SageTea Inc. v. Attorney General of Canada, 2022 ONSC 2938

ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-20-00085340-0000 DATE: 2022/05/16

B E T W E E N:

SageTea Inc. Plaintiff (Responding Party)

– and –

The Attorney General of Canada and Nuruddin Shivji Defendants (Moving Parties)

COUNSEL:

Christopher McLeod and Alexander Bissonnette, for the Plaintiff (Responding Party)

Adrian Johnston, for the Defendants (Moving Parties)

HEARD: February 2, 2022

REASONS FOR decision on motion

RYAN BELL J.

Overview

1SageTea Inc. commenced this action against the Attorney General of Canada and Nuruddin Shivji seeking over $10 million in damages. The causes of action alleged include breach of contract, breach of the duty of good faith and fair dealing in contractual performance, and breach of confidence in relation to a contract that SageTea entered into with Public Services and Procurement Canada in October 2017 under the Build in Canada Innovation Program (“BCIP Program”).

2The causes of action also include defamation based on statements allegedly made by Mr. Shivji at a conference in Montreal that was held between September 30, 2018 and October 3, 2018, as well as other comments allegedly made by Mr. Shivji and others. SageTea alleges that Mr. Shivji was a senior employee of Economic and Social Development Canada (“ESDC”) and SageTea’s primary point of contact at ESDC during the performance of the contract. SageTea alleges that the federal Crown is vicariously liable for Mr. Shivji’s conduct.

3The Attorney General of Canada and Mr. Shivji move for an order dismissing or staying SageTea’s defamation claim arising in Quebec on the ground that this court has no jurisdiction over the subject-matter of the claim. The moving parties also seek an order under Rule 21.01(1)(b) of the Rules of Civil Procedure,¹ striking, without leave to amend, the paragraphs of the statement of claim that advance a claim for defamation.

4SageTea submits that the motion should be dismissed, on the basis that it requires the court to “improperly consider the Plaintiff’s allegations of defamation on a separate and piecemeal basis, instead of considering the cause of action as a whole.”

5For the following reasons, the motion is granted.

Procedural history

6SageTea commenced this action on December 21, 2020. The moving parties served a demand for particulars seeking particulars of SageTea’s defamation claim. SageTea served a response to demand for particulars.

7SageTea had previously brought an action against the federal government and Mr. Shivji in Federal Court in connection with SageTea’s contract under the BCIP Program. The Federal Court action included claims for breach of contract, negligent misrepresentation, unjust enrichment, breach of duty of good faith to negotiate the licensing agreement, breach of duty of good faith and honest performance, tortious interference with economic relations, and copyright infringement.

8SageTea did not advance a claim for defamation in the Federal Court action. The statement of claim in the Federal Court action did not refer to the Montreal conference.

9The Federal Court stayed the Federal Court action under s. 50.1 of the Federal Courts Act,² on the basis that it lacked jurisdiction over the counterclaim and third party claim that the defendants had filed in the proceeding. The motion staying the Federal Court action proceeded on an unopposed basis.

The defamatory statements alleged in this action

10I agree with the moving parties’ summary of the defamatory statements alleged in the present action. In particular, in the statement of claim, as supplemented by the response to demand for particulars, SageTea alleges that Mr. Shivji made the following non-verbatim statements at the Montreal conference and “in other conversations and meetings between Shivji and stakeholders and other employees of the Government of Canada”:

(i) that the Government of Canada had developed the solution of the Competing Innovation (defined in the statement of claim) without giving any credit to SageTea;

(ii) that SageTea’s Innovation did not work as intended;

(iii) that SageTea’s product did not work and was ultimately unusable;

(iv) that there were numerous issues with the functionality of the interface and the reliability of the results generated by SageTea’s Innovation;

(v) that SageTea was improperly using ESDC’s proprietary weights data; and

(vi) that SageTea did not possess the technical capability to have successfully developed the Competing Innovation.³

11SageTea alleges that Mr. Shivji and/or other Government of Canada employees made statements on other occasions that may have included the statements at (i), (ii), and (vi) and that Sage Tea was “awful.”⁴

12In its response to demand for particulars, SageTea alleges that, during a phone call to Troy Levenson on December 3, 2018, Mr. Shivji made “similar statements” to those at (i), (ii), and (vi) and stated “that it was Mr. Shivji’s goal to see that SageTea never does business with the federal government again.”⁵

Legal principles

13To strike a claim for failing to disclose a cause of action under r. 21.01(1)(b), it must be plain and obvious that the plaintiff cannot succeed. For the purposes of deciding a motion under r. 21.01(1)(b), the facts as alleged in the statement of claim must be accepted as true. No evidence is permissible on a r. 21.01(1)(b) motion: r. 21.01(2)(b). The statement of claim is to be read as generously as possible with a view to accommodating any inadequacies in the allegations due to drafting difficulties: Catalyst Capital Group Inc. v. Veritas Investment Research Corp.,⁶ at para. 21.

