Court File and Parties

COURT FILE NO.: CV-22-00000019 DATE: 2023 Mar 16

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

9205187 CANADA LTD., o/a MORVEN CONSTRUCTION Applicant/Responding Party – and – HONG JIE XU and YU QUING HUANG Respondents/Moving Parties

Counsel: C. Edwards and H. Crawhall-Duk for the Applicant/Responding Party A. Tomkins and C. Daoust for the Respondents/Moving Parties

HEARD at Kingston: January 23, 2023

Tranmer J.

Reasons for decision (Section 137.1 Motion)

[1] The Application brought by Morven in this matter seeks an interim and permanent injunction against the Respondents (the “Xus”) enjoining them from defaming the Applicant.

[2] An interim injunction, without prejudice, was granted by this Court by Order dated January 26, 2022, and it has continued in full force and effect. The Xus complied with this Order.

[3] There are two outstanding civil claims that have been brought by the Xus against Morven. One claim seeks damages for structural damage to their property and the other seeks damages for health-related claims. Morven has not counterclaimed in those actions.

[4] The crux of the dispute between the parties is the complaint by the Xus about the dust and noise arising from Morven’s quarry operation. The properties owned by the respective parties are situated across Highway 2 from each other, west of Kingston. The quarry had been in operation for some considerable time before the Xus purchased their property. It has been licensed since 1992. The Xus did not initially occupy their home which they purchased in 2015. But when they began to live in the home in late August 2021, they took issue with the dust and the noise which they attributed to the quarry operations. They posted signage on their property along the highway, distributed a petition to neighbours and posted social media complaints criticizing Morven. They communicated their complaints to Morven and to government officials.

Publication 1: Public Roadway Signs

The roadway signs, erected by the Xus on the Property facing the county road, asserted:

Morven Construction / I can’t breathe safely / stop the corporate greed / my lungs and and [sic] not your dust bin (image: black skull and crossbones) ;

Morven Construction. Silica dust causes silicosis, TB, and cancer. Stop the pollution NOW. (image: black skull and crossbones) ;

Morven stops [sic] pollution! Hjx6580@yahoo.com acebook.com/emerald303101 twitter.com/hjx6580;

Publication 2: Public Social Media Accounts

The social media accounts created by Xus, being Facebook, Twitter, and YouTube, asserted inter alia:

Is it Afghan battlefield? NO, IT IS CANADA. Don’t cry for me, Canada.

Morven’s Construction’s Pollution.

Publication 3: Distributed Flyers

The flyer distributed to residents by the Xus expressed:

We are residents of 6580 County Road 2, Odessa. Morven Construction makes dust PM2.5 exceeds air standard seriously. We have tested for three weeks. High PM 2.5 irreversibly hurt human health, which causes many diseases like heart disease, Silicosis (lung losing function), lung cancer, cough, painful eyes etc. These diseases will surface after many years. Suggest you make appointment of doctor for checking lung. We will make an appointment with lung doctor.

Long-term blasting damages our house, water well, human’s nervous system and biological clock, especially like big blasting today (Nov 18,2021).

We are negotiating with Morven Construction, asking the company compensation and stop pollution. At same time, we report to Canadian Ottawa environment department about Morven Construction blasting and pollution. If necessary, we will find justice and solve the problem by court. If you want to join us to struggle for our health and environment, welcome to contact us.

[5] The Xus sold their property in May 2022 and moved away.

[6] Morven maintains its Application for a permanent injunction.

THIS MOTION

[7] The Xus are moving under s. 137.1 of the Courts of Justice Act.

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.

[8] Morven concedes that the expressions at issue qualify as being of public interest. (Factum paragraph 28). I agree. Therefore, subsection 3 is met by the Xus.

[9] Morven agrees that the burden therefore shifts onto it to satisfy the judge under subsection 4.

THE LEGAL PRINCIPLES

[10] Under subsection 4(a), “grounds to believe” fall above mere suspicion but below the balance of probabilities standard. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para.40.

[11] Grounds to believe requires that there be a basis in the record and the law for finding that the underlying proceeding has substantial merit and that there is no valid defence. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para.39.

