Court File and Parties

COURT FILE NO.: CV-19-00622697

DATE: 2020-11-05

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Ralph Weekes and Ralph Weekes Financial Planning Professional CORPORATION. Plaintiffs

AND:

Investors Group Financial Services Inc. JEFFREY CARNEY, MARK KINZEL, DONALD MACDONALD, WILLIAM CHARLES, PATRICIA KLOEPFER, MARCIE MAGNUSSON, MARISSA TEETER, VAS PACHAPURKAR and JANE DOE 1-100 and JOHN DOE 1-100, Defendant

BEFORE: Davies J.

COUNSEL: Clarke Tedesco, for the Plaintiffs Jeff Galway and Emily Hazlett, for the Defendant

HEARD at Toronto (by video): August 10, 2020

REASONS FOR DECISION

A. Overview

[1] Ralph Weekes worked as a wealth management advisor for Investors Group Financial Services Inc. from June 1976 until December 31, 2017.

[2] In June 2017, Investors Group told Mr. Weekes that they were not going to sponsor his registration with the Mutual Fund Dealers Association of Canada in January 2018. Mr. Weekes could no longer work as a wealth management advisor with Investors Group without their sponsorship. Investors Group’s decision not to sponsor Mr. Weekes, therefore, resulted in his termination as of December 31, 2017.

[3] On June 26, 2019, Mr. Weekes issued a Notice of Action claiming damages for breach of contract. He alleged he was constructively dismissed. He also claimed his employment was terminated without cause and without adequate notice or pay in lieu of notice. In the alternative, Mr. Weekes claimed that Investors Group breached the consultant’s agreement signed by Mr. Weekes. Finally, he claimed that Investors Group’s decision to terminate him was discriminatory.

[4] On July 26, 2019, Mr. Weekes issued a Statement of Claim in which he asserted that he was an independent contractor and alleges that Investors Group breached the implied terms of his contract.

[5] In March 2020, Mr. Weekes filed a Fresh as Amended Statement of Claim in which he claims that he was an employee of Investors Group or, in the alternative, a dependent contractor. He now seeks damages for constructive dismissal and wrongful dismissal. He also claims that Investors Group acted in bad faith by terminating his employment and that his dismissal violated the Ontario Human Rights Code, R.S.O. 1990, c. H.19.

[6] Investors Group brought a motion under Rules 21.01 and 25 and under ss. 4 and 5 of the Limitations Act, 2002, S.O. 2002 c. 24, Sched. B, to strike Mr. Weekes’ claims for constructive dismissal and wrongful dismissal, discrimination and bad faith. Investors Group argues that the constructive dismissal and wrongful dismissal are new claims that are now statute barred. Investors Group also argues that the claims of discrimination and bad faith are inextricably linked to the constructive dismissal and wrongful dismissal claims and cannot survive independent of those claims.

[7] Mr. Weekes argues that the constructive dismissal and wrongful dismissal claims are not new claims. He argues that they were included in his Notice of Action. Mr. Weekes takes the position that the allegations of wrongful dismissal and constructive dismissal in the Fresh as Amended Statement of Claim simply urge a different legal conclusion about the nature of his relationship with Investors Group based on essentially the same facts that were in the original Statement of Claim.

[8] There are three issues on this motion:

(a) Are the constructive dismissal and wrongful dismissal claims new?

(b) If the constructive dismissal and wrongful dismissal claims are new, should they be struck because they were advanced after the limitation period expired?

(c) If the constructive dismissal and wrongful dismissal claims are struck, can the claims for discrimination and bad faith survive independently?

[9] For the reasons that follow, I find that the constructive and wrongful dismissal claims are not new. As a result, I do not have to decide the other issues and the motion is dismissed.

B. Are the constructive dismissal and wrongful dismissal claims new?

[10] Mr. Weekes commenced his claim against Investors Group by issuing a Notice of Action on June 26, 2019 in which he advanced alternative theories in respect of the nature of Mr. Weekes’ relationship with Investors Group. He claimed damages for constructive dismissal, termination without cause and without sufficient pay in lieu of notice, breach of his Consultant’s Agreement and discrimination.

[11] One month later, on July 26, 2019, Mr. Weeks issued a Statement of Claim, in which he asserted that he was an independent contractor with Investors Group and advanced five causes of action:

(a) Breach of contract: He claimed that Investors Group breached the implied terms of his contract by failing to offer him an Asset Value Plan (“AVP”) and by firing his sons a year after his termination.[^1]

(b) Breach of the Ontario Human Rights Code: He also claimed that Investors Group’s decision to terminate him and not allow him to participate in the AVP violated the Ontario Human Rights Code.

