COURT FILE NO.: CV-21-00004688-0000-00OT
DATE: 20220822
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JOHN DUNCAN CLAUDE MACDONALD, Applicant
AND:
FRANK FELDMAN, Respondent
BEFORE: VERMETTE J.
COUNSEL: Matthew Macdonald, for the Applicant
Andrea Gonsalves and Caitlin Milne, for the Respondent
HEARD: May 12, 2022
ENDORSEMENT
[1] The Applicant, John Duncan Claude Macdonald, brings a motion for:
(a) an order that the Small Claims Court Claim No. SC-21-00004688-0000 (the “Defamation Action”) commenced by the Respondent, Frank Feldman, be transferred from the Small Claims Court to the Superior Court of Justice (“SCJ”);
(b) an order that Mr. Macdonald’s motion to have the Defamation Action dismissed under section 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “Proposed Motion”) be heard within 60 days as required, or as soon as practicable for the court thereafter; and
(c) an order that the Defamation Action be stayed until such time as the Proposed Motion is determined and all appeals are exhausted pursuant to the Courts of Justice Act.
[2] Mr. Macdonald’s motion to transfer the Defamation Action to the SCJ is dismissed. In my view, the Defamation Action is capable of being justly and fairly resolved using the procedures available in the Small Claims Court. The fact that the Proposed Motion cannot be brought in the Small Claims Court is insufficient to justify a transfer of the Defamation Action to the SCJ.
I. FACTUAL BACKGROUND
1. Events underlying the Defamation Action
[3] Mr. Feldman is a lawyer who practices law as Frank Feldman Law. His practice focuses on the area of civil litigation, more particularly construction and real estate matters.
[4] Mr. Macdonald is a named defendant in a civil action commenced by Mr. Feldman’s client, Altius Architecture Inc. (“Altius”), in relation to a construction lien (“Construction Action”). The dispute relates to the construction of a small cottage or “bunkie” in Muskoka, Ontario.
[5] On March 22, 2021, a process server retained by Mr. Feldman served the Statement of Claim and Certificate of Action in the Construction Action on Mr. Macdonald by leaving a copy of these documents with Mr. Macdonald’s mother at the address indicated on the building permit for the cottage as the address for contacting Mr. Macdonald. Mr. Macdonald’s position is that the service of the Statement of Claim and Certificate of Action did not comply with the Rules of Civil Procedure and that service should have been made at his home address in Turks & Caicos.
[6] The following day, on March 23, 2021, Mr. Macdonald published the following review of Mr. Feldman which appeared on the search page for Frank Feldman Law on Google (“Google Review”):
Frank is unprofessional and none too bright. When people tell lawyer jokes it is the Frank Feldmans of this world they are thinking of. Also works as a real estate agent to give him something to fall back upon should he be disbarred.
[7] On March 25, 2021, Mr. Feldman posted the following response under Mr. Macdonald’s Google Review:
This is a fake and malicious review. Mr. Macdonald is a defendant in a lawsuit where Mr. Feldman represents the plaintiff. Mr. Macdonald’s “review” is not based on his genuine experience with our firm. Rather, it appears to be an attempt to intimidate and bully Mr. Feldman for representing the plaintiff. Frank Feldman will not be intimidated by such shameful tactics.
[8] On the same day, Mr. Macdonald sent the following e-mail to Mr. Feldman:
Mr Feldman,
You are a disgrace to the legal profession.
I have been advised that you harassed my 89-year-old mother. Like many elderly people, my mother has been isolated for a year and isolation has made her fragile. Did you really attempt to serve me with something by harassing and distressing my mother and exposing her to COVID? You are mistaken if you think your disgraceful tactics will serve to intimidate me. You have crossed a line you should not have crossed. You are a contemptible bully and a coward and should we meet I will tell you that in person.
I have lived at the same residence for almost 30 years. I am not difficult to find. If you wanted my address, all you needed to do was ask. You have no excuse for harassing my mother at her residence. I am not sure how distressed she is by your deplorable actions (I have asked a brother to check on her) but if you have caused her lasting mental anguish or exposed her to COVID you will be receiving a personal visit from me. Stay away from my mother.
You have transgressed all acceptable standards of conduct. There are reasons we have codes of conduct and things are done in a proper matter. When you seek to harm a person’s mother you step outside all bounds of civilized conduct. If you wish to stay outside the bounds of civilized conduct I invite you to meet with me and to consent to a physical altercation. I am calling you a despicable coward. I suspect a man like you is more comfortable bullying an elderly lady than facing someone calling him out on his deplorable conduct.
