COURT FILE NO.: CV-19-00619987-0000

COURT FILE NO.: CV-20-00644233-0000

DATE: 2020/12/22

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

STEDFASTS INC.

Plaintiff

• and -

DYNACARE GAMMA LABORATORY PARTNERSHIP

Defendant

Jason Bogle for the Plaintiff

Breanna Needham for the Defendant

HEARD: December 11, 2020

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] The future will tell whether this motion, brought by the Defendant Dynacare Gamma Laboratory Partnership (“Dynacare”) pursuant to rules 21.01(1)(b), 21.03(d) and 25.11 of the Rules of Civil Procedure,[^1] is: (a) a one-off aberration of a pleadings motion; or (b) the happenstance birth of a new type of hybrid procedural motion that combines a pleadings motion with a preemptive refusals motion.

[2] As I shall explain in more detail below, on what was a pleadings motion, both sides prepared elaborate charts that challenged or defended the compliance with the Rules of Civil Procedure of a Statement of Claim delivered by Stedfasts Inc. As it happened, the challenges to or the defences of the pleading were made on a paragraph-by-paragraph basis. Most of the challenges focused on whether the allegations were material facts or evidence or whether the allegations were scandalous irrelevancies.

[3] The challenges and defences of the pleading resembled the question-by-question charts of a refusals motion. The approach of the parties led to a paragraph-by-paragraph analysis and the classification of all the paragraphs of a 131-paragraph Statement of Claim. The classifications were: (a) no objection to the paragraph [36 paragraphs]; (b) objection to the paragraph denied [6 paragraphs]; (c) objection sustained but paragraph to be edited for compliance [25 paragraphs]; and (d) objection to paragraph sustained [64 paragraphs].

[4] The paragraph-by-paragraph analysis meant that with some editing and re-numbering, the paragraphs of the pleading in classifications (a), (b), and (c) [67 paragraphs] could remain and just the non-compliant paragraphs of classification (d) [64 paragraphs] should be struck and removed from the pleading.

[5] Once the copy editing was done, the ultimate outcome of the hybrid pleadings/refusals motion is the COMPLIANT STATEMENT OF CLAIM annexed as Schedule “A” to these Reasons for Decision. This 39-paragraph compliant pleading would replace the 131-paragraph non-compliant pleading.

[6] Also as I shall explain below, there were several bizarre procedural irregularities in how the pleadings have been filed and served. These irregularities need to be attended to.

[7] Thus, to address Dynacare’s motion and to deal with the irregularities, for the reasons that follow:

a. Stedfasts is to deliver a Notice of Discontinuance in Action No. CV-20-00644233 within ten days.

b. If it has been filed, the Responding Party (Stedfasts’) Motion Record dated November 23, 2020 is to be sealed in the court file.

c. I grant Dynacare’s pleadings motion, and I strike Stedfasts’ Amended Statement of Claim in its entirety.

d. I grant leave for Stedfasts to deliver the Amended Statement of Claim annexed as Schedule A within ten days, failing which its actions CV-19-00619987 and CV-20-00644233 are dismissed with costs to be determined by submissions in writing in action CV-19-00619987 beginning with Dynacare’s submissions within twenty days of the release of these Reasons for decision followed by Stedfasts’ submissions within a further twenty days.

e. If Stedfasts delivers the Amended Statement of Claim annexed as Schedule A within ten days, the pleading is to be filed in CV-19-00619987, and if the parties cannot agree about the costs of this motion, they may make submissions in writing beginning with Dynacare’s submissions within twenty days of the release of these Reasons for decision followed by Stedfasts’ submissions within a further twenty days.

f. If Stedfasts delivers the Amended Statement of Claim annexed as Schedule A within ten days, then Dynacare shall have twenty days thereafter to deliver its Statement of Defence.

[8] To be clear, Stedfasts is not at liberty to deliver an amended Statement of Claim other than the Amended Statement of Claim annexed as Schedule “A” and that pleading should be filed in Action CV-19-00619987.

B. Procedural Background

[9] The following procedural background is derived from the motion records of the parties, from information provided to me during the argument of the motion, and from my review of the court’s computer-generated Case Histories for Court File Nos. CV-19-619987 and CV-20-644233.

[10] Stedfasts Inc. sues Dynacare Gamma Laboratory Partnership (“Dynacare”), which is a medical laboratory services company with its head office in Brampton, Ontario. Stedfasts is a courier service that transports medical samples and medical specimens to and from Dynacare’s laboratory. There is a written contract between Dynacare and Stedfasts described as an Owner Operator Courier Renewal Contract.

