COURT OF APPEAL FOR ONTARIO

CITATION: 2324702 Ontario Inc. v. 1305
    Dundas W Inc., 2020 ONCA 353

DATE: 20200605

DOCKET: C67817

Feldman, Lauwers and Huscroft
    JJ.A.

BETWEEN

2324702 Ontario Inc.

Applicant/Respondent by way of cross-application

(Appellant)

and

1305
    Dundas W Inc.

Respondent/Applicant by way of cross-application

(Respondent)

Sam A. Presvelos, for the appellant

Robert B. Cohen and Melissa Winch, for
    the respondent

Heard: In writing

On appeal from the order of Justice Shaun
    S. Nakatsuru of the Superior Court of Justice, dated March 29, 2019, with
    reasons reported at 2019 ONSC 1885, 100 R.P.R. (5th) 223.

REASONS
    FOR DECISION

[1]

The appellant leased a commercial lounge and
    event space at 1305 Dundas Street West in Toronto from the respondents
    predecessor, as part of a five-year lease beginning March 1, 2008. The
    appellant operated a restaurant and lounge called Remix on the premises. On
    September 5, 2013, the parties signed a lease amending agreement, which extended
    the original term to the end of September 2018 and gave the appellant a unilateral
    option to renew the lease for a further five years. The lease renewal option
    reads as follows:

Provided that the Tenant is: (a) 2324702
    Ontario Inc.; (b) in occupation of the whole of the Premises; and (c) not in
    default under this Lease, the Tenant shall have the option exercisable on no
    less than nine (9) months and no more than eleven (11) months written notice
    to the Landlord prior to the expiry of the then current Term to extend the
    Lease with respect to the Premises for one (1) additional term of five (5)
    years each on the same terms and conditions as the Term save and except:

(i)

there will be no further right to extend the Term following the
    second extension term;

(ii)

the basic rent rate for each extension term shall be the then fair
    market Minimum Rent rate for comparable premises in the area, provided that in
    no event shall such rate be less than the Minimum Rent payable during the last
    twelve (12) month period immediately preceding the commencement of the then
    current extension term; and

(iii)

there shall be no leasehold improvement allowance, Landlords Work,
    rent-free period or other inducements.

If the parties are unable to agree on the
    Minimum Rent for an extension term on or before the date that is sixty (60)
    days prior to the commencement of such extension term, then such Minimum Rent
    shall be determined by arbitration before a sole arbitrator in accordance with
    the
Arbitration Act, 1991
(Ontario), or its successor legislation. The
    parties shall execute a lease extension agreement prepared by the Landlord to
    reflect the terms of the extension term.

[2]

The respondent bought the building in July 2017
    and became the appellants landlord. The application judge found that although the
    parties communicated by email with respect to renewal, the appellant had not
    renewed the lease in accordance with the terms of the option to renew. He also
    refused to grant relief from forfeiture. On this appeal, the appellant submits
    that the application judge erred in both respects.

[3]

For the reasons that follow, we find that the
    application judge made no reviewable error and the appeal must be dismissed.

A.

Facts

[4]

The renewal option in the lease amending
    agreement required the appellant to give no less than nine (9) months and no
    more than eleven (11) months written notice to the Landlord prior to the
    expiry of the then current term in order to renew the lease. This meant that
    written notice of renewal had to be given between November 1, 2017 and December
    31, 2017. The application judge found that the appellant did not provide
    written notice of renewal during that period.

[5]

On May 15, 2017, the appellant requested a
    meeting with its investment group and the respondent. On May 18, 2017, the
    respondent said it was prepared to meet as requested. On June 6, 2017, after
    the parties met, the respondent sent a follow-up email indicating that it was
    still considering its future plans for the building and that if the lease were
    to be extended, the rent would be closer to market rent for commercial space in
    the area. On October 16, 2017, the appellant emailed that it wished to discuss
    our 5yr lease option with you it is very important to us to have this spelled
    out at this time as our interested investors were waiting for this information
    to decide on our new plans for the venue. The appellant proposed a rent rate,
    and hoped they could work this out [] as soon as possible.

[6]

These conversations all took place before the renewal
    period, which began on November 1, 2017.

[7]

The parties exchanged a number of emails on
    November 3, 2017, discussing and disputing the fair market rent value. In the
    course of the exchange, the respondent stated that it would be more than happy
    to extend your lease, but we do need it to be adjusted to the market price, and
    later, that it was willing to discuss more in details and hopefully reach an
    agreement. Ultimately, the respondent asked the appellant to present its best
    offer, to which the appellant responded that it was waiting for the
    compatibles and that it would get back [] early next week. However, no best
    offer was ever presented in writing.

[8]

The renewal period concluded at the end of
    December 2017.

[9]

When the appellant failed to pay the February
    2018 rent, the respondent terminated the lease. The appellant then commenced an
    application on February 21, 2018 for a declaration that the lease had not been
    validly terminated, or for relief from forfeiture. The respondent brought a
    cross-application on July 12, 2018 for a declaration that the lease was
    terminated. Counsel reached an interim, without prejudice agreement that the
    appellant could remain in the premises pending the outcome of the litigation on
    payment of rent. Then, on September 11, 2018, the application judge granted the
    appellant an adjournment on terms that included the ongoing payment of rent.
    The application was heard on February 20, 2019. In the interim, two rent
    cheques were paid late, one of which was returned for non-sufficient funds
    (NSF).

B.

Reasons of the Application Judge

[10]

The first issue before the application judge was
    whether the respondent had validly terminated the lease for failure to pay rent
    in February 2018. He found that it had. The next issue was whether the appellant
    should be granted relief from forfeiture for its breach of the lease in
    February 2018. The application judge granted the appellant relief from that
    forfeiture. The appellant does not challenge these findings on appeal.

[11]

With the original lease still in effect, the
    main issues on the applications were whether the appellant had validly
    exercised its option to renew the lease for five years, whether the respondent had
    waived strict compliance with the lease renewal provision and was estopped from
    relying on it, and if not, whether the appellant should be relieved from
    forfeiture for failing to validly renew.

[12]

The first issue was whether the appellant had
    validly exercised the option to renew the lease. The application judge found,
    at para. 45, that the email correspondence from the tenant did not contain an
    exercise of the option to renew in accordance with the terms of the lease
    amending agreement, given that the case law requires strict compliance with the
    renewal provisions of a lease: see
120 Adelaide Leaseholds Inc. v. Oxford
    Properties Canada Ltd.
, [1993] O.J. No. 2801 (C.A.), and
Doria v. 66
    Degrees Inc.
(2000), 30 R.P.R. (3d) 287 (Ont. S.C.). Rather, the appellant
    was looking to negotiate and agree on the rent as a condition of renewal: at
    paras. 47, 51. These communications were far from an unequivocal and clear
    exercise of [the appellants] option to renew: at para. 47. The words
    exercise the option were never used, nor did the appellant activate the
    arbitration process: at para. 50. The application judge specifically rejected
    the affidavit evidence on behalf of the appellant to the extent that it stated
    that the email correspondence indicated an understanding that the option had
    been exercised: at para. 51.

