COURT FILE NO.: CV-19-615255
DATE: 2019-10-11
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ANNABELLE MARITZA EDGEWORTH, Plaintiff
AND:
KARYN SHAPIRA, BRIAN LEVINE, and NORTHBRIDGE GENERAL INSURANCE CORPORATION and ANDREW EVANGELISTA, Defendants
BEFORE: Sossin J.
COUNSEL: Peter Murray, Counsel for the Plaintiff
David Zuber, Counsel for the Defendant (Northbridge General Insurance Company)
Samaneh Frounchi, Counsel for Defendant (Dr. Brian Levine)
Thomas Slahta, Counsel for Defendants (Karyn Shapira and Andrew Evangelista)
HEARD: September 10, 2019
REASONS FOR JUDGMENT
OVERVIEW
[1] This case arises out of a settlement of a personal injury action by the plaintiff, Annabelle Maritza Edgeworth (“Edgeworth”). Edgeworth alleges that this settlement was inadequate because a key defence expert report was withheld from her. After finalizing the settlement in that action, Edgeworth brought a new suit against some of the parties involved in the previous action, including Karen Shapira (“Shapira”), the lawyer for the defendant in the previous action, Dr. Brian Levine (“Dr. Levine”), the medical expert whose report was allegedly withheld, and Northbridge General Insurance Company (“Northbridge”), the insurer of the defendant in the previous action (collectively, “the defendants”).
[2] Edgeworth alleges defendants conspired to suppress the expert report, in breach of Rule 33.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules of Civil Procedure”), among other torts, and now seeks non-pecuniary damages of $5,000, pecuniary damages of $1,185,425, and punitive damages of $10,000,000.
[3] Shapira, who was counsel to the defendant, Mr. Mazzoli in the previous action (the “Mazzoli action”), now brings a motion to strike the claim against her under Rules 21 and 25 of the Rules of Civil Procedure as disclosing no reasonable cause of action, except for the claim relating to misrepresentation.
[4] It also appears as if Andrew Evangelista (“Evangelista”), the principal of Evangelista, Barristers and Solicitors (the “Evangelista firm”), which employs Shapira, has been added to the claim. To the extent he has been added properly to the action, Evangelista also seeks to have the claim against him struck under Rules 21 and 25 as disclosing no reasonable cause of action.
[5] The defendant, Dr. Levine, who was retained to conduct an independent medical examination (“IME”) in the Mazzoli action, brings a motion to strike the claim against him under Rules 21 and 25 of the Rules of Civil Procedure on similar grounds.
[6] The defendant, Northbridge, the insurer of the defendant in the Mazzoli action, also brings a motion to strike the claim against it under Rules 21 and 25 of the Rules of Civil Procedure on similar grounds.
[7] Finally, all of the defendants also seek to have the lawyers for the plaintiff, Campisi LLP, who represented Edgeworth in the Mazzoli action, removed as solicitor of record on the basis of a conflict of interest in the litigation.
FACTS
[8] The facts leading up to this claim are straightforward.
[9] Edgeworth was involved in an accident while riding her bicycle on July 8, 2013. She sustained injuries and retained Campisi LLP to commence the Mazzoli action.
[10] Mr. Mazzoli was insured by Northbridge, who in turn retained Shapira of the Evangelista firm to defend the Mazzoli action.
[11] Following an unsuccessful mediation, Edgeworth delivered an offer to settle under Rule 49 of the Rules of Civil Procedure, dated October 3, 2016.
[12] In January, 2017, Dr. Levine was retained to conduct a neuropsychological defence medical assessment of Edgeworth. Dr. Levine conducted the IME on February 16, 2017 and completed on April 17, 2017. No written defence medical report was delivered.
[13] On June 7, 2017, Mr. Mazzoli accepted Edgeworth’s offer to settle.
[14] On July 18, 2017, Edgeworth made a request under the Personal Information Protection and Electronic Documents Act (“PIPEDA”) for personal information collected by Dr. Levine during his IME.
[15] The settlement of the Mazzoli action, including costs and disbursements, was finalized on July 31, 2017. The action was formally dismissed on October 12, 2017.
[16] The statement of claim by Edgeworth against the defendants was issued on February 27, 2019, and amended on March 19, 2019.
[17] The motions by Shapira and Dr. Levine to strike pleadings within Edgeworth’s statement of claim and to remove Campisi LLP as solicitors of record of the plaintiff were brought in May, 2019 and originally with a returnable date of May 24, 2019.
[18] On May 24, 2019, Justice O’Brien adjourned the motions to September 10, 2019.
[19] Edgeworth amended her statement of claim on May 24, 2019, and again on June 10, 2019. Evangelista was added as a defendant to the action as a result of this last amendment. This final form of the claim will be referred to as “the fresh as amended claim.”
[20] Northbridge subsequently brought its motion to strike pleadings and remove Campisi LLP to join the motions being heard on September 10, 2019.