[11] Over a year ago, in Action No. CV-19-619987 pursuant to rules 21.01(1)(b), 21.03(d) and 25.11 of the Rules of Civil Procedure,[^2] Dynacare moved for an order striking Stedfasts’ Amended Statement of Claim in its entirety, without leave to amend on the basis that this Statement of Claim disclosed no reasonable cause of action and on the basis that the pleading was frivolous, vexatious and an abuse of process. In a further alternative, relying on rules 21.01(3)(d) and 25.11, Dynacare sought an Order to strike over 120 paragraphs of Stedfasts’ pleading. Over a year ago, on November 18, 2019, I struck out the Amended Statement of Claim with leave to deliver an amended pleading for a breach of contract claim.

[12] While the pleading delivered a year ago (the 2019 Statement of Claim) was a gross violation of the rules that govern pleadings, however, I concluded that Stedfasts should be given an opportunity to plead a claim for breach of contract for the remedy of damages. Apart from a breach of contract cause of action, Stedfasts was not granted leave to plead any other cause of action.[^3]

[13] On July 7, 2020, Stedfasts had issued a Fresh as Amended Statement of Claim which was given the Court File No. CV-20-644233. This is odd and was an irregularity. Stedfasts’ issuance of a new pleading was not what was intended when I granted Stedfasts the right to deliver an amended pleading for a breach of contract action. It seems that the court staff accepted my Order as authority for Stedfasts to start a fresh action. I had no such intention and bringing a second action for the same relief as being claimed in an active court file is in the territory of an abuse of process. Action CV-20-644233 must be discontinued, and it should be action CV-19-619987 that continues.

[14] In any event, on July 21, 2020, the 2020-Fresh as Amended Statement of Claim was served on Dynacare, and on August 7, 2020, Dynacare’s counsel advised that Dynacare intended to move to strike this pleading for non-compliance with my Order and for non-compliance with the Rules of Civil Procedure.

[15] Then there was correspondence between counsel for the parties, and on September 11, 2020, Stedfasts served a Revised 2020-Amended Statement of Claim.

[16] I checked the computer-generated File History for this pleading and there is no record of it having been filed in either CV-19-619987 or CV-20-644233 as of December 10, 2020.

[17] On October 21, 2020, Dynacare served a Notice of Motion to strike the Revised 2020-Amended Statement of Claim. It is this pleading, which is the fourth iteration of a Statement of Claim for Stedfasts’ legal grievance, that is the subject and object of this pleadings motion.

[18] On October 23, 2020, there was an attendance before Justice Kimmel in Civil Practice Court. By this time, Dynacare had filed its motion record and its factum for the motion. Justice Kimmel scheduled December 1, 2020 for the hearing of Dynacare’s motion to strike the Revised 2020-Amended Statement of Claim and to have the action(s) dismissed.

[19] The motion having been scheduled, in late November 2020, Stedfasts served a factum and a Responding Party’s Motion Record dated November 23, 2020. I was advised that this Motion Record was filed with the Court, but I checked the computer-generated File History, and there is no record of the Motion Record having been filed in either CV-19-00619987 or CV-20-00644233 as of December 10, 2020.

[20] The following day, November 24, 2020 Dynacare filed a Reply Factum, strenuously objecting to the service and filing of Stedfasts’ November 2020 Responding Motion Record on the grounds that: (a) the Motion Record contained affidavit material, and affidavit evidence is generally not permitted on a pleadings motion (which is indeed true); and (b) the affidavit material contained sensitive personal medical information and there appeared to be a violation of the privacy provisions of the Personal Health Information Protection Act, 2004.[^4]

[21] With this disagreement about the November Responding Motion Record disturbing the preparation for the motion, Stedfasts sought an adjournment of the pending motion to deal with the problem of the material. A case management conference was arranged to address this issue.

[22] The case conference took place on November 26, 2020 before me. At that time, I learned about the problem with the materials, and I made the following file direction:

This matter is scheduled for a hearing on December 1, 2020. The plaintiff requests an adjournment. The adjournment request was opposed, but the real problem in this case concerns the matter of what material may be used at the hearing of the pleadings motion. That matter is something that cannot be resolved at this case conference. Having heard from the parties, I shall adjourn the hearing to December 11, 2020. I shall remain seized of the motion.