[13]

The next issue was whether the landlord had
    waived the need for strict compliance. At para. 55, the application judge found
    that the two requirements of waiver that the Supreme Court set out in
Saskatchewan
    River Bungalows Ltd. v. Maritime Life Assurance Co.
, [1994] 2 S.C.R. 490, had
    not been met: 1) a full knowledge of rights; and 2) an unequivocal and
    conscious intention to abandon those rights. He concluded, from the lack of
    further discussion between the parties about rental rates following the
    November 3, 2017 emails, that [t]he ready inference [] is that the [respondent]
    stopped discussing it as [the appellant] stopped pushing for it because [the
    appellant] had not given the required written notice: at para. 55.

[14]

The application judge also rejected the argument
    that the respondent was estopped by its silence or otherwise from relying on
    strict compliance with the lease terms. The appellant argued that the respondents
    statement in one of the November 3 emails that it would be happy to extend the
    tenants lease constituted an estoppel. The application judge did not accept this
    submission: at para. 58. The phrase was used in the context of the rent being
    set at market price, but there was no meeting of the minds on this issue: at
    para. 58. Nor did the respondent use silence to mislead the appellant into
    believing that it viewed the option as exercised: at para. 59. There were no
    ongoing negotiations or other conduct after the renewal period that could have
    misled the appellant: at para. 60.

[15]

The application judge then turned to relief from
    forfeiture, although he commented that it had not been specifically requested.
    He found, at para. 63, that the appellants conduct was not reasonable, that it
    was hedging its bets, and that it had not made diligent efforts to comply with
    the terms of the lease, as required by
120 Adelaide Leaseholds Inc.
for a grant of relief from forfeiture. He also found that the appellant was not
    unsophisticated regarding knowledge of its rights: at para. 64. Further, unlike
    in other cases, such as
Velouté Catering Inc. v. Bernardo
, 2016 ONSC
    7281, 135 O.R. (3d) 32, or
Firkin Pubs Metro Inc. v. Flatiron Equities
    Limited
, 2011 ONSC 5262, 8 R.P.R. (5th) 312, the respondent had not, by misrepresentation
    or conduct, led the appellant to believe it had effectively renewed: at para.
    66.

[16]

Finally, the application judge found that the appellants
    conduct did not warrant an award of equitable relief that would result in a
    five-year lease extension. The fact that the appellant had missed paying rent
    on time three times, including in the face of a court order, went to the heart
    of the relationship, leading the application judge to conclude, at para. 67:
    To be blunt, it would not be fair to the [respondent] to enforce a renewal
    that [the appellant] did not properly renew, in these circumstances.

C.

Issues on Appeal

[17]

The appellant argues that the application judge
    erred by 1) failing to find that the respondent waived its right to require
    written notice of the lease renewal, and 2) failing to grant the appellant relief
    from forfeiture for failure to deliver written notice of renewal.

D.

Analysis

(1)

The respondent did not waive the right to
    require strict compliance with the written notice provision of the renewal
    option

[18]

The appellant submits that the application judge
    misapprehended the evidence of the effect of the email correspondence
    negotiations, which it says reflected a mutual understanding that the lease was
    going to be renewed, pending determination of the rent. The appellant relies on
    the fact that the respondent never told the appellant that the appellant had
    not actually exercised its option to renew. The appellant also submits that the
    application judge erred by putting weight on the fact that the appellant never
    invoked the arbitration clause for determining the fair market rent, when it
    was effectively precluded from doing so when the respondent terminated the
    lease for failure to pay rent in February 2018. Finally, the appellant argues
    that the application judge erred by relying on
Doria
,

at para.
    8, where Low J. held that a course of negotiation without a clear exercise of a
    renewal option will not amount to waiver, because that case was distinguishable
    on the facts.

[19]

We see no error in the approach or the overall findings
    of the application judge. Both parties were prepared to renew if the rent could
    be agreed upon. But the application judges reading of the negotiations led him
    to the conclusion that it was the appellant which was not prepared to commit to
    the renewal by actually exercising the option before it knew what the rent
    would be. We agree that the lease was terminated more than 60 days before the
    end of its term, and therefore before the time when the appellant could have invoked
    the arbitration clause. However, the application judges misperception that the
    appellant had failed to invoke the arbitration clause was a minor additional factor
    in his overall assessment that the appellant was hedging and did not intend to
    exercise the option before the rent was agreed.

[20]

It is true, as submitted by the appellant, that
    the option to renew was unilateral and the respondent did not have to agree to
    it. However, the appellant wanted the respondent to agree on a rental figure
    before it committed itself to the renewal. We see no error in the application
    judges conclusion that, in adopting this posture, the appellant effectively
    sought to deny the respondent the certainty that a lease renewal option of this
    kind is meant to provide. We also see no error in the application judges
    assessment of the evidence, to which this court defers.

[21]

Moreover, we see no basis to interfere with his
    application of the test for waiver from
Saskatchewan River Bungalows
.
    The appellant never sent its best offer and there were no further negotiations
    after the expiry of the option period, as in the three cases referred to by the
    appellant:
Directors Film Co. v. Vinifera Wine Services Inc.

(1998), 38 O.R. (3d) 212 (Gen. Div.);

Petridis v. Shabinsky et
    al.

(1982), 35 O.R. (2d) 215 (H.C.);

and

Doral Holdings Ltd. v. Bargain Books Ltd.
, [1994] O.J. No. 3103 (Gen.
    Div.)
.
The respondent did nothing to indicate that it was abandoning its
    right to expect a written notice of renewal within the notice period.

(2)

The application judge did not err by failing to
    grant relief from forfeiture

[22]

The
Commercial Tenancies Act
, R.S.O.
    1990, c. L.7, allows the court to grant such relief as [] the court thinks
    fit, having regard to all the circumstances, where a landlord seeks to enforce
    a right of re-entry or forfeiture following a tenants breach: ss. 19, 20(1). The
Saskatchewan River Bungalows
case also established the test for
    granting relief from forfeiture. In granting the discretionary and equitable
    remedy of a relief from forfeiture, a court is to consider the conduct of the
    applicant, the gravity of the applicants breaches of the lease, and the
    disparity between the value of the forfeited property and the damage caused by
    the breach:
Saskatchewan River Bungalows
, at p. 504.

[23]

Although the failure to renew the lease is not a
    breach of the lease, the court may grant relief from forfeiture where a party
    seeks to renew the lease but has not complied with the formal requirements or
    preconditions for doing so. However, this relief is available only in
    circumstances more narrowly confined than the three-pronged test from
Saskatchewan
    River Bungalows
. As recently restated in
McRae Cold Storage Inc. v.
    Nova Cold Logistics ULC
, 2019 ONCA 452, at para. 10:

With respect to the renewal of a lease, a
    precondition for the exercise of any such equitable discretion is that the
    tenant has made diligent efforts to comply with the terms of the lease which
    are unavailing through no default of his or her own:
120 Adelaide
    Leaseholds Inc.
, at para. 9;
Ross v. T. Eaton Co.
(1992), 11 O.R.
    (3d) 115 (C.A.), at pp. 124-125;
1383421 Ontario Inc. v. Ole Miss Place
    Inc.