ANALYSIS
[21] The moving parties have slightly varying positions given their different roles in the Mazzoli action, but two questions are common to all the motions:
a. Should the pleadings alleging conspiracy should be struck, without leave to amend?; and
b. Should Campisi LLP be removed as solicitors of record for the plaintiffs due to the conflict of interest which has arisen in this litigation?
[22] I will address each of these questions in turn.
Should the Conspiracy Claim Against the Defendants be Struck?
[23] If granted, the motion to strike the allegations of conspiracy from the pleadings would effectively bring the litigation against Dr. Levine, Northbridge and Evangelista to an end. The claim against Shapira would continue only with respect to claims of misrepresentation.
[24] With respect to the motions to strike, Rule 21.01 of the Rules of Civil Procedure provides:
RULE 21 Determination of an Issue Before Trial
Where Available
To Any Party on a Question of Law
21.01 (1) A party may move before a judge,
(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or
(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,
and the judge may make an order or grant judgment accordingly. R.R.O. 1990, Reg. 194, r. 21.01 (1).
(2) No evidence is admissible on a motion,
(a) under clause (1) (a), except with leave of a judge or on consent of the parties;
(b) under clause (1) (b). R.R.O. 1990, Reg. 194, r. 21.01 (2).
To Defendant
(3) A defendant may move before a judge to have an action stayed or dismissed on the ground that,
Jurisdiction
(a) the court has no jurisdiction over the subject matter of the action;
Capacity
(b) the plaintiff is without legal capacity to commence or continue the action or the defendant does not have the legal capacity to be sued;
Another Proceeding Pending
(c) another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter; or
Action Frivolous, Vexatious or Abuse of Process
(d) the action is frivolous or vexatious or is otherwise an abuse of the process of the court,
and the judge may make an order or grant judgment accordingly. R.R.O. 1990, Reg. 194, r. 21.01 (3).
[25] Rule 25 of the Rules of Civil Procedure provides:
STRIKING OUT A PLEADING OR OTHER DOCUMENT
25.11 The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document,
(a) may prejudice or delay the fair trial of the action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the court. R.R.O. 1990, Reg. 194, r. 25.11.
[26] The Supreme Court of Canada stated in R. v. Imperial Tobacco Canada Ltd. 2011 SCC 42(“Imperial Tobacco”), at para. 17, that the test under Rule 21.01(1)(b) to strike a pleading is whether the moving party can establish that it is “plain and obvious” that the responding party’s claim or defence cannot succeed. The same “plain and obvious” standard applies where, under Rule 21.01(1)(a), a party seeks to determine a question of law which may dispose of all or part of an action.
[27] For purposes of the Rule 21 analysis, the motions judge must assume all facts alleged by the responding party’s pleadings are true, as long as they are not manifestly incapable of proof. Further, no evidence can be accepted on a Rule 21 motion, nor can a party rely on what evidence proffered at some future date might or might not show. As Chief Justice McLachlin emphasized in Imperial Tobacco (at para. 22):
It is incumbent on the claimant to clearly plead the facts upon which it relies in making its claim. 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.
[28] The first issue for these motions is therefore whether it is plain and obvious that Edgeworth’s claim against the defendants for conspiracy as pleaded cannot succeed.
[29] There are two types of conspiracy recognized at law: 1) first, where the defendants agree to use lawful means to injure the plaintiff; and 2) second, where the defendants use unlawful means to harm the plaintiff.
[30] With respect to the distinction between the two types of conspiracy, Justice Perell offered the following, concise guide in EnerWorks Inc. v. Glenbarra Energy Solutions Inc. 2012 ONSC 414 (“EnerWorks”) at paras. 68-69:
[68] The elements of conspiracy to injure are: (1) the defendants acted in combination; (2) the defendants intended to harm the plaintiff; and (3) the defendants’ conduct caused harm to the plaintiff.
[69] The elements of conspiracy to perform an unlawful act are (1) the defendants acted in combination; (2) the defendants committed an unlawful act, i.e. a crime, tort, or breach of statute; (3) the defendants knew or should have known that injury to the plaintiffs was likely to occur from their misconduct; and (4) the defendants’ misconduct in furtherance of the conspiracy caused harm to the plaintiff.
[31] With these thresholds in mind, I will now consider whether it is plain and obvious that Edgeworth cannot succeed in her claim of conspiracy against the defendants.
Conspiracy to Injure
[32] The conspiracy to injure case law requires that the plaintiff establish that the defendant’s predominant purpose was to harm the plaintiff, as opposed to advancing legitimate self-interest; Harris v. GlaxoSmithKline Inc., 2010 ONCA 872.
