2024 ONSC 7399

ENDORSEMENT OF CIVIL MOTION, APPLICATION OR CASE CONFERENCE

SHORT TITLE OF PROCEEDINGS: Aenos Food Services Inc. v Emily Tierney et al.

COURT FILE NO.: CV-24-00094737-0000

BEFORE: Associate Justice Perron

HEARD ON: December 10, 2024

COUNSEL: Sarah Lag and Nicholas Valela of Black & Associates for the plaintiff Andrew Lenz of Perley-Robertson, Hill and McDougall LLP for defendant

RELIEF REQUESTED: Order for particulars

Endorsement

[1] This is a motion by the Plaintiff, Aenos Food Services Inc. (“Aenos”), seeking particulars of allegations made in the Statement of Defence pursuant to Rule 25.10 of the Rules of Civil Procedure. The action is governed by Rule 76, the simplified procedure rule.

[2] In 2021, Aenos retained the Defendants, Emily Tierney and Tierney Stauffer LLP (collectively “Tierney”), to provide legal services in respect of Aenos’ proposed acquisition of Quattrocchi & Company Limited. The claim alleges solicitor’s negligence, breach of contract and breach of fiduciary.

[3] It is apparent from a review of the pleadings, that one of the issues in dispute between the parties is the scope of Tierney’s retainer. In response to Aenos’ Request to Inspect Documents, Tierney admitted that it did not enter into a written retainer agreement with Aenos. Aenos characterizes the retainer as a “limited oral retainer agreement” based on its interpretation of the Statement of Defence. That characterization is disputed by Tierney. I will simply refer to the agreement as the oral retainer agreement hereafter.

[4] For purposes of this motion, Aenos categorized the particulars into three categories. The first category of particulars relates to the oral retainer agreement including who entered into the oral agreement, how and where was the retainer entered into, what were the legal services to be provided and what were the specific terms of the oral agreement (“Demand 1” regarding paragraph 5 of the Defence).

[5] The second category of particulars relates to the advice allegedly given by Tierney including when and in what manner Tierney purportedly made Aenos and its president, David Kampitsis, aware of certain risks (i.e. liability associated with failure to comply with the terms of financing); when and in what manner Tierney advised Aenos as to “its obligations” and what the advice was; and, when and in what manner did Ms. Tierney meet with Mr. Kampitsis to explain the “consequences of failing to close” and what did she explain to him regarding those consequences (“Demands 3 to 5” regarding paragraphs 17, 19 and 21 of the Defence).

[6] The third category of particulars relates to the alleged instructions provided by Aenos to Tierney including when and in what manner Mr. Kampitsis gave “all necessary instructions” to Tierney, what those “necessary instructions” were, when and in what manner did Mr. Kampitsis indicate he “understood the agreement” and that “he would agree to be bound” by the agreement (“Demand 2” regarding paragraph 16 of the Defence).

[7] In support of its motion, Aenos relies on an affidavit sworn by Mr. Kampitsis. As set out above, Mr. Kampitsis is Aenos’ current president. In his affidavit, Mr. Kampitsis admits to retaining Tierney in November 2021 on behalf of Aenos. He explains his understanding of the scope of Tierney’s retainer and denies that Tierney provided certain advice or made certain communications (as alleged by Tierney in the Defence). Mr. Kampitsis also states that in light of Tierney’s refusal to provide particulars, he does not know the case to meet and cannot reply because he does not know “the manner in which, the dates when, or the content of the communication that the Defendants allege: a. Created an oral limited retainer agreement; b. Provided all relevant and necessary advice […]”. He further indicates that he cannot plead a version of the facts in Reply that is different from that pleaded by Tierney in the Defence and cannot narrow the issues raised by the action to streamline and/or limit the scope of examinations for discovery or trial which will lead to surprise at trial. In other words, Mr. Kampitsis’ affidavit pleads part of the test for delivery of a Reply pursuant to Rule 25.08.

[8] In addition to requiring the particulars in order to plead in Reply, Aenos’ position is that the applicable allegations from the Defence are bald allegations which lack the material facts required by Rules 25.06(1) and 25.07(3).

