CITATION: PMC York Properties v. Siudak, 2021 ONSC 1134

DIVISIONAL COURT FILE NO.: 235/20

DATE: 20210212

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Sachs, Trimble and Gomery JJ.

BETWEEN:

PMC York Properties Inc. et al.

Marc Munro, for the Appellants

Appellants

– and –

Bill Siudak

Jordan Diacur, for the Respondent

Respondent

HEARD by videoconference: 3 February 2021

Trimble J.

Overview

[1] This case concerns the limits to the modern, relaxed approach to pleading rules in defamation cases.

[2] This is an appeal of an interlocutory order of Parayeski J., dated 14 July 2020, in which he dismissed the Appellants’ motion to strike the Respondent’s counterclaim pursuant to Rules 21.01(1)(b) and 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[3] The Appellants seek an order granting the appeal and striking the Respondent’s counterclaim without leave to amend. They also seek costs below and in this Court.

[4] For the reasons that follow, the appeal is allowed, and the Respondent’s counterclaim is dismissed in its entirety with no leave to amend.

SUMMARY

[5] Courts have made it clear that, in order for a claimant to benefit from the modern, relaxed approach to pleadings in defamation actions, it is a pre-requisite that the claimant plead in full particularity against at least one defendant. To put it another way, it is only after a claimant in a defamation claim has pleaded facts that make out a prima facie case against at least one person that the Court can approach other claims of defamation using the modern, relaxed approach.

[6] In order to make out a prima facie case against one person, the claimant must plead facts to support each of the elements of the tort of defamation: namely, that one person made a particular statement, to another identified person, at a certain time and in certain circumstances, about the claimant, and that the statement is capable of being defamatory.

[7] It is an error to relax the pleading requirement for an alleged instance of defamation in the absence of a prima facie case with respect to another alleged instance.

[8] In this case, the Defendant/Plaintiff by counterclaim, Mr. Siudak, has not made out a prima facie case that any of the defendants to the counterclaim said anything in particular to anyone else about him at a specific time. He has not provided the circumstances of any communication, or identified any statement that is capable of being defamatory. Rather, the defamation claim is a set of bald allegations that one or more of the defendants said something to up to 60 unit owners, over three or four months, that caused him to be ejected from the Board of Directors of Bentley Place. Mr. Siudak does not know what the statement was, whether it was oral or written, when it was made, or to whom. He says that he is the victim of a smear campaign, but, based on his allegations, this is no more than speculation on his part.

[9] Since Mr. Siudak has failed to make out a prima facie case of defamation against any individual, it is not open to the Court to assess the other allegations of defamation in the counterclaim using the modern, relaxed approach to pleadings in defamation cases. Accordingly, the counterclaim, insofar as it pleads defamation, must be struck.

[10] The claim for conspiracy must also be struck. It is merely the defamation claim dressed in different clothing. As such, if the defamation claim is struck, it cannot survive.

Factual BACKGROUND

Events Giving Rise to this Litigation

[11] For a year beginning in the summer of 2018, Mr. Siudak was a unit owner in Bentley Place, a condominium development in Hamilton, Ontario. During the winter of 2018 – 2019, he became concerned about a perceived lack of transparency and accountability with the Board and a pattern of the property manager (the Appellant, PMC York Properties Inc.) influencing decisions of the Board.

[12] On 29 May 2019, at the AGM, Mr. Siudak was elected to the Board by 52 of the 73 votes cast.

[13] After he was elected, Mr. Siudak began to send a newsletter to unit owners in Bentley Place, and to post each copy on a website he had created: www.bentleyplace.info. He also posted other documents on his website with respect to Bentley Place, some which were available only to Board members. Much of what he posted related to issues, which, in Mr. Siudak’s view, showed financial mismanagement by the Appellants.

[14] At a meeting of the Board on 2 July 2019, Mr. Casuccio (one of the Appellants and a principal of PMC) said that, if Mr. Siudak was not removed from the Board, he would resign as the property manager and would take the long-term superintendent of the building with him. Ms. Scholes, one of the Defendants by counterclaim, asked how Mr. Siudak could be removed from the Board. Mr. Casuccio stated that if 15 unit owners signed a written request, a special meeting would be called for a vote on his potential removal. Ms. Scholes immediately produced a letter with 22 preprinted names on it calling for such a meeting to remove Mr. Siudak. The removal letter was signed by 21 of the 22 people whose names were preprinted on it. The letter gave two reasons for their request to remove Mr. Siudak from the Board: the signatories had lost confidence in Mr. Siudak, and he had breached the confidentiality of the Board.

[15] On 6 August 2019, a meeting was held for the express purpose of removing Mr. Siudak from the Board. The motion against Mr. Siudak was successful, and he was removed. He sold his unit a short time later.

This Litigation

[16] The Appellants in this appeal are the Plaintiffs in the litigation, Paul Casuccio and his wife, Margot. They are the principals and guiding minds of PMC York Properties Inc., the condominium management company that manages Bentley Place.

[17] The Appellants sued Mr. Siudak for, among other things, defamation, alleging that he libelled the Appellants in his newsletters and online blog posts. Mr. Siudak counterclaimed against Paul Casuccio and four other Board members, claiming that they had defamed him and conspired to have him removed from the Board.

