OTTAWA COURT FILE

COURT FILE NO.: 11-53210
DATE: 2015/12/07

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Helena Guergis
Plaintiff
(Responding Party)

– and –

Arthur Hamilton, Cassels Brock & Blackwell LLP, The Honourable Shelly Glover and Derrick Snowdy
Defendants
(Moving Parties/Appellants)

David Sheriff-Scott and Stephen Victor,
for the Plaintiff

Paul Levay and Benjamin Kates,
for the Defendants

HEARD: In Writing (Ottawa)

REASONS ON MOTION FOR LEAVE TO APPEAL

MADAM JUSTICE B. R. WARKENTIN

[1] This is a motion for leave to appeal to the Divisional Court brought pursuant to Rule 62.02(4)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 from the order of Justice C. Hackland (the Motion Judge) dated August 4, 2015 by the defendants Arthur Hamilton and his law firm, Cassels Brock and Blackwell LLP.

Procedural History and Background

[2] A Statement of Claim in this matter was first issued on December 22, 2011. The Plaintiff/Responding party (the Plaintiff) sought damages for conspiracy, defamation, misfeasance in public office, intentional infliction of mental suffering and negligence as against several defendants including the defendant Arthur Hamilton and his law firm, Cassels Brock and Blackwell LLP and the former Prime Minister of Canada, Stephen Harper.

[3] In that Statement of Claim, the Plaintiff, a former politician, sued the defendants Arthur Hamilton (Hamilton) and Cassels Brock & Blackwell LLP (Cassels Brock) (together, the Appellants) for damages arising out of her loss of certain political offices.

[4] In 2012 the Appellants were successful in striking the original Statement of Claim in its entirety (upheld by the Court of Appeal on June 28, 2013 with one exception regarding the Defendant the Honourable Shelly Glover who is not a party to this motion for leave to appeal). The Plaintiff was given leave to deliver a new claim against these Appellants as well as the two other Defendants.

[5] The Plaintiff then delivered a Fresh as Amended Statement of Claim in June 2014 (the Claim). The Appellants again moved to strike parts of the Claim under Rule 21 of the Rules of Civil Procedure. In this second Motion to Strike, the Motion Judge granted their motion in part and denied the motion in part.

[6] The Appellants now seek leave to appeal two of the Motion Judge’s five rulings from the second Motion to Strike as they pertain to certain paragraphs of the Claim on the basis that the paragraphs in question are not consistent with the Motion Judge’s first ruling and that they are not tenable in law.

[7] The Appellants relied on Rule 21.01(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. in their argument before the Motion Judge.

[8] The Appellants argued the following:

a) The Motion Judge declined to strike portions of the Claim which were grounded in conduct that he had found to be non-justiciable on the first Motion to Strike. Specifically, the Plaintiff claims economic loss arising from her forced removal as a Minister and from Cabinet and the Conservative Party of Canada (CPC) caucus in Parliament. The Appellants argued that the Motion Judge found these acts to be outside the scope of judicial review on the first Motion to Strike. However, in the second Motion to Strike, he did not strike the claims that the Appellants had caused or contributed to the Prime Minister’s decision to remove her from these offices.

b) The Motion Judge declined to strike portions of the Claim that pled testimony before a Parliamentary Committee, which is protected by parliamentary privilege.

[9] In reaching his decision, the Motion Judge confirmed that in a Rule 21.01 motion to strike pleadings, “[I]t 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.”

[10] Because of the strict nature of the test under Rule 21, the law has developed to impose “… a “very low standard for the demonstration of a cause of action, which is to say that conversely, it is very difficult for the Defendant to show that it is plain and obvious and beyond doubt that the plaintiff cannot succeed with the claim.” (Millwright Regional Council of Ontario Pension Trust Fund (Trustee of) v Celestica Inc., 2012 ONSC 6083, at para. 57)

Test for Leave to Appeal

Good Reason to Doubt Correctness of the Decision

[11] The Appellants have brought their motion for leave to appeal under Rule 62.02(4)(b) of the Rules of Civil Procedure.

