Wakeling v. Desjardins General Insurance Group Inc., 2020 ONSC 6809

BARRIE COURT FILE NO.: CV-19-1633-00

DATE: 20201106

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JOAN WAKELING and BARBARA EVISON

Plaintiffs/Responding Parties

– and –

DESJARDINS GENERAL INSURANCE GROUP INC. and NADIA LUCIA COSTANTINO, RISHA MAHARAJ,

JOE CRNGAROV, TARA DAVIDSON and JACQUELINE THOMPSON

Defendants/Moving Parties

Ashu Ismail, for the Plaintiffs/Responding Parties

Gillian Kerr and William Main, for the Defendants/Moving Parties

HEARD: October 8, 2020

RULING ON MOTIONS

HEALEY, J.

OVERVIEW AND NATURE OF THE MOTIONS

[1] The plaintiff Barbara Evison was involved in a proceeding before the Licence and Appeal Tribunal (LAT) with the defendant Desjardins General Insurance Group Inc., arising from a dispute over Evison’s accident benefit claim. The plaintiff Joan Wakeling was Evison’s friend. Wakeling was also a Desjardins employee. Nadia Costantino was a lawyer for, and employee of, Desjardins. Costantino represented Desjardins in Evison’s contested accident benefits claim before the LAT.

[2] As part of its process, the LAT scheduled a case conference to take place between Evison and Desjardins in May 2019. Wakeling attended the teleconference while she was on vacation, for the purpose of acting as Evison’s aide. Costantino was present as the legal representative of Desjardins, as were Desjardins’ adjusters.

[3] The LAT disclosure requirements mandated that the parties exchange witness lists prior to the hearing. Wakeling’s name appeared on Evison’s witness list that was provided to Desjardins. In her role as its counsel, Costantino informed Desjardins of the names on the witness list.

[4] On her return from vacation Wakeling was advised by Desjardins that she was being investigated. Shortly thereafter Desjardins terminated Wakeling’s employment.

[5] The Statement of Claim alleges that Desjardins and Costantino have committed the tort of intrusion upon seclusion (or “privacy claims”). The defendants move for an order striking out those portions of the Statement of Claim that allege intrusion upon seclusion against both defendants, and further, to strike all claims against the individual defendant Costantino, without leave to amend. In the alternative, they seek leave to file a new Statement of Defence within 15 days after release of this ruling.

[6] By cross-motion the plaintiffs seek leave to amend the Statement of Claim to add four new defendants and two new causes of action. The particulars of the proposed amendments will be discussed below.

[7] The plaintiffs’ action also includes claims against Desjardins by Wakeling for wrongful termination. The defendants are not moving to strike the wrongful termination claims.

THE ISSUES

[8] The issues to be decided by this court are as follows:

a. Did the defendants comply with r. 21.02 by bringing their motion to strike promptly?

b. Do the defendants require leave of the court to bring their motion as a result of having filed a Statement of Defence?

c. Should the claims for intrusion upon seclusion be struck without leave to amend?

d. Should all claims against Costantino be struck without leave to amend?

e. Should the plaintiffs be permitted to amend the claim to add new defendants and new causes of action?

[9] It must be kept in mind that these are pleadings motions. The plaintiffs’ lawyer has listed other issues in her factum which, for reasons that will be explained, are not relevant to the relief requested in either parties’ motion record. Those peripheral issues are: do accident benefit lawyers have absolute immunity from tortious liability, and are employees immune from tortious liability?

THE RELEVANT PARAGRAPHS OF THE STATEMENT OF CLAIM

[10] The defendants do not seek to strike all paragraphs of the Claim set out below, however, those paragraphs that are important to understanding the intrusion upon seclusion claims are reproduced below:

1. The plaintiff, Barbara Evison, claims from the defendant Nadia Lucia Costantino:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $100,000;

The plaintiff, Barbara Evision, claims from the defendant Desjardins Insurance Group:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $1,000,000;

The plaintiff, Joan Wakeling, claims from the defendant Nadia Lucia Costantino:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $100,000;

The plaintiff, Joan Wakeling, claims from the defendant Desjardins Insurance Group:

(a) damages for breach of privacy in the amount of $25,000;

(b) damages for wrongful termination in the amount of $500,000;

(c) aggravated and punitive damages in the amount of $1,000,000;

The plaintiffs claim from the defendants:

(a) pre-judgment and post-judgement interest on damages pursuant to the provisions of the Courts of Justice Act;

(b) costs on a substantial indemnity basis plus Harmonized Sales Tax; and

(c) such further and other relief as this Honourable Court deems just.

2. The plaintiff, Barbara Evison (“Barbara”) resides in the community of Pefferlaw, in the Town of Georgina, Ontario. At all material times she was in insured by The Personal Insurance Company, a subsidiary of the defendant, Desjardins Insurance Group Inc. (“Desjardins”), entitled to receive statutory accident benefits and to whom Desjardins and its subsidiaries owed a duty of good faith.

3. The plaintiff, Joan Wakeling ("Joan"), resides in the community of Keswick, in the Town of Georgina, Ontario. At all material times, she was an employee of Desjardins, as well as a long-term neighbour and close friend of Barbara.

4. The defendant, Desjardins General Insurance Group Inc. (“Desjardins”), is Canada's third largest property and casualty insurance group, employing more than 35,000 full-time employees across Canada, and a wholly owned subsidiary of Fédération des caisses Desjardins du Québec, federally incorporated and providing insurance to Ontarians through its subsidiaries, including but not limited to the Personal Insurance Company.

5. The defendant, Nadia Lucia Costantino (hereafter “Ms. Costantino”) is a licensed Ontario Lawyer and also an employee of Desjardins, who in her capacity as Desjardin's representative for Barbara's accident benefits claim, had an obligation of good faith to Barbara and an obligation to protect Joan’s privacy and ensure that information about Joan’s participation in Barbara’s case was not disclosed and used outside the confines of Barbara’s claim for accident benefits.

Facts

6. On July 27, 2018, Barbara was violently T-boned by a Mac Truck. Her memory, as well as her ability to concentrate and process information were and continue be affected by this accident.

7. As a result of her accident related injuries, Barbara's personal care needs, due to cognitive and physical disability, were initially determined to be in excess of $10,000 monthly.

8. Immediately following the collision, Barbara's long-time best friend and then neighbour, Joan, began assisting Barbara with her care and claim.

9. Desjardins was aware that Barbara was in need of 24 hour care, yet refused provide coverage for any attendant care benefits until Barbara initiated an appeal before the Licence Appeal Tribunal (“Tribunal”).

10. The Tribunal, as part of its process, scheduled a case conference to take place between Barbara and Desjardins.

11. Tribunal disclosure requirements mandate that witness lists be exchanged in advanced of the case conference. Joan's name was placed on Barbara's witness list.

12. On May 22, 2019, Joan attended with Barbara as her aide at the Tribunal mandated teleconference. Joan was on vacation at the time. Ms. Constantino attended as the legal representative of Desjardins. The fact of Joan's attendance at the case conference was known only to its counsel and adjusters in attendance.

13. On May 27, 2019, Joan's first day back from vacation, Desjardins management attended her desk, told her to collect her things, told her she was being investigated and walked her out of the building.

14. On June 10, 2019, Joan was terminated after 24 years of service with Desjardins and is antecedent company, State Farm Mutual Automobile Insurance. Joan was advised, by way of letter, that her termination was effective immediately and solely as result of her involvement with Barbara Evison’s accident benefits claim and compliance with a code of conduct and workplace policies.

15. In disputing her claim against Desjardins, Barbara had an expectation that individuals providing her assistance and/or her potential witness would be held in confidence by the lawyer, Ms. Constantino, and the information would not be disclosed and/or used in any manner outside the proceeding.

16. The plaintiffs had an expectation that in carrying out her good faith obligations to Barbara and her professional obligations to the administration of justice that Ms. Constantino would properly instruct her client, Desjardins, that they were not to make use of any information gleaned from the proceedings, outside of the confines of the claim.

17. As an insured of Desjardins, Barbara was owed a duty of good faith in the management of her claim, which included the protection of her witnesses from a collateral attack as a result of their involvement in her claim and proceeding before the Tribunal.

18. When Barbara learned of the investigation and termination, she experienced significant distress which required medical care.

19. Joan had an expectation of privacy, and that any information disclosed by Barbara in the confines of her claim would not be used for any other purpose by Desjardins.

