The Court of Appeal provided a measure of relief for Bondfield Construction Company Limited (“Bondfield”) recently when it ruled that it could continue its defamation suit against Canadian newspaper company, the Globe and Mail. Specifically, the decision of the Court in Bondfield Construction Company Limited v The Globe and Mail Inc., 2019 ONCA 166, re-affirmed existing anti-SLAPP (Strategic Lawsuits Against Public Participation (“SLAPP”)) jurisprudence in Ontario.
Canadian companies are rightfully interested in protecting their respective business reputations. Construction companies (i.e. contractors, subcontractors and suppliers) in particular are ever-alert to reputational concerns as they can impact the ability of contractors to be eligible to bid on projects. The law has traditionally protected such reputations through the tort of defamation, which permits companies and individuals to recover damages when untrue statements about them have been published. For example, if a general contractor has been falsely accused by a competitor of corruption, the contractor could sue the accuser for damages.
Unfortunately, some companies have employed such litigation in an effort to silence advocacy and media groups when they legitimately report on those companies’ activities. Such lawsuits have come to be known as SLAPP suits.
The increase in usage of SLAPP suits over recent years prompted legislative action by the Ontario government. In 2015 the Ontario government amended the Courts of Justice Act (“CJA”) by introducing additional hurdles for parties commencing lawsuits to overcome when such lawsuits arise from expression relating to matters of public interest. In that regard, section 137.1 of the CJA now states, in part, as follows:
137.1 (3) On motion by a person against whom a proceeding is brought, a judge shall, subject to subsection (4), dismiss the proceeding against the person if the person satisfies the judge that the proceeding arises from an expression made by the person that relates to a matter of public interest.
(4) A judge shall not dismiss a proceeding under subsection (3) if the responding party satisfies the judge that,
(a) there are grounds to believe that,
(i) the proceeding has substantial merit, and
(ii) the moving party has no valid defence in the proceeding; and
(b) the harm likely to be or have been suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression. [emphasis added]
So, How Does Section 137.1 Work?
In 1704604 Ontario Ltd. v Pointes Protection Association, 2018 ONCA 685, the Court of Appeal set out the framework to be used by lower courts in motions under section 137.1.
In order to invoke the protection of section 137.1, the defendant (the moving party) must establish that the expression which gave rise to the action relates to a matter of public interest. Once that has been accomplished, the onus shifts to the plaintiff to overcome three hurdles: (i) there are grounds to believe that the plaintiff’s claim has “substantial merit”, (ii) there are grounds to believe that the defendant has “no valid defence” in the proceeding, and (iii) the likely harm to the plaintiff as a result of the expression is sufficiently serious that the public interest in allowing the lawsuit outweighs the public interest in protecting the defendant’s freedom of expression. Each of these is considered below.
- Is the expression a “matter of public interest”?
“Expression” is defined broadly in section 137.1 to include “any communication, regardless of whether it is made verbally or non-verbally, whether it is made publicly or privately, and whether or not it is directed at a person or entity”. “Public interest” is not defined, although the Court of Appeal has taken an expansive view of what could be captured by these words:
[T]he concept of “public interest” as it is used in s. 137.1(3) is a broad one that does not take into account the merits or manner of the expression, nor the motive of the author. The determination of whether an expression relates to a matter of public interest must be made objectively, having regard to the context in which the expression was made and the entirety of the relevant communication. [emphasis added]
The Court distinguishes between public matters and private and notes that “[p]ublic people are entitled to private lives. Expressions that relate to private matters are not converted into matters relating to the public interest merely because those expressions concern individuals in whom the public have an interest or involve topics that may titillate and entertain.”
It appears that people’s more prurient impulses will not be safeguarded by virtue of section 137.1.
- There are grounds to believe that the plaintiff’s claim has “substantial merit”
A judge will undertake a “limited merits analysis” in order to determine whether the plaintiff has demonstrated that its claim has “substantial merit”. However, the motion judge is not to decide whether he or she thinks that the claim actually has “substantial merit”. Rather, it is for the motion judge to “determine whether it could reasonably be said, on an examination of the motion record, that the claim has substantial merit”. While on the surface this appears to be somewhat of an artificial distinction, nevertheless “the plaintiff must do more than simply show that its claim has some chance of success.” A claim will have “substantial merit” when it is shown to be legally tenable and supported by evidence which “could lead a reasonable [motion judge] to conclude that the claim has a real chance of success.”
