Court File and Parties
COURT FILE NO.: CV-19-618275
DATE: 2020-02-10
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: QIANGLI CAO, Plaintiff
AND:
CITY OF MARKHAM and MARKHAM PUBLIC LIBRARY, Defendants
BEFORE: Sossin J.
COUNSEL: Qiangli Cao, for himself
David Boghosian and Matt Brown, Counsel for the Defendants
HEARD: December 19, 2019
REASONS FOR JUDGMENT
OVERVIEW
[1] This case involves the question of when a claim may be dismissed because it has already been litigated.
[2] The defendants, the City of Markham (“Markham”) and Markham Public Library (the “Library”) (collectively, the “defendants”), move for summary judgment dismissing the action brought by Qiangli Cao (“Cao”) under Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules of Civil Procedure”).
[3] Cao is the CEO of Chinese Publications for Canadian Libraries Ltd. (“CPCL”) which was under contract with the Library between June, 2014 and May, 2016.
[4] Following the termination of this contract, Cao sued Markham for a range of damages and specific performance based on alleged breach of contract (the “CPCL action”).
[5] Markham moved for summary judgment in the CPCL action. Justice Kristjanson granted this motion on June 20, 2017.
[6] Justice Kristjanson’s decision was upheld by the Court of Appeal on May 2, 2018.
[7] Subsequently, on July 19, 2018, Cao launched this action against both Markham and the Library alleging defamation.
[8] On September 10, 2018, the defendants delivered their statement of defence.
[9] The defendants’ basis for summary judgment is that this action raises no new issues and is at attempt to relitigate the CPCL action.
ANALYSIS
[10] The test for summary judgment under Rule 20.04(2)(a) of the Rules of Civil Procedure is well-established. The question I must address is whether there is a genuine issue for trial. There is no genuine issue for trial where, as set out by Karakatsanis J. in Hryniak v. Mauldin, 2014 SCC 7 at para 66:
A judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[11] As the moving party, the defendants have the burden to show there is no genuine issue for trial.
[12] Parties are required to put their “best foot forward” on a motion for summary judgment, and cannot rely on the fact that additional evidence may be able to substantiate their position; McPeake v. Cadesky & Associates, 2018 ONCA 554 at para. 11; and Mahoney v. Sokoloff, 2015 ONCA 390, at para. 5.
[13] The defendants argue that issue estoppel applies to preclude this action by Cao, and that, therefore, there is no genuine issue for trial.
[14] In Angle v. Minister of National Revenue, 1974 168 (SCC), [1975] 2 S.C.R. 248 at 254; and Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44(“Danyluk”) at para. 25, the Supreme Court of Canada held that the requirements of issue estoppel are:
a. The same parties or their privies were involved in the subsequent and prior actions;
b. The decision in the prior action was final; and
c. The same issue was decided in the prior action as raised in the subsequent action.
[15] The Supreme Court also set out that where these requirements are met, the Court retains a residual discretion to decline to apply issue estoppel to avoid an injustice; Danyluk, at para. 67.
[16] I will consider each of these elements of the issue estoppel requirements in the circumstances of this motion.
Was Cao a Privy to the First Action?
[17] The defendants argue that Cao was a privy to the first action, as Cao was the sole officer, director and shareholder of CPCL.
[18] The defendants further point to Cao’s presence at the hearing, as he was granted leave to represent CPCL in its litigation with Markham. Cao attended and made submissions on behalf of CPCL before Justice Kristjanson.
[19] The defendants rely on Rasanen v. Rosemount Instruments Limited (1994), 1994 608 (ON CA), 17 O.R. (3d) 267 (C.A.) (“Rasanen”), where the Court of Appeal found the presence of a plaintiff throughout the prior action, including submitting or reviewing all of the documentation filed and giving evidence and argument, constituted the party as a privy for purposes of issue estoppel in the subsequent action.
[20] Cao argues that, “In a word, the corporation’s action and my personal action are absolutely different cases.” (Cao factum, at para. 103)
[21] There is no question that Cao and CPCL are separate parties. I am persuaded, however, that Cao meets the test for a privy in light of the standard set out by the Court of Appeal in Rasanen. He participated throughout the CPCL action as its sole representative.
[22] I find the first element of the test for issue estoppel is met.
Was the Prior Decision Final?
[23] The decision in the prior action was final, in that it was a summary judgment motion which dismissed the action by CPCL against Markham, and was upheld on appeal.
[24] I find the second element of the test for issue estoppel is met.
Did the Prior Decision Deal with the Same Issues?
[25] The CPCL action was resolved in Markham’s favour on summary judgment. Justice Kristjanson found that CPCL had failed to comply with the price requirement of the contract, missed delivery targets, breached collection profile targets and made cataloguing errors.
[26] Kristjanson J. found that Markham had communicated notice of the defaults to CPCL and offered opportunities for the defaults to be remedied. She held that Markham was justified in terminating the contract with CPCL and that there was no genuine issue requiring a trial.
[27] This action is framed in defamation, not breach of contract. The key question, however, is whether the same material facts which were fundamental to the prior decision are being litigated in the present action.
[28] In The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, Tulloch J.A. described the relationship between the two proceedings as follows (at para. 27):
[27] Different causes of action may have one or more material facts in common. Issue estoppel prevents re-litigation of the material facts that the cause of action in the prior action embraces: Danyluk, at para. 54. However, the question out of which the estoppel arises must be “fundamental to the decision arrived at” in the prior proceedings: Angle v. M.N.R., 1974 168 (SCC), [1975] 2 S.C.R. 248, at p. 255. Accordingly, the question must be “necessarily bound up” with the determination of the issue in the prior proceeding for issue estoppel to apply: Danyluk, at paras. 24, 54.