[33] In Heydary Hamilton PC v. Dil Muhammad, et al., 2013 ONSC 4938, Morgan J. granted a Rules 21 and 25 motion to strike a claim against a law firm from its former clients, and held:
[23] A solicitor owes no duty of care to the opposite party and no action for any breach of such duty can lie against a solicitor in advising his client to take legal action against an opponent. George Cluthe Manufacturing Co., supra. The courts have long been at pains to point out that, “for reasons of public policy inherent in the nature of the adversary process, an action in negligence against the solicitor for one's adversary in litigation is not tenable in the law of Ontario.” Brignolio v. Desmarais, Keenan, 1995 CarswellOnt 4761, at para 8 (Ont Gen Div).
[24] What is true for negligence is equally true for the economic torts pleaded by Heydary. Since there is nothing unlawful about advising a client to assess its former law firm’s fees and to challenge the enforceability of its retainer agreement, there can be no tort of inducing breach of contract or interference with economic relations. This is a specific and logical application of the more general point about these economic torts made by the learned author of Fleming, The Law of Torts (7th edn), at 659: “[a]ctionable interference with contractual relations must involve an element of impropriety or of reliance upon some power or influence independent of lawful authority.”
[53] The conspiracy claim against Schorr fails for essentially the same reasons as the economic tort claims fail. The pleading is comprised of bald, unparticularized allegations, and amounts to a conspiracy to do something – advise a client to bring a court Application – that cannot be described as wrongful and that connotes no malintent.
[54] For these reasons, neither of the branches of civil conspiracy contained in Canada Cement LaFarge Ltd. v BC Lightweight Aggregate Ltd., [1983] 1 SCR 452 applies to the conspiracy claim here.
[55] In terms of the pleading itself, the Statement of Claim does not state the purpose or objects of the alleged conspiracy, nor does it set forth the overt acts which are alleged to have been done by each of the named conspirators in furtherance of the plot. In addition, it does not describe a recognizable injury occasioned by the supposed conspiracy. All of these ingredients are necessary if a pleading of conspiracy is not to be struck for being a bald and improper pleading. Robinson v Medtronic Inc., 2010 ONSC 1739, at para 17 (SCJ).
[56] The nature of the allegation against Schorr and his supposed co-conspirators, the Muhammad Group, virtually ensures that the claim cannot succeed on the intent to injure branch of the Canada Cement LaFarge test. For a conspiracy to injure to be made out, Heydary would have to establish that the predominant purpose of Schorr’s conduct was not to vindicate the rights of the Muhammad Group as client, but to cause injury to Heydary. As Lord Diplock put it in Lonrho Ltd. v Shell Petroleum Co. Ltd. (No. 2),[1982] AC 173, to be a conspiracy the acts of two or more persons must be done “for the purpose not of protecting their own interests but of injuring the interests of the plaintiff.”
[57] The Statement of Claim contains nothing that would distinguish the allegations against Schorr from the conduct of every litigation lawyer. Indeed, if taken seriously the claim would undermine the adversarial system and the well-established role of counsel in advising a client to bring legal action against an opponent. (Emphasis added.)
[34] Edgeworth accepts that the test for conspiracy to injure is that the defendants’ predominant purpose must be to inflict harm on the plaintiff rather than to advance their own legitimate interests. She argues, however, that the suppression of evidence in a civil action cannot be said to be done in the legitimate interests of any party.
[35] At paras. 40-41 of the fresh as amended claim, Edgeworth alleges that the failure to prepare a report was for the predominant purpose of causing injury to Edgeworth even if the failure to prepare the report were permitted by statute or common law, and further, that she did suffer an injury as a result in that she was unable to fairly assess the damages to which she was entitled.
[36] In this case, there are no facts pled setting out that the actions of the defendants were undertaken in order to injure Edgeworth. The defendants agreed to the offer which Edgeworth made. Offers to settle may be accepted for many reasons, whether or not a party believes there is a chance if the matter went to trial, the ultimate result may be better or worse for the party. All that can be presumed from the fact of the settlement is that Edgeworth believed it would advance her interest to make the offer to settle, and Mr. Mazzoli believed it would be in his interests to accept the offer.
[37] Further, even though they were aware that a written defence medical report had not yet been provided, Edgeworth moved forward to finalize the settlement and dismiss the action. Even after bringing this claim, Edgeworth has taken no steps to set aside the settlement in the Mazzoli action.
[38] In these circumstances, the actions of the defendants cannot be said to have been taken with the predominant purpose of injuring Edgeworth. In light of the conspiracy case law and the pleadings in this case, I find that the elements of the conspiracy to injure have not been made out.
Unlawful Act Conspiracy
[39] In the context of unlawful act conspiracy, in addition to the elements set out above from EnerWorks, the Ontario Court of Appeal has clarified that the underlying unlawful act must be conduct that is a tort, breach of statute or breach of contract, even if not independently actionable; Agribrands Purina Canada Inc. v. Kasamekas et al., 2011 ONCA 460 (“Agribrands”), at para. 37.
