DIV. COURT FILE NOS.: 342/04
526/04
DATE: 20041103
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JANSSEN-ORTHO INC. -- Plaintiff
- and -
AMGEN CANADA INC. and KARISMA CANADA INC. – Defendants
BEFORE: GROUND J.
COUNSEL: Kathryn Podrebarac
for the Plaintiff
Rocco DiPucchio
Dominic Campione
for the Defendants
MOTION
HEARD: October 14, 2004
E N D O R S E M E N T
[1] The motions before this court are for leave to appeal from an Order of Pepall, J. dated June 10, 2004 in two actions commenced by the Plaintiff against the Defendants.
[2] With respect to the first action, being Action No. 03-CV-246507CM2 commenced on April 2, 2003 (“First Action”), the Defendants seek leave to appeal that part of the Order of Pepall, J. dismissing a motion to strike paragraphs 26 to 33 of the Amended Statement of Claim in the First Action. With respect to the second action, being Action No. 03-CV-250532CM1 commenced June 12, 2003 (“Second Action”), the Defendants seek leave to appeal that part of the Order of Pepall, J. dismissing the Defendants’ motion to dismiss the Second Action in its entirety and the Defendant Amgen seeks leave to appeal that part of the Order of Pepall, J. dismissing the motion to strike paragraphs 26 to 35 of the Statement of Claim in the Second Action.
[3] In addition to the motions before this court, the parties have commenced appeals and cross appeals to the Court of Appeal raising a number of issues arising from the Order of Pepall, J. including that part of Pepall, J.’s Order striking the paragraphs of the Amended Statement of Claim in the First Action claiming defamation. These issues are all interrelated.
[4] The First Action incorporates several claims and causes of action including a claim in defamation arising out of statements made in two radio broadcasts. No notice under Section 5 of the Libel Act and Slander Act R.S.O. 1990 c. L12 (the “Libel Act”) was provided to the Defendants with respect to such defamation claim prior to the commencement of the First Action. Subsequent to the commencement of the First Action, an article appeared in Frank Magazine which the Plaintiff maintains was defamatory. The Plaintiff then proceeded to amend the Statement of Claim in the First Action (“Amended Statement of Claim”) to include a claim in defamation based on the article in Frank Magazine and commenced the Second Action which included claims for defamation based both on the radio broadcasts and the Frank Magazine article. The Second Action is brought solely in defamation and claims only damages for defamation and punitive damages. It is conceded that a Section 5 Notice was given to the Defendants prior to the commencement of the Second Action.
[5] These proceedings have resulted in numerous motions being brought and appeals launched by both parties with considerable time being expended and costs being incurred by all parties.
[6] It appears to me that the essential issue to be determined, if leave to appeal is granted, is whether the commencement of a second action, after having given notice of a defamation claim under Section 5 of the Libel Act, can salvage a defamation claim made in a first action when a Section 5 notice had not been given with respect to such claim prior to the commencement of the first action.
[7] In my view, Pepall, J. correctly found that, no Section 5 notice having been given with respect to the First Action, the defamation claim in that action could not proceed and accordingly struck the paragraphs in the Statement of Claim in the First Action claiming defamation with respect to the radio broadcasts.
[8] The Defendants seek leave to appeal from that part of the Order of Pepall, J. where she declined to strike paragraphs 26 to 33 of the Amended Statement of Claim in the First Action on the basis that, although they contain statements in support of the defamation claim, the contents of those paragraphs supported the Plaintiff’s other causes of action set out in the Statement of Claim. In my view, this determination was clearly an exercise of discretion by Pepall, J. and I am unable to conclude, after considering her Reasons, that she exercised such discretion based on any incorrect or inapplicable principles. I find that there is no good reason to doubt the correctness of such exercise of discretion by Pepall, J. and, the decision of Pepall, J. being an exercise of discretion, I need not consider whether there are conflicting decisions.
[9] Accordingly leave to appeal will not be granted with respect to that part of the Order of Pepall, J. refusing to strike paragraphs 26 to 33 of the Amended Statement of Claim in the First Action.
