COURT FILE NO.: CV-19-00619987-000
DATE: 2019/11/18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
STEDFASTS INC.
Plaintiff
- and -
DYNACARE LABORATORIES
Defendant
Jason Bogle and Eric Blau for the Plaintiff
Christine Muir and Breanna Needham for the Defendant
HEARD: November 14, 2019
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] Stedfasts Inc. sues Dynacare Gamma Laboratory Partnership (“Dynacare”), which is improperly named in the style of cause as Dynacare Laboratories. I order that the style of cause be amended accordingly.
[2] I have had to deduce, wonder, and guess, but it seems that Stedfasts’ claims as set out in its Amended Statement of Claim against Dynacare sounds in negligence, unjust enrichment, and breach of contract. I have had to deduce, wonder, and guess, but Stedfasts also pleads claims for repudiation of contract, which may or may not be a different claim from its breach of contract claim. And it may be pleading a novel cause of action of “reprisal conduct against a plaintiff”, which is also apparently related to Stedfasts’ breach of contract and repudiation of contract claims.
[3] Stedfasts seeks the remedies of declarations, specific performance, permanent mandatory injunctions misdescribed as specific performance, punitive damages of $10 million, and $40 million in general damages. It also seeks “a further quantum [of general damages] to be determined at trial … resulting from [Dynacare’s] reprisal, negligence, breach of contract and repudiation of contract”.
[4] Confronted with this fusillade of claims and remedial requests, pursuant to rules 21.01(1)(b), 21.03(d) and 25.11 of the Rules of Civil Procedure,[^1] Dynacare seeks an order striking Stedfasts’ Amended Statement of Claim in its entirety, without leave to amend on the basis that the statement of claim discloses no reasonable cause of action and on the basis that the pleading is frivolous, vexatious and an abuse of process.
[5] In a further alternative, relying on rules 21.01(3)(d) and 25.11, Dynacare seeks an order striking in whole or in part the following paragraphs of the Amended Statement of Claim as frivolous, vexatious, and an abuse of process; namely: paragraphs 1-5, 17-19, 21-22, 24, 26-27, 33(a-h), 24-35, 38, 40-42, 44(a, d-f, h-n), 45-46, 48-58, 60, 61-69, 73-78, 80-87, 90-93, 96-97, 98(a-d, f), 99, 103-104, 106-112, 114, 116-142, 147, 150-153, 155-164, and 167.
[6] For the reasons that follow, Stedfasts’ Amended Statement of Claim should be struck in its entirety. The pleading is a gross violation of the rules that govern pleadings.
[7] The more difficult question is whether and to what extent should Stedfasts be allowed leave to amend its Amended Statement of Claim. For the reasons that follow, I have concluded that Stedfasts should be given an opportunity to plead a claim for breach of contract for the remedy of damages.
[8] Apart from a breach of contract cause of action, Stedfasts is not granted leave to plead any other cause of action. Whatever claim Stedfasts may have, the claim arises from the contractual relationship between the parties. The contractual relationship defines the obligations between the parties, and I grant leave to Stedfasts to deliver a Fresh as Amended Statement of Claim confined to a cause of action for breach of contract.
B. Procedural Background
[9] On May 14, 2019, Stedfasts issued its Statement of Claim. The pleading is 34 single-spaced pages comprised of 270 paragraphs.
[10] On July 11, 2019, Dynacare delivered a Notice of Motion seeking to strike the Statement of Claim, which Notice particularized the alleged deficiencies in the Statement of Claim.
[11] On October 25, 2019, Stedfasts delivered an Amended Statement of Claim, which pleading Dynacare seeks to strike in its entirety. This pleading is 23 single-spaced pages comprised of 168 paragraphs.
C. Facts
[12] The following recitation of the core or bare-bones material facts are my deductions and guesswork from reading Stedfasts’ original Statement of Claim and its Amended Statement of Claim. I also read the documentary material that Stedfasts filed in a Responding Motion Record, some of which was not proper material for a pleadings motion. I, nevertheless, read the impermissible material, in order to understand Stedfasts’ allegations and the nature of its potential claims against Dynacare. I also gained some understanding of the nature the claim from Stedfasts’ copious factum.