Breach of Privacy / Tort of Intrusion Upon Seclusion

24. The plaintiffs had an expectation of privacy in proceeding before the Tribunal, which the defendants individually and/or collectively breached when they disclosed the witness list to Desjardins management.

25. Barbara had an expectation that her file, and its related data, would be private and secured and used solely for the purpose of adjusting her accident benefits claim. To the extent that her file was utilized for any other purpose, it was an improper invasion of her privacy.

26. The plaintiffs claim damages as a result of the defendants’ breach of their respective expectations or privacy.

Aggravated Damages

27. Barbara has suffered mental distress as a result of Desjardins breach of their good faith and legal obligations to maintain the privacy of information gained through the processing her claim and the legal proceeding.

28. Joan has suffered significant mental distress as a result of as Desjardins’ wanton termination of her employ, stemming from the improper use of information gained within a legal proceeding.

29. The plaintiffs claim aggravated damages for mental distress which was a reasonable and foreseeable consequence of the defendants’ conduct.

Punitive Damages

30. The plaintiffs seek punitive damages as against the defendant Nadia Lucia Costantino for the following reasons:

a. Ms. Constantino breached her professional obligation to the administration of justice to ensure information obtained in a legal proceeding would not be used for any other purpose;

b. Ms. Constantino breached her professional obligation to the administration of justice when she failed to counsel her client on the impropriety of utilizing information obtained in a legal proceeding for another purpose;

c. Ms. Constantino breached her professional obligation to the administration of justice when she failed to counsel her client on the impropriety of launching a collateral attack on a witness involved in a proceeding to which her client was a party;

d. Ms. Constantino breached her professional obligation to the administration of justice when failed to recognize she was in a conflict of interest, when she learned that her client made improper use of confidential information obtained through a legal proceeding;

e. Ms. Constantino breached her professional obligation to the administration of justice when failed to recognize she was in a conflict of interest, when she learned that her client had utilized confidential information to launch a collateral attack on a witness to a legal proceeding in which she was involved;

f. Ms. Constantino breached her professional obligation to the administration of justice when she failed to recognize that there was a conflict between her professional obligations as a lawyer and her duty of loyalty to her employer, Desjardins; and/or

g. Ms. Constantino breached her good faith obligation to Barbara, when she permitted her client to misuse confidential information gained in a legal proceeding to harass a witness in the proceeding.

31. Barbara seeks punitive damages from Desjardins for the following reasons:

a. Desjardins’ collateral attack on Barbara’s aide, is high handed;

b. Desjardins knowingly and/or blatantly breach their own privacy policies designed to protect the interests of their insureds;

c. Desjardins failed to create and/or implement safeguards to protect their insureds’ privacy;

d. Desjardins’ improper use of information obtained through a legal proceeding to commence an investigation and terminate one of its employees was a wonton disregard for the rules that govern participants in legal proceedings.

TIMING OF THE MOTION TO STRIKE

[11] The plaintiffs argue that the defendants have delayed in bringing their motion to strike. Rules 2.02 and 21.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 are engaged, which provide:

2.02 A motion to attack a proceeding or a step, document or order in a proceeding for irregularity shall not be made, except with leave of the court,

(a) after the expiry of a reasonable amount of time after the moving party knows or ought reasonably to have known of the irregularity; or

(b) if the moving party has taken any further step in the proceeding after obtaining knowledge of the irregularity.

21.02 A motion under rule 21.01 shall be made promptly and a failure to do so may be taken into account by the court in awarding costs

[12] A timeline of the defendants’ efforts to have this motion heard can be reliably pieced together from the correspondence attached as exhibits to affidavits contained within each of the records filed by the parties for the plaintiffs’ motion to amend.

[13] The Statement of Claim was issued on September 17, 2019. On September 19, 2019, in-house counsel for Desjardins, Samia Hussein, corresponded with plaintiffs’ counsel and indicated that they would be seeking instructions to have Ms. Ismail removed as counsel of record because of what they perceived to be a conflict of interest. Ms. Ismail responded on that same date, asking that the defendants either bring their motion or serve a defence within the timelines prescribed by the Rules of Civil Procedure. The issue of a potential conflict was never again raised by the defendants.

[14] On October 4, 2019 Desjardins served its Notice of Intent to Defend. On October 24, counsel from McCarthy Tétrault LLP, Ms. Kerr, telephoned Ms. Ismail and informed her that her firm was taking over the defence of both Desjardins and Costantino and requested an indulgence for filing their Statement of Defence. Ms. Ismail took the position that without a Notice of Change, she would continue to deal with Desjardins’ in-house counsel, and advised that “your client”, presumably meaning Costantino, would be noted in default in 14 days. She also indicated that a further short indulgence would be considered if McCarthy Tétrault LLP provided written notice of their retainer. This information is all contained in an email to Ms. Hussein dated October 24.

[15] On October 31, James Lim of Desjardins’ legal department replaced Ms. Hussein as counsel of record and a Notice of Change was served.

[16] On November 8, Ms. Kerr sent correspondence to Ms. Ismail in which she advised the following:

a. that she was co-counsel with James Lim to both Desjardins and Costantino;

b. that she had instructions to bring a motion to strike out the claims against Costantino in their entirety;

c. that the motion also sought an extension of time for filing a Statement of Defence because her clients could not properly defend the action until the court determined the scope of the pleadings; and

d. that she requested advance notice if the plaintiffs intended to note the defendants in default. Ms. Kerr enclosed a draft notice of motion, which outlined the same grounds for striking the claims against Costantino as those set out in the notice of motion presently before the court.

[17] With no advance warning, Ms. Ismail requisitioned the registrar to note Desjardins in default on November 11, 2019, despite the contents of Ms. Kerr’s last correspondence.

[18] On November 13, Ms. Ismail informed Mr. Lim of the noting in default and intention to proceed with default proceedings without notice, but indicated that if Desjardins delivered a Statement of Defence in the next two weeks her clients would consent to setting aside the default.

[19] On the same date, Ms. Ismail wrote to Ms. Kerr to insist that she either serve her motion or defence by the end of the following week or Costantino would be noted in default. Her position in her email, as it was during her argument of the motion, was that she could not respond meaningfully because the correspondence and motion were marked “without prejudice”. As she wrote in her email, that phrase signaled to her that the defendants “are not beholden to the positions taken therein”, and on that basis she seems to have considered the contents ambiguous or uncertain and to which a response could not be made.

[20] On November 15, a Notice of Change of Lawyer was served by McCarthy Tétrault LLP, indicating that Ms. Kerr, Mr. Ryan MacIsaac and Mr. Lim were all appointed as co-counsel for Desjardins. On that same date, a Notice of Motion was served on Ms. Ismail. The relief sought was the setting aside of the noting in default of Desjardins, and on behalf of both defendants, the striking out of all claims against Costantino. It was returnable on May 19, 2020, during the Central East Region trial sittings, noted in the correspondence to be the first available court date. It is the position of Ms. Ismail that she did not receive this Notice of Motion. The fax transmission data on the top of the covering letter shows that it was sent, and the fax number matches that of correspondence previously received by Ms. Ismail. I must conclude on the available evidence that it was successfully delivered, even if was inadvertently overlooked by Ms. Ismail.

[21] On November 21, Ms. Kerr delivered a Notice of Intent to Defend on behalf of Costantino. She also re-served the same motion that had been served six days earlier, with a correction to a misleading typographical error that originally cited the return date as being both May 19 and May 20, 2020. On that same date, Ms. Kerr sent correspondence to Ms. Ismail indicating that, because of her actions in having Desjardins noted in default, she would be serving Costantino’s Statement of Defence out of an abundance of caution to avoid having Costantino noted in default. She reiterated the position that the defendants should not be required to defend until the motion to strike had been determined.

[22] Costantino’s Statement of Defence was served on November 29. It states that Costantino and her co-defendant Desjardins are bringing a motion under Rule 21.01 to strike out the claim against her, and that she is filing the defence only to avoid being noted in default.

[23] On January 7, 2020 an order was made, on consent, setting aside the noting in default of Desjardins and requiring that it file its defence by a deadline set out in the order. In compliance with the order, Desjardins served its Statement of Defence on January 10, 2020. Desjardins’ pleading provides:

24. Desjardins and its co-defendant, Ms. Costantino, are bringing a Rule 21 motion to strike out the breach of privacy claims as disclosing no cause of action and/or for being frivolous, vexatious or an abuse of process of the Court (the “Motion to Strike”).

