COURT FILE NO.: CV-16-545927
MOTION HEARD: 20200831
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1169433 Ontario Ltd., O/A Durham Towing and Durham Top Quality Collision Centre, plaintiff/Moving Party
AND:
Shayne Simpson, Colin Sauve, and Her Majesty the Queen in Right of Ontario, defendants, Responding Parties
BEFORE: Master Josefo
COUNSEL: Counsel for the Plaintiff/Moving Party: H. Epstein, Email: hepstein@bainspartners.com
Counsel for the Defendants/Responding Parties: A. Mortimer & E. Bala, Emails: adam.mortimer@ontario.ca & emtiaz.bala@ontario.ca
HEARD: August 31, 2020
DECISION RELEASED: September 1, 2020
REASONS FOR DECISION
What this Motion is About:
[1] The Plaintiff seeks to further amend its Statement of Claim (“claim”) pursuant to Rule 26, to add claims seeking an interim and permanent mandatory Order against the Crown. Specifically, the plaintiff wishes to compel the Ontario Provincial Police (“OPP”) to adhere to what it asserts is the “First On Scene” tow policy. The Crown denies that this policy still exists, and opposes the specific proposed amended claims which seek an interim and permanent mandatory order against the Crown.
[2] In my August 5, 2020 endorsement following a telephone case-conference with counsel that day, I described the dispute in part as follows:
As Plaintiff, moving party, described in the Short Motion Request Form:
The Plaintiff is seeking to amend the Amended Statement of Claim under Rule 26.01 to include allegations of ongoing tortious conduct and to include a claim for an interlocutory and permanent mandatory Order requiring the OPP to comply with its tow policy…
The Defendants, responding parties, hold this view:
The Plaintiff's proposed amendment to include a claim for an interlocutory and permanent mandatory Order against the Crown, along with related factual pleadings, is legally untenable. Section 14 of the Proceedings Against the Crown Act prohibits the Court from ordering injunctive and mandatory relief against the Crown and Crown servants. The Superior Court has recognized a narrow exception, but it does not apply here because the relief sought is a mandatory order, not an injunction, and seeks to impose a commercial policy, not preserve the status quo respecting property to protect the effectiveness of the Court's final disposition.
[3] The procedural history involves the plaintiff initially seeking to schedule an urgent motion for a mandatory injunction. Justice Myers, sitting as the triage Justice, on June 17, 2020, declined to schedule that motion. Instead, Justice Myers for reasons set out in his endorsement, referred the matter for a case conference before Justice Chalmers.
[4] On June 18, 2020 Justice Chalmers conducted a tele-case conference. Therein it was noted that the Claim as it then existed did not seek injunctive relief. Yet plaintiff’s counsel obtained instruction to seek to amend the claim. Whether a motion for the requested mandatory order/injunction is to eventually be scheduled depends on the outcome of this motion to amend the claim.
THE CONTESTED AMENDMENTS
[5] Mr. Mortimer, submitting for the Crown, stated that only the following amendments in the draft Amended, Amended Claim are opposed:
a. Paragraph 1(c) : “An interim and permanent Order requiring the Defendants to comply with the OPP “First On Scene” tow policy”;
b. Paragraph 35, only after “CAA”, alleging “irreparable harm”: “Durham states and pleads that the Defendants interfered with Durham’s business relationship with the CAA, causing Durham irreparable harm”.
c. Paragraph 41: “Durham further states and pleads that, as of May 21, 2020, it stopped sending its tow operators to the scene when the OPP requests a tow truck due to the intimidation and harassment of Durham’s tow drivers by certain OPP officers”.
d. Paragraph 45: “Durham further states and pleads that if it is prevented from attending at the scene of, for example, a motor vehicle accident, it will not only lose the revenue from the tow, but also the associated impoundment and collision repair fees. In addition, when Durham tows and assesses damage to a vehicle, it communicates with an insurance company. If Durham is denied the right to communicate with an insurance company by providing an estimate of repair costs, it affects the goodwill Durham has built in the business over the years with various insurance companies”.
