COURT FILE NO.: CV-22-00677523-0000

DATE: 20230630

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LYNDSAY BENSEN, LYNDSAY BENSEN, as Trustee of the WJ and Family Trust and LYNDSAY BENSEN FAMILY HOLDINGS INC. Plaintiffs

AND:

MCCARTHY TÉTRAULT LLP and MICHAEL ROSENBERG Defendants

BEFORE: Justice Chalmers

COUNSEL: N. Tourgis for the Plaintiffs/Responding Party

P. Le Vay for the Defendants/Moving Party

HEARD: April 3, 2023 by videoconference

ENDORSEMENT

OVERVIEW

[1] The Defendants, McCarthy Tétrault LLP (McCarthy) and Michael Rosenberg bring this motion under R. 21.01(1)(b), to strike the Plaintiffs’ Statement of Claim on the basis that it discloses no reasonable cause of action. Alternatively, the Defendants move under R. 21.01(3)(b), to stay or dismiss the action on the basis that it constitutes an abuse of process.

[2] The Claim arises in the context of a dispute between Lyndsay Bensen (Lyndsay) and Robert Bensen (Robert). Robert is the president and sole director of the Charlton Centre for Specialized Treatment Inc. (Charlton Centre). The Charlton Centre together with Charlton Health Inc. (Charlton Health) operates as the Charlton Group. The WJ and Family Trust (WJ Trust) and Lyndsay Bensen Family Holdings Inc. (LBFHI), among others, are shareholders of Charlton Centre.

[3] The Plaintiffs bring this action for declaratory relief and damages in relation to the Defendants’ representation of the Charlton Centre. The Defendants were retained with respect to an employment-related agreement involving Ajisa Kawalecki. The Plaintiffs did not directly retain the Defendants, and the Defendants did not take instructions from them. However, the Plaintiffs argue that the Defendants were fiduciaries to the Plaintiffs and that in representing the Charlton Centre with respect to the agreement with Ms. Kawalecki, the Defendants breached their fiduciary duty to the Plaintiffs. The Plaintiffs also argue that the Defendants “aided and abetted” Robert’s breach of an undertaking between Robert and Lyndsay, and “aided and abetted” a breach of s. 132 of the Ontario Business Corporations Act. (OBCA).

[4] The Defendants argue that the Claim does not disclose a reasonable cause of action. Alternatively, the Defendants argue that the Claim is an abuse of process because it has been brought for the collateral purpose of preventing or impeding the Defendants’ ability to act as counsel for Charlton Centre and Robert in a separate oppression application that has been brought by the Plaintiffs.

[5] For the reasons that follow, I find that the Claim does not disclose a reasonable cause of action as against the Defendants. The Claim is struck without leave to amend.

THE ISSUES

[6] The following issues will be addressed in this endorsement:

a. Is it plain and obvious that the Claim discloses no reasonable cause of action?

i) Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for breach of a fiduciary duty?

ii) Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for “aiding or abetting” Robert’s purported breach of the Undertaking? and

iii) Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for “aiding and abetting” Robert’s alleged contravention of s. 132 of the OBCA?

b. Does the Claim constitute an abuse of process?

ANALYSIS AND DISCUSSION

Legal Principles – Rule 21 Motion

[7] Rule 21.01(1)(b) provides that a judge may strike a pleading for disclosing no reasonable cause of action. The only question to be considered is whether the Statement of Claim pleads a legally sufficient claim: Dawson v. Rexcraft Storage and Warehouse Inc., 1998 CanLII 4831 (ON CA), at para. 9.

[8] The following principles apply to a Rule 21.01 motion to strike a pleading:

(a) the material facts pleaded must be deemed to be proven or true, except to the extent that the alleged facts are patently ridiculous or incapable of proof;

(b) the claim incorporates by reference any document pleaded and the court is entitled to read and rely on the terms of such documents as if they were fully quoted in the pleadings;

(c) novelty of the cause of action is of no concern at this stage of the proceeding;

(d) the Statement of Claim must be read generously to allow for drafting deficiencies; and,

(e) if the claim has some chance of success, it must be permitted to proceed: Trillium Power Wind Corporation v. Ontario (Natural Resources), 2013 ONCA 683, at para. 31.

[9] To strike a claim, the court must be satisfied that there is no reasonable cause of action. It must be plain and obvious that the claim will not succeed: Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, at p. 980.

Does the Claim Disclose a Reasonable Cause of Action – R. 21.01(1)(b)

a. Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for breach of a fiduciary duty?