25. Desjardins is filing this Statement of Defence in order to have the notice of default against it set aside and in response to representations by the Plaintiff’s that they will commence default proceedings against it. The Plaintiffs noted Desjardins in default despite being advised that Desjardins intended to defend the action, and that it was bringing a motion to extend the time for delivery of its Statement of Defence until after the determination of the Motion to Strike. The Plaintiffs refused to set aside the notice of default unless Desjardins files this Statement of Defence.

26. Desjardins has advised the Plaintiffs that this Statement of Defence is being filed for this purpose and use without prejudice to its right to bring the Motion to Strike.

[24] On January 10, 2020 Ms. Kerr delivered another letter to Ms. Ismail in which the privacy claims and pending motion to strike were addressed. She wrote:

We have set out our reasons why the breach of privacy claims cannot stand as a matter of law in the Notice of Motion. We understand the breach of privacy claims to be based on allegations against Ms. Costantino, such that striking the claims against Ms. Costantino should dispense with the privacy claims generally. As previously advised, in the event that we are wrong about that we will amend the Notice of Motion to clarify that we intend to strike the breach of privacy claims generally.

[25] On January 24, Ms. Kerr served a Fresh as Amended Notice of Motion, still returnable on May 19, 2020. The difference between the Fresh as Amended Notice of Motion and the motion that was served on November 15, 2019 was that instead of requesting that all claims against Costantino be struck out, the amended motion requested that all claims for intrusion upon seclusion (against either defendant) be struck, as well as any residual claims against Costantino.

[26] The parties then agreed to a schedule for the exchange of material in advance of the May motion date. Due to the Covid-19 pandemic the motion date was adjourned. It was thereafter scheduled for the first date available to the parties and the court following the publication on July 27, 2020 of the Notice to the Profession – Protocol for Civil Matters in the Superior Court of Justice, Central East Region. There is no evidence that the defendants were the cause of any delay that occurred after the court suspended regular operations in March 2020.

[27] However, once the schedule that targeted the May hearing date became moot, the exchange of correspondence indicates that Ms. Ismail resisted agreeing to a timetable for the orderly exchange of facta. Her main objection seems to have been what she viewed as the defendant’s failure to serve a Motion Record, even after hearing from defendants’ counsel that because it was a r. 21 motion, they did not intend to file evidence. On June 9, 2020, Ms. Ismail raised the issue of delay in correspondence for the first time.

[28] Ms. Ismail’s argument is that the attack by Desjardins on the privacy claims made against it was not communicated until after the plaintiffs had agreed to set aside the noting in default. Up to that point, all indictors were that it was only the claims against Costantino that would be the subject matter of the motion to strike. She argues that both defendants chose to defend, rather than to follow r. 21.02 by bringing their motion promptly. The defendant Desjardins’ participation in this motion may be considered particularly vexatious, she argues, as it secured consent to set aside its default by agreeing to defend.

[29] I conclude that there is no issue that Costantino moved promptly under r. 21. The motion record seeking relief for the claims made against her was served on November 15, 2019 and re-served with a minor edit on November 21, 2019. Having been served with the Claim in the latter part of September, this is a reasonable timeframe to respond by serving a motion to strike parts of that pleading.

[30] It is accurate to say that the first time Ms. Ismail had notice that Desjardins would be moving to set aside the privacy claims made against the corporate defendant was on January 10, 2020 when the Fresh as Amended Notice of Motion was served. What is clear, however, is that the revised Notice of Motion was served out of an abundance of caution, and because of the way in which plaintiffs’ counsel has chosen to frame the privacy claims in the Statement of Claim.

[31] To summarize the pleading with respect to the privacy claims, the plaintiffs have alleged that after receiving the witness list, Costantino or other Desjardins employees at the LAT hearing shared that list with Desjardins management, who then used it for improper purposes. The allegation is that the defendants collectively breached the plaintiffs’ reasonable privacy rights by using the witness list for purposes other than adjusting Evison’s accident benefit claim.

[32] As will be discussed further below, the “wrongful use” of information is not one of the elements of the tort of intrusion upon seclusion. As such, it is understandable how Desjardins’ counsel could be led to the conclusion that a striking of the claims against Costantino, which are based on her being the conduit through which Desjardins’ management learned of Wakeling’s participation, would effectively dispose of the entirety of the breach of privacy claims.

[33] The plaintiffs had notice of the defendants’ attack on the privacy claims as early as November 2019, which were being brought by both Desjardins and Costantino against the claims made against Costantino. As set out in Ms. Kerr’s correspondence of January 10, 2020, Desjardins did not change its position on the merits of the breach of privacy claims, but rather amended the motion to ensure that any and all such claims would be the subject matter of the motion to strike.

[34] Accordingly, I conclude that it is inaccurate to characterize Desjardins as having delayed in bringing the motion in all circumstances.

LEAVE TO BRING THE MOTION TO STRIKE

[35] As a preliminary matter, the plaintiffs also argue that the defendants should have sought leave from the court to bring this motion, having already defended. In the usual course, a motion to strike all or part of a claim is brought prior to a defence being filed.

[36] As the above chronology indicates, Desjardins only defended because it was a term of the consent to set aside the noting in default. Costantino only defended to ensure that the plaintiffs did not have her noted in default also. Their position throughout, as evidenced in Ms. Kerr’s correspondence and reiterated in their pleadings, was that they should not have to plead before the motion to strike was heard. The correspondence dated November 8, 2019, for example, was clear with respect to the intention of both defendants – to bring the motion and, thereafter, file their defence once the parameters of the claim had been decided by the court. Ms. Kerr was obviously providing an opportunity to Ms. Ismail’s clients to consider the content of the motion and to communicate their position in respect of it before costs were incurred to serve, file and argue this motion.

[37] The defendants take the position that leave does not need to be sought because they were forced into the position of having to defend as a result of the plaintiffs’ conduct. However, if leave is necessary, they have referred the court to Wallbridge v. Brunning, 2019 ONSC 556 and the principle set out at para. 27. In deciding whether to grant leave to a plaintiff who had delayed in bringing a motion to strike, Gordon, R.S.J. stated that “[a]s a general proposition, leave should be granted when it is in the interests of justice to do so. It will be in the interests of justice when the motion may assist in securing a just, expeditious, and efficient determination of the action on its merits.”

[38] Here, the defendants did not delay and only took a further step in the proceeding because of the plaintiffs’ precipitous action to have Desjardins noted in default. Accordingly, I conclude that leave is not needed. However, if I am incorrect, I would nonetheless grant leave to bring this motion. Motions to strike serve a valuable function in ensuring that courts and litigants are not burdened with unmeritorious claims, and therefore it is in the interests of justice to consider a motion such as this where the moving party, on first impression, has raised an arguable case about the viability of a pleading.

[39] I would also grant leave on another basis. The Court of Appeal in Male v. Business Solutions Group, 2013 ONCA 382 had an opportunity to review the law in respect of setting aside a noting in default. The Court overturned a decision of the motions judge, who declined to set aside a noting in default, where:

(a) the defendants were noted in default at a time when they were actively defending the case. Actively defending the case was noted to include taking a step in the defence of the proceeding, such as bringing a motion before the court to obtain a stay or the dismissal of an action;

(b) default judgment was obtained without notice to the defendants’ counsel even though the plaintiff’s counsel has been actively engaged with him.

[40] The Court of Appeal in Male, at para. 16, noted that as a result of these factors, the default judgment should have been set aside as of right, without inquiry into the merits of any defence.

[41] Based on the exchange of correspondence, either of these factors should have stopped Ms. Ismail from requisitioning the noting in default of Desjardins, insisting on a Statement of Defence from Costantino, or agreeing to set aside the noting in default only in exchange for Desjardins’ Statement of Defence. As a result of this irregularity, it is in the interests of justice for leave to be granted to bring this motion, although I have already concluded that leave is unnecessary.

STRIKING THE CLAIMS OF INTRUSION UPON SECLUSION

The Law Pertaining to Motions to Strike

[42] The defendants bring their motion to strike pursuant to rr. 21.01(1)(b), 21.01(3)(d) and/or 25.11.

[43] Rule 21.01(1)(b) provides that a pleading may be struck where it does not disclose a reasonable cause of action. In Potis Holdings Ltd. v. The Law Society of Upper Canada, 2019 ONCA 618, at para. 18, the Court of Appeal has summarized the test applicable on a motion under r. 21.01(1)(b) as follows:

A pleading will be struck out if, assuming the facts pleaded to be true, it is plain and obvious that it discloses no reasonable cause action; that is, where it has no reasonable prospect of success. [Citations omitted.]

