2023 MBKB 73, 2023 MBKB 73

Date: 20230501 Docket: CI 22-01-34041 (Winnipeg Centre) Indexed as: Galton Corporation et al v. Riley et al Cited as: 2023 MBKB 73 COURT OF KING’S BENCH OF MANITOBA B E T W E E N: GALTON CORPORATION, PRECISION WEATHER SOLUTIONS, INC., and SUSAN BONK, ) ) ) ) Susan Bonk Self-representing for the plaintiffs ) plaintiffs, ) ) ) - and - ) ) H. SANFORD RILEY, CHARLES LOEWEN, ROBERT SILVER, and WILLIAM WATCHORN, ) ) ) Richard W. Schwartz and Chris C.

Wullum Counsel for the defendants defendants. ) ) ) JUDGMENT DELIVERED: ) May 1, 2023 MASTER GOLDENBERG INTRODUCTION [ 1 ] The plaintiffs filed a statement of claim alleging that the defendants are in breach of their contractual, constitutional, statutory and common law duties to the plaintiffs, as well as their duty of care and fiduciary duties to the plaintiffs under federal and provincial corporations’ legislation. The allegations also include alleged breaches of the Canadian Charter of Rights and Freedoms,

Part 1 of the Constitution Act , 1982 , (the Charter ), and The Human Rights Code, C.C.S.M. c. H175 , The Defamation Act, C.C.S.M. c. D20 , the Personal Information Protection and Electronic Documents Act , S.C., 2000, c. 5 and The Privacy Act , C.C.S.M. c. P125 . [ 2 ] The plaintiffs seek various declarations regarding the alleged breaches as well as orders requiring the defendants to remove references to certain information about the plaintiffs regarding alleged defamatory statements to disclose recipients of alleged defamatory statements and to apologize regarding alleged defamatory statements.

The claim also seeks general damages in the amount of $25,000,000 for breaches of the Charter , plus $10,000,000 for breaches of the Manitoba Human Rights Code , $25,000,000 for defamation and $25,000,000 for breaches of contractual, constitutional, statutory and common law duties.

The claim also seeks pecuniary damages for those breaches and also non-pecuniary and pecuniary damages for civil conspiracy, negligence, breaches of contract and vicarious liability as well as special, aggravated and punitive damages. [ 3 ] The plaintiff Susan Bonk, claims that she is the founder of the other named plaintiffs, that is, Galton Corporation (“Galton”) and Precision Weather Solutions Inc. (“PWS”).

The claim alleges that each of the named defendants were or are investors, shareholders and/or directors of Galton. [ 4 ] The defendants brought a motion to strike the statement of claim in its entirety, without leave to amend. In support of that motion, the defendants filed the affidavit of Kristen Harris affirmed February 3, 2022. Ms. Harris is a legal assistant at the law firm for

counsel for the defendants. The plaintiffs brought a motion to strikeout or expunge portions of the affidavit of Kristen Harris as well as a motion for leave to amend the statement of claim. The plaintiffs’ motion to expunge portions of the defendants’ affidavit [ 5 ] The affidavit of Kristen Harris refers to and attaches copies of voicemails left for counsel, Mr. Schwartz, by Mr. Trippier, as well as an email from the plaintiff Ms. Bonk, to the defendant Mr.

Silver. [ 6 ] The plaintiffs’ position is that the paragraphs referencing these communications, as well as the exhibits, ought to be struck or expunged from the affidavit on the basis that the affidavit is made by an assistant at the office and improperly shields both Mr. Schwartz and Mr. Silver from cross-examination.

In addition, the plaintiff alleges that the paragraphs and exhibits are improper and inadmissible for a number of reasons including that they are argumentative, hearsay, improper opinion evidence, scandalous, frivolous or vexatious, and also communications covered by settlement privilege. [ 7 ] The defendants’ motion to strike is brought pursuant to Court of King’s Bench Rule 25.11(1) which provides as follows: 25.11(1) The court may on motion strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document, (

a) may prejudice or delay the fair trial of the action; (

b) is scandalous, frivolous or vexatious; (

c) is an abuse of the process of the court; or (

d) does not disclose a reasonable cause of action or defence. [ 8 ] As a starting point, I note that affidavit evidence is generally not permissible for a motion to strike on the basis that the claim does not disclose a reasonable cause of action, but generally is permissible within respect to motions to strike on the other grounds set out in Rule 25.11(1). [ 9 ] The two voicemails are messages left for the defendants’ counsel Mr. Schwartz by counsel Mr. Trippier, who apparently represents one of the plaintiffs in a different proceeding.