[13] Dynacare is a medical laboratory. Stedfasts is a courier service that transports medical samples and medical specimens to and from Dynacare’s laboratory.
[14] There is a written contract between Dynacare and Stedfasts described as an Owner Operator Courier Renewal Contract. The contract is dated November 17, 2010. When the contractual arrangement began is not clear.
[15] As for the contract that is central to Stedfasts’ claims, it is not clear from the Amended Statement of Claim whether the contract is a written contract or a contract that is both oral and in writing. It is not clear whether there are implied terms to the contract. It is not clear whether the contract is an employment contract, a dependent contractor contract, an independent contractor contract, or a subcontractor contract or all of these forms of contract or perhaps some other type of contract.
[16] Amongst the salient written terms, Stedfasts was to provide the vehicles and the drivers for the transportation of hazardous medical materials. The drivers must wear Dynacare uniforms and it is Dynacare that directs the driving assignments and the driver’s routes. It is not clear whether Stedfasts’ drivers were employees, dependent contractors, independent contractors, subcontractors and it is not clear whether their employer, if any, is Stedfasts or Dynacare or some combination of Stedfasts or Dynacare. The agreement is expressed to be terminable by either party upon 15 calendar days’ notice.
[17] Stedfasts supplied the drivers and the vehicles. It seems that there were approximately 70 drivers.
[18] Stedfasts alleges that it was hired to transport hazardous medical goods, but it was Dynacare’s contractual obligation to ensure that the hazardous goods were properly packaged so that the goods could be transported safely.
[19] Between 2009 and 2017, the relationship between Stedfasts and Dynacare was cooperative and healthy.
[20] However, the relationship began to break down in early 2017 because Dynacare’s logistics and operations departments allegedly mismanaged routes, mismanaged assignments, and improperly stored and improperly prepared and packaged the materials to be couriered, with the result that hazardous materials could not be safely transported. Moreover, Dynacare began cancelling routes that had previously been serviced by Stedfasts.
[21] It is alleged that Dynacare’s activities exposed the drivers to health and safety risks. It is alleged that Dynacare failed to train the drivers in the skills necessary to transport hazardous materials. It is alleged that Dynacare’s activities breached the confidentiality of the patients’ medical information. It is alleged that Stedfasts and its drivers made numerous attempts to advise Dynacare that the transportation of hazardous materials was contrary to statutory requirements, but that Dynacare ignored this information.
[22] Further, it is alleged that Dynacare’s employees urged Stedfasts’ drivers to join other carrier companies and that Dynacare was dilatory in paying invoices for the services it received from Stedfasts. It is alleged that Dynacare through cellphone requests to Stedfasts’ drivers obtained services from Stedfasts that it did not pay for.
[23] Stedfasts alleges that Dynacare overbilled and improperly billed third parties and clients. Stedfasts submits that Dynacare was not paying the drivers remuneration that befitted their skills and the risks being taken in carrying out their jobs. Further still, Stedfasts alleges that it was forced to put Dynacare’s employees and the spouses of Dynacare’s employees on Stedfasts’ payroll.
[24] As the relationship between the parties deteriorated Stedfasts’ efforts to negotiate a fairer contract were rebuffed and Dynacare interfered with Stedfasts’ relations with the drivers.
[25] Many of the drivers had grievances. The drivers complained that they were not given adequate route information. They complained that Dynacare did not properly package the hazardous material particularly the biohazardous medical specimens. The drivers complained that the packaging did not comply with the statutorily regulated standards of the Dangerous Goods Transportation Act,[^2] the Laboratory and Specimen Collection Centre Licensing Act,[^3] the Personal Health Information Protection Act, 2004,[^4] and the Personal Information Protection and Electronic Documents Act.[^5]
[26] On May 8, 2018, Dynacare terminated the agreement with the result that 70 drivers lost their jobs. Stedfasts alleges that the termination was a reprisal for the drivers’ and Stedfasts’ demanding action in response to their grievances.