14In the statement of claim, the plaintiff must allege all the material facts necessary to establish a legally complete cause of action. If the plaintiff fails to do so, the claim will be struck: Metz v. Tremblay-Hall,⁷ at paras. 9-10. A statement of claim may also be struck on the basis that it does not meet the minimum level of material fact disclosure as required by r. 25.06(1): Lana International Ltd. v. Menasco Aerospace Ltd.,⁸ at para. 15.

15The level of material fact disclosure required depends on the cause of action. For defamation, “[b]oth courts and leading authors on the law of defamation repeatedly state that pleadings in defamation cases are more important than in any other class of actions: Lysko v. Braley,⁹ at para. 91.

16Rule 21.01(3)(a) provides that a defendant may move to have an action stayed or dismissed on the ground that the court has no jurisdiction over the subject-matter of the action.

17Claims against the federal Crown are governed by the Crown Liability and Proceedings Act.¹⁰ Section 21(1) of the CLPA gives the superior court of the province in which the claim arises concurrent jurisdiction with the Federal Court with respect to the subject-matter of the claim.

18In Babington-Browne v. Canada (Attorney General),¹¹ at paras. 19-21, the Court of Appeal for Ontario held that the test for jurisdiction under s. 21 of the CLPA is different than the “real and substantial connection” test that generally governs motions under r. 21.01(3)(a). In deciding whether a provincial superior court has concurrent jurisdiction over a claim against the federal Crown under s. 21(1) of the CLPA, the court must “examine the facts surrounding the claim in the light of the elements of the alleged cause of action in order to decide where the substance of the claim arose”: David S. LaFlamme Construction Inc. v. Canada (Attorney General),¹² at para. 7. The province in which the claim arises is the only factor that gives a provincial superior court jurisdiction over claims against the federal Crown: Babington-Browne, at para. 20; Djukic v. Canada (Attorney General),¹³ at paras. 11-12.

The claim for defamation arising from the Montreal conference

19The claim for defamation arising from the Montreal conference is alleged at paragraphs 48-49, 53, and 75-77 of the statement of claim.

20In an action for defamation, a plaintiff is required to prove: (i) that the impugned words were defamatory in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person; (ii) that the words in fact referred to the plaintiff; and (iii) that the words were published meaning that they were communicated to at least one person other than the plaintiff: Grant v. Torstar Corp.,¹⁴ at para. 28.

21The tort of defamation occurs in the place of publication: Brown on Defamation (Canada, United Kingdom, Australia, New Zealand, United States),¹⁵ at 7.2. In this case, the place of publication of the statements alleged to have been made at the Montreal conference is Quebec.

22The facts alleged in the statement of claim and the response to demand for particulars confirm that the substance of the claim for defamation at the Montreal conference arose in Quebec: the claim is based on statements alleged to have been made by a speaker in Montreal, at a conference in Montreal, to an audience in Montreal.

23SageTea argues that the moving parties’ position is contrary to the purpose of s. 21(1) of the CLPA – that being to limit or eliminate multiple proceedings and to facilitate access to justice: Babington-Browne, at para. 14. SageTea submits that the moving parties’ approach of focusing on the single instance of alleged defamation at the Montreal conference is inconsistent with the approach taken by the Court of Appeal in Rowe v. Canada (Attorney General)¹⁶ and Babington-Browne.