[18] In his counterclaim, Mr. Siudak seeks $500,000 in damages for defamation and the same amount of damages for civil conspiracy, and an additional $200,000 in damages for defamation and civil conspiracy from the remaining defendants to the counterclaim. He alleges in his counterclaim that the Appellants conspired against him by coordinating a smear campaign of defamatory statements designed to injure his reputation among the unit owners and, having done so, orchestrated his ejection from the Board.

[19] Mr. Siudak pleads that, on 25 June 2019, he received a letter from counsel to the Board which accused him of having “continually dismissed [his] duties to the condominium”, “[d]isclos[ed] confidential and privileged information discussed at Board meetings”, and “[i]nterfer[ed] with ongoing repair and maintenance projects.” He concedes that it is not clear at whose instructions this letter was sent. He does not indicate that this letter was sent to anybody else.

[20] Mr. Siudak pleads that, within two months of that letter, Mr. Casuccio declared to the owners that he would quit and would take the long-time Superintendent Bentley Place with him if Mr. Siudak was not removed from the Board of Directors.

[21] He alleges that, on 28 July 2019, he received another letter from counsel to the Board that purported to tell him that he could not contact other members of the Board or other owners, and threatened him with legal action. Mr. Siudak does not know at whose instructions this letter was sent or to whom else it was sent.

[22] Mr. Siudak pleads that both lawyers’ letters defamed him. He has not, however, added the lawyers as defendants to his counterclaim. He has also not claimed that Mr. Casuccio instructed that those letters be sent.

[23] In paragraph 66 of the counterclaim, Mr. Siudak sets out the details of the alleged defamation. He alleges that Mr. Casuccio orchestrated the events that took place before and up to the to July 2019 presentation of the removal letter.

[24] More specifically, Mr. Siudak says that Mr. Casuccio and the other defendants to the counterclaim had “phone calls and/or in person meetings with owners to convince them to vote to remove Siudak from the Board and elect a different director of Paul’s choosing. Owners that did not agree to vote against Siudak were berated by Paul, and he continued to pester them, by phone or in person (often through the Defendant Owners), until they agreed to vote the way he wished.”

[25] In paragraph 68, Mr. Siudak pleads “during these calls and meetings Paul, and certain owners including, but not limited to, the defendant’s owners, made false, derogatory, and defamatory statements about Siudak, the details of which are known only to Paul, the defendant owners, and the other owners which they spoke to [sic]”. This is the central allegation in this appeal.

[26] Mr. Siudak pleads that this was all part of a malicious smear campaign against him that was made in secret and in bad faith, orchestrated by Paul Casuccio. In other words, the defendants to the counterclaim conspired with one another with the purpose of causing injury to Mr. Siudak, which he then suffered.

[27] In paragraph 72, Mr. Siudak pleads that the defendants irreparably harmed his reputation in the eyes of other owners, such that they would think less of him and would no longer trust him. He says his reputation was destroyed by the defamation.

[28] Nowhere in his pleading does Mr. Siudak say specifically who defamed him, what was said or written (or the gist of it), to whom it was said or written, and under what circumstances. From the pleading, it is clear that Mr. Siudak believes that one or more of the Defendants to the counterclaim must have said something defamatory about him to up to 60 unit owners in Bentley Place during the period between mid 2018 and August 2019, which statements caused him to be removed from the Board.

The Motion Below

[29] The Appellants brought a motion to strike the Respondent’s counterclaim pursuant to Rules 21.01(1)(b) and 25.11, arguing that the Respondent failed to plead the necessary material facts to support his counterclaim. On 14 July 2020, in brief oral reasons, the motion judge, referring to the test for sufficiency of pleadings in defamation actions as set out in Magnotta Winery Ltd. et al. v. Ziraldo et al (1995), 1995 7122 (ON SC), 25 O.R. (3d) 575 (Ct. J. (Gen. Div.)), and Catalyst Capital Group Inc. v. Veritas Investment Research Corp. 2017 ONCA 85, 136 O.R. (3d) 23, allowed the counterclaim to stand. With respect to the claim for conspiracy, he referred to the test in Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, and allowed that claim to stand. He dismissed the motion to strike.

[30] Leave to appeal the motion judge’s order was granted by Sachs, Penny and King J.J., without reasons: PMC York Properties Inc. et al v. Siudak, 2020 ONSC 7413 (Div. Ct.).

COURT'S JURISDICTION`

[31] Interlocutory orders of a Superior Court judge are appealed to the Divisional Court (see Rule. 62.02 (1) and s. 19 (1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43). The parties do not dispute the Divisional Court’s jurisdiction.

STANDARD OF REVIEW

[32] The parties agree that the standard of review is correctness for questions of law. In such cases, the appellate court is free to replace the opinion of the trial judge with its own opinion (see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8).

[33] Mr. Siudak submits in this case, however, that the motion judge’s decision not to strike the pleading was an exercise of his discretion. Therefore, the Divisional Court should only intervene if the motion judge erred in principle, misapprehended or failed to take account of material evidence, or reached an unreasonable conclusion.

[34] In my view, the applicable standard of review is correctness, as the motion judge incorrectly interpreted the case law applicable to defamation pleadings.