I say apparently, because there is no affidavit evidence to that effect, rather this is explained in some narrative contained in the defendants’ motion brief. [ 10 ] The assistant’s affidavit affirms that she is employed as a legal assistant at the law firm of Tapper Cuddy LP and works with counsel for the defendants, and as such has personal knowledge of the facts deposed to in her affidavit. With respect to the two voicemails from Mr. Trippier to Mr. Schwartz, the assistant is able to depose that they were left on Mr.

Schwartz’s voicemail, and that the exhibits are a transcript of the voicemails. [ 11 ] The third exhibit to the assistant’s affidavit is an email purportedly sent by the plaintiffs directly to one of the defendants. Presumably, the defendant forwarded a copy to his counsel who then directed that it be included in his assistant’s affidavit. [ 12 ] The plaintiffs had opportunity and did file affidavit evidence regarding those communications. In her affidavit sworn March 24, 2022, the plaintiff Ms. Bonk expresses concerns with the defendants’ use of those communications for various reasons.

The defendants, through the affidavit of Ms. Harris, have put these communications into evidence and rely upon them in their motion to strike. However, by not themselves providing any evidence with respect to the communication or in response to Ms. Bonk’s evidence, the weight to be put on that evidence will be minimal compared to the weight of any evidence given directly by the plaintiffs.

I will comment further on the weight and relevance of this evidence when I address the defendants’ motion to strike on grounds other than for no reasonable cause of action. [ 13 ] I note, however, that the defendants attempt to put evidence in through their motion brief by describing certain background and other proceedings. While it may be appropriate to refer to other proceedings and court documents in relation to their position on striking on other grounds, there still must be evidence before the court and evidence on a motion must be by way of affidavit.

Instead, the defendants set out a narrative in their motion brief and attach various documents to their brief which may be improper. If the defendants wished to rely on this as evidence in support of their motion to strike, then this narrative, including references to other litigation involving some of the parties ought to have been in affidavit evidence, not in their brief. [ 14 ] I am not satisfied that Ms. Harris’s affidavit ought to be struck on any of the grounds raised; however, I will still consider the plaintiffs’ position on relevance when deciding what, if any, weight to give to the evidence.

The plaintiffs’ motion seeking leave to amend the statement of claim [ 15 ] The plaintiffs brought a motion to amend the statement of claim on the grounds that the pleadings are not closed, because the amendment does not include or necessitate the addition, deletion or substitution of a party, and because Canadian citizens should have unimpeded access to justice through the courts. [ 16 ] As noted, the defendants seek leave to strike the statement of claim without leave to amend. The plaintiffs seek leave to amend, and that relief can be dealt with in the context of the defendants’ motion.

If I am satisfied that any or all of the statement of claim ought

to be struck, I will then turn my mind to whether the plaintiffs ought to be granted leave to amend their statement of claim. I was not, however, prepared to adjourn the defendants’ motion to first consider the plaintiffs’ motion to amend the statement of claim, particularly where the plaintiffs did not include a proposed amended statement of claim for consideration. The defendants’ motion to strike [ 17 ] Given the defendants’ reliance on the affidavit evidence already referred to, I will address their motion to strike on grounds other than failure to disclose a reasonable cause of action first.

For the reasons that follow and on the evidence before me, I find that the defendants have not established that the claim is an abuse of process or that it is scandalous or vexatious. [ 18 ] The defendants ask the court to review the pleadings and evidence filed in an application in a different Court of King’s Bench file, and ask the court to note that there are many similarities in the evidence filed in that application by the plaintiffs to the facts and evidence pled and the issues raised in the current claim. [ 19 ] However, as set out above, I find it is inappropriate for the defendants in this case to rely upon pleadings and evidence filed in another court application, without properly putting that into evidence in this case, i.e., without putting it in by way of affidavit evidence. [ 20 ] The defendants ask me to rely upon a sealing order they say was made by a judge in the other application.

The defendants say that because the plaintiff Ms. Bonk in this case emailed the defendant Mr. Silver and notes in her email that the within claim is not subject to the sealing order and will be made public, shows clearly that the plaintiffs are using the filing of this claim for the improper purposes of attempting to extort a more favourable resolution on the other application.

