COURT FILE NO.: CV-21-00662198-0000

DATE: 20220603

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

PARK LAWN CORPORATION

Plaintiff

• and –

KAHU CAPITAL PARTNERS LTD., BENEDICT CHENG, and ALEXANDER ZIVIC

Defendants

AND BETWEEN:

KAHU CAPITAL PARTNERS LTD.

Plaintiff by Counterclaim

• and –

PARK LAWN CORPORATION AND J. BRADLEY GREEN

Defendants by Counterclaim

Robert W. Staley, Nathan J. Shaheen, and Andrew N. Sahai for the Plaintiff/Defendants by Counterclaim

Adam J. Wygodny and Bethanie Pascutto for the Defendants/Plaintiff by Counterclaim

HEARD: May 9, 2022

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] In June 2020, Park Lawn Corporation, which is Canada’s largest funeral home and death-care enterprise, sued Andrew Clark, its former CEO (Chief Executive Officer), for among other things breach of fiduciary duty and breach of confidence largely because he was alleged to have used Park Lawn’s assets and information for his own benefit.

[2] In January 2021, Park Lawn settled with Mr. Clark without recovering any damages or admission of liability, and then in May 2021, in the immediate action, Park Lawn sued Kahu Capital Partners Ltd., Benedict Cheng, and Alexandar (misspelled as Alexander) Zivic, for knowingly assisting Mr. Clark in his alleged misdeeds with respect to the trust funds held by Park Lawn and for repayment of the consulting and management fees paid to Kahu Capital.

[3] In July 2021, before the Defendants had delivered their defence, J. Bradley Green, who is Park Lawn’s current CEO, repeated Park Lawn’s allegations against Kahu Capital in Funeral Service Insider, a trade newsletter for the death-care industry.

[4] In July 2021, Kahu Capital defended, and it brought a Counterclaim against Park Lawn for defamation to which it joined Mr. Green as a co-defendant by counterclaim. The foundation of the defamation claim is the allegedly defamatory statements attributed to Mr. Green in the Funeral Service Insider article entitled “Park Lawn Cautions the Profession Regarding Former CEO”. Mr. Cheng, Mr. Zivic, and Kahu Capital plead in their Statement of Defence and Kahu Capital pleads in its Counterclaim that Park Lawn made false and damaging allegations for the purpose of causing harm to them and in furtherance of Mr. Green's personal vendetta against Mr. Clark, his family and his associates.

[5] Park Lawn and Mr. Green now bring a motion to dismiss Kahu Capital’s Counterclaim pursuant to s. 137.1 of the Courts of Justice Act,[^1] as a claim that unduly limits expression on a matter of public interest.

[6] For the reasons that follow, I dismiss Park Lawn and Mr. Green’s motion. Although Mr. Green’s statements are about a matter of public interest, there are grounds to believe that there is substantial merit to the Counterclaim and that Park Lawn and Mr. Green have no valid defence. Moreover, the harm suffered by Kahu Capital outweighs the public interest in protecting Park Lawn’s and Mr. Green’s freedom of expression on a matter of public interest.

B. Dramatis Personae

[7] For the action and the counterclaim, the main parties, actors, witnesses, and significant background entities are:

• Aston Hill Financial is a Toronto, Ontario-based investment firm at which the Defendant, Mr. Cheng had been President and CIO (“Chief Investment Officer”). Mr. Cheng and Mr. Kitmitto had been investment managers at Aston Hill Financial.

• Argent Trust Company is a Tennessee, U.S.-based independent trust company. Argent Trust was the custodian of some of the trust funds of the Plaintiff Park Lawn that were being managed by the Defendant Kahu Capital.

• Cheng, Benedict. Mr. Cheng, a Defendant, is an economist and business strategist with a Bachelor of Commerce degree from the University of Toronto. He is a resident of Nassau, Bahamas. As noted above, Mr. Cheng is the former President and CIO of Aston Hill Financial. In 2016, Mr. Cheng was investigated by the Ontario Securities Commission (“OSC”) with respect to alleged contraventions of the Ontario Securities Act[^2] in connection with prohibited tipping. In June 2018, Mr. Cheng settles the OSC enforcement proceedings and pays fines and is prohibited from fund management activities in Ontario. In 2018, Cheng is hired by the Defendant Kahu Capital to provide economic advice, market analysis, and asset allocation recommendations. Park Lawn alleges that Mr. Cheng is actually the directing mind of Kahu Capital, which is denied by the Defendants.

• Clark, Andrew. Mr. Clark is a former COO (Chief Operating Officer), a former CEO, a former Director, and a former Chairman of the Board of Directors of the Plaintiff Park Lawn. The Defendants are sued for knowingly assisting Mr. Clark in his alleged breaches of fiduciary duty as an officer of Park Lawn.

• Dodds, Jay. Mr. Dodds is a business associate of the Defendant by Counterclaim Mr. Green. Mr. Dodds and Mr. Green founded the Signature Group, a funeral home business that became a part of the Plaintiff Park Lawn. Mr. Dodds became the COO of Park Lawn. As the discussion below will reveal Mr. Clark failed in his attempt to terminate Mr. Dodds’ (and Mr. Green’s) employment at Park Lawn.

• Funeral Service Insider (“FSI”) is a prominent subscription trade newsletter for the death-care industry. It publishes 48 issues annually. Its publisher is Kates-Boylston Publications, out of New Jersey, which also publishes “American Funeral Director”, “American Cemetery and Cremation”, “Funeral Service Extra” and “Funerals of the Famous”.

• Green, J. Bradley. The Defendant by Counterclaim Mr. Green is the CEO of Park Lawn. He is an American lawyer with a career as a general counsel for large corporations including those in the death-care industry. Before he and Mr. Dodds joined Park Lawn, they founded the Signature Group, a funeral home business. Mr. Green was the President of Park Lawn when Mr. Clark failed in an attempt to terminate Mr. Green’s (and Mr. Dodds’) employment at Park Lawn.

• Harlow, William Clark. Mr. Harlow is the Senior VP, Operational Finance and Accounting at Park Lawn.

• Kahu Capital Partners Ltd., a Defendant, is an investment management firm incorporated in the Commonwealth of The Bahamas. Its head office is in New Providence, Bahamas. It was registered as an investment advisor with the Securities and Exchange Commission (“SEC”) in the U.S. and is still registered with the Securities Commission of the Bahamas. During the tenure of Mr. Clark as the CEO of Park Lawn, Kahu Capital was incorporated as a consultant for Park Lawn and to provide Park Lawn with fund management services for certain trust assets held by Park Lawn. It should be appreciated that Kahu Capital was a trust fund investment manager not a trust fund trustee.

• Kitmitto, Majd. Mr. Kitmitto was an investment manager at Aston Hill, where he worked under Mr. Cheng. In 2016, Mr. Cheng and Mr. Kitmitto were investigated by the OSC with respect to alleged contraventions of the Ontario Securities Act[^3] in connection with prohibited tipping. In February 2018, Mr. Kitmitto is appointed Kahu Capital’s CEO and CIO. Approximately five months later in June 2018, he is replaced by the Defendant Mr. Zivic, who becomes CEO and CIO. The OSC charges are withdrawn against Mr. Kitmitto in December 2018.

• Park Lawn Corporation is an Ontario corporation incorporated under the Ontario Business Corporations Act[^4] with a head office in Toronto, Ontario. Park Lawn is an undertaker, funeral, cremation, and cemetery provider. It operates in three Canadian provinces and fifteen states in the U.S. It is a public company, and its common shares are listed for trading on the Toronto Stock Exchange under the symbol "PLC". It has a market capitalization in excess of $1 billion. It and its subsidiaries are required to establish and maintain trust funds for Park Lawn’s customers.[^5] The trust funds are held by third party trustees and managed by third party money managers. One, amongst the several trustees retained by Park Lawn as a custodian and trustee of the funds, is Argent Trust. One, amongst several investment fund managers, is the Defendant Kahu Capital.

• Smith, Paul G. Mr. Smith is chair of the board of Park Lawn and has been a director of Park Lawn since 2016.