[44] This was the same test articulated by Wilson, J. in the seminal case of Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, at p. 980.

[45] It is acknowledged that the threshold for striking a pleading is high. The pleading must be read generously, with allowances for drafting deficiencies: Falloncrest Financial Corp. v. Ontario (1995), 1995 CanLII 2934 (ON CA), 27 O.R. (3d) 1 (C.A.), (sub nom Nash v. Ontario), at p. 6; Tran v. University of Western Ontario, 2015 ONCA 295, at para. 16.

[46] In Deep v. Ontario, [2004] O.J. No. 2734 (S.C.), aff’d [2005] O.J. No. 1294 (C.A.), the Ontario Superior Court of Justice explained, at paras. 32-35, that the purpose of a r. 21.01(1)(b) motion is to test whether a plaintiff's allegations state a legally sufficient or substantively adequate claim. A claim will be found to be legally insufficient when either the allegations it contains do not give rise to a recognized cause of action, or it fails to plead the necessary legal elements of an otherwise recognized cause of action. The absence of a necessary element of the cause of action will constitute a radical defect, making it plain and obvious that the plaintiff cannot succeed with that cause of action. The plaintiff cannot attempt to cure such a radical defect by pleading speculative allegations or assumptions.

[47] Pursuant to r. 25.06(1), pleadings are required to contain a concise statement of the material facts on which the party relies, but not the evidence by which those facts are to be proved. A party must plead all of the material facts that it must prove to establish a cause of action that is legally complete: Aristocrat Restaurants Ltd. v. Ontario, [2003] O.J. No. 5331 (S.C.), at para 20. Chief Justice McLachlin (as she then was) emphasized this fundamental principle of pleadings in Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42, 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.

[48] In Imperial Tobacco and more recently in Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, the Supreme Court of Canada stressed the importance of r. 21 motions being used, where appropriate, to contribute to an efficient system of justice by eliminating at an early stage those claims that have no chance of success. The policy rationale for weeding out unmeritorious claims that do nothing other than tax the scarce resources of litigants, the courts and judges is perhaps more relevant than ever before in this pandemic era where all of these resources are scarcer. The court must ensure that it is carrying out its gatekeeping function by striking claims that are doomed to fail.

[49] In Atlantic Lottery, at paras. 18-19 the Court provided further guidance on when to strike a claim:

Secondly, and since Microsoft was decided, this Court has recognized in Hryniak v. Mauldin the need for a culture shift to promote “timely and affordable access to the civil justice system”. Where possible, therefore, courts should resolve legal disputes promptly, rather than referring them to a full trial. This includes resolving questions of law by striking claims that have no reasonable chance of success. Indeed, the power to strike hopeless claims is “a valuable housekeeping measure essential to effective and fair litigation”.

Of course, it is not determinative on a motion to strike that the law has not yet recognized the particular claim. The law is not static, and novel claims that might represent an incremental development in the law should be allowed to proceed to trial. That said, a claim will not survive an application to strike simply because it is novel. It is beneficial, and indeed critical to the viability of civil justice and public access thereto that claims, including novel claims, which are doomed to fail be disposed of at an early stage in the proceedings. This is because such claims present “no legal justification for a protracted and expensive trial”. If a court would not recognize a novel claim when the facts as pleaded are taken to be true, the claim is plainly doomed to fail and should be struck. In making this determination, it is not uncommon for courts to resolve complex questions of law and policy. [Citations omitted.] [Emphasis in original.]

[50] In both her factum and argument, Ms. Ismail stated that the privacy claims asserted are not novel. I agree; the privacy claims as well as the claims set out in the plaintiffs’ proposed Amended Claim are established causes of action.

[51] The defendants also move under r. 21.01(3)(d), which provides for an action being dismissed where it is frivolous or vexatious, or otherwise an abuse of process of the court. In Currie v. Halton Regional Police Services Board (2003), 2003 CanLII 7815 (ON CA), 233 D.L.R. (4th) 657 (Ont. C.A.) at para. 17, the Ontario Court of Appeal has explained:

It is apparent that there is a degree of overlap in the meaning of the terms frivolous, vexatious and abuse of process. What I take from the authorities is that any action for which there is clearly no merit may qualify for classification as frivolous, vexatious or an abuse of process.

[52] The defendants further move under r. 25.11, which provides that the court may strike all or part of a pleading or other document on the grounds that it is scandalous, frivolous or vexatious, or an abuse of process of the court. The test under r. 25.11 is met where it is plain and obvious the claim cannot succeed: Miguna v. Toronto Police Services Board, 2008 ONCA 799, at para. 34. Bare allegations and the absence of the necessary material facts render a pleading frivolous and vexatious: Wendy Sin Ming Ho v. Her Majesty the Queen et al., 2014 ONSC 2267, at para. 33.

The Tort of Intrusion Upon Seclusion

[53] The tort of intrusion upon seclusion was introduced into Ontario law by the Court of Appeal in Jones v. Tsige, 2012 ONCA 32. Jones is a case in which a bank employee, without authorization, accessed a customer’s banking information. The court, at paras. 71-72, established three elements to the tort, all of which must exist for a plaintiff to succeed:

1. The defendant’s conduct must be intentional;

2. The defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and

3. A reasonable person must regard the invasion as highly offensive causing distress, humiliation or anguish.

[54] Taking the facts pleaded as true, the necessary elements of this tort are not present in the case against either Desjardins or Costantino.

[55] The claim pleads at paragraphs 24 and 25 that the privacy rights of both plaintiffs were invaded when the defendants individually or collectively disclosed the witness list to Desjardins management, who thereafter used it for a purpose outside of the LAT proceeding. In her argument, Ms. Ismail sought to introduce speculative facts and assumptions not pleaded. Specifically, her allegation is that Desjardins’ management personnel “went into” or “intruded” into the accident benefits file containing the witness list, provided solely for the LAT proceeding, and used that information to harass and ultimately fire Wakeling.

[56] Even reading the claim as a whole and taking it at its broadest by assuming that those allegations may be inferred from the pleading, the elements of the tort still have not been pleaded, nor have the material facts that would support those elements been included.

[57] The first branch of the test requires an intentional act on the part of the defendants. The facts pleaded are that Evison gave the witness list to Desjardins and Costantino before the teleconference. Wakeling appeared at the teleconference of her own volition. There is no suggestion that either defendant compelled or caused either of these acts to occur. The plaintiffs were the active parties. This is not the type of intentional intrusion, physical or otherwise, that is required to satisfy the first branch of the test.

[58] The second branch of the test requires the plaintiff to show three separate elements: 1) an invasion; 2) of private affairs or concerns; and 3) without lawful justification.

[59] The facts alleged could never be considered an invasion. Desjardins did not have to “go into” the accident benefits file; it was a party to the proceeding who received the witness list provided. Again, both defendants were passive recipients of the information that Wakeling would be a witness; Desjardins as a party, and Costantino as counsel to Desjardins. Nor was the information private. Wakeling’s presence at the teleconference or on the witness list for the LAT proceeding was not concealed in any way. While it must be taken as true that Wakeling’s attendance at the case conference was initially known only to its counsel and adjusters in attendance, it could never be successfully argued that, as a party to the proceeding, Desjardins was not entitled to have that information.

[60] The plaintiffs’ argument is that there is an obligation to have a firewall placed internally within Desjardins to prevent management not directly involved in the LAT proceeding, for example, management in the human resources department, from having access to the information provided in the LAT proceeding. Such allegations are not pleaded. In any event, Ms. Ismail likens this situation to the circumstances addressed in Dervisholli et. al v. Cervenak and State Farm, 2015 ONSC 2286 (Div. Ct.), where State Farm was the insurer for both the accident benefits claimant and the tort defendant. State Farm had retained the same lawyer to represent it in both the accident benefits action and in the tort action, resulting in a sharing of confidential information without the plaintiff’s authority. On appeal, the decision by the motions judge to remove the lawyer due to a conflict of interest was upheld. Edwards, J., writing for the panel, concluded that State Farm had breached its duty to its insured by failing to maintain the confidentially required with respect to the contents of the accident benefits file, which resulted in a disqualifying conflict of interest for the lawyer. Dervisholli makes clear that where a tort insurer and accident benefits insurer are the same company, that insurer has an obligation to set up a firewall to prevent dialogue or exchange of the plaintiff’s confidential accident benefits file. As part of its good faith duty to the claimant, the insurer must protect the personal and medical information that such a claimant is mandated to disclose in order to obtain statutory accident benefits. The insurer’s duty includes preventing unauthorized use of that information in the tort action.