The defendants say that the plaintiffs are attempting to interfere with the right of one of the defendants in the other cases from enforcing its judgment, circumventing the sealing order, and attempting to embarrass, annoy and harass the defendants by utilizing the absolute privilege associated in accordance with the pleading. [ 21 ] The defendants argue that this kind of conduct clearly fits within the type of behaviour defined as scandalous and vexatious under King’s Bench Rule 25.11(

b) as well as an abuse of process under Rule 25.11(c). The defendants also submit that given the overlapping evidence and issues as between the application and the claim, that there is a danger of a multiplicity of proceedings where inconsistent findings of facts and issues could be made. [ 22 ] I find that there is entirely insufficient evidence before me to find that there has been an abuse of process. The two voicemails and the email submitted into evidence by the affidavit of the defendants’ legal counsel’s assistant falls far short of establishing an abuse of process.

If the defendants wanted the court to consider the pleadings and evidence filed in the other court file and to note similarities, etc., then at minimum, that evidence ought to have been before the court by way of affidavit. [ 23 ] I note further that because the defendants listed the notice of application and affidavits filed in the other court file, that I did look at that file and the documents referred to. Even if those documents were properly before me instead of simply by reference in a motion brief, my decision would not be different.

I find that there is insufficient evidence for me to conclude that the current claim is an abuse of process or scandalous and vexatious. If the defendants are of the view that this file also ought to be sealed, then they can make such application to a judge. [ 24 ] I will now address the defendants’ motion to strike for failure to disclose a reasonable cause of action. For the reasons that follow, I find that the statement of claim should be struck in its entirety for failure to disclose a reasonable cause of action and because it offends the rules of pleading.

However, I find that the plaintiffs ought to be given leave to file an amended statement of claim with respect to some of the alleged causes of action. [ 25 ] In addition to King’s Bench Rule 25.11(1) which provides grounds on striking, the defendants also rely upon King’s Bench Rule 25.06 which provides as follows: Material facts 25.06(1) Every pleading shall contain a concise statement of the material facts on which the party relies for a claim or defence, but not the evidence by which those facts are to be proved.

Separate claims or defences 25.06(2) Where a party seeks relief in respect of separate and distinct claims, or raises separate and distinct grounds of defence, the material facts supporting each claim or ground of defence shall be stated separately as far as may be possible. Pleading law 25.06(3) A party may raise any point of law in a pleading, but conclusions of law may be pleaded only if the material facts supporting them are pleaded. [ 26 ] The statement of claim is 65 pages in length, comprised of 219 paragraphs.

It includes a lengthy and convoluted narrative of events and lists by name several causes of action known to law plus some actions not known to law, along with various pieces of legislation and the Charter .

[27] I agree with the defendants that the claim offends the basic rules of pleading. In addition, I agree with the defendants that theclaim contains various deficiencies and failures in that it does not, in its current state, disclose a reasonable cause of action.

However, Idisagree with the defendants that all of those issues are not curable, and I have decided that the plaintiffs ought to be granted leave to filean amended claim respecting some of the grounds alleged. [28] My findings with respect to the causes of action referenced in the statement of claim are as follows: Discrimination [29] It is well settled law in Canada that there is no tort of discrimination under the common law nor can there be a cause of actionunder the common law for breach of any provision of any human rights legislation. See Seneka College v.

Bhaduria, (SCC), [1981] 2 S.C.R. 181, at page 194, and Honda Canada Inc. v. Keays, 2008 SCC 39 , [2008] 2 S.C.R. 362 at paragraphs62 to 67. [30] In DeLeeuw v. Canada (Veterans Affairs), 2001 MBQB 292, on a motion to strike the claim on the basis of no reasonable causeof action, Master Sharp stated as follows at paragraph 8: 8 In argument, the plaintiff claimed he had a cause of action based on the "tort of discrimination". It is clear from a review of A.M.Linden's Canadian Tort Law, 6th ed., 1997 at pp. 320-321, that no such right to sue now exists.

At p. 321 the learned author states(referencing that court's decision in Bhadauriua v. Seneca College (SCC), [1981] 2 S.C.R. 181. The Supreme Court ... has held that a cause of action in tort for discrimination was not available either under the common law nor forbreach of the provisions of the statute. [31] Therefore, the leave to amend does not extend to the tort of discrimination. Harassment [32] The defendants acknowledge that there have historically been some trial court decisions that have suggested a tort of harassmentexists under the common law.