(2003), 67 O.R. (3d) 161 (C.A.), at para. 80;
Mapleview-Veterans
    Drive Investments Inc. v. Papa Kerollus VI Inc.
, 2016 ONCA 93, 344 O.A.C.
    363, at paras. 55-56.

[24]

The application judge found that equitable
    relief was not warranted here because of the appellants conduct. First, the appellant
    had not made diligent efforts to comply with the renewal term, but instead
    hedged its bets by seeking to negotiate without committing to renew. Second,
    the appellants failure to pay its rent on time, including one time when it
    delivered an NSF cheque, was not the type of reasonable conduct that a court
    looks for as the basis to grant equitable relief. Although the appellant has a
    large investment in the premises which it stands to lose, this consequence is
    effectively a result of its own decisions regarding its conduct in relation to
    the respondent.

[25]

The appellant argues that in assessing its conduct,
    the application judge misapprehended the evidence by stating that the appellant
    had experience in exercising a renewal option for the premises. In fact, the
    appellant says, it had not previously exercised a renewal option but rather,
    entered into a lease amending agreement. We reject this argument. The
    application judges point was that the appellant had a level of sophistication
    in dealing with the lease of the premises, which was partly based on its prior
    dealings with the respondents predecessor in negotiating and concluding the
    lease amending agreement. That experience spoke against any misunderstanding of
    the renewal requirements.

E.

Conclusion

[26]

For these reasons, the appeal is dismissed with
    costs to the respondent fixed at $10,000, inclusive of disbursements and HST.
    In addition, as requested by the respondent, the August 29, 2019 order of
    Kiteley J., staying the order below pending appeal, is vacated.

K. Feldman J.A.

P. Lauwers J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Aga v. Ethiopian Orthodox Tewahedo
    Church of Canada, 2020 ONCA 421

DATE: 20200625

DOCKET: C66733

van Rensburg, Paciocco and
    Thorburn JJ.A.

BETWEEN

Teshome Aga, Yoseph Beyene, Dereje Goshu,

Tseduke Gezaw and Belay Hebest

Plaintiffs (Appellants)

and

Ethiopian Orthodox Tewahedo Church of Canada,

also known as St. Mary Cathedral, and Mesale Enegada,

and Abune Dimetros and Hiwot Bekele

Defendants
    (Respondents)

Anthony Colangelo, for the appellants

Gordon E. Wood, for the respondents

Heard:
in writing

On appeal from the order of Justice
    Sandra Nishikawa of the Superior Court of Justice, dated February 26, 2019.

Thorburn J.A.:

ADDENDUM

[1]

The appellants, Teshome Aga, Yoseph Beyene, Dereje Goshu, Tseduke Gezaw,
    and Belay Hebest (the appellants), are five former members of the congregation
    of the Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral. They appealed
    the granting of a motion for summary judgment dismissing their claim.

[2]

For reasons released on January 8, 2020, the appeal was granted and dismissal
    of the claim was set aside.

[3]

This court ordered costs of the appeal to the appellants in the amount
    of $5,000, as agreed by the parties. This court also ordered that the costs
    order of the motions judge be reversed.

[4]

The motions judge ordered costs to the respondent in the amount of
    $25,000. (The respondent submitted a bill of costs in the amount of $45,000.)

[5]

Counsel for the respondent seeks to vary the reversal of the motion
    judges costs order only.

[6]

The respondent notes that the motion judge not only granted the motion
    for summary judgment but in doing so dismissed the action. He submits therefore
    that there are costs of the action that are unrelated to the motion for summary
    judgment. Since the action will proceed and the issues in the action have yet to
    be resolved, those costs should not be payable. We agree.

[7]

On March 11, 2020, the appellant advised that his costs for preparing
    and arguing the summary judgment and disbursements related thereto only are
    $5447.39. This includes scheduling the summary judgment motion, delivery of
    affidavits, cross-examinations, disbursements for items such as transcripts,
    and argument before the motions judge.

[8]

This sum is reasonable when viewed in the context of the preparation
    required, the steps taken and the respondents own bill of costs.

[9]

In view of the above, the judgment of January 8, 2020 is amended to confirm
    that the costs order of the motions judge be vacated and that costs of the summary
    judgment motion in the amount of $5447.39 are payable to the appellant.

Released: June 25, 2020 (K.M.v.R.)

J.A.
    Thorburn J.A.

I agree.
    K. van Rensburg J.A.

I agree. David M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Amero (Re), 2020 ONCA 370

DATE: 20200611

DOCKET: C67668

Pepall, Hourigan and Roberts
    JJ.A.

IN THE
    MATTER OF: Klayton Amero

AN APPEAL
    UNDER PART XX.1 OF THE
CODE

Anita Szigeti, for the appellant

Samuel Greene, for the respondent, the
    Attorney General of Ontario

No one appearing for the respondent, Person
    in Charge of St. Josephs Healthcare Hamilton

Heard: in writing

On appeal against the disposition of the
    Ontario Review Board dated October 30, 2019.

REASONS FOR DECISION

[1]

Klayton Amero appeals from the Ontario Review Boards most recent disposition
    that continues his detention on a secure forensic unit
[1]
at St. Josephs Healthcare in Hamilton. Mr. Amero submits that the Board erred
    in finding that he represents a significant risk to the safety of the public and
    seeks an absolute discharge.

[2]

We see no error in the Boards disposition. The record amply supported
    the Boards conclusion that Mr. Amero continued to present a significant risk
    to the safety of the public. The detention order made by the Board was the
    least onerous and restrictive disposition in Mr. Ameros circumstances.

[3]

On November 10, 2017, Mr. Amero was found not criminally responsible (NCR)
    by reason of mental disorder for the theft of a bag of potato chips and other
    items from a dollar store and failure to comply with a probation order. Since then,
    he has resided in a forensic hospital setting. He has a serious acquired brain
    injury with complicated psychiatric issues and addictions. His psychiatric history
    dates to 2004 and has resulted in multiple hospital admissions. He is 32 years
    old. His psychiatric diagnosis is psychotic disorder, neurocognitive disorder,
    as well as cannabis, opioid and alcohol use disorders, which exacerbate his
    psychosis. He disputes his mental illness and need for medication.

[4]

Mr. Amero has a history of violence and aggression. In 2006, he
    assaulted his father and fractured his wrist. He assaulted his stepfather while
    on interim judicial release. While the index offence was not violent, Mr. Ameros
    criminal record includes convictions for intimidation of justice system participants,
    uttering threats and assault. During his NCR detention, Mr. Amero has exhibited
    ongoing aggressive and threatening behaviours. While there has been encouraging
    improvement, in the year under review, Mr. Amero made threats to kill and harm
    staff and continues to be aggressive towards other patients.

