COURT FILE NO.: CV-20-646309

DATE: 2022-01-20

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: 1377041 ONTARIO INC. O/A HOTSPOT AUTO PARTS Plaintiff

AND:

MICHAEL THOMPSON Defendant

BEFORE: Mr. Justice Chalmers

COUNSEL: M. Vernon, for the Plaintiff A. Tieu and N. Kolos, for the Defendant

HEARD: December 21, 2021, by videoconference

ENDORSEMENT

OVERVIEW

[1] The Defendant, Michael Thompson is an elected councillor for Ward 21 in the City of Toronto. In that capacity, he is a member of the Scarborough Community Council (SCC). He brings this motion pursuant to s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43, (the Act) for an order dismissing the action on the basis that it unduly limits expression on a matter in the public interest.

[2] The Plaintiff, Hotspot Auto Parts is the business name of the corporate Plaintiff, 1377041 Ontario Inc. (“137”) In the Statement of Claim, issued on September 14, 2020, Hotspot seeks damages in defamation in the amount of $1,000,000 plus aggravated damages of $500,000 and punitive damages of $500,000. It is alleged that the words spoken by Councillor Thompson at the SCC meeting on December 3, 2019 were defamatory.

[3] At the SCC meeting, three members of the Royal Canadian Legion made a submission with respect to the difficulties they were having with Hotspot. Hotspot operates an auto parts warehouse next door to the Legion. During the SCC meeting, Councillor Thompson asked questions and made remarks about Hotspot. He expressed his disapproval of the conduct of Hotspot and of individuals related to Hotspot. The remarks made by Councillor Thompson at the SCC meeting, form the basis of the Plaintiff’s action in defamation.

[4] The Defendant argues that matters discussed at the SCC meeting relate to matters of public interest and that this action attempts to unduly limit expressions made in the public interest. The Defendant states that he has defences available to respond to the claim including qualified privilege, fair comment and justification and statutory immunity set out in s. 391 of the City of Toronto Act, 2006. The Defendant states that the public interest in protecting Councillor Thompson’s expression outweighs the minimal interest in permitting this action to continue.

[5] The Plaintiff states that the expression made by Councillor Thompson related to a private dispute between two neighbours and was not in the public interest. The Plaintiff also argues that Councillor Thompson’s comments were driven by malice and cannot be justified. The Plaintiff states that it sustained significant harm to its reputation and the interest in the action proceeding outweighs the public interest in protecting speech that is motivated by malice.

[6] For the reasons set out below, I allow the Defendant’s motion and dismiss the action.

THE FACTS

[7] Councillor Thompson has been a City of Toronto councillor for 21 years. As a councillor for Ward 21, he is one of the six members of the SCC. The SCC makes decisions on delegated matters of local significance and makes recommendations to City Council on City-initiated official plan amendment and zoning by-law amendment proposals.

[8] Hotspot operates an auto parts warehouse at 939 Warden Ave. in Scarborough. The property is leased to Hotspot, by 1742385 Ontario Inc. (“174”). Hatcho Nersesian is the principal of both Hotspot and 174. Branch #617 of the Legion is located at 937 Warden Ave. and is directly south of the Hotspot warehouse.

[9] 174 began to renovate the property in 2017. On October 23, 2017, Councillor Thompson’s long-time executive assistant, Ihor Wons called Toronto Building with a complaint that there was no construction fence at 939 Warden Ave. The Building inspector investigated and was told that the fence was down to facilitate paving work. When the inspector returned, the fence was in place. In a letter dated November 1, 2017, Councillor Thompson’s office wrote to the Committee of Adjustment asking it to refuse a variance for the parking space requirement at 939 Warden Avenue. On January 29, 2019, Councillor Thompson’s office called Toronto Building asking how a permit was obtained for 939 Warden Ave. and inquiring if any stop work orders had been issued.