24I disagree. The court is required to examine the facts surrounding the claim in light of the elements of the alleged cause of action – in this case defamation – in order to determine where the substance of the claim arose. The issue in Rowe was whether Ontario had jurisdiction to hear a wrongful dismissal action brought by a federal employee. Both parties agreed that the facts of the case were sufficient to grant Saskatchewan jurisdiction because Mr. Rowe performed all his employment duties in Saskatchewan, he experienced harassment at his workplace in Saskatchewan, and the harassment investigation and discipline proceedings took place in Saskatchewan. The Court of Appeal allowed the federal government’s appeal on the basis that the motion judge erred in concluding that Ontario also had jurisdiction stating,

[i]t cannot be said that this claim arose in Ontario simply because one of its underlying facts took place here...[t]he delay followed the events at Mr. Rowe’s Saskatchewan workplace that constitute the substance of his claim, which was related to his harassment in Saskatchewan by his supervisor and the manner in which it was handled there.

25In Babington-Browne, the Court of Appeal noted that for a cause of action in tort, there must be an accident, a negligent act, and an injury. Having regard to these elements of the tort, the Court of Appeal agreed with the ruling of the motion judge that the substance of the appellants’ claim did not arise in Ontario.

26In this case, SageTea has made more than one allegation of defamation. Each defamation claim must be analyzed separately: Guergis v. Novak,¹⁷ at para. 42. In order to determine where the substance of the defamation claim arising from the Montreal conference arose, it is the facts surrounding that claim which must be considered in light of the elements of the cause of action. There can be no doubt that the substance of the claim for defamation at the Montreal conference arose in Quebec.

27SageTea argues that the paragraphs the moving parties seek to strike are relevant to other causes of action. Specifically with respect to the alleged defamatory statements at the Montreal conference, I agree with the moving parties that the defamation claim is distinct from the other causes of action and that a determination of the defamation claim does not depend on, and is not intermingled with, a determination of SageTea’s claims for breach of contract, breach of the duty of good faith and fair dealing in contractual performance, and breach of confidence. The Attorney General of Canada agrees that this court has jurisdiction over the subject-matter of these causes of action. None of these causes of action depend on proof of defamatory statements at the conference in Montreal.

28The result of the fact-specific analysis may be that not every claim alleged in the statement of claim can be determined by the same court or in the same proceeding. For example, in Conor Pacific Group Inc. v. Canada (Attorney General),¹⁸ the underlying claims were four unrelated claims joined in the same statement of claim. The British Columbia Court of Appeal allowed the claim that arose in British Columbia to proceed; the appeal was dismissed with respect to the remaining claims on the basis that the court had no jurisdiction.

29While the purpose of s. 21(1) of the CLPA is to limit or eliminate multiple proceedings arising out of the same set of facts and to facilitate citizens’ access to justice, under s. 21(1), a provincial superior court’s jurisdiction over claims against the federal Crown is not open-ended: Babington-Browne, at para. 14. A provincial superior court has jurisdiction only if the claim arose in its province: Djukic, at para. 6; Babington-Browne, at para. 14.

SageTea’s attornment and estoppel arguments

30In response to the jurisdictional issue, SageTea advances an additional argument: that the moving parties have attorned to the jurisdiction of the Ontario court and are now estopped from arguing that this court does not have jurisdiction. SageTea argues there has been attornment because of counsel’s “direction” that the matter should proceed in this court upon being stayed in the Federal Court and by virtue of the moving parties’ having demanded particulars in relation to the allegations of defamation.

31SageTea’s attornment argument fails, both factually and legally. There could be no so-called “direction” because no defamation claim was made by SageTea in its statement of claim before the Federal Court and there was no reference in that pleading to any statements made by or on behalf of the moving parties in Quebec.

32Attornment to a court’s jurisdiction by a defendant signifies acquiescence to the jurisdiction of the court. A party may be found to have voluntarily engaged in the jurisdiction of the court and therefore, to have attorned to it, when that party takes steps beyond contesting the jurisdiction of a court: Lilydale Cooperative Limited v. Meyn Canada Inc.,¹⁹ at para. 52. In my view, a party’s demand for particulars to understand if the court has subject-matter jurisdiction does not mean the party has attorned to the jurisdiction.

33In any event, parties cannot confer jurisdiction on a court where it otherwise lacks subject-matter jurisdiction: Rothgiesser v. Rothgiesser,²⁰ at para. 33. While the issue in Rothgiesser was whether consent can confer jurisdiction, the principle applies equally to whether attornment can confer jurisdiction.

SageTea’s argument that the claim for defamation should not be dismissed against Mr. Shivji

34SageTea also argues that the claim for defamation arising out of the Montreal conference should not be dismissed against Mr. Shivji because s. 21(1) of the CLPA does not create any jurisdictional hurdle with respect to SageTea’s claim against Mr. Shivji.

