



COURT OF APPEAL FOR ONTARIO

CITATION: Abbasbayli v. Fiera Foods Company,
    2021 ONCA 95

DATE: 20210216

DOCKET: C66948

van Rensburg, Hourigan and Brown
    JJ.A.

BETWEEN

Ismail Abbasbayli

Plaintiff (Appellant)

and

Fiera Foods Company

Bakery Deluxe Company

2168587 Ontario Ltd.

David Gelbloom and

Boris Serebryany

Defendants (Respondents)

Nikolay Y. Chsherbinin and Shawn Quigg,
    for the appellant

Matthew P. Sammon and S. Jessica Roher,
    for the respondents

Heard: November 17, 2020 by
    video conference

On appeal from the order of Justice Andra
    Pollak of the Superior Court of Justice, dated December 16, 2019, with reasons
    reported at 2019 ONSC 948, and from the costs order, dated June 24, 2019, with
    reasons reported at 2019 ONSC 2905.

van Rensburg J.A.:

A.

INTRODUCTION

[1]

The appellant is pursuing an action arising out of the termination of
    his employment against the respondents: three corporations alleged to have been
    his common employer and two individual corporate directors. In addition to
    claiming wrongful dismissal damages and punitive damages, the appellant claims
    against the individual respondents unpaid vacation pay under s. 81 of the
Employment
    Standards Act, 2000,
S.O. 2000, c. 41

(ESA) and s. 131 of Ontarios
Business Corporations Act
, R.S.O. 1990, c. B.16 (OBCA), and relief from
    oppression under s. 248 of the OBCA.

[2]

The respondents brought a motion to strike certain claims and paragraphs
    of the statement of claim under rr. 21.01(1)(b) (for failure to disclose a reasonable
    cause of action), 25.06 (as pleading evidence) and 25.11 (as irrelevant and
    inflammatory) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.
    The motion judge struck certain pleadings without leave to amend and other
    paragraphs with leave to amend. She awarded costs of $14,569.52 against the
    appellant.

[3]

The appellant asserts that the motion judge erred in striking his s. 81
    ESA and s. 131 OBCA claims at paras. 56-61 of the statement of claim without
    leave to amend, and his s. 248 OBCA claim in the same paragraphs and paras.
    14-23 and 40 of the statement of claim with leave to amend. He argues that none
    of the paragraphs ought to have been struck, with or without leave to amend. He
    also seeks to appeal the costs award.

[4]

For the reasons that follow I would allow the appeal, but only in part.
    I would uphold the motion judges striking of the appellants s. 81 ESA claim
    without leave to amend and her striking of the s. 248 OBCA claim with leave to
    amend. I would set aside the motion judges order striking the appellants s.
    131 OBCA claim without leave to amend, as well as her order striking paras.
    14-23 of the statement of claim with leave to amend. I would vary her order
    with respect to para. 40, striking only the text at para. 40(iii), and not
    requiring any other amendment to that paragraph. I would also vary the costs
    award in view of the outcome of the appeal.

B.

THE STATEMENT OF CLAIM

[5]

The appellant commenced an action in August 2018 with respect to the
    termination of his employment for cause on March 26, 2018. He alleges that the
    corporate respondents are manufacturers of frozen dough and fully baked bakery
    products and his common employer (which he refers to together as Fiera), and
    that each of the individual respondents was a director and the directing mind
    and will of one or more of the corporate respondents.

[6]

According to the statement of claim, the appellant began working as a
    security guard at Fiera in 2002, moved to the role of boxing line operator, then
    to leadhand, and eventually back again to boxing line operator, the position he
    was in when he was fired. He pleads that his employment was terminated
    allegedly for cause on March 26, 2018, after he was accused of punching a
    colleagues time card. The appellant pleads that the time-theft allegation was
    deliberately false, that Fiera failed to conduct a proper investigation, and
    that he was dismissed as a reprisal because he had raised concerns about
    manufacturing, health and safety, and storage requirement violations by Fiera,
    and he had taken steps to encourage employees to organize a labour union.

[7]

The appellant seeks wrongful dismissal damages, moral damages arising
    from the bad faith manner of dismissal, and punitive damages. At paras. 56-61
    of the statement of claim (under the heading Directors Liability), he
    asserts claims against the two individual respondents, including under s. 131
    of the OBCA, s. 81 of the ESA, and s. 248 of the OBCA.

C.

THE MOTION JUDGES REASONS

[8]

The respondents moved under r. 21.01(1)(b) to strike certain paragraphs
    of the statement of claim, asserting that they did not disclose a reasonable cause
    of action for oppression under s. 248 of the OBCA or a claim for unpaid wages
    under the OBCA and the ESA. They moved to strike other paragraphs as pleading
    evidence contrary to r. 25.06(1) and containing irrelevant and vexatious
    allegations contrary to r. 25.11(b).

[9]

The motion judge first dealt with the claims against the individual
    respondents under s. 131 of the OBCA and s. 81 of the ESA, which are pleaded at
    paras. 56-61 of the statement of claim. The motion judge observed that under
    these statutory provisions, [t]he directors of a corporation may be held
    jointly and severally liable for unpaid wages in specific circumstances if
    certain preconditions are met: at para. 6.

