In a statement of claim, in an action for misappropriation and misuse of confidential information what level of specificity is required as “material facts” pursuant to Rule 25.06 of the Rules of Civil Procedure?
In Contino v. Olymel L.P, 2025 ONSC 7064, Associate Justice Nitchke held that broadly describing categories of allegedly confidential information was inadequate. The employer also failed to plead material facts explaining how the information was misused and how it suffered a resulting loss. The court struck the employer’s counterclaim, with leave to amend.
Facts
Olymel L.P. is a meat packing and processing company operating across Canada and internationally. Vincenzo (“Vince”) Contino joined Olymel in July 2013. According to his claim, he began as an Account Manager, became Director of Sales in November 2020, and received a further promotion in May 2023.
On November 22, 2024, Contino gave notice of his resignation, effective December 13, 2024. He admitted downloading personal and work-related documents while cleaning up his company computer. On November 27, he met with his manager and two Human Resource representatives, who told him they knew he had been downloading files and had a list of them. They did not show him that list. Olymel terminated his employment on the spot.
Contino pleaded that he returned the downloaded files to Olymel on a USB key. Olymel’s defence referred to a statutory declaration he signed on December 31, 2024, confirming, among other things, that he had surrendered the property, had not retained copies or disclosed it to third parties, and had not used and would not use it for anyone’s benefit. In December 2024, Contino began working as VP of Sales for Freshstone Brands Inc., which Olymel alleged was a competitor.
Contino sued for wrongful dismissal in April 2025. Olymel defended and counterclaimed for damages for breach of contract, breach of confidence, and copyright infringement, as well as punitive damages. Its counterclaim arose from the alleged unauthorized downloading and retention of approximately 466 confidential files, which it called “Stolen Property.” Olymel alleged that Contino downloaded files to a USB stick and emailed documents to his personal email address. Its descriptions included deals, business projections, price lists, customer lists, kilos and prices of various meat products, and business strategies. These were allegations in the pleadings, rather than findings following a trial.
Contino’s counsel challenged the absence of material facts. Olymel proposed an amended defence and counterclaim, but Contino maintained that it remained deficient and declined to consent. Contino moved under Rule 25.11 of Ontario’s Rules of Civil Procedure to strike the counterclaim in its entirety, without leave to amend, for failing to plead the material facts required by Rule 25.06. Olymel sought leave to file its proposed amendment. The essential complaint was that legal conclusions and general descriptions did not tell Contino the factual case he had to answer.
Decision of the Ontario Superior Court
Associate Justice Nitchke began with the distinction between material facts and the evidence used to prove them, and the court’s power to strike a deficient pleading:
[16] Rule 25.06 (1) of the Rules of Civil Procedure provides that: Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.
[17] Rule 25.11 provides that the Court may strike out all or part of a pleading, with or without leave to amend, on the ground that the pleading is scandalous, frivolous or vexatious, or is an abuse of process of the Court. A pleading that has no material facts is considered frivolous and vexatious: Carney Timber Company, Inc. v. Pabedinskas, 2008 CanLII 63163 (ON SC) at para. 16.
The court found that Olymel had adequately pleaded the contractual relationship and the obligations allegedly breached. Its allegations of damages, however, remained speculative. In explaining why conclusions require supporting facts, Associate Justice Nitchke referred to the Court of Appeal’s decision in Miguna and the earlier decision in Region Plaza:
[32] In Miguna v. Ontario (Attorney General), 2005 CanLII 46385 (ON CA) at para. 18, the Court of Appeal quoted from Region Plaza Inc. v. Hamilton- Wentworth (Regional Municipality) (1990), 12 O.R. (3d) 750 in finding that the Plaintiff had to have actual knowledge of the facts supporting his claims and not merely plead allegations that he believes may or may not be true:
. . . If the plaintiff does not at the outset have knowledge of the facts that give rise to the conclusions of malice, breach of duty, conspiracy to intentionally injure, etc., then it is inappropriate to make these allegations in the statement of claim. It may be that in the future the plaintiff will determine facts as a result of discovery or in some other way that will support some or all of the allegations. . . [B]ut until the plaintiff has knowledge of some facts on which to base the conclusions alleged in the statement of claim, it is improper to allow these conclusions to be pleaded baldly and without any supporting facts.
Turning to breach of confidence, the court explained that the information must have been confidential, communicated in confidence, and misused to the detriment of the party conveying it. Identifying what information was actually in issue was essential. On that point, the court relied on Evertz Technologies Limited v. Lawo AG:
[37] In striking a claim for misappropriation and misuse of confidential information, the Court in Evertz Technologies Limited v. Lawo AG, 2019 ONSC 1355 made it clear that a general description of categories of confidential information is inadequate. Justice Cavanagh found that descriptions of confidential information being “software, architecture, product solution, roadmap, materials, workflow and pricing information” was too vague and general to satisfy the minimum requirement for pleading material facts. At paragraph 32, Cavanagh J. stated:
Each defendant is entitled to know with particularity what confidential information the defendant is alleged to have taken, and the acts allegedly taken by the defendant to misuse the confidential information. It is not an answer for a plaintiff to say that these facts are within the knowledge of the defendants, or that the information will be provided after examinations for discovery have been conducted.
