Court File and Parties

COURT FILE NO.: 46/06 DATE: 2007-09-13

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

LANE, SWINTON AND BRYANT JJ.

B E T W E E N:

PAMELA BADER Plaintiff/Respondent

• and -

ROBERT RENNIE Defendant/Appellant

Counsel: Ronald Chapman, for the Plaintiff/Respondent Jeffrey Klein, for the Defendant/Appellant

HEARD at Toronto: June 7, 2007

Reasons for Decision

BRYANT J.:

[1] This is an appeal from the order of Belobaba J. dated December 1, 2005 in which he dismissed the defendant’s motion for summary judgment. The main issue in this appeal is the applicability of absolute privilege to evidence given in the course of a statutory disciplinary proceeding.

The Facts

[2] Ms. Pamela Bader, the plaintiff/respondent, and Robert Rennie, the defendant/appellant, were real estate agents in the City of Toronto. The plaintiff was employed by Re/Max Estates. The defendant was a principal of Re/Max Estates.

[3] On June 19, 2003, the Manager of Complaints, Compliance and Discipline of the Real Estate Council of Ontario (“RECO”) notified the plaintiff that he was referring a complaint made against her to a discipline hearing. The particulars of the alleged unprofessional conduct specified breaches of the Code of Ethics, including:

Rule 1(1) Ethical Behaviour: A Member shall endeavour to protect and promote the best interests of the Member’s client.

Rule 46 Unprofessional Conduct: A member shall not engage in an act or omission relevant to the practice of the profession that, having regard to all the circumstances, would reasonably be regarded by the members or the public as disgraceful, dishonourable or unprofessional.

Proceedings before the Tribunal

[4] A hearing was held before a panel of the Discipline Committee at RECO’s offices on October 21, 2003. The plaintiff did not attend and the panel proceeded in her absence after due deliberation. Ms. Anita John, legal counsel for RECO, had carriage of the proceeding on behalf of RECO. Mr. Rob Maxwell, solicitor, was counsel to the panel. Mr. Rennie was a witness at the hearing and gave sworn evidence during the disciplinary hearing.

[5] The Discipline Committee decision, dated October 21, 2003, found that Ms. Bader had breached several rules of the Code of Ethics and imposed an administrative penalty of $25,000 and placed her on probation for 2 years. Ms. Bader appealed the decision of the Disciplinary Committee to the Appeals Committee. On May 21, 2004, the Appeals Committee found that Ms. Bader breached several rules of the Code, including rules 1(1) and 46. The Committee decreased the administrative penalty to $10,000 and reduced the period of probation to one year.

Judicial Proceedings

[6] The plaintiff commenced an action on August 27, 2004 against the defendant. The plaintiff claimed that the evidence of the defendant before the disciplinary hearing was defamatory. She sought damages for the defamation and an order prohibiting the republication of the defamation. The defendant pled that the disciplinary hearing before RECO was a judicial proceeding and that evidence given by a witness was privileged. The defendant alleged that the allegations in the statement of claim were scandalous and disclosed no reasonable cause of action.

[7] The appellant/defendant brought a motion under rules 20 and 21(1)(b) of the Rules of Civil Procedure (R.R.O. 1990, Reg. 194) for summary judgment, or alternatively, to strike out the statement of claim on the ground that it disclosed no reasonable cause of action. On December 1, 2005, the motions judge dismissed the summary judgment motion on the basis that “the application of the ‘absolute immunity’ defence is not plain and obvious and given the Seaman and Larche line of cases, this question should be litigated at trial.”

[8] Jennings J. granted leave to appeal to the Divisional Court on February 7, 2006 because he doubted the correctness of the decision by the motions court judge on the ground that the doctrine of absolute privilege was a well-recognized rule of law (Samuel Manu-Tech Inc. v. Redipac (1999), 1999 3776 (ON CA), 124 O.A.C. 125 (C.A.)).

The Position of the Parties

[9] The defendant’s position is that the defendant has absolute immunity from subsequent liability for his testimony before the Disciplinary Committee. The notice of appeal requested this Court to set aside the order of the motions judge and to grant the defendant’s motion for summary judgment. The defendant appeals on the grounds that: (1) the publication of the alleged defamatory words was made at a disciplinary hearing before RECO and was protected by an absolute privilege; (2) the motions judge erred in law by applying the “plain and obvious” test on a summary judgment motion; and, (3) there was no triable issue.