[9] Tierney’s position is that its Defence pleads the material facts and that Aenos is attempting to obtain evidence prior to discovery. Tierney also submits that Aenos is able to plead, and has done so, and that Aenos therefore has not met the burden for particulars. Tierney also submits that given the extent of the pleas set out in the claim, a Reply would not be necessary or permitted pursuant to Rule 25.08.

The Applicable Law

[10] Although they rely on different caselaw, the test and Rules applicable to pleadings and motions for particulars is not disputed between the parties.

[11] Rule 25.06(1) provides that every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.

[12] With respect to defences, Rule 25.07(3) provides that where a party intends to prove a version of the facts different from that pleaded by the opposite party, a denial of the version so pleaded is not sufficient, but the party shall plead their own version of the facts.

[13] With respect to reply pleadings, Rule 25.08 provides that a party shall only deliver a reply if: a) a party intends to prove a version of facts different from that pleaded in the opposite party’s defence unless it has already been pleaded in the claim; and/or b) a party intends to plead in reply any matter that might, if not specifically pleaded, take the opposite party by surprise or raise an issue that has not been raised by a previous pleading.

[14] As set out by the Court in Levchak et al. v Automation Now Inc. et al (2022 ONSC 6703 at paras 18 and 19):

[18] On a motion for particulars, particulars may be required to limit the generality of pleadings but not to the extent that they move from material facts into the realm of evidence. Their primary purpose is to clarify a pleading sufficiently to allow the opposite party to respond. They are intended to narrow the generality of a pleading, define the issues and prevent surprise at trial. See: Duron Ontario Ltd. v Cladit Siding Solutions Inc. 2018 ONSC 3897, referencing Pennyfeather v. Timminco Ltd. 2011 ONSC 4257 at paragraphs 69 and 60.

[19] To succeed on a motion for particulars, the particulars sought must not be within the knowledge of the party requesting them and they must be necessary to enable the requesting party to plead. See: Physicians’ Services Inc. v. Cass.

[15] The objective of particulars differs from the object of discovery, and discovery is not a substitute for particulars (Steiner v Lindzon et al (1977), 14 O.R. (2d) 122 at para 8; Sleep Clinic London Inc. v Merchea, 2012 ONSC 3004 at para 32). That said, particulars will be refused if the demand for particulars is being used to discover evidence before examinations for discovery rather than to enable a party to plead (Brigaitis v IQT Ltd. (2012) ONSC 6584 at para 38; Napora v Demilec, (2023) ONSC 98 at para 15).

[16] The parties also referred me to other helpful cases which further discussed the purpose of particulars, including cases where particulars were requested in order to deliver reply pleadings (Brigaitis v IQT Ltd. (2012) ONSC 6584 at paras 35-47; Pennyfeather v Timminco, 2011 ONSC 4257 at para 60).

Analysis re Demand 1

[17] For Demand 1, Aenos seeks particulars of the oral retainer agreement (the who, how and what of the agreement). In addition to its position that the Defence contains bald allegations and has not properly pled Tierney’s own version of the facts regarding the oral retainer agreement, Aenos relies on Mr. Kampitsis’ affidavit evidence that Tierney did not communicate any limitations to the legal services that it would provide such that the retainer agreement was “limited”. As the Law Society of Ontario requires that all lawyers should confirm limited scope retainer agreements in writing, Aenos therefore argues that Tierney is relying on an oral retainer agreement to relieve themselves of their duties which makes the particulars sought relevant and highly material to the action.

[18] Aenos relies on several cases where the Court sets out the particulars that are required to plead the elements of breach of contract and/or oral agreement, and where the Court has ordered particulars of alleged contracts and oral agreements (see Brad Ind Ltd v Rio Tinto W Co. [1962] OWN 126 at paras 2-4; Van Robb v Rapid Metal LLC, 2016 ONSC 1321 at paras 5 and 14; Daulat Medical v Sharpe). While I have reviewed the caselaw relied upon by both parties, I note that each case turns on its own facts as the applicable test requires the Court to review the pleadings as well as the particulars specifically requested in each case.

[19] Mr. Kampitsis’ evidence that he does not know the case to meet and cannot file a Reply is not consistent with his admission that: a) he is the one who retained Tierney on behalf of Aenos, and b) he is the only one who instructed Tierney on behalf of Aenos (as acknowledged by Aenos’ counsel in response to one of my questions during the hearing of the motion). I therefore find that the particulars sought are within Mr. Kampitsis’ knowledge. As such, it is not appropriate to order the particulars requested.