However, they rely on the Ontario Court of Appeal decision of Merrifield v. Canada (AG), 2019 ONCA205. In that case, in the context of the claim for harassment and bullying in the workplace brought against the RCMP, the Ontario Courtof Appeal stated that there was no common law tort of harassment in such a context and there was no basis for recognizing it as a newtort at this time. The court stated as follows at paragraph 43: [43] In

summary, the case for recognizing the proposed tort of harassment has not been made. On the contrary, as we will explain, thereare good reasons opposing the recognition of the proposed tort at this time. [33] Leave to appeal was denied by the Supreme Court of Canada from the Court of Appeal’s decision in Peter Merrifield v. AttorneyGeneral of Canada et al, [2019] S.C.C.A. No. 174. [34] Recently in Manitoba, Justice Keyser discussed the tort of workplace harassment in the context of a motion to strike in Sarrasinv. Sokal, 2021 MBQB 171, in particular at paragraphs 14 to 21.

The decision lists a number of other Manitoba decision that have foundthere is no tort of harassment in Manitoba, and the court concludes that there is no authority in Manitoba acknowledging the tort ofharassment.

Accordingly, I agree with the defendants, that similar to the concept of discrimination, under the common law, the tort ofharassment does not exist at law in Manitoba and that breaches of any human rights legislation related to harassment are also notrecognized by the common law. [35] Accordingly, the leave granted for the plaintiffs to amend their claim does not extend to filing a claim with respect to harassment.

Intimidation [36] The defendants in this case acknowledge that the tort of intimidation exists under the common law, but take the position that theplaintiffs have not established the elements of that tort by material facts in their statement of claim. [37] The elements of the tort of intimidation which must be supported by the material facts in the claim include: I. A threat; II. An intent to injure; III. Some acts taken or forgone by the plaintiff as result of the threat; IV. Damages suffered by the plaintiff as a result. (see Score Television Network Limited v. Winner International Inc., 2007 ONCA 424 (Ont.

C.A.). [38] Where the plaintiff fails to set out all of the above elements in their pleadings, the claim must be struck. In the Score decision, for

example, while the plaintiff alleged a threat, they failed to plead that the threat caused the plaintiff to forgo taking some action. [39] A careful review of the claim in the present motion demonstrates the similar flaw in that the pleading does not contain the thirdelement of alleging any act taken or foregone by the plaintiffs as a result of the alleged threats.

Therefore, the cause of action has notbeen properly pled and the allegation must fail in the face of the pleadings. [40] However, I find that this is a cause of action that the plaintiffs ought to be granted leave to amend to see if they can correct thedeficiency, that is to see if they can properly plead a cause of action that includes all four of the elements including the third element ofalleging that there was some acts taken or forgone by the plaintiff in this case as a result of the threat.

Charter [41] The law is clear that the Charter only has application to government entities and is not applicable to private defendants. This isset out in

section 32 of the Charter which states as follows: 32.

(1) This Charter applies: a. to the Parliament and government of Canada in respect of all matters within the authority of Parliament includingall matters relating to the Yukon Territory and Northwest Territories; and b. to the legislature and government of each province in respect of all matters within the authority of thelegislature of each province. [42] With respect to the plaintiffs’ alleged breach of Charter rights, the Charter has no application whatsoever to the facts of theclaim. In McKinney v.

The University of Guelph, (SCC), [1990] 3 S.C.R. 229, the Supreme Court of Canada reviewedthe application of the Charter and its history. The court emphasized that the Charter is confined to government actions and has noapplication as between the private actions of non-government individuals. As such, the plaintiffs are excluded from making a claim ofCharter rights against the defendants. See also Garang v.

Grimolfson, 2021 MBQB 234, at paragraph 8. [43] As such, there can be no duties owed by the defendants to the plaintiffs under the Charter as alleged and no declarations ordamages awarded under the Charter in this case. Therefore, if the plaintiffs do amend their statement of claim, they are not given leaveto amend on the ground of breach of the Charter. Defamation [44] A useful

summary on the law of pleading defamation was provided by Justice Keyser in Sarrasin, at paragraph 7 as follows: 7 The first allegation against Sokal is that of defamation. As was stated in Laufer v. Bucklaschuk, (MB CA), [1999]M.J. No. 553 (QL), at paragraphs 23 and 24: 23 Defamation occurs when words are published to a third person that contain an imputation which tends to lower the plaintiff in theestimation of right-thinking members of society generally or to expose him to hatred, contempt, or ridicule. To be actionable, the wordsmust be reasonably understood by others in a defamatory sense.

Words may be defamatory in their natural and ordinary meaning, theymay carry an implied meaning (the true innuendo), and/or an extended meaning (the false innuendo). Unless the literal meaning is plainand obvious, the plaintiff must plead what he alleges the words were intended to mean. 24 Pleadings are of critical importance in a defamation action, and the technical rules which are featured in a defamation action must becomplied with strictly. A party will be bound by his or her pleadings.

