ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 11-53210
DATE: 2015/08/04
BETWEEN:
Helena Guergis
Plaintiff
– and –
Arthur Hamilton, Cassels Brock & Blackwell LLP, The Honourable Shelly Glover and Derrick Snowdy
Defendants
(Moving Parties)
David Sheriff-Scott and Stephen Victor,
for the Plaintiff
Paul Levay and Benjamin Kates,
for the Defendants
HEARD: May 22 and June 15, 2015 (Ottawa)
REASONS FOR decision
Hackland J.
[1] The defendant Arthur Hamilton (the solicitor) and his law firm, Cassels Brock and Blackwell (the law firm), move to strike certain paragraphs of the Fresh as Amended Statement of Claim in this action. In an earlier ruling dated August 24, 2012 (reported 2012 ONSC 4579), I struck a number of paragraphs of the original Statement of Claim and dismissed the action against all of the named defendants except for the current moving parties who were permitted to amend their pleading. This decision was affirmed by the Court of Appeal in a decision dated June 28, 2013 (reported 2013 ONCA 449), except that the plaintiff’s claim against the defendant the Honourable Shelly Glover was re-instated.
[2] The solicitor and the law firm now move to strike a number of paragraphs of the new pleading on the basis that the amended paragraphs are not consistent with this Court’s earlier ruling and are, in any event, not tenable in law. The moving parties rely on Rule 21.01(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[3] In this type of motion, it is well settled that allegations of fact in the Statement of Claim, unless patently ridiculous or incapable of proof, must be accepted as proven. The moving party, in order to succeed, must show that it is plain and obvious that the plaintiff could not succeed. Moreover, the novelty of the cause of action or of the issue raised is not a reason to prevent the case from going forward. The classic statement of the test is found in Hunt v. Carey Canada Inc, 1990 90 (SCC), [1990] 2 S.C.R. 959 at para. 36:
“[T]he test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C. O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgment seat”. Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case.”
[4] In the earlier pleading it was alleged that the solicitor conspired with certain named public officials to engage in tortious activities to deprive the plaintiff of her office as a Minister of the Crown and her membership in the parliamentary caucus of the Conservative Party. The current Statement of Claim is markedly different. It is now alleged that there existed a lawyer-client relationship between the solicitor, the law firm and the plaintiff. It is alleged that the solicitor breached his professional duties to his client, by his actions and by his words, thereby causing her damages. Further, the Statement of Claim alleges that the solicitor published defamatory words concerning the plaintiff on four occasions or categories of occasions.
[5] The moving parties do not seek to strike paragraphs 3 through 22 of the amended pleading which alleges the lawyer-client relationship and the duties arising therefrom.
[6] There are five categories or basis for challenge of the current pleading and I will deal with each in the following order:
(1) Non-justiciable claims (paras. 28, 59-63 and 65)
(2) Lack of particulars (paras. 42-44)
(3) No defamatory meaning (paras. 30-40 and 46)
(4) “dressed up” defamation claims (paras. 23, 41 and 50)
(5) Parliamentary Privilege (paras. 29a, 55-57, 69, 71-73, 83a and 84cc)
Non-Justiciable Claims
[7] The paragraphs in question allege that the solicitor acted to undermine the plaintiff’s efforts to return to caucus and in so doing breached the duties he owed the plaintiff as her lawyer. The basic allegation is that the solicitor’s words and conduct caused the plaintiff’s economic losses namely the loss of her position in the Federal Cabinet and the Conservative Party Caucus and ultimately the loss of her nomination for the Conservative party in her former riding of Simcoe-Grey. The solicitor argues that the plaintiff’s exclusion from cabinet and from the caucus are covered by executive privilege and parliamentary privilege and are therefore non-justiciable in these proceedings.
[8] In the earlier pleading, the allegation was made that the defendants, including the Prime Minister, conspired to remove the plaintiff from the cabinet and from caucus. As framed, those allegations mandated an inquiry into the decision making of the Prime Minister and his senior officials concerning the plaintiff’s continuation in these roles. As such, the executive and parliamentary privileges would have been engaged and therefore these decisions were non-judiciable.
