Court File and Parties

Court File No.: CV 20-999 Date: 2021-06-23 Superior Court of Justice - Ontario

Re: Gaurav Tewari, Plaintiff And: Jennifer Mathers McHenry, Jessica Donen, and Mathers McHenry & Co., Defendants

Before: Justice Verner

Counsel: Gauran Tewari, self-represented Ms. Melanie Anderson, for the Defendants

Heard: June 22, 2021 via Zoom

Endorsement

[1] This was a motion brought by the Defendants to strike out the Plaintiff’s Statement of Claim pursuant to rule 21.01(1)(b) for disclosing no reasonable cause of action, or alternatively to dismiss the action as frivolous or vexatious or an abuse of process pursuant to rules 21.01(3)(d) or 25.11.

[2] The Plaintiff in this case was employed by Marcatus QED Inc. That employment was terminated in February, 2019. The Plaintiff sued Marcatus for amongst other things, wrongful dismissal. Marcatus started a counterclaim alleging after-acquired cause. The Plaintiff also commenced a proceeding before the Ontario Labour Relations Board (OLRB).

[3] The Defendants in this case are lawyers and at one point represented Marcatus on the wrongful dismissal case, the after-acquired cause case and at the OLRB. Marcatus has since obtained new counsel for the lawsuit and the countersuit, but continues to be represented by the Defendants at the OLRB.

[4] To be clear, in this action the Plaintiff is suing his former employer’s lawyers.

The Plaintiff’s Claims in this Action

[5] In his Statement of Claim, the Plaintiff claims that the Defendants acted unprofessionally and illegally in their representation of Marcatus in both the court and tribunal proceedings. In particular, he is seeking relief as a result of the following:

(1) The Defendants did not do their due diligence, before providing legal advice to their client Marcatus;

(2) The Defendants improperly provided legal advice to Marcatus, which resulted in the Plaintiff facing the following allegations:

(a) The Plaintiff committed immigration-fraud;

(b) The Plaintiff was unemployed prior to being employed at Marcatus;

(c) The Plaintiff was negligent in performing his duties at Marcatus, which resulted in losses to the company;

(d) The Plaintiff did not perform due-diligence in his duties at Marcatus, which resulted in losses to the company;

(e) The Plaintiff stole from his co-workers and should be criminally charged;

(3) The Defendants defamed the Plantiff in several ways;

(4) The Defendants conspired with Marcatus to bring an unlawful lawsuit against the Plaintiff and to cause stress, agony and financial hardship to the Plaintiff;

(5) The Defendants conspired with Marcatus to frame the Plaintiff for causing losses to Marcatus; and

(6) The Defendants prepared an affidavit for a witness (Aditya Vikram Singh) they knew to be false, and commissioned the affidavit, after the witness signed it without reading it.

[6] At the motion, the Plaintiff spent some time taking the court through his claim regarding the false affidavit of Aditya Vikram Singh. According to the Plaintiff’s submissions, his position that the Defendants knowingly prepared and commissioned a false affidavit was supported by the testimony of Mr. Singh, when he was cross-examined on his affidavits.

The Grounds for seeking that this Action be Struck or Dismissed

[7] The Defendants submit that the Statement of Claim should be struck pursuant to rule 21.01(1)(b) on the basis there is no reasonable cause of action, since:

(1) All claims by the Plaintiff are barred by the doctrine of absolute privilege;

(2) The claim that the Defendants caused mental distress must fail, since the facts as alleged in the pleadings could not meet the test for the tort of infliction of mental suffering as articulated in McIlvenna v 1887401 Ontario Ltd., 2015 ONCA 830 and, there is no suggestion that the Plaintiff suffers from a “recognized psychiatric illness” as is required.

(3) The claims that the Defendants conspired with Marcutus must fail, since the facts as alleged in the pleadings could not meet either the dominant purpose test or the unlawful means test (Pre-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57);

(4) The claims that the Defendants breached a fiduciary duty must fail, since counsel have no such duty in relation to opposing parties and, even if the Plaintiff could prove they breached their duty to their client Marcatus, they – as counsel – were not liable for any damages to the opposing party resulting from that breach.

[8] The Defendants argue in the alternative, that the action should be dismissed as frivolous or vexatious under rules 21.01(3)(d) or 25.11.

Analysis

A. Is there a Reasonable Cause of Action (rule 21.01(1)(b))?

[9] Under rule 21.01(1)(b) the court must assess “whether it is plain and obvious that the statement of claim discloses no reasonable cause of action” (Tran v. University of Western Ontario, 2015 ONCA 295 at para. 16). In making that assessment, “the court must accept that the allegations in the statement of claim are true, unless patently ridiculous or incapable of proof. The statement of claim must be read generously, allowing for inadequacies due to drafting deficiencies”.