[12] Rule 62.02(4)(b) provides that leave to appeal an interlocutory Order shall not be granted unless:

b) there appears to the judge hearing the motion good reason to doubt the correctness of the Order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[13] The test under rule 62.02(4)(b) contains two branches that are conjunctive. To succeed in a motion for leave to appeal pursuant to rule 62.02(4)(b), the Appellants must satisfy the court that (1) there is good reason to doubt the correctness of the Motion Judge’s decision and (2) that the appeal raises matters of general importance. (Bell ExpressVu Limited Partnership v. Morgan (2008), 2008 63136 (ON SCDC), 67 C.P.C. (6th) 263 at paras. 1-3 (Ont. Div. Ct.))

[14] The phrase “good reason to doubt the correctness of a decision” does not require a conclusion that the decision in question was wrong or even probably wrong. Nor does it require that the judge hearing the leave motion would have decided it differently had he or she been presiding as the motion judge. The test is whether the decision is open to serious debate (Judson v. Mitchele, 2011 ONSC 6004 at para 15, 108 O.R. (3d) 129. See also Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 at 284 (Gen. Div.)).

[15] Because the Appellants are seeking leave to appeal two different rulings made in the Motion Judge’s reasons, the first as it relates to certain paragraphs in the Claim that the Appellants argue are non-justiciable and the second that the Claim pleads privileged testimony, I will address each of those rulings separately.

Non-Justiciable Claims

[16] The Appellants submit that while the Motion Judge properly articulated the test on a Rule 21.01 motion, he failed to apply it correctly when he declined to strike paragraphs 28 and 65(a)-(c) of the Claim that the Appellants maintain are non-justiciable.

[17] It was the position of the Appellants that the Motion Judge did not recognize that it was plain and obvious that those portions of the Claim were incapable of succeeding.

[18] The Appellants pointed to the fact that the Motion Judge dismissed the claims regarding her removal from political office as against the former defendants Prime Minister Harper, Guy Giorno and Raymond Novak without leave to amend. On appeal of that ruling, the Plaintiff acknowledged that, “[T]he Prime Minister’s decision to remove her [from Cabinet and caucus] is not justiciable because it is protected by the exercise of Crown privilege and parliamentary prerogative…”

[19] Crown prerogative consists of powers and privileges accorded by the common law to the Crown. They constitute “the residue of discretionary or arbitrary authority, which at any given time is left in the hands of the Crown.” The Motion Judge found that the Prime Minister’s removal of the Plaintiff from Cabinet was an exercise of such authority in the first Motion to Strike.

[20] It is the position of the Appellants that Crown privilege prevents this Court from inquiring into any aspect of the Prime Minister’s decisions, including any contribution to them by the Appellants. In finding the Prime Minister’s decision to remove the Plaintiff from Cabinet to be a non-justiciable exercise of Crown prerogative, the Appellants argue that the Motion Judge precluded any possible judicial inquiry into that decision. The Appellants contend that this necessarily includes inquiry into any act that caused or materially contributed to it, including the conduct of Hamilton.

[21] It is the Appellants’ position that the Motion Judge failed to appreciate the full implication of his finding in the respect on the first Motion to Strike, when he did not apply that same finding to the paragraphs the Appellants claimed are non-justiciable in the second Motion to Strike.

[22] The Plaintiff disagreed with the Appellants’ characterization of issues pertaining to justiciability and asserted that there were no such issues raised by the Claim.

[23] The Plaintiff acknowledged that the original Statement of Claim pled causes of action directly against the Prime Minister in tort arising from his removal of the Plaintiff from Cabinet and Caucus. She agreed that because the Prime Minister’s decisions were political ones, they were non-justiciable.

