Stevens v. Hutchens involved an appeal from an order authorizing the distribution of assets under receivership. The appellant law firm argued against the pooling of assets of the individual and corporate debtors. It was the only creditor of the corporate debtors. The other creditors only had a claim against the individual debtors. The Court upheld the decision to pierce the corporate veil and order a pooled distribution. The assets held by the corporate debtors had been fraudulently transferred to them by the individual debtors to evade creditors. Fairness therefore dictated that all creditors should share in the distribution.
In a lengthy decision in Hamer v Jane Doe, the Court allowed the appeal and set aside the dismissal of a defamation action under the Anti-SLAPP provisions of s. 137.1 of the Courts of Justice Act. The Court held that the motion judge failed to apply the requisite approach in determining a s. 137.1 motion by effectively focusing only on the respondents’ freedom of expression and losing sight of the equally important value of the protection of the appellants’ reputation.
Stewart v. Bay of Quinte Mutual Insurance Co. was a decision in which the plaintiff’s main claim against his property/fire insurer for underinsuring his property was dismissed after a ten-day trial. However, his claim with respect to the value of his property lost in the fire was allowed, resulting in a $51,000 judgment against the insurer. The insurer’s appeal from that rather modest judgment was dismissed.
In J.M. v B.S., a family case, the Court determined that an appeal from an order temporarily granting one parent authority to administer vaccines to their child was an interlocutory order because the final determination of who would have such authority was to be made at trial. The fact that once a vaccine was administered, the vaccination was irreversible, did not turn the order into a final order for appeal purposes. The Court therefore had no jurisdiction and the proposed appellant’s motion for an order extending of the time to appeal and transferring the appeal from the Divisional Court to the Court of Appeal was dismissed.
Table of Contents
Civil Decisions
Keywords: Family Law, Parenting, Decision-Making, Appeals, Jurisdiction, Orders, Final or Interlocutory, Extensions of Time, Divorce Act, R.S.C., 1985, c.3, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(a.1), 19(1)(b), Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, Fontaine v. Canada (Attorney General), 2021 ONCA 931, Collins v. Tiveron, 2024 ONCA 447, Mattina v. Mattina, 2018 ONSC 1569, Goldberg v. Goldberg (1989), 68 O.R. (2d) 124 (H.C.), Elgner v. Elgner, 2011 ONCA 483, Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495, Paulpillai Estate v. Yusuf, 2020 ONCA 655, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Sypher v. Sypher (1986), 2 R.F.L. (3d) 413 (Ont. C.A.), J.N. v. C.G., 2023 ONCA 77, J.N. v. C.G., 2022 ONSC 1198, A.V. v. C.V., 2023 ONSC 1634
Keywords: Bankruptcy and Insolvency, Receiverships, Fraudulent Conveyances, Distributions, Claims Process, Priority Dispute, Interest, Corporations, Remedies, Piercing Corporate Veil, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 101, FNF Enterprises Inc. v. Wag and Train, 2023 ONCA 92, Wildman v. Wildman (2006), 82 O.R. (3d) 401 (C.A.), Borden Ladner Gervais v. Sinclair et al., 2013 ONSC 7640, Ontario Securities Commission v. Money Gate Mortgage Investment Corporation, 2020 ONCA 812, Stevens v. Hutchens, 2022 ONCA 771, Deloitte & Touche Inc. v. Shoppers Trust Co. (2005), 74 O.R. (3d) 652 (C.A.)