Test for an Ad Hoc Fiduciary Duty

[10] There is no allegation in the Claim that there was a solicitor-client relationship between the Plaintiffs and Defendants. However, the Plaintiffs plead that there was an ad hoc fiduciary duty. An ad hoc fiduciary duty can arise where there is:

a. An undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiaries;

b. A defined class of beneficiaries vulnerable to the fiduciary’s control, and

c. A legal or substantial practical interest of the beneficiaries that may be adversely affected by the alleged fiduciary’s exercise of discretion or control: Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, at para. 612.

[11] The Plaintiffs argue that the issue of whether there is a fiduciary relationship involves a factual enquiry, and the determination cannot be made on a R. 21 motion. The question is whether, given all the surrounding circumstances, one party could reasonably have expected the other party would act in the former’s best interest with respect to the subject matter at issue. As stated by the Supreme Court of Canada in Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 S.C.R. 377 (SCC);

[…] the question to ask is whether, given all the surrounding circumstances, one party could reasonably have expected that the other party would act in the former’s best interests with respect to the subject matter at issue. Discretion, influence, vulnerability and trust are non-exhaustive examples of evidentiary factors to be considered in making this determination.

Thus, outside the established categories, what is required is evidence of a mutual understanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party. […]: at page 227.

Allegations in the Statement of Claim

[12] On a R. 21.01(1)(b) motion, no evidence is admissible. The facts as alleged in the Claim are assumed to be true, unless the facts are patently ridiculous or incapable of proof. The Plaintiffs argue that the Claim contains allegations of fact that supports the claim for breach of fiduciary duty.

[13] The Claim was issued on February 25, 2022. The following facts are pleaded:

(a) Robert and Lyndsay are husband and wife and are involved in Family Law Proceedings. The Defendants knew of the Family Law Proceedings;

(b) Lyndsay is an owner, both directly and indirectly in Charlton Health and Charlton Centre. She gave notice to Robert of specific claims related to the Charlton Group. The Defendants knew that Lyndsay was asserting claims against Robert and the Charlton Group; and that Robert had acknowledged that Lyndsay held an interest, directly or indirectly, in the Charlton Group;

(c) The Defendants had provided legal services to the Charlton Group since at least 2015. As a result of which, Mr. Rosenberg became acquainted with Robert and Lyndsay. Lyndsay knew Mr. Rosenberg was acting for the Charlton Group;

(d) Lyndsay reposed trust in Mr. Rosenberg. In 2018 she provided Mr. Rosenberg with “sensitive and emotionally upsetting information” that Ms. Kawalecki had trespassed at Robert and Lyndsay’s cottage. Lyndsay sent an e-mail to Mr. Rosenberg believing he would take steps to assist her. He never responded to the e-mail;

(e) In late 2020, early 2021, Lyndsay learned of an intimate relationship between Robert and Ms. Kawalecki and that Robert had diverted money from the Charlton Group to purchase a property in which Ms. Kawalecki could live. Lyndsay separated from Robert. On January 20, 2021, Robert and Lyndsay entered into an Undertaking that provided, among other things, that they would not sell or dispose of any assets without notice to the other. The Undertaking expired on April 19, 2021. The Defendants had full knowledge of the Undertaking and its terms;

(f) On February 1, 2021, Lyndsay commenced Family Law Proceedings against Robert, in which she sought, among other things, an accounting of personal and business property diverted to Ms. Kawalecki;

(g) The Defendants were retained by Robert to act on behalf of Charlton Centre and Charlton Health with respect to an employment law matter involving Ms. Kawalecki. On February 3, 2021, Robert’s family lawyer, Heather Hansen wrote to Lyndsay’s family lawyer, Julie Hannaford advising that Robert was working with the Defendants to resolve the employment law issues with Ms. Kawalecki;

(h) On February 3, 2021, Mr. Rosenberg sent an e-mail to Ms. Hannaford advising that he was acting for the Charlton Group in negotiating the termination of Ms. Kawalecki’s employment. In the letter, Mr. Rosenberg stated that he “was wondering whether Lyndsay would like to see what was being negotiated and provide her views, without prejudice to the family law matter”. In a telephone call later that day, Ms. Hannaford took the position that any resolution of the Ms. Kawalecki claim would fall under the Undertaking and that Lyndsay’s consent was required. It is pleaded that Mr. Rosenberg stated that he did not want to do anything but obtain the best outcome for the Charlton Group. Ms. Hannaford did not participate in the negotiations with Ms. Kawalecki;