The adjournment is on the following terms: (1) Without prejudice to the defendant’s right to object in whole or in part to the admission or use of any materials filed by the plaintiff, the plaintiff shall have until December 2, 2020 to file any additional material along with a supplementary reply factum; and (2) the defendant shall have until December 8, 2020 to deliver, if so advised, a sur-reply factum. Costs of the case conference and the adjournment in the cause.

[23] On December 2, 2020, Stedfasts served another Responding Motion Record that did not contain impugned affidavit material and another factum for this motion.

[24] The motion was argued on December 11, 2020, at which time, I learned that Stedfasts had mistakenly served the November Responding Motion Record and wished to rely only on the December Responding Motion Record. Stedfasts was prepared to withdraw the November Responding Motion Record and if that material had been filed, then to have it sealed.

C. Discussion

1. Fixing the Irregularities

[25] The clear intent of the Order I made over a year ago is that Stedfasts was allowed to deliver a Fresh as Amended Statement of Claim in CV-19-619987 to plead a breach of contract action. Stedfasts did deliver an Amended Statement of Claim but it delivered it in a new action, CV-20-644233.

[26] To fix this irregularity, I am treating the Revised Amended Statement of Claim as a pleading in CV-19-619987 and I order Stedfasts to serve a Notice of Discontinuance in action CV-20-644233.

[27] The next irregularity is the matter of Stedfasts’ inadvertently served and perhaps filed Responding Motion Record that contained affidavit material, which is not proper for a pleadings motion. This Motion Record is to be treated as withdrawn.

[28] If this Motion Record actually has been filed, then it should be sealed in the court file since it contains material that may contravene the Personal Health Information Protection Act, 2004.

2. The Rules of Pleading

[29] Rule 25.06 (1) directs that every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved. A pleading should be brief, clear, focused and contain the skeletal or core facts and not the evidence that details those facts unless particulars are required by the rules.[^5]

[30] Material facts include facts that the party pleading is entitled to prove at trial, and at trial, anything that affects the determination of the party’s rights can be proved; accordingly, material facts includes facts that can have an effect on the determination of a party’s rights.[^6] A fact that is not provable at the trial or that is incapable of affecting the outcome is immaterial and ought not to be pleaded.[^7] A pleading of fact will be struck if it cannot be the basis of a claim or defence and is designed solely for the purposes of atmosphere or to cast the opposing party in a bad light.[^8] As described by Riddell J. in Duryea v. Kaufman,[^9] such a plea is said to be “embarrassing”.

[31] “Material” facts include facts that establish the constituent elements of the claim or defence.[^10] The causes of action must be clearly identifiable from the facts pleaded and must be supported by facts that are material.[^11]

[32] A pleading shall contain material facts, but it should not contain the evidence by which those facts are to be proved.[^12] Pleadings of evidence may be struck out.[^13] The prohibition against pleading evidence is designed to restrain the pleading of facts that are subordinate and that merely tend toward proving the truth of the material facts.[^14]

[33] Under rule 25.11, the court may strike out a pleading that may prejudice or delay the fair trial of the action or that is scandalous, frivolous, vexatious or an abuse of process of the court.[^15] The same test that is used for striking a pleading for the failure to show a reasonable cause of action; i.e., the plain and obvious test, is used to determine whether a pleading is scandalous, frivolous or an abuse of process of the court.[^16]

[34] A claim may be found to be frivolous, vexatious or an abuse of process when it asserts untenable pleas, is argumentative, contains insufficient material facts to support the allegations made, or is made for an extraneous or collateral purpose.[^17] For the purpose of rule 25.11, the term “scandalous”, includes allegations that are that are irrelevant, argumentative, simply inserted for colour or to impugn the behaviour or character of the other party unrelated to the issues in the litigation.[^18] Parties are to be allowed a great deal of latitude in how they plead, but there are limits, and the court has the jurisdiction to strike a pleading to remove the pleading of evidence, prolix or vague allegations, repetitive or redundant allegations, or inconsistent allegations that are not clearly pled as alternatives and to direct a party to plead with certainty, precision and with sufficient particulars.[^19]