35I disagree. Section 3(b)(i) of the CLPA provides that the Crown is liable for damages for which, if it were a person, it would be liable in respect of a tort committed by a servant of the Crown. In the statement of claim, Mr. Shivji is identified as a senior employee of ESDC, serving as SageTea’s primary point of contact at ESDC during the performance of the BCIP contract. The claim has been asserted against Mr. Shivji as a Crown servant “for whom ESDC is vicariously liable.”²¹

36Section 22(2) of the CLPA provides: “[a] court shall not in any proceedings grant relief or make an order against a servant of the Crown that it is not competent to grant or make against the Crown.” SageTea relies on Emond v. Michell²² for the proposition that s. 22(2) only extends to Crown servants the limitations upon remedies as set out in s. 22(1) and does not create any jurisdictional immunity for Crown servants. It is important to note, however, that in Emond, the Crown was not named as a defendant. By contrast, in this case, SageTea is pursuing the federal Crown through its employee, Mr. Shivji.

37At paras. 19 and 21 of Emond, the court explained:

...A claimant who names only a Crown servant as defendant foregoes the opportunity to have the Crown found additionally liable for the tort of its servant. In such circumstances the claim is not against the Crown and the jurisdictional immunity afforded to the Crown under the CLPA does not arise.

In cases such as the one at bar, where the alleged wrongful acts of the Crown servant were committed during the course of duty, one would expect that most plaintiffs/claimants would name the Crown as one of the defendants so that the Crown could be found additionally liable. If the Crown were so named, then 21(1) of the CLPA would operate to preclude the matter from proceeding in the Provincial Court.

38SageTea has named the Attorney General of Canada and Mr. Shivji as defendants. In these circumstances, s. 21(1) of the CLPA operates to preclude the defamation claim arising from the Montreal conference from proceeding in this court.

The remaining allegations of defamation

39The Attorney General of Canada and Mr. Shivji move to have the remaining allegations of defamation struck under r. 21.01(1)(b). In particular, they move to have the following words and/or paragraphs struck from the statement of claim, without leave to amend: the word “defamation” from paragraph 1(a); the words “loss of reputation” from paragraph 1(b); paragraph 1(c); paragraphs 47-49; paragraph 53; paragraphs 75-77; paragraph 78 regarding the allegation of defamation only; the word “defamation” from paragraph 79; paragraphs 83-104; and the word “defamation” from paragraph 106.

40I have previously set out the elements which a plaintiff in a defamation action is required to prove. In the case of slander, the plaintiff must also allege and prove special damages, unless the impugned words fall within a category of statements that are slanderous per se: Grant, at para. 28. The plaintiff is required to specify in her claim whether the slander is actionable per se; if it is not, then the plaintiff must plead special damages caused by the alleged defamatory statement: Boucher-Chicago v. Snider,²³ at paras. 9 and 13.

41Where the plaintiff contends that the impugned words were defamatory because of an innuendo, the innuendo must be pleaded specifically: Lana International Ltd.,²⁴ at para. 26.

42The parties agree that the “relaxed, modern approach” to pleading in defamation was set out by the Court of Appeal in Catalyst Capital Group Inc., as summarized by the Divisional Court in PMC York Properties v. Siudak,²⁵ at para. 38:

By way of summary, Catalyst provided that the following factors must be made out:

(a) the claimant has pleaded all the particulars available to him with the exercise of reasonable diligence;

(b) the claimant is proceeding in good faith;

(c) the claimant has established in the pleading a prima facie case and is not on a “fishing expedition”, which will require at least the pleading of a coherent body of fact surrounding the incident, such as time, place, speaker and audience with respect to one defamation;

(d) the coherent body of fact of which she has 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

(e) the exact words are not in her 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 then at their disposal.

43As the Divisional Court in PMC York Properties stated at paras. 5-6:

...it is only after a claimant in a defamation claim has pleaded facts that make out a prima facie case against at least one person that the Court can approach other claims of defamation using the modern, relaxed approach.

In order to make out a prima facie case against one person, the claimant must plead facts to support each of the elements of the tort of defamation: namely, that one person made a particular statement, to another identified person, at a certain time and in certain circumstances, about the claimant, and that the statement is capable of being defamatory.