[10]

She
    noted that s. 131 of the OBCA only provides for a directors liability for
    debts for services performed and vacation pay accrued and not for severance
    pay, termination pay, or damages for wrongful dismissal. The respondents had
    argued that the appellant did not plead that the directors were liable for
    debts for services performed or vacation pay accrued, and the motion judge concluded
    that he did not plead the material facts necessary to establish a cause of
    action under s. 131 of the OBCA. As for the claim under s. 81 of the ESA, the
    motion judge observed that the appellant had pleaded that the directors were
    liable for unpaid vacation pay under this provision, however, no such relief
    had been claimed in the prayer for relief, and the appellant had not included
    any material facts addressing any of the statutory requirements to establish
    the directors liability under this section. Accordingly, the motion judge
    concluded that it was plain and obvious that the s. 131 OBCA and s. 81 ESA
    claims had no reasonable prospect of success, and she struck these claims
    without leave to amend.

[11]

The
    motion judge then dealt very briefly with the other paragraphs of the statement
    of claim challenged by the respondents. After observing that paras. 14-23 and
    40 of the statement of claim contained predominantly evidence, she struck those
    pleadings. The respondents had submitted that these paragraphs, as well as
    paras. 56-61, contained irrelevant facts and inflammatory attacks on the
    corporate respondents integrity. She also referred to the respondents
    submission that these paragraphs were included to embarrass them rather than to
    advance the action in any meaningful way, and she struck the pleadings as
    violating r. 25.11. The motion judge went on to grant the appellant leave
    to amend these paragraphs, observing that the respondents had provided the
    appellant with a roadmap of what was required to fix the pleadings.

[12]

The
    parties returned to the motion judge as her reasons had not addressed the motion
    to strike the appellants claim under s. 248 of the OBCA. In a supplementary
    endorsement the motion judge noted the respondents arguments: that the
    appellant did not have standing to make a claim under s. 248, that he had not
    pleaded the necessary material facts to support the claim, and that he had not
    pleaded his reasonable expectations or that the conduct of the directors
    affected his ability to recover judgment against the corporate defendants. The
    motion judge struck the s. 248 OBCA claim with leave to amend, again stating
    that the respondents had provided the appellant with a roadmap of what was
    required to fix the pleading.

[13]

In
    a separate endorsement, after receiving the parties written submissions, the
    motion judge awarded costs of the motion to the respondents, fixed at
    $14,569.52.

D.

JURISDICTION to hear the appeal

[14]

As
    a preliminary issue, the respondents raise two objections to this courts
    jurisdiction to deal with certain issues on this appeal. First, they assert
    that the order striking the s. 131 OBCA claim is an order made under the OBCA
    which, pursuant to s. 255 of the OBCA, must be appealed to the Divisional
    Court. Second, they say that the motion judges order striking pleadings in the
    statement of claim with leave to amend can only be appealed to the Divisional
    Court, with leave, pursuant to s. 19(1)(b) of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43 (CJA), as these parts of the order are interlocutory.

[15]

It
    is not always clear whether an order dealing with an OBCA claim at an early
    stage is an order made under the OBCA. The question is whether the court, in
    making the order, was exercising a power sufficiently close to a legislative
    source under the OBCA or whether the source of authority is the common law or
    equity as opposed to the OBCA: see
Ontario Securities Commission v.
    McLaughlin
, 2009 ONCA 280, 248 OA.C. 54, at para. 16;
Buccilli v.
    Pillitteri
, 2016 ONCA 775, 410 D.L.R. (4th) 480, at para. 19. In
McLaughlin
OConnor A.C.J.O. held that a final order
    dismissing a motion to amend a statement of defence to plead certain defences
    against an oppression claim was such an order, such that the proper route of
    appeal was to the Divisional Court. In
Buccilli
,
    a panel of this court concluded that an order requiring certain interim payments
    to be made pending a later trial to determine the value of the plaintiffs declared
    interests and the appropriate equitable and monetary remedies under the [OBCA]
    was rooted in a common law or equitable claim, such that s. 255 of the OBCA did
    not apply.

[16]

It
    is unnecessary to determine whether the part of the motion judges order that dismissed
    the appellants s. 131 OBCA claim, standing alone, is an order made under the
    OBCA and appealable to the Divisional Court under s. 255. Section 6(2) of the
    CJA permits this court to hear and determine an appeal that lies to the
    Divisional Court if an appeal in the same proceeding lies to and is taken to
    the Court of Appeal. This was an alternative basis for this court having taken
    jurisdiction in
Buccilli
, and it is equally
    available in the present case where there is also an appeal from the final
    order striking the s. 81 ESA claim.

[17]

Section
    6(2) also permits this court to take jurisdiction over the appeal of the
    interlocutory aspects of the order of the motion judge because there are
    aspects of the order that are appealable to this court. The motion judge struck
    certain claims without leave to amend (a final order) and other claims and
    paragraphs with leave to amend (an interlocutory order). This court can take
    jurisdiction under s. 6(2) where the issues relating to the final and
    interlocutory aspects of the order are so interrelated that once the issues
    arising from the final aspects of the order were before this court, leave would
    inevitably have been granted on the issues arising from the interlocutory
    portions: see
Lax v. Lax
(2004), 239 D.L.R. (4th) 683 (Ont. C.A.), at
    para. 9;
Azzeh v. Legendre
, 2017 ONCA 385, 135 O.R. (3d) 721, at
    paras. 25-26, leave to appeal refused, [2017] S.C.C.A. No. 289;
2099082
    Ontario Limited v. Varcon Construction Corporation
, 2020 ONCA 202, 97
    C.L.R. (4th) 26, at para. 17; and
Cooper v. The Laundry Lounge, Inc.
,
    2020 ONCA 166, at para. 2. This is such a case. The order under appeal arose
    out of a motion to address the sufficiency of a single pleading  the statement
    of claim in a wrongful dismissal action.