[27] Stedfasts seeks the remedies of: (a) a declaration that the safety of Stedfasts and its drivers has been endangered; (b) specific performance in respect of transportation of goods under the Dangerous Goods Transportation Act and the Laboratory and Specimen Collection Centre Licensing Act, (c) specific performance in respect of general public information; (d) a declaration of "reprisal conduct" by Dynacare as against Stedfasts; (e) general damages of $40 million; and, (f) punitive damages of $10 million.
[28] It is not clear from the Amended Statement of Claim, but it seems that Stedfasts seeks these remedies out of self-interest and also for the benefit of its own employees or subcontractors; i.e., the drivers engaged by Stedfasts, And, it seems that Stedfasts sues altruistically in the public interest for the citizens of Ontario to change the behaviour of Dynacare.
D. Discussion and Analysis
[29] Rule 25.06 (1) directs that every pleading 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. A pleading should be brief, clear, focused and contain the skeletal or core facts and not the evidence that details those facts unless particulars are required by the rules.[^6]
[30] Material facts include facts that the party pleading is entitled to prove at trial, and at trial, anything that affects the determination of the party’s rights can be proved; accordingly, a material fact includes facts that can have an effect on the determination of a party’s rights.[^7] A fact that is not provable at the trial or that is incapable of affecting the outcome is immaterial and ought not to be pleaded.[^8] A pleading of fact will be struck if it cannot be the basis of a claim or defence and is designed solely for the purposes of atmosphere or to cast the opposing party in a bad light.[^9] As described by Riddell J. in Duryea v. Kaufman,[^10] such a plea is said to be “embarrassing”.
[31] “Material” facts include facts that establish the constituent elements of the claim or defence.[^11] The causes of action must be clearly identifiable from the facts pleaded and must be supported by facts that are material.[^12]
[32] A pleading shall contain material facts, but it should not contain the evidence by which those facts are to be proved.[^13] Pleadings of evidence may be struck out.[^14] The prohibition against pleading evidence is designed to restrain the pleading of facts that are subordinate and that merely tend toward proving the truth of the material facts.[^15]
[33] Under rule 25.11, the court may strike out a pleading that may prejudice or delay the fair trial of the action or that is scandalous, frivolous, vexatious or an abuse of process of the court.[^16] The same test that is used for striking a pleading for the failure to show a reasonable cause of action; i.e., the plain and obvious test, is used to determine whether a pleading is scandalous, frivolous or an abuse of process of the court.[^17]
[34] A claim may be found to be frivolous, vexatious or an abuse of process when it asserts untenable pleas, is argumentative, contains insufficient material facts to support the allegations made, or is made for an extraneous or collateral purpose.[^18] For the purpose of rule 25.11, the term “scandalous”, includes allegations that are that are irrelevant, argumentative, simply inserted for colour or to impugn the behaviour or character of the other party unrelated to the issues in the litigation.[^19] Parties are to be allowed a great deal of latitude in how they plead, but there are limits, and the court has the jurisdiction to strike a pleading to remove the pleading of evidence, prolix or vague allegations, repetitive or redundant allegations, or inconsistent allegations that are not clearly pled as alternatives and to direct a party to plead with certainty, precision and with sufficient particulars.[^20]
[35] A scandalous pleading refers to indecent or offensive allegations designed to prejudice the opponent or unnecessary allegations maliciously directed at the moral character of the opponent.[^21] Pleadings that are irrelevant, argumentative or inserted only for colour, or that constitute bare unfounded allegations should be struck out as scandalous.[^22] A pleading that raises an issue that cannot influence the outcome of the action is scandalous.[^23] The pleading is struck out because it serves no purpose other than to add colour or argument and to disconcert or humiliate the opponent.[^24] References in pleadings to settlement offers, discussions, and negotiations, which are privileged communications, are scandalous, frivolous or vexatious and should be struck from the pleading.[^25]