[10] On August 22, 2019, Councillor Thompson’s office sent an e-mail to Toronto Building asking that an inspector visit the site and tell the owner the work was done illegally. An inspector visited the site and found no infractions and closed their file. On August 22, 2019, Councillor Thompson’s office wrote a letter to the Committee of Adjustments saying that he strongly opposed the minor variance being considered for the property. The Committee of Adjustment turned down 174’s application for a minor variance. The decision of the Committee of Adjustment was appealed.

[11] On September 17, 2019, a Freedom of Information request was made for Councillor Thompson’s e-mails relating to Hotspot. In October 2019, Councillor Thompson learned that Hotspot had obtained approval for eight boulevard parking (CBP) spaces. Sidewalks were contemplated for the location that would preclude the parking spots. Councillor Thompson was in favour of the sidewalks. He had not been advised of Hotspot’s application for the parking spaces.

[12] In the fall of 2019, the Legion raised a number of concerns with respect to Hotspot. The Legion stated that Hotspot was leaving its heavy construction equipment in the Legion’s parking lot, and that garbage and debris from Hotspot had been left on its property. The Legion also complained about Mr. Nersesian’s use of profanity in interactions with female Legion members and guests. Councillor Thompson asked his staff to contact Hotspot to determine if they could assist the parties in resolving the issues. Mr. Nersesian told the staff member to “lose his number” and “never call again”.

[13] Councillor Thompson asked that “939 Warden” be put on the agenda for the SCC meeting on December 3, 2019. On November 25, 2019, a letter was mailed to both the Legion and the owner of the Hotspot property; 137, advising that an item; “939 Warden Avenue”, and “Various Matters Relating to Property” would be on the agenda for the December 3, 2019 SCC meeting.

[14] Three members of the Legion attended and spoke at the SCC meeting. No one attended the meeting from 137. The Legion members described the issues they were having with Hotspot, 174, and Mr. Nersesian, including trespassing onto the Legion’s property, leaving construction equipment on the Legion property, blocking the Legion signage, interrupting a memorial service for a veteran and exhibiting hostile behaviour to Legion members and guests. Hotspot was referred to as, “not a very good neighbour”. After the Legion speakers had completed their statements, Councillor Thompson asked a series of questions. He inquired into Hotspot’s application for the CBP and the construction of the warehouse on the Hotspot property. He brought a motion to require councillors within Scarborough to be notified of applications for commercial and industrial boulevard parking spaces.

[15] It is alleged that at the SCC meeting, Councillor Thompson made defamatory comments about Hotspot. The Statement of Claim sets out the impugned comments of Councillor Thompson:

a. In a question to the representatives of the Legion, he called the warehouse at 939 Warden Ave., a “monster of a building”, and suggested the construction began at the site without a permit;

b. In questions to the representatives of the Legion, he stated that “they [Hotspot and/or 174] had applied for a variance to essentially expand their building” and “that variance was denied because our office issued a letter saying we were not in support”;

c. He referred to 137 as a “this bad neighbour, the owner of this site, who is the Hotspot who provides auto parts for car repairs across the City and I guess across Scarborough”;

d. He noted on two occasions during the meeting that he was not surprised that Hotspot and 174 failed to attend the meeting;

e. He began asking City staff questions about the building permit that had been issued of the construction at 939 Warden Ave.;

f. He said that the Plaintiff’s business, “moved into the area [and] has done everything that they can to do whatever they wish illegally”;

g. He stated, “my office has proceeded to speak to them … I think one of the comments by the owner … he told my staff to lose his phone number, never to call him, don’t talk to him and out anything because he doesn’t want to talk to us … and so this does not reflect a good neighbour”;

h. He stated that the Plaintiff’s qualities were ones that “one would detest in persons who would be a neighbour”;

i. He stated that what is more “guiling and vile to [him]” is that the plaintiff has “disrespect for the community” and “disrespect for the Legion” and thinks that “none of our rules should essentially have an impact on them”;