In other words, it is not necessary for a plaintiff to demonstrate that they will probably win their case. The standard is lower than that. The plaintiff must show that a judge could reasonably find that they could win their case.
- There are grounds to believe that the defendant has “no valid defence” in the proceeding
Although this hurdle is the plaintiff’s to overcome, there is also an evidentiary burden on the defendant to advance any proposed “valid defence” in the pleadings or other materials filed on the motion.
The “no valid defence” requirement does not require the plaintiff to show that the defendant has no valid defence whatsoever. The burden is slightly less onerous than that. Instead, “[t]he onus rests on the plaintiff to convince the motion judge that, looking at the motion record through the reasonableness lens, a trier could conclude that none of the defences advanced would succeed.” If a defence could go “either way” the plaintiff will clear this hurdle.
Under both the “substantial merit” and “no valid defence” branches of the section 137.1 analysis, a judge may also engage in credibility evaluations. Further, neither bald allegations nor unparticularized defences will be sufficient to meet the standard of the defence requirement.
- The harm suffered or likely to be suffered by the plaintiff as a result of the expression was sufficiently serious that the public interest in allowing the lawsuit to continue outweighed the public interest in protecting the defendant’s freedom of expression
The Court of Appeal has previously described this last hurdle as the “heart of Ontario’s Anti-SLAPP legislation”. In essence, under this branch the judge engages in a balancing exercise between the public interest in protecting the defendant’s expression and the private interest in permitting a valid cause of action to proceed.
With respect to the ‘harm’ side of the equation, bald or unexplained assertions of damages are unlikely to suffice, and it must be clear how the expression causes the harm alleged. Although the harm will usually be monetary, it may also relate to interests more difficult to quantify including one’s reputation or privacy. Where the cause of action is only technically valid, and the defendant can show little, if any, actual damage, the motion judge is likely to grant the motion and dismiss the claim.
With respect to the ‘public interest’ side of the equation, the quality of the expression or motivation of the speaker are important considerations. Not all expressions are created equal. For example, expression relating to the advancement of truth-seeking (i.e. journalistic expression) and political speech will likely carry more weight than expression containing deliberate falsehoods. The Court of Appeal has also expressed the view that expression made with malice or containing vulgarity will be less worthy of protection under section 137.1.
The Curious Case of Bondfield
The framework set out above in relation to section 137.1 of the CJA is not straightforward nor has recent caselaw shown that courts are necessarily unsympathetic to moving parties in circumstances of legitimate expression. This leaves us with the important question of how Bondfield managed to convince the Court of Appeal to reverse a motion judge’s decision to dismiss its action against one of Canada’s leading newspapers.
By way of context, the motion judge had dismissed Bondfield’s action at the “no valid defence” hurdle. When he did so, he had not had the benefit of the Court of Appeal’s reasons in Pointes (which were released after the motion judge had released his own decision), and had held that section 137.1 of the CJA required Bondfield to show that “the [Globe and Mail] has no valid defence whatsoever.” Bondfield was not able to establish that the Globe and Mail had no valid defence whatsoever and, accordingly, Bondfield’s action was dismissed.
As noted above, “no valid defence whatsoever” is too high of a standard. The Court of Appeal acknowledged this and in doing so, reversed the motion judge. The Court found that that there was a reasonable prospect that the defence advanced by the Globe and Mail (i.e. fair comment), could either succeed or fail:
On my review of the record, both the overall fairness of the Globe’s articles and the reasonableness of the steps taken to validate the accuracy of any factual assertions in the articles are open to legitimate dispute. A trier could reasonably find for or against the Globe on these issues. Bondfield established grounds to believe that the responsible communication defence would fail.
Thus, Bondfield met its onus under section 137.1 of the CJA and was permitted by the Court to continue its action against the Globe and Mail.
What does this mean going forward?
In making its decision, and acknowledging that Bondfield was not required to show that the Globe and Mail had no valid defence whatsoever, the Court of Appeal has acknowledged that the burden on section 137.1 motion respondents is not high. Thus, this decision, while beneficial to Bondfield, also serves as an appropriate course correction on section 137.1 motions going forward.
In the meantime, for Bondfield, this is an interesting opportunity for it to carry forward in what was otherwise a stalled piece of litigation.