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Torts - Conspiracy. Konstan v. Berkovits
In Konstan v. Berkovits (Ont CA, 2024) the Ontario Court of Appeal briefly considered tort conspiracy claims:[65] A plaintiff claiming conspiracy to injure must prove that the defendants acted “in combination, that is, in concert, by agreement or with a common design”: Agribrands Purina Canada Inc. v. Kasemekas, 2011 ONCA 460, 106 O.R. (3d) 427, at para. 26. ....
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[68] As aptly stated in Pontillo v. Zinger et al., 2010 ONSC 5537, at para. 15, there is “no tort of engaging in acts that further someone else’s conspiracy”. .... . 6071376 Canada Inc. v. Khedmatgozar
In 6071376 Canada Inc. v. Khedmatgozar (Ont CA, 2024) the Ontario Court of Appeal cited a test for the tort of 'unlawful conduct conspiracy':[6] As Goudge J.A. explained in Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, at para. 26, the tort of unlawful conduct conspiracy has five essential elements:a) the alleged conspirators must “act in combination, that is, in concert, by agreement or with a common design”;
b) their conduct is unlawful;
c) their conduct is directed towards the plaintiff;
d) the alleged conspirators “should know that, in the circumstances, injury to the [plaintiff] is likely to result”; and
e) their conduct causes injury to the plaintiff. . PMC York Properties Inc. v. Siudak
In PMC York Properties Inc. v. Siudak (Ont CA, 2022) the Court of Appeal considered the tests for civil conspiracy:[69] Both the Divisional Court and the motion judge referenced Hunt, at p. 985, where, referencing Canada Cement Lafarge v. B.C. Lightweight Aggregate, 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, at pp. 471-472, Wilson J. for the court instructed that an actionable conspiracy will exist in the following situations:Whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants’ conduct is to cause injury to the plaintiff; or
Where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result. [70] In the latter situation, it is not necessary that the predominant purpose of the defendants’ conduct is to cause injury to the plaintiff. In both situations, however, there must be actual damage suffered by the plaintiff. See: Hunt at p. 85; Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, at para. 24. . Derenzis v. Johnson
In Derenzis v. Johnson (Ont CA, 2022) the Court of Appeal states regarding civil conspiracy (with little explanation):As this court stated in Normart Management Ltd. v. West Hill Redevelopment Co. Ltd. (1998), 1998 CanLII 2447 (ON CA), 37 O.R. (3d) 97 (C.A.), “Simply reciting a series of events and stating that they were intended to injure the appellant is hardly sufficient to establish a conspiracy at law”. . Edgeworth v. Shapira
In Edgeworth v. Shapira (Ont CA, 2021) the Court of Appeal considered where the tort of 'unlawful means' conspiracy was made out:[9] The appellant relies on a failure to comply with r. 33.06 to ground the unlawful means component conspiracy. That rule – limited to a medical report consented to in writing or ordered by the court – requires that the examining health practitioner prepare a written report of any examination and share it with the parties. The motion judge held that this was not the kind of “wrongful act” envisioned in the jurisprudence dealing with unlawful means conspiracy: see Agribrands Purina Canada Inc. v. Kasamekas et al., 2011 ONCA 460, 334 D.L.R. (4th) 714 and Beaird v. Westinghouse (1999), 1999 CanLII 1828 (ON CA), 43 O.R. (3d) 581 (C.A.). The motion judge also rejected the argument that a failure to comply with the rules constituted the crime of obstructing justice under the Criminal Code, R.S.C. 1985, c. C-46, and thus was actionable.
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[12] The motion judge reviewed each of the appellant’s causes of action, considered the facts pleaded and found that it was plain and obvious that they could not succeed. He correctly identified the essential elements of each cause of action, considered the facts and applied the correct test under the rules. . PMC York Properties v. Siudak
In PMC York Properties v. Siudak (Div Ct, 2021) the Divisional Court canvasses leading cases on civil conspiracy:[79] In Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477, at paras. 73–74 and 80, the Supreme Court tells us that, in Canada, there are two types of actionable civil conspiracies: predominant purpose conspiracy and unlawful means conspiracy.
[80] A predominant purpose conspiracy is made out where the predominant purpose of the defendant’s conduct is to cause injury to the plaintiff using either lawful or unlawful means, and the plaintiff does in fact suffer loss caused by the defendant’s conduct. Where lawful means are used, if their object is to injure the plaintiff, the lawful acts become unlawful (see Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, at pp. 471–72).
[81] An unlawful means conspiracy requires no predominant purpose, but is made out where the conspirators direct unlawful conduct at the plaintiff, that the defendant should know would likely cause injury to the plaintiff, and that the injury to the plaintiff does in fact occur (see Cement LaFarge, at pp. 471–72).