THE ISSUE

[35] The issue on this appeal is whether Parayeski J. erred in finding that the Appellants’ motion to dismiss should be struck and the Respondent should be allowed to proceed with his counterclaim.

[36] This issue gives rise to the following questions.

1. What must a claimant plead in a defamation action?

2. Does the counterclaim meet the test?

3. Is the claim in conspiracy merely a restated claim for defamation?

ANALYSIS

Issue 1: What must a claimant plead in a defamation action?

[37] The answer to this question lies in the proper application of the modern, relaxed approach to pleadings in defamation.

The Position of the Parties

[38] The parties agree that the relaxed, modern approach to pleading in defamation was set out by the Court of Appeal in Catalyst, at paras. 21–23. By way of summary, Catalyst provided that the following factors must be made out:

(a) the claimant has pleaded all the particulars available to him with the exercise of reasonable diligence;

(b) the claimant is proceeding in good faith;

(c) the claimant has established in the pleading a prima facie case and is not on a “fishing expedition”, which will require at least the pleading of a coherent body of fact surrounding the incident, such as time, place, speaker and audience with respect to one defamation;

(d) the coherent body of fact of which she has knowledge shows not only that there was an utterance or a writing emanating from the defendant, but also that the emanation contained defamatory material of a defined character of and concerning the plaintiff; and

(e) the exact words are not in her knowledge, but are known to the defendant and will become available to be pleaded by discovery of the defendant, production of a document or by other defined means, pending which the plaintiff has pleaded words consistent with the information then at their disposal.

[39] The parties disagree, however, as to whether the prima facie case mentioned in (c) above is a prerequisite to applying the approach, or whether a prima facie case flows from evidence that the claimant’s case meets the other elements identified by the Court.

[40] The Appellant argues that pleading in defamation involves two distinct parts. First, the claimant must make a prima facie case against one defendant. In other words, the claimant must plead facts, which, if true, would make out each of the elements of the tort of defamation with respect to at least one defendant. The plaintiff must specifically allege the following:

(a) that the defendant spoke certain words;

(b) the words spoken or the gist of them;

(c) that the words referred to the claimant;

(d) that the words were communicated to at least one other specific person; and

(e) that the words reasonably carried a defamatory meaning.

(See Guergis v. Novak, 2013 ONCA 449, 116 O.R. (3d) 280, at para. 52.)

[41] According to the Appellant, if the claimant fails to make out a prima facie case against at least one defendant, the claim fails in its entirety and must be struck. The court cannot apply the modern, relaxed approach to pleading in defamation to other alleged instances of defamation.

[42] If, however, the claimant makes out a prima facie case with respect to at least one defendant, but alleges that there are other acts of defamation, the court may apply the modern, relaxed approach to pleading with respect to those other acts of defamation and, in so doing, forgive some absence of particulars in the pleading.

[43] The motion judge, according to the Appellant, erred in either conflating the two parts of the test, or skipping the first part of the test altogether.

[44] The Respondent argues that the motion judge applied the modern, flexible approach to pleading in a defamation case properly.

The Law

[45] The foundation of the modern, flexible approach to pleading in a defamation case is Paquette v. Cruji (1979), 1979 1964 (ON SC), 26 O.R. (2d) 294 (H. Ct. J.). In Paquette, the plaintiff pleaded that the defendant made slanderous comments about the plaintiff’s competence and mental state that resulted in the plaintiff’s inability to obtain employment. The Statement of Claim set forth the substance of the words spoken, but named neither the time and place of the speaking, nor the persons to whom the words were spoken. The defendant demanded particulars. In response, the plaintiff confirmed the time to be the period between 21 November 1975, and 22 November 1977, and confirmed that the publication was to two individuals and “others, the particulars of which others are not known to the plaintiff but known to the defendant”.

[46] The defendant then delivered a Statement of Defence justifying one of the alleged statements and denying the publication of the others. In the alternative, he pleaded privilege based upon a request for information from a potential employer. The plaintiff delivered a Reply, inter alia, alleging malice.

[47] The defendant moved to strike out the Statement of Claim as amplified by the particulars, referring to the unknown individuals in the Plaintiff’s response to the Defendant’s demand for particulars. The Plaintiff’s claim was struck, with leave to amend. The Plaintiff then amended his pleading again, to read as follows:

Thomas Prue, Theresa Houston, and others, the names of whom are not known to the Plaintiff, but known to the Defendant, but particulars of the identity of whom are that they were an employee or agent of the following corporations or institutions from each of which the Plaintiff sought employment during the periods set out after each, and during said periods, each made an inquiry of the Defendant concerning the Plaintiff’s suitability for employment for the corporation or institution in question.

[48] In sixteen additional paragraphs, the plaintiff listed the organizations, some of whose individual members received the statements, although he did not list the individuals.