[5]

The Board met its inquisitorial duties to apply and interpret s. 672.54
    of the
Criminal Code
, R.S.C. 1985, c. C-46,
    and determine whether the appellant poses a significant threat to public safety.
    We do not accept Mr. Ameros submissions that the Board applied an incorrect test
    or required him to demonstrate that he was not a significant risk to public
    safety. We see no basis to intervene.

[6]

Accordingly, we dismiss the appeal.

S.E.
    Pepall J.A.

C.W.
    Hourigan J.A.

L.B. Roberts
    J.A.

[1]

The Boards reasons stipulate that Mr. Ameros detention
    would be in the Forensic Psychiatric Program. In its factum, the Attorney
    General advises that the Board has indicated its intention to issue an amended
    disposition to correct this error.


COURT OF APPEAL FOR ONTARIO

CITATION: Beniuk v. Leamington
    (Municipality), 2020 ONCA 424

DATE: 20200626

DOCKET: C66773

van Rensburg, Paciocco and
    Thorburn JJ.A.

BETWEEN

Angela and Dennis Beniuk

Plaintiffs (Appellants)

and

The Corporation of the
    Municipality of Leamington

Defendant (Respondent)

Raymond G. Colautti and Eric
    Florjancic, for the appellants

Tom Serafimovski and Samuel Atkin, for
    the respondent

Heard: in writing

COSTS
    ENDORSEMENT

[1]

The appellants appealed an order on a summary
    judgment motion dismissing their claims as statute-barred. At the hearing of
    the appeal, the parties confirmed agreement to an all-inclusive amount of
    $8,000 in costs to the successful party. We reserved judgment on the appeal.

[2]

There was mixed success in the appeal; the
    details are set out in our reasons dated March 25, 2020 and reported at 2020
    ONCA 238. We ordered costs of the appeal to the respondent in the sum of $6,500
    and reduced the respondents costs in the court below from $11,850, inclusive
    of taxes and disbursements to the inclusive amount of $10,000. The order
    reflected the parties mixed success on the appeal.

[3]

At the request of the appellants counsel we
    agreed to receive written costs submissions. We have now considered those
    submissions.

[4]

The appellants contend that the appropriate
    order to reflect the parties mixed success is that each side should bear their
    own costs of the appeal and that the costs of the motion in the court below
    should be in the cause. The respondent asserts that the order made by this
    court fairly reflects the fact that, while success was mixed, they were more
    successful on the appeal, and the appellants achieved limited success.

[5]

We agree with the respondent that the costs
    award already made properly reflects the divided success on the appeal. The
    appellants were unsuccessful on the two main thrusts of their appeal: on the
    applicability of the
Real Property Limitations Act
and on
    discoverability under s. 5 of the
Limitations Act
,
2002
. As
    we stated at para. 78 of our reasons the appellants claim is largely
    statute-barred. The effect of the appeal is that the appellants are entitled
    to proceed with their claim, but only as it relates to damages sustained after
    January 17, 2016.

[6]

For these reasons we affirm the award of costs
    set out in our reasons dated March 25, 2020.

K.
    van Rensburg J.A.

David
    M. Paciocco J.A.

J.A.
    Thorburn J.A.


COURT
    OF APPEAL FOR ONTARIO

CITATION:
    Birdseye Security Inc. v. Milosevic, 2020 ONCA 355

DATE:
    20200605

DOCKET:
    C67407&C67708

Rouleau,
    van Rensburg and Roberts JJ.A.

DOCKET: C67407

BETWEEN

Birdseye Security Inc.

Plaintiff

and

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Defendant

AND
    BETWEEN

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Plaintiff
    by Counterclaim (Appellant)

and

Birdseye Security Inc.
, and Mile Grabovica

Defendants
    by Counterclaim (
Respondent
)

DOCKET: C67708

BETWEEN

Birdseye Security Inc.

Plaintiff

and

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Defendant

AND
    BETWEEN

Danilo Milosevic also
    known as Danny Milosevic carrying on business

as VCMS Security Services and as VCMS
    Security

Plaintiff
    by Counterclaim (Respondent)

and

Birdseye
    Security Inc. and Mile Grabovica

Defendants
    by Counterclaim (Appellants)

Rocco
    Galati, for the appellant in C67407 and the respondent in C67708

Tyler
    H. McLean, for the appellants in C67708 and the respondent in C67407

Heard:
    In writing

On
    appeal from the order of Justice Michael T. Doi of the Superior Court of
    Justice, dated August 14, 2019 (C67407).

On
    appeal from the order of Justice Judy A. Fowler Byrne of the Superior Court of
    Justice, dated October 21, 2019 (C67708).

REASONS
    FOR DECISION

INTRODUCTION

[1]

These two appeals arise out of two separate actions that are pending in
    the Superior Court in Brampton. Both involve the same parties: Mile Grabovica
    and Danilo Milosevic and their respective security and home surveillance
    businesses. Mr. Grabovica, through his company, Birdseye Security Inc.
    (Birdseye), commenced Action CV-18-1527 (Action 1527) in April 2018 and
    Action CV-18-4669 (Action 4669) in October 2018. Both actions named as
    defendant Mr. Milosevics sole proprietorship VCMS Security Services or
    VCMS Security (VCMS).

[2]

In Action 1527, Birdseye claims damages for, among other things,
    conversion and theft of confidential and sensitive proprietary information,
    inducing breach of contract, conspiracy, and unlawful interference with
    economic relations. In Action 4669, Birdseye claims damages for trademark
    infringement and defamation, alleging that VCMS has attempted to duplicate its
    business by infringing its Voice-Down trademark and by making false and
    misleading statements that discredit its goods and services.

[3]

Mr. Milosevic has defended and asserted a counterclaim against Birdseye
    and Mr. Grabovica in both actions. Essentially, he pleads various facts
    concerning the business and personal relationship between himself and Mr.
    Grabovica (who are brothers-in-law), asserting that there is no merit to the
    actions, and that they have been brought to harass him and to put him out of
    business. The counterclaim in each action seeks essentially the same relief:
    damages and an order prohibiting Birdseye and Mr. Grabovica from bringing
    further proceedings against him and his business without prior leave of the
    court. The counterclaim in Action 4669 also seeks an injunction against
    Birdseye and Mr. Grabovica from trademarking the VCMS logo. Mr. Milosevic
    pleads essentially the same facts in each counterclaim, except that in Action
    4669 he pleads, at para. 29, that having launched a claim for trademark
    infringement against him, Mr. Grabovica is attempting to trademark the VCMS
    logo for collateral purposes, and to cause him and his company harm.

[4]

Neither action has progressed beyond the pleadings stage. Birdseye has
    brought motions to strike various paragraphs of Mr. Milosevics statement of
    defence and counterclaim in each action. These appeals arise out of the two
    most recent pleadings motions.