(i) The Plaintiffs plead that based on Lyndsay’s previous relationship with Mr. Rosenberg, her existing relationship with him and his assurances that his goal was to act in the best interests of the Charlton Group, that she understood that Mr. Rosenberg would work towards hers and the Charlton Group’s best interests. The Plaintiffs plead that Lyndsay continued to repose the trust and confidence in Rosenberg to act in the negotiations in a manner that would not be prejudicial to her, LBFHI and the WJ Trust;

(j) Lyndsay retained counsel, Robert Centa to advise her with respect to protecting her interests in the Charlton Group. On February 9, 2021, Mr. Centa wrote to Mr. Rosenberg to advise that it was unreasonable for Lyndsay to be put in a position to negotiate with Ms. Kawalecki given the relationship between Robert and Ms. Kawalecki. By letter dated February 11, 2021, Mr. Centa wrote that it was the Plaintiffs’ expectation that the Defendants would act in the best interests of the Charlton Group and Charlton Centre;

(k) On April 30, 2021, Robert, on behalf of the Charlton Group entered into a Settlement Agreement with Ms. Kawalecki terminating her employment and entering into an Independent Contractor Agreement to maintain her existing physician relationships and a Retainer Agreement to cover new business. It is alleged that the Defendants acted on behalf of Robert, Charlton Health and Charlton Centre with respect to the agreements. Lyndsay was not consulted or advised of the terms of the agreements before they were executed. She did not provide her consent to the agreements. Mr. Rosenberg provided a copy of the agreements to Mr. Centa on December 2, 2021;

(l) The Plaintiffs allege that the agreements with Ms. Kawalecki favoured Robert’s interests to the detriment of the interests of Lyndsay, LBFHI, WJ Trust and the Charlton Group. It is alleged that this was known to, or ought to have been known to the Defendants. It is also alleged that the Defendants knew Lyndsay’s consent was required for the agreements. It is alleged that the agreements were in breach of the Undertaking both actually and in spirit and intent;

(m) It is alleged that the Defendants aided and abetted Robert’s breach of the Undertaking;

(n) It is alleged that the Defendants breached their fiduciary duty to the Plaintiffs;

(o) It is alleged that the Defendants were in a conflict of interest and their duties to the Plaintiffs conflicted with those of Robert; and

(p) The agreements were not disclosed to the shareholders of the Charlton Centre and therefore there was a breach of s. 132 of the OBCA. It is alleged that the Defendants aided and abetted in the breach of s. 132 of the OBCA.

[14] The Plaintiffs argue that the allegations set out in the Claim satisfy the pleading of fiduciary duty. It is alleged that Mr. Rosenberg knew Lyndsay reposed trust and confidence in him and McCarthys. It is also alleged that the Defendants knew the Plaintiffs were relying upon them to act in the Plaintiffs’ best interests in the Charlton Group. The Plaintiffs allege that based on Lyndsay’s previous experience with Mr. Rosenberg, her existing relationship with him and his assurances that his goal was to act in the best interests of the Charlton Group and to protect an asset both Lyndsay and Robert had a significant interest in, that Mr. Rosenberg would work towards hers and the Charlton Group’s best interests.

[15] The Defendants argue that there are no allegations in the Claim that could support a finding of a fiduciary duty between the Plaintiffs and Defendants. They state that the three requirements for a finding of an ad hoc fiduciary duty are not pleaded in the Statement of Claim. It is not alleged that the Defendants undertook to act in the best interests of the Plaintiffs, that the Plaintiffs were vulnerable to the Defendants’ control, or that an interest of the Plaintiffs would be affected by the Defendants’ exercise of discretion or control.

[16] The Defendants state that other than the bald assertions of a fiduciary duty, the only particular provided is in paragraph 30 of the Claim in which it is alleged that Lyndsay sent an email to Mr. Rosenberg about a cottage trespass incident in 2018. In that paragraph it is pleaded that Mr. Rosenberg did not respond to the e-mail or provide any assistance to her. The Defendants argue that this single interaction is insufficient to establish a fiduciary relationship.

[17] The Defendants also argue that there are no allegations consistent with dependence and vulnerability on the part of the Plaintiffs. Lyndsay knew that the Defendants had acted for the Charlton Centre since at least 2015 and were acting for the Charlton Centre with respect to the Kawalecki matter. It is alleged in the Claim that Lyndsay retained a family lawyer, Ms. Hannaford and a separate lawyer, Mr. Centa to act on her behalf.