[20] Although the above finding is sufficient to dispose of Demand 1, I also disagree with Aenos’ position that the Defence contains bald allegations regarding the oral retainer agreement. The Defence pleads that the Defendants were retained by Aenos on or about November 5, 2021 to provide legal services to Aenos with regards to its proposed share purchase of Quattrochi. By virtue of the response to the Request to Inspect, it is admitted that the retainer was entered into orally. Immediately following paragraph 5 of the Defence (i.e. paragraphs 6 to 9), Tierney then pleads facts setting out its position on the scope of the oral retainer agreement including that it was not retained to opine on the letter of intent or to provide tax, accounting or financial advice. I find that Tierney has therefore pled sufficient material facts regarding the formation and scope of the oral retainer agreement.

[21] Furthermore, Aenos does not need the particulars to reply. In addition to Mr. Kampitsis’ admission that he is the only one who instructed Tierney, at paragraph 16 of the Statement of Claim Aenos pleads that on or about November 7, 2021, Aenos retained Ms. Tierney to replace Boyd (the solicitor formally retained by Aenos to advise on the proposed transaction). The “who” is therefore apparent based on Aenos’ own pleading and admissions. Aenos then goes on to plead the facts in support of its position on the scope of the retainer. The Statement of Claim is lengthy and very detailed. It is approximately 26 pages.

[22] Tierney takes the position that the claim offends the rules of pleadings and contains evidence. While I do not make any findings on this motion as to whether or not the claim is compliant, I do agree with Tierney that given the level of detail set out in the claim, it is questionable that Aenos would be permitted to deliver a Reply. Aenos has already extensively pled its version of the facts in the claim, including but not limited to, its version of the facts regarding the oral retainer agreement. In any event, the Defence has a sufficient amount of detail to permit Aenos to prepare a Reply if it feels a Reply is warranted.

[23] I also agree with Tierney that Aenos is trying to elicit evidence and that the information should be elicited during examinations for discovery. The nature of particulars generally sought in this case is similar to that in GASP Business Services Inc. v ARCA Design Inc., 2020 ONSC 5612 where the Court declined to order particulars.

[24] For the reasons set out above, I decline to order the particulars sought in respect of Demand 1.

Analysis re Demands 3 to 5

[25] For Demands 3 to 5, Aenos seeks particulars of the advice allegedly given by Tierney to Aenos. Aenos reiterates its pleas in the claim that Tierney failed to provide advice on various items and that these failures are central to its case. It repeats that the Defence contains bald allegations regarding the nature of the advice allegedly provided, that Tierney is refusing to provide the particulars despite its obligations to maintain records of legal opinions/reports/documents, and that in the absence of the particulars Aenos does not know the case to meet. Aenos again relies on the Daulat case in support of this request.

[26] This grouping of demand for particulars can also be disposed of on the same grounds as Demand 1. As set out above, given that Mr. Kampitsis admits that he is the only person who instructed Tierney on behalf of Aenos, the particulars requested by Demands 3 to 5 as to the advice allegedly given or not given by Tierney are within Aenos’ knowledge.

[27] I also find that the Defence as a whole, including the paragraphs related to this grouping of demands for particulars, contains sufficient detail setting out the materials facts of Tierney’s advice and/or communications.

[28] In addition, Aenos has extensively pled its version of facts in support of the advice that is alleged to have been given and omitted. Unlike the Champagne case where the defendant in that case established that the particulars of the alleged tort were required to plead in defence, Aenos has not established that it needs the particulars to plead in reply, if a Reply is even necessary at all. The particulars are therefore not required for Aenos to plead.

[29] I also find that this grouping of particulars demonstrates even more clearly that on the face of the demand itself, Aenos is seeking to elicit evidence. The details of the advice provided, and when and how the specific advice was provided, is clearly evidence that is more appropriately sought at discovery. Including this level of detail in the pleading would breach Rule 25.06 which requires a “concise” statement of the material facts. I also note that Rule 76.04(1.) does not permit examinations for discovery by written questions and answers. The particulars sought by Aenos on this motion effectively amount to written discovery which is prohibited.