Keywords: Contracts, Insurance, Property, Fire, Actual Cash Value, Statutory Conditions, Proof of Loss, Waiver, Statutory Interpretation, Remedies, Relief from Forfeiture, Insurance Act, R.S.O. 1990, c. I-8, ss. 128, 129, 131 and 148, Bradfield v. Royal Sun Alliance Insurance Co. of Canada, 2019 ONCA 800, Monk v. Farmers Mutual Insurance Company (Lindsay), 2019 ONCA 616, 6 King Inc. v. Aviva Canada Inc., 2017 ONCA 408, The Dominion of Canada General Insurance Company v. Nelson, 2023 ONSC 386 (Div. Ct.)., Hryniak v. Maudlin, 2014 SCC 7
Keywords: Torts, Defamation, Anti-SLAPP, Public Interest, Defences, Fair Comment, Malice, Justification, Responsible Communication, Civil Procedure, Standard of Review, Canadian Charter of Rights and Freedoms, s. 2(b), Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 137.1, Rules of Civil Procedure, rr. 20, 39.01, Bent v. Platnick, 2020 SCC 23, [2020] 2 S.C.R. 645, Marcellin v. London (Police Services Board), 2024 ONCA 468, Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Hansman v. Neufeld, 2023 SCC 14, Thorman v. McGraw, 2022 ONCA 851, Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 26, Levant v. DeMelle, 2022 ONCA 79, 40 Days for Life v. Dietrich, 2024 ONCA 599, Mondal v. Kirkconnell, 2023 ONCA 523, Lascaris v. B’nai Brith Canada, 2019 ONCA 163, Bondfield Construction Company Ltd. v. The Globe and Mail Inc., 2019 ONCA 166, Armstrong v. Corus Entertainment Inc., 2018 ONCA 689, 2110120 Ontario Inc. v. Buttar, 2023 ONCA 539, Awan v. Levant, 2016 ONCA 970, WIC Radio Ltd. v. Simpson, 2008 SCC 40, Zoutman v. Graham, 2019 ONSC 2834, aff’d 2020 ONCA 767, Canadian Union of Postal Workers, Grant v. Torstar Corp., 2009 SCC 61, Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416 (C.A.), Schwartz v. Collette, 2023 ONCA 574, Ontario, Ministry of the Attorney General, Anti-SLAPP Advisory Panel: Report to the Attorney General, (Toronto: 2010), Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 41A, 2014, Peter A. Downard, The Law of Libel in Canada, 4th ed. (Toronto: LexisNexis, 2018)
Short Civil Decisions
Keywords: Family Law, Civil Procedure, Appeals, Leave, Perfection, Extension of Time, Enbridge Gas Distribution Inc. v. Frose, 2013 ONCA 131, Correct Building Corporation v. Lehman, 2022 ONCA 723, Machado v. Ontario Hockey Association, 2019 ONCA 210, Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, Iqbal v. Mansoor, 2022 ONCA 198
Keywords: Torts, Crown Liability, Civil Procedure, Striking Pleadings, Appeals, Costs, Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1.2)(a), Mullin v. Lagace, 2015 ONCA 757
CIVIL DECISIONS
[Favreau J.A.]
Counsel:
J.M. Miller, for the moving party
K. Bromley, for the respondent
Keywords: Family Law, Parenting, Decision-Making, Appeals, Jurisdiction, Orders, Final or Interlocutory, Extensions of Time, Divorce Act, R.S.C., 1985, c.3, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(a.1), 19(1)(b), Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, Fontaine v. Canada (Attorney General), 2021 ONCA 931, Collins v. Tiveron, 2024 ONCA 447, Mattina v. Mattina, 2018 ONSC 1569, Goldberg v. Goldberg (1989), 68 O.R. (2d) 124 (H.C.), Elgner v. Elgner, 2011 ONCA 483, Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495, Paulpillai Estate v. Yusuf, 2020 ONCA 655, Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375, Sypher v. Sypher (1986), 2 R.F.L. (3d) 413 (Ont. C.A.), J.N. v. C.G., 2023 ONCA 77, J.N. v. C.G., 2022 ONSC 1198, A.V. v. C.V., 2023 ONSC 1634
facts:
The moving party mother sought to appeal parts of an order made on a motion for interim relief. Specifically, she appealed from the directions regarding vaccination of the parties’ child (the “Vaccination Order”), which required the parties to bring the child’s immunization record up-to-date and to comply with government recommendations regarding COVID-19 vaccines for their child. If the parties failed to do so, the father and responding party on this motion, was to be given sole decision-making power over this issue.
The mother sought an order extending the time to appeal the Vaccination Order and an order transferring the matter from the Divisional Court to the Court. She contended that the Vaccination Order was made under the Divorce Act and that it was a final order to be appealed in the Court of Appeal pursuant to s.6(1)(b) of the Courts of Justice Act.
issues:
- Did the Court have jurisdiction to hear the appeal?
- Was the Vaccination Order final?
holding:
Motion dismissed.
reasoning:
- No.
The Court explained that on a motion to extend the time to start an appeal, the overall consideration is whether the “justice of the case” requires that the extension be granted. In applying this principle, the Court considered (1) whether the appellant formed an intention to appeal within the relevant period, (2) the length of, and explanation for the delay, (3) prejudice to the respondent, and (4) the merits of the appeal: Enbridge Gas Distribution Inc. v. Froese.
The Court held that there was no doubt that the mother formed the intention to appeal the decision within the appeal period and that she provided a reasonable explanation for the delay. With respect to the merits of the appeal, the Court explained that its jurisdiction was relevant to assessing the merits of the appeal. The Court noted that while a single judge of the Court cannot quash an appeal because of lack of jurisdiction, a single judge can consider the Court’s jurisdiction when deciding whether to grant an extension: Fontaine v. Canada (AG).