• Zivic, Alexandar. Mr. Zivic is the CEO & CIO of Kahu Capital. He formerly was an investment manager at Aston Hill Financial. Mr. Zivic is a non-practising member of the Law Society of Ontario, who was called to the bar in 1994. After his call to the bar, Mr. Zivic held various positions at investment management firms in Canada and elsewhere. Park Lawn alleges that Mr. Zivic is the public face of Kahu Capital but that the genuine principal is Mr. Cheng (see above).

C. Procedural and Evidentiary Background

[8] On May 12, 2021, Park Lawn commences its action against Mr. Cheng, Mr. Zivic, and Kahu Capital.

[9] On June 24, 2021, Park Lawn delivers an Amended Statement of Claim. The central allegations are that Kahu Capital was managing Park Lawn’s trust funds for Mr. Clark’s personal benefit and that Mr. Cheng, Mr. Zivic, and Kahu Capital were liable amongst other things for knowing assistance in breach of fiduciary duty. Park Lawn claims damages of $2.5 million. Park Lawn also claims repayment of the consulting and fund management fees paid to Kahu Capital.

[10] (On July 12, 2021, the Funeral Service Insider, publishes the article entitled “Park Lawn Cautions the Profession Regarding Former CEO.”)

[11] On July 28, 2021, Mr. Cheng, Mr. Zivic and Kahu Capital deliver their Statement of Defence. Kahu Capital also delivers a Counterclaim against Park Lawn to which it joins Mr. Green as a co-Defendant by Counterclaim.

[12] In September 2021, Park Lawn and Mr. Green bring an anti-SLAPP motion to have the Counterclaim dismissed. The motion is supported by: (a) affidavits of Mr. Green dated September 27, 2021 and March 31, 2022; (b) affidavits of Mr. Harlow dated September 27, 2021 and March 31, 2022; and (c) affidavits of Mr. Smith dated September 27, 2021 and March 31, 2022.

[13] In response to the anti-SLAPP motion, Kahu Capital relied on: (a) the affidavit of Mr. Cheng dated March 21, 2022; and (b) the affidavit of Mr. Zivic dated March 21, 2022.

[14] On April 20, 2022, Messrs. Cheng, Harlow, Smith, and Zivic are cross-examined.

[15] On April 21, 2022, Mr. Green is cross-examined.

[16] The motion is argued on May 9, 2022. Judgment is reserved.

D. Facts

[17] In July 2011, Mr. Clark joins Park Lawn’s Board of Directors. In September 2011, Mr. Clark is appointed Park Lawn’s COO. In July 2013, Mr. Clark is appointed Park Lawn’s CEO and Chairman of its Board of Directors.

[18] In June 2014, while Mr. Cheng and Mr. Kitmitto are at Aston Hill Financial, they become involved in an anticipated takeover bid by Amaya Gambling Group of Oldford Group Ltd., an online gambling company.

[19] In 2016, the OSC commences an investigation of Mr. Cheng’s and Mr. Kitmitto’s involvement in the Amaya Gambling takeover bid. The investigation staff of the OSC allege that in contravention of the Ontario Securities Act, Mr. Cheng and Mr. Kitmitto tipped others about the anticipated takeover bid.

[20] In a contested fact, Park Lawn pleads that on April 4, 2017, at the urging of Mr. Clark, Mr. Cheng establishes Kahu Capital in the Bahamas to provide consulting services and manage income funds for Park Lawn. Park Lawn pleads that Kahu Capital is actually Mr. Cheng’s business. This is denied by the Defendants who submit that he was only an employee assisting the CIO and that he was not the directing mind of Kahu Capital.

[21] On April 12, 2017, the OSC commences enforcement proceedings against Mr. Cheng with respect to his involvement in the 2014 takeover bid by Amaya Gambling of Oldford Group and alleged tipping to a tippee in contravention of the Ontario Securities Act.

[22] With respect to the establishment of Kahu Capital, in a contested fact, the Defendants plead that Mr. Clark promised that Park Lawn would pay $300,000 for 300,000 shares and a two-thirds ownership interest in Kahu Capital. The Defendants plead that based on Mr. Clark’s promise, shares were issued to Park Lawn. The Defendants plead, however, that no payment was received from Park Lawn for the shares and the shares were transferred to others. The Defendants plead that subsequently, Park Lawn converted a $150,000 loan into a one-third ownership interest in Kahu Capital. The Defendants plead that ultimately Mr. Zivic paid $150,000 (USD) for a one-third ownership interest in Kahu Capital and that Treasure Island Management Ltd. paid $150,000 (USD) for a one-third ownership interest in Kahu Capital. The Defendants plead that Kahu Capital offered to redeem Park Lawn’s shares but there was no response to this offer.

[23] For present purposes, it is not necessary to decide precisely what ownership interest Park Lawn has in Kahu Capital. For present purposes, it is sufficient to conclude that Park Lawn had and has a minority ownership interest in Kahu Capital. In any event, Mr. Clark becomes one of three directors of Kahu Capital.

[24] Kahu Capital’s initial and ultimately only client is Park Lawn. One of Park Lawn’s major allegations is that Mr. Clark used trust funds managed by Kahu Capital for his own benefit and that Kahu Capital knowingly assisted this breach of fiduciary duty. The Defendants deny: (a) that they improperly managed the trust funds; and (b) that Mr. Clark breached his fiduciary duty with respect to the funds managed by Kahu Capital and that the Defendants knowingly assisted any breach of fiduciary duty.

[25] Based on the evidentiary record on this anti-SLAPP motion, there are pleadings but no evidence that insofar as the trust assets being managed by Kahu Capital are concerned that Mr. Clark obtained any personal benefit.

[26] In 2018, Park Lawn acquires CMS Mid-Atlantic, a death-care corporation operating in New Jersey and New York State. CMS Mid-Atlantic has $53 million (USD) in trust assets. Argent Trust will become the trustee and custodian of the trust assets.

[27] In February 2018, Mr. Kitmitto is appointed CEO and CIO of Kahu Capital. It is Park Lawn’s contention that Mr. Kitmitto, who it may be noted is not a co-Defendant, ought never to have been appointed Kahu Capital’s CEO and CIO because of the OSC investigation. It is the Defendants’ contention that Mr. Kitmitto’s appointment was proper and that from the outset it was an interim appointment pending the completion of the negotiations with Mr. Zivic for him to become CEO and CIO of Kahu Capital. In all events, it should be noted that there is no evidence on this anti-SLAPP motion indicating any wrongdoing by Mr. Kitmitto.

[28] In May 2018, Mr. Zivic replaces Mr. Kitmitto as CEO and CIO of Kahu Capital.

[29] Pausing here in the narrative, it is worth noting that Mr. Zivic has had a lengthy career in the investment industry and was not the subject of the OSC’s investigations.

[30] On June 25, 2018, the OSC approves a settlement with Mr. Cheng. Under the settlement, Mr. Cheng acknowledged his tipping about the anticipated takeover bid, making misleading statements to OSC staff and failing to respect the confidentiality of the OSC's investigative process. Mr. Cheng is: (a) ordered to pay costs and an administrative penalty totaling $400,000; (b) prohibited from serving as a director or officer for six years; and (c) prohibited from holding positions with an investment fund manager for six years.

[31] Pausing here in the narrative, it is worth noting that Mr. Cheng’s activities for Kahu Capital in the Bahamas are not prohibited by the OSC settlement.

[32] On August 1, 2018, pursuant to a Consulting Agreement, Park Lawn engages Kahu Capital to provide consulting services.

[33] On November 23, 2018, the OSC commences enforcement proceedings against Mr. Kitmitto with respect to his involvement in a 2014 takeover bid. The bid was by Amaya Gambling to take over Oldford Group. The OSC alleged tipping of information to a tippee in contravention of the Ontario Securities Act.

[34] On December 3, 2018, Kahu Capital applies to the SEC for registration as an investment advisor.

[35] On December 10, 2018, the OSC withdraws its charges against Mr. Kitmitto.

[36] On February 22, 2019, Kahu Capital’s application for registration as an investment advisor is approved by the SEC. Pausing here in the narrative, it is worth noting that Mr. Cheng’s role in the Amaya Gambling takeover bid and the OSC’s investigation of Mr. Cheng are disclosed to the SEC.