[29] In this case, the material facts raised by Cao include the affidavits filed in support of Markham in the CPCL litigation and a City Council report recommending cancellation of the contract.
[30] One affidavit was sworn by Verna Gilchrist, the Manager of Technical Services and C3 Support for the Library. Her affidavit detailed the failures of CPCL to meet its contractual obligations with Markham.
[31] A second affidavit was sworn by Larry Pogue (“Pogue”), the Special Projects Assistant at the Library.
[32] Justice Kristjanson found in favour of Markham with respect to the breaches of contract by CPCL and the validity of Markham’s termination of the contract, based on the same affidavit evidence.
[33] The defendants argue that attempting to impugn those affidavits in this action in the context of defamation addresses issues necessarily bound up with the prior proceeding.
[34] Further, the defendants submit that a finding that either affidavit was defamatory toward Cao would be an inconsistent finding with Justice Kristjanson’s reasons, which rejected CPCL’s assertion that the affidavits were false. Kristjanson J. held, “There was a general submission by Mr. Cao that all the evidence of the City’s three affiants is false. Given that the evidence is based on contemporaneous documents and notes, is consistent with the contractual issues identified, there is no merit in this submission.” (at pp. 9-10)
[35] Cao also challenges Pogue’s Report to the General Committee of City Council (the “City Council Report”). Again, Justice Kristjanson’s reasons substantiated the material facts in the Report, particularly the failure of CPCL to meet price requirements in the contract, collection profile requirements and catalogue accuracy.
[36] Cao’s statement of claim alleges that certain statements and testimony arising in the context of the prior action was “libel,” and “slander” but to meet the threshold for defamation, Cao must establish that the statements were false. The only way he can do this is to argue that Kristjanson J. erred in her acceptance of the evidence in question.
[37] Cao argues that this action is distinct from the CPCL action: “Different from CPCL’s action, this is my individual action. I am suing the defendants for their defamatory actions, claiming for remedy of my huge personal damages caused by defendants’ defamation... Defendants could argue that they were entitled to terminate CPCL’s contract without cause, but they were not entitled to badmouth me as [sic] individual.” (Cao’s factum, at para. 102-3)
[38] Defamation is clearly a different cause of action than breach of contract; however, I am persuaded that the issues in this action were fundamental to, and resolved by, the prior action.
[39] Cao also raises two issues which were not before Justice Kristjanson.
[40] First, Cao alleges that certain comments from a City Councillor in a Chinese-language publication dated December 11, 2017 constitute defamation. The Councillor, according to a translation provided by Cao, stated “City terminated library’s contract for Chinese services with the book company providing library’s service. The reasons were the unqualified service and delayed delivery.” (Cao factum, at para. 114).
[41] The article in question references CPCL, not Cao personally. Further, neither Markham nor the Library can be liable for the comments to the media of a specific Councillor; St. Elizabeth Home Society v. Hamilton (City), 2005 46411 (ON SC), at para. 264.
[42] Therefore, while not part of issue estoppel, this allegation cannot sustain an action by Cao against the defendants in defamation.
[43] Second, Cao alleges that the City Council Report was altered through “tampering.” He stated that the alleged tampering involved blocking out certain passages. This allegation was not part of the CPCL action, and was not argued before Justice Kristjanson, as Cao argues it only came to his attention afterwards.
[44] Cao does not state how the allegation of tampering relates to any specific claim in defamation. Rather, he alleges that the portions of the report allegedly blocked out were “the key issues in the report.” (Cao factum, at para. 125)
[45] Cao’s reference to the report and its “false statements” is yet a further attack on Justice Kristjanson’s reasons; he submits that “I found that our “errors” approved by judge were all from this report.” (Cao factum, at para. 127)
[46] For these reasons, I find the third element of the test for issue estoppel is met, as the issues dealt with in the CPCL action are the same issues raised in this action, and no new issues have been raised which could sustain an action against the defendants in defamation.
[47] Where the three elements of issue estoppel are met, a further discretion exists not to apply issue estoppel where to do so could result in an injustice, as in Danyluk where the plaintiff had been denied procedural fairness in the prior action.
[48] In this case, the Court of Appeal, in upholding Justice Kristjanson’s decision, held that, “The allegations of procedural unfairness are without merit.” (at para. 6)
[49] In oral submissions on this motion, Cao raised the issue of his poor comprehension of English as another potential fairness concern. A similar issue was raised during the CPCL action.
[50] While Cao stated that he had some difficulty following the submissions of counsel for the defendants, I am satisfied on the basis of Cao’s own submissions at the hearing, and the written submissions from Cao on this motion, that any language barriers he may have did not impair his ability to present his arguments or respond to the arguments of the defendants.
[51] It is clear that Cao continues to believe he has been treated unfairly. However, I find that there is no basis on which to decline to apply issue estoppel. This is not a situation like Danyluk where there has yet to be a fair hearing on the merits of Cao’s allegations. That fair hearing already occurred before Justice Kristjanson, and was affirmed by the Court of Appeal on appeal.
CONCLUSION
[52] For the reasons set out above, there is no genuine issue for trial in light of the application of issue estoppel to Cao’s action.
[53] Therefore, I find the defendants’ motion for summary judgment will be granted.
[54] In these circumstances, a costs award against Cao is appropriate. Markham and the Library have been put to the expense of defending serious allegations of defamation which they had already defended in the CPCL action.
[55] On the other hand, Cao submits that his legal knowledge is limited, his knowledge of English is limited, and his livelihood and savings were lost as a result of the CPCL action.
[56] In these circumstances, I find costs of $10,000.00, all inclusive, to be reasonable. Cao shall pay $10,000.00 to the defendants within 30 days of this judgment.
[57] Cao’s action against the defendants is dismissed.
Sossin J.
Released: 2020-02-10