j. He stated that it is “very disrespectful for an owner of any business … to be speaking to the bar attendant, the female … and the … other members of this Legion with such disrespect”;

k. He stated that “we have a business operating at 939 Warden Avenue who seems to think that all they are required to do is provide auto parts to companies to fix cars”;

l. He suggested that the Legion should think about taking the Plaintiff to court and stated that he would help the Legion connect with lawyers that would be willing to take its case, possibly pro bono;

m. He stated that 174 and the owner has submitted a freedom of information request for all his records “in terms of his contacts with the Legion” which he said was fine, “because he was not going to be intimidated by them”;

n. He stated “we are going to ensure that [the business at 939 Warden] behaves themselves and do a better job at being a good neighbour”; and,

o. He stated, “for those of you that are buying auto parts from this particular facility, I want to ask you to question your judgment”.

[16] After the December 3, 2019 SCC meeting, Mr. Nersesian filed a complaint with the City’s Integrity Commissioner. He complained about the remarks made by Councillor Thompson at the meeting. The Integrity Commissioner reviewed the video recording of the SCC meeting. He dismissed Mr. Nersesian’s complaint on May 22, 2020. He found that Councillor Thompson’s comments did not contravene Article XIV (Discreditable Conduct) of the Code of Conduct for Members of Council. He stated that the remarks were not “unparliamentary”, nor were they discriminating, harassing or bullying. No steps were taken to challenge the decision of the Integrity Commissioner.

[17] On August 20, 2020, Hotspot commenced this action seeking damages for defamation. On October 28, 2020, 174 issued a separate action against Councillor Thompson, the City and two other Defendants. The Claim issued on October 28, 2020 alleges malice, misfeasance in public office and bad faith, on the grounds that Councillor Thompson harassed 174 with building and by-law inspections and “blocked” 174’s application for a minor variance.

THE ISSUES

[18] In this endorsement, I will address the following issues:

a. Does the Plaintiff’s claim arise from an expression made by the Defendant and does the expression relate to a matter of public interest?

b. Does the claim have substantial merit and are there any valid defences? (The merits test)

c. Does the interest in allowing the Plaintiff’s action to proceed outweigh the public interest in protecting the Defendant’s expression? (The public interest test)

ANALYSIS

[19] Councillor Thompson brings this motion to strike the action pursuant to s. 137.1 of the Act. The legislation included a purpose clause for the benefit of judicial interpretation. The purpose clause is to have “considerable interpretative authority”: 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, at para. 11. Section 137.1(1) states that the purpose 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: Courts of Justice Act, s. 137.1(1).

[20] Section 137.1 sets out a two-part test. The first part of the test places the onus on the moving party to satisfy the judge that:

a. The proceedings arise from an expression made by the defendant; and

b. The expression relates to a matter of public interest.

If the moving party satisfies the first part of the test, the action is to be dismissed unless the responding party satisfies the judge that:

a. There are grounds to believe,

i. The proceeding has substantial merit, and

ii. The moving party has no valid defence in the proceedings; 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.

Issue 1 - Does the action arise from an expression made by the Defendant and does the expression relate to a matter of public interest?

[21] Not all expressions will be subject to s. 137.1. The section applies only to expressions that relate to a matter of public interest. The onus is on the Defendant to demonstrate on a balance of probabilities that the proceeding arises from an expression made by the Defendant and that the expression relates to a matter of public interest. The onus of establishing that the remarks relate to a matter of public interest is not an onerous one: 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, at paras. 23 and 28.

[22] There is no dispute that the expression complained of was made by Councillor Thompson during the SCC meeting. At issue is whether the expression was made in the public interest.

[23] The words, “relates to a matter of public interest” are to be given a broad and liberal interpretation. Some segment of the community must have a genuine interest in receiving information on the subject. An issue that does not rise above “mere curiosity or prurient interest” does not satisfy the public interest requirement: Grant v. Torstar Corp. 2009 SCC 61, at paras. 101, 102 and 105. Ultimately the inquiry is a contextual one that requires the court to ask itself – “what the expression is really about”: 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, at paras. 26 to 30.