[37] On May 31, 2019, Park Lawn signs a Portfolio Management Agreement with Kahu Capital. In addition to the services provided under the 2018 Consulting Agreement, Kahu Capital is to manage and invest approximately $53 million (USD) in trust funds for Park Lawn’s operations in New Jersey and New York State, (the “CMS Mid-Atlantic Funds”).

[38] In the autumn of 2019, Park Lawn appoints Argent Trust as the trustee for the CMS Mid-Atlantic Funds, which are being managed by Kahu Capital.

[39] On October 16, 2019, there is a heated telephone call exchange among Mr. Green, Mr. Dodds, and Brad Ross of Goodmans LLP which is external corporate counsel. As a fallout of this telephone call on October 17, 2019, there is a meeting of the Independent Directors of Park Lawn without notice to or attendance by Mr. Green and Mr. Dodds, following which Mr. Clark advises Mr. Green that he is dismissed without cause effective December 31, 2019 and that Mr. Dodds also may regard himself as dismissed.

[40] Mr. Green and Mr. Dodds are surprised and alarmed by the purported dismissal without cause and on October 21, 2019, Mr. Dodds and Mr. Green draft a letter to Park Lawn’s Board of Directors protesting what they regard as procedurally unfair and unjustified dismissal that would be regarded as negligence by the Board of Directors and that would cause disastrous consequences for the enterprise, its employees, and its shareholders. The letter is first sent only to Mr. Clark and then emailed to the Board of Directors on October 31, 2019. The letter is 18 single-spaced pages.

[41] The employment terminations of Mr. Dodds and Mr. Green do not proceed; rather, subsequent events see the ouster of Mr. Clark. On October 31, 2019, in response to Messrs. Dodds and Green’s letter, Park Lawn’s Board of Directors appoints a Special Committee of independent directors to investigate the matter, which it is to be kept in mind has nothing to do with Mr. Clark’s activities with respect to Kahu Capital.

[42] The initial focus of the Special Committee is on Mr. Dodds and Mr. Green but by early 2020, what emerges is the discovery of corporate malfeasance by Mr. Clark. What is revealed are allegations that: (a) Mr. Clark routinely hired family, friends, and acquaintances, and without Board of Directors’ discussion and approval he bestowed benefits that deviated from normal Park Lawn contracts; (b) Mr. Clark submitted inappropriate expenses; (c) Mr. Clark misappropriated Park Lawn's corporate funds for his own benefit; (d) Mr. Clark approved numerous Park Lawn investments, sometimes funded from the trust accounts, without disclosure to or approval of Park Lawn’s Board of Directors; (e) Mr. Clark, without disclosure to or approval of Park Lawn’s Board of Directors, approved investments that are for the benefit of himself, or his family, friends, and acquaintances.

[43] Mr. Clark’s activities with Kahu Capital do come to the attention of the Special Committee later. In February 2020, Mr. Harlow advises Mr. Green that Argent Trust has identified concerns about the relationship between Park Lawn and Kahu Capital. Mr. Harlow brings these concerns to the attention of the Special Committee and the Investment Committee. Argent Trust’s concerns are subsequently set out in its letter to Mr. Harlow dated April 9, 2020 (see below).

[44] On March 2, 2020, Park Lawn and Kahu Capital sign an addendum to the Portfolio Management Agreement. Park Lawn terminates Kahu Capital’s consulting services, but Kahu Capital continues to provide portfolio management services.

[45] On March 31, 2020, because of the investigation by the Special Committee, Mr. Clark resigns as CEO and Mr. Green is appointed interim CEO. Mr. Green is briefed about and becomes familiar with the work of the Special Committee and the Investment Committee.

[46] On April 9, 2020, Argent Trust writes to Mr. Harlow raising a “few concerns” about Kahu Capital managing trust assets for Park Lawn. The first concern is that since Park Lawn has a minority ownership in Kahu Capital, if fees are taken from the trust funds, regulators may regard this arrangement as self-dealing and not in the best interests of consumers. Argent Trust recommends that compensation should be paid from the investments rather than directly from the trust accounts. The second concern is that Kahu Capital may not be sustainable since Park Lawn is its only client. The third concern is that Mr. Clark - then the former CEO of Park Lawn - having been on the Board of Directors of Kahu Capital might raise the same issues as Argent Trust’s first concern. The fourth concern is that an employee of Kahu Capital, i.e., Mr. Cheng is under sanctions from the OSC for a six-year period. Argent Trust’s letter concludes:

We highlight these issues to you as your trustee, which we take very seriously. We appreciate your business and enjoy working with Park Lawn, your team, and you. This does not mean that we in any way wish to change our relationship with Park Lawn. However, it is unlikely Kahu will receive approval from our Investment Committee based on these items above. We would be glad to have further discussion about these issues with your internal Investment decision team at your convenience.

[47] Pausing here and to foreshadow the discussion later in these Reasons for Decision, it needs to be observed that the first and third concerns are largely technical matters about how arrangements should be made to pay an investment manager in which Park Lawn has an ownership interest. The second concern is speculative. The third concern is moot because of Mr. Clark’s departure from Park Lawn. Moreover, none of the four concerns implicate Kahu Capital with misappropriation or negligence with respect to the management of the trust funds, which it should be kept in mind were in the custodianship of Argent Trust not Kahu Capital. None of the four concerns implicate Mr. Clark in having obtained some personal benefit from Kahu Capital.

[48] Further, it should be observed that while Mr. Clark may not have disclosed to Park Lawn’s Board of Directors, Park Lawn’s ownership interest and Park Lawn’s engagement of Kahu Capital, there is no evidence of any wrongdoing by Kahu Capital as an investment advisor or manager and no evidence that Mr. Clark personally was benefitting from the investments managed by Kahu Capital, which were supervised by Argent Trust.

[49] Returning to the narrative, on May 12, 2020, Mr. Clark resigns from Park Lawn’s Board of Directors.

[50] On May 19, 2020, Mr. Clark along with brother Robert Clark and his friend Gill Broome establish Triangle Capital Corp., which is incorporated under Ontario’s Business Corporations Act. Triangle Capital has an ownership interest in Anthem Partners, the operator of six funeral homes and two crematories in California. It is managed by Will Andrews, a friend of Mr. Clark, and Mark Shalz, a former employee of Park Lawn.

[51] On June 22, 2020, Mr. Green is appointed CEO and to the Board of Directors of Park Lawn.

[52] On June 29, 2020 (in action File No. CV-00643148), Park Lawn sues Mr. Clark for breach of contract, breach of confidence, breach of fiduciary duty, unjust enrichment, and violation of a noncompete agreement by joining PlotBox Inc.’s Board of Directors as Chairman of the Board. PlotBox is a company that develops cemetery management software. It is alleged that Mr. Clark provided PlotBox with Park Lawn’s confidential information, including Park Lawn’s project to develop software for the death-care industry.

[53] Insofar as Kahu Capital is concerned, in its action against Mr. Clark, Park Lawn makes the following allegations, which are the only reference to Kahu Capital. Paragraph 37 of the Statement of Claim against Mr. Clark states:

37. Following Mr. Clark’s departure from PLC and his subsequent appointment to PlotBox’s Board, PLC renewed its investigations into Mr. Clark’s activities. Those investigations were primarily directed at understanding the full extent of Mr. Clark’s activities while CEO as well as determining how to unwind some of the improper activities he had engaged in. As a result of those investigations, which are ongoing, PLC has learned that Mr. Clark engaged in the following while at PLC:

(e) Caused PLC to loan money to companies as “alternative investments” without Board approval and which were not in PLC’s best interests, but which directly or indirectly furthered Mr. Clark’s own interests, including an investment in Kahu Capital Partners, a Bahamian company that Mr. Clark was (unbeknownst to PLC) on the Board of Directors of.

(f) Concealed from PLC’s Board his involvement as a director on the board of Kahu Capital Partners and likewise, concealed his ongoing discussions about joining PlotBox’s board.

[54] Relevant to the discussion later about whether Kahu Capital suffered damages as a result of the alleged defamatory statements of Park Lawn and Mr. Green, in the autumn of 2020, Kahu Capital establishes the Kahu Enhanced Income Fund, LP. It incorporates a segregated portfolio company in the Cayman Islands, files a Notice of Exempt Offering of Securities with the SEC; prepares offering memoranda, markets the fund and spends more than US$100,000 in legal and other fees. Kahu Capital alleges that this fund becomes unmarketable because of the defamation.