[30] For the reasons set out above, I decline to order the particulars sought in Demands 3 to 5.

Analysis re Demand 2

[31] For Demand 2, Aenos seeks particulars of alleged instructions provided by Aenos to Tierney. In support of this request, Aenos again repeats its position that the necessary advice was not provided and that Tierney failed to confirm whether the language in the transactional documents reflected Aenos’ instructions. Aenos takes the position that the allegations in the Defence are bald and that the material facts absent from the Defence are not within Aenos’ knowledge. In addition to Daulat, Aenos also relies on Champagne v Kapukasking Plumbing and Heating Ltd. (1996), 48 C.P.C. (3d) 111 (Ont. Div. Ct.) where the Court held, in a wrongful dismissal action where sexual harassment was alleged, that the plaintiff was required to provide particulars of the alleged tort including the dates, times and places of the alleged assault.

[32] All of the reasons set out above also apply to dispose of Demand 2. Given that this demand for particulars seeks details regarding the advice alleged to have been provided by Mr. Kampitsis, it is obvious that the instructions provided by Mr. Kampitsis are within his own knowledge and that the particulars are not required to plead.

[33] As indicated above, I also find that the Defence contains the material facts setting out Tierney’s position on the instructions provided and given the level of detail provided in the Aenos’ claim in respect of the issues raised by this grouping of particulars, it is questionable that a Reply is even necessary. The particulars are therefore not necessary to plead.

[34] I also find that this grouping of particulars seeks evidence. It is apparent from the pleadings that the parties disagree on what instructions were provided, just as they disagree on the nature of the advice provided and the scope of the retainer. These issues are at the very heart of the dispute and will be determined based on the evidence of each party as the action unfolds.

[35] Furthermore, I circle back to the fact that this is an action governed by the simplified procedure rule. Rule 76 is mandatory and seeks to make litigation as cost as effective as possible for claims seeking less than $200,000 by reducing and simplifying the procedures to be followed throughout the action including for discovery, motions and trial. Courts regularly comment that “motions culture” is contributing to delays and costs in court actions, straining the court’s resources and undermining access to justice. The effect of motions culture is all the more pronounced in Rule 76 actions.

[36] This action has been stuck at the pleadings stage since at least March 2024 because of the dispute over the particulars. The potential pleading at issue is a reply, which is only ever required in limited circumstances. In my view, this motion was completely unnecessary and the most practical and cost-effective manner of moving this case forward would have been to proceed to an early exchange of documents and examinations for discovery, just as was proposed by Tierney’s counsel on April 8, 2024.

[37] As an order for particulars is a discretionary order and the court must be satisfied that the order is just in the circumstances of each case (Brigaitis v IQT, Ltd., 2012 ONSC 6584 at para 37), I therefore also decline to order the particulars requested by Aenos as, in the circumstances of this Rule 76 action, it would not be just to do so.

[38] As canvassed with the parties during the motion, the following timetable shall apply to the next steps in the action on consent of the parties: a. The Plaintiff shall deliver its Reply, if any, by January 31, 2025; b. The parties shall produce their Affidavits of documents along with Schedule “A” productions by March 31, 2025; and, c. The discoveries shall be completed in accordance with Rule 76.04 by May 30, 2025.

[39] In order to ensure that this matter moves forward effectively and does not get further bogged down at the discovery stage, I further order that the parties require leave of the Court prior to bringing any discovery motions. Leave can be sought by requesting a case conference before me by emailing the Office of the Associate Judges.

[40] With respect to costs, the Defendants were successful on the motion and seek costs of the motion on a partial indemnity basis of $5,927.63. The partial indemnity costs that the Plaintiff would have sought if successful are almost double that amount ($11,424.29). Pursuant to the applicable principles set out in Rule 57.01 (including the result of the motion, principle of indemnity, amount that each party claimed and would expect to pay and the delay/impact that the motion had in the action compared to the importance of the issue), it is appropriate to award the Defendants their partial indemnity costs in the amount sought of $5,927.63.

[41] The Plaintiff’s motion is dismissed with costs payable to the Defendants in the amount of $5,927.63 within 30 days.

Date: December 13, 2024 Associate Justice Perron