Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20231013 DOCKET: COA-23-CV-0058

van Rensburg, Nordheimer and George JJ.A.

BETWEEN

Christopher Zeppa Plaintiff (Respondent)

and

Karen Rea Defendant (Appellant)

Counsel: Gerald Chan and Carlo Di Carlo for the appellant Emilio Bisceglia and Adriana Di Biase for the respondent

Heard: September 1, 2023

On appeal from the order of Justice Tamara Sugunasiri of the Superior Court of Justice, dated December 7, 2022, with reasons reported at 2022 ONSC 6914.

Nordheimer J.A.:

[1] Ms. Rea appeals from the order of the motion judge that dismissed her motion for an order, pursuant to s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43, dismissing this action. She also seeks leave to appeal the costs award made by the motion judge.

A. Background

[2] The appellant is a Markham city councillor. The respondent is a developer and the principal of City Park (Town Crier) Homes Inc. (“City Park”). City Park proposed to develop a parcel of land that it owns into a subdivision containing 11 large homes. The land is located in the appellant’s ward. The appellant was one of a number of city councillors who voiced opposition to this proposed development.

[3] City Park required a zoning change and an amendment to Markham’s Official Plan. It was through the process of attempting to obtain these changes for City Park that the appellant and the respondent came to know each other. Public meetings were held regarding these proposed changes, at which many residents voiced their opposition to the development. The appellant was present at these meetings. Based on the expressed opposition from these residents, the appellant also voiced her opposition.

[4] When the matter came before City Council, the appellant voted against the development. However, a majority of city councillors voted in favour of the development and it was approved.

[5] Some of the appellant’s constituents, who had spoken out against the development, continued to be concerned about the project. On December 29, 2017, a group of these residents appealed aspects of City Council’s decision to the Local Planning Appeal Tribunal (now known as the Ontario Land Tribunal). The appellant supported these residents. She helped them prepare their appeal forms; she provided them with advice; and she discussed their case with a lawyer, who offered to provide assistance.

[6] In response to the residents’ appeal, City Park filed a $10 million action (the “Residents’ Action”) against two of the residents. The Residents’ Action alleged that, by bringing the appeal, the residents were negligent and unlawfully interfered with the economic relations of City Park. There was some evidence before the motion judge that suggested that the Residents’ Action was brought for the purpose of procuring the withdrawal of the appeal.

[7] On October 12, 2018, the Local Planning Appeal Tribunal dismissed the residents’ appeal for lack of standing.

[8] There was evidence before the motion judge that the appellant’s continued opposition to the development caused the respondent to become frustrated. This led to an incident at a bar. The appellant was celebrating her re-election. In the course of doing so, she ran into the respondent at the bar. She referred to her re‑election and the fact that she would be at council for another four years. This led to an exchange between the two.

[9] There is a dispute as to what was said in this exchange. Regardless, the appellant considered what the respondent said to her to be a threat. She reported it to the York Regional Police. The officers who took the appellant’s statement advised her that the conduct complained of did not meet the legal test for uttering threats.

[10] The respondent became aware of the appellant’s report to the police. He complained about this incident to the City’s Integrity Commissioner. The Integrity Commissioner found that the appellant had breached Markham’s Code of Conduct by her conduct at the bar. City Council chose not to issue any sanction to the appellant. The respondent then commenced this action against the appellant seeking $1.1 million. The respondent alleged that the appellant defamed him by reporting the incident at the bar to the police. He claimed that the appellant contacted the York Regional Police and falsely accused the respondent. He defined what the appellant said to the police, for the purposes of his claim, as the “false and slanderous statements” for which he claimed damages.

[11] In the meantime, the residents brought a motion, under s. 137.1, to dismiss the Residents’ Action. In response, City Park settled with the residents. City Park agreed to dismiss its claim against the residents and pay them $100,000 for their legal fees.

[12] In August 2020, about two years after the respondent had commenced this action against the appellant, he issued and served a fresh as amended statement of claim. In the amended claim, the respondent increased his damages claim by $10 million. The amended claim also added four causes of action: breach of fiduciary duty, interference with economic relations, misfeasance in public office, and champerty. These claims all related to the appellant’s opposition to the project.

