Kastner v. Chitiz Pathak LLP, 2022 ONSC 4698

COURT FILE NO.: CV-16-565324

MOTION HEARD: 20211207

INTERIM REASONS RELEASED: 20220329

ADDITIONAL SUBMISSIONS: 20220509

REASONS RELEASED: 20220812

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

RHONDA KASTNER

Plaintiff

• and-

CHITIZ PATHAK LLP and DANIEL F. CHITIZ

Defendants

BEFORE: ASSOCIATE JUSTICE McGRAW

COUNSEL: J. Vale and D. Fogel E-mail: joelvale@rogers.com -for the Plaintiff

I.McKellar E-mail: imckellar@dgllp.ca -for the Defendants

REASONS RELEASED: August 12, 2022

Reasons For Endorsement

I. Introduction

[1] On March 29, 2022, I released interim Reasons For Endorsement (Kastner v. Chitiz Pathak LLP, 2022 ONSC 1967)(the “Interim Reasons”) on this motion by the Plaintiff for leave to amend her Amended Statement of Claim (the “Pleadings Motion”) in this solicitor’s negligence action against her former counsel. The proposed amendments relate to alleged litigation misconduct by Defendants’ counsel in this action with respect to the removal of labels from boxes containing the Plaintiff’s files. The Plaintiff had previously brought a motion with respect to the labels which was resolved by judicial case management (the “Label Motion”). Complicating matters further, the Pleadings Motion was brought after submissions had started on the Plaintiff’s motion to remove Defendants’ counsel (the “Removal Motion”) which remains adjourned pending the Pleadings Motion.

[2] As set out in the Interim Endorsement, the status of the Label Motion was not clear. As it might impact the Pleadings Motion, I requested that counsel schedule a case conference to speak to the status of the Label Motion. I convened a telephone case conference on May 9, 2022 where counsel advised that the parties had resolved the Label Motion and agreed that costs would be dealt with as costs of this action.

[3] The following are my final reasons and disposition of the Pleadings Motion.

II. Parties and Procedural Background

[4] The Defendants Chitiz Pathak LLP and Daniel F. Chitiz are lawyers who acted for the Plaintiff in two actions commenced in 2010 and 2012 (the “Actions”). The Plaintiff commenced this solicitor’s negligence action by Statement of Claim issued on December 5, 2016. In her Amended Statement of Claim delivered in February 2017 (the “Amended Claim”) the Plaintiff seeks damages of $2,000,000 for negligence and breach of loyalty, trust and confidence, retainer, contract and fiduciary duties for acting in and failing to disclose a conflict of interest. The Plaintiff also seeks $650,000 in fees and disbursements paid to the Defendants, $100,000 paid to other professionals, $100,000 for embarrassment, anguish and stress and punitive damages of $500,000.

[5] Sean Dewart and Dewart Gleason LLP (“DG”) were retained by LawPro to represent the Defendants. The Defendants delivered their Statement of Defence on January 31, 2017. After being retained, DG received the Defendants’ files for the Actions (the “Files”) which were contained in 15 boxes (the “Boxes”). Upon receipt, a DG staff member attached labels to the Boxes which identified the Boxes by number (eg. 1 of 15, 2 of 15, etc.), the name of the insurer which retained DG (LawPro), the name of the insured (Chitiz, Daniel) and DG’s internal file number (100-16-579) (the “Labels”). The Labels did not identify the contents of the Boxes.

[6] When the Plaintiff commenced this action, the Defendants asserted a solicitor’s lien over the Files claiming that she owed $6,000 with respect to an outstanding account (the “Solicitor’s Lien”). On January 12, 2017, Mr. Dewart advised Plaintiff’s counsel, Joel Vale, that the Boxes would be delivered after Mr. Dewart received confirmation from the Defendants that the Plaintiff had settled the outstanding account and upon receipt of Notices of Change of Lawyers in the Actions. He advised Mr. Vale to deal directly with the Defendants regarding the fees. Mr. Vale did not deliver a Notice of Change of Lawyers and the Defendants brought motions to be removed from the record in the Actions.