When the allegation is a true innuendo, the plaintiff must plead thefull particulars of all the material facts necessary to support the cause of action. When the allegation is an extended meaning or falseinnuendo, the plaintiff will be bound by the meanings pleaded. See Raymond E. Brown, The Law of Defamation in Canada, 2d ed.(Toronto: Carswell, 1994) vol. 1 at 19-26 to 19-30.3. Further, John A.

Campion et al., Bullen & Leake & Jacob's Canadian precedents of pleadings, 2d ed. (Toronto: Carswell, 2013), at page354 states the following: A plaintiff bringing a claim for defamation must plead the specific words alleged to be defamatory, that the defamatory words were ofand concerning the plaintiff, what the words were meant and understood to mean, the fact that they were published to one or more thirdparties, the identity of the third party or parties and that damages have been suffered.

Once those essential elements are pleaded, the lawof defamation then presumes that the defamatory words are false, that damages have been sustained and that the words were publishedwith malice. The onus is then on the defendant to rebut those presumptions and in doing so the defendant must plead the defences itrelies upon with particularity. [45] I agree with the defendants in this case that the plaintiffs have failed to properly plead the requisite elements of defamation.

Inparticular, the claim fails to properly particularize the statements alleged to be defamatory, to whom they were published, when theywere published, and how they were of and concerning all three of the plaintiffs.

[46] Further, the plaintiffs allege that certain of the defendants are liable in defamation stating that they failed to cause the author ofthe alleged defamatory publication to retract and apologize for it. There is no known basis for finding such liability under defamationlaw. [47] The defendants also argue that the only defamatory statement for which such particularization is provided is well outside thetwo-year limitation period for such an action. The statement for which the defendants acknowledge there is some particularizationrelates to a statement that was published on or about July 13, 2017.

The defendants acknowledge the general rule is that limitationdefences should first be pled and addressed with evidence on

summary judgment or trial, but that in some instances it would still beappropriate to address the issue on a motion to strike. The defendants rely upon Garang, in particular at paragraph 15: 15 In Abas Auto Inc. v. Superior General Partner Inc., 2015 MBCA 104, the Manitoba Court of Appeal describes the circumstances inwhich a limitation defence will be appropriate in a motion to strike under Rule 25.11(d), as follows: 11 We also confirm previous jurisprudence of this Court that determination of a limitation defence should be on a motion for

summaryjudgment or upon trial of an issue, but not on a motion to strike under r 25.11(

d) unless the pleadings themselves, on their face, containan admission or facts sufficient to conclude that the cause of action arose after the expiry of the limitation period. [48] Justice Kroft also accepted limitation issues as a basis to strike under a claim under Rule 25.11 in Cameron v. Winnipeg (Cityof), 2021 MBQB 109, at paragraphs 48 and 52. I agree with the concerns raised by the defendants, but find that with respect to theallegations of defamation generally, that the plaintiffs should be granted leave to amend their statement of claim, if they are able tocorrect the deficiencies.

Given that this is not a case like in Garang or Cameron, where the court found that no leave to amend wasappropriate, I am not prepared to prevent an amendment relating to defamation solely because of the limitations defence. I will turn nowto explain the many specific deficiencies in the plaintiffs’ pleading as it relates to defamation. [49] Paragraph 114 of the claim does not contain any particulars of the alleged slander including the words used, how the words weredefamatory, or when the words were stated.

Paragraph 115 does not further define defamatory statements and in fact adds less clarity inthat it references other defamatory statements. [50] Paragraph 116 has the allegation that relates to an email being sent on July 13, 2017. In addition to plainly being outside the two-year limitation period for the reasons explained above, this paragraph continues to be vague and uncertain by including the language“potentially the investors”; “in addition to the falsehoods”, and “including but not limited to”. The paragraph also only details how thewords could be of and concerning the plaintiff Ms.

Bonk and not the corporate plaintiffs. [51] Paragraph 122 of the claim further contributes to the uncertainty of who the defamatory email is alleged to have been publishedto as it refers to the communications as being disseminated to a specific individual and “other investors”. In Lowenberg v. Oderbien, (MB KB), [2000] M.J.