[40] With respect to the unlawful act conspiracy, in this case, the allegedly unlawful activity of Shapira, in concert with the other defendants, was the failure to comply with the requirement under Rule 33.06 of the Rules of Civil Procedure that a written medical report must be provided:
33.06 (1) After conducting an examination, the examining health practitioner shall prepare a written report setting out his or her observations, the results of any tests made and his or her conclusions, diagnosis and prognosis and shall forthwith provide the report to the party who obtained the order. R.R.O. 1990, Reg. 194, r. 33.06 (1).
[41] The Rules of Civil Procedure themselves, however, provide a remedy for the failure to provide a written, medical report through the interaction of Rule 33.04 and Rule 33.07, which provides:
33.04 (1) Subrule 30.01 (1) (meaning of “document”, “power”) applies to subrule (2). R.R.O. 1990, Reg. 194, r. 33.04 (1).
Party to be Examined must Provide Information
(2) The party to be examined shall, unless the court orders otherwise, provide to the party obtaining the order, at least seven days before the examination, a copy of,
(a) any report made by a health practitioner who has treated or examined the party to be examined in respect of the mental or physical condition in question, other than a practitioner whose report was made in preparation for contemplated or pending litigation and for no other purpose, and whom the party to be examined undertakes not to call as a witness at the hearing; and
(b) any hospital record or other medical document relating to the mental or physical condition in question that is in the possession, control or power of the party other than a document made in preparation for contemplated or pending litigation and for no other purpose, and in respect of which the party to be examined undertakes not to call evidence at the hearing. R.R.O. 1990, Reg. 194, r. 33.04 (2).
33.07 A party who fails to comply with section 105 of the Courts of Justice Act or an order made under that section or with rule 33.04 is liable, if a plaintiff or applicant, to have the proceeding dismissed or, if a defendant or respondent, to have the statement of defence or affidavit in response to the application struck out. R.R.O. 1990, Reg. 194, r. 33.07.
[42] As the Divisional Court stated in LaForme v. Paul Revere Life Insurance Co., [2006] O.J. No. 2508 (Div. Ct.) at para. 14, the goal of the Rules of Civil Procedure as a statutory regime is to promote fairness in the litigation process:
The Courts of Justice Act and the Rules of Civil Procedure have created a statutory regime to promote fairness in the litigation process and to uphold the right of the defendant to conduct its defence as advised and to assist the court at an eventual trial by furnishing expert evidence that is subject to the adversarial process. The purpose of s. 105 and Rule 33 is to "level the playing field.”
[43] While it is true that the remedy in Rule 33.07 is provided only as between the parties to litigation, and so, for example, would not provide recourse to Edgeworth against the actions of Dr. Levine specifically, the existence of this remedy reflects the view that a breach of the Rules of Civil Procedure gives rise to an irregularity which may lead to a remedy. In these circumstances, I find that the failure to comply with Rule 33 of the Rules of Civil Procedure would not constitute a “wrongful act” of the kind envisioned in Agribrands, and the case law on conspiracy.
[44] Heydary also addresses unlawful act conspiracy. On this point, Morgan J. held that where a lawyer is providing services to a client, the lawyer cannot be held liable, where the lawyer believes she or he has a lawful right to engage in the conduct which is later impugned:
[59] The second type of civil conspiracy under Canada Cement LaFarge is where the alleged conduct of the co-conspirators is unlawful. In the present case there are claims of unlawful conduct by Schorr, but they amount to an assertion that Schorr’s advising the Muhammad Group to challenge Heydary’s fees, and advocating that cause, was inherently unlawful.
[60] As with the tort of inducing breach of contract, legal advice and advocacy on behalf of a client cannot in itself be an instance of unlawful conduct. The Court of Appeal in England has noted that for this type of claim in civil conspiracy, a defendant cannot be held liable where he either has or believes he has a lawful right to do what he is doing. Meretz Investments NV v. ACP Ltd. [2008] Ch. 244 (CA).
[45] There is no indication in the allegations that Shapira did not believe she was engaged in lawful conduct in the course of the Mazzoli action.
[46] Edgeworth argues not only that the Rules of Civil Procedure have been breached but also that the unlawful act of Shapira in suppressing the evidence of Dr. Levine and obstructing justice by not disclosing that evidence (including by dissuading Dr. Levine from preparing a written report) constitutes a breach of sections 139(2), (3) and 465(1)(a) of the Criminal Code R.S.C. 1985, c. C46 (the “Criminal Code”).
[47] Section 139(2) and (3) of the Criminal Code provides:
139 (1) Every one who wilfully attempts in any manner to obstruct, pervert or defeat the course of justice in a judicial proceeding,
a. (a) by indemnifying or agreeing to indemnify a surety, in any way and either in whole or in part, or
b. (b) where he is a surety, by accepting or agreeing to accept a fee or any form of indemnity whether in whole or in part from or in respect of a person who is released or is to be released from custody,
is guilty of
c. (c) an indictable offence and is liable to imprisonment for a term not exceeding two years, or
d. (d) an offence punishable on summary conviction.