Do The Allegations Support a Claim in Breach of Fiduciary Duty?

[18] To strike a claim under R. 21.01, I must be satisfied that there is no reasonable cause of action pleaded and that it is plain and obvious that the claim will not succeed. I am to apply a generous reading of the Claim. The threshold is a high one.

[19] Here there are no allegations that the Defendants were retained by the Plaintiffs. Although there is no allegation of a solicitor and client relationship, the issue is whether the allegations give rise to an ad hoc fiduciary duty whereby the Plaintiffs could reasonably have expected the Defendants would act in their best interests with respect to the Kawalecki agreement: Hodgkinson v. Simms.

[20] The Plaintiffs argue that based on Lyndsay’s previous experience with Mr. Rosenberg, there was an expectation that the Defendants would act in the Plaintiffs’ best interests. The only specific interaction between Lyndsay and Mr. Rosenberg alleged in the Claim is the e-mail she sent to him in 2018 in which she advised Mr. Rosenberg about the trespass of Ms. Kawalecki at their cottage. Mr. Rosenberg did not respond to the e-mail or provide any advice to Lyndsay with respect to the issue. The Defendants argue that the single e-mail in 2018 is “too thin” to ground an expectation on the part of the Plaintiffs that the Defendants would protect their interest. I agree.

[21] It is also alleged that the Defendants had acted for the Charlton Group since at least 2015. There was a solicitor and client relationship between the Defendants and the Charlton Centre and the Charlton Group. The Defendants’ duty is to act in the best interests of their clients; the corporations. It is pleaded in the Claim that Mr. Rosenberg recognized this interest and that he stated that he did not want to do anything but obtain the best outcome for the Charlton Group. Although the Claim alleges a fiduciary relationship between the Defendants and the Charlton Centre and the Charlton Group, there are no facts alleged to support the existence of a fiduciary relationship between the Defendants and the Plaintiffs. There is no allegation that Mr. Rosenberg undertook to act in the best interests of the Plaintiffs.

[22] The Defendants also argue that the Claim does not include allegations that there was the requisite dependence or vulnerability necessary for the fiduciary relationship. It is alleged that Lyndsay had retained two sets of lawyers to represent her interests. Ms. Hannaford was retained with respect to the Family Law matter, and Mr. Centa with respect to her interests in the corporations. Mr. Centa in his letter dated February 11, 2021, stated that it was the Plaintiffs’ expectation that the Defendants would act in the best interests of the Charlton Group and Charlton Centre. That statement is consistent with the Defendants’ solicitor and client relationship with the corporations. The fact that Lyndsay retained her own lawyer to represent her interests is inconsistent with her relying on the Defendants. There are no facts alleged that could support a finding that she relied on the Defendants.

[23] I conclude that on a generous reading of the Claim, the allegations do not support a valid claim for breach of fiduciary duty.

b. Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for “aiding or abetting” Robert’s purported breach of the Undertaking?

[24] The Plaintiffs allege that the Defendants “aided and abetted” Robert in his purported breach of the Undertaking. The Undertaking provides that the parties are not to enter into any agreements during the period of the Undertaking. The Undertaking expired on April 19, 2021. It was not extended by the parties. The Agreements with Kawalecki were not entered into until April 30, 2021. By this date the Undertaking had expired.

[25] The Plaintiffs argue that the Undertaking also provided at (d) that a party is not to take any steps in the operation of the business outside the normal course. The Plaintiffs argue that the fact the Undertaking expired does not necessarily preclude an action for breach of the Undertaking. The Plaintiffs argue that the Undertaking was breached in “spirit”. Again, the Plaintiffs argue that the determination of this issue is a factual enquiry into the merits which is not permitted on a R. 21.01 motion.

[26] The Defendants argue that “aiding and abetting” is a criminal concept and is not a recognized claim at law: WIC Premium Ltd. v. General Instrument Corp., 1999 ABQB 804. The Plaintiffs did not refer me to caselaw to support their position that “aiding and abetting”’ is a valid cause of action.

[27] The Defendants also argue that as a matter of public policy a claim cannot be made against a lawyer by a third-party adversary of their client for giving advice on a contract or for taking instructions. There are no allegations in the Claim that the Defendants were in a solicitor and client relationship with the Plaintiffs. Also, for the reasons set out above, I find that the Claim does not allege facts that there was a fiduciary relationship between the Defendants and the Plaintiffs.