No. 139, 146 Man.R. (2d) 120, 95 A.C.W.S. (3d) 258, (Master Harrison) the court atparagraph 19 struck a defamation allegation that alleged the statements were repeated to “others”. [52] At paragraph 125 of the claim, the plaintiffs allege that the defendants failed to cause or correct the actions of one of thedefendants and failed to cause him to retract or apologize for his defamation against the plaintiffs. There is no basis under defamationlaw for holding a party liable for the statement of another. [53] At paragraph 128, there is an allegation that one of the defendants slandered the plaintiffs.

However, the paragraph fails toparticularize the slander of the words used, how the words were defamatory or when the words were published. [54] At paragraph 134 there is reference to a statement by one of the defendants to the plaintiff Ms. Bonk and refers again todefamatory statements generally. The paragraph does not add any particulars to the defined term defamatory statement and onlyreferences the statement to have been made to the plaintiff Ms. Bonk.

To constitute defamation the statement must be made to a thirdparty, and not just the plaintiff. [55] Paragraph 145 of the claim again alleges generally that one of the defendants made defamatory statements to disparage theplaintiff Ms. Bonk and the corporate plaintiffs. There are no particulars in the claim of how any statements could be of and concerningthe corporate plaintiffs.

As well, this paragraph, while providing the generality of what is alleged to be a false statement, does not allegewhen it was stated or to whom, and uses the language “for example” thereby suggesting and is not limited to this one statement. [56] Paragraph 153 of the claim alleges a “pattern of defamation” without offering any particulars of same. Paragraph 158 of theclaim alleges that all of the defendants are responsible for the defamatory statements, but does not provide particulars of how thedefendants are liable in defamation.

Again, it does not allege particulars of how any statements are of and concerning all of the plaintiffs. [57] At paragraph 161 of the claim, there is reference to defamatory statements including the particulars set out; however, contrary tothe suggestion in the paragraph, there is actually a lack of particulars set forth in the claim of the defamatory statements. [58] As a result of these specific deficiencies, and the general deficiencies noted above, I find that the plaintiffs have not shown areasonable cause of action for defamation.

However, the plaintiffs are granted leave to amend their claim to properly plead the necessarymaterial facts. Injurious falsehood [59] Similar to defamation, the tort of injurious falsehood also requires a proper particularization of the false statements which has notbeen done in the claim. The claim only alleges that the defendants have committed the tort of injurious falsehood. As with the tort of

defamation, I am granting leave to the plaintiffs to amend their claim to properly particularize the false statements alleged. Publicity placing a person in a false light [ 60 ] The plaintiffs have also alleged in the claim that the defendants have committed the tort of “publicity placing a person in a false light”. That tort was discussed in the Ontario Superior Court in Yenovkian v. Gulian , 2019 ONSC 7279 . However, it should be noted that other jurisdictions in Canada, including Manitoba, have yet to accept the existence of the tort.

An exception is a recent decision of the British Columbia Superior Court which recognized that such a claim may be legally tenable, but was not accepted in that particular instance on the facts pled. See Durkin v. Marlan , 2022 BCSC 193 , at paragraphs 21 to 22 . [ 61 ] In Yenovkian , the elements of the tort were described as follows at paragraph 170: 170 With these three torts all recognized in Ontario law, the remaining item in the "four-tort catalogue" of causes of action for invasion of privacy is the third, that is, publicity placing the plaintiff in a false light.

I hold that this is the case in which this cause of action should be recognized. It is described in s. 652E of the Restatement as follows: Publicity Placing Person in False Light One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if (

a) the false light in which the other was placed would be highly offensive to a reasonable person, and (

b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed. [ 62 ] A recent

article cautioning against the adoption of the “false light” tort in Canada reviews the various elements of the tort and notes that “the publicity” element of the tort requires communication to the public at large or to so many people such that the matter is certain to become public knowledge and certainly requires more than “communication to a single individual or a small group of people”. As such, there is a very important distinction between publication and defamation and publicity under this “false light” tort.

See Duncan, Fraser . “Illuminating false light: assessing the case for the false light tort in Canada” Dalhousie Law Journal (2020), Vol. 33 Issue 2, page 9. [ 63 ] The defendants also point out that the “false light” tort is considered a tortuous invasion of privacy, and as such would also be subject to a two-year limitation of action. [ 64 ] In addition to the fact that many jurisdictions in Canada, including Manitoba, have yet to accept the existence of the tort, there is also the concern that the claim does not include the material facts to support this cause of action.

Most notably, there is not particularization of the words or statements that are complained of, who “publicized” any such words or statements, how such words or statements were “publicized”, or when such “publicity” occurred. [ 65 ] The one instance in the claim where specific details of an allegedly false statement being made are provided, i.e. paragraph 116 of the claim, alleges that an email containing false information was circulated to “the defendants” and “potentially the investors”.