I am writing this without prejudice to all remedies I may have after seeking counsel. I expect to file a motion having you removed as counsel and to register a professional misconduct complaint. Your conduct is unacceptable and unworthy of a member of the legal profession. I recognize that my response to you is not the manner in which disputes should be resolved between litigants and involved counsel: this is what you invite when you attack a person’s mother. I will not accept you harming my mother as a tactic. Shame on you.
Govern yourself accordingly.
[9] On March 26, 2021, in reply to Mr. Feldman’s response to his review, Mr. Macdonald added the following to his Google Review:
I have just seen Frank’s response below. Frank is the type of lawyer that thinks it a tactic to harrass [sic] someone’s 89 year old mother. I was trained as a lawyer and worked at a reputable firm where the practice of law was conducted with integrity. Frank is the lowest form of lawyer. Frank is a loser as a person and as a lawyer. My review of Frank is not false.
[10] On March 30, 2021, Mr. Feldman served a Notice of Libel on Mr. Macdonald, but Mr. Macdonald did not offer to retract the Google Review.
2. The Defamation Action
[11] Mr. Feldman commenced the Defamation Action in the Small Claims Court on June 11, 2021. He seeks general damages for libelous and defamatory statements published by Mr. Macdonald in the amount of $35,000.
[12] In the Defamation Action, Mr. Feldman alleges the following, among other things: (a) Mr. Macdonald’s Google Review contains numerous false comments that are libelous and defamatory of Mr. Feldman; (b) the Google Review has been circulated and published by Mr. Macdonald with a view to deliberately defame Mr. Feldman and injure his reputation in the Ontario legal community and with the public; and (c) Mr. Macdonald acted with malice in making defamatory and intimidating statements.
3. The Proposed Motion and Justice Glustein’s endorsement
[13] On October 21, 2021, Mr. Macdonald filed a Notice of Motion and Supporting Affidavit in the Defamation Action in support of the Proposed Motion. In his affidavit, Mr. Macdonald states that he has resided in Providenciales, Turks & Caicos Islands, for more than 25 years, and that his Providenciales address was included in his contract with Altius. He further states that what compelled him to write the Google Review was his view that the attempt to serve him by leaving documents with his mother raised “broader ethical and public interest concerns […] regarding sharp tactics by lawyers, including wrongfully using elderly individuals”.
[14] On March 11, 2022, the parties had a case conference with Justice Glustein in the Defamation Action. The case conference had been scheduled by Mr. Macdonald for the purpose of scheduling the hearing of the Proposed Motion. Justice Glustein declined to schedule the Proposed Motion because he was of the view that the result of the decision of the Court of Appeal in Laurentide Kitchens Inc. v. Homestars Inc., 2022 ONCA 48 (“Laurentide”) was to preclude any motion under section 137.1 of the Courts of Justice Act (“137.1 Motion”) in a Small Claims Court action. Instead, Justice Glustein scheduled this motion to transfer the Defamation Action to the SCJ.
[15] In his endorsement, Justice Glustein reviewed the Laurentide decision in detail and concluded as follows:
[20] I rely on the above analysis in Laurentide Kitchens to conclude that an anti-SLAPP motion cannot be brought in a Small Claims Court proceeding, regardless of whether the motion is heard by a deputy judge (as addressed in Bruyea), Administrative Judge (as addressed in Laurentide Kitchens), or a Superior Court judge.
[21] The jurisdiction of a Superior Court judge to hear an anti-SLAPP motion in a Small Claims Court matter was not directly at issue in Laurentide Kitchens, as the appeal addressed the jurisdiction of the Administrative Judge. A Superior Court judge hearing a Small Claims Court matter sits as a Small Claims Court judge, applying the Rules of the Small Claims Court. As the court held in Laurentide Kitchens, at para. 42, “[t]he s. 137.1 process is not consistent with the rules and procedures in the Small Claims Court”.
[22] For the above reasons, I did not schedule Macdonald’s proposed anti-SLAPP motion before a Superior Court judge, nor did either party request such relief given the decision in Laurentide Kitchens. Instead, I scheduled a motion to transfer the action to the Superior Court of Justice, as requested by Macdonald, so that he could seek the anti-SLAPP relief if the action was transferred. That order is without prejudice to the parties’ positions as to whether such a transfer is appropriate.