[61] There are significant distinctions between the situation in Dervisholli and the facts pled in the Claim. There is no allegation that Desjardins is an insurer for a tort defendant or potential tort defendant in relation to Evison. There is no allegation that Desjardins plays a dual role in relation to Evison that would trigger the obligation to create the firewall discussed in Dervisholli or give rise to a conflict on the part of Costantino. The argument that Desjardins should not have shared the information related to Wakeling with itself has no basis in law in these circumstances.

[62] Following argument, Ms. Ismail provided the court with the recently decided case, The Personal Insurance Company v. Jia, 2020 ONSC 6361 (Div. Ct.). In this case The Personal Insurance Company (“The Personal”) was involved both in a priority dispute and an accident benefits dispute with its insured and used the same lawyer for both proceedings. That counsel filed transcripts of the claimant’s evidence compelled in the priority dispute on behalf of The Personal in the benefits dispute. At the LAT, Adjudicator Moisa concluded that there was no conflict created by using the same counsel for both proceedings and that the filing of a transcript of evidence in non-compliance with the statutory scheme should not lead to exclusion of that evidence. This result was overturned in a Reconsideration Decision of Vice-Chair Trojek of the Safety, Licensing Appeals and Standards Tribunals Ontario (“SLASTO”), and The Personal appealed to the Divisional Court.

[63] At para. 6, the Divisional Court recognized the principle in Dervisholli, stating:

It is established law that insurers may not use the same counsel in statutory benefits cases and in tort cases brought against them by the same insured. This is because the duties of an insurer (and therefore of its counsel) are different in these contexts, and as an accident benefits insurer, the insurer is entitled to receive, and is required to keep confidential, a great deal of sensitive personal information from claimants.

[64] While agreeing that the conflict alleged was not as clear as the conflict that arises if counsel defends an insurer in both a statutory accident benefits case and a tort case arising from the same loss, the court agreed with Vice-Chair Trojek that the situations are sufficiently analogous that the principle in the latter circumstance should apply in the former. An actual conflict arose when the insurer misused transcripts gathered in the priority dispute in the subsequent benefits dispute.

[65] At para. 14, the court noted that the principles underlying the implied undertaking that applies to compelled disclosure in civil proceedings also militate against an insurer being able to file a transcript compelled in the priority dispute in a subsequent liability dispute without first obtaining leave to do so.

[66] By analogy, without deciding this and leaving it for the trial judge to do so, there may be an argument that, without leave, Desjardins is prevented from using the compelled witness list in its defence of the wrongful dismissal claim. But Costantino, to the extent that she provided the list to Desjardins, did so in the context of the LAT proceeding only, as alleged in the Claim. This is entirely distinguishable from the lawyer’s actions in Jia. By further distinction, it is obviously not Costantino who represents Desjardins in the wrongful dismissal action. Jia is not helpful to the plaintiffs in establishing a conflict of interest on the part of Costantino.

[67] Further, a list of witnesses that must be exchanged in a LAT proceeding is not sensitive personal or medical information, nor is the fact of Wakeling’s participation. In Jones, at para. 72, the court defined the strict parameters of this tort, including the type of matters that should be considered “private affairs or concerns”:

These elements make it clear that recognizing this cause of action will not open the floodgates. A claim for intrusion upon seclusion will arise only for deliberate and significant invasions of personal privacy. Claims from individuals who are sensitive or unusually concerned about their privacy are excluded: it is only intrusions into matters such as one's financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive. [Emphasis added.]

[68] In addition to there being no invasion of private affairs or concerns, the second branch of the test also requires that there be an absence of legal justification for the invasion. Although I have already decided there was no invasion of private affairs or concerns, it has been pled that the exchange of witness lists was mandated by tribunal disclosure requirements. Here, then, there was a legal requirement for the witness list to be disclosed to Desjardins; the plaintiff complied with that requirement and disclosed it.

[69] In similar circumstances, where the law mandates disclosure that becomes the subject of an alleged intrusion, courts have held that the tort cannot be made out: See Grech v. Scherrer, 2018 ONSC 7206 at paras. 30 and 32-34; Garrett v. Oldfield, 2014 ONSC 508 at paras. 29-34; Edgeworth v. Shapira et al., 2019 ONSC 5792 at para. 63.

[70] Accordingly, I must conclude that there was a legal justification for Desjardins to be in possession of the witness list, which Costantino was likewise entitled to receive in her capacity as counsel to Desjardins.

[71] The opening paragraph of the plaintiffs’ factum states:

The action is grounded in the defendant’s intrusion, dissemination and misuse of confidential information contained in Barbara Evison’s accident benefits dispute, which was in turn was used by the defendants to fire Joan Wakeling. [Emphasis added.]

[72] There is no allegation in the Claim of dissemination of information. However, this tort does not concern itself with the dissemination of information. This was made clear by Justice Sharpe in Jones, at para. 57:

The first element indicates that the tort focuses on the act of intrusion, as opposed to dissemination or publication of information….

[73] Accordingly, to the extent Costantino relayed any information to Desjardins (her client, and a party to the LAT proceeding), such conduct is of no relevance to establishing the elements of this tort.

[74] The Plaintiffs have not pleaded the third element of the tort, which is that a reasonable person would regard the Defendants’ conduct as highly offensive, causing distress, humiliation or anguish. They do seek to add such a statement in their proposed Amended Claim.

[75] What has been pled, at paragraph 18 of the Statement of Claim, is that “when Barbara learned of the investigation and termination, she experienced significant distress which required medical care.” The plaintiffs have also pled, at para. 23, that “Joan was emotionally traumatized as a result of her abrupt and/or improper termination after 24 years of service. She suffered and continues to suffer from anxiety, paranoia, worry, nightmares and Post-Traumatic Stress. She continues to ingest medication and requires counselling”. Finally, under the heading of aggravated damages, both seek damages for mental distress caused by the defendants’ conduct as particularized in paragraphs 27 and 28 of the Claim.

[76] The Court of Appeal made clear in Jones, at para. 72, that only those intrusions that can be objectively described as “highly offensive” will be captured by the tort of intrusion upon seclusion.

[77] In my view, a reasonable person viewing the matter objectively would not consider the alleged intrusion – Desjardins learning that Wakeling intended to act as a witness in Evison’s LAT proceeding as a result of information provided by Evison – as “highly offensive”. It would be another matter if sensitive information of the type described by Sharpe, J.A. in Jones and contained in Evison’s SAT file had been accessed by someone who had no lawful authority to access such information, but that is not the scenario set out in the pleading.

[78] In the result, no elements of the tort can be established on the facts taken to be true in the pleading. As the constituent elements of this cause of action are absent, along with the necessary allegations to support them, it is certain to fail and must be struck against both defendants.

[79] For the sake of completeness, the claims of intrusion upon seclusion could also be struck pursuant to rr. 21.01(3)(d) and/or 25.11. I concur with the arguments set out at paragraphs 67 through 80 of the defendants’ factum in this regard, any one of which is an alternate basis for striking the claim: the claim is legally untenable and so is frivolous, vexatious, or an abuse of process; the claim is founded on the untenable premise that Costantino should have derogated from her duties to her client by withholding information; and last, advancing – or defending – the claim would necessitate an impermissible incursion into the solicitor-client and litigation privileges of the defendant client.

[80] On this last point, the plaintiffs rely on the case of Amato v. Welsh, 2013 ONCA 258 for the proposition that a claim will not be struck at the pleadings stage on the basis that there will be insurmountable implications to solicitor-client privilege. The principles set out in that case cannot be read as applying to the fact situation raised by this Claim. Amato explored the discrete question of whether the doctrine of absolute privilege can protect a lawyer from being sued by former clients where those clients sought to assert a claim against the lawyer and her law firm for alleged breaches of fiduciary duty and the duty of loyalty, based on statements made or omitted by the lawyer and the law firm while representing different clients in a quasi-judicial proceeding.

[81] To the contrary, a claim is an abuse of process if it necessarily involves the disclosure of privileged communications relating to ongoing litigation, which this Claim seeks to attack: Frank v. Legate, 2015 ONCA 631, at paras. 92 and 94. See also Crown Crest Financial Corp. v. Sabbah, 2019 ONSC 7114, at paras. 35-38 and 48.

