Court File and Parties

COURT FILE NO.: CV-18-00598032-00CP DATE: 20230111 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: WILLIAM TATARYN, Plaintiff – and – DIAMOND & DIAMOND LAWYERS LLP, Defendant

BEFORE: E.M. Morgan, J.

COUNSEL: Peter Waldman and Matthew Armstrong, for the Plaintiff/Responding party Milton Davis, Ronald Davis, and Teodora Prpa, for the Defendants/Moving party

HEARD: June 29, 2022

Second Motion to Strike Claim

The Present Motion

[1] For the second time in a year, the Defendants have moved under Rule 21.01 of the Rules of Civil Procedure seeking to strike out the Plaintiff’s pleading. This is the seventh iteration of the pleading, now called the Amended Amended Fresh as Amended Statement of Claim (the “Claim”). In a previous ruling, I struck out substantial portions of the Plaintiff’s claim, and gave the Plaintiff leave to amend: Tataryn v Diamond & Diamond, 2021 ONSC 2624 (“Tataryn I”).

[2] The Plaintiff has now revised the Claim. He has also brought a cross-motion to add a new Plaintiff, Daya Nand Rajan, and new statutory causes of action.

[3] The Defendant submits that the newly revised Claim does not adequately comply with my previous ruling. The Plaintiff has submitted a detailed response to the Defendant’s motion together with the cross-motion.

[4] The challenge to the current iteration of the Claim is described by Defendant’s counsel as falling under four headings, but in my reading of the argument a number of the identified issues overlap. For present purposes, I have grouped the issues into three categories: (a) pleading against previously discontinued defendants; (b) pleading untenable and insufficiently supported new causes of action by a new statute-barred Plaintiff; and (c) pleading evidence and inflammatory language.

The Challenge to the Claim

(a) Previously discontinued defendants

[5] Counsel for the Defendant submits that the Claim, as presently drafted, repeats in a thinly veiled way the very claims and allegations that were struck out in my previous ruling. There, I indicated that a number of personal defendants who were included in the claim must be removed. Specifically, I stated in Tataryn I, at para 80:

The four personal Defendants – Jeremy Diamond, Sandra Zisckind, Isaac Zisckind, and Corey Sax (collectively, the “Individual Defendants”) – are not partners in Diamond LLP; rather, their professional corporations are the partners. The Statement of Claim provides no basis for a personal claim against them as individuals.

[6] The Defendant’s view has been that the naming of personal Defendants and the pleading of improper allegations against them was a tactic employed by the Plaintiff to tarnish those individuals’ professional reputations. I specifically found, at para 84, that the inclusion of individual members of a law firm partnership is legally unnecessary and that a pleading against the partnership itself would suffice:

The inclusion of the Individual Defendants here is unnecessary since they are all bound by the acts of Diamond LLP. Further, Diamond LLP has inherited the liabilities of its predecessors and constituent professional corporations, and the Partnership Act ensures that their liability remains an issue since it can flow through the limited partnership and the professional corporations.

[7] The newest version of the Claim has eliminated the personal defendants from the style of causse. However, the body of the pleading continues to make explicit misconduct allegations against those same individuals, now labelling them the “Defendant’s Predecessors”. This phrase is defined by the Plaintiff as the discontinued defendants. Defendant’s counsel points out that the Claim currently makes 182 mentions of the “Defendant’s Predecessors”.

[8] It is the Defendant’s position that pleading in this way amounts to an attempt to do indirectly what the court has already ordered the Plaintiff not to do directly. As an example, the Claim now alleges and seeks remedies against the “Defendant’s Predecessors” for things such as professional misconduct, breaches of the Solicitors Act, breach of fiduciary duty and duty of good faith, breach of contract, negligence and negligent misrepresentation, unjust enrichment, breach of the Ontario and two other province’s (B.C. and Alberta) Consumer Protection Acts, and fraudulent concealment.

[9] These allegations repeat those made in the version of the Statement of Claim that was subject to my previous ruling. With the greatest of respect to the Plaintiff and his counsel, couching these allegations in the phraseology of “Defendant’s Predecessors” does not conceal that the allegations are being levelled against the very former defendants against whom the case has been discontinued.

[10] Counsel for the Plaintiff submits that the references to the previously named individuals continues to be necessary for the narrative setting out the present claims against the sole Defendant. While one can understand the need to draft a coherent history of the events at issue, Plaintiff’s counsel will have to draft the pleading in a different way than one that continues to specifically target conduct by persons against whom I have ruled there is no claim.

