[11] In my view, the doctrine of merger should apply in this case such that the claim for conspiracy cannot stand together with the claim in tort for fraudulent misrepresentation. Applying the unassailable logic of Lord Denning in the English case of Ward v Lewis, [1955] 1 All E.R. 55 (C.A.), at 56, an allegation of a prior conspiracy to commit a tort adds nothing to the pleading. This is not a case where conspiracy is pleaded in the alternative because it is uncertain to the plaintiff whether the benefit claims were submitted or the charges incurred. If it were, then a claim for unjust enrichment could hardly be supported. There is nothing that needs to be left to the trial judge here; the claim in conspiracy adds nothing to the pleading as constituted. It is redundant. Applying the doctrine of merger, therefore, the claim in conspiracy cannot be maintained and must be struck.
[12] I am unable to agree with the defendants that the pleading does not disclose a cause of action in unjust enrichment. The alleged enrichment is plain to see, if not plainly worded: the defendants received a benefit to which they were not entitled, namely fees for approved services. The corresponding deprivation to the plaintiffs was the payment of those fees. The absence of a juristic reason is not specifically pleaded, but a generous reading of the claim makes it clear that the entire scheme alleged to have been operated by the defendants was unlawful. I find that paragraphs 17, 18 and 19 of the claim, read in context, are sufficient to constitute the third element of a cause of action in unjust enrichment.
[13] I agree with the defendants that the allegations as against the personal defendants must be struck. There are simply insufficient facts pleaded of alleged wrongdoings by the personal defendants against the plaintiffs directly to support any cause of action against them personally. I acknowledge that directors and officers of corporations may be held personally liable for certain tortious acts; however, standing alone, the allegations in paragraphs 17 and 19 do not support a cause of action against these defendants individually. Greater care must be taken to set out with some specificity the acts which would expose the personal defendants to liability to the plaintiffs. The conduct identified in paragraph 17 may indeed be the kind which the law may frown upon and which may attract scrutiny by licensing authorities, but setting up a corporation for an improper purpose is not a cause of action known at law. The claims against the personal defendants are therefore struck.
[14] I find that the statement of claim does set out sufficient facts to found a cause of action in fraudulent and negligent misrepresentation. It is not plain and obvious that the claims would fail. The law recognizes both torts being advanced. A generous and liberal reading of the pleading allows one to identify the essential elements of both torts. In respect of fraudulent misrepresentation, the representations are the information contained on the submitted OCF-22 forms; they are alleged to be false or to contain false information (paragraph 10); paragraph 10 speaks to the defendants intentions and their knowledge; paragraphs 13 and 14 set out what the submitted forms induced the plaintiffs to do, with the attached schedule to the claim providing specific references to claim numbers. In respect of the fifth element from the Corfax case, it was not, practically speaking, open to the plaintiff to void any contract with the defendants. As an insurer with responsibilities to its insured under the regulations of the Insurance Act, R.S.O. 1990, c.I.8, the course open to it on any particular submitted claim was merely to deny the benefit or service.
[15] I also find that the allegations of fraud are sufficiently pleaded. The description of the acts taken by the defendants provides sufficient detail of the nature of the alleged fraud: that of submitting insurance claim forms containing incorrect information, falsifications or bogus claims.
[16] I find that the pleading discloses a reasonable cause of action in negligent misrepresentation and negligence. The essential elements of those torts pleaded are found at paragraphs 20 and 21. The duty of care owed by the defendants to the plaintiffs, although not specifically set out, may be gleaned from a reading of the claim in its entirety. The defendants, as assessment centres for individuals with injuries arising out of motor vehicle accidents, would be submitting authorized forms to the plaintiffs as insurer for those individuals. The duty to provide honest and reliable information to the insurer can be viewed as inherent to that relationship. A degree of reliance on the assessment centre to submit legitimate claims on behalf of injured persons was to be expected; indeed, the nature and extent of the reliance by insurer is set out clearly at paragraphs 8 and 9 of the claim.