[10] I therefore must accept, as an example, that the Plaintiff will be able to prove that the Defendants prepared a false affidavit for Mr. Singh to sign and commissioned the affidavit, after Mr. Singh signed it without reading it. This is but one of the Plaintiff’s allegations where the Defendants’ wrongdoing is separate and apart from any wrongdoing of the Defendants’ client Marcatus. I must accept for the purposes of this motion that all of those allegations can be proven.

[11] The issue before me is therefore whether there is a reasonable cause of action, assuming that the Defendants acted improperly as alleged. As noted above, the Defendants raise four grounds to support their position there is no reasonable cause of action. I now consider those four grounds in turn.

(1) Absolute Privilege

[12] The Defendants submit that all of the claims made by the Plaintiff are barred as a result of the doctrine of absolute privilege. That doctrine was articulated by Brown J.A. in Salasel v Cuthbertson, 2015 ONCA 115 at para. 35:

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; the privilege extends to documents properly used and regularly prepared for use in the proceedings; and, a statement will not be protected if it is not uttered for the purposes of judicial proceedings by someone who has a duty to make statements in the course of the proceedings: Amato v. Welsh, 2013 ONCA 258 (Ont. C.A.), at para. 34.

[13] Brown J.A. further defined when words were spoken “in the ordinary course of any proceedings”. He said:

The scope of the Ontario rule was summarized comprehensively by the Divisional Court in 1522491 Ontario Inc. v. Stewart, Esten Professional Corp., 2010 ONSC 727, 100 O.R. (3d) 596 (Ont. Div. Ct.), at paras. 37 and 39 to 44:

[37] In Ontario, absolute privilege may extend to communications by a party's solicitor made before the actual commencement of proceedings.

[39] As Cullity J. points out in Moseley-Williams, the following statement from Fleming has been referred to with approval in Ontario decisions:

The privilege is not confined to statements made in court, but extends to all preparatory steps taken with a view to judicial proceedings.... But the statement or document must be directly concerned with actual contemplated proceedings.

[40] However, Cullity J. also found that the authorities do not appear to support an extension of the privilege to all occasions when the possibility of litigation is contemplated, or even when a threat of litigation is made, or when a lawyer is endeavouring to assert and protect a client's rights.

[41] Thus, when a defendant in these circumstances moves to dismiss the claim on the ground of absolute privilege, the decision the court has to make is whether the communication was made "for the purpose of, or preparatory to, the commencement of [judicial] proceedings".

[42] Something more than merely a contemplation of the possibility of litigation is required. The court must decide whether the occasion is "incidental" or "preparatory" or "intimately connected" to judicial proceedings and not one that is too remote.

[43] It is in this sense that Cullity J. accepted that "... some inquiry into the purpose of their publication would appear to be unavoidable"... That case dealt with a motion for judgment under rule 20. On a rule 21.01(1)(b) motion, the "inquiry" is made on the assumed truth of the facts pleaded in the statement of claim.

[44] It must be stressed that "it is the occasion, not the communication, that is privileged. The privilege belongs to the occasion by reason of the setting." [Citations omitted; emphasis in original.]

Determining whether an occasion is preparatory to, or intimately connected with, judicial or quasi-judicial proceedings involves, as Cullity J. aptly put the matter in Moseley-Williams, at paras. 57 and 58, an exercise of ascertaining where a line is to be drawn so that the degree of connection between the occasion and the judicial proceeding is not too remote.

[14] Therefore, any work done in preparation for a proceeding in either a court or a tribunal is protected by the doctrine of absolute privilege.

[15] What is particularly relevant for this case is that the privilege is indeed “absolute”. This principle was emphasized in 1522491 Ontario Inc. v. Stewart et al., 2010 ONSC 727 (Div.Ct.), which was cited with approval by Brown J.A. in the passage from Salasel v. Cuthbertson that is reproduced above. At the leave to appeal to the Divisional Court stage in 1522491 Ontario Inc., Karakatsanis J. (when she was at the Superior Court of Justice) aptly summarized this principle as follows :

While it may well be that the decision was correct based upon the pleadings in this case, the statement of the law in para. 14 appears to depart from and conflict with the principle that if the occasion is one of absolute privilege, it cannot give rise to an action in defamation regardless of malice or knowledge that the statements were themselves false. It appears to confuse the considerations relevant to occasions of absolute privilege with those relevant to qualified privilege and opens the correctness of the decision to serious debate.