[55] On January 20, 2021, Park Lawn’s action against Mr. Clark is settled without any admission of liability by Mr. Clark and without any damages award but with Mr. Clark resigning his positions at PlotBox Inc.

[56] Also relevant to the discussion later about whether Kahu Capital suffered damages as a result of the alleged defamatory statements, in 2021, Kahu Capital is retained by Mark Denning, formerly a portfolio manager at Capital Group, to act as the general partner and investment manager for a metals and mining fund. This retainer is also alleged to have been aborted by the defamation.

[57] In March 2021, Park Lawn terminates its relationship with Kahu Capital.

[58] Also in March 2021, Mr. Green learns about Mr. Clark’s connection to Anthem Partners. Mr. Green attempts to dissuade Anthem Partners from doing business with Mr. Clark. However, it is unreceptive to Mr. Green’s warnings about the risk of doing business with Mr. Clark. To quote Mr. Green in his affidavit:

86. Companies in the death-care business are entrusted with large sums of capital received directly from consumers that must be protected. Clark’s track record at Park Lawn left me with little doubt that Clark would again seek to access trust funds for his personal benefit – and would likely do so with Kahu.

87. There is a clear public interest in safeguarding consumer trust funds in the death-care industry. I believe I have a duty to speak out when I believe that consumer trust funds may be at risk, even if the result is that Park Lawn gets sued and I get sued for speaking out.

88. Before taking my concerns public, I attempted to dissuade Anthem Partners from doing business with Clark. The president of Anthem Partners, Will Andrews, was unreceptive to my warnings and communications, I assume because of his relationship with Clark.

[59] On May 12, 2021, Park Lawn commences its action against Mr. Cheng, Mr. Zivic, and Kahu Capital. Park Lawn claims damages of $2.5 million for alleged breaches of fiduciary duty committed by Mr. Clark for which it is alleged Mr. Cheng, Mr. Zivic, and Kahu Capital are liable for knowing assistance. Park Lawn also claims repayment of the fees paid to Kahu Capital for its consulting and investment management services.

[60] In its Amended Statement of Claim, Park Lawn alleges that Mr. Cheng, Mr. Zivic, and Kahu Capital knew that: (a) Mr. Clark had fiduciary duties owed to Park Lawn; (b) Mr. Clark had concealed from the Board of Directors his relationship with Kahu Capital; (c) Mr. Clark had concealed from the Board of Directors, Park Lawn’s relationship with Kahu Capital; (d) Mr. Clark had concealed the Consulting Agreement between Park Lawn and Kahu Capital; (e) Mr. Clark had concealed the Portfolio Management Agreement between Park Lawn and Kahu Capital; (f) Mr. Clark planned to use Park Lawn’s trust funds for his own benefit; (g) no responsible fiduciary would consider Mr. Cheng to be a proper person to manage investments and trust funds; (h) Mr. Clark had breached his fiduciary duties to Park Lawn fraudulently and dishonestly; and (i) they had participated in and assisted Mr. Clark in his frauds dishonesty.

[61] Kahu Capital claims that with the initiation of the action, investors declined to invest in the Kahu Fund and it was necessary for Kahu Capital to withdraw from its position as investment manager of the Zama Fund.

[62] On July 12, 2021, the Funeral Service Insider (“FSI”) publishes the article entitled “Park Lawn Cautions the Profession Regarding Former CEO.” Before this article, FSI had published news reports about Mr. Clark’s dispute with Park Lawn. The July article focuses on Mr. Clark’s activities while at Park Lawn. The article identifies and discusses Mr. Clark’s connections and engagement of Kahu Capital to provide investment management services to Park Lawn. In the article, Mr. Green states that his comments are made in the public interest to warn the death-care industry about Mr. Clark and his misconduct during his tenure as CEO of Park Lawn.

[63] The article comprises the whole of the 20-page single-spaced edition of FSI. For present purposes, the following excerpts from the article are pertinent:

Once that happened, [Mr. Clark advising Green and Dodds of their dismissal] Green and Dodds sent a letter [the October 31, 2019] letter to the board expressing a myriad of concerns, including that they should not be terminated. The board slammed on the brakes and created a special committee to investigate, according to Green.

The committee discovered that Clark had arranged for $53 million in trust funds to be transferred to a newly established investment firm, Kahu Capital Partners, in the Bahamas - allegedly without the board's approval, according to a lawsuit Park Lawn filed against Clark in Ontario Superior Court in 2020.

Kahu is allegedly connected to Benedict Cheng, a former Aston Hill Financial fund manager who agreed to pay a $350,000 administrative penalty and $50,000 in costs as part of a settlement with the Ontario Securities Commission after admitting to passing along inside information related to an acquisition, according to a lawsuit that Park Lawn filed against Kahu, Benedict Cheng and Alexandar Zivic in Ontario Superior Court.

While Kahu is no longer managing the $53 million, Park Lawn's lawsuit seeks to recover the money it advanced for or to benefit Kahu, including funds paid to acquire shares of Kahu. The lawsuit adds that an award of punitive or exemplary damages would be appropriate.

"We believe that this lawsuit is entirely without merit," says Joseph Groia, principal of Groia & Company Professional Corp., the law firm defending Kahu, Cheng and Zivic. "It is another transparent attempt by Mr. Green to blame Andrew Clark and others for his own shortcomings. It is regrettable that Park Lawn's Board and shareholders are allowing him to do so even though they appear to have settled their differences some time ago."

As part of a 2018 settlement agreement, Cheng agreed to testify as a witness if needed for the Ontario Securities Commission and to refrain from becoming or acting as a director, officer, issuer, registrant or investment fund manager for six years.

"Mr. Cheng's involvement in insider tipping was a serious breach of Ontario securities law. The improper use of insider information leads to unfair advantages for those who use it and can undermine confidence in the integrity and fairness of public markets," OSC commissioner Mark Sandler said of the settlement, according to a June 15, 2018, article in The Canadian Press.

• November 2019: A new management agreement is entered into with Kahu. The agreement is signed by Andrew Clark and negotiated by his brother, Rob Clark, according to Green. Argent Trust Company refused to sign or be part of the agreement, Green says. Clark arranges for $53 million in Park Lawn Trust Funds attributable to customers in New York and New Jersey be subject to the management of Kahu. "Argent stood up and said, 'No this is wrong' to the board, to me to everyone else," Green says. "They did a masterful job. Without them, it would have been a lot worse."

• January 2020: Park Lawn's investment committee starts to directly oversee $53 million in trust funds managed by Kahu Capital Partners. Shortly thereafter, Park Lawn hires AON, a global investment services firm, to determine who should manage the money. Today, Park Lawn's trust funds are managed by multiple investment managers with AON as the overseer and Park Lawn's investment committee having to OK everything, according to Green. Kahu is not one of those managers, he says. Around this same time, Park Lawn's special committee begins to investigate Kahu.

• February 18, 2020: Park Lawn announces a "transition plan" and that Andrew Clark will step down as chairman and CEO.

• March 30, 2021: Park Lawn gives notice to Kahu that it is terminating the management agreement for cause effective March 31, 2021. "The grounds for cause asserted include Kahu's failure to provide consulting services set forth in the Management Agreement, material breach of trust and duty and dishonesty in Kahu's dealing with Park Lawn," the company says in a lawsuit filed against Kahu.

Green adds in his affidavit, "In addition to these 'alternative' investments, the Special Committee also learned of the existence of Kahu Capital Partners, Ltd., an SEC-Registered Investment Advisor (RIA), headquartered in New Providence, Bahamas. Kahu Capital Partners was established only to manage money for PLC. At the time the Special Committee learned of its existence, Mr. Clark was on Kahu's Board of Directors. Mr. Clark had not previously made the PLC Board of Directors aware of his involvement with Kahu Capital Partners or of his plan to have Kahu manage any of PLC's trust fund monies. The Special Committee of the PLC Board learned during its investigation that PLC, through Mr. Clark, made a direct investment into Kahu Capital Partners and was paying Kahu substantial consulting fees. The payment of those fees abruptly stopped the same month Mr. Dodds and I sent the aforementioned letter to the Board. In April 2020, PLC's Trustee, Argent Financial, informed PLC that an employee of Kahu is under sanctions from the Ontario Commission for a six-year period. Argent Financial also informed PLC that they were concerned about the sustainability of Kahu due to the fact it only has one client, PLC, and limited employee assets. As a result, Argent Financial stated that it was unlikely that Kahu would receive approval from their Investment Committee; however, at the prior direction of Mr. Clark, Kahu currently has around $53M USD of PLC trust fund assets. PLC, along with its Board, continues to investigate Mr. Clark's actions in relation to Kahu. While the investigation is ongoing, I suspect that Mr. Clark intentionally misled the Special Committee as to his involvement in Kahu, as well as PLC's financial exposure."