[24] Counsel for the Plaintiff disagreed, however, that the Claim before the Motion Judge on the second Motion to Strike contained no claims against the Prime Minister that could lead to an “evaluation” of the “reasonableness” or “correctness” of the Prime Minister’s decision as the basis for deciding if it was legal. Rather, the Claim asserts that Hamilton and the Plaintiff were in a solicitor and client relationship and that Hamilton breached his duties of commitment, loyalty and fidelity and defamed her. The Claim alleges that it was Hamilton who caused or contributed to, among other damages, the Prime Minister’s removal of the Plaintiff from Cabinet or Caucus.

[25] Counsel for the Plaintiff argued that while the Prime Minister may have enjoyed prerogatives or privileges, those privileges could not be used by Hamilton to shield himself. They submitted that there is no policy basis to excuse Hamilton’s behaviour on the same basis that shields a political decision by a Prime Minister.

[26] On the question of Hamilton’s conduct in this area, the Motion Judge found at paragraphs 7 and 9 of his reasons:

The basic allegation is that the solicitor’s words and conduct caused the Plaintiff’s economic losses… 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.

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.

[27] Because of the “very low” threshold to survive a challenge under Rule 21, I am not satisfied that the Appellants have met the very high burden of showing that there is good reason to doubt the correctness the Motion Judge’s ruling regarding the non-justiciability of the Claim as it pertains to paragraphs 28 and 65(a)-(c) of the Claim.

[28] Having made this finding, I do not need to consider the second part of the test under Rule 62.02(4)(b). I therefore dismiss the motion for leave to appeal on this ground.

Parliamentary Privilege Claims

[29] The Appellants argue that there is good reason to doubt the correctness of the Motion Judge’s treatment of privileged testimony before a Parliamentary Committee when he found that in the event of a conflict between parliamentary privilege and solicitor-client privilege, these constitutional principles would have to be “balanced”. The Motion Judge determined that this was the role of the trial judge, not a judge hearing a Rule 21 pleadings motion.

[30] The Appellants submitted that the Motion Judge’s finding was contrary to authority from the Supreme Court of Canada that parliamentary privilege is absolute and therefore not susceptible to such an exercise. They also argued that in any event, the Claim does not raise a conflict between competing constitutional principles and so even if a balancing test were possible in law, no such issue arises on the face of the Claim.

[31] Counsel for the Plaintiff argued that the Motion Judge was correct to dismiss the second Motion to Strike on this issue and pointed to the reasons at paragraphs 21 and 22:

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.

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.

[32] As already articulated, the test on a leave to appeal under Rule 62.02(4)(b) does not require a conclusion that the decision in question was wrong or even probably wrong. Nor does it require that I would have decided it differently had I been presiding as the motion judge. The test is whether the decision is “open to serious debate”.

[33] As with the prior ruling, the threshold on a pleadings motion is low and much discretion is given to the judge hearing such a motion. It was open to the Motion Judge to find that the issue of parliamentary privilege versus solicitor and client confidentiality was an issue best determined by the trial judge rather than on a pleadings motion.

[34] Having made this finding, I do not need to consider the second part of the test under Rule 62.02(4)(b). The Appellants’ motion for leave to appeal on this ruling is therefore also dismissed.

[35] The motion for leave to appeal is therefore dismissed.

[36] If the parties are unable to agree on costs, they may make written submissions on costs to me within 30 days. The submissions shall be no longer than four pages together with any Bill of Costs.

Madam Justice B. R. Warkentin

Released: December 7, 2015

OTTAWA COURT FILE NO.: 11-53210
DATE: 2015/12/07

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Helena Guergis
Plaintiff
(Responding Party)

– and –

Arthur Hamilton, Cassels Brock & Blackwell LLP, The Honourable Shelly Glover and Derrick Snowdy
Defendants
(Moving Parties/Appellants)

REASONS ON MOTION FOR LEAVE TO APPEAL

Madam Justice B. R. Warkentin

Released: December 7, 2015