Proper pleadings are the cornerstone of a successful case. The causes of action or defences raised in the claim and defence can, respectively, shape litigation and any subsequent pleadings. The propriety of a reply is measured against the other pleadings in a case.(1)
The Ontario Divisional Court clearly delineated the proper scope of a reply in Resolute Forest Products Inc v 2471256 Canada Inc, where it overturned a decision of the Ontario Superior Court of Justice and granted the defendants' request to strike certain impugned paragraphs in the plaintiffs' reply that, on their face, had "almost nothing to do with the central allegations of the claims and defences".(2)
The Resolute decisions stem from a dispute over the pleadings in an action where the plaintiffs (collectively, 'Resolute') claimed defamation, malicious falsehood and intentional interference with economic relations. Resolute initiated the action after the defendants (Greenpeace Canada or, together with the organisation and various entities, 'Greenpeace') published documents that Resolute alleged were defamatory, and allegedly sent communications to Resolute's customers, investors and stakeholders for the purpose of causing injury to Resolute and tortiously interfering with its business. Resolute also alleged that Greenpeace had trespassed, unlawfully picketed, engaged in other unlawful activities and threatened that Resolute's customers would be the target of unlawful activity if they did not remove Resolute from their supply chain.
- contested the defamation allegations on the basis of truth (justification), fair comment, qualified privilege and responsible communication;
- contextualised the factual allegations with background information;
- alleged that the litigation was a strategic litigation against public participation (SLAPP); and
- pleaded that Greenpeace had acted in good faith and without malice.
Resolute filed a reply, which it subsequently sought to amend by the inclusion of a new paragraph. Greenpeace moved under Rules 25.08 and 25.11 of the Rules of Civil Procedure to strike a number of paragraphs without leave to amend, and simultaneously refused to consent to Resolute amending the reply with the addition of the new paragraph.
Rule 25.08 provides that a reply is available in the following limited circumstances:
- where a party intends to prove a version of the facts different from that pleaded in the opposite party's defence; or
- on any other matter that might, if not specifically pleaded, take the opposite party by surprise or raise an issue that has not been raised by a previous pleading, subject to Rule 25.06(5).
Rule 25.06(5) provides that:
"an allegation that is inconsistent with an allegation made in a party's previous pleading or that raises a new ground of claim shall not be made in a subsequent pleading but by way of amendment to the previous pleading."
Rule 25.11 provides that, in certain circumstances, portions of a reply may be struck, with or without leave to amend, on the ground that the pleading:
- may prejudice or delay the fair trial of the action;
- is scandalous, frivolous or vexatious; or
- is an abuse of the court's process.
The motion judge dismissed Greenpeace's motion, holding that, although the right of reply is a qualified right, courts are reluctant to employ the "severe remedy" of striking out a pleading, except in the most obvious cases.(3)
Applying the first branch of the Rule 25.11 test, the court found that although the scope of litigation would potentially be expanded by the impugned paragraphs, such breadth of reply was justified on the basis that:
"Greenpeace... clearly put in issue, by its defence, its motivation, methodology, and justification for its actions and words by pleading at more than one place its 'moral and social duty and public interest reasons' for doing what it did to Resolute."(4)
The court found that Greenpeace had failed to file evidence that indicated that the scope of litigation would be so unnecessarily widened that the reply would prejudice or unfairly delay the trial, nor that the prejudicial effect of the reply outweighed its probative value.(5) The impugned paragraphs constituted "the other side of the story told by Greenpeace", thereby adhering to the limits prescribed by Rule 25.08(1). At the pleadings stage – and because the court found that Greenpeace was one entity comprised of national and international entities – the court found that it was not plain and obvious that the international Greenpeace entities referred to in the reply were not part of the same entity named as defendant in the action.(6)
Under the second branch of the Rule 25.11 test, the court held that the allegations in Resolute's reply were not scandalous, frivolous or vexatious. Greenpeace asserted a moral and social duty in defence of their impugned actions, which the court found could be tested by an opposing party taking issue with that characterisation.(7)
Given that Greenpeace did not assert abuse of process with respect to the impugned paragraphs, the court did not consider the third branch of the Rule 25.11 test.
The court dismissed Greenpeace's motion to strike and granted Resolute leave to amend its reply to incorporate the new paragraph.(8)
The divisional court held that it was an error in principle to permit the impugned pleadings in the reply to stand, given that they unjustifiably expanded the proceedings beyond the conflict between Greenpeace Canada and Resolute to inquire into the entire Greenpeace movement.(9) The court noted that Greenpeace's defence broadened the litigation in respect of allegations that:
- other persons had made allegations similar to those made by Greenpeace in the impugned publications;
- the entire lawsuit was a SLAPP; and
- Resolute has a pattern of using SLAPPs to silence its critics.(10)
However, the court observed that Resolute had not moved to strike those portions of the defence.
