



COURT OF APPEAL FOR ONTARIO

CITATION: Gaur v. Datta, 2015 ONCA 151

DATE: 20150312

DOCKET: C59142

Rouleau, van Rensburg and Pardu JJ.A.

BETWEEN

Pradeep
    Gaur, Apt Flow Technologies Inc.

and 2081706 Ontario Inc.

Plaintiffs (Appellants)

and

Dipti
    Datta,
Utpal Datta, Inge Datta

and M&I Power
    Technology Inc.

Defendants (
Respondents
)

J. David Keith and Evan Moore, for the appellants

Constance Olsheski, for the respondents

Heard: February 6, 2015

On appeal from the order of Justice Michael G. Emery of
    the Superior Court of Justice, dated June 26, 2014.

van Rensburg J.A.:

[1]

This is an appeal from an order dismissing an action against the
    respondents under rule 21.01(1)(b) of the
Rules of Civil Procedure
.
    For the reasons that follow I would allow the appeal. In my view, the motion
    judge erred in dismissing the action against the respondents. I would permit the
    appellants to proceed with their action against the respondents, claiming both defamation
    and intentional interference with economic relations, with leave to amend their
    pleadings as set out below.

A.

Background

[2]

The appellants  Pradeep Gaur and two companies of which he is a
    principal  are defendants to an action in the Superior Court commenced by
    M&I Power Technology Inc. (M&I Power) in 2012 (the First Action).
    That action, alleging breach of contract and breach of fiduciary duty, was
    commenced after the termination of Pradeep Gaurs employment with M&I Power.

[3]

In 2013, the appellants commenced Action No. CV-13-1230-00 in the
    Superior Court against Dipti Datta and the respondents (the Second Action).
    The respondent M&I Power is the plaintiff in the First Action. The
    respondents Utpal Datta and Inge Datta are current directors of M&I Power. Dipti
    Datta (who did not move to dismiss the action, and is therefore not a
    respondent to this appeal) is a former director and officer of M&I Power.

[4]

In the Second Action the appellants claim damages for defamation and
    intentional interference with economic relations. Central to the action are
    three emails. The first two (dated July 5, 2012 and July 11, 2012) were
    authored by Dipti Datta. The third (dated March 22, 2013) was authored by Utpal
    Datta. It is the motion judges dismissal of the Second Action against the
    respondents under rule 21.01(1)(b) that forms the subject of this appeal.

[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] O.J. No. 1137 (C.A.), 79 O.R. (3d) 721,
    at para. 3;
McCreight v. Canada
,

2013 ONCA 483, 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.

[6]

The appellants contend that the motion judge erred by dismissing the claim
    against the respondents after making findings of fact. They assert that the
    amended statement of claim, when read with the particulars and the emails (which
    are incorporated by reference in the pleadings), discloses proper claims
    against the respondents sounding in defamation and intentional interference
    with economic relations.

[7]

I consider the appellants submissions regarding each cause of action in
    turn.

B.

The defamation claims

[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 plaintiffs 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, 116 O.R. (3d) 280, at para. 39;
Grant v. Torstar
    Corp.
, 2009 SCC 61, [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 itA 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.

[11]

In
    this case, the alleged defamation occurred in the three emails referred to
    above: two authored by Dipti Datta and a third by Utpal Datta. The amended
    statement of claim pleads the following:

·

all of the defendants (including the respondents) falsely and
    maliciously published the words set out in the paragraph (defined as the
    Defamatory Words) (para. 7);

·

the Defamatory Words were published by email correspondence to
    certain named third parties (para. 8). It is acknowledged that this pleading
    refers to the two emails authored by Dipti Datta;

·

Utpal Datta published additional Defamatory Words in a third
    email and sent the email to certain named third parties, associated with
    potential clients of the plaintiffs (paras. 8a and 8b);

·

the meaning of the Defamatory Words (para. 10);

·

the defendants published the Defamatory Words knowing they were
    false or with careless disregard for their truth (para. 11); and

·

the plaintiff (presumably, Pradeep Gaur) has been injured and
    suffered damages for which the defendants are liable (paras. 12-14).

[12]

Paragraph
    15 of the amended statement of claim asserts that the respondents acted in
    concert with Dipti Datta to publish the Defamatory Words, and that Utpal Datta
    published some of the Defamatory Words directly. Paragraph 17 pleads, in the alternative,
    that Dipti Datta, when he published the Defamatory Words, was acting as Utpal
    and Inge Dattas agent. Paragraph 18 pleads, in the further alternative, that
    Dipti Datta acted on behalf of M&I Power when he published the Defamatory Words.