[82] The seminal case on pleading conspiracy along with other torts is Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959. In that case, Mr. Hunt claimed that he contracted mesothelioma from being exposed to asbestos at work. He pleaded that the Defendants conspired to supress information about asbestos exposure with predominant purpose of causing him injury. He also pleaded in fraud, deceit, misrepresentation and negligence. The Defendants moved to strike the pleading.
[83] Wilson J., in the Supreme Court, reached a number of conclusions that are germane to the case at bar.
a. To strike a pleading it must be “plain and obvious” on its face that it cannot succeed.
b. The Court recognized the two types of civil conspiracy as causes of action.
c. It is at least arguable (at the time) that civil conspiracy could be plead in a personal injury action.
d. It is possible for a claim for civil conspiracy to exist along with another nominate tort, at least at the pleadings stage. Therefore, the existence of another applicable nominate tort should not, itself, mean that the plea of conspiracy should be struck. . Mughal v. Bama Inc.
In Mughal v. Bama Inc. (Ont CA, 2020) the Court of Appeal discusses the tort of civil conspiracy to cause economic injury:(1) The trial judge made no error in finding that MA Khan conspired to cause economic injury to the respondent
[20] The trial judge applied the correct test for establishing civil conspiracy to injure. The test, as set out in Canada Cement Lafarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, 145 D.L.R. (3d) 385, was cited by this court in Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, to which the trial judge referred.
[21] The tort of conspiracy to injure is recognized where:(1) Whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or,
(2) Where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the respondent is likely to and does result in loss to the plaintiff. [22] With respect to the second factor, it is not necessary that the predominant purpose of the defendants' conduct be to cause injury to the plaintiff but there must be a constructive intent derived from the fact that the defendants should have known that injury to the respondent would ensue and damage would be suffered by the plaintiff: Agribrands, at para. 24. . Agribrands Purina Canada Inc. v. Kasamekas
In Agribrands Purina Canada Inc. v. Kasamekas (Ont CA, 2011) the Court of Appeal considered the tort of civil conspiracy:First issue -- The unlawful conduct conspiracy
[24] The seminal case in Canada on the tort of civil conspiracy is Canada Cement Lafarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, [1983] S.C.J. No. 33. Speaking for the court, Estey J. described, at pp. 471-72 S.C.R., two categories of conspiracy recognized by Canadian law:Although the law concerning the scope of the tort of conspiracy is far from clear, I am of the opinion that whereas the law of tort does not permit an action against an individual defendant who has caused injury to the plaintiff, the law of torts does recognize a claim against them in combination as the tort of conspiracy if:
(1) whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or,
(2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff
(alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result. In situation (2) it is not necessary that the predominant purpose of the defendants' conduct be to cause injury to the plaintiff but, in the prevailing circumstances, it must be a constructive intent derived from the fact that the defendants should have known that injury to the plaintiff would ensue. In both situations, however, there must be actual damage suffered by the plaintiff. [page435]
[25] This case deals with the second category, namely, unlawful conduct conspiracy. The first does not apply because there was no finding that the predominant purpose of the appellants' conduct was to cause injury to the respondents. The respondents did not advance that proposition at trial.
[26] For the appellants to be liable for the tort of unlawful conduct conspiracy, the following elements must therefore be present:(a) they act in combination, that is, in concert, by agreement or with a common design; (b) their conduct is unlawful; (c) their conduct is directed towards the respondents; (d) the appellants should know that, in the circumstances, injury to the respondents is likely to result; and (e) their conduct causes injury to the respondents. [27] In this court, the appellants challenge only the finding that their conduct was unlawful. In particular, while they acknowledge that Purina's breach of its contract with Raywalt was unlawful, they say that the conduct of Ren's and McGrath was in no sense unlawful, and that therefore this element of the tort was not made out. Civil conspiracy cannot be established if only one conspirator acts unlawfully.
[28] What, then, are the requirements for unlawful conduct for the purposes of this tort? Most obviously, it must be unlawful conduct by each conspirator: see Bank of Montreal v. Tortora, 2010 BCCA 139 (CanLII), [2010] B.C.J. No. 466, 3 B.C.L.R. (5th) 39 (C.A.). There is no basis for finding an individual liable for unlawful conduct conspiracy if his or her conduct is lawful or, alternatively, if he or she is the only one of those acting in concert to act unlawfully. The tort is designed to catch unlawful conduct done in concert, not to turn lawful conduct into tortious conduct. The trial judge applied this requirement and found that each of the appellants had committed an unlawful act.
