COURT OF APPEAL FOR ONTARIO

DATE: 20040304

DOCKET: C39906

RE: MOPAL CONSTRUCTION LIMITED (Plaintiff/Respondent) – and – POWELL MOTORSPORT ADVANCED DRIVING SCHOOL INC. and JOHN RICHARD POWELL (Defendants/ Appellants)

BEFORE: GILLESE, ARMSTRONG and BLAIR JJ.A.

COUNSEL: J. Paul Fletcher for the appellants (defendants) H. Richard Bennett for the respondent (plaintiff)

HEARD: March 3, 2004

On appeal from the order of Justice J.E. Sheppard of the Superior Court of Justice dated March 18, 2003.

A P P E A L B O O K E N D O R S E M E N T

[1] We see no basis for interfering with the order of the motions judge.

[2] To the extent that the counterclaim alleges an independent actionable wrong as the basis for punitive damages, it is a claim for defamation or at least a defamation-like claim. The law is well-established that a counterclaim based on such allegations in a statement of claim cannot stand because the allegations are absolutely privileged. This principle is not confined strictly to allegations of defamation: see Dooley v. C.N. Weber Ltd. (1994), 1994 7300 (ON SC), 19 O.R. (3d) 779 (Gen. Div.), at pp. 7-8; aff’d [1995] O.J. 940 (C.A.). Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] S.C.J. 19 (S.C.C.) does not alter this law.

[3] As to costs, there was a basis on the record before him to justify the motion judge’s exercise of discretion and there is no basis for interfering with his disposition in this regard.

[4] Accordingly, the appeal is dismissed.

[5] Costs, payable to the respondent, are fixed at $5,000 all inclusive.