44SageTea submits that in its statement of claim, as supplemented by its response to demand for particulars, it has pleaded sufficient facts to support two prima facie cases of defamation: first, in respect of the Montreal conference and second, in respect of the call between Mr. Shivji and Mr. Levenson.

45The Montreal conference claim for defamation must be dismissed on the basis that this court lacks subject-matter jurisdiction over the claim. It cannot, therefore, constitute a prima facie case of defamation that would allow the court to approach the other claims of defamation using the modern, relaxed approach. A similar situation arose in Guergis. In that case, the Court of Appeal concluded that certain alleged defamatory statements made by the defendant Pellerin to an identified audience were protected by absolute privilege. The allegations were properly struck and could not serve as the prima facie case of defamation that would allow a more relaxed approach to the pleading requirement for other alleged defamatory statements by the same defendant: Guergis, at paras. 51-52.

46The call between Mr. Shivji and Mr. Levenson was first identified by SageTea in the response to demand for particulars:

...similar statements were also made by Shivji during a phone call that took place on or around December 3, 2018 at approximately 2 pm with Troy Levenson, in which Shivji stated to Mr. Levenson that it was Shivji’s goal to see that SageTea never does business with the federal government again. SageTea was advised of these statements by Mr. Levenson.

47These alleged defamatory statements cannot constitute a prima facie case of defamation supporting the use of the modern, relaxed approach in considering the other claims of defamation. There are three shortcomings with the pleading. First, SageTea has failed to specify whether the statement was actionable per se and, if not, to allege special damages arising from the statement.

48Second, SageTea has alleged only that Mr. Shivji made “similar statements” to those in paragraph 1 of the response to demand for particulars: that the Government of Canada had developed the solution of the competing innovation without giving credit to SageTea, that SageTea’s innovation did not work as intended, and that SageTea did not possess the technical capability to have successfully developed the competing innovation. Alleging similar statements is not an adequate level of material fact disclosure, particularly in an action for slander, where the defamatory words are the very facts upon which the entire action is founded; it is essential to know the very words on which the plaintiff founds his claim: Brown on Defamation, at 19.3.

49Third, the allegation that Mr. Shivji stated to Mr. Levenson “that it was Shivji’s goal to see that SageTea never does business with the federal government again” is not capable of a defamatory meaning; it would not lower SageTea in the eyes of a reasonable person: Guergis, at paras. 40-41, 56. It is a statement about Mr. Shivji’s alleged intention, not any negative quality or attribute of SageTea.

50Because SageTea has not pleaded a prima facie case with respect to any alleged instance of defamation, SageTea is not entitled to any relaxation of the pleading requirements for defamation. The remaining defamation allegations in the statement of claim do not meet the requisite level of material fact disclosure.

51At paragraphs 53, 75, 76, and 77 of the statement of claim, as supplemented by paragraphs 1, 3, 4, and 5 of the response to demand for particulars, SageTea alleges that “the Government of Canada has developed the solution of the Competing Innovation (as defined within the Statement of Claim), without giving any credit to SageTea.” This allegation is not “of and concerning” SageTea and is therefore not capable of a defamatory meaning. As set out in Bernstein v. Poon,²⁶ at para. 86:

The requirement that a defamatory statement is “of and concerning the plaintiff” is essential. The allegedly defamatory publication must refer to some ascertained or ascertainable person. The test in every case is whether the ordinary sensible person to whom the words were published would understand them as referring to the plaintiff: Grant v. Cormier-Grant (2001), 56 O.R. (3d) 215 (Ont. C.A.) at para. 19.

52The remainder of SageTea’s defamation claims lack the necessary material facts to sustain a claim for defamation. Simply put, SageTea has failed to plead that one person made a particular statement, to another identified person, at a certain time and in certain circumstances, about SageTea, and that the statement is capable of being defamatory: PMC York Properties, at para. 6. For example, in paragraph 77 of the statement of claim, SageTea pleads that “Shivji made a number of defamatory and untrue statements to other employees of the Government of Canada.” In its response to demand for particulars, SageTea states that the alleged defamatory statements are within the knowledge of Mr. Shivji but “may include” the non-verbatim statements outlined in paragraph 53 of the statement of claim and a statement by Mr. Shivji that SageTea was “awful.” SageTea admits that the date and time that the statements were spoken or written is unknown, the precise individuals to whom the statements were spoken or disseminated is unknown, and the context in which the statements were spoken or written is unknown. With respect, SageTea’s allegation of defamation is speculative at best.