[7] On March 9, 2017, the Defendants attended before Master Pope (as she then was) on their motion for removal as lawyers of record in the Actions. In her Endorsement dated April 4, 2017, Master Pope held that it was not reasonable for the Defendants to assert the Solicitor’s Lien and ordered the Defendants to deliver the Files to the Plaintiff (the “Pope Order”). The Files were scanned on to 2 USB keys which DG delivered to Mr. Vale on April 19, 2017. Mr. Vale claimed that the files on the USB keys were incomplete and requested the original paper Files.

[8] On May 1, 2017, DG staff advised Mr. Vale that the Boxes containing the Files were ready for pick up. Prior to pick up, a DG staff member removed the Labels. After the Boxes were delivered to Mr. Vale he advised that he viewed the removal of the Labels as “obstructionist conduct” and that their removal made it impossible to effectively organize and review the Files. On May 12, 2017, Mr. Dewart advised that the Labels had been intentionally removed. Mr. Vale continued to request electronic copies of the Files he claimed were not included on the USB keys. In January 2018, DG delivered the Defendants’ Affidavit of Documents and scanned copies of all Schedule “A” productions which they state includes the documents that Mr. Vale previously advised were not on the USB keys.

[9] The Actions settled and were dismissed by Order of Firestone J. dated November 26, 2019. On November 29, 2019, Mr. Vale wrote to Mr. Dewart requesting that the discovery plan for this action address the Labels. On December 9, 2019, Mr. Dewart delivered a draft discovery plan which included a proposal that DG would retrieve the Boxes, use best efforts to re-number them and return them to Mr. Vale. Mr. Vale did not provide any comments on the discovery plan. On January 6, 2020, the Plaintiff served a Notice of Motion returnable March 26, 2020 (the “Label Motion”) seeking an order that DG pick up the Boxes and re-deliver them to Plaintiff’s counsel “numbered and organized in accordance with the index corresponding to each box number and document”.

[10] Extensive correspondence between counsel followed. Mr. Dewart repeated his offer to retrieve the Boxes and make best efforts to re-label them. Mr. Vale advised that the Plaintiff would resolve the Label Motion if the Defendants consented to an order requiring DG to organize the Boxes exactly as they had been when they were sent to Mr. Vale in 2017. Since Mr. Vale could not guarantee that the Boxes were organized as they were when he received them, Mr. Dewart advised that he could not consent to an order that he might not be able to comply with. He again offered to make best efforts to re-label the Boxes.

[11] On February 27, 2020, the Plaintiff served her Motion Record in support of the Label Motion. The Label Motion was returnable March 26, 2020 but did not proceed due to the suspension of regular court operations arising from the COVID-19 pandemic. Counsel attended at Civil Practice Court (“CPC”) on October 13, 2020 to schedule the Label Motion. Given that the Plaintiff had not identified a Rule upon which the Label Motion was based, Sanfilippo J. refused to schedule it as it was not possible to determine if it should proceed before a Judge or a Master. Sanfilippo J. ordered the parties to attend a case conference before a Judge to speak to jurisdiction, timing and a timetable for the action.

[12] The parties attended a Chambers appointment before Leiper J. on October 26, 2020. Leiper J. did not schedule the Label Motion, ordering that the parties be provided with 2 weeks to have the Boxes returned for re-labelling and “practical communications between the parties about their contents”. Another Chambers appointment proceeded before Leiper J. on November 10, 2020. In her Endorsement, Leiper J. stated that more time was required to complete the labelling exercise which might address the Label Motion without prejudice to any party’s right to seek costs. DG returned the Boxes to Mr. Vale on November 26, 2020. The Plaintiff has confirmed that the Boxes and the Files were properly delivered as of that date. The Label Motion did not proceed.