According to Park Lawn's lawsuit against Kahu, after the firm was established, Majd Kitmitto was appointed CEO and chief investment officer because he "was needed as a public face for Kahu to conceal Cheng's involvement with Kahu." The lawsuit states that at the time of his appointment, Kitmitto was under investigation by the Ontario Securities Commission on "tipping" allegations in relation to an acquisition.

"In establishing Kahu, Clark and the defendants understood that Kahu was entirely dependent on funding from Park Lawn, and investments to manage provided by Park Lawn, all under Clark's direction, ensuring that Kahu would do Clark's bidding," according to the lawsuit against Kahu.

Asked about how it recovered the money from Kahu and its attempts to recover fees, Green says in a statement, "PLC has filed a lawsuit against Kahu alleging that Kahu was established only for the purpose of managing PLC trust funds. The lawsuit further alleges that certain principals of Kahu, in conjunction with Andrew Clark, intended to exercise greater control over trust funds, so as to facilitate the use of funds for their own personal benefit, similar to what Andrew and Gill Broome did with the purchase of the Dunvegan hotel. The lawsuit further alleges that this was kept from the PLC Board, and once it was discovered by the Board, the Andrew Clark Group continued to mislead the Board as to the true nature of Kahu."

Green adds, "Fortunately, due to the suspicious activity surrounding Kahu, PLC had moved the funds under management with Kahu to a new trustee, Argent, shortly before Andrew stepped down as CEO in February 2020. Upon receipt of these funds, Argent quickly identified the conflicts of interest and other associated problems with Kahu and made PLC's management team aware of the issues. From that point, PLC, along with Argent, took all necessary steps to ensure that the trust funds were never compromised. Kahu's management of these monies has since been terminated and, again, none of the trust funds were ever lost or compromised.

Commenting on the formation of Kahu Capital Partners, Clark states, "This modest investment ($150,000) was intended to be the vehicle for a Registered Investment Advisor structure, and the PLC assets that Kahu managed were independently approved by two different trustees."

Clark adds, "Others at PLC - including Joe Leeder, Linda Gilbert, Bill Passodelis (VP of the Mid-Atlantic Region) and, I believe, members of the audit and investment committees - were well aware of PLC's relationship with and investment in Kahu. As I understand it, PLC can terminate its relationship with Kahu at any time on 60 days' notice if it is not satisfied with Kahu's performance."

[64] In his affidavit, Mr. Green deposed that “in response to an inquiry from Funeral Service Insider, I chose to speak more expansively about Clark and my concerns, including in relation to trust funds.” He deposed:

93. I believed that voicing my concerns in Funeral Service Insider would allow me to ensure that others in the industry were aware of Clark’s prior conduct, and his current relationship with Anthem Partners. Speaking through this subscription-only publication allowed me to target my concerns to those in the funeral industry, including regulators.

94. As explained above, Clark’s engagement with Kahu was one element of self-dealing by Clark that was concerning to me. Clark allowed Cheng, who he must have known was subject to OSC sanctions, and whose involvement with Kahu was minimized and concealed, to have responsibility over trust funds entrusted to Park Lawn.

95. I stand behind the quotes attributed to me in the article, which set out why I chose to speak out about Clark and those associated with Clark:

Andrew Clark and Will Andrews have been very public regarding the fact that Triangle, of which Andrew is the founder, Chairman and CEO, is the money behind Anthem Partners. When we learned that three members of the Andrew Clark Group were principals in Triangle, and thus actively buying or attempting to buy funeral homes and cemeteries, we felt Park Lawn was morally and ethically obligated to ensure that the trust funds in our industry remain safe, which in this case means disclosing what happened with PLC’s trust funds. ... It is now up to the different state and federal regulatory agencies to take any necessary steps to prevent this from occurring again.

[65] On July 28, 2021, Mr. Cheng, Mr. Zivic, and Kahu Capital deliver their Statement of Defence. Kahu Capital also delivers a Counterclaim against Park Lawn to which it joins Mr. Green as a co-defendant by counterclaim. In the Counterclaim, Kahu Capital alleges that the following statements made by Mr. Green and Park Lawn are false and defamatory of Kahu Capital in the way of its business or profession:

a. Argent Trust refused to sign or be part of the Management Agreement because the management of Park Lawn’s trust funds by Kahu was “wrong to the board, to [Mr. Green] [sic] to everyone else” and that without the intervention of Argent Trust, “it would have been a lot worse”;

b. Park Lawn’s investment committee directly oversaw its trust funds being managed by Kahu Capital and Park Lawn’s special committee investigated Kahu Capital;

c. Due to suspicious activity surrounding Kahu Capital, Park Lawn moved the trust funds under management with Kahu to Argent Trust; and

d. Argent Trust identified conflicts of interest and other associated problems with Kahu Capital.

[66] It should be noted that the same facts underlying the alleged breaches of fiduciary duty by Mr. Clark are the basis of the claims against Mr. Cheng, Mr. Zivic and Kahu Capital for knowing assistance in the immediate case.

E. Law

[67] Sections 137.1 of the Courts of Justice Act states:

Dismissal of proceeding that limits debate

Purposes

137.1 (1) 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.

Definition, “expression”

(2) In this section,

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

Order to dismiss

137.1 (3) 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.

No dismissal

(4) 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.

[68] Section 137.1 (3) of the Courts of Justice Act places a threshold burden on the moving party to show on a balance of probabilities that: (a) the underlying proceeding is somehow causally related to the moving party’s expression; and (b) the expression relates to a matter of public interest.[^6] The threshold burden is a purposefully not a heavy onus, and what is a matter of public interest is viewed expansively, liberally, and generously.[^7]

[69] The inquiry of whether a matter is of public interest is a contextual one that asks what the expression is really about and whether some segment of the community would for good or for ill have a genuine interest in receiving information on the subject.[^8] In Grant v. Torstar Corp.,[^9] Chief Justice McLachlin referred to Lord Denning’s comments in London Artists, Ltd. v. Littler[^10] where he described public interest broadly as matters that affect people at large so that they may be legitimately concerned about what is going on or what may happen to them or to others.

[70] While some topics are inherently a matter of public interest (for example, the activities of governments and courts),[^11] there is no exhaustive list of topics that are matters of public interest, and, depending on the context and circumstances, an expression may engage the public interest. An expression may be a matter of public interest without engaging a substantial part of the community; it is enough that some segment of the community would have a genuine interest in the subject matter of the expression.[^12] An expression that relates to a matter of public interest need not further the public interest and indeed may be harmful to the public interest.[^13] The concept of public interest is a broad one that does not take into account the merits or manner of the expression, nor the motive of the speaker.[^14] An expression may be defamatory, false and malicious and still relate to a matter of public interest.[^15] Expressions involving corporations and commercial topics may relate to matters of public interest.[^16]

[71] Once the showing of an expression on a matter of public interest is made, the burden shifts to the plaintiff in the underlying lawsuit to satisfy the motion judge that there are grounds to believe the proceeding has substantial merit and the moving party has no valid defence, and that the public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression. If the plaintiff in the underlying lawsuit cannot satisfy the motion judge that it has met its burden, then the motion will be granted, and the underlying proceeding will be dismissed.[^17]

[72] A s. 137.1 motion is not a determinative adjudication of the merits of the underlying claim or a conclusive determination of the existence of a defence. A motion judge deciding a s. 137.1 motion should engage in only limited weighing of the evidence and should defer ultimate assessments of credibility and other questions requiring a deep analysis into the evidence to a later stage, where judicial powers of inquiry are broader, and pleadings more fully developed.[^18]