[12] For the underlying proceeding to have “substantial merit”, it must have a real prospect of success, “in other words, a prospect of success that, while not amounting to a demonstrated likelihood of success, tends to weigh more in favour of the plaintiff”. The claim must be legally tenable and supported by evidence that is reasonably capable of belief. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, paras. 49, 54.

[13] The Court must be acutely aware of the limited record at this stage. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 37.

[14] The motions judge should engage in only limited weighing of the evidence and should defer ultimate assessments of credibility and other questions requiring a deep dive into the evidence to a later stage where judicial powers of inquiry are broader and pleadings are more fully developed. The judge should engage in limited weighing and assessment of the evidence adduced. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para.52.

[15] A determination that a defence “could go either way” in the sense that a reasonable trier could accept it or reject it, is a finding that a reasonable trier could reject the defence, which would be in favour of Morven on this motion. Bondfield Construction Company Ltd. v. Globe and Mail Inc., 2019 ONCA 166, para 15; Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 26, para.56.

GROUNDS TO BELIEVE

Substantial Merit

[16] The Supreme Court of Canada has stated in Grant v. Torstar Corp., 2009 SCC 61:

28 A plaintiff in a defamation action is required to prove three things to obtain judgment and an award of damages: (1) that the impugned words were defamatory, in the sense that they would tend to lower the plaintiff's reputation in the eyes of a reasonable person; (2) that the words in fact referred to the plaintiff; and (3) that the words were published, meaning that they were communicated to at least one person other than the plaintiff. If these elements are established on a balance of probabilities, falsity and damage are presumed, though this rule has been subject to strong criticism: see, e.g., R. A. Smolla, "Balancing Freedom of Expression and Protection of Reputation Under Canada's Charter of Rights and Freedoms ", in D. Schneiderman, ed., Freedom of Expression and the Charter (1991), 272, at p. 282. (The only exception is that slander requires proof of special damages, unless the impugned words were slanderous per se: R. E. Brown, The Law of Defamation in Canada (2nd ed. (loose-leaf)), vol. 3, at pp. 25-2 and 25-3.) The plaintiff is not required to show that the defendant intended to do harm, or even that the defendant was careless. The tort is thus one of strict liability.

29 If the plaintiff proves the required elements, the onus then shifts to the defendant to advance a defence in order to escape liability.

(see also Bent v. Platnick, 2020 SCC 23, para. 92.)

[17] Actual harm to reputation is not required to establish defamation. There must be a realistic threat that the statement, in its full context, would reduce a reasonable person’s opinion of the plaintiff. (Bent v. Platnick, 2020 SCC 23, para. 96)

[18] Clearly, elements 2 and 3 can be proven in this case.

[19] With respect to the first element, the record contains the following facts.

[20] The Affidavit evidence of Morven as to the past and future damage to its reputation has not been challenged in cross-examination.

[21] The Xus conceded in their Factum that “the petition and the signs, when taken as a whole, could have that defamatory overtone in that its message, if received and accepted, would tend to lower Morven in the esteem of community members and lead them to view it with dislike or contempt”. para.43. The Xus have stated “Those potential clients and business partners who have seen our website pollution record no longer choose Morven, indicating that they are against pollution”.

[22] Although they have sold their home and moved away, the answers on cross-examination by the Xus raise the prospect of future public criticism as a triable issue. In this regard, the submission by counsel for the Xus in paragraph 38 of their Factum is highly relevant.

[23] I agree that Morven has fairly characterized “the sting” of the words and conduct of the Xus at paragraph 47 of its Factum. I would also add that likening the quarry operation to an Afghanistan battlefield as defamatory is a triable issue.

[24] The authorities referred to before me confirm the high importance of reputation. As Justice Cory stated in Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, “a reputation tarnished by libel can seldom regain its former lustre. The democratic society, therefore, has an interest in ensuring that its members can enjoy and protect their good reputation so long as it is merited,” (paras. 107, 108, 109, 110, 111 and on). In Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, the court stated, “reputation is one of the most valuable assets a person or a business can (possess.” (para. 69).