[13]

Although
    these paragraphs appear in the pleading under the heading Intentional
    Interference with Economic Relations, the respondents acknowledge that,
    reading the amended claim broadly, the pleadings of agency and acting in
    concert also apply to the defamation claims.

(1)

Dipti Dattas Emails

[14]

The
    respondents accept that the pleading is sufficient to disclose a defamation
    claim against Dipti Datta. The principal issue is whether the action regarding Dipti
    Dattas emails can proceed against the respondents. This depends on whether the
    pleading is sufficient with respect to their participation, authorization or
    otherwise, to make them liable for the publication of the emails.

[15]

The
    allegations that the respondents acted in concert with Dipti Datta and that he
    was their agent, are bald. These are conclusions of law, not supported by
    material facts:
Williams v. Canon Canada Inc.
, 2011 ONSC 6571, [2011]
    O.J. No. 5049, at paras. 217-220, affd 2012 ONSC 4692, [2012] O.J. No. 3120
    (Div. Ct.);
Durling v. Sunrise Propane Energy Group Inc
., 2012 ONSC
    4196, [2012] O.J. No. 3408, at para. 75.

[16]

However,
    this is not the end of the analysis. One must turn to the particulars to see
    whether material facts have been pleaded. The respondents counsel 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. Eventually, in particulars provided on July 26,
    2013, the appellants stated as follows:

Dipti Datta wrote the words in an email in or around July 2012.
    In addition, Utpal Datta told a contractor (Ilia) that Mr. Gaur was
    incompetent. Mr. Utpal Datta, at an M&I Power Technology Inc. meeting with
    Inge Datta present, told Mr. Gaur that should he leave the company, they would
    do what they could to blacklist him in the industry. Utpal Datta and Inge Datta
    requested the involvement of Dipti Datta who uttered the Defamatory Words.
    Utpal Datta also provided Dipti Datta with the contact information of business
    associates in order that Dipti Datta might contact them to undermine Mr. Gaurs
    reputation.

The threats to litigate were made by Dipti Datta in or around
    July 2012 via email to Triton Synergies. M&I Power and Utpal Datta provided
    the information to Dipti Datta in order that he act on behalf of them in respect
    to Mr. Gaur.

[17]

These
    particulars provide additional material facts relevant to the respondents
    participation in the publication of the Dipti Datta emails: Utpal Datta, at an
    M&I Power meeting with Inge Datta present, told Pradeep Gaur that should he
    leave the company, they would do what they could to blacklist him in the
    industry; Utpal and Inge Datta requested the involvement of Dipti Datta, who
    uttered the Defamatory Words; Utpal Datta provided Dipti Datta with the contact
    information of business associates in order that Dipti Datta might contact them
    to undermine Pradeep Gaurs reputation; and M&I Power and Utpal Datta
    provided Dipti Datta information in order for him to threaten litigation in an email
    to Triton Synergies on their behalf.

[18]

Further,
    paragraphs 8a and 8b of the amended claim plead that Utpal Datta sent his own,
    similarly defamatory email and that the consistency in words used in the emails
    indicate[s] a concerted and collective effort by the defendants. I disagree
    with the motion judges observation that the third email, written by Utpal
    Datta, must be considered in isolation from the emails written by Dipti Datta. Reading
    the pleading generously, the inclusion of consistent Defamatory Words in Utpal
    Dattas email is a material fact supporting the allegation that the respondents
    acted in concert with respect to the Dipti Datta emails.

[19]

The
    motion judge was entitled to review the emails to determine whether what was
    pleaded (as enhanced by the particulars) was patently ridiculous or incapable
    of proof. Instead, he 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 Datta (para. 29) and that the
    respondents could not be held accountable for the Defamatory Words in the Dipti
    Datta emails (para. 32).

[20]

In
    my view, the allegations in the particulars, which are based on the words
    contained in the emails, are capable of an interpretation that the respondents
    acted in concert with Dipti Datta. The facts pleaded are neither patently ridiculous
    nor incapable of proof. This of course does not mean that they will necessarily
    be proven, only that on a Rule 21 motion sufficient material facts have been
    pleaded to support an action in defamation against the respondents in relation
    to the Dipti Datta emails.

