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CIVIL PROCEDURE - Striking out pleadings or allegations - Grounds

Monday, September 09, 2019 @ 9:40 AM  

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Appeal by the plaintiffs from an order striking out their statement of claim against the respondent Law Society as disclosing no reasonable cause of action. The appellants complained that their former lawyer negligently represented them in a lawsuit. The appellants’ action was premised on the Law Society’s alleged practice of requiring or permitting lawyers facing potential negligence claims to provide a copy of the relevant client file to Lawyers’ Professional Indemnity Company to allow it to evaluate and address the anticipated professional indemnity claim. The appellants argued that this practice gave rise to breach of confidence, confidentiality, trust, privacy and solicitor-client privilege and conversion and trespass to chattels against the Law Society. The motion judge found that s. 9 of the Law Society Act conferred upon the Law Society a statutory immunity from claims for damages for actions taken in good faith pursuant to its statutory mandate to regulate the legal profession or the provision of legal services. The motion judge found that the appellants’ pleadings did not include any claim of bad faith against the Law Society, and therefore struck out the pleadings as disclosing no reasonable cause of action, without leave to amend.

HELD: Appeal dismissed. The motion judge did not err in hearing the motion to strike after the respondent delivered its defence. It was obvious from the respondent’s pleading that the respondent took issue with the sufficiency of the appellants’ claim. The statement of claim did not allege that the respondent engaged in any bad faith conduct. There was thus no viable claim against the respondent due to the statutory immunity provided by s. 9 of the Law Society Act. None of the causes of action pleaded by the appellants involved bad faith as an essential element. The motion judge exercised his discretion to refuse leave to amend as the appellants already twice pleaded no allegations of bad faith against the Law Society. His decision to refuse to afford a third opportunity to fashion a tenable plea was reasonable in the circumstances. There were also no amendments that the appellants could make that might resuscitate their claim.

Potis Holdings Ltd. v. Law Society of Upper Canada, [2019] O.J. No. 3843, Ontario Court of Appeal, A. Hoy A.C.J.O., G.T. Trotter and M. Jamal JJ.A., July 22, 2019. Digest No. TLD-September92019002