[49] In upholding the amended pleading, Grange J. laid out the reasons for requiring detailed pleadings in defamation cases:

It is true and has been said over and over again – see, for example, Odgers Digest of the Law of Libel and Slander, 6th ed. (1929), at p. 504, that pleadings in a defamation action are more important than in any other class of action. It is also generally true as put by Gatley on Libel and Slander, 7th ed. (1974), p. 422, para. 1015, that “... the defendant is entitled to particulars of the date or dates on which, and of the place or places where, the slander was uttered. The defendant is also entitled to be told the names of the person or persons to whom the slander was uttered...”, and that the Court will not permit the plaintiff to proceed to use discovery as a “fishing expedition” to seek out a cause of action: see Gaskin v. Retail Credit Co., [1961] O.W.N. 171; Collins v. Jones, [1955] 2 All E.R. 145. There are, however, limitations to the strictness of pleading. Our Courts have always refused to strike out a claim where the plaintiff has revealed all the particulars in his possession and has set forth a prima facie case in his pleading: see Winnett v. Appelbe et ux. (1894), 16 P.R. (Ont.) 57, and Lynford v. United States Cigar Stores Ltd. (1917), 12 O.W.N. 68. In the latter case Falconbridge, C.J.K.B., refused to strike out a statement of claim wherein the plaintiff had been unable to set forth the exact words of an allegedly defamatory letter which had resulted in loss of employment quoting with approval [at p. 69] the words of Odgers, 5th ed. (1912), at p. 624:

“If the plaintiff does not know the exact words uttered, and cannot obtain leave to interrogate before statement of claim, he must draft his pleading as best he can and subsequently apply for leave to administer interrogatories, and, after obtaining answers, amend his statement of claim, if necessary.”

[50] Grange J, said the following with respect to the allegations regarding unknown individual recipients of the statements:

The plaintiff maintains he was slandered by the defendant by communication to persons unknown (but associated with particular institutions) at times unknown (though within a specified time span). He sets forth the words used. He has stated everything he knows. If he proves the facts pleaded he will have established a prima facie case. The law will always protect a defendant from a frivolous action but it should not deprive a plaintiff of his cause of action, ostensibly valid, where the particulars are not within his knowledge and are well within those of the defendant. If the plaintiff should fail to prove any of the 16 slanders specifically alleged there is always a remedy in costs.

[51] The Statement of Claim was properly pleaded against two specific individuals. With respect to the unidentified recipients of the statement, the Defendant knew the nature of the statements, by whom they were spoken, a defined period within which they were spoken, and the name of the organizations those individuals belonged to.

[52] The overwhelming weight of judicial opinion has followed Paquette.

[53] In Magnotta, the plaintiff alleged that Ziraldo, the President of a competing winery who was also on the Board of VQA, told many people at a French wine competition that Magnotta’s cabernet was not really a Canadian wine and did not deserve the medal it won. Ziraldo also gave press interviews to that effect. Magnotta further alleged that Ziraldo complained to the organization that awarded the medal, and that, as a result, the medal was taken away. Magnotta alleged that Ziraldo’s statements about his wine were defamatory and untrue.

[54] Ziraldo attacked the Statement of Claim by contending, among other things, that the allegation in the Claim with respect to the letter to the wine competition organizer had to be struck out, as Magnotta did not particularize the contents of the letter in his pleading. According to Ziraldo, Magnotta had never seen the letter and had no idea whether it contained defamatory material, let alone what the actual words were.

[55] At pp. 583–84, Lane J. held as follows:

[I]t is open to the court in a limited set of circumstances to permit a plaintiff to proceed with a defamation action in spite of an inability to state with certainty at the pleading stage the precise words published by the defendant. The plaintiff must show:

− that he has pleaded all of the particulars available to him with the exercise of reasonable diligence;

− that he is proceeding in good faith with a prima facie case and is not on a “fishing expedition”; normally this will require at least the pleading of a coherent body of fact surrounding the incident such as time, place, speaker and audience;

− that the coherent body of fact of which he does have knowledge shows not only that there was an utterance or a writing emanating from the defendant, but also that the emanation contained defamatory material of a defined character of and concerning the plaintiff; [and]

− that the exact words are not in his knowledge, but are known to the defendant and will become available to be pleaded by discovery of the defendant, production of a document or by other defined means, pending which the plaintiff has pleaded words consistent with the information then at his disposal.

[56] Lane J. allowed the impugned paragraph to stand on the basis that Magnotta had adequately pleaded that it was awarded a gold medal at the competition; that Ziraldo falsely and maliciously complained to the organizers of the competition and others at the event that Magnotta’s wine ought not to have been tasted because it was not made of 100 per cent Canadian grapes; and, that as a result, the medal should not have been awarded to Magnotta. He had made the same comments at the press conference.

[57] Lane J. was satisfied that, with respect to the allegations of the defamatory statement to the industry organization and the withdrawal of the medal, Magnotta was pursuing a bona fide action; had pleaded what it could; had presented a prima facie case of the publication of defamatory words concerning it and its product; had presented a coherent set of facts in support; had explained its inability to plead the exact words used; and had demonstrated that the words could be obtained for ultimate inclusion in the pleading. Accordingly, Lane J. allowed the impugned pleading to stand despite Magnotta’s inability to plead the exact words made to the organization, as would normally be required for pleading in defamation. Again, in Magnotta, unlike in the case at bar, the plaintiff was able to be specific about the defamatory words used in relation to the other aspects of its claim; he just was not able to be specific about the words used in the related claim of the complaint to the organization that had awarded him a medal.

[58] The Court of Appeal addressed the issue of pleading in defamation in Guergis. Ms. Guergis was a federal Minister of the Crown. Over the course of 2010, she said that she was pressured into resigning from Cabinet, forced out of caucus, and denied the opportunity to run as her party’s candidate. She commenced an action against a number of individuals and institutions, claiming damages in defamation, conspiracy, negligence, intentional infliction of mental suffering, misfeasance in public office, and alleged breach of a duty of care.

