Court and Parties
Court of Appeal for Ontario Date: 2024-01-11 Docket: COA-23-CV-0027
Between:
Canadian Tire Corporation, Limited Plaintiff (Respondent)
And:
Eaton Equipment Ltd., Scott Milburn, a.k.a. Scott Eaton*, Servantage Dixie Sales Canada Inc., Carleigh Milburn, Intellectual Inventive Inc., Citrus Grove MortgageCo Ltd., Tammy Diane Robertson*, Libero Everett Tassone*, Appslack Ltd., Appakiss Ltd. and Appnatty Ltd.*** Defendants (Appellants*)
Counsel: T. David Marshall and Matthew Jarrett, for the appellants Colin Pendrith and Jessica Kuredjian, for the respondent
Heard: January 10, 2024
On appeal from the order of Justice Peter J. Cavanagh of the Superior Court of Justice, dated November 28, 2022, with reasons reported at 2022 ONSC 6672.
Reasons for Decision
(1) Background
[1] This appeal concerns a SLAPP motion by several defendants to dismiss an action commenced by Canadian Tire Corporation Limited (“Canadian Tire”). The relevant parties are Eaton Equipment Ltd. and Scott Milburn (together, the “Milburn appellants”), and Carleigh Milburn, Tammy Robertson, Intellectual Inventive Inc., Citrus Grove MortgageCo Ltd., Appakiss Ltd., Appslack Ltd., Appnatty Ltd., Shane Robertson, and Libero Tassone (together, the “Robertson appellants”).
[2] Canadian Tire claimed against the Milburn appellants for damages for, among other things, fraud, fraudulent misrepresentation, misappropriation and conversion, knowing receipt, and knowing assistance. It alleges that the Milburn appellants engaged in a fraudulent scheme by falsely asserting an entitlement to and receiving payment for work under Canadian Tire’s customer return program when that work was not performed.
[3] Canadian Tire pleaded that the Milburn appellants made fraudulent transfers of funds that were misappropriated from Canadian Tire to the Robertson appellants. It claimed against the Robertson appellants for, among other things, leave to issue a certificate of pending litigation, declaratory relief in respect of a mortgage, damages for misappropriation and conversion and unjust enrichment, and disgorgement of proceeds and profits from the alleged fraudulent scheme.
[4] The appellants submit that on May 1, 2018, Mr. Milburn met with Canadian Tire and complained of privacy law violations by Canadian Tire and about Canadian Tire allegedly selling defective and dangerous tools that were not approved by the Canadian Standards Association. Canadian Tire denied these allegations. The appellants contend that after this meeting, Canadian Tire ordered the termination of Eaton Equipment Ltd.’s contract under the customer return program.
[5] On the motion, it was the Milburn appellants’ position that Canadian Tire’s action was initiated to further an indirect, collateral, or improper purpose so that they were obstructed from going public or notifying relevant authorities of their knowledge of Canadian Tire’s sale of allegedly defective parts and privacy law violations. The Robertson appellants made similar submissions and argued that Canadian Tire’s action is a SLAPP proceeding against them by extension because they had been included in the lawsuit as leverage to be used against the Milburn appellants.
(2) Decision of the Motion Judge
[6] The motion was restricted to a determination of whether the moving parties had satisfied the threshold requirement of showing on a balance of probabilities that the action arises from an expression made by the moving parties that related to a matter of public interest. The motion judge ruled that the appellants had not discharged the threshold onus under s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), concluding that they failed to show that Canadian Tire’s action arose from an expression made by any of the appellants.
[7] He found that the claim as pleaded by Canadian Tire and the underlying facts are “not premised or grounded on any expressions made by the Milburn Defendants or any other defendant. Canadian Tire’s claim does not target an expression made by any of the defendants.” In reaching this conclusion, the motion judge adopted the approach articulated in Schwartz et al. v. Collette, 2021 ONSC 2138, determining that motive for bringing a proceeding is not a relevant consideration at the threshold stage of analysis on a motion under s. 137.1 of the CJA.
[8] The motion judge also exercised his discretion under s. 137.1(8) to order costs in the amount of $25,906 on a partial indemnity scale against the moving parties. He did so on the basis that Canadian Tire’s action arises out of an alleged fraud and has “none of the characteristics of a SLAPP.” The motion judge concluded that the moving parties’ evidence on the alleged motive for the action was not relevant to the threshold question, and the motion caused considerable delay in the advancement of this action.
(3) Analysis
[9] The appellants advance three main grounds of appeal: (i) the motion judge erred in finding that they had not met their onus of establishing that Canadian Tire’s action arose from an expression made by any of the appellants; (ii) the motion judge erred in finding that Canadian Tire’s motive in commencing its action was irrelevant on the determination of the threshold issue and that he was prohibited from considering the criteria used to determine whether an action should be dismissed under s. 137.1; and (iii) the motion judge erred in awarding costs against the appellants. We do not give effect to any of these arguments.
[10] The motion judge was correct in finding that Canadian Tire’s fraud claim is neither grounded in nor targeting any expression made by the appellants. We agree there is nothing in the record that supports the assertion that a year after the appellants made their allegations against Canadian Tire, it decided to commence a fraud claim to silence them.
[11] Regarding the issue of motive, the plaintiff’s motivation in commencing an action is not a relevant factor at the first stage of the SLAPP analysis, nor are the criteria that are used in determining whether an action should be dismissed. Instead, the inquiry is restricted under the CJA to the determination of whether the moving party has shown on a balance of probabilities that the action arises from an expression made by it that related to a matter of public interest.
[12] SLAPP motions were intended to be a relatively summary procedure, designed to weed out unmeritorious actions that target expressions on matters of public interest. However, they have proven to be an unwieldly, expensive, and time-consuming remedy. We decline to contribute further to that problem by expanding the threshold test to include an investigation of a plaintiff’s motive in commencing litigation and consideration of factors that would apply had the motion passed the threshold stage.
[13] The appellants require leave to appeal the motion judge’s costs award. Leave to appeal a costs order will not be granted except in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”: Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), at para. 21, leave to appeal refused, [2007] S.C.C.A. No. 92. This test is designed to impose a high threshold because appellate courts recognize that fixing costs is highly discretionary and that trial and motion judges are best positioned to understand the dynamics of a case and to render a costs decision that is just and reflective of what actually happened on the ground: Algra v. Comrie Estate, 2023 ONCA 811, at para. 48.
[14] The motion judge exercised his discretion in accordance with recent authority from this court on the issue of costs in the context of a SLAPP motion: Veneruzzo v. Storey, 2018 ONCA 688. There is no basis to interfere with that decision. Leave to appeal the costs award is denied.
(4) Disposition
[15] The appeal is dismissed. The appellants shall pay the respondent its costs of the appeal in the agreed-upon, all-inclusive amount of $28,121.
“C.W. Hourigan J.A.”
“Gary Trotter J.A.”
“J. Copeland J.A.”