B. The decision below

[13] The respondent brought a motion, pursuant to s. 137.1, to dismiss this action. The motion judge dismissed her motion. In doing so, the motion judge concluded that the appellant did not satisfy her onus on the motion, under s. 137.1(3), to demonstrate that the respondent’s proceeding arose from an expression relating to a matter of public interest. Given her conclusion, the motion judge did not consider whether the respondent satisfied his onus under s. 137.1(4) of showing: (i) grounds to believe that his proceeding had “substantial merit”; (ii) grounds to believe that the appellant had no valid defences; and (iii) that the harm likely to be suffered by the respondent outweighed the public interest in protecting the expression at issue.

[14] In her reasons, the motion judge said that s. 137.1 did not protect the appellant’s expression in filing a report with the police because that complaint was motivated by a “personal dispute”. The motion judge also expressed concern about setting “too low” a bar for assessing public interest, notwithstanding her observation that there was a public interest in supporting complaints to the authorities.

[15] The motion judge then turned to the claim relating to misfeasance in public office. The motion judge found that, on its face, the respondent’s claim arose from a matter of public interest. However, the motion judge nonetheless concluded that the appellant did not satisfy her onus with respect to this claim because the claim impugned the lawfulness of the manner in which the appellant chose to make her views known. She also found that the actions of the appellant were motivated by a “personal vendetta” that the appellant had against the respondent.

C. Analysis

[16] The motion judge’s conclusion regarding expressions on matters of public interest involves a question of law and thus is to be reviewed on a standard of correctness: 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, 2 S.C.R. 587, at para. 97.

[17] In my view, the approach adopted by the motion judge took a much too narrow view of what constitutes expression on matters of public interest. This approach not only fails to recognize the fundamental rationale for s. 137.1, but it is also inconsistent with the prevailing case law on the subject.

[18] On the latter point, Côté J. held in Pointes, at para. 24, that “a broad and liberal interpretation is warranted at the s. 137.1(3) stage of the framework”. She continued, at para. 28:

This is important, as it is not legally relevant whether the expression is desirable or deleterious, valuable or vexatious, or whether it helps or hampers the public interest — there is no qualitative assessment of the expression at this stage. The question is only whether the expression pertains to any matter of public interest, defined broadly. The legislative background confirms that this burden is purposefully not an onerous one. [emphasis added]

[19] There is an obvious public interest in members of the public feeling free to report conduct which is of concern to the police. Members of the public must not feel that, in doing so, they may be exposed to litigation, especially litigation of the size commenced by the respondent against the appellant. The appellant felt threatened by the actions of the respondent and she reported her concerns to the police. The fact that the police determined that the actions complained of did not rise to the level of criminal threatening does not change the public interest in ensuring that such concerns are reported to the police and reviewed by them.

[20] The motion judge also erred in engaging in an evaluation of the expression by saying that “it is questionable who was harassing whom”. That observation has nothing to do with whether the appellant’s report to the police was an expression on a matter of public interest. Even if the appellant had been the harassing party, it does not change the public interest in having incidents reported to the authorities.

[21] The motion judge also found that “the mere importance of supporting complaints to the authorities” could not meet the threshold because, if it did, “every instance of a person suing for false reporting” would be subject to s. 137.1.

[22] Both of these comments reflect the same error. They conflate the stages of the test to be applied under s. 137.1. At the s. 137.1(3) stage, the issue is solely whether the expression relates to a matter of public interest. It is at the s. 137.1(4) stage that the court looks at the merits of the claim, the existence of potential defences, and the relative harm between the expression on the one hand and permitting the proceeding to advance on the other hand. This distinction is important because, among other things, the burden shifts from the defendant to the plaintiff when the analysis moves from ss. (3) to ss. (4).