[59] In allowing the defence motion to strike the Statement of Claim, the motion judge found that the statements made to one identified individual, Mr. Giorno, were not defamatory, as they were subject to privilege. Having struck the pleading with respect to the claim where the individual to whom the statement was made was identified, the court found that the allegations against unnamed individuals could not stand. In doing so, the court reaffirmed the two-step process in defamation pleadings at para. 52:

Further, the Appellant alleges in paragraph 98 of her statement of claim that Pellerin “spoke defamatory words about the Plaintiff” not only to Giorno but “and/or others”. The right to plead that a defamatory statement was made to certain unnamed persons is restricted to the case where a plaintiff has made out a prima facie case that the statement was made to a named person and has produced uncontradicted evidence of publication to other persons: Jaffe v. Americans for International Justice Foundation, [1987] O.J. No. 2370 (H. Ct. J.), at para. 10. These two requirements have not been met. No prima facie case exists that the defamatory statements were made against named persons as that pleading has been struck. Nor are the facts to support publication to other persons pleaded. All that remains is a bald allegation of publication to “others”. Accordingly, the pleading against “others” is also properly struck. [Emphasis added.]

[60] In Catalyst, the Court of Appeal addressed, again, when and how the modern, flexible approach to pleading in defamation ought to be applied.

[61] The parties in Catalyst were all players in the venture capital industry involving investments in distressed and undervalued Canadian companies. Catalyst alleged that the Respondents engaged in a conspiracy to participate in a wrongful and harmful “short selling” strategy designed to injure Catalyst. Catalyst sued in civil conspiracy and intentional interference with economic relations, primarily, but included a claim in defamation.

[62] In the defamation claim, Catalyst alleged that, at a meeting between the defendants in December 2014, representatives of West Face produced to representatives of Veritas a report containing defamatory statements about Catalyst. The West Face representatives encouraged Veritas to issue its own, similar report and distribute it to its customers and subscribers. The plaintiffs alleged that Veritas then issued such a report and gave it to its subscribers in 2015. Catalyst also alleged that the Veritas’ report was published to market participants and was placed on the website for download by Veritas’ customers. Finally, in paragraph 25 of its claim, Catalyst pleaded the following:

Beginning in November 2014, and continuing to March 2015, on specific dates known only to West Face, West Face distributed a report impugning Callidus and Catalyst to market participants (the “West Face Report”). The West Face Report was distributed to third parties, the identities of which are known to West Face.

[63] West Face moved to strike the claims for intentional interference with economic relations and conspiracy to defame. Veritas moved to dismiss the entire action.

[64] The motion judge struck paragraph 25, with leave to amend.

[65] On appeal, with respect to paragraph 25 of the Statement of Claim, Blair J.A. reiterated the two step approach to pleading in a defamation case:

[20] I agree with the Appellants that the failure to name all persons to whom publication was made and/or to specify all the times and places of publication is not automatically fatal. Those particulars are unknown to the Appellants but known to West Face and form an integral part of what is said to be an overall scheme of conspiracy to injure, intentional interference with economic relations, and defamation. The Appellants have otherwise properly pleaded a prima facie claim in defamation (including publication to named persons) against West Face. The Statement of Claim, read generously and as a whole, alleges material facts disclosing publication to unnamed third persons. Viewed in this overall context, the pleading that West Face distributed the allegedly defamatory statements to third party market participants, the identities of which are known to West Face, should stand.

[21] No one contests that the bar for striking a pleading as disclosing no cause of action is very high – is it plain and obvious that the plaintiff cannot succeed? – or that the facts as alleged in the Statement of Claim are to be accepted as true for purposes of deciding the motion: Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959. No evidence is permissible on a rule 21.01(1)(b) motion: rule 21.01(2)(b). The statement of claim is to be read as generously as possible with a view to accommodating any inadequacies in the allegations due to drafting difficulties.

[22] An additional dimension to these principles arises in defamation cases because pleadings in such actions have traditionally been held to a higher standard than is the case with other types of actions, in terms of the precision with which the material facts must be pleaded. West Face relies on this higher standard – as did the motion judge – for the proposition that para. 25 of the Statement of Claim fails to disclose a cause of action. Modern authorities have adopted a somewhat more flexible approach to the assessment of defamation pleadings than older authorities that took a very strict approach, however.

[23] Like any pleading, a statement of claim in a defamation action must set out “a concise statement of the material facts on which the [plaintiff] relies”: rule 25.06(1). And, of course, the material facts must be sufficient, if proved, to establish a cause of action. In libel actions (defamatory statements in writing, as in this case), the material facts to be pleaded are: (i) particulars of the allegedly defamatory words; (ii) publication of the words by the defendant; (iii) to whom the words were published; and (iv) that the words were defamatory of the plaintiff in their plain and ordinary meaning or by innuendo. See, generally, Alastair Mullis & Richard Parkes, eds., Gatley on Libel and Slander, 12th ed. (London, U.K.: Sweet & Maxwell, 2013), at paras. 26-1 to 26-26; Lysko v. Braley (2006), 2006 11846 (ON CA), 79 O.R. (3d) 721 (C.A.), at para. 91; Metz v. Tremblay-Hall (2006), 2006 34443 (ON SC), 53 C.C.E.L. (3d) 107 (Ont. S.C.), at para. 13.

