Executive Summary: Key Legal and Evidentiary Issues

• Adequacy of pleadings in misrepresentation and fraud claims, including whether the statements of claim provided sufficient particulars to give fair notice and define the scope of the case.
• Characterization of “post-transaction conduct” allegations as either improper new causes of action or permissible factual particulars supporting pre-contractual misrepresentation claims.
• Strategic over-pleading and its impact on the breadth of documentary and oral discovery, including concerns about “fishing” through defendants’ evidence.
• Proper use and proportionality of pleadings motions versus simpler particulars motions, in light of escalating litigation costs and delays.
• Application of Rule 57.03 to costs of interlocutory motions, including whether to fix costs immediately or defer them and the meaning of costs “in the cause.”
• Evaluation of the defendants’ technical success on the motions as potentially pyrrhic, given that the result is more focused and better-drafted pleadings against them.

Background and parties

The proceedings arise from misrepresentation lawsuits brought by multiple plaintiffs against Arlene Dickinson and her company, Arlene Dickinson Enterprises. The plaintiffs include individual investors and a corporate plaintiff, Ngi Holdings Inc., who allege they were induced by misrepresentations to enter into a transaction. The litigation is being heard in the Ontario Superior Court of Justice, Commercial List, before Justice F.L. Myers. The actions are related to an existing breach of contract claim brought by BCP, with these misrepresentation claims proceeding as additional litigation rather than replacing the contract suit.

Nature of the claims and pleadings

The plaintiffs issued statements of claim asserting misrepresentation, including potential fraud, in relation to a pre-transaction investment context. They also pleaded allegations of “post-transaction conduct” by the defendants. Those post-transaction allegations became central to the interlocutory disputes. The defendants responded not by immediately contesting the merits at trial, but by bringing motions attacking the form and sufficiency of the plaintiffs’ pleadings. The motions were framed as applications to strike out portions of the statements of claim for disclosing no reasonable cause of action, but in substance they functioned largely as demands for further and better particulars.

Justice Myers emphasized that pleadings perform several crucial roles in civil litigation. They provide notice to defendants that they are being placed in legal jeopardy, define the claims to be met, and delineate the scope of documentary production and oral examinations for discovery that will occur, often years later, in a “backend-loaded” civil system. At the same time, he noted that pleadings are only unproven allegations and are “almost infinitely amendable” as facts evolve; they are technical tools in service of broader procedural fairness, not evidence themselves.

The 2025 motions to strike and to clarify particulars

In the first decision (December 15, 2025, reported as 2025 ONSC 7003), the defendants obtained orders in two related actions striking portions of the statements of claim, with leave to amend all but one allegation that the court found untenable. Justice Myers recorded that, although the motions were nominally brought as motions to dismiss (for disclosing no reasonable cause of action), they were “never more than demands for particulars.” The real issue was whether the plaintiffs’ pleadings adequately particularized the alleged misrepresentations and clearly explained the role of the post-transaction conduct allegations.

The court found that the plaintiffs had not done an adequate job pleading their case. Their statements of claim cast allegations broadly and without sufficient particulars, and the use of post-transaction conduct was confusing as to whether it was being advanced as a separate cause of action or merely as evidentiary support for the pre-contract misrepresentation theory. Justice Myers accepted that the defendants knew the “fundamental case” they had to meet, referring to the threshold discussed in the classic decision Copland v. Commodore Business Machines Ltd., but he still concluded that the technical defects in pleading justified intervention.

In the course of the motion, the plaintiffs effectively conceded that the post-transaction conduct was not a fresh cause of action but instead formed part of the factual matrix supporting the earlier misrepresentation claims. The court struck substantial portions of the pleadings, but with generous leave to amend, thereby compelling the plaintiffs to rethink, reorganize, and restate their claims in a more precise and disciplined fashion. Justice Myers observed that the apparent “success” of the defendants might ultimately prove pyrrhic, since it would likely result in the defendants facing “more organized, better drafted pleadings” and, potentially, a stronger case against them.

Strategic over-pleading, discovery scope, and systemic concerns

Justice Myers used the case to comment on systemic issues in civil litigation. He recognized that over-pleading can itself be a litigation tactic. Plaintiffs’ counsel may be incentivized to draft broad and imprecise pleadings in order to widen the scope of discovery, thereby obtaining access to more of the defendants’ documents and testimony in search of helpful “tidbits” of evidence, regardless of how directly they relate to the original cause of action. This tactic is especially tempting where defendants are reluctant to bring expensive pleadings motions, given their often limited practical benefit and substantial cost.