[18]

Accordingly,
    I would not give effect to the respondents challenge to this courts jurisdiction
    over the appeal of certain aspects of the motion judges order, and I will now
    proceed to consider and determine all of the issues raised in this appeal.

E.

DISCUSSION

[19]

At
    issue on this appeal is whether the motion judge erred in striking the s. 131
    OBCA and s. 81 ESA claims against the individual respondents without leave to
    amend and the s. 248 OBCA claim with leave to amend under r. 21.01(1)(b), and
    in striking with leave to amend paras. 14-23 and 40 of the statement of claim as
    pleading evidence (contrary to r. 25.06(1)) and as inflammatory and irrelevant
    (under r. 25.11(b)).

(1)

The Order Striking Claims Under Rule 21.01(1)(b)

[20]

I
    consider first the motion judges order striking the s. 81 ESA and the s. 131
    OBCA claims without leave to amend and the s. 248 OBCA claim with leave to
    amend. The motion judge struck these claims under r. 21.01(1)(b) for failure to
    disclose a reasonable cause of action. The test is whether, assuming that the
    facts as stated can be proved, and reading the pleading generously with
    allowances for drafting deficiencies, it is plain and obvious that an action or
    a claim within the action will not succeed: see
Hunt v. Carey Canada Inc.
,
    [1990] 2 S.C.R. 959, at pp. 979-80;
Wellington v. Ontario
, 2011 ONCA
    274, 105 O.R. (3d) 81, at para. 14, leave to appeal refused, [2011] S.C.C.A.
    No. 258;
Grand River Enterprises Six Nations Ltd. v.
    Attorney General (Canada)
, 2017 ONCA 526, at paras. 15-16. Striking
    pleadings under this rule serves to [weed] out the hopeless claims and [ensure]
    that those that have some chance of success go on to trial: see
R. v. Imperial Tobacco Canada Ltd.
, 2011 SCC 42, [2011]
    3 S.C.R. 45, at para. 19. A pleading in a statement of claim will be deficient
    under this rule where it fails to plead material facts required to sustain a
    particular cause of action: see
Apotex Inc. v. Eli Lilly
    and Co.
, 2015 ONCA 305, 125 O.R. (3d) 561, at para. 21, leave to
    appeal refused, [2015] S.C.C.A. No. 291. The court should always consider
    whether the deficiency can be addressed through an amendment to the pleading: see
Tran v. University of Western Ontario
, 2015
    ONCA 295, at paras. 26-27.

[21]

As
    I will explain, in my view the motion judge was correct to have struck the
    claim under s. 81 of the ESA without leave to amend as it is plain and obvious that
    the claim could not succeed, and no amendment could have rectified the pleading
    in the circumstances of this case. However, the motion judge ought not to have
    struck the s. 131 OBCA claim without leave to amend. A claim for unpaid
    vacation pay under this section could be asserted by the appellant against the
    individual respondents, with the appropriate amendments to the pleading. Finally,
    the motion judge did not err in striking the s. 248 claim with leave to amend,
    as the appellant did not plead the necessary material facts to support the
    claim, and the respondents do not cross-appeal the motion judges refusal to
    strike the s. 248 claim without leave to amend.

(a)

The Section 81 ESA Claim

[22]

Section
    81 of the ESA provides that the directors of an employer are liable for an
    employees unpaid wages (which includes vacation pay) in certain circumstances
    enumerated in ss. 81(1)(a) through (d). Section 81(1) is found under Part XX of
    the ESA entitled Liability of Directors, and provides as follows:

81(1) The directors of an employer are jointly and
    severally liable for wages as provided in this Part if,

(a) the employer is insolvent, the employee has
    caused a claim for unpaid wages to be filed with the receiver appointed by a
    court with respect to the employer or with the employers trustee in bankruptcy
    and the claim has not been paid;

(b) an employment standards officer has made an
    order that the employer is liable for wages, unless the amount set out in the
    order has been paid or the employer has applied to have it reviewed;

(c) an employment standards officer has made an
    order that a director is liable for wages, unless the amount set out in the
    order has been paid or the employer or the director has applied to have it
    reviewed; or

(d) the Board [the Ontario Labour Relations Board]
    has issued, amended or affirmed an order under section 119, the order, as
    issued, amended or affirmed, requires the employer or the directors to pay
    wages and the amount set out in the order has not been paid.

[23]

A
    directors liability for unpaid wages does not include severance or termination
    pay pursuant to s. 81(3), but it does include liability for vacation pay as
    provided for under the ESA or an employment contract for up to 12 months: ss. 81(3),
    (4) and (7). The appellant confirms that the only unpaid wages he is seeking
    from the individual respondents are three weeks vacation pay.

[24]

The
    appellant submits that the motion judge erred when she struck his s. 81 ESA
    claim because a claim for vacation pay was not included in the prayer for
    relief in para. 1 of the statement of claim. He argues that he ought to have
    been granted leave to amend to assert such a claim in his prayer for relief.
    The respondents contend that the motion judge properly struck the s. 81 ESA
    claim because the appellant did not and could not plead the existence of one of
    the necessary preconditions for a claim under that section.

[25]

The
    appellant argues that he is entitled to make a claim against the individual
    respondents in this action under s. 81 of the ESA without the need for any of
    the conditions set out in s. 81(1). In asserting that his pleading is
    sufficient he relies on s. 81(2) of the ESA (which provides that proceedings
    against the employer under the ESA need not have been exhausted before
    proceedings may be commenced to collect wages from directors under Part XX of
    the ESA), as well as two cases:
Ricci v. Chippingham Financial Group Ltd.
,
    2017 ONSC 6958 and
Beadle v. Gudgeon Brothers Ltd.
, 2006 CanLII 2612
    (Ont. S.C.).