Idem
(2) Every one who wilfully attempts in any manner other than a manner described in subsection (1) to obstruct, pervert or defeat the course of justice is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years.
Idem
(3) Without restricting the generality of subsection (2), every one shall be deemed wilfully to attempt to obstruct, pervert or defeat the course of justice who in a judicial proceeding, existing or proposed,
e. (a) dissuades or attempts to dissuade a person by threats, bribes or other corrupt means from giving evidence;
f. (b) influences or attempts to influence by threats, bribes or other corrupt means a person in his conduct as a juror; or
g. (c) accepts or obtains, agrees to accept or attempts to obtain a bribe or other corrupt consideration to abstain from giving evidence, or to do or to refrain from doing anything as a juror.
[48] Section 465 of the Criminal Code provides:
465 (1) Except where otherwise expressly provided by law, the following provisions apply in respect of conspiracy:
• (a) every one who conspires with any one to commit murder or to cause another person to be murdered, whether in Canada or not, is guilty of an indictable offence and liable to a maximum term of imprisonment for life;
• (b) every one who conspires with any one to prosecute a person for an alleged offence, knowing that he did not commit that offence, is guilty of an indictable offence and liable
o (i) to imprisonment for a term not exceeding ten years, if the alleged offence is one for which, on conviction, that person would be liable to be sentenced to imprisonment for life or for a term not exceeding fourteen years, or
o (ii) to imprisonment for a term not exceeding five years, if the alleged offence is one for which, on conviction, that person would be liable to imprisonment for less than fourteen years;
• (c) every one who conspires with any one to commit an indictable offence not provided for in paragraph (a) or (b) is guilty of an indictable offence and liable to the same punishment as that to which an accused who is guilty of that offence would, on conviction, be liable; and
• (d) every one who conspires with any one to commit an offence punishable on summary conviction is guilty of an offence punishable on summary conviction.
[49] The plaintiff alleges Dr. Levine participated in this obstruction of justice by agreeing not to write a report and by in fact not writing a report. The plaintiff also alleges that Northbridge was involved in this concerted effort to suppress a written report. Paragraphs 32-33 of the fresh as amended claim allege:
[32] The plaintiff pleads that the Defendants common intention to deprive the Plaintiff of a reasonable reward of damages by failing to prepare a Defence Medical Report amounts to an agreement to act in concern for an unlawful purpose. Further, the Plaintiff pleads that the Defendants together conducted their actions in violation of Rule 33.06(1) of the Rules of Civil Procedure…
[33] The Plaintiff pleads that the Defendants knew that the resulting report from Dr. Levine’s assessment of the Plaintiff would have demonstrated that the Plaintiff, as a result of the accident on July 8, 2013, was suffering from serious injuries and that she would be entitled to a large sum of general and special damages. The Plaintiff pleads further that the Defendants did know or should have known that without the report of Dr. Levine and given her serious physical and psychological injuries, the Plaintiff would have agreed to a settlement by the Defendant Shapira for an amount substantially lower than what she would have been entitled.
[50] The deficiency in the plaintiff’s pleadings, in my view, is again equating non-compliance with the Rules of Civil Procedure in these circumstances as an “unlawful act” capable of giving rise to the tort of conspiracy, or being the foundation for a breach of the Criminal Code provisions set out (governing both obstruction of justice and conspiracy to conduct obstruction of justice).
[51] The Rules of Civil Procedure do indeed create standards which require compliance, but also provide a scheme of remedies where compliance is not forthcoming, as discussed above in relation to Rule 33.07, and also authorizes in exceptional circumstances, that compliance may be excused altogether.
[52] Rule 2.01(1) and 2.03 of the Rules of Civil Procedure provide:
2.01 (1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court,
(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or
(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part. R.R.O. 1990, Reg. 194, r. 2.01 (1).
Rule 2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time.
[53] In light of the internal enforcement and curing provisions within the Rules of Civil Procedure, and absent some other factor demonstrating the breach could not be cured, such as a finding of contempt, the failure to follow a step set out in the Rules of Civil Procedure in these circumstances does not constitute an unlawful act capable of being the foundation for the civil tort of conspiracy or the criminal act of obstruction of justice.
[54] For these reasons, I find that it is plain and obvious that the unlawful act conspiracy based on the failure to provide the written medical defence report, either as a breach of the Rules of Civil Procedure itself or a breach of the Criminal Code, cannot succeed.
PIPEDA Allegation
[55] Edgeworth also alleges that PIPEDA has been violated, which while not an unlawful act in itself, sets out the expectation of privacy in dealing with a person’s personal information.
[56] Edgeworth states that Dr. Levine failed to comply with PIPEDA and inform Edgeworth how her personal information was being used. Shapira is also alleged to have violated PIPEDA by accessing Dr. Levine’s oral report on Edgeworth in a manner that was not fair or lawful.