[29] To determine what sort of conduct qualifies as "unlawful" the trial judge looked to the jurisprudence dealing with the tort of intentional interference with economic relations.
[30] The trial judge concluded from the intentional interference cases that "unlawful conduct" includes conduct that the defendant "is not at liberty" or "not authorized" to engage in, whether as a result of law, a contract, a convention or an understanding. [page436]
[31] With respect, I do not think the jurisprudence goes that far. In Reach, this court found the tort of intentional interference with economic relations to be made out because actions by the defendant, a voluntary association, that caused its members to stop advertising with the plaintiff, constituted unlawful means directed at third parties, which then caused them to injure the plaintiff. The court was clear that these actions were beyond the lawful authority that the defendant had under its constitution, and were therefore actions beyond the defendants powers and done without jurisdiction. They could be set aside by the court at the behest of the third parties, its members. While the court made reference to the judgment of Lord Denning in Torquay Hotel Co. Ltd. v. Cousins, [1969] 2 Ch. 106, [1969] 1 All E.R. 522 (C.A.), it explicitly declined to decide how far Lord Denning's concept of "unlawful conduct" as "an act which [the defendant] is not at liberty to commit" might extend. Reach was a case of conduct that was wrong in law. I do not think that it provides a basis for the expansive interpretation used by the trial judge [at para. 127] as any "conduct that the defendant 'is not at liberty' or 'not authorized' to engage in, whether as a result of law, a contract, a convention or an understanding".
[32] Since Reach, this court's jurisprudence on the tort of intentional interference with economic relations has, if anything, tightened the scope of conduct considered unlawful. In Drouillard v. Cogeco Cable Inc. (2007), 2007 ONCA 322 (CanLII), 86 O.R. (3d) 431, [2007] O.J. No. 1664 (C.A.), the defendant's conduct in not following its internal corporate policy but instead acting in bad faith did not amount to unlawful means. In Correia v. Canac Kitchens, a division of Kohler Ltd. (2008), 2008 ONCA 506 (CanLII), 91 O.R. (3d) 353, [2008] O.J. No. 2497 (C.A.), this court approved of Lord Hoffman's majority reasons in OBG Ltd. v. Allen; Douglas v. Hello! Ltd.; Mainstream Properties Ltd. v. Young, [2008] A.C. 1, [2007] UKHL 21 (H.L.), in which he required unlawful conduct against a third party to be conduct that is actionable by the third party for the purposes of the tort of intentional interference with economic relations. This court reiterated this principle in Alleslev-Krofchak v. Valcom Ltd., [2010] O.J. No. 3548, 2010 ONCA 557, while recognizing that the delineation of actionability remained to be fully defined. It was unnecessary to do so in that case because the unlawful conduct relied on was clearly actionable as a matter of private law.
[33] What is clear from this jurisprudence is that, to constitute unlawful conduct for the purposes of the tort of intentional interference, the conduct must be actionable. It must be wrong in law. Conduct that is merely not authorized by a convention or an [page437] understanding is not enough. On this standard, the approach used by the trial judge was simply too broad.
[34] Moreover, reliance on the tort of intentional interference to supply the definition of "unlawful conduct" for the tort of civil conspiracy does not recognize that these two economic torts have evolved separately, and thus each have developed their own concept of unlawful conduct.
[35] The court should therefore be cautious of turning away from the history of this separate evolution simply to achieve a unified theory for the economic torts. Indeed, in Revenue and Customs Commissioners v. Total Network S.L., [2008] 2 W.L.R. 711, [2008] UKHL 19 (H.L.), the House of Lords went further, and said explicitly that, as the torts of intentional interference with economic relations and unlawful conduct conspiracy have developed over time, the concept of unlawful conduct has a different meaning in one tort than in the other:
see, for example, the speech of Lord Walker of Gestingthorpe, at para. 100.
[36] It is not necessary that we go that far in this case. However, rather than automatically adopting the meaning of unlawful conduct given in the intentional interference tort cases, I think the better course is to use those cases as a guide, but also consider the kind of conduct that the jurisprudence has found to be unlawful conduct for the purposes of the conspiracy tort.