(2)

Utpal Dattas Email

[21]

The
    appellants allege that Utpal Datta sent a similarly defamatory email on March
    22, 2013. The motion judge concluded that since only Utpal Datta sent the
    email, it gives rise to no claim against Inge Datta or M&I Power. He also concluded
    that the amended statement of claim did not contain sufficient material facts
    to support this pleading. He dismissed the claim, but without prejudice to its
    being asserted against Utpal Datta by way of counterclaim in the First Action. I
    disagree with the motion judge. In my view, the pleading is sufficient.

[22]

Paragraphs
    8a and 8b of the amended statement of claim plead all of the necessary elements
    of the tort of defamation. The paragraphs plead the words that are alleged to
    have been defamatory, their publication in an email by Utpal Datta, and specifically
    identify two recipients of the email. It is alleged that the consistent use of
    the Defamatory Words indicates a concerted and collective effort by the
    respondents. With respect to the claim against M&I Power and Inge Datta, the
    pleading is sufficient, when considered in the context of the entire pleading
    as well as the particulars provided.

C.

the intentional interference with economic relations claim

[23]

The
    motion judges reasons suggest he struck the appellants claim against the
    respondents for intentional interference with economic relations under rule
    21.01(1)(b), and that he did so for two reasons. First, the amended statement
    of claim failed to disclose material facts addressing the torts requisite
    elements. Second, as with the defamation claims, the pleading disclosed
    insufficient material facts to assert a claim premised on concerted action
    between the respondents and Dipti Datta.

[24]

For
    the reasons already discussed, I do not agree with the second conclusion. I
    turn to consider whether all of the required elements of the tort have been
    pleaded.

[25]

In
A.I. Enterprises Ltd. v. Bram Enterprises Ltd
., 2014 SCC 12, [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 Gaurs 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 Gaurs 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] 2
    S.C.R. 959, [1990] S.C.J. No. 93, at paras. 33, 36;
Knight v. Imperial
    Tobacco Canada Ltd
., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17. Accordingly,
    I would set aside the motion judges 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.

D.

Alternative Bases for Relief

[33]

The
    motion judge indicated that, while it was unnecessary to address the other
    bases for the relief sought by the respondents under rules 25.11, 25.06(1) and
    21.01(3)(d), he would have struck certain paragraphs of the amended statement
    of claim as frivolous, vexatious or an abuse of process.

[34]

The
    motion judge referred to authority that in the absence of material fact, an
    action can be dismissed as frivolous, vexatious or an abuse of process of the
    court: see, for example,
George v. Harris
, [2000] O.J. No. 1762
    (S.C.), at para. 20. Given his finding that the pleading was bald and lacked
    sufficient material facts to establish concerted action between the respondents
    and Dipti Datta, the motion judge would have struck any claims for defamation
    and intentional interference with economic relations premised on such allegations
    as frivolous, vexatious or an abuse of process.

[35]

As
    already explained, I disagree with this characterization. Accordingly, I also
    disagree with the conclusion that the pleadings should be struck on this
    alternative basis.

E.

leave to amend

[36]

While
    not strictly necessary for the survival of the action in defamation against the
    respondents at the pleadings stage, I would grant the appellants leave to amend
    the amended statement of claim to incorporate the material facts set out in the
    particulars in relation to agency and acting in concert.

[37]

With
    respect to the elements of intentional interference with economic relations, as
    I have indicated, the pleading is deficient, but the particulars provide the
    necessary elements of the cause of action. It is therefore necessary for the
    appellants to amend the claim for intentional interference with economic
    relations so that the various facts contained in the particulars are brought
    into the pleading and the elements of the tort are clearly set out. An amended
    pleading shall be delivered within 30 days, and the respondents shall have 30
    days thereafter to deliver their statement of defence.

F.

conclusion

[38]

For
    these reasons I would allow the appeal, set aside the order dismissing the
    action against the respondents, and grant leave to amend the amended statement
    of claim.

[39]

Since
    the appellants were successful in the appeal, I would set aside the motion
    judges order for costs and award the appellants costs of the motion in the sum
    of $10,000, as well as costs of the appeal in the further sum of $10,000, with
    both amounts inclusive of disbursements and applicable taxes.

Released: (KMvR) MARCH 12, 2015

K.
    van Rensburg J.A.

I
    agree Paul Rouleau J.A.

I
    agree G. Pardu J.A.