THE APPLICABLE LAW
[6] Pursuant to Rule 26.01, pleadings shall be amended unless “prejudice would result that could not be compensated for by costs or an adjournment.” Yet pursuant to the case-law which has developed thereunder, while amendments are often granted depending on the issues in a specific case, there is no absolute right to amend pleadings. If, as is argued by the Crown in this matter, the amendments are not legally tenable, then these should not be permitted.
[7] A question arises if I, as a Master, have jurisdiction to assess the legal tenability of the proposed pleadings. Both counsel, albeit counsel for plaintiff perhaps more cautiously in her agreement, submitted that Masters do have such jurisdiction, notwithstanding one case which holds otherwise. Defendants counsel preferred other decisions to the decision of Herzig v. Markham (Town), 2007 CarswellOnt 8039. Defendants specifically referred to Coriale (Litigation Guardian of) v. Sisters of St. Joseph of Sault Ste Marie, 328, 1998 CanLII 14695 (ON SC), 41 O.R. (3rd) 347. In that decision Justice Molloy referenced earlier decisions and, while noting that the jurisdiction of a Master was not specifically addressed, followed the “long established precedent” set by Rosenberg J. in Vaiman v. Yates and the “established practice” of the court in accepting the jurisdiction of a Master to consider such issues (paragraph 20).
[8] The recent decision of Damiani v. Toronto Hydro Corporation, 2019 ONSC 284 involved an appeal from a decision of a Master which denied the appellants motion for leave to amend their statement of claim. Justice Backhouse noted that “the standard of review in an appeal from the order of a master is the same as that for an appeal from an order of a judge: correctness for an error of law, palpable and overriding error for an error of fact, and correctness or palpable and overriding error for a question of mixed fact and law, depending on whether there is an extricable legal principle…” (paragraph 10). Justice Backhouse also helpfully described the test to consider tenability of a pleading (at paragraph 6) as follows:
“…[it is] determined by application of the analysis under Rule 21.01(1)(b)—namely, whether the pleading raises no reasonable cause of action. As explained by Morden and Perell and cited in Brookfield Financial Real Estate Group Ltd. v. Azorim Canada(Adelaide Street) Inc, ‘it makes little sense to grant an amendment that will immediately be challenged as legally unsound, and the court may inquire into the merits to ensure that the amendment is tenable in law and compliant with the rules of pleading’”.
[9] In this within matter, applying the analysis under Rule 21.01(1)(b), I agree with the defendants that a key question to consider is whether it is “plain and obvious” that the proposed amendments disclose no reasonable cause of action. Master McLeod, as he then was, spoke to this (along with addressing jurisdiction) in Plante v. Industrial Alliance Life Insurance Co, 2003 CarswellOnt 2961, as follows (at paragraph 19):
While the court will not therefore conduct a detailed examination of the evidentiary merits of a proposed amendment, the court is required to scrutinize the proposed claim to ensure that it is meritorious in the sense of raising a tenable plea. In addition, it must be scrutinized to ensure it is a proper pleading complying with Rule 25. Put another way, a pleading amendment should be reviewed to ensure it would withstand scrutiny under Rule 25.11 and 21.01 (1)(b), but does not engage a summary judgement analysis under Rule 20. This level of legal technical review is the same whether a master or a judge hears the motion.
[10] There was agreement amongst counsel that both Section 22 of the 2019 Crown Liability and Proceedings Act and Section 14 of the older Proceedings Against the Crown Act prohibit the granting of injunctive relief against the Crown. The parties do not agree which Act applies to this within case. The Crown asserts it’s the older Act while Ms. Epstein asserts it is the 2019 legislation. Yet I need not address that as, nevertheless, each agree that in either case injunctive relief is not available. What Ms. Epstein for the plaintiff asserted, however, is that there is a distinction between an “injunction” and a “mandatory order”, arguing that the use of the word “or” at section 101 of the Courts of Justice Act and at Rule 40 means that these are two different forms of relief, with only the one (injunctive relief) not statutorily permitted against the Crown.