[16] In his affidavit sworn in support of the motion to transfer, Mr. Macdonald states the following:
I am informed by my counsel that the Toronto Small Claims Court has a significant backlog in scheduling trial dates. Currently the Toronto Small Claims Court is assessing Plaintiff Claims filed in March 2020 for hearing dates. Transferring the Defamation Action to the Superior Court of Justice will permit the Anti-SLAPP Motion to dispose the Feldman Claim in a more timely fashion.
I strongly believe that the Feldman Claim is the exact type of litigation that the Anti-SLAPP legislation was meant to deter. I understand that the legal test for an Anti-SLAPP Motion is different than other legal defences to defamation claims. I want to use the Anti-SLAPP defence and I can only do so if the Defamation Action is transferred to the Superior Court. Without a transfer to the Superior Court of Justice, I will be denied an important legal defence to the Feldman Claim.
II. PRINCIPLES APPLICABLE ON A MOTION TO TRANSFER
[17] A SCJ judge may order the transfer of a claim commenced in the Small Claims Court if the party seeking the transfer shows that the claim is not capable of being justly and fairly resolved using the procedures available in the Small Claims Court. While each case must be considered on its own facts and additional factors may be relevant in certain circumstances, the following factors are generally considered on such a motion: (a) the complexity of the litigation; (b) the role and importance of pre-trial discovery and expert evidence; (c) whether the case raises issues of general importance; and (d) the desire for a just and fair determination. See Segura Mosquera v. Rogers Communications Inc., 2020 ONSC 6024 at paras. 6-7 (“Segura SCJ”); aff’d by 2021 ONCA 876 at para. 12 (“Segura CA”); and Ontario Federation of Osteopathic Professionals v. Industrial Alliance Insurance and Financial Services Inc., 2020 ONSC 5776 at para. 5 (“OFOP”).
[18] The discretion to transfer is to be exercised sparingly. A transfer can engender negative consequences. SCJ actions expose the parties to higher costs of pre-trial discovery and trial, both in terms of counsel fees and potential costs awards. If the application to transfer is made just before trial, it may result in duplication of work. In addition, a transfer at the request of a defendant deprives the plaintiff of their choice of court. There are also policy reasons for limiting the transfer of cases. Absent compelling reasons for a transfer, permitting a transfer may undermine the jurisdictional legitimacy of the Small Claims Court. Among other things, a transfer assumes that the procedures in the Small Claims Court are inadequate, which is a dangerous assumption in an era where access to justice is a significant problem. See Segura SCJ at paras. 8-9, Segura CA at para. 13, OFOP at paras. 5, 15 and Farlow v. Hospital for Sick Children, 2009 CanLII 63602at paras. 18, 21 (Ont. S.C.J.)
III. 137.1 MOTIONS
[19] Sections 137.1 to 137. 5 of the Courts of Justice Act came into force in November 2015. These provisions were enacted to mitigate the harmful effects of strategic lawsuits against public participation (also known as “SLAPPs”). SLAPPs are lawsuits initiated against individuals or organizations that speak out or take a position on an issue of public interest. They are generally initiated by plaintiffs who engage the court process and use litigation not as a direct tool to vindicate a bona fide claim, but as an indirect tool to limit the effectiveness of the opposing party’s speech and deter that party, or other potential interested parties, from participating in public affairs. See 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22 at paras. 2-4 (“Pointes”).
[20] Subsections 137(1), (3) and (4) of the Courts of Justice Act provide as follows:
Purposes
(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.
Order to dismiss
(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
[21] The Supreme Court of Canada explained the framework set out in section 137.1 as follows in Pointes (at paras. 31, 54, 60, 82):
(a) Threshold burden on the moving party. Subsection 137.1(3) places a threshold burden on the moving party to show on a balance of probabilities that: (i) the underlying proceeding does, in fact, arise from its expression, regardless of the nature of the proceeding, and (ii) such expression relates to a matter of public interest, defined broadly. To the extent that this burden is met by the moving party, then s. 137.1(4) will be triggered and the burden will shift to the responding party to show that its underlying proceeding should not be dismissed.
(b) Substantial merit. To discharge its burden under s. 137.1(4)(a)(i), the plaintiff must satisfy the motion judge that there are grounds to believe that its underlying claim is legally tenable and supported by evidence that is reasonably capable of belief such that the claim can be said to have a real prospect of success.