[11] Some of the references contained in the present iteration of the Claim are so specific that there is no other way to understand them except as maintaining language that I previously eliminated – e.g. paragraph 8 of the Claim alleges “Sandra PC is liable”, making specific reference to a previous defendant against whom there is no cause of action. This, along with any similar reference to a discontinued defendant, is unnecessary to the narrative and contrary to my prior ruling. As I said in Tataryn I, at para 81-82, “there is no basis in the pleading or as matter of legal principle or policy for naming the individual principals…The inclusion of the Individual Defendants here is unnecessary…”

[12] As for the many references to “Defendant’s Predecessors”, they are for the most part equally unnecessary and unduly inflammatory. While I understand that the acts of the Defendant partnership are done by the individuals that make up that partnership, the extent to which the current Claim reads like a claim against the discontinued defendants makes it an improper pleading. A pleading, as I indicated in Tataryn I, at para 9, “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.” It need not contain a lengthy narrative repetitively impugning the conduct of non-defendants.

[13] It is not the Court’s role to edit the Plaintiff’s pleading or, under the circumstances, to identify each of the instances where the “Defendant’s Predecessors” are improperly referenced or gratuitously referenced in a way which adds nothing necessary to the Claim. It is for the Plaintiff to further revise the Claim in a way that levels the allegations against the one and only proper Defendant, and that does not read like an effort to impugn the conduct of individuals against whom there is no cause of action.

(b) New causes of action – tenability, limitation period, and material facts

[14] I held a case conference in this matter on Monday, April 4, 2022. On Friday, April 1, 2022, the Plaintiff delivered his sixth amended pleading. In light of this new amendment, I scheduled the hearing of this motion for June 2022. Several weeks later, on April 29, 2022 – i.e. before the motion could be heard – the Plaintiff delivered his seventh amended pleading. Defendant’s counsel submits that by serving yet another amended pleading after the Court had scheduled this motion, the Plaintiff failed to heed the principle well expressed by my colleague, Justice Koehnen, in Vale Canada Limited v. Solway Investment Group Limited, 2021 ONSC 7562 at para 42:

[T]he right to amend must be balanced against the competing principle that a motion should be determined on the basis of the state of affairs that existed when the notice of motion was served. There are valid reasons behind that principle. In its absence, the party responding to a motion to strike could try to change the underlying landscape on receipt of the motion and could keep changing it indefinitely.

[15] It is the Defendant’s primary position that the motion before me should deal only with the version of the Plaintiff’s pleading that was produced at the case conference last April. Nevertheless, counsel for the Defendants has managed to put forward a fulsome challenge to the latest iteration of the Claim as well. It is the Defendant’s view that these new versions of the Claim continue to be defective in a number of ways and that the latest one, like all previous ones, should be struck out.

[16] In one instance, Defendant’s counsel notes that in response to my having struck out claims of fraudulent misrepresentation the Plaintiff now pleads negligent misrepresentation, but in the course of doing so asserts that there was intentionality to the Defendant’s actions. According to Defendant’s counsel, that amounts to a reintroduction of a cause of action that has already been struck.

[17] In my view, matters of this nature can be left alone; they raise draftsmanship more than substance. The Plaintiff was told that it should not plead fraud, and he has not pleaded fraud. The fact that he has left in the Claim the allegation of intent does not re-introduce the stricken cause of action. As Justice Chown said in Giangrande (c.o.b. Dundalk Poultry Processing) v. Secure Insurance Solutions Group Inc., 2021 ONSC 761, at paras 32-33, “While I agree that…the proposed paragraphs, could be drafted more concisely…the court should not require changes to a pleading that amount to refinement.”

[18] Defendant’s counsel argue that the Claim contains a number of other statutory and common law causes of action against the Defendant and the “Defendant’s Predecessors” that are unauthorized by my previous ruling. They also submit that there are newly pleaded causes of action that are limitation barred, untenable in law, and/or unsupported by material facts. These include allegations of unfair concealment contrary to several provinces’ consumer protection statutes and a pleading of fraudulent concealment against the Defendant and the “Defendant’s Predecessors”.

[19] To the extent that any cause of action or, for that matter, any aspect of the new Claim is levelled against the “Defendant’s Predecessors”, that language must be deleted for the reasons explained in part (a) above.

[20] In addition, the Defendant argues that the consumer protection claims contained in the new Claim are more generally not permissible under the leave to amend that I granted in Tataryn I, as that leave did not contemplate any new claims. As Defendant’s counsel put it in their factum, nowhere in my ruling was it indicated that the Plaintiff is being given “carte blanche to add claims”.

[21] While it is accurate that I did not grant permission to add a new cause of action, the reason for that is that none was at issue in my previous ruling. The nature of a judgment on a Rule 21 motion is to determine whether some or all of an existing pleading is improper or impermissible and subject to being struck out. It does not determine anything about what might be added to the Claim that was not in it already.