[13] On December 13, 2020, the Plaintiff then brought a motion to remove Mr. Dewart and DG as Defendants’ counsel (the “Removal Motion”) on the basis that Mr. Dewart will be a witness at trial given his involvement in the removal of the Labels.

[14] The Removal Motion first came before me on August 31, 2021. During the Plaintiff’s submissions, questions arose regarding the Amended Claim. Plaintiff’s counsel then advised that the Plaintiff intended to amend the Amended Claim to add allegations regarding the Labels. The proposed amendments relate to the alleged conduct of DG regarding the Labels which is the subject of the Removal Motion, therefore, I adjourned the Removal Motion sine die so that the Plaintiff could deliver a draft Amended Amended Statement of Claim (the “Amended Amended Claim”) to determine if the parties’ could agree on the amendments. Counsel advised during a telephone case conference on September 17, 2021 that the Plaintiff had delivered a draft Amended Amended Claim and the Defendants opposed the proposed amendments. Given the impact on the Removal Motion, the Pleadings Motion was scheduled. The Removal Motion remains adjourned sine die pending the disposition of the Pleadings Motion

III. The Law and Analysis

[15] The only issue is whether the Plaintiff should be granted leave to amend her Amended Claim in the form of the Amended Amended Claim to add the Proposed Amendments regarding the alleged litigation misconduct of Mr. Dewart and DG with respect to the Labels and the Boxes.

[16] Rules 26.01 and 26.02 state:

“26.01 On motion at any stage of an action the 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.

26.02 A party may amend the party’s pleading,

(a) without leave, before the close of pleadings, if the amendment does not include or necessitate the addition, deletion or substitution of a party to the action;

(b) on filing the consent of all parties and, where a person is to be added or substituted as a party, the person’s consent; or

(c) with leave of the court.

[17] A party should be at liberty to craft a pleading in the manner it chooses, providing that the rules of pleadings are not violently offended and there is no prejudice to the other side (Sleep Clinic London Inc. v. Merchea, 2012 ONSC 3004, [2012] O.J. No. 2471 at para. 22). Amendments should be presumptively approved unless they would result in prejudice that cannot be compensated by costs or an adjournment; they are shown to be scandalous, frivolous, vexatious or an abuse of the court's process; or they disclose no reasonable cause of action (Andersen Consulting v. Canada (Attorney General), 2001 8587 (ON CA), 2001 CarswellOnt 3139 (C.A.) at para. 37; Schembri v. Way, 2012 ONCA 620 at paras. 25 and 44).

[18] The Court of Appeal summarized the law on pleadings amendment motions in 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42:

“[25] The law regarding leave to amend motions is well developed and the general principles may be summarized as follows:

The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court's process; or the pleading discloses no reasonable cause of action.

The amendment may be permitted at any stage of the action.

There must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source.

The non-compensable prejudice may be actual prejudice, i.e., evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided.

Non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial.

At some point, the delay in seeking an amendment will be so lengthy, and the justification so inadequate, that prejudice to the responding party will be presumed.

The onus to prove actual prejudice lies with the responding party.

The onus to rebut presumed prejudice lies with the moving party.”[citations omitted]

[19] In Farmers Oil and Gas Inc. v. Ontario (Natural Resources), 2016 ONSC 6359, the Divisional Court held that proposed amendments should be permitted where they arise out of the same facts or factual matrix that was pleaded in the original statement of claim (Farmers Oil at para. 22). The Divisional Court concluded that the proposed amendments were integral to the dealings already pleaded, factually intertwined with the existing allegations and part of the same factual matrix:

“In the end result, the requirement to read a pleading generously, and the concomitant requirement to allow amendments unless they will inflict non-compensable prejudice, means that the presumption is that any amendment, that can reasonably be seen as falling within the four corners of the existing claim, ought to be permitted….”(Farmers Oil at para. 31).