(c) No valid defence. Under s. 137.1(4)(a)(ii), the moving party (i.e. defendant) must put potential defences in play, and the responding party (i.e. plaintiff) must show that none of those defences are valid in order to meet its burden. Mirroring the “substantial merit” prong, the “no valid defence” prong requires the plaintiff to show that there are grounds to believe that the defences have no real prospect of success.
(d) Weighing of the public interest. Under s. 137.1(4)(b), the burden is on the plaintiff — i.e. the responding party — to show on a balance of probabilities that it likely has suffered or will suffer harm, that such harm is a result of the expression established under s. 137.1(3), and that the corresponding public interest in allowing the underlying proceeding to continue outweighs the deleterious effects on expression and public participation. This weighing exercise is the crux or core of the s. 137.1 analysis, as it captures the overarching concern of the legislation, as evidenced by the legislative history. It accordingly should be given due importance by the motion judge in assessing a 137.1 Motion.
IV. DECISION OF THE COURT OF APPEAL IN LAURENTIDE
[22] In Laurentide, the Court of Appeal concluded that the Administrative Judge of the Small Claims Court did not have the authority to make an order under section 137.1 of the Courts of Justice Act for three reasons: (1) the authority was not given by statute; (2) the Court of Appeal had already determined that only Superior Court judges had the jurisdiction; and (3) the section 137.1 process was not consistent with the rules and procedures in the Small Claims Court. See Laurentide at para. 26.
[23] The Court of Appeal stated the following with respect to the third reason (at paras. 42-46):
[42] A third reason confirms my view that the legislature did not intend to confer jurisdiction on the Administrative Judge. The s. 137.1 process is not consistent with the rules and procedures in the Small Claims Court.
[43] The Small Claims Court is a branch of the Superior Court of Justice. The court embodies the foundations of access to justice: informality, affordability, timely resolution, accessibility for self-represented people and active judicial engagement. By providing access to justice, the court has an important role in the administration of justice for the province. The court handles nearly half of the civil disputes in the province. It provides a cost-effective forum for civil disputes involving less than $35,000. To achieve these objectives, all questions of fact and law are to be determined in a summary way. Rule 1.03(1) of the Rules of the Small Claims Court, under the [Courts of Justice Act], provides:
These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act. O. Reg. 258/98, r. 1.03 (1).
[44] These hallmarks of the Small Claims Court, as enshrined in its rules, are incompatible with the provisions of s. 137.1. A s. 137.1 analysis requires the detailed process of shifting burdens with respect to merits, proportionality and public interest, which involves exchange of affidavits and cross-examinations. Motions are not encouraged in the Small Claims Court. The Rules of Small Claims Court do not provide for cross-examination on affidavits. Under s. 137.1, costs of an unsuccessful motion are presumptively full indemnity. The limit on costs for a motion in Small Claims Court, absent special circumstances, is $100. The limit on costs after trial is 15% of the award. Small Claims Court jurisdiction is limited to $35,000. Contrary to these limits of Small Claims Court, s. 137.1 provides extensive powers with respect to damages.
[45] The s. 137.1 motion must be heard within 60 days and stays the underlying action. Appeals go directly to the Court of Appeal. This does not comply with r. 1.03.(1) of the Rules of the Small Claims Court.
[46] The Small Claims Court provides timely justice to litigants in matters under $35,000. I conclude that the legislature did not intend to inject complex interim proceedings into its summary process. Doing so would frustrate the objectives of the Rules of the Small Claims Court. [Emphasis in the original.]
V. POSITIONS OF THE PARTIES
1. Position of the Applicant
[24] The Applicant points out that a 137.1 Motion can be made by any person “against whom a proceeding is brought”, and that the provisions that deal with the Small Claims Court in the Courts of Justice Act contain references to “proceedings” before it. The Applicant argues that the only reasonable conclusion is that 137.1 Motions must be available in Small Claims Court proceedings, and that denying the availability of such motions would be inconsistent with the purposes outlined in subsection 137.1(1). He submits that “[d]etermining whether a proceeding like the Defamation Action is captured by the Anti-SLAPP provisions requires transfer to the Superior Court of Justice.”
[25] The Applicant relies on the decision of the Divisional Court in Chopak v. Patrick, 2020 ONSC 5431 (“Chopak”) in support of his position that it is appropriate to transfer a Small Claims Court proceeding to the SCJ in order to enable the bringing of a 137.1 Motion.