[9] In the current pleading, the focus is on the solicitor’s alleged conduct. He is not shielded by executive or parliamentary privilege. To succeed on the economic loss claim, the court would be required to find that the plaintiff’s loss of office and caucus membership was caused or materially contributed to by the solicitor’s conduct. Clearly the Prime Minister and his senior officials could not be required to testify on this issue. However, notwithstanding the likelihood that the plaintiff might encounter some evidentiary hurdles at trial, I am not prepared to say at the pleadings stage of this action, that she would be unable to establish her economic loss claim on some evidentiary basis. For example, the public statements made by officials, the timing of events and the plaintiff’s own testimony might suffice to establish her position on her economic loss claim. As to her claim for the loss of her constituency nomination, privilege issues are not directly engaged. If the justiciability issue is to be pressed, the trial judge is the proper person to decide the issue.
Lack of Particulars
[10] The solicitor seeks to strike paragraphs 42-45 of the amended Statement of Claim on the basis that it lacks the necessary particulars required of a pleading in libel, i.e.: the specific words capable of a defamatory meaning to a specific audience on a specific occasion. Paragraph 42 of the pleading states:
- Between April 9, 2010 and April 16, 2010, or on other later occasions known to Hamilton, he maliciously and recklessly spoke and published further and other false and defamatory words of and concerning the Plaintiff orally or in writing to the Prime Minister and to his senior aides, including Guy Giorno and Raymond Novak and others within the Conservative Party, including Glover, Colin McSweeny, Gord Elliott, Mark Dotzert and Laurie Livingstone. These allegations included the allegations described in Paragraph [24] of this Statement of Claim and also that the Plaintiff had used cocaine, that she had associated with prostitutes while using cocaine, that a video recording existed depicting the Plaintiff using cocaine and inhaling it off the breast of a prostitute, that the Plaintiff’s husband carried on a notorious lifestyle, including consorting with escorts and strippers and that the Plaintiff raised no objection to this lifestyle or consorted with prostitutes herself, and that the Plaintiff had deliberately and fraudulently held herself out with her husband to businessmen as being able to unlawfully offer access to government financial programs, loans or other benefits and the Plaintiff deliberately engaged in promoting the aura that her husband’s company was “ultra” connected to the Conservative Party and could offer direct access to government money and money through government programs. Hamilton made the foregoing allegations about the Plaintiff, and he also attributed them to Snowdy. Hamilton further claimed that he had other sources of information supporting the foregoing allegations.
[11] The solicitors position is that the phrases “or on other occasions known to Hamilton” and “further and other false and defamatory words” and “to his senior aides, including Guy Giorno…” and “These allegations included…” are insufficient, vague and open-ended and preclude the defendants from knowing the allegations to which they are required to respond and allows the plaintiff to conduct a fishing expedition to bolster her claims.
[12] The governing principles applicable to a libel pleading which pertain when a plaintiff is unable to be specific as to the defamatory words spoken or the exact occasion or audience, are set out in the opinion of Rosenberg J.A. in Lysko v. Braley (2006) 2006 11846 (ON CA), 79 O.R. (3d) 721 at para. 101:
- It would seem that under some of the older, stricter authorities, these pleadings were properly struck out on the theory that the actual words spoken are not merely evidence, but material facts. In my view, however, the strict rules requiring that the exact words be pleaded no longer represent the law in this province. In the two decisions referred to above, Paquette, supra, and Magnotta Winery, supra, Grange J. and Lane J. respectively, have adopted a more nuanced approach, in circumstances such as these, where applicable principles in Magnotta Winery at pp. 583-594:
On these authorities, it 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;
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.
[13] In my view, all of the requisites set out in Lysko are met in this case. There is certainly a coherent body of fact pled as it relates to the events. In particular the nature of the defamatory remarks has been specified, most of the recipients identified and a fairly limited time frame specified. Reading the pleading as a whole, the inference to be drawn is that the plaintiff has pled the particulars available to her and her claims are sufficiently clear as to enable the defendants to plead to them. This conclusion is supported by paragraph 24 of the pleading which clearly specifies the alleged defamatory statements and paragraph 47 which summarizes the statements made to by the solicitor to the RCMP. Neither of these paragraphs are challenged.