[25] I do not agree with the moving party that the pleadings in the Application are deficient. The particulars are set out in the Application at paragraphs 1(b), and 2(n) and (0), and in the Affidavit of Mr. Aitken at paragraphs 48 and 56.

[26] The Xus point out that a permanent injunction is an extraordinary remedy that must be granted sparingly. They point out that permanent injunctions have been ordered after findings of defamation where there is a likelihood that the defendant will continue to publish defamatory statements despite the findings that they are liable for defamation. Astley v. Verdun, 2011 ONSC 3651, para.21.

[27] On this point, the Factum of the Xus at paras. 66 which states: “…which may see us never again, being able to speak out against Morven…”, and at para. 38 which states, “… do not relate to a private grievance between Morven and the Xus; they are meant as “a call to the world”, an attempt to effectuate change…”, are highly relevant. These statements demonstrated that there are grounds to believe that they will continue to criticize Morven, if not restrained.

[28] In the case of Labourers’ International Union of North America, Local 183 v. Castellano, 2020 ONCA 71, the Court stated,

25 As referenced in Robert J. Sharpe, Injunctions and Specific Performance, loose-leaf, (Toronto: Canada Law Book, 2019), at para. 1.45, in NunatuKavut Community Council Inc. v. Nalcor Energy, 2014 NLCA 46, 358 Nfld. & P.E.I.R. 123, at para. 72, the Court of Appeal of Newfoundland and Labrador summarized the approach to be applied in deciding whether to grant a permanent injunction:

(i) Has the claimant proven that all the elements of a cause of action have been established or threatened? (If not, the claimant's suit should be dismissed);

(ii) Has the claimant established to the satisfaction of the court that the wrong(s) that have been proven are sufficiently likely to occur or recur in the future that it is appropriate for the court to exercise the equitable jurisdiction of the court to grant an injunction? (If not, the injunction claim should be dismissed);

(iii) Is there an adequate alternate remedy, other than an injunction, that will provide reasonably sufficient protection against the threat of the continued occurrence of the wrong? (If yes, the claimant should be left to reliance on that alternate remedy);

(iv) If not, are there any applicable equitable discretionary considerations (such as clean hands, laches, acquiescence or hardship) affecting the claimant's prima facie entitlement to an injunction that would justify nevertheless denying that remedy? (If yes, those considerations, if more than one, should be weighed against one another to inform the court's discretion as to whether to deny the injunctive remedy.);

(v) If not (or the identified discretionary considerations are not sufficient to justify denial of the remedy), are there any terms that should be imposed on the claimant as a condition of being granted the injunction?

(vi) In any event, where an injunction has been determined to be justified, what should the scope of the terms of the injunction be so as to ensure that only actions or persons are enjoined that are necessary to provide an adequate remedy for the wrong that has been proven or threatened or to effect compliance with its intent? [Emphasis added.]

26 Given their potentially broad and restrictive scope, permanent injunctions must be particularly tailored to the specific circumstances of the case in which they are ordered. It is therefore incumbent on the court asked to consider such relief to conduct a careful analysis and to limit the breadth of any permanent injunction to only what is reasonably necessary to remedy the specific wrong committed and prevent further harm to the claimant. See Cambie Surgeries Corp., at para. 39; NunatuKavut Community Council Inc. v. Nalcor Energy, 2014 NLCA 46, at para. 71.

[29] I find on the basis of the record and the law that there is substantial merit to the Morven position that damages are not an adequate alternate remedy.

[30] Morven has satisfied me that there are grounds to believe that its proceeding has substantial merit.

No Valid Defence

[31] The “no valid defence” prong requires Morven to show that there are grounds to believe that the defences offered have no real prospect of success. (Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 60, Bent v. Platnick, 2020 SCC 23, para. 103)

[32] The moving parties assert the defence of fair comment in their Factum and oral submissions.