[24] At one time, the weight of authority required the pleading of these essential elements with strict precision, including the exact wording complained of and the names of all persons to whom the words had been published. It was, and remains the case that pleadings in defamation actions attract a more critical evaluation than pleadings involving other causes of action; they require a more detailed outline of the material facts alleged in support of the claim. Courts are attentive to guard against “fishing expeditions” in such cases. This is because – given the serious nature of such allegations and the significance of context in assessing them – it is particularly important that the defendant know the case it has to meet.

[25] While the need for as much precision as possible and for enhanced judicial scrutiny continues, however, more recent authorities have applied greater flexibility in permitting defamation pleadings to stand in certain circumstances where the plaintiff is unable to provide full particulars of all allegations. These circumstances include situations where the plaintiff has revealed all the particulars within its knowledge, where the particulars are within the defendant's knowledge, and – importantly – where the plaintiff has otherwise established a prima facie case of defamation (including publication) in the pleading. See, for example, Paquette v. Cruji (1979), 1979 1964 (ON SC), 26 O.R. (2d) 294 (H.C.), at p. 296-97; Magnotta Winery Ltd. v. Ziraldo (1995), 1995 7122 (ON SC), 25 O.R. (3d) 575 (C.J.), at pp. 583-84; Lysko, approving Paquette and Magnotta Winery, at paras. 93-95; and Guergis v. Novak, 2013 ONCA 449, 116 O.R. (3d) 280, at para. 52.

[29] The more flexible approach was recognized by this Court in Lysko and, again, in Guergis. In Guergis the Court said that a plaintiff may plead that a defamatory statement was made to certain unnamed persons “where a plaintiff has made out a prima facie case that the statement was made to a named person and has produced uncontradicted evidence of publication to other persons” (para. 52). See also, Gatley on Libel and Slander, at para. 26.7; Jaffe v. Americans for International Justice Foundation, [1987] O.J. N. 2370 (Ont. Master), at para. 10. [Emphasis added.]

Discussion

[66] Mr. Siudak relies on paragraph 25 of Blair J.A.’s reasons in Catalyst for his position that his pleading should stand, notwithstanding that he has not pleaded facts for each element of the tort of defamation with respect to any defendant. He acknowledges the traditional rules of pleading in defamation, but says that the modern, relaxed rule relieves him of complying with the older, more rigid rules. Mr. Siudak says that he has complied with the modern, relaxed rule. His counterclaim is brought in good faith. He has pleaded all the facts he knows or are within his power to know. He has limited the potential speakers of the defamatory statements to one of four people (although most probably Mr. Casuccio), he has stipulated a limited window of time within which the statements were made, and set out a defined class of people to whom the statements were made. All other information is solely within the defendants’ knowledge.

[67] Mr. Siudak relies selectively on paragraph 25 of Catalyst (and only on that paragraph) and similar passages in Pacquette, Magnotta, and Guergis that extol the merits of the modern, relaxed approach to pleading in defamation. Mr. Siudak overlooks the overarching analysis in each case that affirms that, before the court can apply the modern, flexible approach to pleadings in defamation, the claimant, as a pre-requisite, must properly plead a prima facie claim in defamation against at least one defendant. That is to say, the plaintiff must plead that the defendant made a particular statement(s) to another, about the claimant, at a certain time and place and in certain circumstances, and that the statement(s) is capable of being defamatory. With respect specifically to Catalyst, Blair J.A. made it clear that a prima facie case is still required in paras. 20 and 29 of his reasons.

[68] The Respondent also relies on the decision of Falconbridge C.J. in Lynford v. United States Cigar Stores Ltd. (1917), 12 O.W.N. 68 (H.C.) in which the court appears to support the proposition that where a claimant does not know the exact words uttered, s/he should be permitted to plead without them, then proceed with “interrogatories”, and amend the Claim afterwards. Lynford was decided before the courts developed the two-step procedure of having to properly plead against one defendant before applying the modern, relaxed rules for pleadings with respect to other alleged defamers or instances of defamation.

[69] As such, the case is of historical interest, but does not alter the current state of the law. In Paquette, Grange J. referred to Lynford as being in one of the two streams of thought on how strict pleadings in defamation cases ought to be, and a case which favoured the more modern approach. That dichotomy was resolved by Paquette and the cases since.

Issue 2: Does the counterclaim meet the test?

[70] It does not.

[71] Mr. Siudak has failed to meet the pre-requisite necessary in order to avail himself of the modern, relaxed approach to pleading in defamation. He has not established a prima facie case of defamation against any one person. Specifically, the counterclaim fails to plead the communication of a defamatory statement to a specific person, the contents of that communication, or the time or circumstances of that communication. The Court is therefore precluded from applying the modern, flexible approach to the other allegations of defamation.

[72] Even applying the modern, flexible approach to pleading in defamation, the counterclaim must fail.