[24] The Defendant argues that the comments made by Councillor Thompson in the SCC meeting relate to a matter of public interest. He was responding to concerns raised by members of the public with respect to the manner in which Hotspot was conducting its business and interacting with the members and guests of the Legion. The SCC was satisfied that the concerns raised by the Legion were sufficiently in the public interest to warrant an agenda item.

[25] It is the Plaintiff’s position that the Councillor Thompson’s comments were made with respect to a “not in my backyard” type of private interest dispute between the Legion and Hotspot that does not rise to the level of public interest: 1704604 Ontario Ltd. v. Pointes Protection Association et al,. 2016 ONSC 2884, at para. 39. The Plaintiff also argues that a defendant who makes statements about a purely private matter cannot gain the protection of s. 137.1 by including in the statement reference to some other topic that may relate to a matter of public interest: Veneruzzo v. Storey, 2018 ONCA 688, at para. 20.

[26] I do not accept the Plaintiff’s argument that the expression related solely to a private dispute. The expression complained of was made by a city councillor during a public municipal council meeting in response to a deputation made by a community service organization. The Legion is an organization that serves veterans and senior citizens and the matter in which the Legion, its members and guests are treated is a matter of public interest. I am satisfied that veterans, senior citizens as well as other members of the public have a genuine interest in receiving information on the topic. As noted in Sole Cleaning Inc. v. Chu, 2020 ONSC 7226:

In my view the public would have an interest in knowing something about a company that offers them services and whether they wish to be supporting that company through paying for the use of its services. In particular, the public has an interest in knowing about a company's stance on matters of social and political importance such as the [Black Lives Matter] movement and its treatment of its employees, at para. 52.

[27] In addition, some of the impugned comments were with respect to whether the Plaintiff complied with City by-laws. I am of the view that the public has a genuine interest in whether businesses are in compliance with City rules and by-laws.

[28] I find that the moving party satisfied its onus that the expression was made by Councillor Thompson. In considering the expression of Councillor Thompson as a whole, I am satisfied that the expression relates to a matter in the public interest.

Issue # 2 - Does the claim have substantial merit and are there any valid defences? (The merits test)

Statutory Framework

[29] Once the defendant establishes that the expression relates to a matter of public interest, the onus shifts to the plaintiff to satisfy the judge hearing the motion that there is a basis in the record and the law to support a finding that the action has substantial merit and that there are no valid defences. The legislation includes the term “substantial” to qualify “merit”. Therefore, the plaintiff must do more than show that there is some chance of success. The plaintiff must show that the claim has a real prospect of success. This does not require the plaintiff to demonstrate that success is likely, only that the likelihood of success tends to weigh more in favour of the plaintiff and that success is more than a possibility: Pointes, at paras. 42, 48, 49, 50 and 54.

[30] In addition to showing that the claim has substantial merit, the plaintiff must satisfy the judge hearing the motion that there are grounds to believe that the defendant has no valid defence. This does not require the plaintiff to anticipate every defence that the defendant may raise and then rebut each defence. However, once the defendant has put a defence in play, it is up to the plaintiff to demonstrate that the defence is not legally tenable or supported by evidence that is reasonably capable of belief. If any of the defences are valid, the plaintiff has not met its burden: Pointes, at paras. 58, 59.

Test for Defamation

[31] The Plaintiff seeks damages for defamation. In order to succeed on a claim for defamation the Plaintiff must prove the following:

a. The words complained of were published, meaning they were communicated to at least one person other than the plaintiff;

b. The words complained of refer to the plaintiff;

c. The words were defamatory, in the sense that they would tend to lower the reputation of the plaintiff in the eyes of a reasonable person: Bent v. Platnick, 2020 SCC 23, at para. 92.