[28] In the absence of a solicitor and client relationship, or a fiduciary relationship, the Defendants owe no duty of care to the Plaintiffs. Also, as a matter of public policy, a claim cannot be made against a lawyer by an adversary of their client for giving advice on a contract or taking instructions. Arguably in every case of breach of contract where the party alleged to have breached the contract is represented by counsel, a claim for “aiding and abetting” the breach could be brought. This is clearly not the law.

[29] As noted by Perell J. in Crown Crest Financial Corp. v. Sabbah, 2019 ONSC 7114, at paras. 26 and 27:

An action in negligence against a litigant’s adversary’s legal counsel for negligence or for breaches of ethical duties, will be struck out on the grounds that a lawyer has no duty of care to his client’s adversary in litigation. However, the action will also be struck out on public policy grounds.

The public policy prohibiting such claims is that they would interfere with the loyalty relationship between a litigant and his or her legal representative and would encourage re-litigation of the dispute between the litigants and collateral attacks on the judgments reached in the dispute between the litigants.

In Stanfield v. Schneider, [15] another case involving striking a claim against lawyers and also a claim against them for inducing breach of contract, Master Robertson of the Alberta Court of Queen’s Bench stated at paragraph 53:

53. The allegation of inducing breach of contract is made on the premise that the Low defendants advised Ms. Schneider to breach the contract. This inevitably would require reviewing privileged communications. It is untenable that an opposing party could force the waiver of privilege simply by asserting the tort of inducement of breach of contract. That runs completely counter to the jealously guarded right of a client and lawyer to communicate in private, and for the lawyer to provide advice to the client, all with confidence that the communications will remain private.

I agree with Master Robertson’s comments. I also agree with Master Robertson’s comments at paragraph 56 of the decision:

56. Lawyers regularly advise their clients about breaching contracts. This is what happens regularly when an employer seeks advice about the termination of an employee's employment. The advice is, in essence, "Terminating the employment without notice and without cause is a breach of contract and in my opinion the damages for the breach will be $X." If the client chooses to breach the contract and suffer the consequences, the lawyer is not liable to the dismissed employee for providing candid legal advice. The lawyer may draft the letter terminating the employment. However, the claim for damages is against the employer. That does not change simply because the former employee is offended by the termination.

In the immediate case, it is plain and obvious that on public policy grounds and because it would be an abuse of process, the cause of action for inducing breach of contract should be struck without leave to amend: at paras. 26, 27 and 38 to 40.

[30] I am of the view that the claim that the Defendants “aided and abetted” the breach of the Undertaking is contrary to public policy. It would interfere with the lawyer-client relationship and could result in an inquiry into the legal advice Robert and Charlton Centre received from the Defendants. The Defendants argue that McCarthys owed an absolute duty of loyalty to their clients and none to the Plaintiffs. I agree.

[31] I conclude that on a generous reading of the Claim, the allegations do not support a valid claim for “aiding and abetting” breach of the Undertaking. I find that this claim has no reasonable prospect of success.

c. Is it plain and obvious that the Defendants cannot be liable to the Plaintiffs for “aiding and abetting” Robert’s alleged contravention of s. 132 of the OBCA?

[32] It is alleged that the Defendants knew that the Kawalecki agreements were not presented to the shareholders for approval. This is required by s. 132 of the OBCA and therefore it is alleged that Robert was in breach of that provision. The Plaintiffs argue that the Defendants “aided and abetted” Robert in the breach of s. 132 of the OBCA.

[33] For the reasons set out above, I find that a claim that the Defendants “aided and abetted” a breach of the Undertaking is contrary to public policy. The reasoning with respect to aiding and abetting a breach of the undertaking also applies to the allegations of aiding and abetting a breach of s. 132 of the OBCA.

[34] The Defendants also argue that s. 132(9) of the OBCA provides that where a director fails to make full disclosure or otherwise contravenes s. 132, a shareholder may seek an order setting aside the transaction and require the director to account to the corporation for any profit or gain realized. Therefore, the Plaintiffs’ remedy is against the director, Robert. The remedy is being pursued by the Plaintiffs in the Oppression Application.