See: 1522491 Ontario Inc. v. Stewart et al., 2009 CarswellOnt 1829

[16] When 1522491 Ontario Inc. was before the Divisional Court, Ferrier J. adopted the language of Karakatsanis J. and further emphasized that false statements that were made with ill intent are protected by the doctrine of absolute privilege. Speaking for the court, he said:

33 Absolute privilege applies even though counsel, in communicating the words, has been guilty of malice or misconduct, or had an indirect motive: Munster v. Lamb (1883), L.R. 11 Q.B.D. 588 (Eng. C.A.) per Brett, M.R. at pp. 602-603. The privilege applies even though the statements were made falsely: Hall v. Baxter, [1922] O.J. No. 525 (Ont. H.C.) per Orde J., para.10; (1922), 22 O.W.N. 207 (Ont. H.C.) .

34 Absolute privilege applies to false or malicious statements in pleadings and factums: Big Pond Communications 2000 Inc. v. Kennedy, 2004 CanLII 18758 (ON SC), [2004] O.J. No. 820 (Ont. S.C.J.); Web Offset Publications Ltd. v. Vickery, 1998 CanLII 14858 (ON SC), [1998] O.J. No. 6478 (Ont. Gen. Div.), aff'd (Ont. C.A.), leave to appeal to Supreme Court of Canada denied (2000) (S.C.C.).

35 It makes no difference that the words may be totally and knowingly false and spoken mala fides and with actual malice and without justification or excuse: Brown, supra, at 12-36 to 12-37; Web Offset, supra, per Kruzick J. at para.38-39.

[17] The Court of Appeal for Ontario has also confirmed that absolute privilege applies to false affidavits (see Admassu v. Macri, 2010 ONCA 99; Samuel Manu-Tech Inc. v. Redipac Recycling Corp. (1999), 1999 CanLII 3776 (ON CA), 124 O.A.C. 125).

[18] In summary, any words spoken or written by lawyers in preparation for either a court proceeding or a tribunal will be protected by absolute privilege, whether or not they were true and whether or not they were said or written to maliciously cause damage to another. And importantly, it is not the communication that is protected by privilege, but the occasion of preparing for a proceeding that is protected.

[19] Although the doctrine was not created to protect the wrongdoer who maliciously causes damage to others, it sometimes will work to do just that.

Application to the case at bar

[20] In the case at bar, all of the Plaintiff’s claims against the Defendants relate to their work in representing Marcatus in the court claim and counterclaim, and in the OLRB proceedings. In other words, all of the claims relate to lawyers’ work done in preparation for a court or tribunal proceeding.

[21] The Plaintiff does not contest the fact that all of his claims relate to words spoken or written in contemplation of litigation. However, he submits that the doctrine of absolute privilege should not apply since lawyers are required to act ethically, and therefore the actions of the Defendants in this case (which according to the Plaintiff include amongst other things, intentionally preparing false documents to harm him) were outside their role as lawyers. In short, according to the Plaintiff, the doctrine – which only applies if the individual is acting within the proper role as a lawyer – should not apply to the Defendants in this case.

[22] The Plaintiff also submitted that the Defendants were abusing the doctrine of absolute privilege and thus, on policy reasons, the Defendants should not be permitted to avail themselves of that privilege.

[23] However, the law on absolute privilege is very clear. Even when lawyers are acting unethically, the doctrine of absolute privilege applies and, it applies on an absolute basis, such that the court has no discretion but to strike any claims that rely on a lawyer’s words spoken or written in contemplation of litigation. Thus, all of the claims in this case must be struck on the basis there is no reasonable cause of action.

[24] I must now consider whether the claims should be struck “without leave to amend”, recognizing that they will only be so struck “in the clearest of cases”. The Defendants’ only connection to the Plaintiff is through court and tribunal proceedings. Therefore, there is no claim that the Plaintiff could possibly make that would not be barred from the doctrine of absolute privilege. I therefore find that this is “the clearest of cases” and the Statement of Claim must be struck without leave to amend.

[25] Since I find that the Statement of Claim must be struck without leave to amend, I need not consider the other arguments raised by the Defendants.

Conclusion

[26] I order that the Statement of Claim be struck pursuant to rule 21.01(1)(b) without leave to amend.

[27] With respect to costs, I ask the parties to consult with one another in hopes of coming to an agreement. In the event the parties cannot agree, I invite the Defendants to provide a bill of costs, a costs outline and no more than three pages of submissions by July 5, 2021; and the Plaintiff to provide his response with the same limitations by July 9, 2021.

Justice Verner

Date: June 23, 2021