Applying those principles to Olymel’s pleading, Associate Justice Nitchke held:
[40] In my view, the lack of particularity that troubled Justice Cavanagh in Evertz is similarly lacking in the Defendant’s pleading here. Broadly referring to 466 files without identifying the documents said to hold confidential information, fails to meet the minimum level of factual disclosure required by Rule 25.06. This decision should not be taken as requiring a list of every document taken; but using broad categories such as “business strategies,” “price lists” and “deals” is too vague and general to meet the required standard of disclosure and does not inform the Plaintiff of the information taken that was confidential.
[41] More significantly, the material facts of how the Plaintiff or his new employer allegedly misused the confidential information are missing and have not been pleaded, nor how Olymel suffered a loss as a result of the misuse of that information. A bald assertion of misuse and detriment does not inform the Plaintiff of the acts that the Plaintiff took to misuse the confidential information and how the Defendant suffered a loss. If the Defendant does not have knowledge of certain facts to support a claim for breach of confidence, then it is not appropriate to plead it (Region Plaza Inc. v. Hamilton-Wentworth (Regional Municipality) (1990), 1990 CanLII 6761 (ON SC)).
The court also struck the copyright claim because Olymel had not sufficiently identified the works said to be protected or pleaded how ownership of copyright arose. Although unauthorized downloading and the absence of consent were sufficiently pleaded, those allegations did not cure the other deficiencies.
The result was leave to deliver a fresh amended defence and counterclaim within 30 days. The court found more than a scintilla of a cause of action given Contino’s admission of unauthorized downloading, and did not consider this a clear case for refusing leave to amend. It declined to strike the punitive damages claim at that time and ordered Olymel to pay Contino $5,803.70 in costs. This was a decision about the sufficiency of the pleadings, not a final determination of liability for misuse of confidential information.
Commentary
I agree with the court in this case. An allegation that a former employee “stole” confidential information is serious. The employee should be able to understand what information the employer says was confidential, what the employee allegedly did with it, and how that conduct caused the employer a loss. A list of possible categories does not answer those questions.
I have previously presented on the subject of confidential information. The whole of my paper is available here: You Can’t Take It With You – The Right to Retain / Obligation to Surrender Confidential Information Post-Employment.
In addition to the challenges I identify in that paper, Contino highlights a requirement that arises at the outset of litigation: pleading the claim properly. Evertz explains why the party asserting misuse must identify the information and the alleged acts with sufficient particularity. Miguna and Region Plaza explain why a party cannot plead unsupported conclusions in the hope that discovery will later produce the facts to sustain them.
There is a practical distinction here. As Associate Justice Nitchke expressly said, the decision does not require a list of every document taken. Nor does Rule 25.06 require a party to plead its evidence. But an employer wishing to claim misappropriation and misuse of confidential information must do more than refer vaguely to “business strategies,” “price lists,” or “deals.” The pleading must contain material facts identifying the confidential information at issue, the alleged misuse, and the resulting detriment.
Takeaways for Employers
Before counterclaiming against a departing employee, identify the factual basis for each element of the claim. Possessing an NDA, alleging that hundreds of files were downloaded, and asserting that a competitor gained an advantage will not necessarily be enough. Describe the information with sufficient particularity and plead the facts supporting the alleged misuse and loss. Do not assume that saying the employee already knows what was taken, or promising details after discovery, will cure an inadequate pleading.
Takeaways for Employees
A counterclaim alleging theft of confidential information should explain the case you have to meet. If it consists of broad categories and unsupported assertions of misuse or harm, its sufficiency may be challenged. A successful motion to strike may nevertheless give the employer an opportunity to amend, as happened here. Nothing in this decision gives departing employees permission to download, retain, or use their employer’s confidential information.
Sean Bawden: Experience. At Work.
I am an experienced employment lawyer and wrongful dismissal lawyer practicing across Ontario and beyond with Kelly Santini LLP, which is based in Ottawa.
For two and a half years I was in-house legal counsel providing employment law advice to one of Canada’s largest corporations and appeared in labour courts and tribunals literally the world over.
I have also been a part-time professor at Algonquin College and have taught Employment Law, Trial Advocacy for Paralegals, and Small Claims Court Practice. I am a past president (2024-2025) of the County of Carleton Law Association (“CCLA”), and have sat as a safe sport adjudicator.
I can be reached by email at sbawden@kellysantini.com or by phone at 613.238.6321 x233.
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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.
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