[11] I respectfully disagree with that attempted distinction. An injunction and a mandatory order are basically two sides of the same coin. One, an injunction, enjoins someone from doing something which they seek to do. A mandatory order compels someone to do something that they do not wish to do. The terms are typically used interchangeably, as did Justice Myers and Justice Chalmers in their endorsements in this matter when referring to what relief the plaintiff sought. Moreover, Justice Sharpe discusses these terms extensively in Injunctions and Specific Performance, at ss. 1.10-1.30. What I take from that text is that these terms are often used interchangeably.
[12] The plaintiff agrees that an injunction is not available against the Crown pursuant to the clear wording of either statute, yet asserts that a mandatory order is available. Taking that argument to its conclusion, however, leads to the outcome that the Court could not stop the Crown from doing something (an injunction) but could, arguably more intrusively, direct the Crown to do something: to take action which it does not wish to take (a mandatory order). In my view, such would not be a logical nor a principled outcome. Consistent with Deep v. Ontario, 2004 CarswellOnt 2625 and Granite Power Corp v. Ontario, 2002 CarswellOnt 5929, in which in those cases claims for mandatory orders were struck under section 14 of the Proceedings Against the Crown Act, I respectfully reject the plaintiff’s argument. I follow these decisions and find that the two Acts each preclude injunctive relief which, as Justice Sharpe explains, includes mandatory orders.
[13] The acknowledged limited exceptions to the statutory prohibition of injunctive relief against the Crown would not, I find, apply in this case. Unlike the interim preservation order granted in Couchiching First Nation v For Frances (Town) (“Couchiching”), 2010 ONSC 4373, this case is not about preserving the “status quo” pertaining to property or to property rights, so to ensure that the Court may make an effective final disposition of a matter. The issue here for the plaintiff is its economic claims, which the plaintiff alleges are being interfered with by the OPP. Yet those economic claims do not fit within the exception.
[14] Moreover, a law is not asserted to be breached in this case. Rather, the plaintiff seeks to compel the Crown, through the OPP, to follow not a law but rather a policy, which policy defendants in any event dispute remains applicable. In Grain Farmers of Ontario v Ontario, 2015 ONSC 6581 (“Grain Farmers”), at paragraph 14 and following, Justice Akhtar reviewed the case-law which discussed the “general rule that interlocutory or interim declarations should not be granted against the Crown unless there is some evidence of a ‘deliberate flouting of the law’”. Given the within plaintiff claims that the failure of the OPP is to follow not a law but, again, a policy, this exception also does not apply.
[15] Justice Akhtar also distinguishes economic versus property rights at paragraph 19 of Grain Farmers when considering the Couchiching decision referenced above. I agree that by allowing the plaintiff in this case to seek injunctive relief against the Crown to protect its economic rights would be contrary to the conclusions reached in the above-referenced decisions of Deep v. Ontario and Granite Power Corp v. Ontario.
[16] Applying the above law, I now assess the tenability of the proposed further amended pleadings. In so doing, I rely on decision of Master Sandler in Panalpina Inc v. Sharma et al, 1988 CarswellOnt 459 (at paragraph 31):
I wish to make it clear that a Master still has jurisdiction…to strike out a pleading or a part of a pleading which contains an ‘untenable plea’ but it is essential to understand what is meant by ‘untenable’. An untenable plea is one that is clearly impossible of success at law, that has no legal potential whatsoever, that is clearly unviable or unachievable at law… .
THESE PROPOSED PLEADINGS: TENABLE?
[17] Neither counsel in their submissions addressed in much detail the specific pleadings in issue. Ms. Epstein asserted that these were all viable. While not conceding a lack of distinction between an injunction and a mandatory order, counsel for plaintiff focused more on whether this case fit within the exception principles described above. Mr. Mortimer also took an “all or nothing” approach; arguing that none of these proposed amendments were tenable based on the statutory and case-law.
