Anti-SLAPP motions are a useful tool for obtaining the early dismissal of an action that arises from an expression on a matter of public interest. The use of anti-SLAPP motions has received some academic criticism and courts have recognized that it has become an expensive tool which has added to the costs of litigation, particularly where the motion is brought to dismiss a counterclaim in whole or in part. This is contrary to the purposes of section 137.1 of the Courts of Justice Act ("CJA"). Accordingly, courts should be hesitant to dismiss a counterclaim on an anti-SLAPP motion because even if a counterclaim is dismissed, the parties will remain locked in litigation.
In
The corporate plaintiff,
During an investigation by Park Lawn into allegations of misconduct by its Chief Executive Officer ("CEO"), concerns were expressed about the management company's relationship with Park Lawn. Park Lawn ultimately sued its CEO, who had resigned from his position, settled with him, and then sued the management company on the grounds that it had knowingly assisted the CEO in alleged wrongdoing in connection with the trust funds.
Park Lawn's new CEO, G, then made statements to a funeral services newsletter wherein unflattering comments were made about the management company. The comments suggested, among other things, that the management company was not to be trusted because it had committed a crime and fraud, and had engaged in dishonest, immoral and dishonourable conduct. Accordingly, the management company counterclaimed against Park Lawn for breach of contract and defamation.
The management company alleged that as a result of the comments made by G it had lost the opportunity to market new funds.
Park Lawn sought to have the counterclaim dismissed under section 137.1 of the CJA on the basis that the counterclaim represented strategic litigation against public participation. The motion judge dismissed the motion and Park Lawn and G appealed.
At issue on the appeal was whether the motion judge had erred in finding that allowing the management company's counterclaim to proceed outweighed the public interest in protecting the moving parties' expression about the management company.
Park Lawn and G argued that the motion judge had erred in his analysis of the public interest hurdle found in section 137.1(4)(b) of the CJA. More specifically, Park Lawn and G alleged that there was no evidence that the management company had suffered any harm because of the impugned statements made by G and that the motion judge had inadequately weighed the management company's harm against the public interest in protecting the impugned expressions on what was a matter of public interest.
The public interest hurdle in section 137.1(4)(b) was described by the
Furthermore, general damages are presumed in a defamation action. This is sufficient to constitute harm. However, a responding party is required to provide support where special damages are claimed.
The statements made against the management company were serious and, indeed, the moving parties had conceded on the anti-SLAPP motion that G's statements had caused damage to the management company.
While these findings favoured the dismissal of the anti-SLAPP motion under section 137.4(b), the appellate court further delved into the purpose of the moving parties' motion and the fact that the motion had been brought to dismiss a counterclaim. Although the
Remarkably, unlike most anti-SLAPP motions, if Park Lawn and [G's] motion succeeds, the proceedings will not be done. Park Lawn's action will go forward, and it will seek to prove that what [G] expressed to [the industries newsletter] was true. However, if the anti-SLAPP Motion succeeds, and Park Lawn fails to prove its case, [the management company] will be precluded from claiming damages [for] harm caused to its reputation by Park Lawn's failure to prove that what [G] said was true. An anti-SLAPP motion designed to suppress strategic litigation is being used very strategically and tactically.
The Court of Appeal found no error in the motion judge's decision.
This case demonstrates that a party must be cautious when seeking to dismiss a counterclaim using an anti-SLAPP motion. Notwithstanding the presumption against awarding costs to the management company for successfully defending the anti-SLAPP motion, the motion judge had awarded costs to it. The Court of Appeal also affirmed this finding and noted overall that the moving parties had sought more than
It will be interesting to see how the appellate court's guideline will be utilized by motion judges in future anti-SLAPP motion cost awards. particularly in light of its
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