Court File and Parties

COURT FILE NO.: CV-18-6028929 DATE: 2019-02-05 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ROSALIND TUCKER, Plaintiff/Responding Party AND: VALCO PRODUCTS and J. VAILLANCOURT CORP LTD/LTEE Defendants/Moving Parties

BEFORE: Justice S. Nakatsuru

COUNSEL: R. Soni, for the Plaintiff/Responding Party A. Monkhouse and S. Lucifora, for the Defendants/Moving Parties

HEARD: February 5, 2019

MOTION RECORD ENDORSEMENT

[1] Ms. Tucker is suing the Defendants (henceforth “Valco”) for damages arising out an employment context. Ms. Tucker had worked as a sales representative for Valco for a number of years. Essentially, she sold medical supplies. She has issued her Statement of Claim. Valco has moved to strike a number of claims and paragraphs in that Statement of Claim. In addition to this motion, I am dealing with an injunction and an Anton Pillar order obtained by Valco.

[2] Let me deal first with the Anton Pillar order.

A. The Anton Pillar Order

[3] I do not need to set out the background given that, after submissions, the parties have agreed to a way forward. The Anton Pillar order can be resolved in the following manner. Much of the material has already been returned to Valco. There remains with Mr. Groot materials that needs to be distributed. Mr. Soni has attended the office and although he has not provided a list of materials left, has grouped the remaining materials into 4 categories. These categories are known to Mr. Groot’s office. Thus, I direct the following:

1. The materials which Ms. Tucker claims solicitor-client privilege over shall be returned to Ms. Tucker without further inspection;

2. The materials that Mr. Soni has identified as returnable to Valco shall be forthwith returned to Valco;

3. The materials that Mr. Soni has identified as evidence in the action, shall be returned to Valco. (I understand Mr. Soni wishes them maintained. However, I note that if such evidence falls under the production regime in the rules, they will be identified and produced to Ms. Tucker in any event. Further, she is aware of what they are. No prejudice or harm will befall Ms. Tucker if they are returned to Valco pursuant to the terms of the order)

4. There is material that Mr. Soni has identified as belonging Ms. Tucker to be her personal property. Amongst this category, there are electronic devices such as a computer or phone. Obviously, any physical items of Ms. Tucker should be returned to her. However, items that have data stored in them, such as computers, should be further investigated to ensure that there are no materials than fall within the order stored on them. I am advised that Mr. Groot has copied a mirror image of the data contained within them. However, further steps are required before the items are returned to Ms. Tucker. A forensic assessment of their contents should be conducted to ensure that any items that fall within the order and are the property of Valco, should be returned to Valco. Such items should be deleted from the devices before the devices are returned to Ms. Tucker. However, before they are deleted, those specific items should be identified by Mr. Groot for the parties. If there is a dispute about whether those items are properly returned and deleted, the parties will have a right to object to their deletion or return. The parties will have 14 days to make any such objections once Mr. Groot has identified them to the parties. Any such objections, if they cannot be resolved to the mutual satisfaction of the parties, shall be determined by me upon a proper motion being filed.

[4] This should resolved the issues raised by the Anton Pillar order and finally distribute the materials seized under that order.

B. The Interlocutory Injunction

[5] Valco wishes the injunction to be made permanent. More specifically, Valco is concerned about whether Ms. Tucker will misuse any of its confidential information or records obtained during her employment with Valco. This common law requirement is written into paragraph 3 of her employment contract.

[6] There is also the issue of a non-solicitation condition. However, as pointed out by Ms. Tucker, the 6 months in which the agreement specifies that this will be in effect, has now expired. With respect to Valco’s concern about the misuse of confidential information, Ms. Tucker submits that the record does not support such a concern. Any records that she has will have been returned to Valco. Mr. Soni submits that Ms. Tucker has not breached any terms or conditions of the injunction. Ms. Tucker is concerned about potential harassment or even innocent mistake being made by Valco about any potential breach if this aspect of the injunction is made permanent.

[7] I am persuaded by Ms. Tucker’s position. In my view, the test for a permanent injunction has not been met. On the record before me, I am not convinced that the higher threshold of a strong prima facie case has been met. I fully appreciate that Valco is not seeking judgment in their favour in making the request that the injunction be made permanent. That said, it must be remembered that a permanent injunction remains an exceptional remedy even though it seeks nothing more than what Valco is entitled to contractually or under the common law. Secondly, I do not find Valco has shown they will suffer irreparable harm if the injunction is not continued. In the circumstances of this case, any misuse of confidential information can be quantified by damages. Finally, on the balance of convenience, I find that on the record produced, it favours Ms. Tucker. Here, the Anton Pillar order has been effective. There is no compelling evidence that Ms. Tucker will not abide by her obligations that are well-known in law. They should also been well-known to her now. Injunctions should not be used to simply convey a message to those subject to it to obey the law. On the other hand, to maintain this order may involve potential risk of further litigation expense to her. The record shows that Valco was already once concerned about Ms. Tucker breaching the order and brought a motion regarding it. This concern turned out to be unsubstantiated. In my view, it is not appropriate to maintain this injunction, particularly in circumstances where damages can be an effective remedy.