[35] In addition, the Defendants argue that the Defendants’ client was Charlton Centre and therefore any harm caused by the Defendants’ breach was suffered by the corporation, and not a shareholder. Pursuant to the rule in Foss v. Harbottle, a shareholder such as Lyndsay does not have a right to bring an action for a wrong done to the corporation. A shareholder cannot be held accountable for the liabilities of the corporation and conversely a shareholder cannot sue for the losses suffered by the corporation. Only the corporation has a cause of action flowing from the wrongs committed against it: Tran v. Bloorston Farms Ltd., 2020 ONCA 440, at para. 1.

[36] I am satisfied that the claim for “aiding and abetting” breach of s. 132 of the OBCA has no reasonable prospect of success.

Does the Claim Constitute an Abuse of Process?

[37] I find that the Claim is struck in its entirety for failing to disclose any reasonable cause of action. Having struck the Claim pursuant to R. 21.01(1)(b), it is not necessary for me to address the Defendants’ alternative argument that the Claim is to be stayed or dismissed because it constitutes an abuse of process.

Leave to Amend

[38] In striking the Claim under R. 21.01, I must also consider whether to grant leave to amend.

[39] For the reasons set out above, I conclude that the Claim does not allege a reasonable cause of action. With respect to the claim for breach of fiduciary duty, I find that there are no allegations of fact to support a fiduciary relationship between the Plaintiffs and Defendants. When the Claim was issued, the Plaintiffs were required to plead the material facts to support the causes of action. The Plaintiffs are required to plead details and specifics in the Claim and cannot hope that material facts will emerge later in the discovery process. The material facts with respect to the nature of the relationship with the Defendants were known to the Plaintiffs at the time the Claim was drafted. Nothing new has occurred or has been discovered since that date.

[40] With respect to the claims for “aiding and abetting” breach of the Undertaking and breach of s. 132 of the OBCA, I find that the Defendants had no duty to the Plaintiffs and that the claims are contrary to public policy. I am of the view that no amendment is available that could result in a valid cause of action being pleaded.

[41] The Plaintiffs did not provide to the court a draft amended claim that the Plaintiffs would seek to file if leave was granted. It is my view that if the defects in the Claim could have been remedied, it was incumbent upon the Plaintiffs to provide a draft to the court for review on this motion.

[42] Leave to amend will not be granted if a claim discloses no reasonable cause of action or lacks a legal foundation. As noted in Turner v. York University, 2011 ONSC 6151, at para. 56:

Where as in this case it is plain and obvious that the pleading is fatally flawed, the amendment should be refused. It makes no sense to allow an amendment that does not disclose a cause of action and lacks a legal foundation. Further, the defendant should not be faced with having to bring a motion to strike such a pleading.

[43] I am satisfied that the material facts related to the relationship between the Plaintiffs and Defendants were known to the Plaintiffs at the time the Claim was issued. If there were material facts which could have supported the Plaintiffs’ position that there was a fiduciary relationship with the Defendants, it was incumbent upon them to plead those facts in the Claim. With respect to the claims for “aiding and abetting” the breach of the Undertaking and breach of s. 132 of the OBCA, I am of the view that this claim is contrary to public policy and no amendment will change that fact. I do not grant leave to amend the Claim.

DISPOSITION

[44] For the reasons set out above, I find that the claims pleaded against the Defendants have no reasonable prospect of success. I grant the Defendants’ motion and strike the Plaintiffs’ Claim, without leave to amend.

[45] The Defendants are successful on this motion and are entitled to their costs. The Defendants uploaded a cost outline in which they seek their costs in the amount of $57,405.97 inclusive of counsel fee, disbursements and H.S.T. The Plaintiffs also filed a cost outline in which they state that if successful on the motion, they would have sought costs in the amount of $8,577.55, inclusive of counsel fee, disbursements, and H.S.T.

[46] I have considered the factors set out in R. 57.01. I am of the view that the motion was not particularly complex. There is no allegation made that the conduct of either party tended to shorten or lengthen unnecessarily the duration of the proceedings. I have not been advised of any offers to settle that may be relevant.

[47] I have also taken into account the overall objective that costs should be fixed in an amount that is fair and within the reasonable expectations of the unsuccessful party to pay in the particular proceedings: Boucher v. Public Accountants Council (Ontario) 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). Costs must also be proportional.

[48] I fix the Defendants’ costs in the amount of $15,000, inclusive of counsel fee, disbursements and H.S.T. I am satisfied that a cost award in this amount is fair and within the reasonable expectation of the Plaintiffs to pay if unsuccessful on the motion.

DATE: June 30, 2023