[20] The Court of Appeal provided guidance regarding causes of action and limitations periods in Klassen v. Beausoleil, 2019 ONCA 407:

“25 The rule is framed in mandatory terms: the court must allow the amendment, unless the responding party would suffer non-compensable prejudice, the proposed pleading is scandalous, frivolous or vexatious, or the proposed pleading fails to disclose a reasonable cause of action: 158844 Ontario Ltd v. State Farm Fire and Casualty Co., 2017 ONCA 42, 135 O.R. (3d) 681, at para. 25; Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2009 ONCA 517, 264 O.A.C. 220, at paras. 15-16.

26 The expiry of a limitation period is one form of non-compensable prejudice. A party cannot circumvent the operation of a limitation period by amending their pleadings to add additional claims after the expiry of the relevant limitation period: Frohlick v. Pinkerton Canada Ltd, 2008 ONCA 3, 88 O.R. (3d) 401, at para. 24; 1100997 Ontario Ltd. v. North Elgin Centre Inc., 2016 ONCA 848, 409 D.L.R. (4th) 382, at paras. 21-23; United Food and Commercial Workers Canada, Local 175 Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671, at paras. 64; Davis v. East Side Mario's Barrie, 2018 ONCA 410, at paras. 31-32. In this regard, the "addition of new statute-barred claims by way of an amendment is conceptually no different than issuing a new and separate Statement of Claim that advances a statute-barred claim" (emphasis added): Quality Meat Packers, at para. 64; citing Frohlick, at para. 24.

27 An amendment will be statute-barred if it seeks to assert a "new cause of action" after the expiry of the applicable limitation period: North Elgin, at paras. 19-23, 33; Quality Meat Packers, at para. 65. In this regard, the case law discloses a "factually oriented" approach to the concept of a "cause of action" -- namely, "a factual situation the existence of which entitles one person to obtain from the court a remedy against another person": North Elgin, at para. 19; Quality Meat Packers, at para. 65.

28 An amendment does not assert a new cause of action -- and therefore is not impermissibly statute-barred -- if the "original pleading ... contains all the facts necessary to support the amendments ... [such that] the amendments simply claim additional forms of relief, or clarify the relief sought, based on the same facts as originally pleaded": Dee Ferraro, at paras. 4, 13-14; North Elgin Centre Inc., at paras. 20-21; East Side Mario's Barrie, at paras. 31-32; Quality Meat Packers, at para. 65. Put somewhat differently, an amendment will be refused when it seeks to advance, after the expiry of a limitation period, a "fundamentally different claim" based on facts not originally pleaded: North Elgin, at para. 23.

29 The relevant principle is summarized in Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis, 2017), at p. 186:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.

30 In the course of this exercise, it is important to bear in mind the general principle that, on this type of pleadings motion, it is necessary to read the original Statement of Claim generously and with some allowance for drafting deficiencies: Farmers Oil and Gas Inc. v. Ontario (Ministry of Natural Resources), 2016 ONSC 6359, 134 O.R. (3d) 390 (Div. Ct.), at para. 23.”

[21] In the Amended Claim, the Plaintiff claims special and punitive damages arising from the Defendants’ refusal to immediately deliver the Files to the Plaintiff due to their assertion of the Solicitor’s Lien for outstanding accounts of $6,000 (amounting to 1% of $650,000 in fees paid). The Plaintiff alleges that this was a breach of the Defendants’ duties as officers of the court, contract and good faith and prevented the Plaintiff from mitigating her damages in the Actions.

[22] In the Amended Amended Claim, the Proposed Amendments include allegations that the Defendants are vicariously liable for the litigation misconduct of Mr. Dewart and DG whereby they had control and custody of the Files from January 14, 2017 to May 10, 2017 and November 1, 2020 to November 26, 2020 and did not properly deliver the Files to the Plaintiff until November 26, 2020 (the “Proposed Amendments”). The Plaintiff alleges that Mr. Dewart and DG rendered the Files unusable by removing the Labels which they knew or should have known would result in the recipient not knowing which documents corresponded to which box or index, all of which was in breach of the Pope Order and was designed to hinder, delay or confuse the litigation and gives rise to punitive damages. The Proposed Amendments also include pleadings with respect to the Plaintiff’s assertion that the Proposed Amendments are not barred by operation of the Limitations Act, 2002 (Ontario).