[82] In Davy Estate v. Egan, 2009 ONCA 763, the Court of Appeal held that there was no basis in law for allowing the defendant to assert a claim against the plaintiff's solicitor for allegedly providing negligent advice with respect to mitigation. At para. 28, Sharpe, J.A. stated:

I would add that there appears to me to be strong underlying policy reasons that support this result. The defendant is, after all, a wrongdoer who caused the plaintiff loss, and a plea of mitigation does not excuse or justify the wrong, nor does it rest on the attribution of partial responsibility for the wrong to some other party. Obvious mischief arises from allowing one party to sue another party's solicitor. Such claims invade the sanctity of the solicitor-client relationship. The solicitor's loyalty to the client is undermined. Difficult issues regarding solicitor-client privilege are bound to arise in relation to the solicitor's defence. These policy reasons cannot prevail in cases like Corcoran where the defendant has a valid legal claim against solicitor for contribution and indemnity, but in a case such as the present one, the policy coincides with the strict letter of the law.

[83] Ms. Ismail framed one of the issues to be decided on this motion to be whether accident benefit lawyers have absolute immunity from tortious liability. They do not; a solicitors’ negligence action can arise against a lawyer acting for an accident benefit insurer in circumstances where that lawyer’s negligent conduct was the cause of her client’s loss. But it is only in very specific instances, such as those existing in 478649 Ontario Ltd. v. Corcoran (1994), 1994 CanLII 219 (ON CA), 20 O.R. (3d) 28 (C.A.), in which a lawyer would be exposed to a personal liability in tort to third parties such as Evison and Wakeling: Davy Estate, at paras. 22 and 28. This is not one of those specific instances.

[84] In the result, paragraphs 24 to 27 inclusive, and the related relief claimed in paragraph 1 of the Claim will be struck.

[85] There is no purpose in permitting an amendment to the Statement of Claim to allow the plaintiffs to attempt to bolster these claims. The facts underlying the Claim are straightforward and cannot and will not, no matter how massaged or re-worded into additional allegations, become the sort of material facts necessary to support the essential elements of the tort of intrusion upon seclusion.

STRIKING REMAINING CLAIMS AGAINST COSTANTINO

[86] The plaintiffs also claim punitive damages from Costantino, on various grounds as set out in paragraph 30 of the Claim. To summarize, this paragraph alleges that Costantino breached her professional obligation to the administration of justice by failing: to ensure that information obtained through the LAT proceeding was not used for another purpose; to counsel her client on the impropriety of utilizing that information for another purpose; to counsel her client on the impropriety of launching a collateral attack on a witness; to recognize she was in a conflict of interest after learning that her client made improper use of confidential information, including to launch a collateral attack on a witness to a legal proceeding in which she was involved; and/or to recognize that there was a conflict between her professional obligations as a lawyer and her duty of loyalty to her employer. It is also alleged that punitive damages are warranted by Costantino breaching her good faith obligation to Evison, when she permitted her client to misuse confidential information gained in a legal proceeding to harass a witness in the proceeding.

[87] The punitive damage claim is founded on the privacy claim. It is plain and obvious that these punitive damage claims against Costantino must also fail, and so should be struck. To be clear, the punitive damage claims against Desjardins, only to the extent that they are dependent upon the wrongful dismissal claim, will stand.

[88] The primary basis for striking the punitive damage claims against Costantino is that punitive damage claims are not free-standing claims. Rather, they can only be awarded where the conduct giving rise to the award of punitive damages constitutes a separate actionable wrong: Ferme Gérald Laplante & Fils Ltée v. Grenville Patron Mutual Fire Insurance Co. (2002), 2002 CanLII 45070 (ON CA), 61 O.R. (3d) 481 (C.A.), leave to appeal refused, [2002] S.C.C.A. No. 488, at para. 113. Accordingly, even if the trial judge were to consider the actions of Costantino to be deserving of such an award, there are no other claims available on the face of the pleading that constitute a separate cause of action or “actionable wrong” now that the claim of intrusion upon seclusion has been struck.

[89] It is trite to say that Costantino was under ethical and professional obligations to disclose the witness list to Desjardins, which she received when acting in the capacity of its employee and counsel. And despite the allegations in paragraphs 15 and 24 of the Claim that Costantino should have kept this information confidential, Ms. Ismail’s factum explains that Wakeling’s complaint is not that the defendants received information of her intention to act as Evison’s witness, rather she complains that the information was misused, and that she had a right to be protected from its misuse.

[90] Each of the above allegations is premised on the idea that Costantino had a duty to protect Evison and/or Wakeling from what is alleged to be misuse of the information obtained through the LAT proceeding.

[91] As previously covered, some of these allegations delve into the advice that Costantino did or did not provide to her client, and as such should be struck on the basis that they are an abuse of process.

[92] There is no support in law for the remaining allegations. In Davy Estate, at para 19, the Court stated that the plaintiff's solicitor owes the defendant no common law duty of care; conversely, here Costantino owed no common law duty of care to Evison or Wakeling. Costantino’s duty was strictly to her client, and accordingly she was never in a conflict of interest as alleged in paragraph 30. See also Heydary Hamilton PC v. Dil Muhammad et al, 2013 ONSC 4938 where in striking all claims dismissing the action brought by a law firm against their former client’s new lawyer, Morgan J. held at paras. 22-23:

Far from being an actionable wrong, it was Schorr’s duty as a lawyer “to advance his client’s interest and not to protect those of the opposite party in the negotiations or dealings that he is engaged in.” For this reason, courts have often found it to be “an abuse of process to sue opposing counsel, under the guise of any cause of action, for their conduct of a case.”

A solicitor owes no duty of care to the opposite party. [Citations omitted.] [Emphasis added.]

[93] Ms. Ismail’s argument that Costantino should have protected Wakeling from “witness harassment and victimization” from her employer is based the ruling in A-G’s Application, Re (sub nom A-G v. Butterworth), [1962] 3 W.L.R. 819. In that case the Master of the Rolls was considering an appeal of a ruling holding that criminal contempt should not issue against members of a labour union who penalized a union member after that individual gave unhelpful evidence against it during a proceeding in the Restrictive Practices Court. The ruling was overturned on appeal and the court held that regardless of when the punitive tactics toward a witness occurred, whether during or after the hearing, the effect should be a finding of contempt.

[94] Butterworth does not touch on the duty alleged by the plaintiffs – the duty of a lawyer to ensure that a witness to a proceeding is not harassed or penalized by that lawyer’s client. While obviously a lawyer must never interfere to prevent a witness from giving testimony in a proceeding (see Law Society (British Columbia) v. Ewachniuk, 2003 BCCA 223, for example), there is no allegation in the Claim that Costantino attempted or actually interfered with Wakeling’s proposed testimony. The facts pled do not allege that Costantino was aware of or was in any way connected to the investigation and termination of Wakeling that occurred after the teleconference. Butterworth may assist the plaintiffs in their claims against Desjardins, but not against Costantino. The question of how Desjardins’ knowledge that Wakeling was involved in the LAT proceeding relates to Wakeling’s dismissal remains potentially relevant to the wrongful dismissal claim against Desjardins.

[95] There are at least two additional reasons for striking the punitive damage claims against Costantino. The first is that, to the extent there are any materials facts pleaded about her conduct, that conduct occurred within the ordinary course of her employment with Desjardins, and thus cannot give rise to personal liability.

[96] In ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 1995 CanLII 1301 (ON CA), 26 O.R. (3d) 481 (C.A.), at pp. 490-91, the Court of Appeal summarized the requirements for advancing a claim against employees in their personal capacity:

The decided cases in which employees and officers of companies have been found personally liable for actions ostensibly carried out under a corporate name are fact-specific…. In the absence of findings of fraud, deceit, dishonesty or want of authority on the part of employees or officers, they are also rare. …Absent allegations which fit within the categories described above, officers or employees of limited companies are protected from personal liability unless it can be shown that their actions are themselves tortious or exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own. [Citations omitted.]

[97] The Claim pleads that Desjardins is an incorporated entity, but makes no allegation that Costantino was “exhibiting a separate identity or interest from that of the company”. Nor are there any allegations being made against her of fraud, deceit, dishonesty or acting with lack of authority. Having dismissed the intrusion upon seclusion claims, there are no other allegations of tortious behaviour on the part of Costantino. Accordingly, it is plain and obvious that any claim based against her in her personal capacity will not succeed.