[26] The Applicant submits that the factors under the traditional test to transfer a proceeding favour the matter being transferred to the SCJ. The Applicant points out that the process associated with 137.1 Motions is inherently complex and involves the exchange of affidavits and cross-examinations. He also states that the general importance of the matters at issue favours a transfer of the Defamation Claim. The Applicant argues that the very nature of a proceeding where a 137.1 Motion could apply engages issues of general importance. According to the Applicant, his comments in the Google Review relate to matters of public interest and, therefore, are matters of general importance.
[27] The Applicant further submits that a transfer from the Small Claims Court to the SCJ is needed for the fair and just resolution of the Defamation Action. He argues that if a transfer is not permitted and he is not able to bring the Proposed Motion, he will be denied a key defence to the Defamation Action and a precedent will be set that individuals who wish to evade 137.1 Motions can do so by initiating proceedings in Small Claims Court. The Applicant states the following in his Factum:
Transfers from the Small Claim [sic] Court to the Superior Court of Justice normally occur when additional relief sought by the plaintiff is outside of its jurisdiction. The converse, like this Motion, rarely arises. There is rarely a situation where a defendant would be denied a defence in the forum a plaintiff initiated the proceeding. Anti-SLAPP Motions are such a rare occurrence. It is illogical that a plaintiff can add relief to a proceeding which justifies a transfer, but that a defendant raising an otherwise applicable defence is denied simply by the plaintiff’s choice of venue.
[28] According to the Applicant, the fact that Mr. Feldman is a practicing litigator and is represented by counsel mitigates concerns that might arise from transferring a proceeding from the Small Claims Court to the SCJ. The Applicant expresses the view that Mr. Feldman is not a litigant in need of the “hospitable” environment of the Small Claims Court.
2. Position of the Respondent
[29] The Respondent states that the Small Claims Court provides a cost-effective forum for civil disputes involving less than $35,000 and argues that a transfer would deprive him, as the plaintiff, of his choice of court. He notes that if the case is transferred, both parties would incur the considerable expenses of a 137.1 Motion, none of which would be incurred in advance of trial if the action were to remain in the Small Claims Court. He further notes that if the Proposed Motion were to be dismissed in the SCJ, both parties would then be exposed to much higher costs of pre-trial discovery and trial, both in terms of counsel fees and potential costs awards against them at various stages of the litigation. The Respondent is of the view that the associated costs of proceeding in the SCJ would likely greatly exceed his claim of $35,000.
[30] The Respondent submits that the Applicant misconstrues the purpose of a 137.1 Motion as a defence to the Defamation Action. He states that a 137.1 Motion is not a substantive defence to the Defamation Action, but, rather, a procedural mechanism that allows defendants to move at an early stage to dismiss proceedings that adversely affect freedom of expression on matters of public interest. The Respondent argues that the summary process available in the Small Claims Court does not limit the Applicant’s ability to bring any defence available to him and that the same relief – a dismissal of the Defamation Action against the Applicant – is available following a summary trial in the Small Claims Court. The Respondent points out that the most significant difference between the process under section 137.1 and a trial of the merits of the Defamation Action is the absence of weighing of competing public interests pursuant to subsection 137.1(4)(b) in a trial. According to the Respondent, this difference alone does not justify transferring the entire proceeding to the SCJ, and the inability to bring a 137.1 Motion alone does not provide a basis to conclude that the Defamation Action is incapable of being justly and fairly resolved in the Small Claims Court.
[31] The Respondent argues that the procedures in the Small Claims Court are perfectly suitable for the resolution of the Defamation Action and that permitting a transfer would undermine the jurisdictional legitimacy of the Small Claims Court. The Respondent submits that the procedure under section 137.1 is not available in the Small Claims Court context because the Small Claims Court is already designed to provide a summary process that is both cost-effective and efficient. In other words, the potential efficiencies of a 137.1 Motion are not necessary when an action is proceeding in the Small Claims Court. The Respondent notes that a 137.1 Motion would likely be more costly and time-consuming than proceeding to trial in the Small Claims Court, which involves no prior examinations and requires no written submissions. According to the Respondent, granting the Applicant’s motion would, in effect, circumvent the Court of Appeal’s decision in Laurentide. The Respondent states that 137.1 Motions were intended to be limited to cases that are properly before the SCJ.
[32] The Respondent’s view is that the Defamation Action is not complex and does not raise issues of general importance. He notes that all the indicators of complexity relied upon by the Applicant describe the complexity involved in 137.1 Motions themselves, not in the Defamation Action. The Respondent submits that there is no basis to suggest that cross-examination or discovery are of particular importance in the Defamation Action so as to justify a transfer to the SCJ, or that expert evidence better suited for the SCJ procedure will be required at trial. The Respondent’s position is that the Applicant has failed to meet the onus placed on a party seeking to transfer an action to the SCJ.
3. The Applicant’s reply
[33] In reply, the Applicant argues that the different legal burden and test applicable on a 137.1 Motion are much more than a simple procedural mechanism, as claimed by the Respondent. He submits that 137.1 Motions are an intentional effort by the legislature to put an additional legal burden on litigants who initiate proceedings arising from expressions relating to matters of public interest. The Applicant states that the Respondent claims a false distinction between a defence and a procedural mechanism to dismiss proceedings, but that even if the distinction is accepted, it does not change the result. According to the Applicant, not transferring the Defamation Action to the SCJ denies the Applicant an important mechanism to dismiss a claim against him, and denying a substantive mechanism prevents a fair and just resolution of the Defamation Action.
VI. DISCUSSION
[34] Before turning to the principles and factors applicable on a motion to transfer, I will address three points raised by Mr. Macdonald: the relevance of the merits of the Proposed Motion, whether a 137.1 Motion is a defence, and the decision of the Divisional Court in Chopak.
1. Relevance of the merits of the Proposed Motion
[35] Mr. Feldman did not adduce any affidavit evidence on this motion, nor did he cross-examine Mr. Macdonald on his affidavit. The affidavit of Mr. Macdonald filed in support of the motion to transfer incorporates the affidavit that he swore in support of the Proposed Motion. Mr. Macdonald argues that he has a strong prima facie case for the Proposed Motion.
[36] I decline to consider the merits of the Proposed Motion on this motion. Requiring the parties to adduce evidence and make submissions with respect to the merits of a proposed 137.1 Motion in the context of a motion to transfer would be premature and disproportionate and would amount to having a motion within a motion. It would make motions to transfer matters from the Small Claims Court to the SCJ – which matters already have a limited dollar value – more expensive and burdensome, especially given the complex nature of 137.1 Motions. In my view, this motion to transfer can be decided based on the principles and factors traditionally applied on a motion to transfer a case from the Small Claims Court to the SCJ, without delving into the merits of Mr. Macdonald’s Proposed Motion.
2. Nature of a 137.1 Motion
[37] The Supreme Court of Canada has described the procedure under section 137.1 as a “mechanism”, more specifically “a mechanism to screen out lawsuits that unduly limit expression on matters of public interest through the identification and pre-trial dismissal of such actions”: see Pointes at paras. 16 and 62. In my view, a motion under section 137.1 is a procedural mechanism like a motion to strike under Rule 21 or a motion for summary judgment under Rule 20. This is supported by the fact that the Supreme Court explains the differences between these mechanisms in Pointes at para. 38.
[38] As made clear by the Supreme Court of Canada in Pointes, the application of section 137.1 is not restricted to defamation actions. Rather, it applies to any type of proceedings that arise from an expression, including, for instance, a breach of contract action, as in Pointes: see Pointes at para. 24. Thus, a 137.1 Motion is not a “defence” to a particular cause of action, including defamation.
[39] The characterization of a 137.1 Motion as a procedural mechanism rather than a defence is also supported by the fact that the consideration of available defences is part of the test under subsection 137.1(4)(a)(ii).
[40] The different and shifting legal burdens on a 137.1 Motion do not impact this characterization. I note that on a motion for summary judgment brought by a defendant, a defendant has to discharge an evidentiary burden that it would not have at trial before the burden shifts to the plaintiff to prove that its claim has a real chance of success: see, e.g., Sanzone v. Schechter, 2016 ONCA 566 at paras. 24-25, 29-30. While I acknowledge that this different and shifting legal burden on a motion for summary judgment is not for the benefit of the defendant, contrary to a 137.1 Motion, this shows that a particular mechanism can feature a different and shifting legal burden.
[41] Ultimately, however, the issue before me is not whether a 137.1 Motion is a defence or a procedural mechanism. On this motion to transfer, the issue is whether the unavailability of a 137.1 Motion in the Small Claims Court prevents a fair and just resolution of the Defamation Action in that Court. While the nature and characterization of a 137.1 Motion may inform the answer to this question, it does not provide a complete answer.