This does not rise to the level of communication “to the public at large”. [ 66 ] Given that Manitoba has yet to accept the existence of the tort and given that there is no suggestion that the alleged false light had wide publicity, I am not satisfied that the plaintiffs ought to be given leave to allege publicity placing a person in a false light. Conflict of interest [ 67 ] The plaintiffs have alleged a failure by the defendants to identify or disclose certain alleged conflicts of interest at paragraphs 162 to 163 of the claim.

There is no standalone cause of action at law known as a conflict of interest and the allegations do not seem to relate to or support any other cause of action in the claim. They are therefore irrelevant and are struck without leave to amend. Breach of contract [ 68 ] The plaintiffs have alleged breaches of contract as a cause of action at paragraphs 164 and 196 to 200 of the claim. Breach of contract is an obviously well known cause of action, however, in a pleading it requires at least some particularization of the alleged agreement in question.

In the claim, the details of the agreement are vague at best. [ 69 ] The plaintiffs are granted leave to claim breach of contract provided that they are able to particularize the alleged agreement in question. Negligence [ 70 ] At paragraphs 203 to 204 of the claim under the heading of “Negligence” the plaintiffs have alleged that the defendants owed the plaintiffs “a duty of care and fiduciary duty to carry out those duties and obligations as the Defendants’ Duties”.

Again, while negligence is a well-known cause of action, the claim fails to coherently, logically and concisely describe the duties owed with proper supporting material facts. For example, the defendants’ duties are defined in paragraph 170 to include: “duty to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances including but not limited to abiding by and enforcing regulations”. The paragraphs also define the breaches of duty as “wrongful acts” and “Defendants’ failures”.

The wrongful acts are vaguely disclosed under paragraph 149 as “the multiple forms of wrongful conduct described herein”. “Defendants’ failures” is defined at paragraph 155 with a non-exhaustive list that provides little particularization including when specifically these actions took place and

the absence of material facts to support them despite the lengthy narrative of evidence in the claim. While I find that the plaintiffs have not pled the material facts for the tort of negligence in their claim, they are granted leave to amend their claim as it relates to negligence. Allegations of employment and related breaches of duties [ 71 ] At paragraph 4 of the claim, the plaintiff Ms. Bonk alleges she was, and is, an employee of the plaintiff PWS and that she is employed in the role of Chief Executive Officer.

There is no allegation that she is employed by the plaintiff Galton. [ 72 ] In paragraphs 5 to 8 of the claim, the plaintiff Ms. Bonk alleged that each of the defendants was an investor and director of Galton.

Although paragraphs 16 and 169 of the claim allege that the defendants have the majority of the director seats and therefore that they control Galton, PWS and the workplace, there are no particulars or legal basis provided in the claim for which to support their allegation. [ 73 ] Based on the allegations of the claim, there is no basis to consider the defendants, particularly being individuals, as the employers of the plaintiff Ms. Bonk.

Therefore, there can be no basis to hold the defendants responsible for any of the alleged actions based on an employment relationship in paragraphs 139, 150, 155, 169, 170, 171 and 197. Further, based on the relationship pled in the claim, there is nothing to support or particularize that the defendants owed a fiduciary duty to the plaintiffs Bonk or PWS or to support the allegations of vicarious liability in paragraphs 201 to 202 of the claim. [ 74 ] The pleading falls far short of establishing a reasonable cause of action relating to breach of any employment obligations by the defendants.

Nevertheless, pleadings should only be struck in the clearest of cases, and I am not satisfied that it is not possible to cure the defects. The plaintiffs are granted leave to amend their claim as it relates to allegations of employment and breaches of related duties.

Further problems with the pleadings [ 75 ] The defendants raise that in addition to not setting out reasonable causes of action, that the statement of claim pleads evidence, irrelevant facts, opinion, argument and contains inflammatory and prejudicial statements. [ 76 ] Pleadings should only contain the material facts in support of the claim and are not to contain evidence (Rule 25.06(1)). A further useful

summary of the rules on pleadings was provided by Justice Martin in Olfman v. University of Manitoba et al , 2014 MBQB 128 , at paragraph 13 as follows: 13 Dewar J. recently expounded on the rules of pleadings in Peguis First Nation et al v. Canada (Attorney General) , 2014 MBQB 98 .

