Jevco Insurance Co. v. Pacific Assessment Centre Inc. et al., (2015) 341 O.A.C. 321 (DC)

• Judge: Molloy, Linhares de Sousa and Wilton-Siegel, JJ.
• Court: Superior Court of Justice of Ontario (Canada)
• Case Date: December 23, 2015
• Jurisdiction: Ontario
• Citations: (2015), 341 O.A.C. 321 (DC);2015 ONSC 7751

Jevco Ins. v. Pacific Assessment (2015), 341 O.A.C. 321 (DC)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. DE.036

Jevco Insurance Company (plaintiff/respondent) v. Pacific Assessment Centre Inc. a.k.a. Pacific Rehab and Therapy Inc. , Professional Medexam Management Inc., Evident Diagnostics Inc., Fairview Assessment Centre Inc. , Century Diagnostic and Assessment Centre Inc., Vitali Tourkov , Oleg Konnyi, Vladimir Naidenov, Alexandre Lobatch and Pavlo Tsysar (defendants/appellants)

(183/14; 2015 ONSC 7751)

Indexed As: Jevco Insurance Co. v. Pacific Assessment Centre Inc. et al.

Court of Ontario

Superior Court of Justice

Divisional Court

Molloy, Linhares de Sousa and Wilton-Siegel, JJ.

December 23, 2015.

Summary:

The plaintiff insurer alleged that the defendants were part of an elaborate insurance fraud scheme that caused the plaintiff to overpay insurance claims by more than $500,000. The plaintiff sued the defendants in conspiracy and tort, claiming damages for both. The defendants moved to strike the conspiracy claim at the pleadings stage, arguing that the doctrine of merger applied (i.e. same damages claimed so conspiracy claim was redundant).

The Ontario Superior Court, in a judgment reported 2014 ONSC 2244, dismissed the motion on the grounds that: (1) it was not plain and obvious that the plaintiff had not alleged additional special damages flowing from the conspiracy; (2) it was not plain and obvious that the conspiracy claim was redundant; and (3) it was time to clarify the law by ruling that the doctrine of merger was not a bar to alternative claims in tort and conspiracy at the pleading stage. The plaintiff applied for leave to appeal.

The Ontario Divisional Court, per Harvison Young, J., in a judgment reported [2015] O.A.C. Uned. 150, granted leave to appeal on the ground that there were conflicting decisions on the issue which created a level of confusion that warranted clarification at the appellate level.

The Ontario Divisional Court dismissed the appeal. The court stated that "the law supports permitting the conspiracy claim to be pleaded along with other nominate torts and applying the doctrine of merger only at the end of the trial when it is known if the plaintiff has been fully successful on the nominate torts and whether there is anything added by the conspiracy claim".

Equity - Topic 5006

Merger - Application of doctrine - The plaintiff insurer sued the defendants in both tort and conspiracy for insurance overpayments resulting from an alleged elaborate insurance fraud scheme to submit false claims - The defendants moved to strike the conspiracy claim from the pleadings under the doctrine of merger, which applied where there was a conspiracy to commit a tort and the tort was actually committed - In that case, where damages were the same, the conspiracy claim became redundant - At issue was whether the merger doctrine should be applied at the pleadings stage - The Ontario Divisional Court held that "the law supports permitting the conspiracy claim to be pleaded along with other nominate torts and applying the doctrine of merger only at the end of the trial when it is known if the plaintiff has been fully successful on the nominate torts and whether there is anything added by the conspiracy claim" - It was not plain and obvious that the conspiracy claim added nothing where the pleadings also alleged a conspiracy to commit unlawful acts that were not also torts (i.e., alleged breach of Insurance Act) - Further, the pleading of special damages, at this stage, was sufficient to allow the conspiracy claim to continue - Application of the doctrine of merger should be left to the trial judge to determine whether the conspiracy claim was distinct from the tort - See paragraphs 20 to 53.

Torts - Topic 5083

Interference with economic relations - Conspiracy - What constitutes a conspiracy - A motions judge defined the elements of the tort of conspiracy as follows: "(1) two or more defendants make an agreement to injure the plaintiff; (2) the defendants (a) use some means (lawful or unlawful) for the predominate purpose of injuring the plaintiff; or (b) use unlawful means with knowledge that their acts were aimed at the plaintiff and knowing or constructively knowing that their acts would result in injury to the plaintiff: (3) the defendants act in furtherance of their agreement to injure; and, (4) the plaintiff suffers damages as a result of the defendants' conduct." - The Ontario Divisional Court held that "This is a succinct and correct summary of the law" - See paragraphs 18 to 19.

Cases Noticed:

State Farm Mutual Automobile Insurance Co. v. Assessment Direct Inc. et al., 2014 CarswellOnt 19136 (Sup. Ct.), refd to. [para. 6, footnote 4].