[23] For the reasons that follow, I conclude that the Pleadings Motion should be dismissed.

[24] The Plaintiff submits that the Proposed Amendments further particularize her existing claim for punitive damages for the non-delivery of the Files in a proper format until November 26, 2020 and do not constitute new causes of action. The Defendants submit that the Pleadings Motion is a tactical attempt by the Plaintiff to gain an advantage on the Removal Motion and the Proposed Amendments are unrelated to the existing claims in the Amended Claim, constitute a new cause of action barred by the Limitations Act, offend Rule 5.05 regarding joinder, would result in non-compensable prejudice and are frivolous and vexatious.

[25] In light of the context and timing of the Pleadings Motion, this Court must proceed with caution. To summarize, the Plaintiff commenced a solicitor’s negligence action against the Defendants based in part on their refusal to deliver the Files due to the assertion of the Solicitor’s Lien. On their motion for removal as lawyers of record, the Defendants were ordered by Master Pope to deliver the Files. The Files were delivered in electronic format, then physical format at the request of Plaintiff’s counsel. Plaintiff’s counsel took issue with the removal of the Labels from the Boxes. The Labels had been prepared, attached and removed by staff at the office of Defendants’ counsel. Defendants’ counsel offered to re-label the Boxes and return them. The Plaintiff requested that Defendants’ counsel consent to an order requiring them to organize the Boxes exactly as they were when they were sent to Plaintiff’s counsel but Plaintiff’s counsel could not guarantee that the Boxes were in the same state. Defendants’ counsel repeated his offer to make best efforts to re-label the Boxes. The Plaintiff then brought the Label Motion which was resolved by judicial case management substantially in the manner previously proposed by the Defendants. Three weeks later, the Plaintiff brought the Removal Motion. After oral submissions on the Removal Motion had already started, Plaintiff’s counsel advised that the Plaintiff intended to amend the Amended Claim to plead the conduct regarding the Labels which is the subject of the Removal Motion.

[26] Motions brought solely or even primarily for tactical reasons should be discouraged by the court (Milicevic v. T. Smith Engineering, 2016 ONSC 2166 at paras. 62-63). Consistent with this approach, and similar to a motion to remove counsel, these circumstances call for the court to exercise scrutiny to ensure that the Pleadings Motion has not been brought to gain a tactical advantage.

[27] Based on my review of the pleadings, I conclude that the Proposed Amendments do not arise out of the existing facts and factual matrix as pleaded in the Amended Claim. The allegations regarding the Files in the Amended Claim arise from the Defendants’ refusal to deliver the Files due to the assertion of the Solicitor’s Lien. The Proposed Amendments arise from the alleged “litigation misconduct” of Defendants’ counsel for removing their own Labels and delivering the Files in an unusable format contrary to the Pope Order causing “disruption” to the litigation. These are two different and distinct causes of action. The Proposed Amendments rely on different facts related to the Labels which are pleaded with respect to a different, non-party not referenced in the Amended Claim. One cause of action relates to the Defendants’ refusal to deliver the Files, and the other relates to their delivery in an alleged improper format. While the Defendants can be held vicariously liable for the conduct of their counsel, this does not change the fact that the Amended Amended Claim contains two causes of action with respect to the Files. In this regard, I reject the Plaintiff’s characterization of the removal of the Labels as part of one continuous breach of the Pope Order which started with the assertion of the Solicitor’s Lien.