[22] If anything new is added to a claim after leave to amend is granted, its propriety must be determined on a subsequent motion. The mere fact that the consumer protection claims are newly added does not in itself provide grounds for striking them out. The Defendant has not yet pleaded and, as indicated above, Defendant’s counsel have had sufficient time to respond to the newly added issues. Under the circumstances, it is better to consider the newest version of the Claim on this motion than to consider a pre-final version and have the final version waiting in the wings for the next amendment and challenge. Proceeding with the final version filed by the Plaintiff produces no prejudice that cannot, if necessary, be compensated in costs.

[23] Turning to the new statutory claims, the Defendant submits that the new pleading does not state how representations allegedly made by the Defendant constitute “unfair practices” under the three provincial consumer protection statutes. The new paragraphs identify representations, but the Defendant argues that they do not specify how the representations are false, misleading, or deceptive. The Defendant is also concerned that the new Claim fails to particularize how the alleged representations rise to the level of an “unfair practice”. Defendant’s counsel point out that I went out of my way to reiterate in Tataryn I, at para 10, that, “The causes of action must be clearly identifiable from the facts pleaded and must be supported by facts that are material.”

[24] The Plaintiff responds that the material facts in support of the claims under the Consumer Protection Act and equivalent consumer protection statutes in other provinces are expressly incorporated by reference from the section of the newly revised Claim dealing with negligent misrepresentation. Plaintiff’s counsel points out that statutory causes of action under consumer protection legislation are generally thought to be rather straightforward, and permit “damages to be recovered on an objective basis, which would likely be formulaic and simple”: Matoni v. C.B.S. Interactive Multimedia Inc. (c.o.b.) Canadian Business College, [2008] OJ No 197, supplemental reasons [2008] OJ No 3340 and [2008] OJ No 3341.

[25] Having pled the material facts going to misrepresentation, and having incorporated those facts by reference into the portion of the Claim dealing with consumer protection, the Plaintiff submits that all material facts supporting the consumer protection pleading have been included in the Claim. The pleading alleges that the Defendant’s representations are “untrue, misleading and/or deceptive”. As Plaintiff’s counsel points out, the interpretation of a firm’s representations to the public and its clientele, and the determination of whether those representations are true or false, raise questions of fact. Plaintiff counsel states that there is nothing more that needs to be filled in to allow the Defendant to plead in response.

[26] Further, counsel for the Plaintiff points out that the specific “unfair practices” referenced in the consumer protection statutes have been identified and listed in the Claim. The Claim also further details the ways in which the representations were wrongful in six sub-paragraphs describing the deceptive and misleading nature of the Defendant’s promotion of its services. In Plaintiff’s counsel’s view, this is sufficient in terms of the factual support required in a pleading. I agree.

[27] Section 14 of the Consumer Protection Act provides that, “It is an unfair practice for a person to make a false, misleading or deceptive representation”. With this statutory language in mind, it stands to reason that the material facts supporting the common law misrepresentation claim can also support the Consumer Protection Act claim.

[28] The Defendant also asserts that the consumer protection claims based on other province’s statutes are outside of the Superior Court of Justice’s jurisdiction and should be struck on that ground. That might well be true in an individual action, but this is a proposed class proceeding. If it is ever certified it is possible that it will be consolidated with other claims across the country and that certification will pronounce it a national class action.

[29] I do not know at this point whether a national class action is a realistic prospect here or not, but in that case multi-provincial claims could be considered by this court. There are certainly any number of class actions that proceed on that basis. In my view, it is premature to consider this jurisdictional challenge at this stage of the action.

[30] Additionally, the Defendant submits that the consumer protection claim, which is advanced only on behalf of the newly added Plaintiff, is out of time and statute barred. As with the rest of the Rule 21 analysis, this would only be the case if is plain and obvious that a limitation has expired and no additional facts are offered to refute that conclusion.

[31] The new Plaintiff is added in order to represent a sub-class of individuals who retained the Defendant but whose services were referred out to other lawyers and firms. The Claim now sets out that the referral was not disclosed to the new Plaintiff and that he did not discover it until sometime after March 20, 2019. The Defendant disagrees with that timing, but that is how the matter is pleaded. Since the originating process herein was issued on May 17, 2018, this discovery date would bring the new Plaintiff’s claim within the limitation period.

[32] The mutual contentions of the parties with respect to the discovery of the claim and the running of the limitation period entail matters of fact. These can be explored as this action continues on its course through discoveries, etc.: Longo v. MacLaren Art Centre, 2014 ONCA 526, at para 38. The response to the limitation argument is properly pleaded with the material dates clearly set out.

[33] As the Court of Appeal said in Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572 at para 41, “where the resolution of the limitation issue depends on a factual inquiry, such as when the plaintiff discovered or ought to have discovered the claim, the issue should not be decided on the motion for certification.” What is true for a certification motion, which often entails a rather substantial factual inquiry in its own right, is certainly true of a pleadings motion in which there is no evidentiary basis for such a factual inquiry to take place. It is currently too early in the action to consider dismissing it on limitation grounds.