The mother argued that the Court had jurisdiction to hear the appeal because the Vaccination Order was made under the Divorce Act and because its effect was final. She submitted that vaccinating a child is an irreversible act. Based on the Form 8 Application, the Court accepted that this aspect of the order was made under the federal Divorce Act. Accordingly, it would not be caught by s. 19(1)(a.1) of the CJA, which gives the Divisional Court jurisdiction to hear appeals from final orders of the Family Court that were made only under provincial legislation.
An appeal from a final order under the federal Divorce Act lies to the Court of Appeal: Mattina v. Mattina. However, the Court stated that this does not end the inquiry. Contrary to the mother’s submission, the Court explained that it does not have jurisdiction over all appeals arising from the Divorce Act. The Court only has jurisdiction if the order appealed from is also final and therefore not captured by s. 19(1)(b) of the CJA: Goldberg v. Goldberg; Elgner v. Elgner. In the Court’s view, the decision in this case was interlocutory and the Court therefore did not have jurisdiction.
- No.
The Court held that it was evident that the motion judge made the order on an interim basis from the notice of motion, which sought interim relief, and from the disposition paragraph in the motion judge’s decision that stated that the orders were made on a temporary basis. Finally, while the parties had not yet obtained an issued order from the Court, the form approved between them was for a temporary order.
The mother made two arguments in support of her position that the Vaccination Order was final. First, she argued that, in the notice of motion, the father sought “final” decision-making with respect to vaccinations. The Court rejected this argument, holding that this was one word in a much broader context, which included that this was a motion for interim relief and that the judge characterized his order as temporary.
Second, the mother argued that the language used to describe the order was less important than the character of the order. In this case, the vaccinations could not be undone. The Court accepted that it must look at the character of the order to determine whether it was final: Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc. The Court explained that many interim or interlocutory decisions give parties the ability to do things that cannot be undone, but this does not make an order final. As the Court stated previously, “the characterization of the order depends upon its legal nature, not its practical effect”: Paulpillai Estate v. Yusuf. In deciding whether an order is final or interlocutory, the crux of the issue is whether the court has finally determined an issue between the parties: Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc.; Sypher v. Sypher.
In this case, the Court explained that the motion judge decided parental decision-making over vaccination only on an interim basis and that at trial, the court would decide this issue on a final basis. The Court stated that while the child may receive some vaccines in the meantime, this on its own did not mean that the Vaccination Order was final, nor that the mother had no avenue of appeal. The Court held that it simply meant that she must bring her proposed appeal in the Divisional Court after first obtaining leave of that court.
The mother also relied on J.N. v. C.G. to argue that the Vaccination Order was final. The Court explained that its decision in J.N. and the decision below did not indicate that the order at issue in that case was made on a temporary or interim basis. The order made below simply directed that the mother was to have sole decision-making authority over the children’s COVID vaccines. Accordingly, it appeared that it was a final order. In contrast, the Court noted that in A.V. v. C.V., the Divisional Court dealt with an appeal arising from an order granting interim decision-making to a father over vaccination issues. In that case, the mother argued that the court should never make such orders on an interim basis because vaccines are irreversible. However, the Court held that the Divisional Court rightly noted that it is appropriate for the court to make such orders as long as they are based on the best interests of the child.
[Miller, Copeland and Gomery JJ.A.]
Counsel:
B. D. Moldaver, for the appellant Adroit Advocates LLC (non-party)
J. Gibson and E. Wuschnakowski, for the respondent receiver B. Riley Farber Inc.
J. Necpal, for the respondents G. Stevens, L. Stevens and 1174365 Alberta Ltd.
B. VanBunderen, for the respondents CGC Holding Company, LLC, Harlem Algonquin LLC and J. T. Medick
Keywords: Bankruptcy and Insolvency, Receiverships, Fraudulent Conveyances, Distributions, Claims Process, Priority Dispute, Interest, Corporations, Remedies, Piercing Corporate Veil, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 101, FNF Enterprises Inc. v. Wag and Train, 2023 ONCA 92, Wildman v. Wildman (2006), 82 O.R. (3d) 401 (C.A.), Borden Ladner Gervais v. Sinclair et al., 2013 ONSC 7640, Ontario Securities Commission v. Money Gate Mortgage Investment Corporation, 2020 ONCA 812, Stevens v. Hutchens, 2022 ONCA 771, Deloitte & Touche Inc. v. Shoppers Trust Co. (2005), 74 O.R. (3d) 652 (C.A.)
facts:
Adroit Advocates LLC, appealed the order of the motion judge authorizing the distribution of the remaining assets under a receivership. The appellant objected to the motion judge’s approval of a pooled distribution of the assets of the individual debtors and three corporate debtors controlled by one of the individual debtors. The appellant was an unsecured creditor of both the individual and the corporate debtors. The remaining creditors, the Pennsylvania and Colorado plaintiffs, were unsecured judgment creditors of only the individual debtors. The effect of the distribution authorized by the motion judge was that the appellant shared the assets held by the corporations on a pro rata basis with the Pennsylvania and Colorado plaintiffs – creditors of the individual debtors – rather than receiving all of the corporate assets.
issues:
- Did the motion judge err in piercing the corporate veil to implement a pooled distribution to the creditors of the individual and corporate debtors?
- Was there procedural unfairness in the motion judge determining whether to pierce the corporate veil on the motion?
- Did the motion judge err in disallowing certain interest charges claimed by the appellant?
holding:
Appeal dismissed.
reasoning:
- No.
The Court disagreed with the appellant’s argument that the motion judge’s reasoning was improperly results-driven based on the concern that if a pooled distribution to the creditors of the individual and corporate debtors was not ordered, the Pennsylvania and Colorado plaintiffs would receive nothing in the final distribution.
The Court agreed with the motion judge’s finding that piercing the corporate veil and pooling the assets of the corporate and individual debtors was justified because the assets in the hands of the corporate debtors, to which the appellant asserted priority, were only in possession of the corporate debtors as a result of fraudulent transfers by the individual debtors.
The Court held that the motion judge correctly set out the two-part test for piercing the corporate veil by considering whether the corporate entities were completely dominated and controlled by the individual debtors and whether the corporation was being used as a shield for fraudulent or improper conduct.
- No.
The Court rejected the appellant’s argument that creditor claims and priorities cannot be determined on a motion for directions and that the receiver’s role is limited to an orderly distribution of funds to creditors based on established claims. The Court held that one of the functions of a court-appointed receiver is to establish a summary procedure for determining the validity and value of creditors’ claims, so that they are determined in a single proceeding. A court may make a summary determination of creditor rights on a motion for directions in receivership proceedings so long as there are no genuine issues that require a trial: Ontario Securities Commission v. Money Gate Mortgage Investment Corporation.
The Court disagreed with the appellant’s submission that the pooled distribution was unfair to the appellant as a third-party creditor to the corporate debtors. The Court held that although the appellant had the only remaining claim against the corporate debtors, the motion judge found, based on the tracing done by the receiver, that the assets held by the corporations were fraudulently transferred to the corporations in order to defeat creditors of the individual debtors. In the circumstances, there was no unfairness to the appellant in the pooled distribution, which effectively reversed the fraudulent transfers to the corporations.
- No.
The Court held that the motion judge correctly disallowed interest claimed by the appellant after the date of the receivership on the basis that, as an unsecured creditor, the appellant was barred from claiming interest after the date of the receivership order: Deloitte & Touche Inc. v. Shoppers Trust Co.
Furthermore, the Court held that it saw no palpable and overriding error in the motion judge’s conclusion that the appellant was not entitled to claim retroactive interest on previously unbilled legal fees at the time of issuing statements of account. The appellant’s retainer with the debtors did not permit the charging of retroactive interest at the time of issuing statements of account for legal fees. Rather, the retainer provided that interest may be charged on any statement not paid within thirty days after the statement was issued.
[Hourigan, Trotter and Gomery JJ.A.]
Counsel:
R. S. Baldwin and L. Thomson, for the appellants
R. J. Reynolds, for the respondent
Keywords: Contracts, Insurance, Property, Fire, Actual Cash Value, Statutory Conditions, Proof of Loss, Waiver, Statutory Interpretation, Remedies, Relief from Forfeiture, Insurance Act, R.S.O. 1990, c. I-8, ss. 128, 129, 131 and 148, Bradfield v. Royal Sun Alliance Insurance Co. of Canada, 2019 ONCA 800, Monk v. Farmers Mutual Insurance Company (Lindsay), 2019 ONCA 616, 6 King Inc. v. Aviva Canada Inc., 2017 ONCA 408, The Dominion of Canada General Insurance Company v. Nelson, 2023 ONSC 386 (Div. Ct.)., Hryniak v. Maudlin, 2014 SCC 7
facts:
On February 26, 2011, L’s home (the “Property”) was severely damaged in a fire. His property insurer, Bay of Quinte Mutual Insurance Co. (“BOQ”), paid out the policy limit of $220,000 for the dwelling but only $60,000 for its contents. This was considerably less than the value of items that L claimed to have lost in the fire. He successfully sued BOQ for an additional $51,000, following a ten-day trial that spanned three years. L’s main claim against BOQ for negligently underinsuring his property was dismissed. BOQ appealed the $51,000 judgment.
issues:
- Did the trial judge err in allowing the claim despite the absence of a sworn proof of loss?
- Did the trial judge err in declining to order an appraisal under s. 128 of the Insurance Act?
- Did the trial judge err in assessing the actual cash value (“ACV”) of the lost personal property?
holding:
Appeal dismissed.
reasoning:
- No.
The trial judge held that BOQ had waived its right to rely on L’s non-compliance with the requirement that he submit a sworn proof of loss. He furthermore granted the estate relief from forfeiture.
The Court explained that following an occurrence covered by a policy, an insured is required to deliver “as soon as practicable to the insurer a proof of loss verified by a statutory declaration … giving a complete inventory of the destroyed and damaged property and showing in detail quantities, costs, actual cash value and particulars of amount of loss claimed”. This is a statutory condition incorporated into every property insurance contract in Ontario under s. 148 of the Insurance Act (the “Act”). As the trial judge noted, however, there is no specific form mandated for a proof of loss and the requirement must be interpreted consistent with the Act’s consumer protection purpose.
The trial judge noted that L had submitted a signed but unsworn list of contents to BOQ in 2011 and later, through an expert appraiser he had retained, an even more expansive 17-page “Schedule of Loss”. BOQ had an opportunity to examine L under oath in 2013, and could have asked him questions about the items on the Schedule at that time. The trial judge concluded that the information that L provided about the lost contents was sufficient for BOQ to assess his claim. He found that BOQ had waived strict compliance with the sworn proof of loss requirement.
The Court stated that a determination that an insurer has waived its rights to insist on an insured’s perfect compliance with a contractual obligation is explicitly permitted under s. 131 of the Act. The Court held that it was open for the trial judge to make this finding on the evidence.
- No.
An appraisal mechanism is set out in s. 128 of the Act. Under s. 128(2) the insured and the insurer each appoint an appraiser, and the two appraisers so appointed appoint an umpire.
The Court explained that a judge has the discretion to decline to appoint an appraiser under s. 128(5), based on the permissive language (“may” rather than “shall”), and the prior interpretation of this provision by the Court.
As a result, the Court saw no basis to interfere with the trial judge’s exercise of discretion under s. 128(5). As he observed, the purpose of the appraisal mechanism in the Act is to provide an expeditious and easy means for the settlement of claims for indemnity under insurance policies. By the time BOQ took the position that the ACV could only be decided through an appraisal, nine years had passed since the fire. L’s claim that BOQ had negligently under-insured his property would have had to proceed to trial anyway. The Court held that the trial judge’s conclusion that an appraisal would result in additional delay and expense was eminently reasonable.
- No.
The Court stated that there is no single or right way to calculate the ACV under an insurance policy. The Court held that the trial judge was entitled to accept the respondent’s evidence and to prefer it to BOQ’s evidence, and that there was no palpable and overriding error in the ACV determination.
[Roberts, Zarnett and Favreau JJ.A.]
Counsel:
S.J. Erskine and A. Zaya, for the appellants
C. Calon and B. Murphy, for the respondents
Keywords: Torts, Defamation, Anti-SLAPP, Public Interest, Defences, Fair Comment, Malice, Justification, Responsible Communication, Civil Procedure, Standard of Review, Canadian Charter of Rights and Freedoms, s. 2(b), Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 137.1, Rules of Civil Procedure, rr. 20, 39.01, Bent v. Platnick, 2020 SCC 23, [2020] 2 S.C.R. 645, Marcellin v. London (Police Services Board), 2024 ONCA 468, Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Hansman v. Neufeld, 2023 SCC 14, Thorman v. McGraw, 2022 ONCA 851, Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 26, Levant v. DeMelle, 2022 ONCA 79, 40 Days for Life v. Dietrich, 2024 ONCA 599, Mondal v. Kirkconnell, 2023 ONCA 523, Lascaris v. B’nai Brith Canada, 2019 ONCA 163, Bondfield Construction Company Ltd. v. The Globe and Mail Inc., 2019 ONCA 166, Armstrong v. Corus Entertainment Inc., 2018 ONCA 689, 2110120 Ontario Inc. v. Buttar, 2023 ONCA 539, Awan v. Levant, 2016 ONCA 970, WIC Radio Ltd. v. Simpson, 2008 SCC 40, Zoutman v. Graham, 2019 ONSC 2834, aff’d 2020 ONCA 767, Canadian Union of Postal Workers, Grant v. Torstar Corp., 2009 SCC 61, Barrick Gold Corp. v. Lopehandia (2004), 71 O.R. (3d) 416 (C.A.), Schwartz v. Collette, 2023 ONCA 574, Ontario, Ministry of the Attorney General, Anti-SLAPP Advisory Panel: Report to the Attorney General, (Toronto: 2010), Legislative Assembly of Ontario, Official Report of Debates (Hansard), No. 41A, 2014, Peter A. Downard, The Law of Libel in Canada, 4th ed. (Toronto: LexisNexis, 2018)
facts:
The appellants challenged the motion judge’s dismissal of their defamation action under s. 137.1 of the Courts of Justice Act. The appellants, who operate a cat rescue, rehabilitation and adoption service, initiated a defamation action against the respondents and others for negative posts and associated comments about them on Facebook alleging that they were mistreating the cats under their care and that one of the appellants was a cat hoarder with mental health issues.