[5]

Birdseye brought its first motion in Action 1527 seeking to strike
    certain paragraphs of the counterclaim on various grounds, including that it
    disclosed no reasonable cause of action (in relation to the claim for abuse of
    process), that it was frivolous and vexatious, and that it failed to contain a
    concise statement of material facts. The motion was served in August 2018 and
    was heard on December 19, 2018. By order dated April 29, 2019, Kumaranayake J.
    struck certain paragraphs of the counterclaim with leave to amend: 2019 ONSC
    2676. No appeal was taken, and Mr. Milosevic amended his pleading.

[6]

While this motion was under reserve, Birdseye served a motion in January
    2019, returnable April 2, 2019, to strike certain paragraphs of the statement
    of defence and the entire counterclaim in Action 4669. By order dated August
    14, 2019, Doi J. dismissed the motion with respect to the statement of
    defence and struck the counterclaim without leave to amend.

[7]

Meanwhile, while the motion before Doi J. was under reserve, in June
    2019, Birdseye served another motion in Action 1527, seeking to strike certain
    paragraphs of Mr. Milosevics amended counterclaim, including the entire cause
    of action of abuse of process. That motion was heard by Fowler Byrne J. on July
    23, 2019. She dismissed the motion by order dated October 21, 2019.

[8]

In their appeals to this court, Mr. Milosevic appeals the order of Doi
    J. striking its counterclaim in Action 4669 (Appeal C67407), and Birdseye and
    Mr. Grabovica appeal the order of Fowler Byrne J. dismissing the motion to
    strike in Action 1527 (Appeal C67708).

APPEAL C67407

[9]

Birdseye moved to strike paras. 16 to 19 of the statement of defence and
    the entire counterclaim in Action 4669.

[10]

The
    relevant paragraphs of the statement of defence set out the personal and
    business history of the parties, referring to the other proceedings commenced
    by Birdseye, which Mr. Milosevic claims are abusive. These paragraphs also
    allege that Birdseyes pleadings contain misleading or blatantly false claims.
    Birdseye asserted that these paragraphs were neither relevant nor material to
    the defence, and were pleaded to give atmosphere and to show Birdseye in a bad
    light. The motion judge disagreed and refused to strike paras. 16 to 19 of the
    statement of defence.

[11]

Birdseye
    argued that the entire counterclaim should be struck under r. 21.01(3)(c) of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194

because it
    duplicated the counterclaim asserted in Action 1527. Mr. Milosevic
    submitted that any concern about duplication could be addressed by
    consolidating or ordering the trial together of the two Superior Court actions,
    as well as another action between the same parties in the Small Claims Court in
    Toronto (SC-18-5547). He also argued that he would be prejudiced if the
    counterclaim were struck and Birdseye discontinued Action 1527.

[12]

The
    motion judge rejected the request for consolidation or trial together in the
    absence of a motion for such relief. He noted that Mr. Milosevic had retained a
    different lawyer to defend the Small Claims Court action, which was not before
    the court. He directed that, should the parties wish to pursue a consolidation
    or joinder of the actions, they would need to do so by motion with notice on a
    different occasion. The motion judge found that the counterclaim should be
    stayed under r. 21.01(3)(c) and made an order striking the counterclaim.
    He concluded that to do otherwise would constitute an abuse of process and that
    Mr. Milosevic would not be prejudiced as, under r. 23.02, he could pursue the
    counterclaim in Action 1527 even if Birdseye were to discontinue its claim in that
    action.

[13]

On
    appeal, Mr. Milosevic submits that the counterclaim ought not to have been
    struck and that, in the alternative, all of the actions ought to be
    consolidated or ordered to be tried together. In response, Birdseye asserts
    that the order striking the counterclaim reflected a proper exercise of
    discretion, as there was no motion to consolidate, and the counterclaim
    duplicates what is asserted in Action 1527.

[14]

A
    defendant may move for an order staying or dismissing an action (in this case a
    counterclaim) under r. 21.01(3)(c) where another proceeding is pending in
    Ontario or another jurisdiction between the same parties in respect of the same
    subject matter. Having concluded that the duplicative counterclaim justified a
    stay, the motion judge ought to have stayed, and not struck the counterclaim.
    No issue was made of this, and nothing turns on it for the purpose of the
    appeal. Rather, the issue is whether there was a reversible error in the
    application of r. 21.01(3)(c) to bring to an end the counterclaim in Action
    4669.

[15]

The
    determination of whether a stay of proceedings should be granted because
    another proceeding is pending between the same parties involves an exercise of
    discretion, taking into consideration the circumstances of the particular case.
    The moving party must demonstrate that the continuation of the action would
    cause it substantial prejudice or injustice (beyond inconvenience and expense) because
    it would be oppressive or vexatious or would otherwise be an abuse of the
    process of the court, and that the stay would not cause an injustice to the
    responding party:
Farris v. Staubach Ontario Inc.

(2004), 32
    C.C.E.L. (3d) 265 (Ont. S.C.), at para. 15. Factors relevant to prejudice
    include: the likelihood and effect of the two matters proceeding in tandem, the
    possibility and effect of different results, the potential for double recovery,
    and the effect of possible delay:
Farris
, at para. 16.

[16]

The
    fact that another proceeding is pending between the same parties in respect of
    the same subject matter does not automatically lead to an order dismissing or
    staying the claim. Rather, the order is discretionary and the judge hearing the
    motion must be satisfied that the stay or dismissal is warranted in the
    particular circumstances of the case. While a multiplicity of proceedings
may
constitute an abuse of process which warrants an order staying or dismissing a
    proceeding (see e.g.,
Maynes v.
    Allen-Vanguard Technologies Inc. (Med-Eng Systems Inc.)
, 2011 ONCA
    125, 274 O.A.C. 229, at paras. 36, 46), that is not necessarily always the
    case. All of the circumstances must be considered to determine whether, in the
    interests of justice, a stay or dismissal should be granted.

[17]

In
    this case, the motion judge stayed the counterclaim to avoid an unjust
    multiplicity of proceedings. He concluded that the duplicative litigation
    would on the facts of this case constitute an abuse of process, and he
    rejected Mr. Milosevics claim of prejudice on the basis that he would be
    able to pursue his counterclaim in Action 1527 regardless of whether Birdseye
    discontinued the main action in that proceeding.

[18]

An
    order dismissing or staying a proceeding under r. 21.01(3)(c) is a
    discretionary order that is subject to deference on appeal, absent an error in
    principle:
1420041 Ontario Inc. v. 1 King West Inc.
, 2010 ONSC 6671, 1
    R.P.R. (5th) 33 (Div. Ct.), at para. 24, revd on other grounds 2012 ONCA 249,
    349 D.L.R. (4th) 97, leave to appeal refused, [2012] S.C.C.A. No. 272;
Canada
    (Minister of Citizenship and Immigration) v. Tobiass
, [1997] 3 S.C.R. 391,
    at para. 87. In this case, the motion judge did not explain why permitting Mr. Milosevic
    to assert his counterclaim in both actions would constitute an abuse of
    process. He appears to have assumed that the existence of an almost identical
    pleading in both actions would
ipso facto
constitute an abuse of process. His failure to consider the context of the
    litigation was an error in principle that warrants this courts intervention.