[32] The expression complained of was made by Councillor Thompson in the SCC meeting. The expression was communicated to the public and a transcript of the proceedings was prepared. The first part of the defamation test is satisfied.

[33] The Defendant argues that some of the expression does not relate to the Plaintiff. The only Plaintiff is 137 operating as Hotspot. The owner and landlord of the property; 174 is not a Plaintiff. Mr. Nersesian is the principal of both Hotspot and 174 and he is also not a Plaintiff.

[34] I am satisfied that at least some of the expressions complained of refer to Hotspot. After the Legion members spoke at the meeting, Councillor Thompson began asking them questions. He asked one of the Legion members to identify Hotspot as the neighbour that the Legion was having problems with. He specifically stated that the bad neighbour is “Hotspot” which is a company that provides auto parts for car repairs across the City. Councillor Thompson admitted in his cross-examination that he did not distinguish between Hotspot and the owner of the property. As far as he was concerned all three entities; Hotspot, 174 and Mr. Nersesian were one and the same.

[35] The Defendant argues that the expression does not tend to lower the reputation of Hotspot in the eyes of the public. I disagree. The expression includes reference to Hotspot being a “bad neighbour” and that the business at 939 Warden Ave, has “done everything that they can to do whatever they wish illegally”. Councillor Thompson stated that individuals thinking about buying auto parts from the company should “question your judgment”. I am satisfied that the impugned comments may tend to lower the reputation of the Plaintiff in the eyes of the public.

[36] The bar for establishing defamation is reasonably low: Bernier v. Kinsella, 2021 ONSC 7451, at paras. 48, 49. I am satisfied that the Plaintiff’s claim in defamation is legally tenable and supported by evidence that is reasonably capable of proof.

Available Defences

[37] The Plaintiff has the onus of establishing that there is no reasonable prospect of any of the defences succeeding: Bernier v. Kinsella, at para. 65. It is insufficient to show that it is “possible” the defence will not succeed; the Plaintiff must show the defences have “no real prospect of success”: Pointes, at paras. 59, 69. Councillor Thompson relies on three defences; qualified privilege, fair comment and justification and statutory immunity under s. 391 of the City of Toronto Act, 2006.

i) Qualified Privilege

[38] Qualified privilege is a defence for defamatory remarks spoken on a privileged occasion: Bent v. Platnick, at para. 121. Qualified privilege applies to meetings of municipal council and its committees: Gutowski v. Clayton, 2014 ONCA 921, at para. 6.

[39] Qualified privilege applies if the defendant establishes that the words were, “fairly warranted and that there was a mutuality of interest or duty on the person to publish the statement and the recipient to receive it”: Young v. Toronto Star Newspaper Ltd. 2003 64296 (ON SC) at para. 174.

[40] Councillor Thompson asked that issues relating to 939 Warden Ave. be added to the agenda of the SCC meeting. The impugned comments formed part of Councillor Thompson’s response to the deputation from the members of the Legion. He had a duty to receive the information as a member of the SCC and those in attendance at the meeting had an interest in receiving his questions and comments with respect to the deputation. Councillor Thompson did not stray beyond the agenda item. The chair of the meeting did not intervene during Councillor Thompson’s comments and did not deem the remarks to be out of order. As noted by the Chair of the Integrity Committee in dismissing Mr. Nersesian’s complaint: “The Chair of the meeting had responsibility for maintaining order and decorum in the meeting and did not sanction or find the comments inappropriate. Elected representatives are entitled to engage in political debate on matters and take positions on issues before a committee.”

[41] The Plaintiff alleges that qualified privilege does not apply because the dominant motive of the Defendant’s remarks was malice: Bent v. Platnick, at para. 45. Councillor Thompson’s evidence on this motion is that he harboured no ill-will against Hotspot. He stated that he expressed his disapproval at the meeting in response to the concerns raised by the Legion, and that he did so in a professional manner. Counsel for the Plaintiff made reference to the video of the SCC meeting. Counsel argues that Councillor Thompson appears to be angry and emotional during his remarks about Hotspot and Mr. Nersesian. I reviewed the video. I do not agree with counsel’s characterization. It is my view that, Councillor Thompson conducted himself in a calm and professional manner.