[57] Edgeworth, in her factum, analogizes the actions of the defendants to “insider trading” (at para. 20): “…where negative news is suppressed contrary to the law so that the insiders can sell their stock at the expense of others.”
[58] As set out in Cook v. Ip et al. (1985), 52 O.R. (2d) 289 (C.A.), however, the Court of Appeal confirmed that a plaintiff in a personal injury case must acknowledge some diminishing of her right to privacy by entering into litigation. As Cory J.A. (as he then was) stated, “No doubt medical records are private and confidential in nature. Nevertheless, when damages are sought for personal injuries, the medical condition of the plaintiff both before and after the accident is relevant. In this case, it is the very issue in question. The plaintiff himself has raised the issue and placed it before the court. In these circumstances there can no longer be any privacy or confidentiality attaching to the plaintiff’s medical records.” (Emphasis added.)
[59] Any potential breach of PIPEDA would be a matter for federal court; for purposes of this motion, I find PIPEDA does not form the basis of liability for conspiracy in these circumstances.
Intrusion on Seclusion Allegation
[60] Edgeworth also makes a similar argument with respect to Edgeworth’s privacy and an alleged breach of the tort of intrusion on seclusion.
[61] Edgeworth alleges that the defendants intruded on her seclusion obtaining updates on her medical reports that were intended to be used for the purpose of creating a written report in the manner required under the Rules of Civil Procedure.
[62] In Jones v. Tsige 2012 ONCA 32, the Court of Appeal recognized the tort of intrusion on seclusion in narrow circumstances where the following elements could be established: 1) an intention to invade in the private affairs of another; 2) an intrusion without lawful justification; and 3) a reasonable person would conclude this led to anguish.
[63] In this case, however, Edgeworth submitted to the IME willingly and with justification in the context of the personal injury claim which she herself had brought. Dr. Levine conducted the IME with lawful justification under the Rules of Civil Procedure. To the extent the failure to provide the written report constituted a lack of compliance with the Rules, this did not remove the lawful justification for Dr. Levine examining Edgeworth or gathering personal and health information in the course of this exam, but rather triggers other remedies in the Rules of Civil Procedure to address this irregularity, as described above.
[64] For the reasons above, I find that the elements of the tort of intrusion on seclusion have not been established in the pleadings by Edgeworth, and therefore that this tort cannot be the basis of a conspiracy by the defendants.
The Systemic Issue
[65] Edgeworth also raises a final “systemic” concern with the insurance industry as a while. Edgeworth’s fresh as amended claim states that (at para. 50), “All of this occurs in the context of systemic practices in which the Defendants systematically and routinely communicate prior to a written report being provided and suppress a written report in efforts to compromise the position of disabled Plaintiffs.”
[66] Even reading the pleadings generously, this aspect of Edgeworth’s claim does not meet the threshold for an unlawful act by any of the defendants on which unlawful act conspiracy may be founded, and no other separate liability for this alleged conduct is alleged.
[67] Similarly, Evangelista is alleged to be liable for Shapira’s unlawful activity indirectly. He is alleged to have marketed the services of Shapira, who is employed with the Evangelista firm, in a way that created a risk of her engaging in unlawful conduct. There is no basis of personal liability for Evangelista in this allegation.
The Damages Issue
[68] Even if the other elements of conspiracy were founded in the pleadings, Edgeworth would have an insurmountable challenge in establishing actual damages for the purposes of the claim in conspiracy, as the settlement she has characterized as the basis of her loss was of her own making.
[69] In Hunt v. Carey, [1990] 2 S.C.R. 959, the Supreme Court stated this connection clearly (at p. 985):
Although the law concerning the scope of the tort of conspiracy is far from clear, I am of the opinion that whereas the law of tort does not permit an action against an individual defendant who has caused injury to the plaintiff, the law of torts does recognize a claim against them in combination as the tort of conspiracy if:
(1) whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or
(2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result.
In situation (2) it is not necessary that the predominant purpose of the defendants' conduct be to cause injury to the plaintiff but, in the prevailing circumstances, it must be a constructive intent derived from the fact that the defendants should have known that injury to the plaintiff would ensue. In both situations, however, there must be actual damage suffered by the plaintiff. [Emphasis in original.]
[70] There is no allegation that Edgeworth was compelled to accept the settlement in the Mazzoli action, nor allegations that it was improvident. Rather, based on all of the evidence at her disposal, including her own medical evidence, and with the advice of counsel, she settled on an appropriate amount for which she offered to settle her claim. The defendants accepted that offer. At that point, aware that a written medical report had not been provided, Edgeworth could have declined to finalize the settlement and re-open negotiations. She did not do so, and instead concluded the settlement and received payment of the funds.
[71] Edgeworth does not allege that she now has material information about the settlement which she did not have in July, 2017. Further, to the extent part of her claim is that certain information which should have been disclosed prior to finalizing the settlement was not disclosed, the appropriate remedy would be to seek to set aside the settlement agreement.