The respondents brought a motion under s. 137.1 of the CJA to dismiss the appellants’ action. Although the motion was brought by only the respondents, the motion judge dismissed the action against all the defendants and ordered full indemnity costs payable by the appellants to the respondents in the all-inclusive amount of $40,000. The appellants appealed.
issues:
- Did the motion judge err in her application of s. 137.1(4)(a) and (b) of the CJA?
- Did the motion judge err in dismissing the action against all the defendants when only the respondents brought a motion to dismiss under s. 137.1 of the CJA?
holding:
Appeal allowed.
reasoning:
Regarding the standard of review, the Court noted that, absent an error in law or a palpable and overriding error of fact or mixed fact and law, there is no basis for appellate intervention: Marcellin v. London (Police Services Board); Park Lawn Corporation v. Kahu Capital Partners Ltd.; Bent v Platnick. However, if such an error is established, the Court stated that it may consider the matter afresh.
- No.
(a) The motion judge’s reasons under s. 137.1(4)(a)(i) and the required approach
The Court agreed that the motion judge did not follow the correct analytical framework under s. 137.1(4)(i), holding that she did not carry out a robust analysis of whether there were grounds to believe that the appellants’ action had substantial merit. Rather, she considered the impugned statements in isolation and effectively required the appellants to prove each was defamatory on an individual basis. The Court held that this led her to undervalue the merit of the appellants’ action and skewed her assessment of s. 137.1(4)(a) and her final weighing of the factors under s. 137.1(4)(b).
The motion judge did not refer to the “grounds to believe” standard but stated that the appellants “must show their claim has substantial merit” and “that they have a real chance of proving that the words were published,” referred to the appellants and that they were defamatory in the sense that they would lower the appellants reputation. The Court held that the motion judge erred in law by applying a standard that was higher than the legislated standard.
The Court held that it was necessary to consider the cumulative effect of all the comments because they were interconnected and formed part of a series of statements relating only to the appellants and about the same subject. They were inseparable from each other and had to be considered as a whole so that the sting of the defamation could be properly ascertained: Bent. The Court held that the sting of calling someone a mentally unstable cat hoarder who killed cats in her care was very damaging to the professional reputation of the appellants in the cat rescue community where the appellants were well known. The Court held that the motion judge’s mischaracterization of the defamation caused her to understate, in her overall assessment, the legitimacy of the appellants’ action and their right to protect their reputation by way of their action.
(b) Were there grounds to believe the respondents have no valid defence?
(i) Fair comment defence
The Court explained that this defence requires that the comment: be on a matter of public interest; be based on fact; be recognizable as comment; and satisfy an objective test: Hansen. There must be a factual foundation for the impugned statement: Hansen. Even if the comment satisfies the above objective elements, the defence can be defeated if the plaintiff proves that the defendant was actuated by malice, which can be established by reckless disregard for, or indifference to, the truth, by spite or ill-will, or by any indirect or ulterior motive: Hansen; 2110120 Ontario Inc. v. Buttar; Awan v. Levant. Little or no effort to check the facts may support a finding of malice: Awan. The argument for recklessness must be understood having regard to the context in which the comments were made: WIC Radio Ltd. v. Simpson. It may be that in some contexts, a failure to inquire into the truth of a matter will give rise to a finding of recklessness, and hence malice: Mondal.
The Court held that the motion judge’s mischaracterization of the defamation meant she did not assess whether there were grounds to believe that the impugned statements amounted to fair comment. The Court stated that at most, the appellants’ admissions supported a finding that the defence could go either way – and, in that case, there would be grounds to believe that the defences could be rejected and would fail.
The Court held that the motion judge’s assessment of the issue of malice was flawed in two ways. First, it was impacted by her mischaracterization of the sting of the defamation. Second, there were grounds to believe that the respondents have no valid defence of fair comment. One of the respondents’ increasingly vehement assertions against the appellants could support an argument that her actions were motivated by spite or ill-will. The respondents’ apparent failure to take any steps to verify the postings of the anonymous respondent could be construed as recklessness amounting to malice. Moreover, the Court held that while the appellants may not ultimately succeed at trial in establishing malice, on a motion under s. 137.1(4)(a) and (b), the appellants only needed to establish that there were grounds to believe that the respondents’ fair comment defence would not succeed: Mondal; Canadian Union of Postal Workers.