[35] A scandalous pleading refers to indecent or offensive allegations designed to prejudice the opponent or unnecessary allegations maliciously directed at the moral character of the opponent.[^20] Pleadings that are irrelevant, argumentative or inserted only for colour, or that constitute bare unfounded allegations should be struck out as scandalous.[^21] A pleading that raises an issue that cannot influence the outcome of the action is scandalous.[^22] The pleading is struck out because it serves no purpose other than to add colour or argument and to disconcert or humiliate the opponent.[^23] References in pleadings to settlement offers, discussions, and negotiations, which are privileged communications, are scandalous, frivolous or vexatious and should be struck from the pleading.[^24]

[36] The rule authorizing the court to strike out a pleading as prejudicial, scandalous, frivolous, vexatious, or an abuse of the process of the court is exercised only in the clearest of cases.[^25] Where a pleading is struck as defective, leave to amend should only be denied in the clearest cases when it is plain and obvious that no tenable cause of action is possible on the facts as alleged.[^26] The usual practice is to grant the plaintiff leave to amend unless it is clear that the plaintiff cannot improve its case by any further and proper amendment.[^27]

3. Analysis

[37] Stedfasts’ Revised Amended Statement of Claim is 131 paragraphs in length. Dynacare challenged 95 paragraphs of the Revised Amended Statement of Claim. Dynacare did not challenge 36 paragraphs. Removing the surrounding chaff and clutter, one finds within the unchallenged 36 paragraphs a $1.0 million claim for unpaid services rendered.

[38] I reviewed the factums and the charts provided by the parties. As set out in my own chart found below, I made rulings with respect to the 95 challenged paragraphs. With respect to Dynacare’s 95 objections, I sustained Dynacare’s objections for 64 paragraphs. I denied Dynacare’s objections with respect to 6 paragraphs. I sustained Dynacare’s objections with respect to 25 paragraphs, but I noted that these paragraphs could be edited and made to be compliant.

[39] There are three columns in the chart below. In the first column is the paragraph number of the Revised Amended Statement of Claim. In the second column is my ruling. In the third column is the paragraph number of the Statement of Claim that emerges when the objectionable paragraphs or objectionable parts of the paragraphs of the Revised Amended Statement of Claim are removed.

[40] Voilà. When the paragraph-by-paragraph rulings are assembled, Schedule “A,” a rule-compliant Statement of Claim, emerges.

Para. Statement of Claim	Ruling	Para. # Complaint Statement of Claim
1-7	No objection	1 (a)-(g)
8-12	No objection	2-6
13	Objection denied	7
14	Objection denied	8
15-18	Objection sustained; paragraphs to be edited to for compliance.	9
19-20	No objection	10-11
21	Objection sustained; paragraph to be edited to for compliance	12
22 -33	Objection sustained; paragraph to be edited for compliance	13
34	No objection	10
35-39	No objection	14-18
40	Objection sustained; paragraph to be edited for compliance	19
41	No objection	20
42	Objection sustained
43	No objection	13-14
44	Objection sustained
45	Objection sustained
46-49, 52, 54, 59	Objection sustained; paragraphs to be edited for compliance	21-22
50-51, 53, 55, 56, 57, 58, 60, 61, 62, 63, 64, 65, 66, 67, 68	Objection sustained
69	No objection	23
70	No objection	24
71, 72, 73	Objection sustained
74	No objection	25
75	No objection	26
76	No objection	27
77	Objection sustained
78, 79, 80, 81, 82, 83, 84, 85, 86, 87	Objection sustained
88	Objection denied	28
89, 90, 91, 92, 93, 94, 95	Objection sustained
96	Objection denied	29
97	No objection	30
98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110	Objection sustained
111	No objection	31
112	No objection	32
113	No objection	33
114	No objection	34
115	Objection denied	35
116	No objection	36
117	No objection	37
118	No objection	38
119. 120, 121, 122, 123, 124, 125, 126, 127, 128, 129	Objection sustained
130	Objection denied	39
131	No objection	40

[41] It was quite appropriate for Dynacare to challenge the Revised Amended Statement of Claim, and its challenges were successful with respect to 89 paragraphs of the 131-paragraph pleading. Some of the challenged paragraphs contained allegations that were not material facts and this offended the rules for pleadings. Some of the challenged paragraphs contained allegations that were not material facts but were allegations of evidence to prove a material fact and these paragraphs offended the rules for pleadings. While the allegations of evidence might be discoverable and provable at trial - if they were material and relevant - a pleading is not the place for non-material facts and it is not the place for the evidence in support of the material facts. Thus, Dynacare was on solid ground in challenging the pleading, and they had the added argument that my Order precluded allegations other than those that were material facts for an action for breach of contract.