[73] The modern, flexible approach, once it applies, allows for greater flexibility in pleading defamation actions by allowing claims in defamation to stand in circumstances where the plaintiff is unable to plead the full facts in support of each related instance of defamation. These circumstances include situations where the plaintiff has revealed all the relevant facts within its knowledge, where some facts are solely within the defendant’s knowledge, or where the plaintiff has otherwise established a prima facie case of defamation (including publication) in the pleading. The modern, relaxed approach, once it applies, does not relieve the claimant from pleading facts in support of at least some of the elements of the tort. It does not allow the claimant to plead baldly, then embark on a fishing expedition.

[74] In this case, Mr. Siudak’s counterclaim is exactly the sort of case that the two-step approach to pleadings in a defamation claim is aimed at avoiding. It is a set of bald allegations that one or more of the defendants said something to up to 60 unit owners, over perhaps three or four months, that caused Mr. Siudak to be ejected from the Board of Directors of Bentley Place. Mr. Siudak pleads no facts. His claim is based on what he imagines might explain his ouster from the condominium board. He does not know that anyone made a statement about him, although he clearly believes so. He has no facts about what the statements were, or even the gist of them. He pleads that the statements, which he has never seen or heard, defame him. This is not a fact. It is mere speculation. He does not plead whether it was oral or written, when it was made or to whom it was made.

[75] In light of our findings, the counterclaim, insofar as it claims defamation, must be struck. We see no point in granting leave to amend since it is clear Mr. Siudak cannot plead with greater specificity in respect of any individual defendant.

Issue 3: Can the plea of civil conspiracy stand?

[76] In the counterclaim, Mr. Siudak also pleads that the Defendants conspired against him in order to remove him from the Board by orchestrating a coordinated campaign to have him removed “by destroying his reputation with the Owners” (see Counterclaim, at paragraph 65). Mr. Siudak also refers to the campaign as a “malicious smear campaign” (see Counterclaim, at paragraph 89).

Positions of the Parties

[77] The Appellant argues that this plea cannot stand for two reasons.

1. The conspiracy claim is entirely duplicative of the defamation claim. It Is improper and an abuse of process to “dress up” a defamation claim as another tort, which would allow the defamation claim to circumvent the specific body of law that governs claims for reputational damage.

2. The case in conspiracy is not properly pleaded.

[78] Mr. Siudak argues that the counterclaim discloses a reasonable cause of action in civil conspiracy and is not duplicative of the claim in defamation. He relies on the Supreme Court of Canada’s decision in Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, which warned against striking claims of civil conspiracy on the basis of purported duplication or merger at the pleadings stage for three reasons:

(a) a conspiracy can cause damage of a greater magnitude than a tortfeasor acting alone;

(b) a predominant purpose conspiracy might only be proven if other pleaded torts are also proven; and

(c) it would be inappropriate to ask on a motion to strike whether the plaintiff will succeed in other nominate torts.

The Law

[79] In Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477, at paras. 73–74 and 80, the Supreme Court tells us that, in Canada, there are two types of actionable civil conspiracies: predominant purpose conspiracy and unlawful means conspiracy.

[80] A predominant purpose conspiracy is made out where the predominant purpose of the defendant’s conduct is to cause injury to the plaintiff using either lawful or unlawful means, and the plaintiff does in fact suffer loss caused by the defendant’s conduct. Where lawful means are used, if their object is to injure the plaintiff, the lawful acts become unlawful (see Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 23 (SCC), [1983] 1 S.C.R. 452, at pp. 471–72).

[81] An unlawful means conspiracy requires no predominant purpose, but is made out where the conspirators direct unlawful conduct at the plaintiff, that the defendant should know would likely cause injury to the plaintiff, and that the injury to the plaintiff does in fact occur (see Cement LaFarge, at pp. 471–72).

[82] The seminal case on pleading conspiracy along with other torts is Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959. In that case, Mr. Hunt claimed that he contracted mesothelioma from being exposed to asbestos at work. He pleaded that the Defendants conspired to supress information about asbestos exposure with predominant purpose of causing him injury. He also pleaded in fraud, deceit, misrepresentation and negligence. The Defendants moved to strike the pleading.

[83] Wilson J., in the Supreme Court, reached a number of conclusions that are germane to the case at bar.

a. To strike a pleading it must be “plain and obvious” on its face that it cannot succeed.

b. The Court recognized the two types of civil conspiracy as causes of action.

c. It is at least arguable (at the time) that civil conspiracy could be plead in a personal injury action.

d. It is possible for a claim for civil conspiracy to exist along with another nominate tort, at least at the pleadings stage. Therefore, the existence of another applicable nominate tort should not, itself, mean that the plea of conspiracy should be struck.

[84] Mr. Siudak argues that Wilson J. addressed and rejected the same arguments as the Appellants advance here.

[85] None of the cases the plaintiff cites address the pleading of civil conspiracy in defamation cases. The one exception is Verner v. Morton (1919), 1919 444 (NS CA), 46 D.L.R. 597 (N.S.S.C.), which appears to be an appeal from a trial decision.

[86] The jurisprudence post Hunt that addresses civil conspiracy pleadings in defamation cases differs somewhat from Hunt and its progeny.

[87] In Bai v. Sing Tao Daily Ltd. (2003), 2003 24013 (ON CA), 226 D.L.R. (4th) 477 (Ont. C.A.), the Ontario Court of Appeal upheld the principle that where other causes of action pleaded are really dressed up claims in defamation, the other causes of action cannot stand.

