COURT FILE NO.: 8/16

DATE: 2018/06/01

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Jaoa Curvelo, Maria Curvelo, Jose Damota, Maria Pereira, Paulo Salvador

Plaintiffs

– and –

Portuguese Canadian Club of Strathroy, Walter Medeiros, Eddie Costa, Charlie Milhomens, Jaoa Salvador

Defendants

N. Pizzale, for the Plaintiffs

K. A. Dunn, for the Defendants

HEARD: May 23, 2018

George J.

[1] The Plaintiffs were members of the Defendant Portuguese Club of Strathroy (“Club”). The other Defendants are Club members and either were or are now a part of the executive or otherwise involved in Club leadership.

[2] The Plaintiff Jaoa Curvelo was the Club’s president whose term was to expire February 2, 2014. He had been a member for approximately 23 years. The Plaintiff Maria Curvelo was the secretary-treasurer to the Discipline Committee and had been a member for approximately 23 years.

[3] The Plaintiff Jose Damota was a member and director of the Discipline Committee. The Plaintiff Maria Pereira was secretary to the Club’s General Assembly and had been a member for approximately 15 years. The Plaintiff Paulo Salvador was a member and president of the Discipline Committee.

[4] The Club is governed by the Corporations Act R.S.O. 1990, Chapter C.38 and Not-for-Profit Corporations Act, 2010 S.). 2010, Chapter 15. It’s Constitution and Bylaws require that:

…when a member, board member or executive member breaks a club regulation be it in words, acts or undignified actions, they will be punished according to the action committed. Punishment will be decided by a majority of the Disciplinary Council whose decision will be communicated to the Board and General Assembly Representatives.

[5] Club rules require that when a member is accused of wrongdoing that they be informed of the allegations and be afforded an opportunity to respond. Member sanctions are to be recorded and presented to other members at a General Assembly meeting. Whenever punishment is imposed the Disciplinary Council is to meet with the Board and General Assembly “in order to present the motives of the resolution and send a registered letter to the accused presenting the final decision.”

[6] The Plaintiffs allege that on January 24th, 2014 they received a letter from the Club advising that they each had been suspended and were to remain out of the Clubhouse. This was essentially an expulsion. The statement of claim pleads that they did not receive a notice of allegations beforehand, were not provided a chance to respond, and that most of the signatures on the letter were illegible. The Plaintiffs deny any wrongdoing.

[7] The central aspect of the claim is in relation to the Club’s failure to follow due process. They seek reinstatement. However, some of the allegations are grounded in defamation, which is the focus of this motion. The Defendants move to have struck paras. 1(i)(j)(k) and 14 of the statement of claim as not disclosing a reasonable cause of action.

[8] Subparas. 1(i), (j) and (k) requests the following relief:

(i) An Order directing that the Police, including the OPP, assist the Plaintiffs to ensure that the Plaintiffs’ rights as members are respected and that the Plaintiffs are not prevented from participating in activities of the Club or attending at activities occurring at the Clubhouse.

(j) An Order directing that the Defendants pay to each of the Plaintiffs general damages in the amount of $10,000.00 (total of $50,000.00).

(k) In addition to the general damages suffered by the Plaintiffs, an Order directing that the Defendants pay to the Plaintiff, Paulo Salvador, general damages in the amount of $90,000.00.

[9] Para. 14 reads as follows:

The Plaintiffs plead that the Defendants have defamed and slandered the Plaintiffs directly and by implication and that each of the Plaintiffs have suffered embarrassment and suffered emotionally, financially, socially and culturally as a result of the words, conduct and actions of the Defendants.

[10] The Plaintiffs concede that the relief sought in subpara. 1(i) is improper and ought to be struck.

[11] While they resist the balance of the motion, the Plaintiffs agree that the statement of claim does not set out the content of the allegedly defamatory statements, by whom and to whom they were made, when and where they were made, or the means by which they were made.

[12] They advise that they were not made aware of, and to this day do not know, what allegations were made that led to their suspension. They do not know what transpired immediately before and after they received their suspension letters in January 2014. They advise that they do not know the exact dates of any such statements – but that allegations must have been levelled against them and statements must have been made before the Club’s final decision on suspension – and that, given their pleading contains a denial of any wrongdoing, must have been defamatory in nature.

[13] The Plaintiffs plead specifically that they “do not have particulars of the defamatory statements made but have heard rumours that they were removed from their positions and suspended because they were dishonest and/or that money was missing”. They believe - relying only on the rules that govern member discipline - that a meeting in some form must have precipitated the issuance of their suspension letter. They suspect that defamatory statements were made verbally and written in electronic communications and will be reflected in Club minutes and records.

[14] They deny this is a fishing expedition. They argue that, given I must for the time being assume as true that which is set out in their claim - that they did nothing to warrant a suspension - false statements must have been made about them which had to have been published within Club records and made available to its general membership. They contend that false statements about them must have been expressed verbally either at a Discipline Committee meeting (with a newly constituted membership) or General Assembly.

[15] I am governed by rules 25.06 and 21.01 of the Rules of Civil Procedure. Rule 25.06(1) provides that:

Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.

[16] Rule 21.01(1) provides that:

A party may move before a judge,

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,

and the judge may make an order or grant judgment accordingly.

[17] In Law of Civil Procedure (Toronto, Butterworths, 1970) the authors set out the purpose and function of pleadings. They are to:

1. Define with clarity and precision the question in controversy between the litigants.

2. Give fair notice of the case which has to be met so that the opposing party may direct his evidence to the issues disclosed by them. A defendant is entitled to know what it is that the plaintiff asserts against him. The plaintiff is entitled to know the nature of the defence raised in answer to his claim.

3. Assist the court in its investigation of the truth of the allegations made by the litigants.

4. Constitute a record of the issues involved in the action so as to prevent future litigation upon the matter adjudicated between the parties.

[18] On a r. 21 motion I must:

• accept all allegations of fact, unless patently ridiculous or incapable of proof, as proven;
• before granting relief to the moving party, require that they show it is “plain, obvious and beyond doubt” the plaintiff could not succeed;
• not allow the novelty of any claim to militate against the plaintiff; and
• read the statement of claim generously and allow for inadequacies due to drafting deficiencies.

[19] The issue before me is this: Is it plain and obvious that the statement of claim discloses no cause of action for defamation? If it is, the paras. in question must be struck. If not, the Defendants motion must be dismissed.

[20] The threshold for striking a pleading as disclosing no cause of action is high, and there is a well-developed body of law to be applied on r. 21 motions. That said, the jurisprudence has established, in certain narrow circumstances, a more flexible approach to the assessment of pleadings in defamation cases. This approach would permit, when appropriate, a defamation claim to proceed where the plaintiff pleads all facts available to them and where it is done so in good faith, even if the precise statements are unknown.

[21] Of course, this flexibility requires a balancing with the generally accepted rule that pleadings in defamation actions are to be held to a higher standard. And, indeed, precision will usually be required. Precision, however, is not always determinative. Grange J. puts it this way in Paquette v. Cruji (1979), 26 O.R. (2d) 204 (H.C.):

It is true and has been said over and over again…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)…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 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.

[22] Grange J. went on:

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.

[23] This more flexible approach is elaborated upon in Magnotta Winery Ltd. v. Ziraldo (1995), 1995 7122 (ON SC), 25 O.R. (3d) 575 (C.J.), where the plaintiff was unable to plead the exact wording of the allegedly defamatory statement. After a review of the jurisprudence the court concluded that:

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, 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 at his disposal.

[24] The Plaintiffs filed several cases that reinforce this more flexible approach. Defendant counsel ably distinguished those from our fact-set and directed me to other authorities that illustrate when the more flexible approach is unwarranted. Much of this turns on the facts, as currently pleaded, and an assessment of whether the claim is a fishing expedition or a good faith attempt to establish a plaintiffs sincere belief they were defamed.

[25] In applying what I will call the Magnotta test, I must first assume that what the plaintiffs have pleaded is in fact true. For the purposes of this motion, I must accept:

• that the Plaintiffs were all members of the Club;
• that they held fairly prominent positions within the Club;
• that each were notified of their suspension by letter;
• that the Club is a corporation governed by a Constitution and By-laws, which require that:
  • punishment be meted out to members only when they engage in “undignified actions”;
  • that such discipline is to be decided by a “majority of the Disciplinary Council”;
  • and that any such decision “will” be communicated to the Board and General Assembly Representatives.
• I must accept that Club rules require that a disciplined member be able to speak in their own defence, and that these Plaintiffs were not provided such an opportunity; and
• crucially, I am to accept that the Plaintiffs did not breach any Club regulation and had not, whether in words or deeds, committed an “undignified action”.

[26] This the body of fact before me, and on this fact-set it would be open to a trier-of-fact to conclude that words were uttered and or published that defamed the Plaintiffs. Again, at this stage, I must assume there was no malfeasance and that there were no grounds to suspend.

[27] The Defendants contend that without knowing the precise statements alleged, when they were made, and to whom they were made, they cannot adequately respond. Defendant counsel highlighted the process in adjudicating a defamation claim which requires, first, that the Plaintiff establish the elements for defamation on a balance of probabilities, at which point the onus shifts to the Defendant who can escape liability by advancing one of a handful defences. These include:

• justification (that is, what was said is true);
• fair comment (which requires an assessment of, amongst other things, public interest and express malice);
• qualified privilege;
• responsible communication on matters of public interest; and
• establishing that what was uttered is protected by every citizen’s right to freedom of expression.

[28] On this pleading, the Defendants say they are unable to make an informed decision as to what, if any, defence to advance. I disagree.

[29] Applying the principle that permits, in certain circumstances, flexibility is not to be formulaic. I am to essentially engage in an assessment of whether what has been pleaded is sufficiently clear and framed in a way that allows the Defendant to respond. The court in Magnotta, and in the more recent case Catalyst Capital Group Inc. v. Veritas Investment Research Corporation 2017 ONCA 85, asks whether the plaintiff has pleaded a coherent body of fact. If so, and if that body of fact discloses a reasonable cause of action, then a Defendant should have no difficulty responding.

[30] In addition to ensuring a Defendant can properly respond, we must remember that the typical strictures on defamation pleadings is to prevent an out of control discovery phase. And of course we must protect against overly broad questioning during discovery, which is inevitable when a claim is unduly vague. But, for reasons I will explain, there is no such risk here.

[31] While this case is somewhat novel in that the Plaintiffs have indeed failed to identify specific statements or particular documents to support their defamation claim - and this would normally lead to a striking of the relevant paragraphs - in my view they have done all that they could have possibly done to identify the facts and events that led to, in their view, unjust suspension. Their pleadings are not impermissibly vague. It simply cannot be said, on any fair reading of the materials now before the court, that the Defendants are in the dark and unable to respond. They know full well when it is they first learned of allegations against the Plaintiffs; what they did about it; and over what period of time the relevant events occurred.

[32] The Defendants know there is a defamation claim. They know what statements were made or published about the Plaintiffs during the period of time set out in the claim, their respective roles in the organization, and what led to the suspension. In respect of the discipline process they employed, the Defendants know to whom any statements about the Plaintiffs were made, which by the way had to either be the Club’s Board of Directors or general membership, or both. This is no mystery.

[33] The Defendants cannot escape liability because they chose not to follow the rules and prescribed procedure for discipline, because if they had the Plaintiffs would be aware of the allegations and could have pleaded with precision. At this point I must assume the Defendants did not fully follow the mandated discipline process, as the plaintiffs have pleaded they were not informed of the reasons for their suspension nor given an opportunity to respond. The bottom line is, something was said by or to the Defendants that led to the suspension.

[34] The other more practical problem is the fact that the defamation claim is completely intertwined with the Plaintiff’s other claims, which the Defendants do not seek to strike. This means the Plaintiffs are going to be entitled to the relevant information on discovery in any event. Across the various claims the information that will be garnered is identical. With that in mind, I ask myself this question: What if the answers on examination, or documents produced through discovery, disclose potentially defamatory statements? To strike the claim without leave to amend, would be to enable an unseemly suppression of a legitimate claim. To strike the claim but not bar further amendment, would simply bring us back to this exact point several months down the road with the Plaintiffs looking to amend. This is unnecessary.

[35] In these unique circumstances the more prudent course is to allow this case to proceed into and through the discovery phase? The Plaintiffs have been diligent in advancing what they do know, and the Defendants can surely respond to the allegation in its current form. And, again, at this point the Plaintiff’s allegations must be accepted as true, which means they were suspended for no good reason, not informed as to why, or otherwise allowed to present a defence. Against that backdrop, the facts now pleaded would in the least allow an inference that either slanderous statements were made or libelous information was written or published.

[36] I agree with the Plaintiffs who, at para 12 of their factum, submit that:

As in the Catalyst Capital Group Inc. case, the allegations against the Defendants are not a fishing expedition. The effects of the communications by the Defendants have a physical manifestation, particularly the fact that the Plaintiffs were all expelled from the Club. The expulsion alone, unless properly undertaken by the Defendants, implies significant wrongdoing by the Plaintiffs which, in and of itself, defames the character and reputations of the Plaintiffs…

[37] For the foregoing reasons, I would grant the Defendant’s motion in part and strike para. 1(i) of the statement of claim. I dismiss the balance of the motion.

[38] Should the parties not agree on costs I invite brief written submissions, limited to two pages in length not including a costs outline. The Plaintiffs have 30 days to file; the Defendants 10 days thereafter. There is no right of reply.

“Justice J. C. George”

Justice J. C. George

Released: June 1, 2018

COURT FILE NO.: 8/16

DATE: 2018/06/01

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Jaoa Curvelo, Maria Curvelo, Jose Damota, Maria Pereira, Paulo Salvador

Plaintiffs

– and –

Portuguese Canadian Club of Strathroy, Walter Medeiros, Eddie Costa, Charlie Milhomens, Jaoa Salvador

Defendants

REASONS FOR DECISION ON DEFENDANT’S MOTION TO STRIKE

George J.

Released: June 1, 2018