[10] With respect to that part of the Order of Pepall, J. dismissing the motion to strike the Second Action in its entirety as an abuse of process or on the basis of a multiplicity of proceedings, Pepall, J. concluded that the motion to dismiss the Second Action as frivolous or vexatious or an abuse process was on the ground that it was allegedly commenced to cure the failure to provide a Section 5 notice prior to the commencement of the First Action. She did not dismiss the Second Action on that basis as it was her view that the substantive issues in dispute between the parties should not be defeated on procedural grounds. Again it appears to me that this was an exercise of discretion on the part of Pepall, J. that it was not exercised on any incorrect or inapplicable principles and there is no good reason to doubt the correctness of the decision. In addition, I am not able to conclude that there is good reason to doubt the correctness of that part of Pepall, J.’s Order particularly in view of the fact that the Plaintiff takes the position that it was required to commence the Second Action and could not rely on its Amended Statement of Claim in the First Action based on its interpretation of the jurisprudence as requiring that the notice be given prior to the commencement of a proceeding. With respect to multiplicity of proceedings, Pepall, J. concluded that the defamation claim having been struck in the First Action and the Second Action being limited to claims in defamation, the jurisprudence with respect to multiplicity of proceedings was not applicable. I have been cited no decisions which conflict with the decision of Pepall, J. in this respect and I find no good reason to doubt the correctness of her decision in this respect. Accordingly, leave to appeal will not be granted with respect to that part of the Order of Pepall, J. declining to dismiss the Second Action in its entirety as an abuse of process or on the basis of multiplicity of proceedings.
[11] The remaining issue is the Defendants’ motion for leave to appeal that part of the Order of Pepall, J. declining to strike paragraphs 26 to 35 of the Statement of Claim in the Second Action. These paragraphs relate strictly to the claim for defamation based upon the radio broadcasts and this part of the Defendants’ motion raises squarely what I have described above as the essential issue on these motions. Pepall, J. in her Reasons declined to strike these paragraphs for the same reason that she dismissed the motion to dismiss the second action in its entirety in that “to the extent possible, and without offending the Statutory Notice Provisions, the substantive issues in dispute between the parties should not be defeated on essentially procedural grounds”.
[12] I have been cited ample authority for the proposition that the failure to provide a Section 5 Notice is an absolute bar to the bringing of a claim in defamation and, in my view, this is a substantive issue. There is also ample authority for the proposition that the notice must be given prior to the commencement of the proceeding and that the Statement of Claim in a proceeding cannot constitute notice for purposes of Section 5 of the Libel Act. Accordingly, in my view, there is good reason to doubt the correctness of Pepall J.’s Order in this regard. In addition, it does not appear that the essential question of whether a claim in defamation can be salvaged by the commencement of a second proceeding after failure to provide a Section 5 Notice in a first proceeding has ever been addressed by the courts in this province. In my view, this is an issue of some importance to the administration of justice and the development of the law in that it could affect any libel proceeding in this province where there has been a failure to provide a Section 5 Notice prior to the commencement of the proceeding.
[13] Accordingly, leave to appeal will be granted with respect to that part of the Order of Pepall, J. wherein she declined to strike paragraphs 26 to 35 of the Statement of Claim in the Second Action.
[14] The Plaintiff takes the position that the Defendant Amgen should be precluded from raising the issue of the lack of notice under Section 5 of the Libel Act on the basis that it has not pleaded by way of Statement of Defence to either action. In response, Amgen refers to the decision of the Ontario Court of Appeal in Beardsley v. Ontario (2001), 57 O.R. (3rd) 1. In Beardsley, supra, the Plaintiff brought action against the Crown and two police officers and the Defendants moved, prior to the filing of the defence, to strike the claims on the basis that no notice had been provided to the Crown pursuant to Section 7(1) of the proceedings against the Crown Act, R.S.O. (1990) Ch. P.27 (the “PACA”) and on the basis that, as against the two police officers, the limitation period had expired. With respect to the claim against the Crown, the Court of Appeal held that no notice having been given prior to the commencement of the action pursuant to Section 7 of the PACA, the Plaintiffs claim against the Crown should be struck as the notice was a necessary precondition to the right to bring the action. By contrast, the Court of Appeal did not strike the claim against the two police officers on the basis of the expiry of the limitation period. The Court ruled that the expiry of a limitation period, unlike the failure to give a statutory notice, does not render a cause of action a nullity but rather it is a defence that must be pleaded. The Plaintiff has made reference to other authorities decided under the old Rules where it was held that a motion brought for the determination of a question of l. (See Canadian Plasmapheresis Centres Ltd. v. Canadian Broadcasting Corp. (1975), 8 O.R. (2nd) 55 and Sentinel-Review Co. v. Robertson Estate (1928) 2 S.E.R. 258). In my view, these latter authorities are distinguishable. The motion brought by Amgen in the case at bar is not for the determination of a question of law raised by the Statement of Claim but rather for a determination that a condition precedent to the issuance of the Statement of Claim has not been satisfied. In any event, I adopt the statement of Doherty, J.A. in Roach v. New Communications (2002) O.J. No. 875 that “nothing would be gained by requiring Mr. Davis to recommence this motion after service of his Statement of Defence”. I am of the view that nothing would be gained by requiring Amgen to serve a Statement of Defence and bring its motion again after having served the Statement of Defence.
[15] Counsel may make brief written submissions to me as to the costs of these motions on or before November 30, 2004.
Ground J.
Released: November 3, 2004