C. The Motion to Strike the Pleadings

[8] I need not set out the test for such a motion. It is well-known. I will deal with each of Valco’s submissions in this regard.

i. The Limitations Period

[9] Valco submits that on the face of its pleadings, much of Ms. Tucker’s claims for commissions owing to her are statute barred. Valco submits that Ms. Tucker was suspicious of being short-changed on what was owing to her years ago and remained suspicious on a continuous basis since then. Thus, on the material facts set out in the pleadings, it is submitted that this aspect of the claim can be struck as she only commenced her action outside of the two year limitation period.

[10] Assuming for the moment that a limitations defence can be raised on a motion such as this based solely on the Statement of Claim, I do not find it plain or obvious that the claim can be struck on this basis. Those portions of the Statement of Claim relied upon by Valco has to be read along with the other material facts as pleaded. One of those facts is that Valco mislead Ms. Tucker during this time about her commissions by telling her that they were accurate. Another material fact plead is that although Valco did at one point agree that it underpaid her, it promised to rectify the situation which Ms. Tucker accepted. On these facts, it is not plain and obvious that Ms. Tucker’s claims stand no reasonable prospect of success. Given the misleading of her and her potential reliance on Valco’s representation that any shortfalls or inaccurate accounting would be rectified, discoverability of her claim is a real issue for trial. It is not plain or obvious that her claim will fail even having regard for the presumption. As the case law firmly directs, a rule 21.01(b) motion is not a summary judgment motion. As a result, this part of Valco’s motion will be dismissed.

[11] I also note that in the factum, Valco relied upon rule 21.01(a), although this was not argued in oral submissions. In my view, this rule is not applicable as the application of a limitation period is a question of mixed fact and law and is not a question of law as captured by the rule. Further, this rule is not applicable given that there are material facts which are clearly in dispute by the parties.

ii. Negligent and Fraudulent Misrepresentation

[12] Valco has submitted that paragraphs 21 to 30 of the Statement of Claim should be struck. Here the essence of the claim is that Valco misrepresented to its customers the degree of compression offered by its medical devices. In short, these customers did not get what they paid for.

[13] Ms. Tucker argues that the tort has been made out on the pleadings in two ways: Ms. Tucker suffered harm from these misrepresentations since it damaged her relationships with her clients and she suffered economic harm though these misrepresentations were to Valco’s customers. Secondly, she submits that pleadings, read generously support the tort in that Valco negligently and fraudulently misrepresented what she was entitled to in remuneration owing to her.

[14] I find it plain and obvious that this claim as pleaded raises no reasonable cause of action. There are no material facts supporting two requirements of the tort: that the misrepresentation caused Ms. Tucker to act and that she suffered harm as a result. As pleaded, it is only the customers who acted to their detriment. Mr. Soni’s submissions about this claim is not supported by any material facts in the Statement of Claim.

[15] Secondly, with respect to the second submission made by Mr. Soni, I appreciate that material facts need not fall neatly under headings and the Statement of Claim must be read as a whole. However, when done so, it is clear that any misrepresentations about her commissions are related to a breach of contract. What is missing beyond bald assertions, are material facts supporting that Valco acted negligently or fraudulently in making these representations to Ms. Tucker.

[16] As a result, I am satisfied that the claims against Valco for negligent and fraudulent misrepresentation should be struck.

[17] However, although Valco objects to the granting of leave to amend, I am satisfied that leave should be granted. The test for leave to amend is not stringent. Sufficient material facts as pleaded exist that it is possible for Ms. Tucker to amend her claim to support a reasonable cause of action.

iii. Loss of Future Income and Loss of Future Earning Capacity

[18] Under a head of damages, paragraph 1(g), Ms. Tucker claims damages for loss of future income and loss of future earning capacity. I accept that such damages can be proper in the employment context: Boucher v. Wal-Mart Canada 2014 ONCA 419, [2014] O.J. No. 2452 (C.A.) at para. 103.

[19] However, the problem for Ms. Tucker is that it is plain and obvious that no reasonable cause of action exists where such damages would fall under. In short, she has not plead any material facts nor is a tort identified whereby the loss of future income or loss of future earning capacity would be a proper head of damages. In addition, there are no material facts plead that any tortious conduct by Valco has lead a loss of future income or loss of earning capacity. What she had plead looks backwards to what she was owed before she claims she was constructively dismissed.

[20] Mr. Soni now claims that the material facts plead in her Statement of Claim such has tampering with her phone, could support a reasonable claim of harassment. While I am somewhat skeptical that such a claim on these facts can be supported, I find that Ms. Tucker should have an opportunity to amend her Statement of Claim in order to try and remedy this deficiency. As a result, this claim for damages is struck but leave to amend is granted.

D. CONCLUSION

[21] The order will go in accordance with these reasons. Ms. Tucker will have 30 days to serve and file an Amended Statement of Claim having regard to my reasons.

[22] I have received costs outlines. If the issues of costs cannot be resolved between the parties, I will entertain written submissions, each one limited to two pages not including attachments such as offers to settle or authorities. Valco shall file within 20 days of this decision. Ms. Tucker shall file within 10 days thereafter. There will be no reply submissions without leave of the court.

Justice S. Nakatsuru

Date: February 5, 2019