The Ontario Court of Appeal just released an update on certain elements of the Burns[1] decision. While the Court of Appeal did not interfere with the Motion Judge’s decision to strike out the appellant’s statement of claim against the individual defendants, it did overturn the portion of the judgment that refused leave to amend.
The Motion Decision
The appellant, Mr. Burns, brought an action against RBC Life Insurance and two individual insurance adjusters. His statement of claim alleged that “the Defendants engaged in conduct that, jointly and/or severally, amounted to bad faith, negligence, and/or negligent misrepresentation conduct.” He did not distinguish between the conduct of the adjusters and the conduct of RBC Life Insurance.[2] The motion judge held that Mr. Burns had not pleaded a viable cause of action against the adjusters that would attach personal liability to them as the allegations “did not manifest an identity or interest separate from RBC Life Insurance”. He struck out the claim without leave to amend.[3]
Court of Appeal Decision
The Appeal Court noted that Rule 25.06(1) of the Rules of Civil Procedure “requires a statement of claim to contain a concise statement of the material facts on which the party relies for its claim.”[4] Each defendant named in the statement of claim should be able to read the pleading and answer the questions: “what do you say I did that caused you, the plaintiff, harm, and when did I do it?” Mr. Burns’s statement of claim did not provide the individual adjusters with answers to these questions.[5]
The Court of Appeal found that the motion Judge did not err in concluding that Mr. Burns failed to plead a claim against the individual adjusters in their personal capacities but did err in concluding that he could not plead such a claim.[6] The Appeal Court found that “there was no reason to deny Mr. Burns leave to amend his statement of claim as an appropriate amendment might cure the pleading’s deficiency and there is no suggestion that the respondents would suffer litigation prejudice by granting leave to amend.” Further, the Court cited Tran v. University of Western Ontario[7] and Adelaide Capital Corp v. Toronto Dominion Bank[8]for the principle that leave to amend should only be denied in the clearest of cases. Since no reasons were given for the refusal of leave to amend, the discretionary decision of the motion Judge was not entitled to deference.[9]
Stay tuned to see whether the plaintiff amends the claim, and the effect, if any, it may have on the individual adjusters’ liability.
[1] 2020 ONCA 347
[2] Ibid at para 10.
[3] Ibid at para 12.
[4] Ibid at para 16.
[5] Ibid at para 17.
[6] Ibid at para 21.
[7] 2015 ONCA 295
[8] 2007 ONCA 456
[9] Supra note 1 at 23.