[42] The Plaintiff also argues there is evidence of malice in the manner in which Councillor Thompson’s office arranged for building inspectors to inspect the Plaintiff’s property. The building inspectors attended twice in 2017 and twice in 2019. The referrals were made as a result of complaints from the public. The referrals to the building inspectors was considered by the Integrity Commissioner who stated that councillors who forward complaints to city staff do not infringe the Code of Conduct. Similarly, there is no evidence that Councillor Thompson’s opposition to the planning application for a minor variance was inappropriate.

[43] I am satisfied that the evidence before me does not support the Plaintiff’s position that the dominant purpose of Councillor Thompson’s comments at the SCC meeting was malice. I find that the Plaintiff failed to satisfy its burden to show that the defence of qualified privilege has no real prospect of success.

ii) Fair Comment and Justification

[44] The defence of fair comment and justification requires the following:

i. the comment must be on a matter of public interest;

ii. the comment must be based on fact;

iii. the comment, though it can include inferences of fact, must be recognizable as comment;

iv. the comment must be one that any person could honestly make on the proved facts; and

v. the comment was not actuated by express malice: B.W. (Brad) Blair v. Premier Doug Ford, 2020 ONSC 7100, at para. 31.

[45] The Defendant argues that the impugned comments are based on fact. The comment that Hotspot was not a good neighbour was based on the Legion’s firsthand account of the difficulties it had with respect to parking on Legion property, leaving garbage and debris on Legion property, disrupting a veterans memorial service and the treatment of Legion members and guests. The comment that Hotspot seems to think that none of the City rules apply to them and that they can do what they want illegally, is based on the fact that Hotspot encroached and trespassed onto Legion property, and that 174 had been fined for the sign on top of the building. The comment that it is a “monster of a building” is based on the fact that Hotspot operates a large warehouse on the property. The comment that the construction at the site began without a permit was based on the fact that a permit had not been issued at the start of construction activity.

[46] The Defendant also argues that the remarks were recognizable as comment. Comment is considered to be “deduction, inference, conclusion, criticism, judgment, remark or observation which is generally incapable of proof”: Simpson v. Mair, 2008 SCC 40, at paras. 26, 30. Councillor Thompson qualified many of his remarks with commentary such as “I think”, “I find it”, “to me” and “seems to”.

[47] The Plaintiff argues that the defence of fair comment and justification is defeated by evidence of malice. As noted above, I am of the view that the evidence is insufficient to establish that the impugned comments were motivated by malice. I find that the Plaintiff failed to satisfy its burden to show that the defence of fair comment and justification has no real prospect of success.

iii) Section 391 of the City of Toronto Act, 2006

[48] Section 391 of the City of Toronto Act, 2006 provides as follows:

Immunity re performance of duty

S. 391(1) No proceeding for damages or otherwise shall be commenced against a member of city council, an officer, employee or agent of the City or a person acting under the instructions of the officer, employee or agent for any act done in good faith in the performance of intended performance of a duty or authority under this act or a by-law passed under it or for any alleged neglect or default in the performance in good faith of the duty or authority.

[49] The Defendant argues that the remarks were made in the good faith performance of his duties and there is no evidence of malice or bad faith. The Plaintiff takes the position that the defence of statutory immunity has no reasonable prospect of success because Councillor Thompson’s expression was not made in good faith.

[50] Councillor Thompson was in attendance at the SCC meeting in his capacity as a City Councillor. His responsibilities included receiving the deputation from the Legion and responding to their concerns in his capacity as a City Councillor. The Integrity Commissioner determined that Councillor Thompson was conducting his duties at the meeting in accordance with the Code of Conduct and found there was no basis for Mr. Nersesian’s complaint.