[26]

Neither
Ricci
nor
Beadle
provides
    a persuasive precedent for the appellant.
Ricci
involved
    the appeal of an order to produce certain documents on discovery, where the
    appeal judge rejected the argument that the Master could not order production
    of documents relevant to, among other things, a s. 81 claim, before one of the
    preconditions in s. 81(1) had been met. The case did not deal with the
    sufficiency of the plaintiff/respondents
pleading
of a s. 81 ESA claim.
    In
Beadle
the motion judge refused to strike a
    claim under s. 81 of the ESA, stating that the pleading disclose[d] a cause of
    action against the moving defendants because on the date the claim was issued,
    the plaintiff was owed unpaid wages and accrued vacation pay by the corporate
    defendant, however, there is no indication of what was specifically pleaded
    and there was no further analysis of the issue. The plaintiff had acknowledged
    in evidence (the court was also considering a summary judgment motion) that he
    had been paid his outstanding wages and vacation pay, so the s. 81 claim would
    not have succeeded in any event.

[27]

On
    a plain reading of the ESA, a director is only liable for an employees outstanding
    unpaid wages under s. 81 in certain prescribed circumstances. The employee must
    have filed a claim in the employers receivership or bankruptcy (under s.
    81(1)(a)); an employment standards officer must have made an order that the
    employer or a director is liable for the wages, which order is not under review
    (under ss. 81(1)(b) and (c)); or the Board must have issued, amended or
    affirmed such an order (under s. 81(1)(d)).

[28]

Section
    97(1) provides that a person who files a complaint under the ESA with respect
    to an alleged failure to pay wages may not commence a civil proceeding with
    respect to the same matter. In other words, employees are put to an election:
    to pursue their claims under the summary procedures provided for under the ESA (including
    the complaints procedure and orders by employment standards officers under ss.
    103, 106 and 107, with the potential for review under s. 116) or to pursue
    litigation in the courts. It is in this context that s. 81(2) must be
    understood, permitting an employee to pursue claims against both the employer
    and directors in proceedings
under Part XX of the ESA
, which provides
    for directors liability in certain circumstances.

[29]

Typically,
    a claim against a director for unpaid wages under s. 81 of the ESA will operate
    and be enforced within the statutory regime. Assuming without deciding that a
    s. 81 claim could be pursued in a wrongful dismissal action, the appellant
    failed to set out any material facts in the statement of claim that, if proved,
    could satisfy any of the statutory preconditions. In the circumstances of this
    case, this defect cannot be cured with an amendment. The appellants only
    proposed amendment is to amend para. 1 to specifically include this claim in
    the prayer for relief. He does not assert that any of the four preconditions
    exist nor does he propose to plead them; rather his position is simply that
    they are unnecessary. It is plain and obvious that the appellants s. 81 ESA
    claim cannot succeed and as such it was properly struck without leave to amend.

(b)

The Section 131 OBCA Claim

[30]

The
    appellant also seeks to pursue his claim for unpaid vacation pay against the individual
    respondents under s. 131 of the OBCA. Section 131 provides that the directors
    of a corporation are jointly and severally liable for up to six months wages
    and for accrued vacation pay for up to one year if (a) the corporation is sued
    in the action and execution is returned unsatisfied; or (b) the corporation is
    involved in certain insolvency proceedings and the employees claim has been
    proved:

131(1) The directors of a corporation are jointly and
    severally liable to the employees of the corporation for all debts not
    exceeding six months wages that become payable while they are directors for
    services performed for the corporation and for the vacation pay accrued while
    they are directors for not more than twelve months under the
Employment
    Standards Act
, and the regulations thereunder, or under any collective
    agreement made by the corporation.

(2) A director is liable under subsection (1) only
    if,

(a) the corporation is sued in the action against
    the director and execution against the corporation is returned unsatisfied in
    whole or in part; or

(b) before or after the action is commenced, the
    corporation goes into liquidation, is ordered to be wound up or makes an
    authorized assignment under the
Bankruptcy and Insolvency Act
(Canada), or a receiving order under that Act is made against it, and, in any
    such case, the claim for the debt has been proved.

[31]

The
    motion judge observed that the appellant failed to plead material facts in the
    statement of claim necessary to establish a cause of action against the
    defendant directors pursuant to s. 131 of the OBCA.

[32]

The
    respondents argue that s. 131 of the OBCA has no application to the appellants
    claim as framed in the statement of claim. The only place where s. 131 is mentioned
    is at para. 57, which pleads that the individual respondents are jointly and
    severally liable under s. 131 (and under s. 248) of the OBCA for the
    aforementioned claims, which would include all of the appellants claims for
    damages, including for compensation in lieu of reasonable notice. The
    respondents correctly point out that the scope of s. 131 is limited to a claim
    for unpaid wages and vacation pay.

[33]

In
    argument the appellant clarified that, although pleaded broadly, his intention
    is to claim only unpaid vacation pay against the directors under s. 131 of
    the OBCA. He says that the material facts were pleaded  that he was owed
    vacation pay at the date of termination and that it remained unpaid, and that
    he is entitled to make the claim at this time. He asserts that he is entitled
    to include the claim against the individual respondents in the action as this
    is contemplated by s. 131(2).

[34]

I
    do not agree with the motion judge that the material facts to support a claim
    against the individual respondents under s. 131 have not been pleaded. While
    the s. 131 pleading as it currently stands is too broad (the aforementioned
    claims would include claims for damages for wrongful dismissal that are not
    covered under s. 131), the appellant did plead in para. 58 of the statement of
    claim that he was entitled to three weeks vacation pay at the time of his
    dismissal and that this pay was not received. While the appellant only pleaded
    this in para. 58 as a claim under s. 81 of the ESA, the claim for vacation pay
    is a claim that he can assert against the individual respondents under s. 131
    of the OBCA. Further, it is not premature to assert the claim in this action:
    s. 131(2)(a) contemplates that the corporate employer will be sued in the
    same action as the director, although the director will not become liable to
    pay the accrued vacation pay until execution against the corporation is returned
    unsatisfied.

[35]

While
    the pleading is awkward, the appellant has pleaded the necessary material facts
    to support a claim against the individual respondents under s. 131 of the OBCA
    for unpaid vacation pay. The statement of claim discloses a reasonable cause of
    action under s. 131 of the OBCA and the claim should not have been struck. The
    appellant will however need to amend the pleading to clarify that his claim
    under that section against the individual respondents is limited to a claim for
    vacation pay.

(c)

The Section 248 OBCA Claim

[36]

The appellant is seeking relief under s. 248 of the OBCA against
    the individual respondents as part of his wrongful dismissal action. Section
    248 provides a complainant with a remedy for oppression  conduct that is oppressive
    or unfairly prejudicial to or that unfairly disregards the interests of any
    security holder, creditor, director or officer of the corporation. Complainant
    is defined at s. 245 as (
a) a registered holder or
    beneficial owner, and a former registered holder or beneficial owner, of a
    security of a corporation or any of its affiliates, (b) a director or an
    officer or a former director or officer of a corporation or of any of its
    affiliates, or (c) any other person who, in the discretion of the court,
    is a proper person to make a s. 248 application.

[37]

The
    s. 248 OBCA claim is asserted at paras. 56-61 of the statement of claim under
    the heading Directors Liability. As already noted, these paragraphs seek to
    hold the individual respondents liable for various kinds of damages, relying in
    part on the statutory claims. The appellant alleges at para. 56 that the
    individual respondents used their directorial powers oppressively by directing
    Fiera to dismiss [him] for cause, and at para. 57 he pleads that they
    exercised the powers of directors in an oppressive manner, without legal or
    moral justification, and as such are jointly and severally liable for the
    aforementioned claims pursuant to sections 131 and,
inter
    alia
, 248 of the [OBCA]. At para. 59 he pleads that the individual
    respondents did not carry out their duties in good faith when they failed to
    instruct Fiera to remit the wages owing to him before the dismissal, made the
    decision on behalf of Fiera to dismiss him without notice or compensation, and
    did not issue him a record of employment. He pleads at para. 60 that he
    remains a creditor and complainant of Fiera pursuant to the [OBCA] and at
    para. 61 he pleads that the individual respondents are liable for all
    compensation and damages sought against Fiera, jointly and severally, that are
    claimed in his prayer for relief.

[38]

The
    respondents sought to strike the appellants s. 248 claim under r. 21.01(1)(b).
    The motion judge, in supplementary reasons, struck the oppression claim with
    leave to amend, observing that the respondents had provided the appellant with
    a roadmap of what is required to fix the pleading. On the motion to strike, the
    respondents had submitted that the appellant did not have standing to make the
    claim, that he did not plead what the reasonable expectations were or what the
    conduct was of the defendant directors which disregarded his reasonably held
    expectations, and that he did not plead that the directors conduct affected his
    ability to recover judgment against the corporate defendants. It appears that
    the motion judge may have been referring to these arguments on the motion to
    strike as the roadmap guiding the appellant on how to fix his pleadings.

[39]

The
    appellant argues that the motion judge erred in striking the s. 248 OBCA
    oppression claim, as he had pleaded the necessary material facts, and in
    failing to provide an explanation for striking the claim.

[40]

The
    respondents argue that the motion judge correctly struck the s. 248 OBCA
    oppression claim as the appellant does not have standing to advance such a
    claim and has failed to plead that the conduct of the directors disregarded his
    reasonable expectations. The respondents however did not cross-appeal the
    motion judges refusal to strike the s. 248 claim without leave to amend.

[41]

The
    motion judge did not err in striking the oppression claim under s. 248 of the
    OBCA with leave to amend.

[42]

I
    begin by noting that wrongful dismissal by itself will not usually justify a
    finding of oppression; nor is a terminated employee always a complainant who
    has standing to bring an oppression proceeding under s. 248 of the OBCA.
    Typically, oppression claims that are asserted in the context of wrongful
    dismissal are made by shareholder employees whose interests have been unfairly
    disregarded: see e.g.
Walls v. Lewis
(2009), 97 O.R. (3d) 16 (S.C.).
    Claims have been asserted successfully by non-shareholder employees where a
    directors conduct has prevented the corporate employer from paying wages or
    wrongful dismissal damages: see e.g.
Churchill v. Aero
    Auction Sales
, 2019 ONSC 4766, 147 O.R. (3d) 44 (the director, also
    the plaintiffs former common law spouse, withheld wages, terminated her
    employment, caused the corporation to cease operations, and transferred its
    assets to a related corporation);
Downtown Eatery (1993)
    Ltd. v. Ontario
(2001), 200 D.L.R. (4th) 289 (Ont. C.A.), leave to
    appeal refused, [2001] S.C.C.A. No. 397 (directors caused the company to go out
    of business and transferred its assets to related companies they owned and
    operated a few months before a scheduled wrongful dismissal trial). Similarly,
    such a claim was permitted to proceed as part of a proposed class proceeding in
Brigaitis v. IQT, Ltd. c.o.b. as IQT Solutions
,
    2014 ONSC 7, 22 B.L.R. (5th) 297, at paras. 90-99, where it was alleged that
    the directors had diverted funds for personal use before the corporation
    terminated the employment of employees, leaving insufficient funds to pay
    termination pay and other amounts.

[43]

It
    is not sufficient for a terminated employee, as here, to plead that the
    individual defendants acted oppressively as directors of the corporate
    defendants, and to claim all of their damages against such individuals, relying
    on s. 248 of the OBCA. Nor is it sufficient to allege that the directors
    directed the appellants termination, or that they failed to ensure that he
    received a record of employment.

[44]

The
    necessary elements of an oppression claim were recently articulated by the
    Supreme Court in
Wilson v. Alharayeri
, 2017 SCC 39, [2017] 1 S.C.R.
    1037. First, the complainant must identify the reasonably held expectations they
    claim to have been violated by the conduct at issue. Second, the complainant
    must show that these reasonable expectations were violated by corporate conduct
    that was oppressive or unfairly prejudicial to or that unfairly disregarded the
    interests of any security holder, creditor, director or officer of the
    corporation: at para. 24. The Supreme Court in
Wilson
also observed
    that to impose personal liability, there must be oppressive conduct that is
    properly attributable to the directors implication in the oppression and the
    imposition of personal liability must be fit in all the circumstances: at
    paras. 47-48.

[45]

The
    appellant did not address these elements in his pleading. He did not plead his
    reasonable expectations of the directors or that those reasonable expectations
    were violated by oppressive corporate conduct. The appellants reasonable
    expectations cannot simply be inferred from his pleadings of what the directors
    did or failed to do. As such, there were insufficient material facts in the
    statement of claim to establish a claim for oppression under s. 248 of the
    OBCA.

[46]

I
    would therefore uphold the motion judges order striking the s. 248 claim with
    leave to amend. Before leaving this ground of appeal however I would observe
    that nothing in these reasons is intended to determine whether a claim for an
    oppression remedy is appropriate in the circumstances of this case, whether the
    appellant would have standing as a complainant (which is in the discretion of
    the court), or even whether, having been granted leave to amend his pleadings,
    the appellant will be able to plead the facts that are necessary to seek an
    oppression remedy against the individual respondents under s. 248.

(2)

The Order Striking Paras. 14-23 and 40 With Leave to Amend

[47]

I
    will next address the motion judges order striking paras. 14-23 and 40 of the
    statement of claim with leave to amend. The respondents moved to strike these
    paragraphs on the basis that they plead evidence, contrary to r. 25.06(1), and contain
    pleadings that are scandalous, frivolous and vexatious, contrary to r. 25.11(b).
    The motion judge struck these paragraphs with leave to amend. She did not
    identify the specific amendments that would address the deficiencies, observing
    that the respondents had provided the appellant with a roadmap of what was
    required to fix the pleadings.

[48]

Rule
    25.06(1) provides that pleadings are to contain a concise statement of the
    material facts on which the party relies for the claim or defence, but not the
    evidence by which the facts are to be proved. As Perell J. noted in
Jacobson
    v. Skurka
, 2015 ONSC 1699, 125 O.R. (3d) 279, at paras. 43-44, t
he difference between pleading material facts and pleading evidence is
    a difference in degree and not of kind, and the prohibition against pleading
    evidence is designed to restrain the pleading of facts that are subordinate and
    that merely tend toward proving the truth of the material facts. As the same
    judge observed in
Mirshahi v. Suleman
, 2008 CanLII 64006 (Ont. S.C.),
    seeking to strike a pleading for pleading evidence can be a technical objection
    and pleading evidence may be closer to providing particulars, which in most
    cases is more helpful than harmful: at para. 21. Particulars are not
    evidence but additional bits of information, or data, or detail, that flesh
    out the material facts: see
Janssen-Ortho Inc. v. Amgen Canada
    Inc.
(2005), 256 D.L.R. (4th) 407 (Ont. C.A.), at paras. 89-90, citing
Copland
    v. Commodore Business Machines Ltd.
(1985), 52 O.R. (2d) 586 (S.C.,
    Master), affd (1985), 52 O.R. (2d) 586 (note) (H.C.).

[49]

Rule
    25.11(b) provides that the court may strike out or expunge all or part of a
    pleading, with or without leave to amend, on the ground that the pleading is
    scandalous, frivolous or vexatious. A scandalous pleading includes those
    parts of a pleading that are irrelevant, argumentative or inserted for colour,
    and unfounded and inflammatory attacks on the integrity of a party: see
George v. Harris
, [2000] O.J. No. 1762 (S.C.), at para.
    20. The focus in considering a challenge to a pleading under this rule is on the
relevance
of the pleading to a cause of action or defence. As this court
    recently noted in
Huachangda Canada Holdings Inc. v. Solcz Group Inc.
,
    2019 ONCA 649, 147 O.R. (3d) 644, at para. 15, [a] fact that is relevant to a
    cause of action cannot be scandalous, frivolous or vexatious. On the other
    hand, a pleading that raises irrelevant or superfluous allegations that cannot
    affect the outcome of an action is scandalous, frivolous or vexatious, and
    should be struck out.