[10] The position of the plaintiff is that the defendant’s testimony was defamatory. Counsel submitted that the privilege did not apply because the words spoken by the defendant were not relevant, or in the alternative, were not in reference to the cause of the inquiry. Counsel further submitted that the evidentiary record was incomplete because it was necessary to cross-examine the defendant on his motive for giving the alleged defamatory evidence.

Analysis and Decision

(a) The Witness Immunity Rule

[11] Rules of privilege operate to exclude relevant evidence. Their rationale is to protect interests and relationships which are regarded as sufficiently important to justify some sacrifice of the availability of evidence in the fact-finding process (McCormick on Evidence, (6th ed.) St. Paul: West Group (2006) vol. 1, at p.339). The administration of justice requires participants to be able to testify freely and candidly without fear of a possible lawsuit for what they say in court. The rule promotes the administration of justice even though an individual might be defamed. In Reynolds v. Kingston (City) Police Services Board (2007), 2007 ONCA 166, 84 O.R. (3d) 738, the Ontario Court of Appeal recently reaffirmed the immunity of parties and witnesses from subsequent liability arising from their testimony in judicial proceedings. The court states at paragraph 14:

The absolute immunity of parties and witnesses from subsequent liability for their testimony in judicial proceedings developed in early English cases and is well established at common law. Any communication, even perjured testimony, made in the course of a judicial proceeding, cannot serve as the basis for a suit in tort. The rationale for witness immunity, which has become less an evidentiary rule than a rule of substantive law, is that the proper administration of justice requires full and free disclosure from witnesses unhampered by fear of retaliatory lawsuits. See, e.g., Samuel Manu-Tech Inc. v. Redipac Recycling Corp., 1999 3776 (ON CA), [1999] O.J. No. 3242, 38 C.P.C. (4th) 297 (C.A.), at paras. 19 and 20.

[12] The Safety and Consumers Statutes Administration Act (S.O. 1996, c.19; O. Reg. 27/05, s.4) designates RECO as the sole administrative authority for administering the provisions of the Real Estate Brokers and Business Brokers Act, 2002 (S.O. 2002,c. 30, Schedule C) and regulations made under that Act. The RECO Disciplinary Committee is a statutory tribunal with the statutory power to hold hearings and impose penalties against its members with respect to unethical behaviour and unprofessional conduct (Luzak v. Real Estate Council of Ontario (2003), 2003 25437 (ON SCDC), 67 O.R. 530 (Div. Ct.), at paras. 7-24).

[13] The alleged defamatory words were uttered by the defendant in the course of the proceedings held before the RECO Disciplinary Committee. The witness immunity rule extends to testimony given before the Disciplinary Committee because it had the statutory authority to make inquiries, conduct hearings and impose sanctions (Connor v. Waldron [1931] O.J. 462, (C.A.) at para. 47; Sussman v. Eales (1986), 25 C.P.C. (2d) 7 (C.A.)).

(b) The Summary Judgment Rule

[14] The threshold test on a motion for summary judgment is whether the moving party has established there is no genuine issue for trial (Aguonie et al v. Galion Solid Waste Material Inc. et al (1998), 1998 954 (ON CA), 156 D.L.R. (4th) 222 (O.C.A.)). The Court of Appeal expounded on the term “genuine” (ibid. at p. 234-235):

It is safe to say that "genuine" means not spurious and, more specifically, that the words "for trial" assist in showing the meaning of the term. If the evidence on a motion for summary judgment satisfies the court that there is no issue of fact which requires a trial for its resolution, the requirements of the rule have been met. It must be clear that a trial is unnecessary. The burden is on the moving party to satisfy the court that the requirements of the rule have been met. Further, it is important to keep in mind that the court's function is not to resolve an issue of fact but to determine whether a genuine issue of fact exists (authorities omitted).

An issue of fact must relate to a material fact. As Morden A.C.J.O. pointed out in Ungerman: "[i]f a fact is not material to an action, in the sense that the result of the proceeding does not turn on its existence or non-existence, then it cannot relate to a 'genuine issue for trial'." In ruling on a motion for summary judgment, the court will never assess credibility, weigh the evidence, or find the facts. Instead, the court's role is narrowly limited to assessing the threshold issue of whether a genuine issue exists as to material facts requiring a trial. Evaluating credibility, weighing evidence, and drawing factual inferences are all functions reserved for the trier of fact.

