In Gaur v. Datta, 2015 ONCA 151 the Ontario Court of Appeal allowed an appeal from a Rule 21.01(1)(b) motion and set aside an order striking a claim for disclosing no reasonable cause of action. The Court noted that neither of the two alleged causes of action were made out in the statement of claim, however, read "generously" together with the particulars and documents incorporated by reference in the pleading, all required elements were disclosed.
The Parties and Allegations
The appellant bought a claim against three individuals and a company at which the appellant had previously worked. Two of the individuals were directors of the company. The claim was grounded in defamation and intentional interference with economic relations.
At the heart of the defamation claim were three emails sent to third parties containing defamatory words: two sent by one defendant, Dipti, and a third sent by a second defendant, Upti. A third defendant, Igne, did not send an email but was alleged to have "acted in concert" with the parties who sent the emails. The respondents agreed that the pleading sufficiently disclosed a defamation claim against Dipti, but argued it failed to disclose a claim as against Upti, Igne or the company.
The motion judge ordered that the claim be struck as against Upti, Igne, and the company for failing to disclose a reasonable cause of action. As noted by the Court of Appeal, the motion judge "appears to have examined the emails as evidence, weighing the inferences that could be drawn from their contents and then concluding there was no allegation or fact to support the pleadings that the respondents acted 'in concert' with Dipti and that the respondents could not be held accountable for the [d]efamatory [w]ords in the Dipti emails."[para.19]
The Court of Appeal noted that under a Rule 21.01(1)(b) motion (a motion to strike out a pleading for disclosing no reasonable cause of action) it must be "plain and obvious" that no reasonable cause of action has been disclosed and that the legal principles applicable are as follows:
1) No evidence is admissible;
2) Facts as pleaded are assumed to be true unless patently ridiculous or incapable of proof;
3) Particulars can be considered as part of the pleading; and
4) The Court is entitled to review the documents referred to in the pleadings.[para.5]
The Court of Appeal agreed that the allegations that the respondents acted in concert with Dipti were "bald" and were conclusions of law, not supported by material fact in the pleading. However, the analysis needed to go further: the Court was required to turn to the particulars to see whether material facts were plead. Of note to the Court of Appeal was the fact that the respondents' counsel had made "a number of demands for particulars over the course of several months, which included increasingly more pointed requests for particulars as to how the respondents acted in concert". The appellants provided particulars which included additional material facts relevant to the respondents' participation in the publication of the emails.
So, rather than examine the emails as evidence and weighing the inferences that could be drawn from them, a proper approach would have been to review "the emails to determine whether what was pleaded (as enhanced by the particulars) was 'patently ridiculous or incapable of proof'" [para.19]. The Court of Appeal concluded that the allegations in the particulars were capable of an interpretation that the respondents acted in concert with Dipti and that the facts as pleaded were neither "patently ridiculous nor incapable of proof".[para.20]
As for the claim of intentional interference with economic relations, the Court of Appeal also agreed that the statement of claim did not address the essential elements of the tort. However, the Court concluded that "on a generous reading of the pleading together with the particulars" all elements of the tort were disclosed and the allegations made were neither incapable of proof nor patently ridiculous. [paras. 30 & 32]
Rule 21 Motions - To Bring or Not to Bring?
I am always a little wary of bringing a Rule 21 motion. As judges are reluctant to dismiss an action on its pleadings, it is a high hurdle to clear and if the claim is struck, leave to amend is usually allowed. Depending on how deficient the claim is, I have to wonder what you are gaining by bringing such a motion. Now the plaintiff has had a chance to make his or her pleading better, your client's money and time has been spent on a motion, and you are back at square one. Unless the claim is truly inadequate, you have to ask, based on the circumstances of the case, is it better to just keep the original pleading? At the very least the deficiencies should be made clear to the other side and amendments requested before a motion is brought.
The case also provides a helpful overview of the elements of the torts of defamation and intentional interference with economic relations. The full decision can be found here: Gaur v. Datta 2015 ONCA 151.
Erin C. Cowling is a freelance lawyer, entrepreneur, legal career consultant researcher & writer, and President and Founder of Flex Legal Network Inc., a network of freelance lawyers.