53In the statement of claim, SageTea alleges that Mr. Shivji “advised others of his intention to prevent SageTea from doing further business with the Government of Canada” and that Mr. Shivji “engaged in a deliberate pattern of conduct intended to harm or impact SageTea’s ability to obtain further contracts or opportunities from the Government of Canada” (paragraph 83 of the statement of claim). At paragraph 87 of the statement of claim, SageTea pleads that “the Defendants’ conduct, including their stripping of the value of SageTea’s Innovation as well as the defamation of SageTea and SageTea’s Innovation, resulted in an abrupt end to the proposed follow-on project with ESDC Legal Services. At paragraph 91, SageTea pleads that “this follow-on contract with IRCC [Immigration, Refugees and Citizenship Canada] did not proceed due to defamatory remarks and statements from the defendants, specifically Shivji [and that] IRCC advised they were no longer interested in working with SageTea after receiving a reference from Shivji and/or ESDC.” And at paragraph 97, SageTea alleges that contracts with the Department of National Defence did not proceed due to defamatory remarks and statements from the defendants, specifically Mr. Shivji.

54With respect to ESDC Legal Services and the Department of National Defence, in its response to demand for particulars, SageTea states that the “speaker/writer was the Defendant, Shivji, and/or other employees of the Government of Canada.” With respect to IRCC, SageTea alleges that the “speaker/writer was the Defendant, Shivji and/or Vincent DaLuz of the Government of Canada, and/or other employees of the Government of Canada.” Even as supplemented by the response to demand for particulars, none of these allegations identify the person alleged to have made the defamatory statements. The failure to plead the identity of the person alleged to have made the statement is fatal to a claim in defamation: Lysko, at para. 92. It is not sufficient to allege that one individual in a group of individuals made defamatory statements: Lysko, at para. 94.

55In addition, these allegations of defamatory statements fail to identify to whom the statements were made. The defamatory words are not pleaded; instead, SageTea states in its response to demand for particulars that “the alleged defamatory statements are within the knowledge of the Defendant, Shivji, but may include the non-verbatim statements outlined in paragraph 53 of the Statement of Claim, as well as a statement by Shivji that SageTea was ‘awful’.” SageTea does not specify whether the alleged defamatory statements were written or spoken and has no knowledge of when or where they were made. These allegations of defamation fall far short of the requisite level of material fact disclosure.

56At paragraphs 98 to 100 of the statement of claim, SageTea claims damages in relation to a loss of an opportunity involving Dell Canada Inc. SageTea pleads that the opportunity did not proceed due to “defamatory remarks and statements from the defendants.” In its response to demand for particulars, SageTea clarifies that Dell Canada first became aware of the alleged defamatory statements from an article in the Ottawa Business Journal. SageTea states that the defamatory statements were spoken by Mr. Shivji at the Montreal conference from September 30, 2018 to October 3, 2018.

57These claims are bound to fail on several grounds. First, they are predicated on alleged defamatory statements made in Quebec, over which this court does not have jurisdiction. Second, the only statements by the federal government referred to in the article are those from its pleading in the Federal Court. The statements in that court pleading are absolutely privileged: TD Bank v. LaFramboise,²⁷ at paras. 11 and 18. Third, the Ottawa Business Journal article is itself absolutely privileged as a fair and accurate report without comment in a newspaper: Libel and Slander Act,²⁸ s. 4(1). Finally, there is no indication that SageTea gave notice in writing as required by s. 5(1) of the Libel and Slander Act, and any claim based on alleged defamatory statements in the article would be out of time: Libel and Slander Act, s. 6.

58At paragraph 101 of the statement of claim, SageTea pleads that “as a result of the defendants’ conduct, including the defamation and the ongoing dispute with the Government of Canada, MNP [a large full-service chartered accountancy and business advisory firm in Canada] ended its business relationship and involvement with SageTea.” At paragraph 104, SageTea claims damages arising out of the alleged defamation by the defendants. In its response to demand for particulars, SageTea alleges that the other allegations of defamation pleaded in the statement of claim caused MNP to end its business relationship and involvement with SageTea. To the extent these paragraphs advance claims based on defamation claims that I have concluded must be struck, these allegations must also be struck.