[42] While understandable, Dynacare, however, went too far in asking that Stedfasts’ Revised Amended Statement of Claim be struck out without leave to amend being granted.

[43] I appreciate why Dynacare was skeptical that a compliant pleading could be delivered, but, ironically, Dynacare’s paragraph-by-paragraph challenge, and the paragraph-by-paragraph response from Stedfasts morphed the pleadings motion into something that resembled a refusals motion, and the transformed motion demonstrated that a compliant pleading could be delivered notwithstanding that this would be the fifth iteration of a Statement of Claim.

[44] It would not have been in the interests of justice to not allow the breach of contract action to go forward so that its merits can be determined.

[45] Courts are not in the business of copy editing, but that was a natural by-product of the paragraph-by-paragraph approach of the parties. I could have ordered Stedfasts’ counsel to assemble the by-product, but it’s time to move on with this action without further delay to determine whether there is anything to it on the merits.

[46] As I stated at the outset, I do not know whether this motion is (a) a one-off aberration of a pleadings motion; or (b) the happenstance birth of a new type of hybrid procedural motion that combines a pleadings motion with a refusals motion. I make no positive or negative recommendation as to the utility or efficiency of the approach to a pleadings motion used in the immediate case.

D. Conclusion

[47] Thus, for the above reasons, I make the Order set out in paragraph 7 above.

Perell, J.

Released: December 22, 2020

SCHEDULE “A” – COMPLIANT STATEMENT OF CLAIM

[1] The Plaintiff claims against the Defendant:

a. $40,000,000.00 CAD (Forty million dollars) in general damages and a further quantum to be determined at trial in general damages resulting from the Defendant’s breach of contract, and the resulting loss to the Plaintiff;

b. $10,000,000.00 CAD (10 million dollars) in punitive damages;

c. Special damages to be determined at trial;

d. Pre-judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43;

e. Post-judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43;

f. Costs on a substantial indemnity basis; and

g. Such further and other relief as this Honourable Court deems just and expedient.

OVERVIEW

The Parties

[2] The Plaintiff, Stedfasts Inc. (hereinafter “Stedfasts”) is an Ontario corporation with its head office located in Richmond Hill, Ontario, and at all material times was contracted by the Defendant for specialized courier services containing medical samples and/or specimens, and biohazardous materials.

[3] The Defendant, Dynacare-Gamma Laboratory Partnership (hereinafter “Dynacare”), is a Provincial partnership with its head office located at 115 Midair Court in Brampton Ontario and

at all material times, hired Stedfasts for specialized delivery services, in which medical samples and/or specimens, dangerous goods, and medical biohazards were transported.

Brief overview of the matter:

[4] Stedfasts had contracted with Dynacare pursuant to an Owner Operator Courier Renewal Contract, dated November 17, 2010 (hereinafter “contract” or “the contract”).

[5] On or about the time the parties entered the contract, Dynacare was formerly known as Gamma-Dynacare Medical Laboratories.

[6] On or about the time the parties entered into the contract, Stedfasts was formerly known as Steadfast Courier Services.

[7] Stedfasts has at all times, understood that considerations toward public health and safety, as well as toward the safety of employees were central to the upholding of the contractual agreement with Dynacare, which requires Stedfasts employees to handle and transport dangerous goods packaged by the Defendant.

[8] The packaging and preparations for transport of biohazardous dangerous goods and medical specimen, corrosive materials, and explosive materials (all referred to hereafter as “dangerous goods”) were at all times the sole responsibility of the Defendant.

[9] In breach of its contract with Stedfasts, Dynacare withheld payments and refused to allow Stedfasts’ drivers to transport medical samples and/or specimens, and biohazardous materials because Stedfasts had raised concerns that the materials had not been properly prepared for transport in accordance with Ministry of Transportation regulations.

Contractual Relationship

[10] On or about November of 2010, Stedfasts entered into a contractual agreement with Dynacare, whereby Stedfasts would provide courier services on behalf of Dynacare, transporting dangerous goods, including medical, corrosive, explosive and biohazardous materials as well as medical supplies, medical packages, specimens, confidential paperwork containing people’s medical information, and bodily samples of medical patients (“dangerous goods”). Stedfasts would be responsible for the timing, planning, pricing and staffing related to courier services.