[51] I am satisfied that on the evidence before me that the Plaintiff has not established that the defence of statutory immunity has no reasonable prospect of success.

Issue # 3 - Does the interest in allowing the plaintiffs’ action to proceed outweigh the public interest in protecting the expression? (The Public Interest Test)

i) Is the Harm to the Plaintiff Sufficiently Serious

[52] If the Plaintiff had satisfied the merits-based hurdle, it would then be required to establish that the harm caused to it is “sufficiently serious” that the public interest in allowing the action to proceed outweighs the public interest in protecting the expression: s. 137.1(4)(b). This is known as the public interest hurdle. The public interest hurdle has been described as the “core” of s. 137.1. Its purpose is described as follows:

In this way, s. 137.1(4)(b) is the key portion of the s. 137.1 analysis, as it serves as a robust backstop for motion judges to dismiss even technically meritorious claims if the public interest in protecting the expression that gives rise to the proceeding outweighs the public interest in allowing the proceeding to continue: Pointes, at para. 62.

[53] The public interest hurdle requires a consideration of the harm that the plaintiff has suffered or is likely to suffer as a result of the defendant’s expression. The plaintiff must establish both the existence of harm and that the harm was suffered as a result of the moving party’s expression. There is no minimum harm that must be established. However, the magnitude of the harm is relevant when the motion judge is required to weigh the harm to the plaintiff against the public interest in protecting the expression: Pointes, para. 70.

[54] The plaintiff is not required to file a fully developed damages brief or prove harm or causation on a balance of probabilities. However, the plaintiff must provide sufficient evidence to allow the motions court judge to draw an inference of the likelihood of harm and the relevant causal link: Pointes, at paras. 71, 72.

[55] The Plaintiff put forward fairly limited evidence with respect to the issue of harm. In his affidavit, Mr. Nersesian expresses concern about the impact of Councillor Thompson’s remarks on Hotspot’s relationships with its clients, suppliers, customers and business partners. He does not state that there has been a negative impact on his business operations in the two years that followed the expression. There is no evidence of a decline in Hotspot’s revenue, sales or customers. No financial records have been produced. In his cross-examination, Mr. Nersesian stated that he has not heard from anyone about the SCC meeting.

[56] The Plaintiff is a corporation. The general presumption of harm in a defamation action is weaker in an action brought by a corporation. The reputation of a corporation can be injured by libel, but the injury must sound in money: 2504027 Ontario Inc. o/a S-Trip! v. Canadian Broadcasting Corporation (CBC) et al, 2021 ONSC 3471, at para. 66. No evidence of specific economic harm was produced by the Plaintiff.

[57] The Plaintiff relies on s. 16 of the Libel and Slander Act, RSO 1990, c. L.12, which provides that it is not necessary to prove special damages to maintain an action in slander. The Plaintiff argues that a requirement that a plaintiff must prove special damages for the purpose of a s. 137.1 motion is inconsistent with this principle.

[58] It is my view the two sections are not inconsistent. An absence of evidence of special damages does not in and of itself defeat an action in slander. However, the plaintiff is required to present evidence of some damage to meet its burden under s. 137.1. If there is no evidence of harm, the plaintiff will be unable to show that the public interest in allowing the action to continue outweighs the public interest in protecting the expression.

[59] In Levant v. Demelle, at para. 69, the defendant brought a motion pursuant to s. 137.1. The plaintiff relied on the traditional principle that damages in a defamation action can be “at large”. The plaintiffs led no evidence of any particular or specific economic harm or damage to their reputation. The court found that the plaintiffs had not cleared the hurdle of showing harm and causation.