[73] In determining whether there exist grounds to believe that the claim can be said to have a real prospect of success, courts must be aware of the limited record, the timing of the motion in the litigation process, and the potentiality of future evidence emerging.[^19]

[74] Taking into account the stage of litigation at which the motion is brought, the court must be satisfied that there is a basis in the record and in the law for finding that the underlying proceeding has substantial merit and that there is no valid defence, which is to say that while the plaintiff in the underlying proceeding need not definitively demonstrate that its claim is more likely than not to succeed, the claim must nonetheless be sufficiently strong that it has a real prospect of success; this requires the motion judge taking into account the stage of the proceeding, and be satisfied that the claim be legally tenable and supported by evidence that is reasonably capable of belief.[^20] A real prospect of success means that the plaintiff's success is more than a possibility and more than an arguable case.[^21]

[75] The no valid defence prong of the test on the motion requires the plaintiff to show that there are grounds to believe that all the defences that have been put into play by the defendant to the underlying proceeding do not have a real prospect of success, which is to say that the defences could be found to be not legally tenable or not supported by evidence that is reasonably capable of belief.[^22]

[76] On a s. 137.1 motion, there is an evidentiary burden on the defendant who is resisting the motion to advance a valid defence, and then the persuasive burden moves to the plaintiff to show on a balance of probabilities that there are reasonable grounds to believe that the defence is not valid, which is to say not a successful defence.[^23] The question, however, is not whether there is no merit to the defence; rather, the question is whether a trier of fact could reasonably conclude that among the range of possible outcomes was the outcome that there was no defence.[^24]

[77] Thus, if the defendant meets the evidentiary burden of putting the defence in play, the plaintiff bears the onus of persuading the motion judge that a reasonable trier examining the record could, but not necessarily would, reject the defence(s).[^25] In other words, the plaintiff does not have to show that there was no possibility that the defence could succeed but, rather, the plaintiff need show just that it was reasonably possible that a trier could conclude that the defence would not succeed; a determination that a reasonable trier could decide either way on the defence satisfies the onus.[^26]

[78] Weighing the public interest in freedom of expression and public participation against the public interest in vindicating a meritorious claim is the critical aspect of the s. 137.1 motion analysis, and the critical determination is whether the harm (be it monetary or non-monetary harm such as an injured reputation) caused by the defendant’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.

[79] On an anti-SLAPP motion, the party seeking to have his or her action continue must demonstrate the existence of harm that is sufficiently serious that it outweighs the public interest in protecting his or her opponent’s expression on a matter of public interest. However, the party resisting the anti-SLAPP motion is not required to fully particularize or quantify the harm; rather, he or must only demonstrate the existence of serious harm caused by the opponent’s statements.[^27] There is no threshold of seriousness, and harm is not limited to monetary harm.[^28] General damages for harm to reputation are presumed from the publication of a libel or slander,[^29] and the gravity of some statements, such as an attribution of the plaintiff being dishonest, immoral, a pedophile, a terrorist, a terrorist supporter, a racist, a human smuggler, a corrupt politician, a swindler, a racketeer, a gangster, a mobster, are so obviously likely to cause serious harm to a person’s reputation that the likelihood of harm and general damages can be inferred, even if the party defamed does not lead evidence to show actual harm.[^30]

[80] Once harm has been established and shown to have been caused by the defendant’s expression it is necessary to assess whether the quality of the expression and the motivation behind the expression justifies its protection from civil lawsuit. The level of protection afforded to expression depends on the nature of the expression, and the court may inquire into, among other things, the core values underlying freedom of expression, such as the search for truth, participation in political decision making, and diversity in forms of self-fulfilment and human flourishing.[^31]

[81] The court may also consider: the importance of the expression; the history of litigation between the parties; broader or collateral effects on other expressions on matters of public interest; the potential chilling effect on future expression either by a party or by others; the defendant's history of activism or advocacy in the public interest; any disproportion between the resources being used in the lawsuit and the harm caused or the expected damages award; and the possibility that the expression or the claim might provoke hostility against an identifiably vulnerable group or a group protected under human rights legislation or under s. 15 of the Canadian Charter of Rights and Freedoms.[^32]

F. Discussion and Analysis

[82] Metaphorically speaking, a potent and remarkable feature of the immediate anti-SLAPP motion is that the claim and the Counterclaim are flip sides of one factual coin. On cross-examination, Mr. Green admitted that the same facts underlying the alleged breaches of fiduciary duty are at issue in the within claim. Remarkably, in the immediate case, Park Lawn is litigating again Mr. Green’s allegations against Mr. Clark, which were settled in an action against Mr. Clark without an admission of liability or a payment of damages.

[83] Remarkably, in the immediate case: (1) Park Lawn commences its action on May 12, 2021; (2) on July 12, 2021, before the Defendants defend, Mr. Green allegedly defames Kahu Capital about its connection with Mr. Clark; and (3) on July 28, 2021, Kahu delivers a Counterclaim in which it alleges that it was defamed. In the immediate case, Mr. Green’s allegations against Mr. Clark are being litigated in court and in the media.

[84] Remarkably, unlike most anti-SLAPP motions, if Park Lawn and Mr. Green’s motion succeeds, the proceedings will not be done. Park Lawn’s action will go forward, and it will seek to prove that what Mr. Green expressed to Funeral Service Insider was true. However, if the anti-SLAPP Motion succeeds, and Park Lawn fails to prove its case, Kahu Capital will be precluded from claiming damages to the harm caused to its reputation by Park Lawn’s failure to prove that what Mr. Green said was true. An anti-SLAPP motion designed to suppress strategic litigation is being used very strategically and tactically.

[85] As I shall explain in more detail below, in my opinion, in these remarkable circumstances - and more importantly for other reasons - the harm caused by Park Lawn’s and Mr. Green’s expression is sufficiently serious that the public interest weighs in favour of permitting Kahu Capital’s Counterclaim proceeding along with Park Lawn’s claim against Kahu Capital.

[86] There is no dispute in the immediate case that Mr. Green’s expressions to Funeral Service Insider are causally connected to Kahu Capital’s Counterclaim, but there was a contest about whether Mr. Green’s statements were matters of public interest.

[87] Kahu Capital’s submission is that Mr. Green’s statements were malicious and were about a purely private affair between Park Lawn and Kahu Capital and its principals. There is, however, no merit to this submission. Whether Mr. Green spoke maliciously does not colour whether what he said was a matter in the public interest. The evidence in the immediate case is that Mr. Green spoke because he felt compelled to protect the dealers, which is a particularly interested audience of corporations serving the public, and the consumers of the death industry, which is a universal audience of the living public. Putting his motives to the side, his statements were matters of public interest to both the special and the general audience.

[88] It does not require a generous or liberal understanding of what counts for a matter that is in the public interest to conclude that Mr. Green was speaking on a matter of public interest. If we assume that Mr. Green was not acting out of malice, which is his position, then it follows that he was on an altruistic mission to protect the consumers of death care. Based on both parties’ evidence, Mr. Green’s statements in pursuit of that mission are matters of the public interest.

[89] With this showing that Mr. Green’s statements were an expression on a matter of public interest, the burden shifts to Kahu Capital to show that: (a) there are grounds to believe that its defamation proceeding has substantial merit and that Park Lawn and Mr. Green have no valid defence; and (b) the public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression.

[90] The elements of a claim of defamation are: (1) the defendant makes a statement; (2) the words of the statement are defamatory, i.e., the words would tend to lower the plaintiff’s reputation in the eyes of a reasonable person; (3) the statement is referable to the plaintiff; and (4) the statement is published.[^33]

[91] In the immediate case, with respect to the merits of Kahu Capital’s claim in defamation, it was not disputed that Mr. Green made a published statement referable to Kahu Capital. The dispute is about whether the four pleaded statements were defamatory. A defamatory meaning was denied by Park Lawn and Mr. Green. They argued that, read in the context of the whole article, Mr. Green’s comments were predominately about Mr. Clark and only peripherally or incidentally about Kahu Capital and the words of the four alleged defamatory statements would not tend to lower Kahu Capital’s reputation in the eyes of a reasonable person.