[42] I conclude that the fact that a defendant cannot bring a 137.1 Motion in the Small Claims Court is insufficient to establish that a claim is not capable of being justly and fairly resolved using the procedures available in the Small Claims Court. I have come to this conclusion for a number of reasons, including the following:
(a) The defendant is not deprived of any substantive defences.
(b) The fact that a defendant is deprived of a particular mechanism does not automatically make a process unjust or unfair. It is noteworthy that motions for summary judgment, like 137.1 Motions, are not available in the Small Claims Court. I agree with the Respondent that the Small Claims Court is designed to provide a summary process that is both cost-effective and efficient and, therefore, early screening mechanisms are not necessary to ensure the justness and fairness of the process. This is consistent with the decision of the Court of Appeal in Laurentide. See, in particular, Laurentide at para. 46.
(c) If an action is brought in the Small Claims Court for an improper purpose, a defendant can bring a motion to strike under Rule 12.02 of the Rules of the Small Claims Court.
(d) The rationale behind the adoption of the section 137.1 mechanism is not as strong for actions commenced in the Small Claims Court as for actions in the SCJ. Given the cap on damages that can be sought in the Small Claims Court and the lower costs involved in defending a claim in that Court, the harmful effects of a SLAPP are not as extensive and pronounced in a Small Claims Court action compared to an action in the SCJ where hundreds of thousands of dollars can be sought in damages and significant litigation costs can be incurred.
(e) Proportionality is a relevant and important consideration when determining whether a particular procedure is just and fair. See, e.g., Rules 1.04(1) and (1.1) of the Rules of Civil Procedure. In my view, the bringing of a complex and potentially expensive 137.1 Motion in a matter that is within the jurisdiction of the Small Claims Court would usually violate the principle of proportionality as the damages sought in such a case cannot exceed $35,000.[^1]
(f) While the issue before me was not squarely before the Court of Appeal in Laurentide, the Court of Appeal’s reasons do not suggest in any way that the unavailability of 137.1 Motions in the Small Claims Court is unjust or unfair. Quite the contrary.
[43] Given that the unavailability of a 137.1 Motion is, in and of itself, insufficient to show that the Defamation Action is not capable of being justly and fairly resolved using the procedures available in the Small Claims Court, the traditional principles applicable on a motion to transfer must be considered. Before doing so, however, I will briefly discuss the Chopak case given the Applicant’s heavy reliance on it.
3. Decision of the Divisional Court in Chopak
[44] It is my view that the decision of the Divisional Court in Chopak neither supports nor detracts from Mr. Macdonald’s position. In Chopak, Schabas J. held that a 137.1 Motion had to be brought before trial. After noting that such a motion could not have been brought before the trial judge in that case, as the matter was heard by a Deputy Judge in the Small Claims Court, Schabas J. stated the following (see para. 74):
it was open to the defendant to have taken steps to bring the motion before a Superior Court Justice and he did not do so: see, e.g., Peel Condominium Corporation No. 346 v. Florentine Financial Corporation, 2018 ONSC 2636, in which the Court transferred a matter from Small Claims Court when only the Superior Court had jurisdiction to grant additional relief sought by the plaintiff.
[45] The fact that Schabas J. stated that it was open to the defendant to have taken steps to transfer the action to the SCJ so as to be able to bring a 137.1 Motion does not mean that a transfer would have automatically and inevitably been granted. Schabas J. merely pointed out the procedural steps that were open to the defendant, without commenting on whether such steps would have been successful or not. Indeed, there was no motion to transfer before him. While Mr. Macdonald has followed the procedural avenue identified by Schabas J. in Chopak, Chopak is not an authority on the issue before this Court as it does not address the point of whether a motion to transfer should be granted or not.
4. Application of the principles and factors relevant to a motion to transfer
[46] I discuss below the factors that are generally considered on a motion to transfer, as identified in the case law referred to above. I agree with the Respondent that these factors have to be considered in relation to the Defamation Action, and not the Proposed Motion.
[47] Complexity of the litigation. The Defamation Action does not raise complex issues, neither factually nor legally. It relates to a short Google Review and will require the application of established legal principles.
[48] Role and importance of pre-trial discovery and expert evidence. I note that this factor refers to pre-trial discovery, not cross-examinations on affidavits on a motion. Since the issues in the Defamation Action are very narrow, the need for pre-trial discovery under the rules applicable in the SCJ has not been established. Further, none of the parties have suggested that expert evidence would be required in this case or that SCJ procedures would be required with respect to such evidence.
