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Civil Litigation Dicta - Pleadings - Documents [25.06(7)]. Del Giudice v. Thompson
In Del Giudice v. Thompson (Ont CA, 2023) the Court of Appeal considered the extent to which documents 'incorporated into pleadings' [under RCP 25.06(7)] may be subsequently admitted into evidence in a R21 striking pleadings motion [where evidence may not be admitted pursuant to RCP 21.01(2)]:A. INCORPORATING CONTRACTUAL DOCUMENTS BY REFERENCE
[12] The first issue received significant attention both at the hearing of the motion and on appeal: whether it was permissible for Capitol One to have filed a document brief containing four documents that it argued were incorporated by reference into the Fresh as Amended Statement of Claim, and for the motion judge to have considered those documents.
[13] The four documents were the Capital One Privacy Policy, Ms. Del Giudice’s Application for Credit, a Credit Card Agreement, and a document entitled “Important Card Information”. The documents were pivotal in the motion judge’s analysis of the viability of some of the appellants’ substantive claims.
[14] The appellants argue that it was improper for Capital One to have filed the documents because the motion judge directed them not to do so. They further argue that the motion judge erred in accepting the documents into evidence given that the documents were not proven through sworn testimony and the appellants contested their authenticity.
[15] I do not agree that the motion judge erred in the use he made of the documents.
[16] As a preliminary matter, I do not agree that the documents filed by Capital One on the motion were either tendered or received as evidence. Nor do I accept the appellants’ related argument that the motion judge used the documents to transform a pleadings motion into a summary judgment motion.
[17] In its factum for the Phase 1 hearing, Capitol One set out the basis for filing the document brief: that the documents had been incorporated by reference into the appellants’ pleading. A document incorporated by reference in a pleading is not evidence, and a judge considering a document so incorporated in assessing a pleading is not making findings of fact: McCreight v. Canada (Attorney General), 2013 ONCA 483, 116 O.R. (3d) 429, at para 32; Darmar, at para. 44.
[18] It is well established that a statement of claim is deemed to include any document to which it refers, and which forms an integral part of the plaintiffs’ claim: McCreight, at para. 32. As the appellants had pleaded that they had contracts and a credit application with Capital One (and that Capital One had breached the contracts and exceeded the terms of the application), these documents were incorporated by reference into the Fresh as Amended Statement of Claim. It was therefore permissible to consider those documents in determining whether the appellants had pleaded viable causes of action.
[19] The additional arguments that the appellants advance against permitting the documents to be used on the motion are likewise unpersuasive.
[20] First, the appellants argue that some of the documents pertain only to cardholders, and that the vast majority of class members never became cardholders and have no contractual relationship with Capital One. These documents therefore have no application to the dispute between the respondents and the vast majority of non-cardholder class members who never had contractual relationships with Capital One.
[21] This argument, like the preceding one, is foreclosed by settled law. Whether a pleading discloses a reasonable cause of action is to be determined by reference to the claims of the named plaintiffs and not to potential members of a proposed class: Darmar, at para. 8. The appellants pleaded that they are both Capital One cardholders. Accordingly, although the proposed class includes those whose applications for Capital One credit cards were unsuccessful, the motion judge properly assessed the pleadings by reference to the appellants’ claims only.
[22] Second, the appellants argue the documents were not incorporated by reference in the claim, because the documents are not “central enough to the claim to form an essential element or an integral part of the claim itself”: Jensen v. Samsung Electronics Co. Ltd., 2021 FC 1185, at para. 85; McCreight, at para. 32. The appellants argue that the primary bases for the claim are the various torts relating to data breach and misuse of data. The breach of contract claim is not only pleaded in the alternative, but with express scepticism: “alternatively, (iv) breach of contract and negligent breach of contract (if a contract existed at all), (collectively, ‘Negligent Breach of Contract’).”
[23] This argument is unavailing. Whether the documents were integral to the claim is to be assessed objectively and not according to the plaintiffs’ intentions. “Integral to the claim” does not mean “integral to the plaintiffs’ dominant theory of liability”. The claims to be assessed include theories of liability pleaded in the alternative. The alternative claim that the respondents breached a contract with the appellants puts in play the contractual documents that form the basis of those contracts. The submission made by counsel for the appellants at the hearing of the appeal that the contract referenced in the pleading could be an oral contract is perplexing in the context of a claim arising out of a relationship between a financial institution and its account holders. It would be extraordinary in the 21st century for a relationship between a regulated financial institution and thousands of account holders to be constituted by oral contracts. If it were to be alleged – even in the alternative – that there were oral communications giving rise to unwritten contracts, the appellants would had to have pleaded the fact that such oral communications were made. They did not. This submission fails. (As explained further below, this conclusion has significant consequences for several of the privacy-based tort claims that are predicated on no consent having been provided beyond a single purpose use.)
[24] Third, the appellants argue they were prejudiced by the use of the documents, because they do not admit the authenticity of the documents. At the hearing of the motion, they objected to the documents’ production and advised that they were proceeding “under protest”.
[25] One would expect that where a party pleads the existence of a contract, and then disputes the authenticity of the contractual documents that a defendant argues are incorporated by reference in the statement of claim, the answer would be to produce the actual contractual documents. In this case, the appellants say they did not do this for two reasons. First, because counsel did not review the motion brief until the eve of the motion and were therefore unaware that the respondents had filed a document brief. Second, because they do not actually believe there were contracts.
[26] With respect to being caught unawares, Capital One filed the document brief in a timely fashion. If the appellants were to object, they needed to do so in a timely fashion. At the very least, they ought to have sought an adjournment in order to locate and produce what they assert to be the authentic contractual documents, or to file evidence establishing the false nature of the documents. The appellants did not do either but instead chose to proceed “under protest”. I am left with the conclusion that the protest was groundless.
[27] With respect to the argument that there was no contract, an available remedy – again – would have been to adjourn to seek leave to amend the pleadings to remove the contractual claim and all aspects of the claim that relied on a commercial relationship that could only be established by contract. The appellants did not do so and accordingly were left with no basis to complain of the impropriety of Capital One filing the document brief on the basis that the claim incorporated the documents by reference.
[28] The appellants further argued that the motion judge erred in considering the documents in his determination of whether the causes of action pleaded were viable because the contracts between the appellants and Capital One were invalid and unenforceable. Again, on a pleadings motion what is in the pleadings and what is not in the pleadings matters. This submission founders on what was not pleaded: invalidity or unenforceability of the contracts. To the contrary, the appellants pleaded in the alternative that Capital One had failed to live up to contracts that were enforceable against it.
[29] In summary, the documents were properly filed for the purposes of the s. 5(1)(a) hearing and the motion judge made no error in referencing them as though they were included in the pleadings.
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