I wish to point out that, although the court's role in respect to motions that involve factual issues must stop short of resolving such issues, rule 20.04(4) permits the motions judge to determine a question of law and grant judgment accordingly, where he or she is satisfied that the only genuine issue is a question of law.

[15] The “plain and obvious” test applied by the motions judge was the correct test for the defendant’s rule 21.01(1)(b) motion (Reynolds v. Kingston (City) Police Services Board, supra at paras. 9-13). The motions judge, however, erred in law by applying the “plain and obvious” test to the summary judgment motion.

[16] The plaintiff submitted that there were issues of fact requiring a trial. First, the witness’s testimony must be relevant to the proceedings in order for the witness to be protected by the privilege. Second, the plaintiff submitted that it was necessary to cross-examine the defendant on his motive for making the alleged defamatory statements in order to complete the evidentiary record. The plaintiff and the motions judge relied upon Larche v. Middleton (1989), 1989 4404 (ON SC), 37 C.P.C. (2d) 174 (H.C.J.) at pp. 186-188 in support of this proposition.

[17] In the early English case of Seaman v. Netherclift (1876), vol. II, C.P.D.5, at p.56, Cockburn C.J held that the privilege was not affected by the relevancy or irrelevancy of the witness’s testimony. The current state of the law is set out in Reynolds v. City of Kingston Police Services Board, supra, and The Law of Defamation in Canada (Brown, Raymond E. (2nd ed., Carswell:Toronto, vol. 2, s.12.4) which states that : “… it makes no difference that the words may be totally and knowingly false and spoken mala fide and with actual malice, or that they may be irrelevant to all the issues in the judicial proceeding.”

[18] In my view, a relevancy requirement would create uncertainty if witness immunity depended upon an after the fact determination as to whether the witness’s testimony was relevant. A relevancy requirement would also undermine the purpose of the rule, which exists to protect the proper functioning of the administration of justice, and which would be impeded if a witness feared that what he or she said as a witness could expose him or her to future litigation.

[19] The plaintiff alternatively submitted that the defendant’s testimony must have “reference to the cause or matter of inquiry” (Seaman v Netherclift supra at pp. 56-57;60). The defendant testified about the conduct of the plaintiff in relation to her ethical behaviour and whether she engaged in unprofessional conduct.

[20] The alleged defamatory words were uttered by the defendant during the course of a hearing before the Disciplinary Committee. The prosecutor asked the defendant a number of questions and the defendant responded to them. The prosecutor asked the defendant an open ended question at the conclusion of the hearing and he responded. Members of the Committee then asked the defendant additional questions to which he responded. Neither counsel for RECO, counsel for the Disciplinary Committee nor members of the panel interrupted the defendant while he was giving evidence or told him that the information he provided was improper or irrelevant.

[21] The Law of Defamation in Canada, supra, s.12.4, articulates the application of the privilege in relation to an action for defamation. It states:

An absolute privilege or immunity attaches to those communications which take place during, incidental to, and in the processing and furtherance of, judicial or quasi-judicial proceedings. No action for libel or slander will lie for words spoken or written during the ordinary course of those proceedings.

Thus, any communication made in the course of a judicial proceeding is privileged. It is the occasion on which the words were spoken that is material for the application of the rule. The witness’s motive or the relevance of her or his testimony is not a material issue (Samuel Manu-Tech Inc. v. Redipac Recycling Corp., supra, at para. 19).

[22] There are no facts in dispute concerning the defamatory words spoken as the defendant’s testimony was transcribed. There is no factual dispute as to when, where and what transpired before the disciplinary panel. There is no need to evaluate the credibility of the defendant, weigh the evidence, or draw factual inferences. Thus, this Court is in just as good a position as the motions judge or a trial judge to determine the question of law as to whether the defendant has absolute immunity from subsequent liability arising out of his testimony before the Disciplinary Committee.

Conclusion

[23] There is no genuine factual issue for trial. The sole question is whether the witness immunity rule attaches to the defendant’s testimony before the RECO Disciplinary Committee.

[24] In my view, the defendant has absolute immunity from subsequent liability for his testimony before the RECO Disciplinary Committee. Accordingly, the appeal is allowed, the order of the motions judge is set aside and summary judgment is granted to the defendant.

[25] If counsel are unable to agree on costs, they may provide brief submissions on the issue of costs together with a bill of costs.

Bryant J.

Lane J.

Swinton J.

Released: