United Soils Management v. Barclay, 2017 ONSC 918

CITATION: United Soils Management v. Barclay, 2017 ONSC 918

COURT FILE NO.: CV-16-560781

MOTION HEARD: February 1, 2017

SUPERIOR COURT OF JUSTICE – ONTARIO

Re:

UNITED SOILS MANAGEMENT LTD.

Plaintiff

v.

KAYT BARCLAY

Defendant

BEFORE: Master Lou Ann M. Pope

APPEARANCES: William A. Chalmers, Aird & Berlis LLP for plaintiff Fax: 416-863-1515

Krishana Persaud, Sotos LLP for defendant Fax: 416-977-0717

REASONS FOR ENDORSEMENT

[1] There are two motions before this court.

[2] The plaintiff seeks an order requiring the defendant to deliver particulars sought in its Demand for Particulars, to produce for inspection the documents referred to in the Request to Inspect Documents, to attend at her own expense for cross-examination in connection with the Anti-SLAPP motion, and an order setting a timetable for the steps relating to the Anti-SLAPP motion.

[3] The defendant seeks an order prohibiting the plaintiff from bringing further motions in this action without leave until the defendant’s motion, brought pursuant to section 137.1 of the Court of Justice Act, R.S.O. 1990, c. C.43 (“Anti-SLAAP motion”), has been determined. The relief sought is brought pursuant to rule 37.16 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”).

[4] This is a defamation action in which the plaintiff alleges that the defendant published false, malicious and defamatory statements about the plaintiff in text messages exchanged on Facebook on September 13, 2016.

[5] The statement of claim was issued on September 19, 2016. The defendant delivered a notice of intent to defend and served her statement of defence and counterclaim on October 21, 2016. On October 26, 2016 the plaintiff served a demand for particulars (“Demand”) and request to inspect documents (“Request”).

[6] On November 7, 2016 the defendant served an Anti-SLAPP motion record seeking to dismiss the action as a “SLAPP suit” (Strategic Lawsuit Against Public Participation), otherwise known as a Gag Proceeding. That motion is returnable April 12, 2017.

[7] As the defendant failed to respond to the Demand and Request, the plaintiff served this motion on December 7, 2016 originally returnable January 17, 2016. On January 23, 2017 the defendant served a motion record for the motion herein.

Plaintiff’s Motion

[8] The plaintiff submits that the particulars sought are not within its knowledge and are necessary to enable it to plead in response to the statement of defence and counterclaim. Further, the plaintiff submits that the responses to the Demand and Request are relevant to the merits of the defences pleaded and they are relevant to the judge’s consideration of the issues on the Anti-SLAPP motion.

[9] The defendant submits that she has provided responses to the Demand and Request. In the alternative, she argues that the motion should be dismissed as the particulars demanded and the documents requested are already within the plaintiff’s knowledge or possession, and the particulars demanded and the documents requested are not necessary to enable the plaintiff to plead. In addition, the defendant contends that this motion should be quashed as contrary to section 137.1(5) of the Courts of Justice Act (“CJA”), as set out below.

[10] I will address firstly the defendant’s opposition to this motion on the ground that it is contrary to section 137.1(5) of the CJA.

[11] Section 137.1 of the CJA provides, in part:

137.1(1) Dismissal of proceeding that limits debate – Purposes - The purposes of this section and sections 137.2 to 137.5 are,

(a) to encourage individuals to express themselves on matters of public interest;

(b) to promote broad participation in debates on matters of public interest;

(c) to discourage the use of litigation as a means of unduly limiting expression on matters of public interest; and

(d) to reduce the risk that participation by the public in debates on matters of public interest will be hampered by fear of legal action.

(2) Definition, “expression” – In this section,

“expression” means any communication, regardless of whether it is made verbally or non-verbally, whether it is made publicly or privately, and whether or not it is directed at a person or entity.

(3) Order to dismiss – On motion by a person against whom a proceeding is brought, a judge shall, subject to subsection (4), dismiss the proceeding against the person if the person satisfies the judge that the proceeding arises from an expression made by the person that relates to a matter of public interest.

(4) No dismissal – A judge shall not dismiss a proceeding under subsection (3) if the responding party satisfies the judge that,

(a) there are grounds to believe that,

(i) the proceeding has substantial merit, and

(ii) the moving party has no valid defence in the proceeding; and

(b) the harm likely to be or have been suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.

(5) No further steps in proceeding – Once a motion under this section is made, no further steps may be taken in the proceeding by any party until the motion, including any appeal of the motion, has been finally disposed of.

[12] In a very recent decision by Master Muir that involved a defamation action brought by the same plaintiff herein in United Soils v. Mohammed, 2016 ONSC 7567, the plaintiff sought to strike the amended statement of defence and counterclaim, delivered after the defendant served an Anti-SLAAP motion, on the ground that delivery of the pleading was prohibited under section 137.1(5).

[13] Master Muir stated that section 137.1(5) is clear that once an Anti-SLAPP motion is made, no party may take any step in the proceeding until the Anti-SLAPP motion has been finally determined. (para. 8) He not only found that the statement of defence and counterclaim was a step in the proceeding, he held that delivery of that pleading was more than just a step in the proceeding in that it was directly connected to the Anti-SLAPP motion. He found support in section 137.1(4) which specifically directs the judge hearing the Anti-SLAPP motion to consider the merits of any defence put forward by the defendant. He also referred to the decision in 1704604 Ontario Ltd. v. Pointes Protection Association, 2016 ONSC 2884, at paragraph 50, where Justice Gareau stated:

The defendant has not pleaded its defence in this proceeding. Without a pleading there is no way for the court to be satisfied that it has a “valid defence” in the proceeding and I am not satisfied that the defendant has a “valid defence” based on the material before me on the motion.

[14] Ultimately Master Muir held that to interpret section 137.1(5) to prevent the delivery of a defence would lead to an absurdity. He held further that the section should not be interpreted to prevent a party from taking a step that is obviously relevant to the Anti-SLAPP motion and would also assist in the determination of that motion. He stated further at paragraph 12:

In my view, a step taken by a party that is in some way relevant to the Anti-SLAPP motion is not prohibited by section 137.1(5) of the CJA, regardless of whether or not that step may also amount to a step in the proceeding generally.

[15] Lastly, Master Muir stated that the legislation should not be interpreted in a way that encourages motions within the motion and other unnecessary procedural and tactical wrangling. (para. 13)

[16] Applying the law to the facts herein, firstly, I find that a Demand and Request are “further steps” in an action in that they are intended to enable a party to determine how to respond to a pleading. It is obvious that Demands and Requests are not mandatory steps in every action; however, they are optional steps that lead to the next mandatory step, for example, a pleading. In that respect, they are not a fresh step in the action. In this case, it is the plaintiff’s position that the Demand and Request will enable it to determine how to respond to the statement of defence and counterclaim in its defence to the counterclaim. In addition, it will enable the plaintiff to determine whether to deliver a reply.

[17] In my view, the defence to the counterclaim and possibly a reply are relevant to the issues on the Anti-SLAPP motion. I concur and apply Master Muir’s reasoning that delivery of the plaintiff’s defence to the counterclaim and any reply are not only steps in this action but they are necessary steps that are relevant to the Anti-SLAPP motion. In reaching that finding, I have considered the tests set out in section 137.1(4) of the CJA. In seeking to have this action dismissed, the initial onus is on defendant herein to satisfy the judge that the action arises from an expression made by the defendant that relates to a matter of public interest. The onus then shifts to the plaintiff herein to satisfy the judge that there are grounds to believe that the proceeding has substantial merit and the defendant has no valid defence. In addition, the court must balance the public interest in permitting the action to proceed with the public interest in protecting the impugned expression in the context of the harm likely to or have been suffered by the plaintiff as a result of the defendant’s expression.

[18] Essentially, the test under section 137.1(4) requires consideration of the merits of this action (subsection 137.1(4)(a)(i)), the validity of the defences (subsection 137.1(4)(a)(ii)), and any harm suffered by the plaintiff (subsection 137.1(4)(b)). Thus, in considering the merits of the action, the judge will have reference to the statement of claim and any reply. In considering the validity of the defence, reference will be made to the statement of defence. Further, in considering any harm suffered by the plaintiff, the judge will have reference to the statement of claim, any reply and the defence to the counterclaim. Here, the counterclaim seeks damages of $20,000, on the grounds that the action was commenced in bad faith and for an improper purpose and further that the defendant has suffered and will continue to suffer significant distress, humiliation and anguish.

[19] It is my view that it would be unjust for the plaintiff to be prohibited from pleading in response to the statement of defence and counterclaim with its defence to counterclaim and or a reply in the face of the defendant’s Anti-SLAPP motion. In other words, it would be unjust and prejudicial to the plaintiff for the judge hearing the Anti-SLAPP motion not to have all the pleadings in this action in order to properly consider the test under section 137.1(4).

[20] In my view, the intent of section 137.1(4) was that the pleadings in the proceeding would have been delivered in order for the judge hearing the Anti-SLAPP motion to consider in applying the test. I find some support for that view in section 137.1(6) which provides that a responding party shall not be permitted to amend his or her pleadings in certain circumstances without leave. In my view, that section, at a minimum, suggests that the responding party’s pleadings would have been delivered in the proceeding.

[21] For the above reasons, I decline to dismiss the plaintiff’s motion on the grounds that it is prohibited under section 137.1(5) of the CJA.

[22] On a further point, and although not argued by either party, it is my view that the delivery of the defence to counterclaim and any reply by the plaintiff are not prohibited under section 137.1(5) for the same reasons above.

Demand for Particulars

[23] Rule 25.10 provides that where a party demands particulars of an allegation in the pleading of an opposite party, and the opposite party fails to supply them within seven days, the court may order particulars to be delivered within a specified time.

[24] I shall refer to the helpful chart at Schedule “C” of the defendant’s factum. The following particulars are in issue:

a. Numbers 1, 2 and 3

Given the defendant’s pleading at paragraph 30 that her Facebook post contained statements of fact “derived from discussions at the Town council meetings . . .” the defendant is required to plead the particulars of the precise statements of fact she relies on for her defence of privilege. This includes particulars of the “discussions”, what was “suggested” and what was “proposed” by Bannon at the Town council meeting on August 19, 2014 and to produce any documents in her possession that relate to the discussions, what was suggested and what was proposed at the said Town council meeting. The defendant’s response by reference to paragraphs 10 and 11 of her affidavit sworn on October 26, 2016 is insufficient.

b. Number 5

In my view, the name of the defendant’s neighbour who informed her about the amendment and who attended the council meeting on August 23, 2016, which gave rise to her Facebook post in issue in this action, is a material fact on which the defendant relies for her defence. The defendant shall provide the name of her neighbour.

c. Numbers 6 and 7

The defendant pleads in paragraphs 24 and 25 of her defence that her Facebook post was made as a comment to an original posting by an unknown individual in the WS Citizens Group, and the original post provided a copy of, or link to, the letter the defendant sent to the editor of the Stouffville Sun-Tribune on August 28, 2014 (paragraph 8 of defence). Paragraph 26 of her defence pleads that other individuals posted comments under the original post. The defendant’s Facebook post is at the heart of this action; therefore, I find that the circumstances that gave rise to her Facebook post are relevant to the defences pled, in particular the defendant’s understanding and knowledge of the statements made in her post regarding Mr. Bannon and Mr. Smith. Further, I find that they are material facts on which the defendant relies for her defence. The defendant’s response by referencing paragraph 26 of her Affidavit is an inadequate response. Therefore, the defendant shall provide particulars of the “original posting by an unknown individual in the WS Citizens Group” and the “posted comments.”

d. Number 8

As stated above, the defendant’s Facebook post is at the heart of this action; therefore, she is required to plead the particulars of the “statements of fact” that she alleged were contained in her post.

e. Number 9

For the same reasons provided in subparagraph a. above, the defendant shall provide particulars of the “discussions” at the Town council meetings including producing any document in her possession that relates to the said discussions. It is not sufficient for the defendant to respond to the plaintiff’s request for particulars by referring to paragraphs 18 and 19 of the defendant’s affidavit. The defendant must state unequivocally the particulars of the discussions she relies on for her defence.

f. Number 10

The defendant pleads in paragraph 31 of her defence that her Facebook post is a “fair and accurate account of the facts presented at the Town council meetings.” Further, she pleads at paragraph 30 that her post contained statements of fact derived from discussions at the Town council meetings. Therefore, in order to prove that the statements in her post were accurate statements of the facts presented at the Town council meetings, the discussions and particulars of what was presented at the Town council meetings are material facts on which the defendant relies for her defences of privilege, fair comment and responsible communication. Therefore, the defendant shall respond to this request by providing particulars of the “facts presented at the Town council meetings.” For the reasons set out in subparagraph e. above, the defendant’s response is inadequate.

g. Number 11

It is plead in paragraph 33 of the defence that the Town has a history of contaminated soils. The defendant relies on the alleged history of contaminated soils to justify her Facebook post and her alleged “good faith” in so doing on which she relies for her defence of qualified privilege. As such, she is required to provide the particulars of the history of contaminated soils on which she relies for her defence. Paragraph 5 and Exhibit “A” to her affidavit fails to adequately respond to the request for particulars. The defendant must state unequivocally the particulars of the Town’s history of contaminated soils on which she relies for her defence.

h. Number 12

I am satisfied that the defendant is required to provide particulars of her allegation in paragraph 35 of her defence that she was “diligent in trying to verify the allegations in the Facebook Post by drawing on information she gathered at the Town council meetings . . . .” This allegation is directly relevant to her defence of responsible communication and what efforts she made to ensure the contents of her Facebook post were accurate. To the extent that the defendant attempted to respond to this request by referencing paragraphs of the defendant’s affidavit, as stated above, that form of response is adequate and the defendant must state unequivocally the particulars of her attempts or efforts to verify the accuracy in her Facebook post.

i. Number 13

For the same reasons set out above in subparagraph h, I am satisfied that the defendant is required to provide particulars of the information she gathered at the Town council meetings, on which she relies for the accuracy of her Facebook post for her defence of responsible communication, including producing any document in her possession that refers to what took place at the meetings. Also for the same reasons above, the defendant’s responses to this request are inadequate.

j. Number 14

I find that the use of the word “suggested” in paragraph 36(c) and elsewhere in the statement of defence and counterclaim fails to meet the requirements of the rules of pleading in that it is not a “concise statement” of the material facts relied on by the defendant as required in rule 25.06(1) of the Rules. The word “suggested” in the context of the allegations of what took place at Town council meetings is vague. Therefore, the defendant shall provide particulars of how Bannon “suggested” something at the Town council meeting.

k. Number 16

I am satisfied that the defendant is required to provide the particulars of the basis for her claim for damages. If her responses to the request are contained in her affidavit, it is inadequate to merely reference the affidavit. As stated above, she must state unequivocally the particulars of the distress, humiliation and anguish alleged.

Request to Inspect Documents

[25] Rule 30.04(1) provides that a party who serves on another party a request to inspect documents is entitled to inspect any document that is not privileged and that is referred to in the other party’s affidavit of document as being in his or her possession, control or power. Rule 30.04(2) provides that a request to inspect documents may also be used to obtain the inspection of any document in another party’s possession, control or power that is referred to in the originating process, pleadings or an affidavit served by the other party.

a. Numbers 1 and 5

The defendant shall produce for inspection the audio of the Town council meetings referred to in paragraphs 6 and 18 of her defence if the audio is in her possession, control or power. In doing so, the defendant shall comply with Rule 30.04(3). The defendant’s response to this request is inadequate. If the defendant’s response is as set out in the Chart, the defendant is required to respond whether she has possession, control or power of the “audio.”

b. Number 8

The defendant shall produce for inspection the “original posting” referred to in paragraph 24 of her defence by complying with Rule 30.04(3). The defendant’s response to this request is inadequate.

c. Number 10

The defendant shall produce for inspection the “information” she gathered at the Town council meetings that are pled in paragraphs 33 and 35 of the defence.

[26] In providing the particulars and producing documents for inspection, the defendant shall comply with the timelines set out in Rules 25.10 and 30.04.

Timetable

[27] The parties reached an agreement on timelines regarding the Anti-SLAPP motion. The cross-examination of the defendant is scheduled for February 17, 2017.

[28] The defendant’s cross-examination was originally scheduled in December 2016 but it did not proceed as the plaintiff had served its notice of motion for the motion herein. The defendant resides in Ontario but the evidence is that she was in Florida in December and scheduled a return flight to Toronto for the examination which did not proceed. The defendant is in Florida in February and will be returning for her examination on February 17, 2017; however, she seeks payment from the plaintiff for her travel costs thrown away for the examination that did not proceed in December. Firstly, I am unaware that the defendant has produced receipts to verify her out-of-pocket travel expenses. Secondly, there is no dispute that the defendant resides in Ontario and pursuant to Rule 34.03 the plaintiff is entitled to examine her in Ontario. Further, the fact that the defendant may have incurred travel costs in December to attend her examination in Toronto, is not, in my view, the fault of the plaintiff as the plaintiff was within its right to bring this motion and have it determined prior to examining the defendant. Any out-of-pocket travel expense of the defendant was incurred because the defendant travelled outside of Ontario while early steps in this action were occurring and the defendant knew or ought to have been known that the plaintiff may exercise its right to examine her on her pending Anti-SLAPP motion which, notably, was served in early November 2016.

[29] Therefore, for the above reasons, I decline to grant the defendant’s request that the plaintiff pay her out-of-pocket travel costs.

[30] The parties shall abide by the consent timetable set out in paragraph 9 of the Affidavit of Deborah Abbott at Tab 2 of the plaintiff’s Supplementary Motion Record.

Defendant’s Cross-Motion

[31] The defendant seeks an order prohibiting the plaintiff from making further motions in this proceeding without leave until the defendant’s Anti-SLAPP motion has been finally disposed pursuant to Rule 37.16.

[32] Counsel for the parties did not make oral submissions at the hearing of these motions due to time constraints. Thus I advised counsel that if I required oral submissions be made, I would request they be made in writing.

[33] I find that the defendant’s evidence, being the affidavit of David Sterns sworn January 12, 2017, fails to meet the defendant’s onus of satisfying the court that the plaintiff is attempting to delay or add to the costs of the proceeding or otherwise abuse the process of the court by a multiplicity of frivolous or vexatious motions. In reaching that conclusion I rely on my reasons set out above with respect to the Timetable in finding that the plaintiff has attempted to delay or add to the costs of the proceeding.

[34] For the above reasons, I dismiss the defendant’s motion.

Costs

[35] The plaintiff is entitled to costs of its motion as it was successful. The plaintiff served a Rule 49 Offer To Settle the motion on December 12, 2016 which was not accepted by the defendant. The results of the plaintiff’s motion have been as favourable as the terms of the offer; therefore, the plaintiff is entitled to partial indemnity costs to December 12, 2016 and substantial indemnity costs from that date to the hearing on February 1, 2017. Therefore, I fix the plaintiff’s costs in the amount of $8,500 payable within 30 days.

[36] Regarding the costs of the defendant’s motion, the defendant seeks that costs be awarded in the cause to be determined by the judge hearing the Anti-SLAPP motion. The defendant relies on section 137.1(5) of the CJA. In my view, Rule 57.03(1) is the specific rule with respect to costs of a contested motion. While that Rule grants the court discretion to order costs of the motion or a different order if just, I am satisfied that it is appropriate to order costs of this motion rather than defer the determination of costs to the judge hearing the Anti-SLAPP motion as I am more familiar with the motion and the time spent to make submissions.

[37] In her Costs Outline, the defendant seeks approximately $1,137 for fees for this motion. The defendant was not successful on this motion.

[38] If counsel are unable to agree on costs of the defendant’s motion, they may make short submissions in writing by filing with my ATC, Christine Meditskos, 393 University Avenue, Toronto, 6th floor, a Costs Outline from the plaintiff (defendant’s Costs Outline includes her costs of this motion) and short submissions of no longer than two pages double spaced from both counsel, within seven days.

_(original signed)

February 7, 2017 Master Lou Ann M. Pope