[23] The motion judge repeated this same error when she addressed the claim for misfeasance in public office. While finding that, on its face, the respondent’s claim in this respect arose from the appellant’s expression relating to a matter of public interest, the motion judge went on to consider whether that expression should be constrained in order to promote what the motion judge saw as the interest of ensuring public officials were held to account. Indeed, the motion judge said, at para. 14:

If we left the analysis there, [the appellant], and many other public officials whose jobs are inherently related to matters of public interest would too easily meet the basic threshold of section 137.1 and quickly stifle challenges to the exercise of their authority under the guise of protected expression.

[24] The genesis for the motion judge’s concern about stifling challenges to public officials exercising their authority is unclear. While she appears to be particularly concerned with holding public officials accountable for their actions, I note that a claim for damages of the type advanced by the respondent is not the only remedy that is available for misconduct by a public official. In any event, a finding that the conduct of the appellant in this case represents expression on a matter of public interest does not determine that issue. Any concern about stifling challenges to public authorities is properly addressed at the s. 137.1(4) stage, especially when considering the relative harms described in s. 137.1(4)(b): Hansman v. Neufeld, 2023 SCC 14, 481 D.L.R. (4th) 218, at para. 76.

[25] In my view, the expression at issue, properly considered, is an expression on a matter of public interest. That conclusion is consistent with giving the language of expression relating to a matter of public interest a “generous and expansive” interpretation: Pointes at para. 30. As I said earlier, there is a public interest in people feeling free to report matters of concern to the police. This point is well made by Sharpe J.A. in Cusson v. Quan, 2007 ONCA 771, 87 O.R. (3d) 241 where he said, at para. 39:

Employment references, business and credit reports, and complaints to police, regulatory bodies or public authorities are classic examples of occasions of qualified privilege. The rationale for qualified privilege is that on such occasions, "no matter how harsh, hasty, untrue, or libellous the publication . . . the amount of public inconvenience from the restriction of freedom of speech or writing would far outbalance that arising from the infliction of private injury" [citation omitted].

[26] It was more recently reiterated in Hobbs v. Warner, 2021 BCCA 290, where Goepel J.A. said, at para. 89:

The judge held there was significant public interest in protecting expressions to law enforcement agencies to assist with the detection and prevention of crimes. There is no doubt that, as a general proposition, bona fide police complaints are public expressions of great importance.

[27] The motion judge’s conclusion, at para. 12, that a finding that complaints to authorities always relate to matters of public interest would set the bar “too low” for the purposes of s. 137.1(3) fails to reflect the importance attached to those expressions. Indeed, the proper concern, as expressed in Pointes, at para. 30, is that the bar should not be set too high for the onus under s. 137.1(3) to be met.

[28] There are other issues that are raised by the claims in this action. They include whether the respondent can advance claims that would appear, on their face, to belong to City Park; whether the appellant can be found to owe a fiduciary duty or a duty of good faith to the respondent (or any other member of the public); whether the actions of the appellant could constitute interference with economic relations or whether they could constitute champerty and maintenance. None of those issues, and others, are properly considered at this stage of the proceedings. They are properly considered when the factors in s. 137.1(4) are evaluated, especially the factor of substantial merit. On that latter factor, there must be a basis in the record and the law for finding that the underlying proceeding has substantial merit: Pointes at para. 39.

[29] The motion judge did not consider any of those factors.

D. Conclusion

[30] I would allow the appeal. Having concluded that the expression at issue was on a matter of public interest, I find that the appellant has satisfied her onus under s. 137.1(3). Since we do not have the benefit of the motion judge’s consideration of the factors under s. 137.1(4), I would remit the matter back to a different judge to consider and rule on those factors. In light of my conclusion, I do not reach the motion for leave to appeal the costs award since that costs award would be set aside in the successful appeal. The costs of the motion as a whole shall be determined by the judge hearing the s. 137.1(4) issue.

[31] The appellant is entitled to her costs of the appeal fixed in the agreed amount of $17,500, inclusive of disbursements and HST.

Released: October 13, 2023 “K.M.v.R.” “I.V.B. Nordheimer J.A.” “I agree. K. van Rensburg J.A.” “I agree J. George J.A.”