No Defamatory Meaning
[14] In paragraphs 30-33 of the amended Statement of Claim, the plaintiff pleads that the letter of April 8, 2010 from Mr. Novak to the RCMP Commissioner, the letter of the same date from Mr. Giorno to the Conflict of Interest and Ethics Commissioner and the Prime Minister’s statement of April 9, 2010 were defamatory of her. The solicitor argues that it has already been decided by this court in the earlier pleadings motion, and affirmed by the Court of Appeal, that these letters and the Prime Minister’s statement are not capable of bearing a defamatory meaning. The permission previously granted to the plaintiff to amend her pleading was on the basis that the amendments would be in accordance with the Court’s ruling.
[15] I agree with the solicitor’s argument. It has previously been determined in this action, including at the appellate level, that these letters and the public statement are not defamatory. Certain of the original defendants were removed from the action on that basis. An issue estoppel arises in the circumstances and it would be an abuse of process to re-litigate the matter. The paragraphs in question may well be pleaded in support of the claims based on breach of the solicitor’s duty, but they must be re-cast to remove the allegation that the letters and public statement are a republication of the defamation.
Dressed-up Defamation Claims
[16] The solicitor argues that the allegation against him that he breached his fiduciary duties owed to the plaintiff as her lawyer, must be struck out on the basis that it is in substance a “dressed up” defamation claim. I do not accept this argument.
[17] Viewing the amended Statement of Claim as a whole, the fiduciary duty claim and the defamation claim are separate and can stand alone. The crossover between the respective claims arises from the allegation that among the acts of alleged disloyalty was that the solicitor defamed his former client on a number of occasions. However, the fiduciary claim, as pled, contains all of the ingredients of a proper fiduciary claim i.e. a pre-existing solicitor-client relationship, a breach of the duty of good faith and loyalty and economic damages (not merely reputational damages) arising from the breach of duty. Moreover, the actionable conduct, as pled, went well beyond the making of the defamatory statements.
[18] I see no practical or policy reason why the fiduciary claim cannot co-exist with the defamation claims. In a somewhat similar case, a claimant had suffered career detriment and reputational damages as a result of being wrongfully accused of child abuse. The allegations arose from a negligent inquiry by the defendants as to the facts of the complaint. The Supreme Court permitted the negligence claim to proceed notwithstanding that the damages were substantially of a reputational nature, see Young v. Bella 2006 SCC 3, [2006] 1 S.C.R. 108. The Court stated at paragraph 56:
We cannot accept the respondents’ argument. The possibility of suing in defamation does not negate the availability of a cause of action in negligence where the necessary elements are made out. Freedom of expression and the policies underlying qualified privilege can be taken into account in determining the appropriate standard of care in negligence. Counsel for the University referred to a number of cases in support of the assertion that this action lies only in defamation: see, e.g., Fulton v. Globe and Mail (1996), 1996 10551 (AB KB), 194 A.R. 254 (Q.B. (Master)), aff’d (1997), 1997 14835 (AB KB), 53 Alta. L.R. (3d) 212 (Q.B.) and Elliott v. Canadian Broadcasting Corp. (1993), 1994 10569 (ON SC), 16 O.R. (3d) 677 (Gen. Div.) afff’d (1995), 1995 244 (ON CA), 25 O.R. (3d) 302 (C.A.). In fact, these were cases where the defendants’ actions alleged to have caused the plaintiffs’ loss of reputation fell entirely within the law of defamation and the basic element of a negligence action, such as a duty of care owed to the plaintiffs, had not been established. There is no reason in principle why negligence actions should not be allowed to proceed where (a) proximity and foreseeability have been established, and (b) the damages cover more than just harm to the plaintiff’s reputation (i.e. where there are further damages arising from the defendant’s negligence): see Spring v. Guardian Assurance plc, [1994] 3 All E.R. 129 (H.L). In fact, all of the cases cited by the respondents as standing for the proposition that defamation had “cornered the market” on reputation damages were cases in which (unlike here) there was no pre-existing relationship between the parties that gave rise to a duty of care.