Respecting Rule 25.06, at para. 6 he noted the following comments of Holmested and Watson, Ontario Civil Procedure , looseleaf (Toronto: Carswell, 1993): This is the master rule of pleading: all of the other pleading rules are essentially corollaries or qualifications to this basic rule that the pleader must state the material facts relied upon for his or her claim or defence.

The rule involves four separate elements: (1) every pleading must state facts, not mere conclusions of law; (2) it must state material facts and not include facts which are immaterial; (3) it must state facts and not the evidence by which they are to be proved; (4) it must state facts concisely in a

summary form. See Odgers, Principles of Pleading and Practice (21st ed.) p. 94. As Master Haberman stated in Pineau v. Ontario Lottery & Gaming Corp. , 2011 CarswellOnt 11375 (Master) , "A pleading is meant to give all parties fair notice of what the others plan to prove at trial, but not necessarily of how they intend to prove it." Thus, a party should avoid pleading (

a) bald conclusory statements or arguments, (

b) irrelevant matters, (

c) evidence and (

d) prolix descriptions of factual detail. Dewar J. went on to say in his conclusion: 46 When Rule 25.06(1) says that a pleading must consist of "a concise statement of material facts", it does not necessarily mandate that a statement of claim must be short. Due to the complexity of a matter and the abundance of material facts, there may well be statements of claim which run several pages. However, what Rule 25.06(1) does say is that whatever is required to be pleaded, it must be stated as simply and directly as possible.

Immaterial allegations, such as unnecessary description, platitudes, and repetition are not to be included. A statement of claim is a functional document - its purpose is to define the parameters of a party's case to enable the other side to understand what is being alleged. It is not to entertain or even to persuade. The pleading must simply contain the material facts in a concise and logical order that supports a cause or causes of action. Anything beyond that is surplusage. 47 In my opinion, the re-amended statement of claim in totality does not meet the grade required by Rule 25.06(1).

Courts often turn a blind eye to statements of claim that do not measure up in some respect. But the re-amended statement of claim is simply too prolix and repetitive on the one hand and not specific enough where it counts on the other to qualify as a proper pleading in this litigation. Furthermore, it is not capable of spotty strikeouts or insertions as was done following the decision of Master Berthaudin.

This pleading needs to be completely redrafted with an eye on the objectives of pleading and Rule 25.06(1). [ 77 ] The defendants submitted in this case that this claim is also flooded with evidence, irrelevant and immaterial statements, non- exhaustive lists and examples, argument, opinion, inflammatory language and attacks of character. [ 78 ] I agree with the defendants that the claim violates the principles of pleading in that it contains argument, opinion and inflammatory statements. For example, see paragraphs 15, 20, 30, 62, 101, 147 and 153.

There are also numerous examples in the claim of improperly providing non-exhaustive lists or mere examples which adds to the difficulties of knowing the entire case the defendants must meet. The main examples of this are at paragraphs 116, 123, 131, 145, 150, 161, 163 (i), 170 (

h) and 195 (d).

[ 79 ] Despite the extensive list of problems with the claim, I am granting leave to amend with respect to certain causes of action. If, however, the plaintiffs file an amended claim that continues to have significant violations of the principles of pleadings, it is likely that the court will consider that the plaintiffs’ claim ought to be struck out without further leave to amend.

The plaintiffs should therefore be aware that any further amendment must not only disclose a reasonable cause of action, but must also meet the test of a proper pleading, that is, only contain the material facts in support of the claim. The plaintiffs are strongly encouraged to seek legal advice if they intend to file an amended claim. [ 80 ] Given the complexity involved with amending the statement of claim, and given that the plaintiffs may retain legal counsel, I am granting the plaintiffs 60 days from service of the order to amend their statement of claim.

SUMMARY [ 81 ] The statement of claim is struck in its entirety on the basis that it offends the rules of pleading and contains no reasonable cause of action. [ 82 ] The plaintiffs are granted leave to amend their statement of claim based on the following causes of action: 1. intimidation 2. defamation, 3. injurious falsehood, 4. breach of contract, 5. negligence, and 6. breaches relating to an employment relationship including vicarious liability. [ 83 ] For greater certainty, the plaintiffs are not granted leave to amend their statement of claim based on the following causes of action: 1. discrimination, 2. harassment, 3. breaches of the Charter , 4. publicly placing a person in false light, and 5. conflict of interest. [ 84 ] The plaintiffs have 60 days from service of the order striking the claim to file an amended statement of claim on the grounds set out above. [ 85 ] The defendants were successful and are entitled to tariff costs for the motion in any event of the cause. _________________________ J.

L. Goldenberg Master