Court File and Parties

Court File No.: CV-18-00609960-0000 Date: 2019-10-16 Superior Court of Justice - Ontario

Between: Medha Joshi, Plaintiff/Defendant by Counterclaim (Moving Party)

And: Allstate Insurance Company of Canada, Defendant/Plaintiff by Counterclaim (Responding Party)

Before: Kimmel J.

Counsel: Andrew Monkhouse, Alexandra Monkhouse, Kevin Wisnicki, for the Plaintiff/Defendant by Counterclaim (Moving Party) Seann McAleese and Sasha Segal, for the Defendant/Plaintiff by Counterclaim (Responding Party)

Heard: May 16, 2019 (with supplementary written submissions received September 5, 2019, September 24, 2019 and October 11, 2019)

Supplementary Reasons Re: Anti-slapp damages and costs

[1] In my Reasons for Decision in this case released on July 22, 2019, ONSC 4382, after granting the plaintiff’s motion under s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c.C-43 (CJA) and dismissing Allstate’s counterclaim against her, I allowed at paragraph 79 for the parties to make written submissions on costs and/or s. 137.1(9) damages if they were unable to come to an agreement on these matters. The parties were not able to reach an agreement and I have since received their supplementary written submissions dated September 5, 2019, September 24, 2019 and October 11, 2019.

[2] The two issues that remain to be decided based on these submissions are:

a. Is the plaintiff entitled to damages under s. 137.1(9) of the CJA as the successful moving party on the Anti-SLAPP motion that resulted in the dismissal of Allstate’s counterclaim and, if so, in what amount? and

b. What scale and quantum of costs is the successful plaintiff/moving party entitled to?

Section 137.1(9) Anti-SLAPP Damages

[3] Section 137.1(9) of the CJA provides that if the judge finds, in dismissing a proceeding under that section, that the responding party brought the proceeding in bad faith or for an improper purpose, the judge may award the moving party such damages as the judge considers appropriate.

[4] I observed in paragraph 78 of my reasons that, to succeed in a claim for damages under s. 137.1(9), Ms. Joshi would have to satisfy me that Allstate brought its counterclaim “in bad faith or for an improper purpose”, and that the mere fact that I have decided to dismiss the counterclaim as a Strategic Lawsuit Against Public Participation is not enough to satisfy me of this.

[5] The plaintiff seeks $20,000.00 in damages to compensate her for the stress and anxiety that she claims to have suffered, which is said to have aggravated her pre-existing medical conditions. She relies on other cases, some decided under s. 137.1 and some decided in other contexts, that have awarded damages in this range for mental stress.

[6] The plaintiff relies upon the following factors in support of her contention that Allstate acted bad faith and with an improper purpose in advancing its counterclaim: her vulnerability as a former employee, a perceived accusation that she was blackmailing Allstate in the context of without prejudice correspondence, Allstate’s failure to lead evidence of harm or to properly plead its claim for defamation suggesting a lack of seriousness about the claims made, and its decision only to sue her and not the media organizations that repeated her statements, among other defence tactics.

[7] The plaintiff relies primarily on United Soils Management v. Mohammed, 2017 ONSC 4450, United Soils Management Ltd. v. Barclay, 2018 ONSC 1372, and the decision of the Court of Appeal in both of those cases (decided at the same time) indexed as United Soils Management v. Mohammed 2019 ONCA 128, said to support her claim for s.137.1(9) damages. This decision is relied upon for the proposition that medical evidence is not required for proof of damages, and that damages may be presumed in some cases. These cases are said to reinforce that the purpose of s. 137.1(9) is to provide compensation for harm done directly to the moving party arising from the impact of the dismissed proceeding.

[8] Allstate also relies on these same cases, and points to the Court of Appeal’s observation in United Soils v. Mohammed (at paras. 37 and 38) that damages will not naturally follow in every case where the action is dismissed, nor are these damages intended to be so broad as to encompass punitive damages.

[9] Allstate contends that there is no evidence (or finding in my earlier ruling) that Allstate commenced its counterclaim for an improper purpose or in bad faith and relies on my findings (at paras. 39 and 63 of my Reasons for Decision) that there were grounds to believe that its counterclaim for defamation, even though not properly pleaded, had substantial merit and could have led a trier of fact to conclude that it had a real chance of success. Allstate also disputes the contention that it led no evidence of damages, pointing to the expenses incurred in response to the ongoing FSCO investigation said to have been initiated as a result of the plaintiff’s expressions. Allstate disputes the plaintiff’s characterization of the counterclaim and its litigation strategy and points to the case of Papa v. Zeppieri, in which the court rejected the argument that a decision not to sue newspapers or Facebook for defamation was not evidence of bad faith or an improper purpose.

[10] I agree with Allstate that the requisite bad faith or improper purpose on the part of Allstate in the pursuit of its counterclaim in this case has not been established. Something further is required beyond what supported the reasons for my decision to dismiss the counterclaim under s. 137.1 and I am not satisfied of the existence of the additional required elements of bad faith or improper purpose on the part of Allstate in this case.

[11] The suggestion that Allstate accused Ms. Joshi of having engaged in blackmail in without prejudice communications that occurred prior to the commencement of the action (which I ruled inadmissible on the motion) is not a fair characterization of Allstate’s position, nor am I prepared to accept that the issuance of a Libel Notice (even as against Ms. Joshi’s solicitors) is a threat outside of the normal course of the preservation of a defamation claim. The other factors that the plaintiff relies upon regarding decisions by Allstate about who to sue, what evidence to lead and how to plead their case are similarly matters of normal course defence tactics in litigation. Even what I described as Allstate’s cavalier approach to the claim for defamation does not amount to bad faith or an improper purpose when all of the particulars of that claim had ben detailed in Allstate’s libel notice.

[12] I am also not satisfied, in any event, that there is an evidentiary basis upon which to award the plaintiff any damages under s. 137.1(9) in this case. While medical evidence may not be required, and in certain cases it may be presumed that damages arise from the SLAPP lawsuit (per the Court of Appeal in United Soils at para. 36), I am not prepared to infer, as the plaintiff asks me to do, that Ms. Joshi has suffered incremental stress and anxiety as a direct result of the dismissed counterclaim, over and above the stress and anxiety that she may have suffered as a result of her employment having been terminated and her participation in the lawsuit that she commenced, without some further foundational evidence and basis for so doing.

[13] I am denying the plaintiff’s requests for s. 137.1(9) damages in the exercise of my discretion in the circumstances of this case.

Section 137.1(7) Costs

[14] Ms. Joshi presumptively claims her full indemnity costs of $126,449.16, pursuant to s. 137.1(7) of the CJA. It is Allstate’s burden to demonstrate why a departure from what would otherwise be intended to be a complete reimbursement of all legal fees in relation to the counterclaim is appropriate. (See Platnick v. Bent, 2017 ONSC 685, at para. 25)

[15] Allstate contends that not all Anti-SLAPP cases result in full indemnity costs; some have awarded only substantial indemnity costs. See, for example, Niagara Peninsula Conservation Authority v. Smith, 2018 ONSC 127, at paras. 12-13.

[16] Allstate contends that even where an award of full indemnity costs is prescribed, the court must still undertake the same analysis that is required when fixing costs in any other context and “the quantum must still be fair and reasonable for what was involved in the particular proceeding… [and] the award must also be proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding…” (see United Soils, 2019 ONCA at para. 42; see also Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686).

[17] Allstate also argues that this circumstance is unique because the SLAPP proceeding was a counterclaim and the main action is continuing, with the result that much of the evidence (affidavits, productions and examinations) is relevant and will be useful in the ultimate prosecution and determination of Ms. Joshi’s claims.

[18] Allstate also questions the veracity of the amount of costs claimed by the plaintiff. First, it does so because of a draft costs outline received from plaintiff’s counsel which reflected a much more modest claimed amount of $43,006.59 in substantial indemnity costs, which was immediately replaced with a costs outline supporting the request for full indemnity costs of $126,449.16 after Allstate delivered its costs outline reflecting full indemnity costs of $95,173.26. Allstate also argues that the rates and amount of fees claimed are not reasonable or proportionate, having regard to the relative work done and levels of seniority of the lawyers involved.

[19] I will begin by acknowledging that very significant amounts of time have been spent by the lawyers on both sides and that this was justified because the legislation is relatively new. The law remains in flux with the Court of Appeal having released recent decisions for which leave to appeal to the Supreme Court of Canada has been granted, and this is the first identified example of an Anti-SLAPP motion under s. 137.1 involving a counterclaim.

[20] While no two cases are the same, the amount of costs sought by Ms. Joshi in this case is similar to those sought and awarded in both United Soils cases. I am not going to parse the bill of costs of plaintiff’s counsel as suggested by Allstate, nor am I prepared to make the finding that Allstate inferentially suggests that the plaintiff’s bill of costs has been inflated because an earlier draft claimed a lower amount. I am satisfied by the explanation for that provided by plaintiff’s counsel in their reply submissions of October 7, 2019.

[21] I do, however, find merit in the argument by Allstate, in the unique circumstances of this case involving a counterclaim, that not all the costs associated with the motion were exclusively incurred in relation to the counterclaim given that the action is continuing. There is no method by which I could parse through the bill of costs and assess which portions of the costs incurred also relate to matters in issue in the main action, nor would I go so far as to say that the plaintiff should be foreclosed from claiming any costs on this motion that may be for work done that will also be of use to the plaintiff in the main action. This is a matter of discretion where I must apply the general costs principles and determine a quantum of costs that I consider to be fair, reasonable and proportionate to award to the plaintiff for this motion and in the circumstances of this proceeding.

[22] I find that the appropriate amount of costs to award to Ms. Joshi in this case is $95,173.26. This is an amount that Allstate could reasonably have expected to pay as the losing party since it is the full indemnity amount of costs charged by Allstate’s counsel. While below the full and substantial indemnity costs claimed by plaintiff’s counsel, it is in the range of what was asked for and is a significant amount of costs that is consistent with one of the identified purposes of s. 137.1(7), which is to ensure that plaintiff’s counsel, who may be working on contingency, are compensated fairly for their work as an incentive for them to represent parties who might otherwise not have sufficient means to retain counsel. (see Anti-SLAPP Advisory Panel October 28, 2010 Report to the AG).

[23] Further, the amount is significant enough to serve as a deterrent against plaintiffs resorting to the courts to shut down public debate. (see Niagara Peninsula, at para. 12) I find this to be a fair, reasonable and proportionate award of costs for a motion in a proceeding that is continuing and in which it is reasonable to infer that some of the fruits of the work done will be of use to the plaintiff in the pursuit of her action and were not exclusively incurred in relation to the dismissed counterclaim.

[24] Allstate is ordered to pay Ms. Joshi her costs pursuant to s. 137.1(7) in the all-inclusive amount of $95,173.26 forthwith.

Kimmel J.

Date: October 16, 2019