[19]

Considering
    the matter afresh, we set aside the order of Doi J. We are not persuaded, in
    the context of the proceedings involving these parties, that there would be any
    prejudice or injustice in permitting Mr. Milosevic to assert a counterclaim in
    response to both actions.

[20]

First,
    it is Birdseye that is responsible for the fact that there are multiple
    proceedings. Rather than asserting all of its claims in a single action,
    Birdseye chose to commence three separate actions in the Superior Court in
    Brampton (one of which it discontinued) and an action in the Toronto Small
    Claims Court. Birdseye opposed the consolidation or trial together of the pending
    actions as a solution to its concern about duplication. If the facts pleaded by
    Mr. Milosevic in his statement of defence and counterclaim are true (and they
    are assumed to be true for the purpose of the pleadings motions), the actions
    commenced by Birdseye are without merit, an abuse of process, and were initiated
    for the collateral purpose of causing him harm. The fact that Mr. Milosevic has
    asserted a counterclaim in each of the multiple actions commenced by Birdseye
    does not in itself constitute an injustice or prejudice to Birdseye. Indeed, no
    specific harm was alleged by Birdseye.

[21]

Second,
    we note that the counterclaim in Action 4669 seeks additional relief that is
    not claimed in Action 1527: an injunction against Birdseye and Mr. Grabovica
    from trademarking the VCMS logo, and it pleads the additional facts to support
    that claim. Striking the counterclaim in Action 4669 would eliminate this claim
    for relief altogether.

[22]

For
    these reasons, we agree with Mr. Milosevic that, by striking his counterclaim, the
    motion judge deprived him of a claim that he was validly entitled to make in
    response to each of Birdseyes actions  that the actions started against him
    were an abuse of process. It was not sufficient to strike the counterclaim in Action
    4669 simply because the same type of claim was asserted in response to Action
    1527. The counterclaim followed on the facts pleaded at paras. 16 to 19 of the
    statement of defence, which the motion judge had refused to strike.

[23]

Accordingly,
    the appeal is allowed, and the order of Doi J. is set aside.

APPEAL C67708

[24]

This
    appeal is in respect of the order of Fowler Byrne J. dismissing Birdseyes
    motion to strike certain paragraphs of Mr. Milosevics Fresh as Amended
    Counterclaim in Action 1527 on the grounds that they disclose no cause of
    action and are frivolous and vexatious. Fowler Byrne J. dismissed the motion,
    concluding that Mr. Milosevic had addressed the flaws previously identified by
    Kumaranayake J. and that the pleading was not otherwise deficient. In
    particular, she concluded that the claim in respect of abuse of process was
    properly pleaded. She encouraged the parties to move beyond the pleadings stage
    to focus on discovery and then possible mediation or trial. Birdseye and Mr.
    Grabovica appeal from the order dismissing the motion.

[25]

Birdseye
    and Mr. Grabovica submit that it is plain and obvious that the claim for abuse
    of process discloses no reasonable cause of action, or alternatively that the
    claim is frivolous and vexatious and should be struck. Mr. Milosevic argues
    that the order under appeal is interlocutory and that the appeal should be
    quashed for want of jurisdiction. In the alternative, he asserts that the
    question of whether the claim for abuse of process could stand was already
    decided in his favour in the earlier motion before Kumaranayake J.

[26]

We
    agree that the order of Fowler Byrne J. is interlocutory. Birdseyes motion was
    to strike paragraphs in Mr. Milosevics pleading as failing to disclose a cause
    of action and as frivolous and vexatious, relying on rr. 21.01(1)(b),
    21.01(3)(d) and 25.11. An order dismissing such a motion is typically
    interlocutory:
S.(R.) v. H.(R.)
(2000), 195 D.L.R. (4th) 345 (Ont. C.A.), at paras. 13-15;
Hopkins v. Kay
, 2014 ONCA 514, at para. 7.
    The appellants reliance on
Brown v. Hanley
, 2019 ONCA 395, 2019
    C.L.L.C. 220-044, as authority that the order under appeal is final, is
    misplaced. That case involved, among other things, the appeal of an order
    refusing to strike a claim under r. 21.01(3)(a) on the basis that the dispute
    was covered by a collective agreement. See
Abbott
    v. Collins
(2002), 62 O.R. (3d) 99 (C.A.), at paras. 6-7, where
    Morden J.A. distinguished between such an order, which determines jurisdiction
    on a final basis, and an order dismissing a motion under r. 21.01(1)(b) to
    strike pleadings for failure to disclose a reasonable cause of action, which is
    interlocutory.

[27]

As
    the order of Fowler Byrne J. dismissing Birdseyes motion is interlocutory, any
    appeal lies to the Divisional Court with leave under s. 19(1) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C-43. Accordingly, the appeal to this court is quashed.

DISPOSITION

[28]

For
    these reasons, we allow the appeal in C67407, and set aside the order of Doi J.
    dated August 14, 2019, and we quash the appeal in C67708.

[29]

Mr.
    Milosevic is entitled to his costs of both appeals, and he may be entitled to
    costs of the motion before Doi J. If the parties are unable to agree on costs,
    they shall serve and file with the
court at COA.E-File@ontario.ca
    their written submissions as follows: Mr. Milosevic shall provide his costs
    outline and
written submissions of no more than three pages within 20
    days, and Birdseye and Mr. Grabovica shall provide their written
    submissions limited to three pages, within 15 days thereafter.

Paul
    Rouleau J.A.

K.
    van Rensburg J.A.

L.
    B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Burns v. RBC Life Insurance
    Company, 2020 ONCA 347

DATE: 20200604

DOCKET: C67837

Gillese, Brown and Jamal JJ.A.

BETWEEN

Randolph
    Burns

Plaintiff (Appellant)

and

RBC Life Insurance Company,
    Lauren McLean and Anna Oslizlok

Defendants (Respondents)

Sloan H. Mandel and Deanna S. Gilbert,
    for the appellant

Barry G. Marta, for the respondents

Heard: In-writing

On
    appeal from the order of Justice Paul Perell of the Superior Court of Justice,
    dated December 3, 2019, with
reasons reported at 2019
    ONSC 6977
.

REASONS FOR DECISION

OVERVIEW

[1]

This
appeal concerns the adequacy of the claims
    pleaded against corporate employees for torts allegedly committed in the course
    of their employment.

[2]

The appellant, Randolph Burns, brought an action seeking the payment of
    long-term disability (LTD) benefits under a policy of insurance issued by the
    respondent, RBC Life Insurance Company (RBC Life), as well as damages against
    RBC Life and two of its employees, the respondents, Lauren McLean and Anna
    Oslizlok.

