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Civil Procedure - Striking Pleadings - No Reasonable Cause of Action or Defence

Tort - Defamation

Tort - Intentional Interference with Economic Relations

Gaur v. Datta (Ont CA, 2015)

In this case the Court of Appeal expressed itself on several legal issues as follows.

First the criteria involved in assessing a motion to strike pleadings for showing no reasonable cause of action or defence:
[5] The motion judge correctly identified the legal principles applicable to a motion to strike under rule 21.01(1)(b). No evidence is admissible, and the facts pleaded are assumed to be true unless patently ridiculous or incapable of proof: Lysko v. Braley, 2006 CanLII 11846 (ON CA), [2006] O.J. No. 1137 (C.A.), 79 O.R. (3d) 721, at para. 3; McCreight v. Canada, 2013 ONCA 483 (CanLII), 116 O.R. (3d) 42, at para. 29. In determining whether a cause of action is disclosed, particulars can be considered as part of the pleading. In assessing the substantive adequacy of the claims, the court is entitled to review the documents referred to in the pleadings: McCreight, at para. 32.
Then it made the following useful comments on the tort of defamation:
[8] The tort of defamation requires the plaintiff to prove three elements: (1) the defendant made a defamatory statement, in the sense that the impugned words would tend to lower the plaintiff’s reputation in the eyes of a reasonable person; (2) the words in fact refer to the plaintiff; and (3) the words were communicated to at least one person other than the plaintiff: Guergis v. Novak, 2013 ONCA 449 (CanLII), 116 O.R. (3d) 280, at para. 39; Grant v. Torstar Corp., 2009 SCC 61 (CanLII), [2009] 3 S.C.R. 640, at para. 28; see also Lysko, at para. 91.

[9] In Lysko, at para. 90, this court noted that “publication by the defendant is an essential element of a defamation action and any person who participates in the publication of the defamatory expression in furtherance of a common design will be liable to the plaintiff”. As Raymond E. Brown stated in The Law of Defamation in Canada, loose-leaf (2012-Rel. 3), 2nd ed. (Scarborough: Carswell, 1999), at pp. 7-30 – 7-31:
The defamatory material may be published indirectly through the action of some intermediary for whose publication a defendant may be held to share responsibility. This may be because the defendant authorized, incited or encouraged another to publish it…A defendant may be responsible for the acts of others by encouraging, instructing or authorizing them to publish defamatory information, or providing them with information intending or knowing that it will be published.
[10] Pleadings in defamation cases are more important than in any other class of action, and require a concise statement of the material facts: Lysko, at para. 91.
Lastly, the court considered in context the elements of the tort of intentional interference with economic (aka 'contractual') relations:
[25] In A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12 (CanLII), [2014] 1 S.C.R. 177, a recent decision of the Supreme Court of Canada, Cromwell J. clarified the elements of unlawful interference with economic relations, which he indicated is also referred to as intentional interference with economic relations: at para. 2. The tort requires the defendant to have committed an actionable wrong against a third party that intentionally caused the plaintiff economic harm. Conduct is unlawful if it is actionable by the third party, or would be actionable if the third party had suffered a resulting loss: A.I. Enterprises Ltd., at para. 5.

[26] The amended statement of claim asserts the following with respect to the tort of intentional interference with economic relations. It alleges that, by undermining Pradeep Gaur’s professional reputation, the defendants sought to, and did, interfere with the plaintiffs’ ability to maintain existing contracts, secure additional contracts and develop business opportunities (para. 20). The claim also alleges that this interference was unlawful and induced a breach of contract (para. 21). Finally, the claim alleges that the defendants’ conduct aggravated the damages caused to the plaintiffs by, among other things, “sending the plaintiffs’ third party business associates threats to send ‘quasi legal letters’ to potential customers implicating the third party business associates and threatening legal action” (para. 22d), and “attempting to induce potential third-party business associates of the plaintiffs to either break their contracts with the plaintiff or not enter into contracts with the plaintiff” (para. 22e).

[27] This pleading alone does not address each of the essential elements of the tort of intentional interference with economic relations. In particular, there is no allegation that would amount to “unlawful means”. The reference to third parties here is confusing and there is no clear allegation of an actionable wrong against any third party.

[28] However, the appellants urge the court to consider, together with the amended statement of claim, the particulars and what is stated in the July 5, 2012 email.

[29] With respect to the unlawful means element, the particulars assert that the respondents, through Dipti Datta, offered to pay Triton (a third party) a portion of an acknowledged debt owed by M&I Power if Triton would cease doing business with Pradeep Gaur. The appellants contend that, when considered with reference to the July 5, 2012 email, the allegation is that Dipti Datta (on behalf of himself and the respondents) threatened that Triton would not receive payment of a debt owed by M&I Power unless it provided its “full cooperation” in the respondents’ campaign against Pradeep Gaur by ending its business relationship with Gaur. In A.I. Enterprises Inc., at para. 80, Cromwell J. acknowledges that threatening to breach a contract with a third party can satisfy the unlawful means element of the tort of intentional interference with economic relations.

[30] Regarding the intention element, the amended statement of claim only alleges that the respondents, by undermining Pradeep Gaur’s reputation, sought to interfere with the appellants’ ability to maintain existing contracts, secure additional contracts and develop business opportunities (para. 20). This allegation is not explicitly pleaded as the respondents’ reason for inducing third parties to either break or not enter into contracts with the appellants (para. 22e). However, on a generous reading of the pleading together with the particulars and the July 5, 2012 email, it appears that the appellants are alleging that the respondents’ threats to withhold monies from Triton was targeted at inflicting economic harm on the appellants, as the condition for receiving payment was for Triton to cease its business relationship with Gaur.

[31] Regarding the requirement that the unlawful means caused the plaintiffs economic harm, the particulars assert that the appellants have lost $1.5 million as a result of third party business associates – who pursued contracts on their behalf and provided them access to contract opportunities – discontinuing their relationship with the appellants. The particulars also attribute $32 million in losses to the withdrawal of third parties from proposed contracts and joint venture opportunities. Although Triton is not explicitly named in these particulars, given the similarity between the relationship between the appellants and Triton and the intermediary relationship described, on a generous reading this element of the tort is disclosed.

[32] In my view, when the particulars and the July 5 email are considered, intentional interference with economic relations is raised in this action against the respondents. The appellants allege an actionable wrong by the respondents (a threat to continue an ongoing breach of contract) against a third party (Triton Synergies) that was aimed at causing, and did in fact cause, the appellants economic harm: A.I. Enterprises Inc., at paras. 5, 23. These allegations are neither incapable of proof nor patently ridiculous. Taking them as true, and adopting a broad and generous reading of the pleading together with the particulars and the July 5, 2012 email, it is not “plain and obvious” that the pleading discloses no reasonable cause of action for intentional interference with economic relations: Hunt v. T & N plc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959, [1990] S.C.J. No. 93, at paras. 33, 36; Knight v. Imperial Tobacco Canada Ltd., 2011 SCC 42 (CanLII), [2011] 3 S.C.R. 45, at para. 17. Accordingly, I would set aside the motion judge’s order under rule 21.01(1)(b) striking the appellants’ claim for intentional interference with economic relations, subject to what I say below respecting the need to amend the pleading.

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