[50]

The
    appellant contends that the motion judge ought to have simply refused to strike
    paras. 14-23 and 40. He asserts that these paragraphs contain narrative facts
    related to his length of employment, the history of his working relationships,
    and the breaches of his employment contract and reprisals. The respondents
    assert that this court should not interfere with the motion judges order striking
    these paragraphs with leave to amend on the basis that they contain evidence,
    inflammatory attacks and irrelevant facts.

[51]

I
    begin by observing that the motion judges reasons for striking these
    paragraphs with leave to amend are conclusory. She stated only that she found
    that paras. 14-23 and 40 contain predominantly evidence contrary to r. 25.06(1)
    and, after referring to the respondents submissions that these paragraphs include
    irrelevant facts and inflammatory attacks on the corporate respondents
    integrity and have been included to embarrass the respondents rather than to
    advance the action in any meaningful way, she held that these pleadings ought
    to be struck as they violate r. 25.11.

[52]

Her
    reasons do not explain what the deficiencies are, which parts of what
    paragraphs contain evidence, or which parts contain irrelevant facts and
    inflammatory attacks. There is nothing in the reasons that would assist the
    appellant in amending his pleading to address her concerns. Again, the motion
    judge refers to the respondents as having provided the appellant with a roadmap
    of what is required to fix the pleadings, however there was nothing in the
    record on this appeal that pointed to a roadmap for any required amendment.

[53]

Since
    the motion judge did not provide reasons that would assist in understanding why
    she struck paras. 14-23 and 40, or the amendments required to address her
    concerns, it falls to this court to consider the matter afresh.

(a)

Paragraphs 14 to 23

[54]

Paragraphs
    11-24 of the statement of claim are preceded by the heading Employment
    History. The appellant pleads that he was hired by Fiera as a security guard,
    and that he moved to the position of boxing line operator, to leadhand, and eventually
    back to boxing line operator. He pleads, at paras. 14-23, that certain changes
    to his position as well as a reduction in his hours resulted from ongoing production-related
    conflicts he had with the Director of Manufacturing who routinely pressured
    him to overlook discrepancies in the raw goods, and that he refused to do so.

[55]

The
    respondents submit that these paragraphs contain irrelevant and immaterial
    facts that are unrelated to the appellants wrongful dismissal that have been
    inserted for the sole purpose of attacking the integrity of the corporate
    respondents. They point to pleadings in paras. 16 and 19 of irrelevant facts
    concerning other employees, and they argue that the pleadings of historical
    conflict during the appellants employment and well before his termination are
    irrelevant to his wrongful dismissal claim.

[56]

I
    do not agree with the respondents that paras. 14-23, or any parts of these
    paragraphs, should be struck as pleading evidence or as containing irrelevant facts
    inserted only for atmosphere and to impugn the corporate respondents
    integrity. At para. 37(a) the appellant pleads that Fieras allegations of
    time-theft are deliberately false and were deployed as a means to rid itself of
    an employee who: (a) repeatedly raised concerns about Fieras failure to
    observe manufacturing, health and safety, and storage requirements. The facts
    pleaded at paras. 14-23 are relevant to the appellants assertion that he was
    fired, not because of the alleged time-theft, but as a reprisal for having
    brought certain violations of manufacturing requirements to the attention of
    management. They plead a course of conduct alleged to have culminated in the
    appellants termination as a reprisal for repeatedly raising issues. The
    references to two other employees at paras. 16 and 19 are not inflammatory or
    inserted merely for colour; rather they are part of the pleading that the
    appellant, after raising issues, was instructed to train other employees to
    replace him in the leadhand position, resulting in his return to the position
    of boxing line operator. While it was unnecessary for the appellant to identify
    the other employees by name in the statement of claim, this does not in itself
    amount to a pleading of evidence that would require this part of the pleading
    to be struck.

[57]

Accordingly,
    I would not strike any of these paragraphs, and I do not see any reasoned basis
    for requiring their amendment.

(b)

Paragraph 40

[58]

Paragraph
    40 is a lengthy paragraph that begins as follows:

40. In support of the allegations referred to in paragraph
    37(a) above, Abbasbayli states that during his tenure at Fiera, he
observed
,
documented
,
recorded
and regularly
reported
to Fieras
    management, the following violations that, he states, routinely occurred, but
    to no avail. In this regard, Abbasbayli pleads that,
inter
    alia
, the following violations occurred. [Emphasis in original.]

[59]

Paragraph
    40 continues with three headings: (i) Violation of Specific Requirements for
    the Refrigeration and Storing of Raw Goods; (ii) Violation of Specific
    Requirements for the Production of Allergen Goods; and (iii) Violation of
    Specific Requirements for the Storing of Dough. Each of the first two headings is
    followed by a list of instances of violations, identified by date, product, and
    code, that the appellant 
observed
,
documented
,
recorded
and regularly
reported
to Fieras management (emphasis in original). Under
    the first two headings, the appellant also asserts that the corporate
    respondents routinely breach specific requirements for the storing of raw goods
    and routinely mix allergen and non-allergen goods. The third heading is
    followed by three additional allegations, that the corporate respondents (a) routinely
    violate requirements for storing dough by storing it in places that would allow
    it to expand and re-using dough that falls on the floor for orders that call
    for the same type of dough; (b) routinely defreeze, repack and then refreeze
    their raw goods, resulting in substandard baking properties; and (c) routinely
    mix stale baked goods with water to create a mixture that is combined with
    fresh dough which is then used to manufacture various goods.