[98] The final basis for striking all claims made against Costantino is that the communications that forms the basis of the claims against her, whether reporting the witness list or the fact of Wakeling’s presence to her client, or the constellation of allegations in paragraph 30 of the Claim that relate to Wakeling as a witness, all arose within the context of a quasi-judicial proceeding and are protected by absolute immunity. An action brought in violation of the doctrine of absolute immunity is an abuse of process: Salasel v. Cuthbertson, 2015 ONCA 115, at para. 26. The doctrine of absolute immunity was described by the Court in Salasel, at para. 35, as follows:

The doctrine of absolute privilege contains several basic elements: no action lies, whether against judges, counsel, jury, witnesses or parties, for words spoken in the ordinary course of any proceedings before any court or judicial tribunal recognised by law;

[99] For all of the above reasons, paragraphs 30 and 31 of the Claim will be struck.

THE PLAINTIFFS’ MOTION TO AMEND THE CLAIM

[100] The plaintiffs move to amend their claim as follows:

1. The plaintiff, Barbara Evison, claims from the defendant Nadia Lucia Costantino:

(c) damages for breach of the Human Rights Code, in the amount of $50,000;

The plaintiff, Barbara Evision, claims from the defendant Desjardins Insurance Group:

(c) damages for breach of the Human Rights Code, in the amount of $50,000;

The plaintiff, Joan Wakeling, claims from the defendant Nadia Lucia Costantino:

(a) damages for breach of privacy/confidence in the amount of $25,000;

The plaintiff, Joan Wakeling, claims from the defendant Desjardins Insurance Group:

(a) damages for breach of privacy/confidence in the amount of $25,000;

The plaintiffs claim from the defendants Risha Maharaj, Joe Crngarov, Tara Davidson and Jacqueline Thompson, jointly and severally:

(a) damages for breach of privacy/confidence in the amount of $500,000;

4A. The defendants, Risha Maharaj, Joe Crngarov, Tara Davidson and Jacqueline Thompson are individuals who at the material time had access to and/or misused the plaintiffs’ personal information to harass and eventually improperly terminate the plaintiff/witness Joan.

12. On May 22, 2019, Joan attended with Barbara as her aide at the Tribunal mandated teleconference. Joan was on vacation at the time. Ms. Costantino attended as the legal representative of Desjardins. Risha Maharaj and Joe Crngarov attended as representatives of Desjardins. The fact of Joan's attendance at the case conference was known only to its counsel and adjusters in attendance.

12A. During the teleconference the defendant Ms. Costantino noted the plaintiff Joan was an employee of Desjardins and raised concerns about her attendance as Barbara’s communication aide. Ms. Costantino was asked to confirm that there would be no interference with Joan’s employment. She refused asserting she had no control over what would happen to Joan as a result of her presence. Joan left the room crying, and unable to assist Barbara, during the case conference.

15. In disputing her claim against Desjardins, Barbara had an expectation that individuals providing her assistance and/or her potential witness would be held in confidence by the lawyer, Ms. Costantino, adjusters Risha Maharaj and Joe Crngarov, and the information would not be disclosed and/or used in any manner outside the proceeding.

Breach of Confidence and Privacy/Tort of Intrusion Upon Seclusion

25. Barbara had an expectation that her file, and its related data, would be private and secured and used solely for the purpose of adjusting her accident benefits claim. To the extent that her file was utilized for any other purpose, it was an improper invasion of her privacy and/or breach of confidence.

25A. The plaintiffs plead and the fact is that the misuse of confidential information provided under a contract for benefits and/or mandated through a quasi-judicial process was an unauthorized, intentional and/or reckless act, without lawful justification, which a reasonable person would consider highly offensive and to reasonably cause distress.

26. The plaintiffs claim damages as a result of the defendants’ breach of confidence and their respective expectations or privacy.

BREACH OF HUMAN RIGHTS

33. Ms. Costantino and Desjardins knew at the time of the case conference that Barbara had emotional and cognitive impairments that required the assistance of communications aide.

34. Ms. Costantino and/or Desjardins interfered with Barbara’s right to be assisted directly at the case conference and indirectly prior, by refusing to fund Barbara’s attendant care benefit, prior to the conference.

35. The plaintiffs plead and rely upon the Human Rights Code, RSO 1990, c H.19. as amended.

[101] Rule 26.01 provides that a court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. However, as the Court of Appeal has explained in Marks v Ottawa (City), 2011 ONCA 248, at para 19:

…[T]here is no absolute right to amend pleadings. The court has a residual right to deny amendments where appropriate. Further, I would agree that the proper factors to be considered are those first set out in Simrod v. Cooper, which can be summarized as follows:

• An amendment should be allowed unless it would cause an injustice not compensable in costs.

• The proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious.

• No amendment should be allowed which, if originally pleaded, would have been struck.

• The proposed amendment must contain sufficient particulars. [Full citations omitted.]

Breach of Privacy Claims

[102] The proposed amendments seek to add four additional Desjardins employees to the action in their personal capacities. To the extent that the amended claim seeks damages for the tort of intrusion upon seclusion from those four individuals, the claim is without possibility of success for the same reasons previously explained in relation to Desjardins and Costantino.

[103] Additionally, like the claim against Costantino, there is no basis for suing these four employees in their individual capacities; nor is there any basis in fact to do so. It is not pleaded that the conduct of any one of these proposed defendants fell within the test outlined in ScotiaMcLeod Inc.

[104] Finally, as previously discussed in relation to Costantino, absolute immunity would protect those communications between these four employees to their employer from being used as the basis of a proposed claim against them, as the proposed amendments make clear that all stem from the LAT proceeding.

Claims for Breach of Confidence

[105] The plaintiffs also seek leave to add claims for breach of confidence against the existing and proposed defendants. In order to make out a claim for breach of confidence the plaintiffs are required to prove each of these three essential elements, as established in Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, at para. 10:

1. Confidential information was conveyed;

2. The information was conveyed in confidence; and

3. The information was misused by the defendant to whom it was communicated to the detriment of the plaintiff.

[106] Read most broadly, the proposed Amended Claim states that Evison’s attendance at the teleconference and the fact of her name being on the witness list is confidential information that was conveyed strictly for use in the LAT proceeding. With respect to Wakeling, there is no suggestion in the proposed amendments that she conveyed information to Desjardins, let alone that she conveyed it in a manner of confidence or that it was accepted in confidence. On the face of the proposed Amended Claim, only once she was participating in the case conference did Wakeling ask whether her participation would have any impact on her employment. That comment alone cannot cloak the information in confidentiality.

[107] In Lac Minerals, at para. 10, the Supreme Court of Canada defined confidential information as that which has a “quality of confidence” about it. In determining whether something has such a quality, the test is whether a person, acting reasonably, should have expected the information to be confidential: GasTOPS Ltd. v. Forsyth, 2009 CanLII 66153 (ON SC), 2009 CarswellOnt 5773 (Ont. S.C.), aff’d 2012 ONCA 134, at para 133. See also Free Trade Medical Network Inc. v. RBC Travel Insurance Co., 2005 CarswellOnt 4659 (Ont. S.C.), leave to appeal refused, 2007 CarswellOnt1353 (S.C.C.) at paras 87 and 89.

[108] On the facts pled in this claim, I conclude that a reasonable person would not expect the fact of Wakeling’s attendance at the teleconference or her appearance on the witness list to have the necessary quality of confidentiality. No steps were taken by Evison or Wakeling to guard the secrecy of this information, nor could any steps be taken because, at least as far as the witness list is concerned, its production was mandatory. Nor is it information that is inherently valuable, like a client list or trade secret.

[109] There are no material facts pleaded in the proposed Amended Claim to establish that Wakeling’s participation as a support person or witness was conveyed in confidence to the individuals who participated in the teleconference. Nor can such a situation be inferred, as none of the Desjardins employees who were present at the teleconference had an obligation to guard any aspect of this information from coming to the attention of their employer. Further, as a party to the LAT proceeding, it was Desjardins who was the recipient of the witness list, not any of the employee defendants in their personal capacities.

[110] Nor does the proposed Amended Claim plead any facts to support a finding of misuse of this information by any of the personal defendants. The sole allegation made against Costantino appears to be that she misused the information about Wakeling by sharing it with Desjardins, a party to the proceeding. This would be wrongly characterized as “misuse”, as Costantino’s duty to divulge such information to her client is paramount to her role as counsel.