The court applied the 'plain and obvious' test under Rule 21 to determine what to strike under Rule 25.11,(11) finding that Resolute's pleadings in the reply had almost nothing to do with the central allegations of the claims and defences. (12)
The court identified numerous errors in principle in the motion decision, including that the judge had:
- permitted Resolute to plead allegations in reply that should have been pleaded (if at all) in the claim;
- failed to find that the impugned pleadings were prejudicial to the proportional resolution of Resolute's claims on their merits; and
- failed to balance the obvious prejudicial effect of the impugned pleadings with their potential probative value.(13)
The court noted that the Hyrniak v Maudlin principle of proportionality applies not only to motions for summary judgment, but to all stages of litigation, and clearly was not followed by the motions judge.(14)
Granting Greenpeace's appeal and overturning the motion decision, the divisional court cited the following reasons:
- Greenpeace did not place the history of its movement in issue by pleading its membership in the international Greenpeace organisation:
- If Resolute disputed that Greenpeace was one of the entities that constituted the international Greenpeace organisation, it could investigate and challenge that allegation, but could not investigate activities of other entities in the international Greenpeace organisation in matters unrelated to Resolute on this basis. Although the legal relationship between Greenpeace International and Greenpeace Canada was imprecisely defined, the pleading constituted background information.
- Resolute, in pleading that it is a forest products company, did not thereby place the entire history of forest products companies into issue, nor its own entire history or its entire environmental record as a forest products company.
- Greenpeace did not place its own history or that of the international Greenpeace organisation in issue by pleading that it had a social or moral duty to publish the impugned publications:
- It was wrong to conclude that in pleading qualified privilege on the basis of a social or moral duty, Greenpeace broadened the scope of litigation to include an inquiry into the moral stature of itself, the organisation of which it is a constituent part or other entities within that organisation.
- Pleading similar fact evidence is improper:
- Neither party pleaded any examples of Greenpeace distorting the truth or sensationalising evidence to appeal to its donor base, as Resolute alleged in its reply:
"As an allegation of past bad conduct, this is a pleading of presumptively inadmissible similar fact evidence. As an allegation of malice, it is so devoid of particularity as to be scandalous and vexatious."(15)
- Pleadings relating to threats and intimidation are not proper reply – this issue did not arise from Greenpeace's defence, and because it did not respond to something in the defence, it was not properly pleaded in the reply.
- Pleadings respecting civil disobedience are irrelevant – Resolute's pleadings in this respect had nothing to do with whether Greenpeace published the impugned statements, whether they were defamatory or whether Greenpeace had a defence for publishing them, and instead suggested that Greenpeace was not entitled to the benefit of the law in the proceedings because in the past it was prepared to break the law. Those allegations were "utterly without merit".(16)
- The motions judge had erred in failing to balance prejudice from the impugned pleadings against the probative value of the pleadings:
- On a Rule 25.11 motion, the principle of proportionality as set out in Rule 1.04(1.1) must also be considered to balance the added complexity and potential prejudice against any potential probative value of new alleged facts.(17)
- It was obvious in this case that the impugned pleadings greatly expanded the scope of the proceeding, transforming the trial into an inquiry into Greenpeace rather than focusing on the allegations of defamation, threats and intimidation at the centre of Resolute's claim.
The divisional court allowed the appeal, set aside the motion judge's decision, ordered that the impugned portions of the reply be struck and denied leave to amend the reply.
The divisional court's ruling in the Resolute appeal demonstrates that courts will scrutinise improper pleadings. A proper reply will be viewed in the context of earlier pleadings and must adhere to proper requirements:
- a reply is optional;
- a reply must not raise a new ground of claim or make an allegation that is not consistent with allegations made in the parties' earlier pleadings (if a reply does so, those claims should be struck);
- new claims should be introduced by amending an application or claim;
- allegations in a reply should contain sufficient particularity (or risk being characterised as scandalous or vexatious); and
- allegations in a reply should not disproportionately expand the scope of the litigation (and if pleadings broaden the scope of the central issues, the court will engage in a consideration of whether the probative value of the new alleged facts outweighs the prejudicial effect).
Parties should exercise their right of reply only to properly respond to issues newly raised in the defence and not raise new issues that should have been dealt with in the claim in the first instance or by amendment.
For further information on this topic please contact Douglas BB Stewart at Dentons by telephone (+1 416 863 4511) or email ([email protected]). The Dentons website can be accessed at www.dentons.com.
(1) Resolute Forest Products Inc v 2471256 Canada Inc (2015 ONSC 3863) ('Resolute motion'); rev'd 2016 ONSC 5398 at para 48 ('Resolute appeal').
(2) Resolute appeal at paras 50-51.
(3) Resolute motion at para 21.
(9) Resolute appeal at para 10.