The Lawyers Weekly - July 1, 2011

Motion for an order compelling defendants CF and MF to disclose documents related to the true identities of two John Doe defendants. Plaintiff sought damages for defamation with respect to messages posted on websites owned and operated by CF and MF. The messages were posted by individuals using pseudonyms. The action also named eight John Doe defendants, six of whom had been identified. The two unidentified John Does that were the subject of the predicate motion were identified as “ conscience” and “HR-101.” The documents sought included email addresses and subscriber information used and submitted by the John Does to register at the websites, the IP addresses of the computers used to establish the accounts and the IP addresses used when making the posted messages that were the subject of plaintiff’s claim. Relevance of the documents was not disputed and CF and MF admitted possession of most of the documents requested.

HELD: Motion allowed. Plaintiff undertook reasonable investigative techniques to identify the remaining John Does and was unable to do so. The only remaining investigative avenue required disclosure of the documents sought from CF and MF. Despite the use of pseudonyms, the John Does did not have a reasonable expectation that their identities would remain anonymous given the express terms of membership applicable to the websites from which their postings originated. Plaintiff established a prima facie case of defamation. The comments in question were capable of lowering plaintiff’s reputation in the eyes of a reasonable person. Disclosure was sought for the limited purpose of enabling plaintiff to effect service of his claim, which was made in good faith. Given the foregoing, the public interest favoured disclosure, outweighing the freedom of expression and right to privacy interests of the John Does. Disclosure was ordered of those documents which CF and MF had admitted were in their possession.

Warman v. Wilkins-Fournier,
[2011] O.J. No. 2418, Ont. S.C.J., Bli-
shen J., May 30/11. Digest No. 3109-
007 (Approx. 13 pp.)
SECURITY FOR COSTS – Appellate
court upheld order that plaintiff post
security for costs.

Appeal by plaintiffs from an order for
security for costs. Plaintiffs were the major
backers in a relatively straightforward
incorporation of a corporation and the
company’s acquisition of a gravel pit.
Defendant solicitor and his law firm were
the lawyers for the transaction. Plaintiffs
alleged that they did not get what they
bargained for, which was a direct result of
defendants’ actions. They commenced an
action seeking $2,000,000 in damages
for breach of contract and breach of fidu-
ciary duty. Defendants denied that there
was a direct relationship between the par-
ties, that they had been instructed by
plaintiffs to carry out anything or that
there was a duty of care or contractual
duties or fiduciary duties owed to plain-
tiffs. Defendants brought a motion for
security for costs. As the individual plain-
tiff was not resident in the province and
the judge was loathe to assume that her
interest in corporate plaintiff would be
exigible and could be applied to a costs
award, he concluded that it was an appro-
priate case to order security for costs.

SOLICITOR AND CLIENT PRIVILEGE – Trial judge erred in excluding documents that established plaintiffs’ case against defendants because of solicitor-client privilege.

Appeal by plaintiffs from the dismissal of their action. Plaintiffs alleged that they loaned the defendants $89,500 in a series of advances between 2001 and 2004 through their son, who acted as solicitor for defendants. They alleged that the advances were each made by a cheque payable to defendants’ solicitor, who issued trust cheques to pay various amounts owed by defendants. Plaintiffs submitted that the loans were arranged through the solicitor acting as a mutual agent to the parties. The funds were lent to cover the cost of a trial involving defendants. Plaintiffs contended that the parties agreed upon an eight per cent interest rate. Plaintiffs stated that they demanded payment in 2005, but no amounts were received. Defendants denied that they requested plaintiffs to advance any of the moneys claimed. They stated that they never spoke with plaintiffs and never agreed to any terms whatsoever. Defendants admitted that they received certain sums directly from their solicitor pursuant to an agreement to invest in their company. In dismissing the action, the trial judge found that plaintiffs failed to prove the existence of a loan agreement with defendants.

HELD: Appeal allowed. The trial judge erred in refusing to admit documents sent by defendants to the solicitor disclosing the nature and purpose of the requests for the funds and an acknowledgment of the debt to plaintiffs. The fact that the documents were contemporaneous with a solicitor and client relationship and referenced ongoing litigation did not necessarily support a finding of privilege. The request for funds did not fall within the usual and ordinary scope of the professional relationship or within the continuum of communications in which the solicitor tendered advice. Having put into issue the nature and purpose of the advancement of funds, it was unfair to exclude other documents related to the same issue. The documents were admissible. The documents made it clear that the bulk of the advances related to specific requests to fund personal living expenses. The trial decision was set aside. Plaintiffs were awarded $78,500.