[11] The following terms of the Written Agreement are of significance in this action:

a. Stedfasts is to provide services on behalf of Dynacare.

b. Dynacare is to provide Stedfasts with the appropriate route information and reserves the right to amend the route at its discretion from time to time.

c. Stedfasts is to maintain its vehicles in a safe, reliable and clean condition.

d. Dynacare reserves the right to amend the route at its discretion from time to time.

e. Stedfasts is to maintain all licences and permits at its expense, in order to carry out the services under the Agreement.

f. Dynacare is to pay a fixed fee of $24.00 hourly to Stedfasts for services rendered.

g. Stedfasts is to provide Dynacare with an invoice on a monthly basis.

h. Dynacare is responsible for ensuring 100% service coverage is maintained, and in the event that employees require time off for sickness, emergencies or other periods requiring time off, Dynacare must approve of the replacement persons provided by Stedfasts.

i. The sole relationship between the parties is that of principal and independent contractor.

j. The Agreement may be terminated by either party upon 15 calendar days, immediately and without notice in the event of any material breach of obligations under the Agreement by Stedfasts or Dynacare.

k. Any exceptions to the Agreement are not effective unless expressed in writing.

l. Any notice under the Agreement shall be in writing and personally delivered or mailed by registered mail to the last known address of either party.

m. The Agreement shall be governed by the laws of Manitoba and the laws of Canada applicable therein.

n. The Agreement is not assignable by either of the parties hereto without the prior written consent of the other.

o. In the event that any provision of the Agreement be deemed invalid or void in whole or in part by a court of competent jurisdiction, the remaining terms of and provisions of the Agreement shall remain in full force and effect.

[12] Further, the following terms were implied, oral or constructive terms of the contract between the parties:

a. Dynacare is to provide reasonable notice to Stedfasts in making requests for their services transporting dangerous goods, including medical, corrosive, explosive, and biohazardous material as well as medical supplies.

b. Stedfasts is responsible for providing drivers to cover routes, and to report to Dynacare using run sheets, which outline the time a delivery begins, any breaks, and time the delivery is complete.

c. Dynacare, in the event that an invoice is disputed, is obliged to identify the name of the route, the driver, the time period disputed, and the invoice number.

d. Stedfasts’ drivers are to be in proper uniform, possess a valid drivers licence, and be provided training by Dynacare for the transportation of dangerous goods. Dynacare’s dispatcher is to verify whether these conditions are satisfied before a driver may begin a route.

e. Dynacare is to provide training and certification to Stedfasts’ drivers regarding the handling of dangerous goods including medical, corrosive, explosive and biohazardous material as well as medical supplies.

[13] It was an implied, oral, or constructive term of the contract between the parties that in preparing the goods for transport, which was the sole responsibility of the Defendant that:

a. Dynacare would not leave the packages and the associated confidential paperwork unattended or left behind;

b. dangerous goods containing dry ice would be secured from agitation and toppling;

c. the packages would be prepared promptly and without delay;

d. the packages would be safely prepared and inspected for a safe secure transportation;

e. blood samples vials would be properly stored upright and refrigerated;

f. clean and sterilized coolers with intact insulation absent internal wear and tear would be provided;

g. coolers would be equipped with a means for securing ice packs from damaging the specimen;

h. protective gloves and/or other equipment necessary to handling dangerous goods would be provided; and

i. the goods would be labeled according to what type of dangerous goods are contained and specify whether the packages included bacteria and biomaterials.

Factual Background

[14] Over the period between 2009 to early 2017, Dynacare and Stedfasts had cooperated without issue, and without Stedfasts raising their pricing.

[15] In early 2017, the relationship between Stedfasts and Dynacare began to deteriorate on several bases.

[16] In early 2017, Dynacare failed to pay invoices in full.

[17] In early 2017, Dynacare failed to pay invoices on time.

[18] In early 2017, Dynacare began notifying Stedfasts of route changes at short (often days’) notice.

[19] In early 2017, in breach of contract, Dynacare demanded that Plaintiff staff train Defendant staff in the course of delivery routes and transportation of dangerous goods (hereinafter “TDG”), notwithstanding the Defendant was contractually obliged to train Plaintiff employees, not the other way around.

[20] In early 2017, Dynacare failed to apprise Stedfasts accounting staff of changes to scheduled routes, resulting in undocumented billable work.