[18] I believe that the answer is more nuanced. Each specific impugned pleading should be considered on its own merits, to determine if what is asserted is a viable, tenable plea, or if it is “plain and obvious” that the plea cannot stand. For the readers’ convenience, I re-state the paragraphs, along with my findings for each:
a. Paragraph 1(c) : “An interim and permanent Order requiring the Defendants to comply with the OPP “First On Scene” tow policy”. This pleading is clearly not tenable at law, it is impossible of success, with no legal potential. For reasons already discussed, such Orders are not available against the Crown pursuant to Section 22 of the Crown Liability and Proceedings Act and Section 14 of the Proceedings Against the Crown Act. Each prohibit the granting of injunctive relief against the Crown. The limited exceptions I find for reasons already stated, do not apply. Paragraph 1(c) is therefore not a permissible amendment.
b. Paragraph 35, only after “CAA”, alleging “irreparable harm”: “Durham states and pleads that the Defendants interfered with Durham’s business relationship with the CAA, causing Durham irreparable harm”. While “irreparable harm” is of course what must be established for injunctive relief (when seeking one is otherwise tenable and viable), nothing in my view precludes that phrase or expression from being used otherwise in a pleading. I agree with Ms. Epstein that, if the plaintiff ultimately can establish irreparable harm, this might lead to enhanced damages awarded against the defendants. Accordingly, there is nothing per se improper about this pleading. It is not plain and obvious that it cannot stand. Rather, the pleading has legal potential and, if the allegation is proven, it is possible of success. It is thus a permissible amendment.
c. Paragraph 41: “Durham further states and pleads that, as of May 21, 2020, it stopped sending its tow operators to the scene when the OPP requests a tow truck due to the intimidation and harassment of Durham’s tow drivers by certain OPP officers”. While counsel for the Crown submitted that this pleading also speaks to “irreparable harm”, I respectfully disagree. This is simply an allegation which, if proven, would again potentially be relevant for damages. It is not hardly plain and obvious to fail. It is actually a tenable pleading in the context of the existing case as framed, given its legal potential and possibility of success.
d. Paragraph 45: “Durham further states and pleads that if it is prevented from attending at the scene of, for example, a motor vehicle accident, it will not only lose the revenue from the tow, but also the associated impoundment and collision repair fees. In addition, when Durham tows and assesses damage to a vehicle, it communicates with an insurance company. If Durham is denied the right to communicate with an insurance company by providing an estimate of repair costs, it affects the goodwill Durham has built in the business over the years with various insurance companies”.
[19] This pleading at proposed paragraph 45, as written, speaks to injunctive relief far more clearly than, for example, paragraph 41, above. That paragraph simply spoke to an existing alleged fact that arguably would lead to damages, if proven. This proposed paragraph 45, as written, I find speaks much more to a need for preventative relief and intervention from hypotheticals that, if these happen, could cause much harm for plaintiff. While perhaps somewhat disguised, and not as plain and obvious as the others, the main intent in my view is still, in context of this case, quite obvious. On that basis, it is not a tenable plea, given (again) no possibility of injunctive relief being granted against the Crown.
[20] Yet paragraph 45, while not permitted as written, could likely easily be revised to address present and ongoing allegations. For example, as I mooted during the hearing, if it read, “…as it is prevented from attending at the scene of…it will not only lose the revenue (etc.)…as Durham is denied the right to communicate with an insurance company by providing an estimate of repair costs, it affects the goodwill Durham has built in the business over the years with various insurance companies”, this arguably could be a viable pleading, again addressing damage quantum if the alleged facts of what Durham is prevented from doing can be ultimately established.
[21] On that basis, the proposed paragraph 45 is not permitted. Yet, if the plaintiff desires, it has leave to further amend if plaintiff desires.
COSTS:
[22] In one sense, there has been divided success on this motion. Two specific amendments were allowed as written, while two were not (one with leave to further amend). Yet the plaintiff did not obtain what was important to it: the right to amend the pleading so to be able to seek injunctive relief. Notwithstanding that, my preliminary view is that “costs in the cause” would still be a reasonable outcome in all the circumstances of this long-running case.
[23] If, however, the parties disagree, they may contact ATC Mr. D. Backes at david.backes@ontario.ca in order to schedule a brief tele-conference to address costs. In addition to any costs outline, the parties may also submit written submissions of no more than three pages each, using normal font and spacing.
Master J. Josefo
Date: September 1, 2020