Doctrine of Merger

Jevco Insurance Company v Pacific Assessment Centre Inc., 2015 ONSC 7751 (CanLII)

[20] The doctrine of merger applies in a situation where there is a conspiracy to commit a tort, and the tort is actually committed. The theory behind merger is that once the planned tort is actually committed, the harm flows from the tort and the pleading of conspiracy is therefore redundant.

[21] As I indicated above, cases dealing with this issue often referred to the decision of Lord Denning in Ward v. Lewis. In that case, the plaintiff, who was an osteopath, alleged he had been slandered by the defendants, and further alleged that the defendants had conspired together to utter the slanders against him. When asked for particulars of the special damages caused by the conspiracy, he first said there were none. His claim was struck out. He then sought leave to amend to add an averment that after the slanders the value of his business had been cut in half. The master gave leave to amend, which was upheld by Gerrard J. However, on further appeal, the Court of Appeal disallowed the amendment with brief oral Reasons by Denning L.J. and Morris L.J., both of whom stated that the basis for their decision was the plaintiff’s failure to plead any causal connection between the conspiracy and the damages claimed. Lord Denning stated, “In this case, the allegation of conspiracy fails for the simple reason that there is no nexus alleged between the falling off in practice and the slanders which are alleged.”

[22] Although this is the clear ratio decidendi of the case, it is the obiter comments by Lord Denning that are frequently relied upon for striking out conspiracy claims at the pleadings stage, based on the doctrine of merger. Lord Denning’s remarks on the issue, in their entirety, are as follows, at p. 56:

It is important to remember (and we had a case only last week on this point) that when a tort has been committed by two or more persons an allegation of a prior conspiracy to commit the tort adds nothing. The prior agreement merges in the tort. A party is not allowed to gain an added advantage by charging conspiracy when the agreement has become merged in the tort. It is sometimes sought, by charging conspiracy, to get an added advantage, for instance in proceedings for discovery, or by getting in evidence which would not be admissible in a straight action in tort, or to overcome substantive rules of law, such as here, the rules about republication of slanders. When the court sees attempts of that kind being made, it will discourage them by striking out the allegation of conspiracy, on the simple ground that the conspiracy adds nothing when the tort has in fact been committed.

[23] As noted by the motion judge in this case, an adjunct to the merger doctrine is the “special damages” principle. It is clear that damages are an essential element of the tort of conspiracy, no matter which manner of committing the tort is relied upon. However, there are cases which have determined that the damages caused by the conspiracy must be “special” or distinct from the damages caused by the underlying tort. This is connected to the merger principle in that, if the same damages are alleged to have been caused by the tort, then the conspiracy claim adds nothing and is redundant.

[24] In an earlier decision in another case, Robinson v. Medtronic, Perell J. dealt with this issue and the reasons for a specific pleading of special damages in the following manner (at paras. 12-13):

I believe that a plaintiff advancing a cause of action for civil conspiracy must plead the special damages associated with the civil conspiracy for three reasons. The first reason is that the case law establishes that damages are a constituent element of the tort of civil conspiracy. The second reason is that the law about civil conspiracy is still being developed and its scope may be determined by the types of damages for which it would provide compensation. Thus, it is necessary to identify what damages were caused by the civil conspiracy even if those damages might overlap with damages caused by another tort. The third reason is that by the plaintiff specifying the damages for the conspiracy, the defendant is given fair notice so that it can plead the defence, the merits of which would be decided at trial, that the tort of civil conspiracy merged with the plaintiff’s proof of another tort.

If, as is the situation in the case at bar, a plaintiff’s pleaded damages for negligence are the same as the special damages pleaded for the civil conspiracy, I see no reason for striking out the pleading of the special damages. At the trial, it may come to pass that the Plaintiffs’ claim in negligence fails but their civil conspiracy claim might succeed based on some other wrongful act and the proof of the other constituent elements of the tort of civil conspiracy including the special damages associated with the civil conspiracy. [Emphasis added.]