(c) Unjust enrichment: He claimed that Investors Group unjustly benefited from retaining his book of business without allowing to him to participate in the AVP.

(d) Intentional interference with economic relations: He claimed that Investors Group intentionally interfered with his economic interests by offering free services to his former clients after his sons were terminated and by reporting to the Mutual Fund Dealers Association that his sons were terminated for cause, thereby triggering an investigation.

(e) Conspiracy: He alleges that several senior executives at Investors Group acted with a common design to improperly take over Mr. Weekes’ book of business.

[12] The original Statement of Claim details Mr. Weekes’ work history with Investors Group and the decision made by Investors Group not to sponsor his registration with the Mutual Fund Dealers Association. It also details how his sons were treated after he left Investors Group. However, the 2019 Statement of Claim did not particularize the constructive dismissal or wrongful dismissal claims that were set out in the Notice of Action.

[13] In March 2020, Mr. Weekes issued a Fresh as Amended Statement of Claim in which he asserts that he was an employee or, in the alternative, a dependent contractor of Investors Group and claims he was constructively dismissed and/or wrongfully dismissed. Further particulars about the nature of Mr. Weekes’ relationship with Investors Group and the events leading up to his departure from the company were also added in the Fresh as Amended Statement of Claim.

[14] The defendant argue that the constructive and wrongful dismissal claims raise new causes of action, ones that Mr. Weekes abandoned when he failed to include them in his Statement of Claim.

[15] Mr. Weekes argues that the allegations in the Fresh as Amended Statement of Claim were contained in the Notice of Action and were never abandoned. Mr. Weekes also argues that the constructive and wrongful dismissal claims simply urge a different legal conclusion about Mr. Weekes’ relationship with Investors Group from facts alleged in the original Statement of Claim.

i. Did Mr. Weekes abandon the constructive and wrongful dismissal claims?

[16] Investors Group relies on the decision in Curtis v. Bank of Nova Scotia, 2019 ONSC 7539, to support its position that Mr. Weekes abandoned the constructive and wrongful dismissal claims that were included in his Notice of Action when he filed his Statement of Claim.

[17] The circumstances here are very different than in Curtis v. Bank of Nova Scotia.

[18] In Curtis v. Bank of Nova Scotia, Mr. Curtis resigned his position with Bank of Nova Scotia in the midst of a fraud investigation. Mr. Curtis commenced a claim for defamation, wrongful dismissal and constructive dismissal. He also filed a complaint under the Canada Labour Code, R.S.C., 1985, c. L-2, claiming he had been constructively dismissed. The adjudicator appointed under the Canada Labour Code found that Mr. Curtis had resigned and dismissed his complaint. Mr. Curtis sought judicial review of that decision in the Federal Court. Mr. Curtis’s civil claim for wrongful dismissal and constructive dismissal were stayed pending the outcome of the judicial review application. After the stay was issued, Mr. Curtis filed an Amended Statement of Claim removing the wrongful dismissal and constructive dismissal claim, leaving only the defamation claim. Several years later, Mr. Curtis brought a motion for leave to file a further amended Statement of Claim that would have effectively resurrected the wrongful and constructive dismissal claims under the guise of claims for bad faith, breach of employment contract and inducing a breach of an employment contract. The Court dismissed the motion, in part, because Mr. Curtis had voluntarily removed those claims from his pleadings.

[19] In Curtis v. Bank of Nova Scotia, the plaintiff initiated a claim and then took clear, decisive, deliberate steps to remove some claims that had already been advanced. In those circumstances, the Court found that Mr. Curtis had intentionally abandoned his wrongful and constructive dismissal claims.

[20] Here, Mr. Weekes issued a Notice of Action that set out alternative theories of liability. He then issued a Statement of Claim that neither clearly nor precisely particularized the wrongful dismissal and constructive dismissal claims. As required by the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the Notice of Action and Statement of Claim were both served on the defendant (rule 14.08(2)). While a Notice of Action expires if a Statement of Claim is not issued within 30 days, the issuance of a Statement of Claim does not cancel the Notice of Action (rule 14.03(3)). The Notice of Action continues to form part of the pleadings even after the Statement of Claim is issued. The fact that wrongful and constructive claims set out in the Notice of Action were not clearly and precisely particularized in the Statement of Claim is not sufficient to find that Mr. Weekes knowingly and intentionally abandoned those claims.

ii. Does the Fresh As Amended Statement of Claim seek alternative relief based on the same facts?