[49] Whether the case raises issues of general importance. While the Google Review may or may not be expression “that relates to a matter of public interest” within the meaning of subsection 137.1(3), which is defined broadly, I am of the view that the Defamation Action and the Google Review do not raise issues of general importance. The issues in the Defamation Action relate to very specific facts and require the application of established legal principles. I find that the importance of the issues raised in the Defamation Action do not go beyond the specific interests of the parties. Among other things, the following issues are not issues of general importance: at what address could Mr. Macdonald be properly served; how do Rules 16.03(5) and 17 of the Rules of Civil Procedure regarding service of an originating process apply in the specific context of this case; and whether ringing a doorbell and giving documents in an envelope to the person who answers the door could be interpreted as harassment.
[50] The desire for a just and fair determination. I have already discussed this factor above with respect to the unavailability of a 137.1 Motion in the Small Claims Court. Aside from his arguments related to the bringing of a 137.1 Motion, Mr. Macdonald has not argued that the Defamation Action, in itself, is not capable of being justly and fairly resolved using procedures available in the Small Claims Court.
[51] Mr. Macdonald has raised the issue of delay in the Small Claims Court in his affidavit. In my view, however, Mr. Macdonald compares apples and oranges as he compares the delay to schedule a trial in the Small Claims Court and the delay to schedule a 137.1 Motion in the SCJ. There are delays in every court as a result of the COVID-19 pandemic, and Mr. Macdonald has not established that the delay to schedule a trial would be shorter in the SCJ than in the Small Claims Court.
[52] While subsection 137.2(2) requires that a 137.1 Motion be heard no later than 60 days after the notice of motion is filed with the court, I am of the view that this short statutory-imposed deadline cannot, in and of itself, constitute a justification for transferring a case from the Small Claims Court to the SCJ if the traditional factors do not support a transfer. The SCJ’s capacity to hear motions is not unlimited. With the current delay to schedule a motion in the SCJ in Toronto, any motion that takes advantage of the 60-day statutory deadline “jumps the queue” and prevents another motion that is properly before the SCJ from being heard. If the traditional test to transfer an action from the Small Claims Court to the SCJ is not met, the fact that a 137.1 Motion in the SCJ may dispose of a case more quickly does not justify giving scheduling priority to a matter that falls withing the jurisdiction of the Small Claims Court over a matter that is properly before the SCJ.
[53] Further, I note that Mr. Macdonald’s argument regarding delay is based on the assumption that he will be successful on the Proposed Motion and ignores the fact that once a 137.1 Motion is made, no further steps may be taken in the proceeding until the 137.1 Motion, including any appeal of the motion, has been finally disposed of. Very significant delay could be experienced if the matter was appealed and/or if the Proposed Motion was unsuccessful.
[54] As stated above, the discretion to transfer a case from the Small Claims Court to the SCJ has to be exercised sparingly. Given the lack of any compelling factor militating in favour of a transfer, I find that permitting a transfer to the SCJ in this case would undermine the jurisdictional legitimacy of the Small Claims Court as its procedures are adequate to deal with defamation actions in general, and the Defamation Action in particular. In addition, a transfer would expose the parties to higher costs and deprive Mr. Feldman of his choice of court. While Mr. Feldman may be a litigation lawyer, it does not mean that he is not entitled to benefit from the informality, affordability and timely resolution of the Small Claims Court: see Laurentide at para. 43
[55] In light of the foregoing, this is not one of the rare cases where this Court should exercise its discretion to transfer to the SCJ a claim commenced in the Small Claims Court that is within the jurisdiction of that Court.
VII. CONCLUSION
[56] The Applicant’s motion is dismissed.
[57] If costs cannot be agreed upon, the Respondent shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, within 14 days of the date of this decision. The Applicant shall deliver his responding submissions (with the same page limit) within 14 days of his receipt of the Respondent’s submissions. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.
Vermette J.
Date: August 22, 2022
[^1]: The principle of proportionality may not be infringed with respect to Small Claims Court matters that raise issues that are complex and of public or general importance. However, this is not the case here (as discussed below) and, in any event, these factors (i.e. the complexity of the litigation and whether a case raises issues of general importance) are independently considered when determining whether a case should be transferred from the Small Claims Court to the SCJ.