[88] In that case, many members of Falun Gong sued a Chinese newspaper in defamation, but also advanced causes of action such as negligent research, incitement of hatred and crimes against humanity. The motion judge struck the pleading entirely.

[89] Bai was decided 13 years after Hunt but did not refer to it. Instead, Bai cited several defamation actions that considered whether other causes of action that rest on the statements made by the defendant should be struck.

[90] One of the cases referred to in Bai is the Supreme Court of Canada’s decision in Frame v. Smith, 1987 74 (SCC), [1987] 2 S.C.R. 99, a matrimonial case in which a father sued his former spouse and her new husband claiming that they had wrongfully interfered with his relationship with the couple’s children. He also pleaded conspiracy. La Forest J. spoke for the majority and struck the Statement of Claim as advancing no cause of action. At p. 114, he warned that allowing defamation claims dressed up as other causes of action to continue may cause more harm than the wrong they seek to address.

[91] Bai also referred to, and followed, Montgomery J. in Elliott v. Canadian Broadcasting Corp. (1993), 1994 10569 (ON SC), 16 O.R. (3d) 677 (Ct. J. (Gen. Div.)). In that case, Elliott, a representative Plaintiff, sued the CBC because of its program about bomber command during the Second World War. The Statement of Claim pleaded defamation, but also malicious falsehood, injurious falsehood, and conspiracy. The Defendants moved to strike the claim.

[92] Montgomery J. did so. With respect to the conspiracy claim, the plaintiffs there, as before this court, pleaded an unlawful means conspiracy. Montgomery J. held that if the unlawful means were uttering falsehoods, it follows that the unlawful means used to carry out the conspiracy was the uttering of defamatory statements. If the defamation claim cannot be sustained, then neither can the conspiracy claim, as there were no unlawful means used. He distinguished Hunt on the basis that, in Hunt, the unlawful means to carry out the conspiracy differed from the tort. At p. 689, Montgomery J. said the following:

In my view, the whole claim rests on the publication of the film and the book. Attempts to find another cause of action inexorably lead back to the alleged harm and damage to reputation by the words claimed of. The so-called subsidiary torts are nothing more or less than defamation.

[93] In Trizec Properties Inc. v. Citigroup Global Markets Inc. (2004), 2004 1548 (ON SC), 72 O.R. (3d) 265 (Sup. Ct.), Trizec and Peter Munk alleged that one of Citigroup’s senior analysts, in a conference call with investors, defamed Mr. Munk and Trizec, then issued a report downgrading Trizec’s ratings, advising that shareholders should sell, and lowering its estimate of Trizec’s stock value by 55%. The Plaintiffs sued Citigroup for defamation and other relief, such as breach of s. 52 of the Competition Act, R.S.C. 1985, c. C-34, and negligence in preparing their analysis and reports.

[94] The defendants there, as the Appellants before this court, argued that the only cause of action available to Mr. Munk is that of defamation. They argued that the law of defamation has exclusive jurisdiction over actions for injury to reputation, and has developed unique procedural and substantive rights and defences both at common law and by statute. To allow other claims to proceed when the gravamen of the claim is defamation would deny the defendants their rights to those defences. They submitted that Canadian courts have repeatedly struck claims other than libel at the preliminary stage where the other claims are for alleged damage to reputation on the basis that such claims are exclusively governed by the law of defamation.

[95] Carnwath J. reviewed Hunt and considered himself bound by it. After reviewing Bai and Fulton, he held at para. 12 that, in Canada, courts have not been reluctant to strike claims that are defamation claims recast as other torts. He held that allowing the “other” claims to proceed would deprive the defendants of the defences available in defamation.

Discussion

[96] In Mr. Siudak’s case, the whole of the conspiracy claim is founded upon defamation. He says most clearly at paragraph 65 of the counterclaim that Mr. Casuccio conspired with the other Defendants to have Mr. Siudak removed from the Board by destroying his reputation with the owners.

[97] This is not a case like Hunt where the tort of conspiracy is separate from the defamation. In this case, as in Bai and Elliott, the unlawful means used in the conspiracy was Mr. Casuccio or others making defamatory statements. Since those pleadings are struck, there are no other unlawful means pleaded with respect to the conspiracy and, therefore, it too must be struck.

Conclusion

[98] For these reasons, the appeal is allowed, the order of the motion judge is set aside, and the counterclaim is dismissed without leave to amend.

[99] By agreement, Mr. Siudak shall pay costs to the Appellant fixed at $8,000.00 for the appeal and leave application.

[100] If the parties wish to address us with respect to the costs awarded in the motion below, they may do so in writing within 10 days of the release of these reasons.

Trimble, J.

I agree, Sachs, J.

I agree, Gomery, J.

Released: February 12, 2021

CITATION: PMC York Properties v. Siudak, 2021 ONSC 1134

DIVISIONAL COURT FILE NO.: 235/20

DATE: 20210212

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Madam Justice Harriet Sachs Justice Jamie Trimble, Mr. Madam Justice Sally Gomery

BETWEEN:

PMC York Properties Inc. et al.

Appellants

-and-

Bill Siudak

Respondent

REASONS FOR JUDGMENT

TRIMBLE J.

Released: February 12, 2021