[36] The rule authorizing the court to strike out a pleading as prejudicial, scandalous, frivolous, vexatious, or an abuse of the process of the court is exercised only in the clearest of cases.[^26] Where a pleading is struck as defective, leave to amend should only be denied in the clearest cases when it is plain and obvious that no tenable cause of action is possible on the facts as alleged.[^27] The usual practice is to grant the plaintiff leave to amend unless it is clear that the plaintiff cannot improve its case by any further and proper amendment.[^28]
[37] Having reviewed the Amended Statement of Claim, in my opinion, the following paragraphs in whole or in part contravene rules 25.06(2) and or 25.11: 45; namely: 21, 22, 24, 26, 27, 33, 34, 35, 38, 40, 41, 42, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 73, 74, 75, 76, 77, 78, 77, 80, 81, 82, 83, 84, 85, 86, 87, 90, 91, 92, 93, 96, 97, 98, 99, 103, 104, 106, 107, 108, 109, 110, 111, 112, 114, 116, 117, 118, 119, 120, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 147, 150, 151, 152, 153, 155, 156, 157, 158, 159, 160, 161, 162, 163, and 164.
[38] While there are parts of the Amended Statement of Claim that are proper pleadings, taken as a whole, the Amended Statement of Claim is so contrary to the rules of proper pleading that it must be struck in its entirety.
[39] Dynacare argues that if the claim is struck, then it should be struck without leave to amend because Stedfasts has had two tries at articulating a proper pleading and Dynacare submits there is nothing to suggest that Stedfasts can plead a reasonable cause of action. I disagree, and I grant leave to Stedfasts to plead a breach of contract cause of action against Dynacare.
[40] I agree with Dynacare that the causes of action in the original Statement of Claim and in the Amended Statement of Claim for breach of contract, repudiation of contract, and “reprisal conduct against a plaintiff” are vague and illogical and discordant with the recognized principles of contract law. By way of illustration, it is trite law that specific performance is not an available remedy for contracts for service and that equitable remedies, in general, are not available when damages are an adequate remedy. There are other examples of the infelicity of the current pleading.
[41] However, there is enough revealed in the Amended Statement of Claim to show that it should be possible for Stedfasts to deliver a properly pleaded breach of contract claim.
[42] I would, however, not grant leave for Stedfasts to plead claims for unjust enrichment or for negligence. These claims would be subsumed or made redundant by the breach of contract cause of action.
[43] In this last regard, by way of illustration, in the immediate case, the tort claim would be a claim for pure economic losses. In Canadian National Railway Co. v. Norsk Pacific Steamships Co.[^29] and D’Amato v. Badger,[^30] the Supreme Court of Canada recognized that there were at five categories of recoverable pure economic loss tort claims; namely: (1) liability of public authorities; (2) negligent misrepresentation; (3) negligent performance of a service; (4) negligent supply of shoddy goods or structures; and (5) relational economic loss. In Martel Building Ltd. v. Canada,[^31] the Court stated that new categories could also be added if the category satisfied a duty of care analysis.
[44] In the immediate case, however, a contract already defines the rights and obligations of the parties, and that contract would inform whether a tortious duty should be recognized. In the immediate case, there is little to nothing in the Amended Statement of Claim that would support a pure economic tort claim by Stedfasts in the recognized categories or in a new category. In the immediate case, it is plain and obvious that apart from a breach of contract claim, there is no tenable tort cause of action by Stedfasts against Dynacare on the facts as alleged or that could be alleged.
E. Conclusion
[45] For the above reasons, Dynacare’s motion to strike is granted, and I strike Stedfasts’ Amended Statement of Claim in its entirety. I grant leave to Stedfasts to deliver a Fresh as Amended Statement of Claim confined to a cause of action for breach of contract with the remedy of damages. There is no tenable route to specific performance or any equitable remedy. I order the style of cause amended to properly name Dynacare.