Ranger v. Penterman, [2011] O.J.
No. 2414, Ont. C.A., per Weiler, Rou-
leau and Karakatsanis JJ. A., May 31/11.
Digest No. 3109-009 (Approx. 7 pp.)

STRIKING OUT PLEADINGS – Plaintiff’s claims against defendant for items allegedly stolen from safety deposit boxes summarily dismissed because of lack of evidence and expiration of relevant limitation periods.

Motions by defendants for summary judgment dismissing plaintiff’s action against them. Plaintiff’s action against defendant bank was for negligence and breach of contract. She alleged that unidentified individuals had impersonated her and stolen items and documents that she had stored in one or more safety deposit boxes leased to her at various branches of the bank. Plaintiff alleged that defendant police failed to investigate various complaints she had made and that she was the subject of discrimination.

HELD: Motions granted. The bank led evidence of its internal safety deposit box procedures which showed that only plaintiff had accessed her safety deposit boxes. On closing out each box she signed an acknowledgment that all contents had been removed and she released the bank from all claims. Plaintiff failed to establish the loss of specific property or put forward any cogent evidence of any negligence or beach of contract by the bank. Her claims were further barred by the surrender and release she signed and the passing of the limitation period. With respect to the alleged failure to investigate by the police, it was clear in law that police officers had discretion to decide whether or not to proceed with an investigation and a complainant could not seek redress from them for failing to conduct a sufficiently thorough investigation of a complaint. While plaintiff alleged discrimination, she did not describe in what way the police discriminated against her. Her claims against the police were also barred because of the expiry of the governing limitation period.

Bhoopaul v. Canadian Imperial Bank
of Commerce, [2011] O.J. No. 2357, Ont.
S.C.J., Lederman J., May 24/11. Digest
No. 3109-010 (Approx. 4 pp.)
CLASS ACTIONS
SETTLEMENT – Court dismissed
motion to make changes to notice plan
in class proceeding that had been set-
tled by parties.

Motion for an order authorizing changes to the notice plan, costs paid from the settlement fund and extending the deadline for making claims. The action alleged that a travel company was negligent in sending vacationers to a resort where there was an outbreak of Norovirus. It was certified as a class action in 2010 and a settlement approved. The settlement structure involved establishing a fixed fund from which class members’ claims would be paid if they filed a claim. The notice plan did not contemplate direct contact with all the class members. In addition to direct mailings, it provided for letters to travel agents, notices in national and regional papers, web page notice and email notice to travel agents.

HELD: Motion dismissed. When the
settlement was approved, the order pro-
vided that the court retained jurisdiction
to consider any further appropriate
applications concerning the administra-
tion of the settlement. After the press
release, there was not a significant
increase in the take-up of the settlement
and class counsel together with the
administrator prepared a proposal
described as “enhanced notice efforts.”
Under that proposal, certain class mem-
bers who had not filed a claim would be
contacted by class counsel or the admin-
istrator. The proposal also contemplated
developing additional class member con-
tact information by obtaining additional
information from defendants. The costs
of the enhanced notice efforts were esti-
mated to be between $10,000 and
$15,000. The variations to the notice
plan were not within the language of the
settlement agreement and were not
minor. They were a difference in kind not
a difference in degree. The proposed
changes to the notice plan, the additional
costs of administration and the extension
of the claims deadline went beyond
administration of the settlement.

CONSUMER PROTECTION

DISCLOSURE – Respondent entitled to amend water heater rental agreement to require consumers to contact respondent in order to terminate agreement.

Application for a declaration that a proposed amendment to a water heater rental agreement was invalid because the contract did not comply with Regulations under the Consumer Protection Act (Ont.). The amendment required customers wishing to terminate their rental agreements to first telephone respondent to obtain a “Removal Reference Number.” Applicant argued that respondent had no right to amend the agreement because its terms and conditions did not comply with the Act and the Regulations. He said that at the time he entered into the agreement with respondent he was not informed of his right to terminate the rental agreement if he did not accept a proposed amendment. Respondent submitted the proposed amendment satisfied para. 42( 5)(c) of the Regulations because it was consistent with the statutory right to make amendments to terms and conditions from time to time by announcing such changes in advance by written communication.

HELD: Application dismissed. Section 42 of the Regulation recognized that a supplier may have a legitimate reason to amend a remote agreement from time to time and sought to achieve a fair balancing of the interests of the parties in the context of a standard form consumer contract. The consumer must be given either the right to terminate the agreement or the right to retain the existing agreement, unamended. The proposed amendment did just that. The proposed amendment was, from the consumer’s point of view, entirely innocuous. It imposed no additional burden on the consumer, other than the burden of picking up the telephone and informing respondent that he or she wished to terminate the contract and have the water heater removed.