[21] In early 2017, in breach of its contractual obligations and notwithstanding the notifications given by Stedfasts:

a. Dynacare failed to train Stedfasts drivers in the skills necessary to handle hazardous materials consistent with TDG training and regulations.

b. Dynacare failed to properly prepare and store dangerous goods and medical specimen.

c. Dynacare failed to provide coolers and ice packs as required.

d. Dynacare failed to provide appropriate route information.

[22] Dynacare, has at no point, disputed the new rates requested by Stedfasts.

[23] Between September 2017 and May 2018, Stedfasts continued to make requests to Dynacare to pay overdue invoices owed by Dynacare.

[24] On or about May 4, 2018, a deposit of $106,715.41 was made via electronic transfer by Dynacare to Stedfasts.

[25] The plaintiff pleads that deposit made on May 4, 2018 was insufficient to pay Dynacare’s outstanding balance to Stedfasts and was not related to any particular invoice.

[26] Stedfasts maintains that Dynacare still has an outstanding balance of $1,018,030.28 toward many unpaid invoices and is liable for over 2 years of interest.

[27] Between early to mid 2018, Dynacare in breach of contract had cancelled numerous routes covered by Stedfasts, with insufficient notice required by the Plaintiff.

[28] On or about May 8, 2018, Dynacare terminated its contractual relationship with Stedfasts.

Damages for Breach of Contract

[29] Stedfasts pleads that Dynacare's actions, taken as a whole, amount to a breach of contract, entitling Stedfasts to their statutory, common law and/or contractual entitlements on breach of contract.

[30] Stedfasts believes that it is entitled to damages flowing from Dynacare’s failure to meet its contractual obligations, and the resulting financial losses.

Bad Faith Damages

[31] The Plaintiff pleads that Dynacare owed Stedfasts a duty of good faith and fair dealing in the manner of their termination of contract. The duty of good faith is characterized by candour, reasonableness, honesty and forthrightness. The Plaintiff reasonably expected that Dynacare would act in good faith and not mislead the Plaintiff in the manner of termination.

[32] The Plaintiff pleads that Dynacare refused and/or failed to act in a good faith manner and instead, acted in bad faith by being evasive to Stedfasts’ repeated request for payment and refusal to meet over, let alone discuss contractual terms.

[33] Stedfasts pleads that Dynacare’s actions as set out above constitute a breach of its contractual obligations which could reasonably be foreseen as resulting in financial losses to Stedfasts, specifically:

a. Cancellation of routes days before embarkment, contrary to notice provisions under contract;

b. Cancellation of routes shortly after Dynacare employees had shadowed Stedfasts drivers;

c. Failure to pay invoices in full contrary to payment provisions under contract;

d. Failure to pay invoices on time contrary to payment provisions under contract;

e. Failure to pay the resulting interest contrary to payment provisions under contract; and,

f. f. In its attempts to make changes to Stedfasts routes by calling drivers directly, contrary to logistics protocol established under contract.

Punitive Damages

[34] Stedfasts pleads that Dynacare’s breaches to contract were malicious, oppressive, heavy-handed and extreme in nature. This conduct is deserving of full condemnation and punishment of the court.

[35] Stedfasts pleads that Dynacare’s lack of consideration for the timely notice of cancellations, treatment of drivers and attempt to pay off its obligations by way of an insufficient lump sum have been high-handed, malicious, arbitrary and highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour that was expected based on the past dealings between Dynacare and Stedfasts.

[36] Stedfasts pleads that Dynacare committed independent actionable wrongs entitling Stedfasts to an award of punitive damages. Specifically, Dynacare failed to pay out substantial amounts toward overdue invoices on termination, it breached its duty of good faith and fair dealing, and its overall actions have affected the competitiveness of the company.

[37] Stedfasts pleads that the awarding of damage or loss in this action is supported by the following:

a. the damage or loss, sustained by Stedfasts can be ascertained and expressed in dollars;

b. the degree to which Dynacare is at fault can be ascertained and expressed as 100% of the total fault, and;

c. the amount of damage or loss, the fault, and the degrees of fault by Dynacare are supported by affidavit, photographic, and documentary evidence.

[38] The Plaintiff proposes that the trial of this action be heard in Toronto, Ontario.

COURT FILE NO.: CV-19-00619987-0000

COURT FILE NO.: CV-20-00644233-0000

DATE: 2020/12/22

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

stedfasts inc.

Plaintiff

• and -

DYNACARE GAMMA LABORATORY PARTNERSHIP

Defendant

REASONS FOR DECISION

PERELL J.

Released: December 22, 2020

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