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CONSPIRACY - Nature and elements of tort of conspiracy

Friday, May 29, 2020 @ 9:25 AM  

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Appeal by the wife from partial summary judgment dismissing her conspiracy claim as not raising a genuine issue requiring trial. In her application for a divorce and corollary relief, the wife also sought damages in conspiracy from the husband, his parents, certain family trusts, and a related corporation. The wife alleged that the respondents conspired to keep money out of the husband’s hands specifically for the purpose of reducing her family law entitlements. The husband was an entrepreneur who worked in the casino and gaming industry for over 20 years. The alleged conspiracy related to the management of the River Cree Casino. The casino management contract was bought out by the Cree nation from the family corporation. The husband’s father kept all proceeds, but the wife claimed the husband had a 40 per cent interest in the proceeds. The motion judge concluded that there was no unlawful conspiracy to hide the money from the buyout of the casino management contract based on the judge’s findings that there was no evidence of an agreement, that inaccurate representations by the husband about his income were not made in concert with his father, that the steps taken by the father were not intended either actually or foreseeably to harm the wife, and none of the actions of the father or the husband were wrong at law. The motion judge also concluded that the wife was unable to establish damages.

HELD: Appeal allowed. The motion judge erred in law by bifurcating the issues and in her analysis of the tort of conspiracy. She also made a palpable and overriding error of fact about critical evidence that the wife relied on in support of her conspiracy claim and did not advert to other important evidence in her analysis. The motion judge never engaged with the question of whether bifurcating the issues was appropriate. The risk of inconsistent outcomes in this case was genuine because the factual footprint of the conspiracy claim was substantially the same as the support issues that remained for trial. The very same evidence brought in support of the conspiracy allegation would be relevant to a request to attribute additional income for support purposes. The risk of inconsistent findings materialized in the motion judge’s own inconsistent statements relating to the conspiracy claim and her assertions about avenues that remained open to the wife in her family law litigation. Despite the judge’s stated acceptance that the case law did not preclude the application of the tort of conspiracy in family cases, her approach was that all claims should be determined under the family law regime and this approach imbued her analysis of whether the tort was established. The motion judge also erred in law in finding that a damage claim in conspiracy would effectively be a form of punitive damages because the wife would already have an imputation remedy under the family law framework. The motion judge’s concern seemed to be that permitting multiple claims would necessarily result in double recovery. This concern was based on a misunderstanding of the law of damages.

Leitch v. Novac, [2020] O.J. No. 1668, Ontario Court of Appeal, P.D. Lauwers, C.W. Hourigan and J.A. Thorburn JJ.A., April 17, 2020. Digest No. TLD-May252020010