(ii) Defence of Justification
The Court explained that to succeed on this defence at trial, the burden is on the defendant to prove the substantial truth of the sting of the defamation: Bent. The Court held that while the appellants’ admissions may have provided a basis for the truth of some of the statements, there were grounds to believe that the admissions could not support the respondents’ defence of justification with respect to the true sting of the defamation. The sting of the defamatory statements went well beyond the admitted facts. At best, the defence could go either way, which meant that there were grounds to believe that the respondents had no valid defence of justification.
(iii) Defence of Responsible Communication
The Court explained that to succeed on this defence at trial, the respondents must demonstrate that the subject matter of the impugned statements was of public interest and that the publication of the statements was responsible in the sense that reasonable steps were taken to ensure the overall fairness of the publication and the accuracy of any factual assertions: Grant v. Torstar Corp.; Bondfield; Corus; Canadian Union of Postal Workers. The Court noted that the defence can be defeated by a finding of malice because: “[a] defendant who has acted with malice in publishing defamatory allegations has by definition not acted responsibly”: Torstar.
The Court held that a trier of fact could accept that the respondents’ reason to publish the postings was on a matter of public interest – animal welfare. However, the Court held that the true sting of the defamation put the overall fairness of the publication into question. Moreover, there were grounds to believe that this defence could fail because the respondents did not appear to have taken any steps to ensure the accuracy of the factual assertions in the publication. Finally, the Court held that there was good reason to believe that the defence would be unavailable because a finding of malice could be made. As a result, both the overall fairness of the publication and the reasonableness of the steps taken to validate the accuracy of any factual assertions in the impugned statements were open to legitimate dispute. The Court held that a trier could reasonably find for or against the respondents on these issues, which established grounds to believe that the responsible communication defence could fail: Bondfield.
(c) Subsection 137.1(4)(b): the weighing exercise
(i) Correct Analysis
The Court explained that s 137.1(4)(b) is the public interest weighing stage and the “crux of the analysis”: Pointes. This requires the “structured evaluation” of the competing values of the public interest in allowing a legitimate action to continue to redress harm caused by the moving party’s actions against the public interest in the moving party’s expression.: 40 Days for Life. The Court held that, to succeed, the respondent “must provide evidence that enables the judge ‘to draw an inference of likelihood’ of harm of a magnitude sufficient to outweigh the public interest in protecting the [moving party’s] expression”: Hansman. Neither reputational harm nor monetary harm is more important than the other. Nor is harm synonymous with the damages alleged: Subway Franchise Systems of Canada, Inc.
The Court stated that while no definitive determination of harm or causation is required, it is insufficient to rely on “[p]resumed general damages” or “bare assertions of harm”: Hansman. However, “there is no threshold requirement for the harm to be sufficiently worthy of consideration…the magnitude of the harm simply adds weight to one side of the weighing exercise”: Pointes. At this stage, it is necessary to evaluate the expression’s quality and the motivation behind it: Pointes; Thorman. Citing 40 Days for Life, the Court reiterated that the evaluation of “the expression under s. 137.1(4)(b) should be guided by principles at the core of freedom of expression and other principles that underlie a free and democratic society.” In weighing the public interest in allowing a proceeding to continue, certain factors may be relevant, including a history of attempts to silence critics, financial power imbalance, punitive purpose, and minimal damages suffered. The potential chilling effect on future expression and the defendant’s history of advocacy in the public interest may also be relevant: Pointes. Further, “the only factors that might be relevant in guiding that weighing exercise are those tethered to the text of s. 137.1(4)(b).”
(ii) Motion Judge’s reasons under s. 137.1(4)(b)
The Court held that rather than a balanced weighing of the relevant principles to which she referred, the motion judge determine that the appellants “must establish harm caused by the expression” and that the issue was “whether the real purpose of the claim [was] to silence and whether the harm [was] sufficient to outweigh the public interest in protecting expression.” The motion judge erred in her assessment of harm, focusing unduly on the public interest in protecting the expression and failed to consider the public interest in allowing the action to continue.
The Court noted that the question under s. 137.1(4)(b) is whether the appellants met their onus to establish that the harm likely to be or that has been suffered by them because of the respondents’ expression was sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression: Levant. The Court held that the motion judge’s imposition of a more onerous burden on the appellants with respect to the issue of harm was reflected in her failure to engage in a robust consideration of the reputational harm caused by the sting of the defamation to the appellants.