[28] I also conclude that the Proposed Amendments are not legally tenable. Master MacLeod (as he then was) set out in the test for legal tenability in Plante v. Industrial Alliance Life Insurance Co., 2003 CarswellOnt 2961:

“21…(b) The amended pleading must be legally tenable. It is not necessary to tender evidence to support the claims nor is it necessary for the court to consider whether the amending party is able to prove its amended claim. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success. For this purpose amendments are to be read generously with allowance for deficiencies in drafting: [citations omitted].”

[29] The approach for determining legal tenability was summarized by Fregeau J. in Essa v. Panontin, 2010 ONSC 691 at para. 8:

“To be allowed, the amendments requested by the Plaintiffs must be tenable at law. On a motion to add a party and/or to amend the statement of claim against existing parties, the court may not consider the factual and evidentiary merits of the proposed new claims. A court is not to concern itself with the credibility of the case set forth by a party seeking an amendment. The court, in its analysis, is not to consider whether the amending party is able to prove the amended claim. The court must assume the facts pleaded in the proposed amendment are true. The only question is whether they disclose a tenable cause of action. The court is not to make findings of fact or weigh evidence. Amendments are to be read generously with allowance for deficiencies in drafting.”

[30] More recently, the Court of Appeal has held that an amendment is to be granted unless it would have been struck out under Rule 21.01(1)(b) had it been pleaded originally (Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2016 ONCA 404 at para. 31).

[31] The threshold for establishing that the Proposed Amendments disclose a tenable claim is a low one, requiring only that the Plaintiff demonstrate that the Proposed Amendments are not clearly impossible of success. However, in the present circumstances, I conclude that the Plaintiff has not met this test. Assuming all of the facts pleaded by the Plaintiff are true, I conclude that the Plaintiff’s claim for litigation misconduct based on the Proposed Amendments clearly cannot succeed.

[32] Litigation misconduct is an independent actionable wrong which may give rise to punitive damages and substantial indemnity costs (McCabe v. Roman Catholic Episcopal Corporation, 2019 ONCA 213 at paras. 43-48; Walling v. Walling, 2012 ONSC 6580 at paras. 37, 40; Goldentuler Estate 2017 ONCA 591 at para. 12; Whiten v. Pilot Insurance Co., 2002 SCC 18 at paras. 30-35). The Court of Appeal has held that while punitive damages are the exception rather than the norm, they may be awarded to address conduct of the litigation deserving of condemnation (McCabe at para. 48).

[33] The present case is distinguishable from the cases cited by the Plaintiff. The alleged litigation conduct in the Proposed Amendments regarding the Labels does not approach the level of misconduct found by the courts in these cases. In Goldentuler, in addition to a finding of inordinate litigation delay, the defendants “stole” 120 client files, refused to return them in violation of a court order and attempted to alter computer records (Goldentuler at para. 12). In Walling, the court held that the defendant’s conduct in failing to comply with multiple court orders was “outrageous”, showed “complete disregard of the court’s orders”, “systemic failure to comply with any of the court orders” and that the defendant mismanaged and squandered estate funds and was “completely derelict in his duties to the estate”, such that the “enormity of the defaults is quite shocking” (Walling at paras. 33-40). In McCabe, the Court of Appeal concluded that “the Diocese's strategic decision not to admit responsibility to a vulnerable victim of abuse -- given these circumstances -- is uniquely egregious” (McCabe at para. 49).

[34] The Plaintiff submits that the alleged litigation misconduct is about disruption to the litigation. The Plaintiff pleads in the Amended Amended Claim that the Pope Order required the Defendants to deliver the Files. The Files were delivered, however, the Plaintiff pleads that they were not “properly delivered” pursuant to the Pope Order because they were in an “unusable form”. The Plaintiff further pleads that this was a continuation of the “same disruptive non-delivery from January 14, 2017”. The Plaintiff has not referred me to any case law that would support the removal of a law firm’s own labels as the basis of a claim for litigation misconduct or any similar conduct with respect to the transfer of files. There are no allegations that Defendants’ counsel removed labels affixed by the Defendants or tampered with the Files in any manner. If there were, my conclusions might be different. Rather, Defendants’ counsel attached their own labels which identified the Boxes by box number, insurer, client and file number.