State Farm Mutual Automobile Insurance Co. v. Assessment Direct Inc. et al. (2014), 120 O.R.(3d) 422; 2014 ONSC 2877 (Div. Ct.), refd to. [para. 9, footnote 6].

McCreight et al. v. Canada (Attorney General) et al. (2013), 308 O.A.C. 128; 116 O.R.(3d) 429; 2013 ONCA 483, refd to. [para. 10, footnote 7].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc. et al.

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 11, footnote 8].

Canada Cement LaFarge Ltd. et al. v. British Columbia Lightweight Aggregate Ltd. et al., [1983] 1 S.C.R. 452; 47 N.R. 191, refd to. [para. 15, footnote 10].

Robinson et al. v. Medtronic Inc. et al., [2010] O.T.C. Uned. 1739; 2010 ONSC 1739, refd to. [para. 23, footnote 12].

Robinson et al. v. Medtronic Inc. et al., [2009] O.T.C. Uned. P46; 2009 CanLII 56746 (Sup. Ct.), refd to. [para. 23, footnote 12].

Apotex Inc. v. Plantex USA Inc. et al., [2005] O.T.C. 348 (Sup. Ct.), refd to. [para. 23, footnote 12].

Cineplex Corp. v. Vicking Rideau Corp., [1985] O.J. No. 304 (H.C.), refd to. [para. 23, footnote 12].

Harcourt v. Solloway Mills & Co. (1931), 40 O.W.N. 214 (H.C.), refd to. [para. 23, footnote 12].

Normart Management Ltd. v. West Hill Redevelopment Co. et al. (1996), 16 O.T.C. 63; 30 O.R.(3d) 531 (Gen. Div.), affd. (1998), 113 O.A.C. 375; 37 O.R.(3d) 97 (C.A.), refd to. [para. 26, footnote 14].

Aristocrat Restaurants Ltd. v. Ontario, [1984] O.J. No. 5164 (Sup. Ct.), refd to. [para. 28, footnote 15].

D.G. Jewelry Inc. et al. v. Cyberdiam Canada Ltd. et al., [2002] O.T.C. 251; 21 C.P.C.(4th) 174 (Sup. Ct.), refd to. [para. 30, footnote 16].

Elliott et al. v. Canadian Broadcasting Corp. et al. (1993), 16 O.R.(3d) 677 (Gen. Div.), affd. (1995), 82 O.A.C. 115; 25 O.R.(3d) 302 (C.A.), leave to appeal denied (1996), 201 N.R. 80 (S.C.C.), refd to. [para. 31, footnote 17].

Sun Life Assurance Co. of Canada v. 401700 Ontario Ltd. (1991), 3 O.R.(3d) 684 (Gen. Div.), refd to. [para. 32, footnote 18].

Apple Bee Shirts Ltd. v. Lax (1988), 27 C.P.C.(2d) 226 (Ont. H.C.), refd to. [para. 33, footnote 19].

Graye v. Filliter, 1997 CarswellOnt 5335 (Gen. Div.), refd to. [para. 34, footnote 20].

Wolf v. Ontario (Attorney General) et al., [2012] O.T.C. Uned. 72; 2012 ONSC 72, refd to. [para. 35, footnote 21].

Beaver Lumber Inc. et al. v. Hamer et al., [2004] O.T.C. 411; 35 C.L.R. (3d) 165 (Sup. Ct.), refd to. [para. 36, footnote 22].

Dominion of Canada General Insurance Co. v. MD Consult Inc. et al., [2013] O.T.C. Uned. 1347; 2013 ONSC 1347, leave to appeal denied [2013] O.A.C. Uned. 684; 2013 ONSC 6906 (Div. Ct.), refd to. [para. 37, footnote 23].

Allstate Insurance Co. of Canada et al. v. Fairview Assessment Centre Inc. et al., [2013] O.T.C. Uned. 5446; 2013 ONSC 5446, refd to. [para. 39, footnote 24].

2038724 Ontario Ltd. et al. v. Quizno's Canada Restaurant Corp. et al. (2009), 250 O.A.C. 87; 96 O.R.(3d) 252 (Div. Ct.), affd. (2010), 265 O.A.C. 134; 2010 ONCA 466, refd to. [para. 40, footnote 25].

Yordanes et al. v. Bank of Nova Scotia et al., [2006] O.T.C. 81; 78 O.R.(3d) 590 (Sup. Ct.), refd to. [para. 40, footnote 26].

Counsel:

Aldo Picchetti, for the plaintiff/respondent;

James McReynolds, for the underlined defendants/appellants.

This appeal was heard on October 27, 2015, before Molloy, Linhares de Sousa, and Wilton-Siegel, JJ., of the Ontario Divisional Court.

On December 23, 2015, Molloy, J., delivered the following judgment for the Court.