[92] In my opinion, there is no merit in Park Lawn’s and Mr. Green’s argument. Together or separately, Mr. Green’s statements are connected to Park Lawn’s action against Kahu Capital and his statements in their natural and ordinary meaning convey the message that Kahu Capital participated or knowingly assisted in Mr. Clark’s wrongdoing. Mr. Green refers to Kahu Capital’s management of Park Lawn’s trust funds and connects that management with suspicious activity and wrongdoing and problems that would have been worse but for Argent Trust’s intervention.

[93] At the time when Mr. Green made his comments, Park Lawn was already suing Kahu Capital and his statements would be understood to mean, in their natural and ordinary meaning, that Kahu Capital is not to be trusted because it is guilty of a crime, fraud, dishonesty, immorality and/or other dishonourable conduct. Prima facie, Mr. Green’s statements would tend to lower Kahu Capital’s reputation in the eyes of a reasonable person. Further, the evidence reveals that the action and its flip side the article in FSI did lower Kahu Capital’s reputation in the investment community and in its relationship with the death-care industry.

[94] It is further my opinion, that based on the evidence submitted on this motion, Kahu Capital has met the onus of showing that Park Lawn and Mr. Green have no valid defence in the sense that a trial judge examining the record could, but not necessarily would, reject their defences of justification and qualified privilege.

[95] In Roy v. Ottawa Capital Area Crime Stoppers,[^34] Justice MacLeod said that there are nine recognized defences to defamation actions and of these two are pertinent to the immediate case; namely: (a) “truth or justification”, where the defendant proves that the communication was factually accurate and substantially true; and (b) qualified privilege, where the defendant has a duty or legitimate interest in communicating to an audience that has a legitimate interest in receiving the information and the communicating is made without malice.

[96] To succeed on the defence of justification, a defendant must adduce evidence showing that the statement was substantially true.[^35] The burden is on the defendant to prove, on a balance of probabilities, not that the truth of each and every word or the literal truth of every statement, but that the "sting, or main thrust of the defamation" is substantially true.[^36] Minor inaccuracies do not preclude a defence of justification as long as the publication conveyed an accurate impression.[^37]

[97] In the case at bar, in my opinion, Kahu Capital has shown that there are substantial grounds to believe both macroscopically and microscopely that the defence of justification could be found to not legally tenable or not supported by evidence that is reasonably capable of belief. Viewed together, i.e., macroscopically Mr. Green sent the message that Kahu Capital was a knowing participant in misdeeds involving Mr. Clark and there are substantial grounds to believe that Park Lawn and Mr. Green will not be able to prove that this allegation is substantially true.

[98] As I have already alluded to, Mr. Green’s alleged defamation is closely entwined with Park Lawn’s action and knowing assistance is a formidable claim to prove. The elements of a claim for knowing assistance are: (1) the plaintiff is the beneficiary of a trust or fiduciary relationship; (2) the trustee or fiduciary fraudulently or dishonestly breaches his or her equitable duty; (3) the defendant has actual knowledge of the misconduct; and, (4) the defendant assists in the fraudulent or dishonest design.[^38]

[99] In the immediate case, Park Lawn has apparently abandoned its efforts to prove that Mr. Clark breached his fiduciary duties, which he apparently persists in denying and at this juncture, based on the evidentiary record for this motion, it is plausible that a trial judge could find that Mr. Clark did not breach his fiduciary duties insofar as Kahu Capital was concerned. It is also plausible that Kahu Capital did not any know that Mr. Clark had gone rouge and that the Board of Directors did not know what he was doing with respect to Kahu Capital. And it is plausible that a trial judge could also find that even if Mr. Clark was a wrongdoer, he did his evil deeds without Kahu Capital’s assistance.

[100] On this anti-SLAPP motion, the focus of Park Lawn and Mr. Green putting the justification defence in play was to separately analyze the four pleaded alleged defamatory statements and they did not address the overall sting of the four statements taken together, but even viewed separately, it is plausible that a trial judge could conclude that the justification defence was not viable.

[101] I conclude that Kahu Capital has met the onus of demonstrating that the justification defence does not have a real prospect of success.

[102] Turning to the qualified privilege defence, to succeed on the defence of qualified privilege, a defendant must adduce evidence showing that he or she made a communication on a privileged occasion, which is to say that the speaker has a legal, social, or moral interest or duty to make the statement to the listener and the listener has a corresponding interest or duty to hear the statement.[^39] Qualified privilege can be defeated where: (a) the dominant motive for publishing the statement is malice, or (b) the limits of the duty or interest of the speaker have been exceeded.[^40]

[103] Although the point was contested, for present purposes, I am prepared to assume that Mr. Green made his communications on a privileged occasion to convey an important message to the special audience of subscribers of Funeral Service Insider and to the general audience of the clients of the death-care industry.

[104] I am, however, not prepared to assume that Mr. Green did not overstep the boundaries of qualified privilege and his comments about Kahu Capital complicity in Mr. Clark’s as yet not proven breaches of fiduciary duty could be found to have been made recklessly. Moreover, based on the evidentiary record on this anti-SLAPP motion, in my opinion, Kahu Capital has met the onus of showing that it is plausible that a trial judge would reject the qualified privilege defence on the grounds of malice towards any person or entity associated with Mr. Clark. As alluded to above, Argent Trust’s concerns are much more muted than Mr. Green’s thunderous allegations of complicity in Mr. Clark’s alleged wrongdoings in retaining Kahu Capital as a consultant and as an investment manager under the supervision of a trustee custodian of the trust funds.

[105] Thus, in my opinion, Kahu Capital has succeeded in showing that it has a defamation claim with a real prospect of success and that Park Lawn’s and Mr. Green’s defences do not have a real prospect of success, which brings the analysis to the critical issue of weighing the public interest in freedom of expression and public participation against the public interest in vindicating a meritorious claim.

[106] I begin this analysis by examining the harm alleged to have been suffered by Kahu Capital caused by Mr. Green’s message conveyed through Funeral Service Insider. In my opinion, Kahu Capital has met the onus of showing that Mr. Green’s words caused sufficiently serious damage.

[107] I disagree with Park Lawn’s and Mr. Green’s argument that Mr. Green’s words cause no serious damage. As the above excerpts from the article in Funeral Service Insider reveals, both quantitatively and qualitatively substantial portions of the article was about Kahu Capital. In support of its argument that the public interest in freedom of expression outweighs the public interest in allowing a corporate citizen to vindicate and protect its reputation, Park Lawn and Mr. Green submit that there is no evidence that Kahu Capital suffered or is likely to suffer any harm as a result of Mr. Green’s statements in the FSI article. They submit that there was no proven or provable damage because Kahu Capital has put forward evidence only that it has been harmed by Park Lawn's underlying lawsuit against Kahu Capital, which lawsuit came before the Funeral Service Insider article. Upon analysis, however, this causation argument rather supports Kahu Capital’s argument that the public interest favours allowing the counterclaim to proceed.

[108] Analysis reveals that the clever conceit of Park Lawn’s and Mr. Green’s argument is that Kahu Capital’s damages, (which Park Lawn and Mr. Green implicitly concede occurred) are exclusively caused by the underlying lawsuit which preceded the article in Funeral Service Insider. However, the commencement of a lawsuit, which provides an absolute privilege for litigation speech, does not license prior or subsequent defamatory statements made outside the litigation.

[109] Mr. Green believed himself on a righteous mission, and he intended his words to have consequences to the reputation of Kahu Capital (and also Mr. Cheng and Mr. Zivic), so it is a perverse irony for him and Park Lawn to argue that his words to Funeral Service Insider were not even rubbing salt in the wounds and occasioned no harm.

[110] Moreover, once damages are conceded to have been occasioned to Kahu Capital’s reputation, it is for the court and not Park Lawn and Mr. Green to decree what caused the damages to the reputation. It is not for Park Lawn and Mr. Green to determine that causation was done and spent and to determine that Mr. Green’s statements occasioned no damages or no further damages. In my opinion, the record in the immediate case is sufficient to establish that Kahu Capital was damaged by Mr. Green’s purposeful statements to Funeral Service Insider.

[111] Harm having been shown to have been caused by Mr. Green’s expression it is necessary to assess whether the quality of the expression and the motivation behind the expression justifies its protection from civil lawsuit.