[35] The Plaintiff has not pleaded the following undisputed and/or uncontroverted facts: i.) Plaintiff’s counsel retained possession of the Boxes for all but approximately 5 months from early May 2017 until November 26, 2020; ii.) Plaintiff’s counsel was in possession of the USB drive which contained the Files; iii.) Defendant’s counsel previously proposed on numerous occasions to retrieve the Boxes and re-label them; and iv.) the Plaintiff brought the Label Motion which was resolved by judicial case management as a result of Leiper J. directing that Defendants’ counsel re-label the Boxes as they had previously proposed. These facts would further support my conclusions. Notwithstanding their omission from the Amended Amended Claim, relying only on the facts as pleaded by the Plaintiff in the Proposed Amendments and assuming them to be true, I conclude that there is no tenable cause of action for litigation misconduct.

[36] There is no prohibition against pleading the conduct of counsel. The Plaintiff relies on Bansal v. 2343467 Ontario Inc., 2015 ONSC 1016 in which Master Short (as he then was) held as follows:

“63 Clearly, any allegations with respect to the conduct of Maxis Legal counsel are presently unproven. However legal counsel do not have immunity from their actions, on behalf of his client, being reviewed by the Court. Indeed, the Supreme Court of Canada in Whiten was highly critical of conduct of the insurer's legal counsel. Justice LeBel J., writing in dissent, described the case as follows:

This case started as litigation based on a home insurance contract. The insured had the misfortune to run across what might be characterized as the insurer from hell. Far from finding peace of mind and receiving a settlement in a fair and diligent manner, the claimant faced obduracy and bad faith. No evidence has been offered, though, that such conduct was a regular incident of Pilot Insurance's way of running its business. It looks more like a rogue file mishandled by an overeager manager, aided and abetted by counsel who seemed to have misunderstood the nature of his duties as an officer of the court..."

64 I conclude this portion of my reasons by setting out the observations with which I fully agreement made by my colleague Master C.U.C. MacLeod in Prior v. Sunnybrook and Women's College Health Sciences Centre, [2006] O.J. No. 2070; 148 A.C.W.S. (3d) 534; 2006 17329. In that case similar problems arose in a case alleging bad faith by the employer with respect to the position of their counsel: for the employer

“13 Arguably the pleading as drafted injects into the litigation an unnecessary distinction between the acts of the defendants and those of their counsel. Perhaps there might be seen in this pleading an invitation to the defendants to disown their counsel's actions or to put in issue their legal advice. Perhaps there lies in this pleading the seed of a motion to compel McCarthy Tëtrault to withdraw as counsel by increasing the possibility that Ms. Bock may be a necessary witness. There is always, truth be known, an uncomfortable tension that arises when the termination letter or other communication must be put in evidence and it was sent by the solicitor of record or a member of his or her firm. Should it be necessary to call the author of the letter as a witness at trial, there is a potential problem but this pleading does not create that problem. Whether the problem materializes will depend to a large degree on what facts are admitted and denied, how the defendant pleads and what is ultimately in issue at trial. In the case of paragraph 30 it is necessary to plead who wrote the allegedly libellous letter, when it was written and to whom. Thus the name of the author is material and cannot be described as frivolous or vexatious.