[3]

After the defendants delivered a joint statement of defence, Ms. McLean
    and Ms. Oslizlok moved pursuant to r. 21.01(1)(b) of the
Rules of Civil
    Procedure
to strike out the statement of claim as disclosing no reasonable
    cause of action as against them. At the same time, RBC Life moved for
an order requiring Mr. Burns examination for discovery to proceed
    before that of RBC Lifes representative witness.
The motion judge
    granted both motions. He struck out the statement of claim as against Ms.
    McLean and Ms. Oslizlok, without leave to amend, and granted RBC Life the
    relief it sought in respect of the examinations for discovery. The same law
    firm represented all the defendants. The motion judge awarded costs for both
    motions in the combined amount of $6,000.

[4]

Mr. Burns appeals that part of the order of the motion judge that struck
    out his statement of claim. Although he has not formally sought leave to appeal
    the costs order, Mr. Burns requests that the $6,000 award of costs against him
    be set aside.

[5]

For the reasons set out below, we allow the appeal in part, to the
    extent of granting Mr. Burns leave to amend his statement of claim.

THE STATEMENT OF CLAIM

[6]

The RBC Life policy of disability benefits (the Policy) purchased by
    Mr. Burns provides for the payment of LTD benefits in the event of a total
    disability. According to the statement of claim, in June 2012, Mr. Burns
    stopped working as a result of pain in or around his lumbar spine, waist, and
    right lower extremity. In September 2012, RBC Life accepted that Mr. Burns was
    suffering from a total disability and approved the payment of LTD benefits to him.

[7]

RBC Life terminated Mr. Burns LTD benefits in October 2017. The
    statement of claim identifies Ms. McLean and Ms. Oslizlok as employees involved
    in the termination process. Mr. Burns pleads:

24. On or about October 30, 2017, on behalf of the Insurer,
    Lauren McLean advised Mr. Burns that his LTD benefits were being terminated.

26. On or about May 4, 2018, on behalf of the Insurer, Anna
Oslizlok
denied Mr. Burns' appeal of the termination of
    his LTD benefits.

27. On or about August 2, 2018, on behalf of the Insurer, Anna
    Oslizlok denied Mr. Bums' further appeal of the termination of his LTD
    benefits.

[8]

Mr. Burns advances two claims in his pleading. First, he alleges that
    the failure of RBC Life to pay his LTD benefits amounted to a breach of
    contract.

[9]

Second, he advances claims against RBC Life and the two individual
    defendants based in bad faith, negligence, and/or negligent misrepresentation.
    In paras. 29 and 30 of his statement of claim, Mr. Burns pleads that:

29. At all material times, the Defendants owed to Mr. Burns a
    duty of the utmost good faith.

30. At all material times, the Defendants represented to Mr. Burns
    that, in exchange for the premiums he paid, Mr. Burns would receive the
    benefits offered by the Policy in keeping with the terms, conditions, and
    definitions expressly set out therein.

[10]

In
    para. 31 of his statement of claim, Mr. Burns lists 45 particulars of his
    allegation that the Defendants engaged in conduct that, jointly and/or
    severally, amounted to bad faith, negligence, and/or negligent
    misrepresentation conduct. Eight of the particulars refer only to the conduct
    of RBC Life. The remaining particulars refer to conduct that the pleading
    attributes to the defendants collectively, without differentiating which of
    them engaged in any particular act. By way of illustration, the first five particulars
    pleaded in para. 31 of the statement of claim allege:

31. Mr. Burns pleads that in the course
    of the adjustment and appeals of his LTD claims,
the
    Defendants engaged in conduct that, jointly and/or severally, amounted to bad
    faith, negligence, and/or negligent misrepresentation conduct including
,
    but not limited to:

(a) they terminated Mr. Burns' LTD
    benefits on the basis of an erroneous, extra-contractual, reckless, misleading,
    and/or bad faith interpretation of the language of the Policy;

(b) they terminated Mr. Burns' LTD
    benefits on the basis of language, criteria, terms, and/or conditions that were
    not prescribed in the Policy and which they, instead, elected to import into
    the Policy;

(c) they terminated Mr. Burns' LTD
    benefits on the basis of their unilateral interpretation of the phrase
    "gainful occupation" in the Policy and despite the Insurer's written
    admission of May 4, 2018 that "the term gainful occupation is not defined
    in the policy";

(d) they terminated Mr. Burns' LTD
    benefits on the basis of a single, 16 year old, extra-provincial case involving
    a different type of insurance policy and different type of benefits;

(e) they "cherry picked"
    case law when interpreting the Policy and terminating Mr. Burns' LTD benefits;

[11]

Mr.
    Burns seeks payment of the LTD benefits under the Policy and special damages
    for expenses he has incurred. In addition, he seeks to recover against all the
    defendants $1 million in punitive, aggravated, and/or exemplary damages, in
    part on the basis of the following undifferentiated allegations contained in
    paras. 34 and 35 of the statement of claim:

34. Mr. Burns pleads that the Defendants knew or ought to have
    known that at or around the time that it terminated his LTD benefits and/or
    denied his appeal(s), Mr. Burns was under financial strain and was financially
    dependent upon the receipt of his LTD benefits. The Defendants nevertheless
    embarked upon a course of conduct that caused and/or aggravated Mr. Bums'
    vulnerable psycho-emotional state.

35. Mr. Burns pleads that in terminating his LTD benefits when
    it did, and without any material change since the Insurer had found him totally
    disabled for over five years, the Defendants engaged in bad faith, high handed,
    reckless, wilfully ignorant, and/or grossly arbitrary conduct. So as to condemn
    this conduct, to modify the Defendants' behaviour, and/or to deter the
    Defendants from engaging in such conduct in future, Mr. Burns pleads that an
    award of punitive, aggravated, and/or exemplary damages are warranted.

[12]

The
    motion judge held that Mr. Burns had not pleaded a viable cause against Ms. McLean
    and Ms. Oslizlok that would attach liability to them in their personal
    capacities because the allegations advanced against them did not manifest an
    identity or interest separate from RBC Life: at para. 36. Accordingly, he
    struck out the claim as against them without leave to amend: at para. 37.

ANALYSIS

[13]

Mr.
    Burns submits that the motion judge erred by failing to follow the
    well-established jurisprudence that a cause of action in tort can lie against
    the employee of a corporate employer for conduct carried out in the usual
    course of employment:
Sataur v. Starbucks Coffee Canada
    Inc.
, 2017 ONCA 1017, 140 O.R. (3d) 307, at para. 4. According to
    Mr. Burns, had the motion judge given proper effect to that jurisprudence he
    could not have concluded that it was plain and obvious that Mr. Burns
    statement of claim disclosed no reasonable cause of action against Ms. McLean
    and Ms. Oslizlok.

[14]

We
    read the motion judges reasons in a different way. The motion judge referred to
    the well-established jurisprudence at several points in his reasons: at paras.
    22-25 and 33. The crux of his reasons focused not on legal principles, but on whether
    Mr. Burns had properly pleaded the material facts to support separate tort and
    bad faith claims against the individual defendants.

