole were breaches of the Human Rights Code, for which the plaintiff is vicariously liable.
[32] Since amendments to the Ontario Human Rights Code in 2008, a civil remedy for the breach of an individual’s human rights can be made in this court, provided that the plaintiff’s action is not based solely on an infringement of the plaintiff’s human rights: Human Rights Code, s. 46.1; Wilson v. Solis Mexican Foods Inc., 2013 ONSC 5799.
[33] Relevant portions of the Human Rights Code provide as follows:
Employment
5(1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.
Harassment in employment
5(2) Every person who is an employee has a right to freedom from harassment in the workplace by the employer or agent of the employer or by another employee because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.
Harassment because of sex in workplaces
7(2) Every person who is an employee has a right to freedom from harassment in the workplace because of sex, sexual orientation, gender identity or gender expression by his or her employer or agent of the employer or by another employee.
Acts of officers, etc.
46.3 (1) For the purposes of this Act, except subsection 2 (2), subsection 5 (2), section 7 and subsection 46.2 (1), any act or thing done or omitted to be done in the course of his or her employment by an officer, official, employee or agent of a corporation, trade union, trade or occupational association, unincorporated association or employers’ organization shall be deemed to be an act or thing done or omitted to be done by the corporation, trade union, trade or occupational association, unincorporated association or employers’ organization.
[34] The essence of a motion to strike out a portion of a pleading on the ground that it discloses no reasonable cause of action is that the alleged wrongdoing as described in the pleading is not a violation of the legal right asserted by the claimant, with the result that the claimant is not entitled to a remedy even if he or she is able to prove the material facts pleaded in support of the claim: The Law of Civil Procedure in Ontario, supra, at p. 614.
[35] The allegations concerning the conduct of Sharon Cole would, if proved, support a finding of sexual harassment, contrary to subsection 7(2) of the Code, and, possibly, a finding of harassment, contrary to subsection 5(2).
[36] However, Section 46.3 of the Code addresses vicarious liability and while generally, in the case of a corporation, any act or thing done to an individual in the course of his or her employment by an officer or fellow employee is deemed to be an act or thing done or omitted to be done by the corporation, vicarious liability for harassment in employment (s. 5(2)) or sexual harassment (s. 7) by an officer or employee of a corporation is expressly excluded.
[37] Sharon Cole is not a party to this action and the plaintiff is not, by virtue of Section 46.3 of the Code, vicariously liable for her alleged harassment of Mr. Perry.
[38] The Responding Parties argue that even if the plaintiff is not vicariously liable, a number of decisions of the Human Rights Tribunal of Ontario have held that, in appropriate circumstances, a complainant who suffers sexual harassment in the workplace may invoke the application of the general discrimination provision in subsection 5(1) of the Code. The applicable principles are summarised by the adjudicator in Taylor-Baptiste v. OPSEU, 2012 HRTO 1393, a case involving a claim of discrimination based on sex and marital status, at para. 27:
The conclusion that s. 5(2) does not apply is not, however, the end of the matter. Since Janzen v. Platy Enterprises Ltd., [1989] 1 S.C.R. 1252, it has been recognized that discrimination includes actions that may also fit the definition of harassment. Employers and managers may violate s. 5(1) through a failure to appropriately respond to or prevent harassment, thereby contributing to a “poisoned work environment”. See generally, Ontario Human Rights Commission v. Farris, 2012 ONSC 3876 (Div. Ct.), at paras. 29-36. Actions of an employee that may not meet the definition in s. 5(2) may nevertheless fall under s. 5(1). See, for example, Romano v. 1577118 Ontario Inc., 2008 HRTO 9; Brooks v. Total Credit Recovery Ltd., 2012 HRTO 1232; Baisa v. Skills for Change, 2010 HRTO 1621, at para. 51; Race v. General Motors of Canada, 2011 HRTO 24, at para. 31. The determination of whether actions constitute discrimination under s. 5(1) involves a consideration of all the relevant circumstances, including the seriousness of the conduct, their significance, their effect on the workplace, the role of the person making them, the effect on the applicant, and the reaction of the respondent to any concerns raised.