[112] In my opinion, in the case at bar, both the quality of the expression and the motivation behind it do not justify it being protected from a civil lawsuit. Indeed, the quality of Mr. Green’s expression and the motivation for it will be tested by Park Lawn’s action. I have already observed that if Park Lawn’s and Mr. Green’s motion succeeds, the proceedings will not be done, and Park Lawn’s action will go forward, and it will seek to prove that what Mr. Green expressed to Funeral Service Insider was true.

G. Conclusion

[113] For the above reasons, I dismiss the anti-SLAPP motion. If the parties cannot agree about the matter of costs, they may make submissions in writing, beginning with Kahu Capital’s submissions within twenty days of the release of these Reasons for Decision, followed by Park Lawn’s and Mr. Green’s submissions within a further twenty days.

Perell, J.

Released: June 3, 2022

COURT FILE NO.: CV-21-00662198-0000

DATE: 20220603

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

PARK LAWN CORPORATION

Plaintiff

• and –

KAHU CAPITAL PARTNERS LTD., BENEDICT CHENG, and ALEXANDER ZIVIC

Defendants

AND BETWEEN:

KAHU CAPITAL PARTNERS LTD.

Plaintiff by Counterclaim

• and –

PARK LAWN CORPORATION AND J. BRADLEY GREEN

Defendants by Counterclaim

REASONS FOR DECISION

PERELL J.

Released: June 3, 2022

[^1]: R.S.O. 1990, c. 43. [^2]: R.S.O. 1990, c. S.5. [^3]: R.S.O. 1990, c. S.5. [^4]: R.S.O. 1990, c B.16. [^5]: Cemeteries maintain “care and maintenance” or “perpetual care” trust funds for maintenance expenses. Cemetery and funeral home businesses maintain “pre-need” trust funds for death-care industry consumers. [^6]: Catalyst Capital Group Inc. v. West Face Capital Inc., 2021 ONSC 7957 at para. 63; 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 20-31. [^7]: Catalyst Capital Group Inc. v. West Face Capital Inc., 2021 ONSC 7957 at para. 63; Canadian Thermo Windows Inc v. Seangio, 2021 ONSC 6555 at para. 87; 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 28-30. [^8]: Canadian Therma Windows Inc v. Sango, 2021 ONSC 6555 at para. 89; Ontario Inc. v. Moore, 2020 ONSC 4553 at para. 20; 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 27-30; Grant v. Torstar Corp., 2009 SCC 61. [^9]: 2009 SCC 61. [^10]: [1969] 2 Q.B. 375 (C.A.). [^11]: Armstrong v. Corus Entertainment Inc., 2018 ONCA 689 at para. 15; Able Translations Ltd. v. Express International Translations Inc., 2018 ONCA 690 at para. 19. [^12]: Nanda v. McEwan, 2020 ONCA 431 at para. 35; New Dermamed Inc. v. Sulaiman, 2018 ONSC 2517, aff’d 2019 ONCA 141; Grant v. Torstar Corp.¸2009 SCC 61 at paras. 102-105. [^13]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2018 ONCA 685 at para. 55, aff’d 2020 SCC 22; Levant v. Day, 2019 ONCA 244 at para. 10, aff’g 2017 ONSC 5956, leave to appeal refused [2019] S.C.C.A. No. 194; Amorosi v. Barker, 2019 ONSC 4717 at para. 11. [^14]: Sokoloff v. Tru-Path Occupational Therapy Services Ltd, 2020 ONCA 730; Nanda v. McEwan 2020 ONCA 431 at para. 37; Levant v. Day, 2019 ONCA 244 at para. 11, aff’g 2017 ONSC 5956, leave to appeal refused [2019] S.C.C.A. No. 194. [^15]: Platnick v. Bent, 2018 ONCA 687 at para. 38, aff’d 2020 SCC 23; 1704604 Ontario Ltd. v. Pointes Protection Assn., 2018 ONCA 685 at paras. 55–65, aff’d 2020 SCC 22. [^16]: Catalyst Capital Group Inc. v. West Face Capital Inc., 2021 ONSC 7957; Bradford Travel and Cruises Ltd. v. Viveiros, 2019 ONSC 4587 Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686. [^17]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22. [^18]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 52. [^19]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 37. [^20]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 32-54. [^21]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 50. [^22]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 51-60 (S.C.C.). [^23]: 1704604 Ontario Ltd. v. Pointes Protection Assn., [2018] O.J. No. 4449, 2018 ONCA 685 at paras. 83–84 (Ont. C.A.), leave to appeal granted [2018] S.C.C.A. No. 467 affd 2020 SCC 22 (S.C.C.). [^24]: Levant v. Day, 2019 ONCA 244 at para. 14, affg 2017 ONSC 5956, leave to appeal refused [2019] S.C.C.A. No. 194 (S.C.C.); Bondfield Construction Co. v. Globe and Mail Inc., 2019 ONCA 166 at para. 14; Amorosi v. Barker, 2019 ONSC 4717. [^25]: Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corp., 2021 ONCA 26; Bondfield Construction Co. v. Globe and Mail Inc., 2019 ONCA 166 at para. 15, rev’g 2018 ONSC 3347. [^26]: Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corp., 2021 ONCA 26; New Dermamed Inc. v. Sulaiman, 2019 ONCA 141 at para. 12. [^27]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 69-71. [^28]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at paras. 69-71. [^29]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 44; Magno v. Balita, 2018 ONSC 3230 at para. 36; Rutman v. Rabinowitz 2018 ONCA 80 at paras. 62-63, aff’g 2016 ONSC 5864; Hill v. Church of Scientology, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 at paras. 167-172. [^30]: Canadian Union of Postal Workers v. B'nai Brith Canada, 2021 ONCA 529, aff’g 2020 ONSC 323; Skafco Ltd. (c.o.b. Robbie's Italian Restaurant) v. Abdalla 2020 ONSC 136 at para. 15; Montour v. Beacon Publishing Inc. (c.o.b. Frontline Safety & Security), 2019 ONCA 246 at paras. 27-42; Lascaris v. B’nai Brith Canada, 2019 ONCA 163 at para. 40-41; Awan v. Levant, 2016 ONCA 970, aff’g 2014 ONSC 6890, leave to appeal to S.C.C. ref’d [2017] S.C.C.A. 71; Cooke v. MGN Limited, [2015] 2 All ER 622 at para. 43 (C.A.); Grant v. Torstar Corp., 2009 SCC 61. [^31]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 61-82. [^32]: 1704604 Ontario Ltd. v. Pointes Protection Assn., 2020 SCC 22 at para. 61-82. [^33]: Grant v. Torstar Corp.¸2009 SCC 61 at para. 28; Warman v. Grosvenor (2008), 2008 CanLII 57728 (ON SC), 92 O.R. (3d) 663 at paras. 52-57 (S.C.J.); Lysko v. Braley (2006), 2006 CanLII 11846 (ON CA), 79 O.R. (3d) 721 (C.A.); Mantini v. Smith Lyons LLP (No. 2) (2003), 2003 CanLII 22736 (ON CA), 64 O.R. (3d) 516 (C.A.), leave to appeal to S.C.C. ref’d [2003] S.C.C.A. No. 344; Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130; Botiuk v. Toronto Free Press Publications Ltd., 1995 CanLII 60 (SCC), [1995] 3 S.C.R. 3. [^34]: 2018 ONSC 4207. [^35]: Platnick v. Bent, 2020 SCC 23 at para. 103. [^36]: Platnick v. Bent, 2020 SCC 23 at para. 103; Holden v. Hanlon, 2019 BCSC 622at para. 169. [^37]: Kuehl v. Ross, 2021 ONSC 4251at para. 292; Holden v. Hanlon at 2019 BCSC 622 at para. 169. [^38]: Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 CanLII 334 (SCC), [1997] 3 S.C.R. 805; Air Canada v. M & L Travel Ltd. 1993 CanLII 33 (SCC), [1993] 3 S.C.R. 787; Gold v. Rosenberg, 1997 CanLII 333 (SCC), [1997] 3 S.C.R. 767. [^39]: Platnick v. Bent, 2020 SCC 23 at para. 121; Botiuk v. Toronto Free Press Publications Ltd., 1995 CanLII 60 (SCC), [1995] 3 S.C.R. 3: Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130at para. 146. [^40]: Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130at para. 150.