[15]

We
    see no error in the motion judges statement, at para. 26, that [w]here an
    employee is sued for his or her acts, the material facts giving rise to
    personal liability must be specifically pleaded. That led him to conclude, at
    para. 35, that Mr. Burns has not pleaded such a claim against the respondent
    employees. We agree.

[16]

Rule 25.06(1) requires a statement of claim to contain a concise
    statement of the material facts on which the party relies for its claim.
Each
    defendant named in a statement of claim should be able to look at the pleading
    and find an answer to a simple question: What do you say I did that has caused
    you, the plaintiff, harm, and when did I do it?

[17]

Mr.
    Burns statement of claim does not provide either Ms. McLean or Ms. Oslizlok
    with an individualized answer to that question. The heart of Mr. Burns claim
    against Ms. McLean and Ms. Oslizlok is found in paras. 29 through to 35 of his
    statement claim, much of which is reproduced above. None of those paragraphs of
    the statement of claim inform Ms. McLean or Ms. Oslizlok what each did individually
    that Mr. Burns alleges constitutes actionable wrongs against him for which he
    seeks a remedy, and when did they it. Instead, his pleading lumps the defendants
    together, without providing the necessary separate, differentiating material
    facts that could support a claim against each individual.

[18]

Mr.
    Burns relies on some comments made in
Moynihan v. Rowe
, 2018 ONSC 502, at paras. 37-38, that a statement of claim need not
    draw a distinction between the conduct of employees and that of the employer,
    and where it does not, it is always open to the defendant to seek particulars.

[19]

Those comments were made in
obiter.
The requirement for a
    proper pleading remains that set out in r. 25.06(1). As applied to a tort
    claim, the rule requires a plaintiff to set out the materials facts specific to
    each defendant that support a claim against the defendant that it owed a duty
    of care to the plaintiff, and by reason of specified conduct, breached that
    duty and caused injury or harm to the plaintiff. As this court noted in
Sataur
, at para. 5, in re-instating the
    statement of claim that had been struck out, in that case the plaintiff had
    pleaded specific acts of negligence against each individual defendant for
    which each may be personally liable: see also,
ADGA
    Systems International Ltd. v. Valcom Ltd.
, [1999]
    O.J. No. 27 (C.A.), at para. 39.

[20]

Since
    Mr. Burns statement of claim failed to plead specific acts of bad faith,
    negligence or negligent misrepresentation by Ms. McLean or Ms. Oslizlok, the
    motion judge did not err in concluding that Mr. Burns has not pleaded a claim
    against the individual employee defendants that complied with the jurisprudence
    governing personal liability in tort for the acts of an employee done in the
    course of employment: at para. 35.

[21]

However,
    the motion judge did err in concluding that Mr. Burns cannot plead such a
    claim against the employees: at para. 35. That conclusion was premature. The
    deficiencies in Mr. Burns pleading might well be cured by an appropriate
    amendment had the motion judge granted him leave to amend.

[22]

The
    motion judge denied Mr. Burns leave to amend but gave no reasons for doing so. As
    this court has stated, leave to amend should be denied only in the clearest of
    cases, especially where the deficiencies in the pleading can be cured by an
    appropriate amendment and the other party would not suffer any prejudice if
    leave to amend was granted:
Tran v. University of Western Ontario
,
    2015 ONCA 295, at para. 26;
South Holly Holdings Limited v. The
    Toronto-Dominion Bank
, 2007 ONCA 456, at para. 6.

[23]

In
    the absence of reasons explaining why he denied leave to amend, the discretionary
    order of the motion judge is not entitled to deference.

[24]

Here,
    there was no reason to deny Mr. Burns leave to amend his statement of claim as
    an appropriate amendment might cure the pleadings deficiency and there is no
    suggestion that the respondents would suffer litigation prejudice by granting
    leave to amend. Although we do not interfere with that part of the order of the
    motion judge striking out the statement of claim as against Ms. McLean and Ms. Oslizlok,
    we grant Mr. Burns leave to amend.

[25]

Given
    the deficiencies in Mr. Burns statement of claim, it is not necessary to
    resolve the dispute between the parties as to whether alleged bad faith conduct
    by the employees of an insurance company constitutes a distinct actionable
    legal wrong that can be pleaded against the employees in their personal
    capacities. The resolution of that dispute, if required, must await Mr. Burns
    amending his statement of claim to properly plead individualized claims against
    Ms. McLean and Ms. Oslizlok.

DISPOSITION

[26]

Accordingly,
    we allow the appeal to the extent of varying para. 1 of the order to read:

THIS COURT ORDERS that the Statement of Claim shall be struck
    as against the Defendants, Lauren McLean and Anna Oslizlok, with leave to
    amend.

[27]

If the parties are unable to resolve the matter
    of costs of this appeal and Mr. Burns wishes to pursue that matter, he shall
    file written cost submissions to a maximum of three pages, with the Court,
    within seven days of the date of release of these reasons. The respondents shall
    have a further seven days within which to file responding submissions, such
    submissions not to exceed three pages in length.

E.E.
    Gillese J.A.

David
    Brown J.A.

M. Jamal
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Burns v. RBC Life Insurance
    Company, 2020 ONCA 377

DATE: 20200610

DOCKET: C67837

Gillese, Brown and Jamal JJ.A.

BETWEEN

Randolph
    Burns

Plaintiff (Appellant)

and

RBC Life Insurance Company,
    Lauren McLean and Anna Oslizlok

Defendants (Respondents)

Deanna S. Gilbert, for the appellant

Barry G. Marta, for the respondents

Heard: In-writing

On
    appeal from the order of Justice Paul Perell of the Superior Court of Justice,
    dated December 3, 2019, with
reasons reported at 2019
    ONSC 6977
.

COSTS ENDORSEMENT

[1]

By
reasons for decision dated June 4, 2020, we
    allowed the appeal to the extent of granting the appellant leave to amend his
    Statement of Claim as against the individual respondents, Ms. McLean and Ms.
    Oslizlok. As the parties were unable to resolve the issue of costs, we heard
    brief cost submissions by teleconference on June 8, 2020.

[2]

The appellant seeks partial indemnity costs in the amount of $12,500.
    The respondents submit that they should be awarded partial indemnity costs in
    the amount of approximately $7,170 and no change should be made to the costs
    awarded by the motion judge.

[3]

In our view, success on the appeal was divided: the order of the motion
    judge striking out the Statement of Claim as against the individual respondents
    was not set aside but the order was varied to grant the appellant leave to
    amend his claim. Accordingly, we order no costs of the appeal.

[4]

The appellant sought to appeal the costs awarded by the motion
    judge. We reduce the costs awarded below from $6,000 to $3,000 payable only to
    RBC Life Insurance Company to reflect its success on the discovery-related part
    of the motion.

E.E.
    Gillese J.A.

David
    Brown J.A.

M.
    Jamal J.A.