[37] It is clear from that jurisprudence that quasi-criminal conduct, when undertaken in concert, is sufficient to constitute unlawful conduct for the purposes of the conspiracy tort, even though that conduct is not actionable in a private law sense by a third party. The seminal case of Canada Cement LaFarge is an example. So too is conduct that is in breach of the Criminal Code, R.S.C. 1985, c. C-46. These examples of "unlawful conduct" are not actionable in themselves, but they have been held to constitute conduct that is wrongful in law and therefore sufficient to be considered "unlawful conduct" within the meaning of civil conspiracy. There are also many examples of conduct found to be unlawful for the purposes of this tort simply because the conduct is actionable as a matter of private law. In Peter T. Burns and Joost Blom, Economic Interests in Canadian Tort Law (Markham, Ont.: LexisNexis, 2009), the authors say this, at pp. 167-68:There are two distinct categories of conduct that can be described as comprising "unlawful means": conduct amounting to an independent tort or other actionable wrong, and conduct not actionable in itself. . . . . Examples of conspiracies involving tortious conduct include inducing breach of contract, wrongful interference with contractual rights, nuisance, intimidation, [page438] and defamation. Of course, a breach of contract itself will support an action in civil conspiracy and, as one Australian court has held, the categories of "unlawful means" are not closed.The second category of unlawful means is conduct comprising unlawful means not actionable in itself. . . . . The first class of unlawful means not actionable in themselves, but which nevertheless supports a conspiracy action, is breach of a statute which does not grant a private right of action, the very instance rejected in Lonrho (1981) by the House of Lords. A common case is a breach of labour relations legislation, and another is the breach of a criminal statute such as the Canadian Criminal Code.
[38] What is required, therefore, to meet the "unlawful conduct" element of the conspiracy tort is that the defendants engage, in concert, in acts that are wrong in law, whether actionable at private law or not. In the commercial world, even highly competitive activity, provided it is otherwise lawful, does not qualify as "unlawful conduct" for the purposes of this tort. . Berry v. Pulley
In Berry v. Pulley (Ont CA, 2015) the Court of Appeal distinguished two categories of the tort of conspiracy in Canadian law:[35] Canadian courts recognize two types of actionable conspiracy: Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57 (CanLII), [2013] 3 S.C.R. 477, at para. 73. The first is predominant purpose conspiracy, also known as conspiracy to injure. This appeal involves the second type, which is known as unlawful means or unlawful act conspiracy.
[36] As outlined in Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460 (CanLII), 106 O.R. (3d) 427, at para. 26, a plaintiff must establish the following five elements to succeed on a claim of unlawful act conspiracy:1) The defendants acted in combination, that is, in concert, by agreement or with a common design;
2) The defendants’ conduct was unlawful;
3) The defendants’ conduct was directed towards the plaintiff;
4) The defendants should have known that, in the circumstances, injury to the plaintiff was likely to result; and
5) The defendants’ conduct caused injury to the plaintiff. . Tran v University of Western Ontario
In Tran v. University of Western Ontario (Ont CA, 2015) the Court of Appeal commented as follows on some of the constituent elements of the tort of conspiracy, and their pleading requirements:[21] In Normart, at p. 104, this court held that a statement of claim alleging conspiracy should:[D]escribe who the several parties are and their relationship with each other. It should allege the agreement between the defendants to conspire, and state precisely what the purpose or what were the objects of the alleged conspiracy, and it must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy; and lastly, it must allege the injury and damage occasioned to the plaintiff thereby. [22] If read generously, some facts supporting these elements may be identified in the statement of claim. However, an agreement to conspire, its objects and the overt acts of each of the individual respondents have not all been pled. . Shah v. LG Chem Ltd.
In Shah v. LG Chem Ltd. (Ont CA, 2018) the Court of Appeal discusses the tort of unlawful means conspiracy:[54] The tort of unlawful means conspiracy requires that:
• the defendants’ conduct was unlawful;
• the defendants’ conduct was directed at the plaintiffs “alone or together with others”;
• the defendants knew that, in the circumstances, injury to the plaintiff was “likely”, or “should have known that injury to the plaintiff would ensue”; and
• actual injury resulted: see Cement LaFarge v. B.C. Lightweight Aggregate, 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, at pp. 471-472; Pro-Sys, at para. 80. . McHale v. Lewis
In McHale v. Lewis (Ont CA, 2018) the Court of Appeal sets out the 'merger' doctrine for the tort of conspiracy:[12] I also do not accept the argument on appeal that leave to amend was properly refused in application of the “merger doctrine.”
[13] This principle holds that where two or more persons conspire to commit a tort, and the tort is committed, the allegation of conspiracy adds nothing to the claim. A plaintiff is not entitled to be compensated twice for the same harm where the damages from both the conspiracy and the tort are the same: Jevco Insurance Co. v. Pacific Assessment Centre Inc., 2015 ONSC 7751 (CanLII), 128 O.R. (3d) 518 (Div. Ct.).
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[21] I agree with the observations of Molloy J. in Jevco:[52] Accordingly, in my view, 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. Further, in the interests of paring down out-of-control interlocutory proceedings and introducing consistency in the law, as a practical matter it is preferable not to resolve these types of claims at the pleadings stage.
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