The motion judge correctly noted that presumed harm, by itself, may not be sufficient to outweigh the public interest in protecting the respondents’ expression. However, here, the appellants did not rely on presumed harm or bald statements. They led affidavit evidence attesting to the loss of donations, volunteers, public engagement, and psychological and concomitant physical harm. The Court held that the motion judge appeared to have rejected or at least given no weight to this evidence because they were not “established by documentation”. The Court held that this was inconsistent with a preliminary assessment for the purposes of a s. 137.1(4) motion and reflected an approach consistent with a motion for summary judgment. It was unnecessary for the appellant at this preliminary assessment stage to corroborate evidence with documentation: Marcellin; Thorman. Further, because of her mischaracterization of the defamation and her imposition of a more onerous burden, the motion judge did not properly assess the reputational harm to the appellants, which was a necessary step in order to conduct a proper weighing under s. 137.1(4)(b): Levant; Subway Franchise Systems of Canada, Inc.
The Court explained that the weighing exercise also requires an examination of the quality of the impugned statements. Rather than analyzing how close the impugned statements were to core Charter values, the Court explained that the motion judge focused on the engagement of the respondents in animal welfare volunteer work and their participation in online activities related to animal welfare and rescue. Her observations concerning the validity of the respondents’ activities did not reflect on the quality of the impugned statements. The Court held that without this assessment, she could not determine whether the public interest in the protection of the impugned statements outweighed the harm to the appellants.
The Court stated that when taken as a whole, the quality of the impugned statements made them less worthy of protection because they collapsed into unsupported personal and virulent attacks. The Court agreed that the broader context of animal welfare concerns is important for understanding the meaning of the expression, but that whatever good one ultimately hopes to achieve cannot be used to justify an expression that is untrue, not fair comment and could support a finding of malice, nor can it elevate the value of the expression: 40 Days for Life. The Court held that the respondents could have expressed their concerns about the appellants’ activities without resort to the extreme and defamatory language that was used in the impugned statements.
- No.
The Court held that the motion judge erred in dismissing the action against the respondents, and compounded that error by dismissing the entirety of the action against all defendants. It was clear from the provisions of s. 137.1 of the CJA that the action may be dismissed against only the moving party, not other defendants who did not participate in the motion. Section 137.1(3) provides for dismissal “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”. Similarly, s. 137.1(4) refers to the moving party, not all defendants. In this case, only the respondents brought a s. 137.1 motion to dismiss. As expressly stated in their notice of motion, they sought a dismissal of the appellants’ action against only themselves. There was no basis to grant relief not requested nor required.
The respondents argued this was inconsistent with a purposive reading of the statute and clear direction of the Court in Schwartz v. Collette. The Court disagreed, stating that Schwartz had no application to this case. Schwartz confirmed the broad jurisdiction that motion judges have under s. 137.1(3) to dismiss the entirety of a plaintiff’s action, even where some of the claims brought are “separate and distinct” from those at issue on the motion. The Court explained that this had nothing to do with the question here of whether the wording of s. 137.1(3) allowed a court to dismiss a proceeding against a party who has not brought a motion to dismiss. The Court held that the “purposive” approach suggested by the respondents ignored the plain language of s. 137.1(3) that only permits the court to dismiss the action against a party who brings the motion to dismiss. The court has no jurisdiction to dismiss the action against a party who does not bring or otherwise participate in the motion to dismiss.
SHORT CIVIL DECISIONS
[Hourigan, Trotter and Gomery JJ.A.]
Counsel:
T. N. M., acting in person
J. R. N., acting in person
Keywords: Family Law, Civil Procedure, Appeals, Leave, Perfection, Extension of Time, Enbridge Gas Distribution Inc. v. Frose, 2013 ONCA 131, Correct Building Corporation v. Lehman, 2022 ONCA 723, Machado v. Ontario Hockey Association, 2019 ONCA 210, Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, Iqbal v. Mansoor, 2022 ONCA 198
[Hourigan, Trotter and Gomery JJ.A.]
Counsel:
F. Marinic, for the appellant
C. Afonso and L. Csanyi, for the respondents, Firearms Safety Education Service of Ontario, C. B., D. M. and D. B.
B. Haynes and M. Saad, for the respondents, His Majesty the King in Right of Ontario, as represented by the Ministry of Community Safety and Correctional Services, the Chief of Firearms Office of Ontario, A. F. and B. M.
Keywords: Torts, Crown Liability, Civil Procedure, Striking Pleadings, Appeals, Costs, Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1.2)(a), Mullin v. Lagace, 2015 ONCA 757
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