[111] With respect to the additional employee defendants, the proposed Amended Claim alleges that they, “are individuals who at the material time had access to and/or misused the plaintiffs’ personal information to harass and eventually improperly terminate the plaintiff/witness Joan”. This is a bald pleading that discloses no material facts relating to such alleged misuse, and as such should be struck due to being frivolous and vexatious: Wendy Sin Ming Ho, at para. 33; Aristocrat Restaurants Ltd., at para. 21. Without more material facts, it would be impossible for the proposed individual defendants to respond to such a broad allegation, short of a general denial. Bare allegations are considered particularly vexatious where, as here, allegations of intentional or malicious conduct are made: Wilson v. Toronto Police Service, [2001] O.J. No. 2434 (S.C.) at paras. 66-67, aff'd, 2002 CanLII 4770 (ON CA), [2002] O.J. No. 383 (C.A.).

[112] Although I have concluded that none of the three elements of the tort of breach of confidentiality can be made out in this case, it is enough that a fatal defect exists in respect of only one of them to prevent this amendment from going forward. Wakeling’s participation as a support person or witness is not confidential information, and in my view could never be properly found to be so characterized. Had breach of confidentiality been advanced in the original claim it too would have to be struck, and so should not be permitted.

Human Rights Code Amendment

[113] The plaintiffs also seek leave to add a claim on behalf of Evison for breach of the Human Rights Code, R.S.O. 1990, c. H.19 (the “Code”) against Costantino and Desjardins.

[114] Evison makes two allegations in support of this proposed claim. First, she alleges that Costantino and Desjardins directly interfered with her right to be assisted at the case conference. The material facts pled in support of this allegation are that during the teleconference Costantino noted that Wakeling was an employee of Desjardins and raised concerns about her attendance as Evison’s communication aide. When Costantino was asked to confirm that there would be no interference with Wakeling’s employment, she could not give that confirmation. As a result of Wakeling then leaving the “room”, presumably meaning the teleconference, she was unable to assist Evison.

[115] Second, Evison alleges that these defendants indirectly interfered with her right to be assisted prior to the case conference by refusing to fund the attendant care benefit sought by Evison in the LAT Proceeding prior to the case conference.

[116] A complaint that does not relate to one of the particular social areas targeted by the Code is not sustainable. Those prescribed social areas are: services; accommodation of persons under 18; contracts; employment; and vocational associations: s. 46.1 of the Code; Eidoo v. Infineon Technologies AG, 2015 ONSC 5493, at paras. 74-75.

[117] The Code at Part I prescribes that these social areas are to be provided without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability. The proposed Amended Claim does not plead that the Defendants breached a recognized right under the Code, so it is difficult to ascertain the basis of Evison’s proposed complaint. Presumably it would be disability.

[118] However, it is not possible that any of the social areas set out in Part I apply in this case. Assuming the “emotional and cognitive impairments” referenced in paragraph 33 of the proposed Amended Claim qualify as “disability” within the meaning of the Code, the only Part I area that might apply would be that of “services”.

[119] In the proposed amendments, neither Desjardins nor Costantino are alleged to provide the service of delivering employment guarantees. In the amended claim, neither Desjardins nor Costantino are alleged to provide the service of ensuring that support persons are available to claimants at case conferences. Further, on the facts as pled in the amended claim, it was Wakeling who voluntarily withdrew from the conference when she became upset, not Desjardins or Costantino who insisted that she do so.

[120] There are three elements required to show a prima facie case of discrimination: (1) that the person is a member of a group protected by the Code; (2) that the person was subjected to adverse treatment; and (3) that the person’s status as a member of a group protected under Part I was a factor in the alleged adverse treatment. In other words, there must be a “connection” between the adverse treatment and the ground of discrimination: Phanlouvong v. Northfield Metal Products (1994) Ltd., 2014 ONSC 6585, at para 109, citing Pieters v. Peel Law Association, 2013 ONCA 396; Meekis v. Ontario (AG), 2019 ONSC 2370, at paras. 128 and 131-33. Such a connection is absent both within the pleading and on the facts of this case. There is no connection made between Evison’s disability and Costantino’s response to Wakeling. In fact, the proposed amendments do not outline how the defendants are alleged to have subjected Evison to adverse treatment, or to have done so as a result of her disability, by Costantino’s inability to provide Wakeling with employment assurances.

[121] Turning to the other allegation, Evison proposes to plead that these defendants indirectly interfered with her right to be assisted prior to the case conference by refusing to fund the attendant care benefit. This allegation of indirect interference similarly discloses no conduct that could ground a claim for discrimination under Part I of the Code.

[122] Again, there is no allegation nor any basis in fact or law to say that Costantino was a service provider or was providing services to Evison. Again, Evison does not plead discrimination by either Desjardins or Costantino, nor any material fact that could sustain such an allegation. There are no facts pleaded to the effect that Evison was treated differently from others, or that Desjardins had discriminatory motivations. To permit this claim to go forward would suggest that every injured person who was denied accident benefits has a right to assert an infringement of the Code. However, the Human Rights Tribunal has affirmed that insurance companies are free to set requirements for disability-based benefits schemes, provided they are applied in a non-discriminatory manner: Knight v. Surrey Place Centre, 2017 HRTO 281, at para. 24.

[123] It is plain and obvious that the proposed cause of action pursuant to the Code is doomed to fail, as the plaintiff Evison has failed to plead the necessary constituent elements of a cause of action grounded in the Code, nor is it a cause of action available on the material facts set out in the proposed Amended Claim.

[124] There is a further reason for striking the Code complaints against Costantino. In order to bring a human rights complaint in a civil proceeding, the complaint must be brought alongside a cause of action that does not arise solely from a breach of the Code. In Jaffer v York University, 2010 ONCA 654, leave to appeal refused, [2010] S.C.C.A. No. 402, the appellant brought a claim under the Code for York University’s failure to accommodate his disabilities. In striking the appellant’s claim, the Court at para. 44 explained s. 46.1 of the Code as follows:

Although a person may not commence an action based solely on an infringement of a right under Part I of the Code, breach of the Code may be properly raised in an action if the claim is otherwise properly before the court. Thus, whether or not a claim for breach of the duty to accommodate disabilities can proceed in the Superior Court depends upon whether or not the pleading discloses a reasonable cause of action that does not arise solely from a breach of the Code.

[125] Having decided that all claims against Costantino must be struck, and that the proposed amendments to plead breach of confidence should not be allowed, the law is clear that any civil action based strictly on a Code violation would not be permitted to stand. With respect to Desjardins, although there is an independent cause of action remaining (wrongful dismissal), for the reasons set out above the proposed claim based on the Code is not viable.

[126] Although the plaintiffs’ motion attempts to remedy the deficiencies in the original claim by proposing two new causes of action, such a procedure would not cure the problem that the underlying factual matrix does not support either such cause of action. Nor do the facts support the addition of more employees. The fundamental problems with the proposed Amended Claim are not due to deficient drafting, but rather the facts underlying the action. Any other causes of action based on these same facts (counsel sharing information with her client and party to the proceeding, or that party sharing information with itself) similarly cannot stand. Accordingly, the plaintiffs’ motion is dismissed.

ORDER

[127] This Court orders:

1. The following portions of the Claim are hereby struck without leave to amend: 24 (and the heading that precedes it), 25-27, 30, 31, and the following portions of paragraph 1:

2. The plaintiff, Barbara Evison, claims from the defendant Nadia Lucia Costantino:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $100,000;

The plaintiff, Barbara Evision [sic], claims from the defendant Desjardins Insurance Group:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $1,000,000;

The plaintiff, Joan Wakeling, claims from the defendant Nadia Lucia Costantino:

(a) damages for breach of privacy in the amount of $25,000;

(b) aggravated and punitive damages in the amount of $100,000;

(a) damages for breach of privacy in the amount of $25,000.

2. The action as against Nadia Lucia Costantino is hereby dismissed, without leave to amend.

3. The Plaintiffs’ motion for leave to amend the Statement of Claim is dismissed.

[128] I am grateful to counsel for their extremely thorough facta, from which I acknowledge having copied liberally in the preparation of these Reasons.

COSTS

[129] Following the conclusion of the argument of these motions, this court directed that the parties file Costs Outlines in support of, potentially, their claim for costs. This was to enable costs to be dealt with in the most expeditious and least costly fashion. I will now review the material submitted by counsel and will issue a separate ruling on costs. If the parties are able to reach an agreement on costs before the release of that ruling, they are asked to notify the judicial assistants’ office at the email address from which they have received this ruling.

The Honourable Madam Justice S.E. Healey

Released: November 6, 2020