[72] As pled, I do not see how the claim in conspiracy could give rise to actual damage arising from the defendants’ agreement to settle for the amount offered by Edgeworth.
Conclusion On The Motion To Strike The Conspiracy Claims Under Rules 21 And 25
[73] For the reasons set out above, assuming the pleadings to be proven, it is plain and obvious within the meaning of Rules 21 that the plaintiff’s allegations of conspiracy in the conduct of the Mazzoli action cannot succeed, nor can the related torts and statutory breaches be the subject of liability, with the exception of the claim of misrepresentation against Shapira.
[74] As this aspect of the motion may be resolved under Rule 21.01(1)(b), it is not necessary to consider whether any of the conspiracy claims may also be struck under Rule 25.
[75] Therefore, the claim against Dr. Levine is struck as disclosing no reasonable cause of action.
[76] The claim against Northbridge also is struck as disclosing no reasonable cause of action.
[77] The claim against Evangelista, to the extent he is properly added as a defendant in this action, is struck as disclosing no reasonable cause of action.
[78] Finally, the claim against Shapira is struck for disclosing no reasonable cause of action, with the exception of the claim for misrepresentation.
[79] Each of the defendants seeks the claims to be struck without leave to amend. I would not do so absent exceptional circumstances, and I am not aware of any exceptional circumstances in this context. As recently affirmed by the Ontario Court of Appeal, leave to amend pleadings should generally be granted; Asghar v. Toronto Police Services Board, 2019 ONCA 479 at para. 9. In this case, I would not preclude further amendment to the statement of claim.
Should Campisi LLP be Removed?
[80] The defendants all argue that Campisi LLP should be removed as solicitors of record from this case. They each argue that there is a real likelihood that the lawyer from the firm who participated in the Mazzoli action will be called as a witness, which justifies removal of counsel at the pleadings stage to ensure the proper administration of justice; P& J Contracting Inc v. Singer, 2017 ONSC 3783, at paras. 37, 43, 45-46, 50-52 and 54-63.
[81] Edgeworth argues that a litigant’s right to choose counsel should not be interfered with except in the clearest of cases and with good cause, and that the mere potential that counsel may be called to testify is insufficient to meet this standard. Edgworth relies on the Divisional Court’s decision in Essa (Township) v. Guergis (1993), O.R. (3d) 573 (Div. Ct.), in which the Court stated (at paras. 43-45):
I believe courts should be reluctant to make what may be premature orders preventing solicitors from continuing to act. In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should do so only in clear cases. I adopt the approach taken on this point in Carlson v. Loraas Disposal Services Ltd. (1988), 30 C.P.C. (2d) 181 at p. 188, 70 Sask. R. 161 (Q.B.).
As discussed in the Carlson decision, an application to remove counsel can be made to the trial judge when it is certain there is a problem. In this case Mr. Green may, or may not be, subpoenaed to testify. Concessions or admissions may be made which will obviate the need to call him as a witness. The evidence he could give may be readily obtainable from other witnesses. As issues are developed, or resolved during trial, his evidence may not be required at all. A trial judge will be in a much better position to determine if his firm should be disqualified.
I do not accept the argument that when a lawyer is compelled to testify against the "other" side in a lawsuit the lawyer's firm must always be prevented from acting in the lawsuit. There are a variety of scenarios which might develop at, or during, trial. The possible conflict as discussed in the Kitzerman decision, supra, should not automatically result in a law firm's removal. In the course of litigation an honest witness is often compelled to give evidence which will assist a party that witness feels is "opposite". I do not agree that such a possible conflict requires removal in all cases. There may be some where it does. I am not persuaded that decision should be made at this pre-trial stage of the proceedings in this case.
[82] Edgeworth further submits that motions to remove counsel are not always brought with the “purest of motives” and that the hardship and disruption this may cause to a party also must be factored into the analysis.
[83] As the Supreme Court set out in MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235 (S.C.C.) at para. 13, the law with respect to disqualifying counsel for conflict of interest involves balancing several factors, including (1) the maintenance of high standards of the legal profession and the integrity of our system of justice; and (2) the right of a litigant to its choice of counsel, which he or she should not be deprived of without good cause.
[84] The Supreme Court returned to this theme in R. v. Neil 2002 SCC 70 (“Neil”), where the Court held that a lawyer’s duty of loyalty to current clients includes the principle of avoidance of conflicts of interest which includes ensuring that divided loyalty does not impair a lawyer’s relationship with a client (at paras. 17, 19).
[85] The Court in Neil accepted the definition of conflict as a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client, a former client, or a third person. This standard relates not only to actual conflicts but also to perceived conflicts that reflect adversely on the administration of justice.
[86] In light of this context, the test to be applied on a motion to remove a lawyer from the record because that lawyer may a witness is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of the lawyer. This assessment must be based on an examination of all factors in the case; Ontario Realty Corp v. P. Gabriele & Sons Limited et al, [2006] O.J. No. 4497 (“Ontario Realty”), at para. 20.