[60] I am of the view that the Plaintiff failed to produce sufficient evidence to clear the initial hurdle of establishing the likely existence of harm and that the harm is causally related to the expression.

ii) Weighing the Public Interest

[61] If an inference of harm had been drawn, the next step is to weigh the harm and corresponding public interest in permitting the proceeding to continue, against the public interest in protecting the expression. The weighing exercise is dependent upon the factual circumstances of the case. The court may consider a number of factors, some of which include 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, any disproportion between the resources being used in the lawsuit and the damage caused or the expected damages award: Pointes, at para. 80.

[62] As noted above, there is very little evidence of harm being suffered by the Plaintiff as a result of the impugned expression. On the other hand, there is a strong public interest in protecting Councillor Thompson’s expression. It is the role of municipal officials to take positions on issues of concern to their constituents. The importance of preserving a municipal councillor’s freedom of expression was articulated by the Supreme Court in Prud’homme:

In a defamation action against an elected municipal official, freedom of expression takes on singular importance, because of the intimate connection between the role of that official and the preservation of municipal democracy. Elected municipal officials are, in a way, conduits for the voices of their constituents: they convey their grievances to municipal government and they also inform them about the state of that government … Their right to speak cannot be limited without negative impact on the vitality of municipal democracy.

The councillor’s freedom of expression is a crucial instrument for achieving effective participation in and transparent management of municipal affairs: Prud’homme v. Prud’homme, 2002 SCC 85, at paras. 42 and 53.

[63] Councillor Thompson made his comments during a community council meeting. The impugned comments were made in response to a deputant’s presentation at the meeting. I am satisfied that there is a high public interest in a councillor having the freedom to state their position and to comment on matters discussed in community council meetings.

[64] In balancing the public interest in allowing the action to continue and the public interest in protecting Councillor Thompson’s expression, I considered the four indicia of a s. 137.1 matter;

(i) a history of the plaintiff using litigation or the threat of litigation to silence critics;

(ii) a financial or power imbalance that strongly favours the plaintiff;

(iii) a punitive or retributory purpose animating the plaintiff’s bringing of the claim; and

(iv) minimal or nominal damages suffered by the plaintiff: Pointes, at para. 74.

[65] Here, the Plaintiff has used litigation or the threat of litigation against Councillor Thompson. The Plaintiff commenced a second lawsuit against Councillor Thompson with respect to his opposition to 174’s application for a minor variance. The Plaintiff has also failed to establish anything more than minimal or nominal damages. While Hotspot has sued Councillor Thompson for $2 million in damages, no evidence has been provided to support any financial loss.

[66] I am satisfied that the public interest in protecting the Councillor Thompson’s expression outweighs the public interest in allowing the Plaintiff’s claim to continue.

DISPOSITION

[67] I conclude that the impugned expression made by Councillor Thompson relates to a matter of public interest. I also conclude that the Plaintiff failed to discharge its onus of establishing that the Defendant has no valid defences or that the public interest in allowing the action to proceed outweighs the public interest in protecting the expression. The motion brought by the Defendant pursuant to s. 137.1 of the Act is granted. I dismiss the Plaintiff’s action in its entirety.

[68] The Defendant is presumptively entitled to his costs of the action. Section 137.1(7) provides that if the proceeding is dismissed, the moving party is entitled to costs on the motion and in the proceeding on a full indemnity basis unless the judge determines that such an award is not appropriate in the circumstances.

[69] The Defendant submitted a Bill of Costs in which he seeks costs of the motion and the action, in the amount of $53,843.44 on a partial indemnity rate, and $89,189.84, on a full indemnity rate. Both amounts are inclusive of counsel fee, disbursements and H.S.T. The Plaintiff submitted a Bill of Costs for the motion only, in the amount of $14,121.92 on a partial indemnity rate, inclusive of counsel fee, disbursements and H.S.T.

[70] If the parties are unable to agree on costs, the Defendant may deliver written costs submissions of no more than three pages in length, excluding the Bill of Costs and caselaw, within 10 days of the date of this endorsement. The Plaintiff may file its costs submissions in response, on the same basis, within 10 days of receiving the Defendant’s submissions.

DATE: January 20, 2022