[33] Supreme Court of Canada in Grant v. Torstar Corp., 2009 SCC 61 set out the test for a defendant to meet in claiming fair comment,

31 In addition to privilege, statements of opinion, a category which includes any "deduction, inference, conclusion, criticism, judgment, remark or observation which is generally incapable of proof" (Ross v. New Brunswick Teachers' Assn., 2001 NBCA 62, 201 D.L.R. (4th) 75, at para. 56, cited in WIC Radio, at para. 26), may attract the defence of fair comment. As reformulated in WIC Radio, at para. 28, a defendant claiming fair comment must satisfy the following test: (a) the comment must be on a matter of public interest; (b) the comment must be based on fact; (c) the comment, though it can include inferences of fact, must be recognisable as comment; (d) the comment must satisfy the following objective test: could any person honestly express that opinion on the proved facts?; and (e) even though the comment satisfies the objective test the defence can be defeated if the plaintiff proves that the defendant was actuated by express malice. WIC Radio expanded the fair comment defence by changing the traditional requirement that the opinion be one that a "fair-minded" person could honestly hold, to a requirement that it be one that "anyone could honestly have expressed" (paras. 49-51), which allows for robust debate. As Binnie J. put it, "[w]e live in a free country where people have as much right to express outrageous and ridiculous opinions as moderate ones" (para. 4).

[34] The signs and petition and media post assert in part, “I can’t breathe safely… Stop the corporate greed… Morven Construction. Silica dust… Stop the pollution now… Is it Afghan battlefield?... Long-term blasting damages our house, water well, human’s nervous system and biological clock…”.

[35] One sign bore the skull and cross bones logo.

[36] Each party asserts that there are proved facts. The Xus do so at paragraph 50 of their Factum and assert their expert reports. It is to be noted that the expert reports were secured well after the signage, petition and media post.

[37] Morven asserts that there are deficiencies in the expert reports, and notes that there is no evidence of health issues caused by the quarry operations, there is no evidence that the quarry generates silica dust, there is no evidence of corporate greed and there is no evidence of similarity between the quarry operation and an Afghan battlefield.

[38] I find that there are grounds to believe that the Xus have no valid defence.

[39] Further, I find that in considering the submissions of the parties concerning malice, I find that there are grounds to believe that the defence of fair comment could be defeated by malice on the part of the Xus, despite their testimony as to their motivation. At trial, their testimony as to motivation will be subject to the usual assessment of credibility and the reasonableness of the basis for their beliefs will also be properly assessed.

[40] Accordingly, I find that Morven has satisfied me that are grounds to believe that the Xus have no valid defence.

Public Interest: Permit the Proceeding to Continue versus Protecting the Xus’ Expression

[41] Under subsection 4(b), to save the proceeding, Morven must also satisfy the court that the harm likely to be or have been suffered by it as a result of the Xus’ expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression. The Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, paras. 66 and 67, identifies the considerations that are to be made by the motions judge. It is not a balancing exercise.

[42] Harm can be monetary or reputational. “In a defamation action, harm (and therefore general damages is presumed”. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, paras. 69, 71.

[43] As I have pointed out above, a central theme through the ages has been that the reputation of the individual is of fundamental importance and highly protected by the courts. Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, pages 1175 to 1178; Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para.69; Bent v. Platnick, 2020 SCC 23, paras. 144 to 148.

[44] Mr. Aitken’s Affidavit evidence as to harm suffered and to be suffered stands unchallenged on this motion. Counsel for the moving party submitted that that was their tactical decision. The harm alleged is both monetary and reputational. There are no other sources identified on the record.

[45] This must be weighed against the expression by the Xus. Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, paras. 73 and 79.

[46] Freedom of expression is a fundamental right and value. As I have indicated earlier, I find that there are grounds to believe that they have defamed Morven and there are grounds to believe that they have no valid defence.

[47] On the record, I find that they made their expression based on minimal, unsophisticated research or investigation at the time they did so.

[48] In my view, their expression could be fairly characterized as strongly held personal opinion put forward as if it were fact. The expression has no sound foundation.