[87] In Urquhart v. Allen Estate, [1999] O.J. No. 4816 (Ont. S.C.J.) (“Urquhart”), Justice Gillese (as she then was) set out the following concerns relating to counsel appearing as a witness (at paras. 27-28):
When counsel appears as a witness on a contentious matter, it causes two problems. First, it may result in a conflict of interest between counsel and his client. That conflict may be waived by the client as indeed, was done in this case. The second problem relates to the administration of justice. The dual roles serve to create a conflict between counsel's obligations of objectivity and detachment, which are owned to the court, and his obligations to his client to present evidence in as favourable a light as possible. This is a conflict that cannot be waived by the client as the conflict is between counsel and the court/justice system.
Counsel are independent officers of the court. The trial judge must be able to rely upon plaintiff’s counsel for a high degree of objectivity. The overriding value, in these circumstances, is concern for the proper administration of justice. A distinction must be drawn between the role of counsel as an independent officer of the court and the role of a witness whose objectivity and credibility are subject to challenge. The dual roles that [counsel] intends to fulfill compromises the integrity of the system. As I can see no way to alter the process that respects the rights of both parties, fulfills the needs for due process and maintains regard for the dictates of the proper administration of justice, in these circumstances plaintiffs’ counsel cannot be permitted to continue. I note that even if I were to exercise my discretion and permit him to continue procedural problems may very well arise. If they did so, it is likely that it would require me to abort the trial at that time. Such a course of events would result in more prejudice to the plaintiff than does dealing with the issue now. (Emphasis added.)
[88] While the potential for a conflict of interest may have arisen in the claims relating to conspiracy against each defendant, given that those sections of the claim have now been struck, I must now consider if the same concerns arise in relation to the remaining claim for misrepresentation against Shapira.
[89] In relation to misrepresentation, Edgeworth alleges in the fresh as amended claim (at para. 42):
Additionally, the Plaintiff pleads that Ms. Edgeworth agreed to attend the defence medical examination with the understanding that the report of Dr. Levine would be created and provided forthwith. The Plaintiff pleads that Ms. Shapira misrepresented the agreement and the compliance with the agreement when on May 31, 2017, she stated that the report had not been received “yet” when in fact there had been specific instructions not to create a report. It was the reliance on this presentation which resulted in the plaintiff not withdrawing the offer to settle.
[90] Shapira argues that the allegations of misrepresentation relate specifically to conversations between Shapira and a lawyer with Campisi LLP who was representing Edgeworth in the Mazzoli litigation. For example, the fresh as amended claim (at para. 15) alleges that the communication from Shapira that the medical report was not “yet” received was contained in an email exchange between Shapira and the lawyer with Campisi LLP representing Edgeworth.
[91] In these circumstances, it is apparent that the testimony of the lawyer from Campisi LLP involved in the communications with Shapira in the Mazzoli litigation is very likely to form a necessary basis of the remaining claim for misrepresentation, and thereby create a conflict of interest which cannot be waived. In this context, certainty that a lawyer will testify is not required (Ontario Realty, at para. 33), though it is hard to imagine a scenario where this litigation would not involve the testimony of the lawyer from Campisi LLP with respect to the Mazzoli action.
[92] In light of the case law with respect to the disqualification of counsel for conflict of interest, I find that Campisi LLP must be removed as solicitors for Edgeworth. While Edgeworth argues it is premature to consider this issue at this stage of the litigation, I share the view expressed by Justice Gillese in Urquhart that the prejudice to Edgeworth would likely increase if the decision to remove her law firm of choice was made at a later stage in the litigation.
ORDERS AND COSTS
[93] For the reasons stated above, I grant the motions of the defendants Dr. Levine, Northridge and Evangelista to strike the claims against them as disclosing no reasonable cause of action under Rules 21 and 25 of the Rules of Civil Procedure.
[94] I also grant the motion of the defendant Shapira to strike the claims against her as disclosing no reasonable cause of action under Rules 21 and 25 of the Rules of Civil Procedure, with the exception of the claim of misrepresentation.
[95] Finally, I grant the motion of the defendants to have Campisi LLP removed as solicitor of record for Edgeworth due to the conflict of interest arising from the likelihood of a lawyer from the firm being a witness in this litigation.
[96] As the defendants have been successful on this motion, they are entitled to costs. However, many of the issues raised by the defendants overlapped. In these circumstances, I find that the defendants are collectively entitled to costs of $20,000, all inclusive, payable by Edgeworth within 30 days of this judgment, to be allocated between the defendants as agreed upon by them.
[97] If the defendants cannot agree on an allocation of costs as between them, they each may make brief submissions to me with respect to the allocation of costs (of no more than two pages) to be submitted within 20 days of this judgment.
Sossin J.
Released: October 11, 2019