[46] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Dynacare’s submissions within twenty days of the release of these Reasons for Decision followed by Stedfasts’ submissions within a further twenty days.
Perell, J.
Released: November 18, 2019
COURT FILE NO.: CV-19-00619987-000
DATE: 2019/11/18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
stedfasts inc.
Plaintiff
- and -
DYNACARE LABORATORIES
Defendant
REASONS FOR DECISION
PERELL J.
Released: November 18, 2019
[^1]: R.R.O. 1990, Reg. 194. [^2]: R.S.O. 1990, c. D.1. [^3]: R.S.O. 1990, c L.1. [^4]: S.O. 2004, c.3. Sched. A. [^5]: S.C. 2000, c.5. [^6]: Mudrick v. Mississauga Oakville Veterinary Emergency Professional Corp., [2008] O.J. No. 4512 (Master). [^7]: Brydon v. Brydon, [1951] O.W.N. 369 (C.A.); Hammell v. British American Oil Co., [1945] O.W.N. 743 (Master); Daryea v. Kaufman (1910), 21 O.L.R. 161 (H.C.J.). [^8]: Wood Gundy Inc. v. Financial Trustco Capital Ltd., [1988] O.J. No. 275 (H.C.J.); Guaranty Trust Co. of Canada v. Public Trustee (1978), 1978 ONSC 1704, 20 O.R. (2d) 247 (H.C.J.); Everdale Place v. Rimmer, (1975), 1975 ONSC 337, 8 O.R. (2d) 641 (H.C.J.); Elder v. Kingston (City), [1953] O.W.N. 409 (H.C.J.). [^9]: Canadian National Railway Co. v. Brant (2009), 2009 ONSC 32911, 96 O.R. (3d) 734 (S.C.J.); Wilson v. Wilson, [1948] O.J. No. 62 (H.C.J.). [^10]: Duryea v. Kaufman (1910), 21 O.L.R. 165 at p. 168 (H.C.J.). [^11]: Philco Products, Ltd. v. Thermionics, Ltd., 1940 SCC 43, [1940] S.C.R. 501. [^12]: Cerqueira v. Ontario, 2010 ONSC 3954 at para. 11. [^13]: McDowell and Aversa v. Fortress Real Capital Inc., 2017 ONSC 4791; Murray v. Star, 2015 ONSC 4464; Mudrick v. Mississauga Oakville Veterinary Emergency Professional Corp., [2008] O.J. No. 4512 (Master). [^14]: Envirochill Cryogen Development Corporation v. University of Ontario Institute of Technology, 2018 ONSC 766 (Master); Jacobson v. Skurka, 2015 ONSC 1699; Sun Life Assurance Co. of Canada v. 401700 Ontario Ltd. (1991), 1991 ONSC 7050, 3 O.R. (3d) 684 (Gen. Div.). [^15]: Grace v. Usalkas, [1959] O.W.N. 237 (H.C.J.). [^16]: 876502 Ontario Inc. v. I.F. Propco Holdings (Ontario) 10 Ltd. (1997), 1997 ONSC 12196, 37 O.R. (3d) 70 (Gen. Div.); R. Cholkan & Co. v. Brinker (1990), 1990 ONSC 6865, 71 O.R. (2d) 381 (H.C.J.); Demeter v. British Pacific Life Insurance Co. (1983), 1983 ONSC 1838, 43 O.R. (2d) 33 (H.C.J.), affd (1984), 1984 ONCA 1996, 48 O.R. (2d) 266 (C.A.); Foy v. Foy, (1978), 1978 ONCA 1394, 20 O.R. (2d) 747 (C.A.). [^17]: Resolute Forest Products Inc. v. 2471256 Canada Inc. (c.o.b. Greenpeace Canada), 2016 ONSC 5398 (Div. Ct.); Miguna v. Toronto (City) Police Services Board, 2008 ONCA 799. [^18]: Carney Timber Co. v. Pabendinskas, 2008 ONSC 63163, [2008] O.J. No. 4818 (S.C.J.); Hainsworth v. Ontario, [2002] O.J. No. 1380 (S.C.J.); Panalpina Inc. v. Sharma, [1988] O.J. No. 1401 (H.C.J.). [^19]: Holder v. Wray, 2018 ONSC 6133 (S.C.J.); Carney Timber Co. v. Pabendinskas, 2008 ONSC 63163, [2008] O.J. No. 4818 (S.C.J.); George v. Harris, [2000] O.J. No. 1762 (S.C.J.). [^20]: Cadieux (Litigation guardian of) v. Cadieux, 2016 ONSC 4446 (Master); Dolan v. Centretown Citizens Ottawa Corp., 2015 ONSC 2145 (Master); Fockler v. Eisen, 2012 ONSC 5435. [^21]: Wolker v. Ogilvie Realty Ltd., [2006] O.J. No. 381 (S.C.J.); 876502 Ontario Inc. v. I.F. Propco Holdings (Ontario) 10 Ltd. (1997), 1997 ONSC 12196, 37 O.R. (3d) 70 (Gen. Div.); Paul v. Paul (1980), 1980 ONSC 1838, 28 O.R. (2d) 78 (H.C.J.). [^22]: Gardner v. Toronto Police Services Board, [2006] O.J. No. 3320 (Ont. S.C.J.), var’d 2007 ONCA 489; Senechal v. Muskoka (District Municipality), [2003] O.J. No. 885 (S.C.J.); Solid Waste Reclamation Inc. v. Philip Enterprises Inc., 1991 ONSC 7369, [1991] O.J. No. 213 (Gen. Div.). [^23]: Caras v. IBM Canada Ltd., [2004] O.J. No. 3009 (Master); Everdale Place v. Rimmer (1975), 1975 ONSC 337, 8 O.R. (2d) 641 (H.C.J.). [^24]: Sequin v. Van Dyke 2011 ONSC 2566 (Master); Dugal v. Manulife Financial Corp., 2011 ONSC 387; Williams v. Wai-Ping, [2005] O.J. No. 1940 (S.C.J.), aff’d, [2005] O.J. No. 6186 (Div. Ct.); Jane Doe v. Escobar, [2004] O.J. No. 2760 (S.C.J.); Hodson v. Canadian Imperial Bank of Commerce, [2001] O.J. No. 4378 (Div. Ct.); George v. Harris, [2000] O.J. No. 1762 (S.C.J.). [^25]: Lemonius v. Audmet Canada, 2019 ONSC 4485 (Master); 2030945 Ontario Ltd. v. Markham Village Shoppes Ltd., 2013 ONSC 1020 (Master); Canadian Gateway Development Corp. v Canada (National Capital Commission), [2002] O.J. No. 3167 (Master) [^26]: Tarion Warranty Corp. v. Brookegreene Estates Inc., [2006] O.J. No. 923 (S.C.J.); Wernikowski v. Kirkland, Murphy & Ain (1999), 1999 ONCA 3822, 50 O.R. 124 (C.A.). [^27]: Mitchell v. Lewis, 2016 ONCA 903; Conway v. Law Society of Upper Canada, 2016 ONCA 72; Piedra v. Copper Mesa Mining Corp., 2011 ONCA 191; Heydary Hamilton Professional Corp. v. Hanuka, 2010 ONCA 881. [^28]: Fournier Leasing Co. v. Mercedes-Benz Canada Inc., 2012 ONSC 2752; AGF Canadian Equity Fund v. Transamerica Commercial Finance Corp. Canada, (1993), 1993 ONSC 8682, 14 O.R. (3d) 161 (Gen. Div.). [^29]: (1992), 1992 SCC 105, 91 D.L.R. (4th) 289 (S.C.C.). [^30]: (1996), 1996 SCC 166, 137 D.L.R. (4th) 129 (S.C.C.). [^31]: 2000 SCC 60, [2000] 2 S.C.R. 860.