No leave to amend

59An opportunity to amend a pleading should be granted unless the claim clearly has no chance of success: Guergis, at para. 93. A claim that is untenable as a matter of law is not amenable to amendment. Leave to amend will not be granted where a claim that lacks material facts cannot be pleaded with further specificity: PMC York Properties, at para. 75. That is the case here. SageTea’s response to demand for particulars confirms the absence of material facts.

Conclusion

60Accordingly, the defamation claim arising from the Montreal conference is dismissed on the basis that this court lacks subject-matter jurisdiction over this claim. The dismissal is without prejudice to SageTea’s right to pursue this defamation claim in the Superior Court of Quebec if so advised. As a result, paragraphs 48-49, 53, and 75-77 are struck from the statement of claim.

61I also strike the following from the statement of claim on the basis that it is plain and obvious that the remaining claims of defamation cannot succeed:

(i) the word “defamation” from paragraph 1(a);

(ii) paragraph 1(c);

(iii) paragraph 47 because it is predicated on “communications to stakeholders and others that [the government] had developed the Competing Innovation, without giving any credit to SageTea.” Repeatedly, SageTea has identified the failure to give credit statement as a defamatory statement;

(iv) the word “defamation” from paragraph 78;

(v) the word “defamation” from paragraph 79;

(vi) paragraph 83 because it relies on the alleged statements by Mr. Shivji to others of his intention to prevent SageTea from doing further business with the Government of Canada. SageTea has identified this as a defamatory statement;

(vii) the words “as well as the defamation of SageTea and SageTea’s Innovation” from paragraph 87;

(viii) paragraphs 89-92 because SageTea specifically pleads that the “follow-on” contract with IRCC did not proceed due to defamatory remarks and statements from the defendants;

(ix) paragraphs 93-97 because SageTea specifically pleads that the contracts with Department of National Defence did not proceed due to defamatory remarks and statements from the defendants;

(x) paragraphs 98-100 because SageTea specifically pleads that the opportunity with Dell Canada did not proceed due to defamatory remarks and statements from the defendants;

(xi) the words “including the defamation and the ongoing dispute with the Government of Canada” from paragraph 101;

(xii) paragraph 104 which claims damages arising out of the defamation by the defendants; and

(xiii) the word “defamation” from paragraph 106.

62In the event the parties are unable to agree on costs of the motion, they may make written submissions limited to a maximum of three pages. The moving parties shall submit their costs submissions by May 30, 2022. SageTea shall deliver its responding costs submissions by June 13, 2022. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

COURT FILE NO.: CV-20-00085340-0000 DATE: 2022/05/16

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SageTea Inc. Plaintiff (Responding Party)

– and –

The Attorney General of Canada and Nuruddin Shivji Defendants (Moving Parties)

REASONS FOR decision on motion

Ryan Bell J.

Footnotes

1. 1R.R.O. 1990, Reg. 194.
2. 2R.S.C. 1985, c. F-7.
3. 3Response to demand for particulars, para. 5(a).
4. 4Statement of claim, paras. 77, 87, 91, 97, 99, and 100.
5. 5Response to demand for particulars, para. 2.
6. 62017 ONCA 85.
7. 7[2006] O.J. No. 4134.
8. 8[1996] O.J. No. 1448.
9. 979 O.R. (3d) 721 (C.A.).
10. 10R.S.C. 1985, c. C-50 ("CLPA").
11. 112016 ONCA 549.
12. 122014 ONCA 775.
13. 1352 O.R. (3d) 348 (C.A.).
14. 142009 SCC 61.
15. 15Raymond E. Brown, Brown on Defamation (Canada, United Kingdom, Australia, New Zealand, United States), 2nd ed. (Release 2021-2) (Toronto: Carswell, 2019).
16. 16[2004] O.J. No. 1878.
17. 172013 ONCA 449.
18. 182011 BCCA 403.
19. 192019 ONCA 761.
20. 2046 O.R. (3d) 577 (C.A.).
21. 21Statement of claim, para. 75.
22. 222008 BCSC 111.
23. 232009 CarswellOnt 1125 (Sup. Ct. J.).
24. 24[1996] O.J. No. 1448 (Gen. Div.).
25. 252021 ONSC 1134.
26. 262015 ONSC 155.
27. 272016 ONSC 5402.
28. 28R.S.O. 1990, c. L.12.