[21] A cause of action is a factual situation that gives one person an entitlement to a remedy against another person: see 1100997 Ontario Ltd. v. North Elgin Centre Inc., 2016 ONCA 848, at para. 19. An amendment to the pleadings will not be considered a new cause of action if it “pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based”: 1100997 Ontario Ltd., at para. 20. On the other hand, if the amendment relates to material facts that were not substantially pleaded in the original claim or are essential to support the claim being advanced, the amendment will be considered a new cause of action: see Timber Estate v. Bank of Nova Scotia, 2011 ONSC 3639, at para. 13.

[22] To put this motion in its proper context, it is important to identify the factual situation that gives rise to Mr. Weekes’ entitlement to a remedy. Here, the cause of action arose when Investors Group decided not to sponsor Mr. Weekes’ registration with the Mutual Fund Dealers Association in 2018. Investors Group allegedly made that decision based on concerns it had about how Mr. Weekes was managing his portfolio and whether his portfolio was over-leveraged. Because of that decision, Mr. Weekes was no longer able to work for Investors Group as a wealth management advisor as he had for 41 years. The question then is whether Mr. Weekes’ claim that he was constructively dismissed and/or wrongly dismissed relies on material facts that were not substantially pleaded in the original claim.

[23] When assessing whether the constructive and wrongful dismissal claims in the Fresh as Amended Statement of Claim are new, I must read the original Statement of Claim generously and must allow for drafting deficiencies: see Trillium Power Wind Corp v. Ontario (Natural Resources), 2013 ONCA 683, at para. 30. While the original Statement of Claim is not particularly precise or clear, I find that it contains the facts necessary to support the constructive and wrongful dismissal claims in the Fresh as Amended Statement of Claim.

[24] In addition to describing himself as an independent contractor, Mr. Weekes also asserts in his original Statement of Claim that he contracted his services exclusively with Investors Group. Mr. Weekes claims that during his time with Investors Group, he signed various contracts known as Incorporated Consultant’s Agreements. Mr. Weekes also asserts that there was no merit to any of the concerns raised by Investors Group about the management of his portfolio, which formed the basis of the decision by Investors Group not to sponsor his registration. Mr. Weekes also references various Investors Group policies and programs that he was subjected to during his time as a wealth management advisor. Mr. Weekes also describes the decision by Investors Group not to renew his registration as “wrongful and discriminatory.” In at least one paragraph of the original Statement of Claim, Mr. Weekes also claims that the manner in which his employment with Investors Group was terminated violated the Ontario Human Rights Code.

[25] To borrow the language of Chief Justice Strathy in Dee Ferraro Limited v. Pellizzari, 2012 ONCA 55, at para. 4, the original Statement of Claim was “far from elegant and orderly.” However, it contained the essential facts that gave rise to the cause of action now pled in the Fresh as Amended Statement of Claim. I find that the Fresh as Amended Statement of Claim simply asserts different legal conclusions from the facts already pleaded in the original Statement of Claim.

C. Conclusion

[26] The motion to strike is dismissed.

[27] I encourage the parties to reach an agreement on the issue of costs. If they are unable to do so, counsel for Mr. Weekes may serve and file written submissions on costs of no more than five (5) pages together with their costs outline and any supporting authority no later than November 20, 2020. Counsel for Investors Group may serve and file written responding submissions on costs of no more than five (5) pages with supporting authorities no later than November 30, 2020. In addition to filing their cost submissions with the Court, they are to send an electronic copy to my assistant. In the event that I do not receive any written cost submissions by December 3, 2020, I will deem the issue of costs to have been settled.

Davies J.

Released: November 5, 2020

[^1]: The Asset Value Plan was a program that Investors Group offered to departing or retiring wealth management advisors. If the departing advisor let Investors Group transition his book of business to other Investors Group advisors, rather than selling it, the departing advisor was entitled to a portion of the earnings generated from his book of business for a period of time. Mr. Weekes sold his book of business to his two sons, who had been working for Investors Group for several years, for almost $6 million. Mr. Weekes’ sons agreed to pay him the purchase price over several years from the income they generated from his book of business. As a result, Mr. Weekes was not eligible for the AVP. Mr. Weekes claims he decided to sell his business to his sons rather than participate in the AVP on the understanding that Investors Group would treat his sons fairly after he was terminated so his sons would be able to generate income and pay him the $6.0 million. Investors Group terminated Mr. Weekes’ sons for cause in February 2019, alleging that they were permitting Mr. Weekes to engage in securities and insurance related business without the proper registrations. Mr. Weekes claims that his sons were not able to pay him for his book of business because they were terminated by Investors Group.