Parliamentary Privilege
[19] In a number of paragraphs of the amended Statement of Claim the plaintiff refers to testimony given by the solicitor and by one Derrick Snowdy to the Standing Committee of Parliament on Operations and Estimates. The testimony is a matter of public record. In essence this testimony is pled in support of the assertion that the solicitor was acting against the interests of his former client, the plaintiff and that there was malice demonstrated in connection with the defamatory statements. The solicitor’s argument is that Parliamentary Privilege prevents this evidence from being utilized in this action and the paragraphs referring to this evidence should be struck.
[20] It is well settled law that testimony before Parliamentary Committees cannot be introduced as evidence in legal proceedings due to parliamentary privilege. For example in Canada (Deputy Commissioner, RCMP) v. Canada (Commissioner RCMP) 2007 FC 564 Tremblay-Lamer J. held that an allegation could not go forward that the applicant gave false testimony before a Committee of the House of Commons, as such an allegation could only be established by evidence of what was said in the Committee proceedings. This evidence would be precluded by Parliamentary privilege. The Court explained the rationale for this privilege as follows, at para. 76.
As stated above, one of the primary justifications for providing immunity to witnesses, as well as to Members of Parliament, is to ensure that they can speak openly and freely before a Committee without fear that what they say will later be held against them. In other words, for Parliament to fulfil its deliberative and investigative functions with dignity and efficiency it is necessary that witnesses before the House committees can be confident that their testimony is immune from subsequent challenges from outside the House. Lord Brown-Wilkinson, on behalf of the House of Lords and the Judicial Committee of the Privy Council, emphasized this idea in Prebble v. Television New Zealand, where he wrote that the purpose underlying parliamentary privilege is:
…to ensure so far as possible that a member of the legislature and witnesses before committees of the House can speak freely without fear that what they say will be held against them in the courts. The important public interest protected by such privilege is to ensure that the member or witness at the time he speaks is not inhibited from stating fully and freely what he has to say. If there were any exceptions which permitted his statements to be questioned subsequently, at the time when he speaks in Parliament he would not know whether or not there would subsequently be a challenge to what he is saying. Therefore he would not have the confidence the privilege is designed to protect. [Emphasis added]
[21] The plaintiff concedes that the principle of Parliamentary privilege would apply to testimony before a Parliamentary Committee. However it is argued that in the circumstances of this case lawyer-client privilege also comes into play because the solicitor’s testimony before the Committee breached the lawyer and client privilege attaching to his communications with the plaintiff. The Supreme Court has recently recognized that solicitor and client privilege is a constitutionally protected right, see Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7. The plaintiff therefore argues that the Court is faced with competing privileges, both of which are constitutionally recognized. A balancing of the constitutionally protected interests will likely be required and that is not an exercise which can be carried out in the context of a pleadings motion.
[22] I accept the plaintiff’s argument. This case may well raise important issues involving competing constitutionally protected rights. Bearing in mind the Supreme Court’s ruling in Hunt v. Carey Canada Inc.,1990 90 (SCC), [1990] 2 S.C.R. 959, that novel and important issues are best left to a trial judge to resolve on a proper evidentiary record, I decline to strike from the pleading the references to the testimony of the solicitor and Mr. Snowdy before a Parliamentary Committee. The admissibility of such evidence will be for the trial judge to consider.
[23] The plaintiff is permitted to amend her pleading in accordance with these reasons.
[24] If the plaintiff wishes to seek costs of this motion, she may provide a concise written submission within 30 days of the release of these reasons and the moving party may respond within 30 days of receiving the plaintiff’s submission.
Mr. Justice Charles T. Hackland
Released: August 4, 2015
COURT FILE NO.: 11-53210
DATE: 2015/08/04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Helena Guergis
Plaintiff
– and –
Arthur Hamilton, Cassels Brock & Blackwell LLP, The Honourable Shelly Glover and Derrick Snowdy
Defendants
(Moving Parties)
REASONS FOR JUDGMENT
Hackland J.
Released: August 4, 2015