[39] It has been held that where an individual is subjected to persistent offensive behaviour and mistreatment by a co-worker that consists of either direct or indirect sexual content sufficient to create an “inappropriately sexualized workplace”, it is open to a tribunal to find not only sexual harassment, but also the existence of a poisoned work environment. As the Ontario Human Rights Tribunal explained in Smith v. Menzies Chrysler Incorporated, 2009 HRTO 1936, at para. 151:
It is well-settled law that the prohibition against discrimination in section 5(1) affords employees the right to be free from a poisoned work environment in relation to Code-protected grounds. If sexually charged comments and conduct contaminate the work environment, then such circumstances can constitute a discriminatory term or condition of employment contrary to both section 5(1) and 7(2) of the Code …
[40] The Responding Parties argue that Sharon Cole’s alleged persistent sexual harassment of Mr. Perry during the course of his employment created a poisoned work environment and required Mr. Perry to take leave for medical reasons. This was exacerbated by the nature of Ms. Cole’s position as the individual in the company responsible for human resources and, thus, the person to whom Mr. Perry was supposed to bring any concerns that he had with respect to his employment. Such a finding, if made, would, it is said, amount to discrimination contrary to subsection 5(1), for which the plaintiff would be responsible.
[41] The problem with this argument is that Mr. Perry does not assert a claim of discrimination. Specifically, he does not plead that he was forced to work in a sexualized environment. Aside from the bare allegation that the plaintiff is vicariously liable for Sharon Cole’s alleged behaviour, there is no allegation that the plaintiff enabled, tolerated or otherwise failed to prevent the creation and maintenance of an inappropriately sexualized workplace.
[42] Instead, Mr. Perry makes very explicit allegations of sexual advances which he says were made by a fellow employee and pleads that, as a consequence, his human rights were violated for which his former employer is vicariously liable.
[43] As discussed, the circumstances pleaded are not capable of supporting a finding of vicarious liability on the part of the plaintiff for alleged conduct of Sharon Cole because, to the extent that the alleged conduct of Sharon Cole is pleaded to have constituted sexual harassment, such acts or things done or omitted to be done by her would not, by virtue of s. 46.3(1) of the Human Rights Code, be deemed to be acts or things done or omitted to be done by the plaintiff.
[44] In the absence of any allegation of the existence of discrimination, resulting from a poisoned workplace or otherwise, the contents of paragraph 21 of the statement of claim do not disclose a reasonable cause of action. The paragraph should therefore be struck, as should paragraph 22 of the statement of defence and counterclaim which, while not specifically part of the plaintiff’s motion to strike, becomes wholly redundant as a result of my determination in connection with paragraph 21. Similarly, the claim made by Mr. Perry in paragraph 60 of the statement of defence and counterclaim for damages arising from sexual harassment by Sharon Cole in violation of the Human Rights Code, should be struck out too.
[45] The Responding Parties did not request that leave should be given to amend their pleading in the event that the court acceded to all or part of the plaintiff’s motion to strike. Accordingly, no leave to amend is granted.
Disposition
[46] Subparagraphs (a), (b), (e), (g), (h), (i), (l), (m), (n) and (o) of paragraph 19 of the statement of defence and counterclaim are struck out pursuant to Rule 25.11 of the Rules of Civil Procedure, without leave to amend.
[47] Paragraphs 21, 22 and 60 of the statement of defence and counterclaim are struck out pursuant to Rule 21.01(1)(b) on ground that they disclose no reasonable cause of action.
[48] Given my finding that the plaintiff is not liable for alleged incidents of sexual harassment on the part of Sharon Cole, the words “and the incidents of sexual harassment outlined herein” in paragraph 20 of the statement of defence and counterclaim are now redundant, and should also be struck out.
Costs
[49] The plaintiff has been entirely successful on both the contempt motion and the motion to strike. I am therefore presumptively of the view that the plaintiff should be entitled to its costs of both motions. If counsel are unable to agree on the issue of costs within ten days of the release of this decision, counsel may notify the trial coordinator at Kingston and I will then give further direction with respect to costs submissions.
Graeme Mew J.
Released: 20 September 2018
ADDENDUM (added 24 September 2018)
As noted at the beginning of the decision, Carol F. Q. Mackillop and Kate Kahn appeared as counsel for the defendants. Their firm, Mackillop Law, acts for Kevin Gurnsey. The lawyer of record for the Responding Parties (Clifford Perry and 2543727 Ontario Ltd. o/a Premier Stairs and Railings) is SJO Legal. Ms. Mackillop and Ms. Kahn were instructed by SJO Legal as counsel for the purposes of advocating the Responding Parties’ position on the motion to strike and the contempt motion which was heard the same day. The defendant Kevin Gurnsey took no position in respect of either motion.
Graeme Mew J.