[34] Finally, the Defendant submits that the Claim has improperly added a new cause of action – fraudulent concealment. It is the Defendant’s view that no facts have been pleaded which could support that claim. Defendant’s counsel identifies one sentence in the Claim that is inserted to support this new cause of action, and contends that the sentence is so broadly generic that it cannot constitute a material fact: “Defendant and the Defendant’s Predecessors concealed the existence of the Plaintiff’s and the Class Members’ causes of action plead [sic] above by failing to disclose the wrongful conduct set out above.”

[35] In essence, it is the Plaintiff’s position that all of the other causes of action add up to a cause of action in fraudulent concealment because the Defendant did not let the Plaintiff know it could be sued on those grounds. However, the doctrine of fraudulent concealment is not meant to be a mere reiteration of other claims contained in a pleading; in that case, virtually all causes of action could be accompanied by a fraudulent concealment claim. It is the very rare defendant who goes out of their way to actively flag for a plaintiff the grounds on which they can be sued.

[36] The Supreme Court of Canada has stated that the challenge for a court analyzing a fraudulent concealment claim is to determine “whether it would be, for any reason, unconscionable for the defendant to rely on the advantage gained by having concealed the existence of a cause of action”: Pioneer Corp. v. Godfrey, 2019 SCC 42, at para 54. This analysis requires that something more than a reiteration of the other causes of action in the Claim be pled. The Claim does not fulfill that requirement. The fraudulent concealment pleading as presented by the Plaintiff is little more than a bare assertion; it cannot stand.

[37] Having said that, the Plaintiff also makes the point that fraudulent concealment is not really a cause of action, but rather is a doctrine of equity that prevents a limitation period from being used “as an instrument of injustice”: Ibid., at para 56. It is invoked by the Plaintiff not as a ground of liability claimed against the Defendant, but as an equitable rule in support of the discoverability response to the Defendant’s limitation argument.

[38] As indicated above, I am of the view that the Claim cannot be dismissed at this stage on the basis of its being time barred. Accordingly, the Plaintiff is in no need of the equitable support that the fraudulent concealment argument would give him even if it were properly utilized here.

[39] Accordingly, the fraudulent concealment portion of the Claim is to be struck out. But this will have no meaningful impact on the limitation point to which it was meant to apply, since the limitation challenge to the Claim will in any case not succeed here.

(c) Evidence and inflammatory language

[40] In the Plaintiff’s second-to-last version of the Claim, paragraphs 130-133 contained highly critical allegations made against Jeremy Diamond, who is one of the members of the Defendant. He, of course, is both a non-party and an individual against whom the Plaintiff’s action was required to be discontinued. The allegations are of professional misconduct. It is little wonder that Defendant’s counsel seeks to ensure that these type of personal allegations against a non-party are removed from the Claim.

[41] I agree with Defendant’s counsel that in the context of the Claim, narration of a series of professional misconduct allegations would be inflammatory and improper. To the extent that Plaintiff’s counsel tries to justify their inclusion in the pleading by explaining that they derive from Law Society of Ontario (“LSO”) disciplinary proceedings, they are also improperly included as being a pleading of evidence.

[42] I note that the professional misconduct paragraphs have not been included in the very last iteration of the Claim. There is therefore no reason for me to order them struck as I would do had they been included. For greater certainty, however, I feel it necessary to say that these paragraphs, or a redrafted version of the material contained therein, are not to be included in the Plaintiff’s pleading if the Claim is further amended.

[43] I consider it significant that Plaintiff’s counsel submits in his factum that he decided for now to keep the professional misconduct allegations out of the present draft of the pleading, and to save them for a Reply pleading if he deems it necessary. I do not know what will eventually be pleaded in the Statement of Defense, so I can offer no view on what will or will not be acceptable in a Reply. But I am virtually certain that inflammatory statements about a non-party, even if they emanate from a source like an LSO decision, should not be included in a pleading. This applies to a Reply as much as it applies to a Claim.

Disposition

[44] References made in the Claim to “Defendant’s Predecessors” or to specific individuals or entities against whom the action has been discontinued are struck. The Plaintiff shall have leave to re-draft those paragraphs and revise the Claim in a way that aims at the Defendant alone and not at the individual members of the Defendant. Any re-draft is to comply with, inter alia, the principles set out in part (a) above.

[45] The fraudulent concealment portion of the Claim is also struck.

[46] The balance of the Defendant’s motion to strike is dismissed.

[47] The Plaintiff’s cross-motion to add a new Plaintiff is granted.

[48] The results here are mixed. There will be no costs of this motion for or against either party.

Morgan J. Date: January 11, 2023