The judge linked these dynamics to a broader problem in civil justice: the overuse of motions and discovery processes, escalating costs, and delayed access to trials on the merits, with the result that civil litigation becomes unaffordable for many Canadians. He floated, in a purely hypothetical way, an alternative system in which parties would be required to provide their evidence at the outset, thus giving precise and detailed notice and reducing the need for particulars motions and open-ended discovery. However, he stressed that this is not the system currently in place, and the court must work within existing rules.

The 2026 costs decision on the pleadings motions

The subsequent endorsement dated January 12, 2026 (2026 ONSC 207) addresses the costs consequences of the earlier pleadings motions. Under Ontario’s general rule, the successful party on a motion is presumptively entitled to partial indemnity costs, subject to proportionality (Boucher v. Public Accountants Council for the Province of Ontario). Here, the defendants sought approximately $40,000 in partial indemnity costs, having actually incurred over $66,000 in fees, disbursements, and HST to bring the motions. The plaintiffs had spent about $41,000 all-inclusive on the motions and valued their costs on a partial indemnity basis at around $25,000.

Justice Myers acknowledged that the defendants were technically successful: they had significant portions of the pleadings struck and had prompted the plaintiffs to clarify and narrow the role of post-transaction conduct. Yet he also reiterated his concern that the victory might be pyrrhic, as the defendants would now face better organized and more tightly drafted pleadings. The plaintiffs, for their part, argued that the motions only exposed technical deficiencies that could be corrected and even “bolstered,” and they asked that the costs be “in the cause,” meaning payable by whichever party ultimately lost the case at trial.

In analyzing whether to fix costs immediately or defer them, Justice Myers considered Rule 57.03 of the Rules of Civil Procedure and adopted the approach articulated by Wright J. in Sea Vision Marine Products Ltd. v. McKitrick. That approach recognizes that trial judges are often poorly positioned to assess interlocutory steps over which they did not preside, and that awarding costs “in the cause” on a motion to strike may signify the court’s view that, while the motion had to succeed technically, it was a “tempest in a teapot.” Justice Myers agreed with the idea that there can be circumstances where justice is better served by postponing the final costs consequences until the ultimate winner of the lawsuit is known.

Balancing responsibility and proportionality in costs

Justice Myers concluded that both sides bore responsibility for an unnecessarily expensive procedural detour. The plaintiffs had delivered defective pleadings that invited attack. The defendants, in response, chose to bring an elaborate and costly motion to strike, rather than a more straightforward motion for particulars or engaging in frank discussions between counsel to clarify what was truly at issue. He criticized the overall size of the costs on both sides as “too high” for a pleadings motion that could have been resolved by cooperative dialogue and a narrower procedural approach.

On that basis, the court fashioned a tailored costs order. Justice Myers declined to make a standard “costs in the cause” order benefitting either side equally. Instead, he ordered that the plaintiffs pay the defendants’ costs “in the cause,” but only in favour of the defendants, fixed at $20,000 on a partial indemnity basis, all-inclusive. In practical terms, this means that the defendants will be entitled to receive $20,000 in respect of the motions if they ultimately succeed in the action; if they lose at trial, the plaintiffs will not recover any costs for the motions, despite having spent substantial sums themselves. The judge justified this asymmetrical result on the basis that the plaintiffs’ inadequate pleadings were the “ultimate cause of this process detour,” whereas the defendants’ response, though perhaps heavy-handed, was still a reaction to those deficiencies.

Outcome and practical implications

Taken together, the 2025 and 2026 decisions reshape but do not resolve the underlying misrepresentation dispute. Substantively, the plaintiffs’ misrepresentation and potential fraud claims survive, but only after substantial redrafting. The court struck portions of the pleadings while granting broad leave to amend, clarified that the post-transaction conduct allegations should function as particulars rather than as standalone causes of action, and signaled that future discovery will be bounded by more disciplined and precise pleadings. Procedurally, the court underscored the importance of proportionality, cooperation, and careful pleading in civil litigation, warning against both over-pleading by plaintiffs and over-engineered pleadings motions by defendants.

As of these decisions, there has been no trial or final adjudication on liability or damages, and thus no monetary damages award has been made in favour of any party. On the interlocutory costs issue, the defendants are treated as the successful party on the pleadings motions, with the court fixing their partial indemnity costs at $20,000, payable by the plaintiffs only if the defendants ultimately prevail in the action. Because this costs order is expressly “in the cause” and contingent on the final outcome, the total monetary recovery in favour of the successful party at the end of the case cannot yet be determined from these decisions alone.