[49] As stated in Bent v. Platnick, 2020 SCC 23, by the majority of the Court,

163 In Pointes Protection, this Court finds that the public interest in protecting an expression can be determined by reference to the core values that underlie s. 2(b) of the Canadian Charter of Rights and Freedoms, such as the search for truth, participation in political decision making, and diversity in forms of self-fulfilment and human flourishing: para. 77. That said, in Hill, this Court noted that "defamatory statements are very tenuously related to the core values which underlie s. 2 (b)": para. 106. In consistent fashion, this Court finds in Pointes Protection that there will be less of a public interest in protecting a statement that contains "gratuitous personal attacks" and that the "motivation behind" the expression will be relevant to the inquiry: paras. 74-75 (emphasis omitted).

167 However, with great respect to my colleague, she does not consider a crucial element of Ms. Bent's expression. Permitting Dr. Platnick's defamation claim to proceed will deter others not from speaking out against unfair and biased practices, as my colleague argues, but from unnecessarily singling out an individual in a way that is extraneous or peripheral to the public interest. It will also deter others from making defamatory remarks against an individual without first substantiating, or attempting to substantiate, the veracity of their allegations. In this way, rather than dis incentivizing people from speaking out against unfair and biased practices, it will in centivize them to act with reasonable due diligence and to tailor their expression so as to avoid needlessly defaming an individual who depends on their reputation for their livelihood.

168 In my humble opinion, this is the appropriate balance, at the unique stage of a s. 137.1 motion, between freedom of expression and reputational considerations, which this Court has historically strived to optimize: good reputation "reflects the innate dignity of the individual, a concept which underlies all the Charter rights", and the protection of reputation "must be carefully balanced against the equally important right of freedom of expression" (Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, at paras. 120-21).

(See also Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, paras. 72-77).

[50] The reputational harm to Morven’s professional reputation must be considered, even if it is not quantifiable at this stage. (Bent v. Platnick, 2020 SCC 23, para. 148).

[51] The four indicia identified in Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 78, are absent in this plaintiff, Morven, on the record before me. I have also considered the factors set out in Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 80.

[52] I have also considered the point made by the Xus that the costs incurred in the litigation would be disproportionate to the harm to be quantified. (Factum, para. 65, Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 80. and Bangash v. Patel, 2022 ONCA 763, para. 12). In this regard, I observe that counsel chose to use two lawyers on each side to argue the motion, that counsel travelled to Kingston to argue the motion in person when it could have been heard effectively and efficiently virtually and counsel chose to file duplicate materials, many of which were not necessary.

[53] I am satisfied that reputational harm outweighs the costs that could reasonably be necessary in this litigation.

[54] In my view, the harm likely to be or have been suffered by Morven is closer to the high end of the spectrum and so too then does the public interest in allowing it to proceed. Or the other hand, the public interest on the Xus’ expression lies well below the high end of the spectrum.

[55] I am satisfied that Morven has established on a balance of probabilities that the harm likely to be or have been suffered as a result of the Xus’ expression is sufficiently serious that the public interest in permitting this defamation proceeding to continue outweighs the public interest in protecting their expression.

DECISION

[56] I find that Morven has successfully met both the merits based hurdle and the public interest hurdle and I dismiss the motion brought by the Xus under s. 137.1 and I allow the Morven’s lawsuit in defamation to proceed.

[57] The decision in this motion is plainly not a determinative adjudication of the merits of the claim. I have not prejudged the merits of the action. This decision simply means that the Morven Application deserves a trial on the merits and is not one that ought to be dismissed at this early stage. I find that this action is not a SLAPP as described by Justice Coté in Pointes Protection Association v. 1704604 Ontario Ltd., 2022 SCC 22, para. 2. Morven deserves to have its day in court to potentially vindicate its reputation. (See also Bent v. Platnick, 2020 SCC 23, para. 176).

COSTS

[58] Bearing in mind s. 137.1(8), if the parties find it necessary to address the issue of whether costs should be awarded, they may do so in writing, limited to 2 pages double spaced. Morven shall deliver its submission within 5 days, and the Xus shall deliver their response within 5 days thereafter. If no such submissions are filed accordingly, there shall be no Order as to costs.

The Honourable Mr. Justice Gary W. Tranmer

Released: March 16, 2023