14 It is true that if the letter from counsel simply reiterates defamatory remarks already made the claim could be constructed without mentioning the communication from counsel. It is also true that the pleading of agency could be viewed as anticipating a defence that may not be made and it would have been possible to construct the other paragraphs without mentioning counsel. Providing the party pleading does not offend the rules of pleading however the plaintiff should be allowed to tell her story as she and her counsel see fit and the court does not concern itself with the wisdom of her tactics. In the final analysis, while I have an uneasy feeling that the naming of counsel in the pleading and the defendants' response by way of motion forebodes future procedural difficulties, I am unable to agree with the moving party that the pleading is improper.” [my emphasis]”

[37] Both Bansal and Prior are distinguishable. These were bad faith termination cases where the proposed amendments included references to employers’ counsel who had written correspondence to plaintiffs in the context of employee terminations or engaged in other alleged litigation tactics. One of multiple distinguishing factors is that the concerns expressed by Master MacLeod in Prior about the potential consequences of permitting the amendments have already occurred in the present case. Namely, the Plaintiff has already brought the Removal Motion on the basis that Defendants’ counsel will be a witness at trial, the Pleadings Motion was brought after submissions on the Removal Motion started and the Proposed Amendments relate directly to the basis for the Removal Motion.

[38] In my view, given the extraordinary circumstances and timing, the purpose and motivation behind the Pleadings Motion is relevant to my disposition on this motion. In Plante, Master MacLeod held that proposed amendments cannot constitute "an abuse of the process of the court" under Rule 25.11(c)(Plante at para. 21(c)). To establish that there is an “abuse of process”, the moving party must demonstrate that there is a collateral and improper purpose and a definitive act or threat in furtherance of a purpose not legitimate in the use of the process and some overt act or threat distinct from the proceedings themselves in furtherance of the improper purpose (3 Dogs Daycare Inc. v. Dogtopia Enterprises Canada Inc., 2021 ONSC 514 at para. 25).

[39] Until submissions on the Pleadings Motion began, the Plaintiff was content to move forward on the basis of the Amended Claim. It was only after submissions started that Plaintiff’s counsel advised that the Plaintiff would be seeking to amend the Amended Claim to plead the underlying facts giving rise to the Removal Motion. In my view, this, together with the overall circumstances suggests that the Plaintiff’s primary purpose and motivation in seeking the Proposed Amendments was to fortify her arguments and gain a tactical advantage on the Removal Motion. Specifically, adding references to Defendants in the Amended Claim would bolster her arguments on the Removal Motion that the issues related to the Labels are relevant to this action thereby supporting her position that Defendants’ counsel is a necessary witness at trial which in turn would require counsel’s removal.

[40] I am not satisfied that the sole purpose of the Pleadings Motion is to gain a tactical advantage on the Removal Motion or that there is a collateral purpose outside of the litigation. Therefore, I am not prepared to conclude that the Pleadings Motion is an abuse of process. However, given that it is the primary motivation, it supports dismissal of the motion particularly when coupled with my conclusion that the Proposed Amendments reveal no tenable cause of action (Milicevic at paras. 62-63).

[41] I also reject the Plaintiff’s submission that pleading the Proposed Amendments is necessary to give the notice to the Defendants of the case they must meet including with respect to the Plaintiff’s claim for substantial indemnity costs (Cerqueira v. Ontario, 2010 ONSC 3954 at para. 11). In my view, the parties have adequately addressed the issues with respect to the Labels and the Boxes in the usual and appropriate manner. Namely, the Plaintiff brought the Label Motion to address the disputed issues between the parties, counsel attended at CPC, case management was provided, the disputed issues were resolved with directions made by the case management Judge and the parties have agreed that costs will be dealt with by the trial Judge. I am satisfied that this is consistent with Rule 1.04(1) and is proportionate to the disputed issues and the amounts claimed. Further, it is unnecessary to add the Proposed Amendments to amend the Amended Claim in order to claim substantial indemnity costs. This can be sufficiently addressed by the trial Judge.

[42] Given my conclusions above, I make no conclusions with respect to the limitations issues raised by the parties.

IV. Disposition and Costs

[43] Order to go dismissing the Pleadings Motion. Counsel may schedule a telephone case conference with me to speak to re-scheduling the Removal Motion and a process for costs submissions with respect to the Pleadings Motion if they cannot agree.

Released: August 12, 2022

Associate Justice McGraw