[60]

The
    respondents contend that para. 40 pleads evidence and makes allegations of
    wrongdoing against the corporate respondents that are inserted solely to impugn
    their integrity and for atmosphere. The appellant argues that this paragraph
    contains facts that are related to his pleading of bad faith conduct and the
    allegation at para. 37(a) that his employment was terminated as an act of
    reprisal after he repeatedly raised concerns about Fieras failure to observe
    manufacturing, health and safety, and storage requirements.

[61]

I
    will deal first with the argument that para. 40 contains evidence. This is
    primarily based on the fact that the paragraph contains a lengthy list of
    violations that the appellant claims he observed and reported to management (at
    paras. 40(i)(a)-(fff) and (ii)(a)-(ii)). Each entry includes a date, product,
    and code, which presumably corresponds with Fieras records. While it may well
    have been sufficient for the appellant to have pleaded that he observed,
    documented, recorded and regularly reported to Fieras management violations
    between the dates indicated (April 3, 2017 to March 12, 2018), or even a
    certain number of violations, the list of the various instances is a pleading
    of particulars, not evidence. I would not strike these parts of para. 40 as
    pleading evidence.

[62]

I
    turn to the assertion that para. 40 contains irrelevant facts and inflammatory attacks
     allegations of wrongdoing that are inserted only for colour and to impugn the
    integrity of the corporate respondents. I agree that it is appropriate to
    strike under r. 25.11(b) allegations of wrongdoing or illegal conduct of a
    party which have no relevance to a claim or defence: see e.g.
Foodcor Services Corp. v. Seven-Up Canada Inc.
, [1998]
    O.J. No. 2576 (Gen. Div.), at para. 32;
Ontario Consumers
    Home Services Inc. v. EnerCare Inc.
, 2014 ONSC 4154, at paras. 45-47;
Transamerica Occidental Life Insurance Co. v.
    Toronto-Dominion Bank
, [1997] O.J. No. 1 (Gen. Div.), at para. 12.
    In the present case, the question is whether the pleading of violations of
    various requirements for the production and storage of bakery products by the
    corporate respondents is relevant to the appellants claim.

[63]

In
    my view, most of what is contained in para. 40 is relevant to the appellants
    claim that his employment was terminated as a reprisal. It identifies the
    occasions when he observed, documented, recorded and reported alleged
    manufacturing deficiencies and regulatory violations: at para. 40(i), violations
    of requirements for the refrigeration and storing of raw goods and at para.
    40(ii), violations of requirements for the production of allergen goods. At the
    conclusion of each of para. 40(i) and (ii) the appellant pleads that based on
    his extensive knowledge of Fieras violations approximately 25% of all of its
    raw goods have been repacked in breach of requirements for the storage of raw
    goods and that Fiera disregards the requirements for the production of allergen
    goods.

[64]

Paragraph
    40(iii) however is different. Under the heading Violation of Specific Requirements
    for the Storing of Dough the appellant pleads various egregious practices by
    the corporate respondents, but there is no indication that the appellant 
observed
,
documented
,
recorded
and regularly
reported
 (emphasis in
    original) these practices. In contrast to the allegations under paras. 40(i)
    and (ii), there is no list of incidents, nor does the appellant connect these
    general allegations to his own knowledge or experience. Rather, he simply states
    and pleads the egregious practices described at para. 40(iii). There is no apparent
    connection between para. 40(iii) and the appellants claim that his employment
    was terminated as a reprisal for bringing violations to the corporate
    respondents attention. As such, it is appropriate to strike these other
    allegations of wrongdoing, which are not relevant to the appellants wrongful
    dismissal claim.

[65]

Accordingly,
    I would set aside the motion judges order striking paras. 14-23 and 40 with
    leave to amend and instead only strike para. 40(iii) without leave to amend. No
    other amendment to that paragraph is required.

(3)

Costs in the Court Below

[66]

The
    motion judge awarded costs to the respondents in the sum of $14,569.52, based
    on their success on the motion. The appellant seeks to appeal the costs award.

[67]

A
    motion judges costs award is entitled to deference. Unless the judge has made
    an error in principle or the costs award is plainly wrong, an appellate court
    should not set aside the costs award: see
Hamilton v. Open
    Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.
    Where, as in this case, an appeal is allowed in whole or in part, it is appropriate
    to revisit the costs award in the court below having regard to the outcome on
    appeal.

[68]

The
    appellant asserts that the motion judge erred in principle by failing to make a
    costs award that was proportionate, and in double-counting certain entries in
    the respondents bill of costs. I disagree. In the context of the appellants wrongful
    dismissal claim asserting various claims against the corporate and individual
    respondents, and the range of issues raised by the motion, the award of partial
    indemnity costs of $14,569.52, inclusive of HST and disbursements, reflected
    the respondents substantial success at first instance, was proportionate and
    fair, and did not contain any element of double-counting.

[69]

I
    would however reduce the costs award in the court below to reflect the appellants
    partial success on appeal: see
Mihaylov v. 1165996 Ontario

Inc.
, 2017 ONCA 218, at
    para. 8;
Mitchell v. Lewis
, 2017 ONCA 105, at
    paras. 3-5. I would vary the motion judges costs order to fix the respondents
    costs at $8,000, inclusive of disbursements and HST.

F.

DISPOSITION

[70]

For
    these reasons, I would allow the appeal to the extent and on the terms indicated.
    I would not award any costs of the appeal.

Released: February 16, 2021 (K.M.v.R.)

K.
    van Rensburg J.A.

I
    agree. C.W. Hourigan J.A.

I
    agree. David Brown J.A.


