A lawyer is saying he hopes politicians at Queen’s Park pay close attention to an Ontario Court of Appeal decision involving the province’s laws on fighting strategic lawsuits against public participation, or SLAPPs, to see if the legislation is working the way they originally intended it to.
The Ontario Superior Court of Justice had dismissed an anti-SLAPP motion brought by funeral home company Park Lawn Corp. against investment management company Kahu Capital Partners Ltd., which had brought a defamation action over comments that Park Lawn CEO J. Bradley Green had made in a funeral industry publication about Kahu’s relationship with his predecessor at the company.
Justice Paul M. Perell considered the three-part test for anti-SLAPP motions set out in Ontario’s Courts of Justice Act and refined by the Supreme Court of Canada in two seminal decisions (1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, and Bent v. Platnick, 2020 SCC 23). At the first stage, employing a generous definition for public interest, he concluded that the impugned statements concerned a matter of public interest. At the second stage, he concluded that there were grounds to believe that there was substantial merit to the defamation counterclaim and that the appellants had no valid defence (Park Lawn Corp. v. Kahu Capital Partners Ltd., 2022 ONSC 3341).
On appeal, Park Lawn did not take issue with those first two conclusions, but argued that Justice Perell was wrong on the third stage of the test when he ruled that the harm likely suffered by Kahu was sufficiently serious that it outweighed the public interest in protecting the appellants’ freedom of expression on a matter of public interest.
But Ontario Court of Appeal Justice Sarah Pepall ruled against Park Lawn and Green, while noting the overall theme in the legislative debates over the anti-SLAPP legislation was that it
was designed to stop a plaintiff from silencing a defendant by pursuing meritless litigation that served to intimidate and undermine public expression.
“The process was intended to be efficient and economical. Presumably this would pre-empt the need for a motion judge to conduct a granular analysis,” she wrote. “[A] deep dive into the record is not required.”
But Justice Pepall also noted that “unfortunately” the practice has evolved into quite a different state than that anticipated by the legislature and by the Supreme Court — and that they tend to be expensive. She wrote that the case was a good example of this, in that Park Lawn delivered a costs outline of just over $375,000, whereas Kahu’s costs were approximately $31,000.
“To address the objectives of the legislation, it bears repeating that the emphasis of the motion should be on the ‘crux’ or ‘core’ of the analysis, namely the weighing exercise. This should not involve a trial of the issue or as some have put it, a ‘trial in a box,’” she wrote. “Rather, the motion is a screening procedure. At the third stage of the test, the weighing exercise, a technical, granular analysis is not required. Instead, as directed by the Pointes Protection and Bent decisions, the motion judge should step back and ask what is really going on.”
Justice Pepall suggested that “as a guideline” the costs of an anti-SLAPP motion should not generally exceed $50,000 on a full indemnity basis, while also noting there will be exceptions and motion judges always have the power to award less, more or nothing as they see fit in the circumstances of each case.
“The cost of litigation is a plague that has infected our system of justice and serves to undermine its efficacy. Here the Legislature enacted a provision designed to help people avoid a costly defamation lawsuit and preserve the opportunity for public discourse and expression, but at the same time allow legitimate actions to proceed,” she wrote. “The procedure was to be efficient and inexpensive [but] ironically, a procedure intended to avoid costly, unmeritorious, protracted defamation lawsuits has developed into a platform for sometimes costly, unmeritorious and protracted litigation.”
And Justice Pepall also held that “consistent with the legislation” anti-SLAPP motions should be heard no later than 60 days after the notice of motion is filed.
“Subject to court availability, motion judges should generally compel compliance with this 60- day time parameter. The timeframe for these motions should act as a reminder that they are meant to be limited in scope,” she wrote. “Lastly, it bears repeating that a motion judge’s determination … will be entitled to deference on appeal absent an error in law or palpable and overriding error. This is especially so with respect to a motion judge’s weighing of the public interest. Parties should be mindful of this standard of review when seeking to appeal an order in anti-SLAPP proceedings.”
Justice Pepall was joined by Justices Gary Trotter and Julie Thorburn in her decision, which was issued Feb. 28 (Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129).
Joseph Groia of Groia & Company, which represented Kahu, said the case was a good example of not only the problems with Ontario’s anti-SLAPP legislation but also the larger issue of the costs of civil litigation matters in the province.
“I really hope that the people up at Queen’s Park will pay some attention to what the court has said, because they really need to look at whether this legislation is working the way they expected it to or wanted it to,” he said. “The theory is great — the theory is you don’t want to have important questions or debates on matters of public importance stifled by the threat of strategic litigation. But it has now taken on a completely dysfunctional aspect, and what I mean by that is we are seeing big companies like Park Lawn are using the legislation to try and do exactly the opposite of what it was intended to do.”
Media and defamation lawyer Howard Winkler of Winkler Law said the consensus on anti SLAPP legislation is that it is meant to be a relatively inexpensive and expeditious way of weeding out defamation cases where the harm likely to be done does not outweigh the public interest in its expression.
“And that is a good objective, but a ton of time and money is being spent on parties fighting over whether there are valid defences or not, because the Supreme Court has set a high threshold for that,” he said. “So, what has happened is that a defendant can bring an anti-SLAPP motion and, because of the complicated nature of the defences test, can ring up hundreds of thousands worth of costs — and under the regime subject to an order from the court the defendant who succeeds on an anti-SLAPP motion gets full indemnity costs.”
Winkler said what the Court of Appeal is trying to do is “make what I call bad legislation work through judicial interpretation.”
“The whole object of the legislation is to deter defamation actions where the harm suffered is not really serious, but what has happened is because of the cost regime under these motions bringing an anti-SLAPP motion has been itself used strategically,” he said. “What the court is really saying is, notwithstanding the other aspects of the test, focus on the weighing of interest — and if you focus on the weighing of interests and you don’t get caught up in a huge deep dive into the question of whether the defences are valid, then the object and spirit of the legislation might be achieved.”
Groia said he has been concerned for many years that costs have gotten out of control, pointing to Justice Pepall’s conclusions about the “plague” infecting the justice system.
“I do a lot of work in Alberta and B.C., and they have a cost system that I think Ontario needs to take a good hard look at adopting because they have tariffs,” he said. “If you argue a case in B.C. or in Alberta you are liable for costs, but those costs are a fraction of what they would be in Ontario. And the problem is that if you are a big corporation, you can afford it — but if you are a little individual suing a big corporation you really can’t.”
Counsel for Park Lawn did not respond to a request for comment.
The Lawyer hopes Ontario lawmakers will pay attention to Appeal Court’s message in anti SLAPP case was published by Law360 Canada on March 8, 2023.