Court File and Parties

COURT FILE NO.: CV-20-00653410-00CL DATE: 20230913 ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

RE: Anson Advisors Inc. et al., Plaintiffs AND: James Stafford and Jacob Doxtator et al., Defendants

BEFORE: Peter J. Osborne J.

COUNSEL: Robert William Staley, Doug Fenton, Dylan Yegendorf and Andrew Carlson, for the Plaintiffs Won J. Kim, Megan B. McPhee, Rachael Sider and Nicole Kelly, for the Defendants James Stafford and Jacob Doxtator and the Defendant/Plaintiff by Counterclaim, Robert Doxtator

HEARD: September 13, 2023

Endorsement

[1] This case conference was scheduled before me to address two issues:

a. a proposed motion by the Defendants James Stafford and Robert Doxtator (referred to collectively as “the Defendants” for the purposes of this Endorsement since the Defendant Jacob Doxtator is not a moving party on the proposed motion) to amend their Amended Statement of Defence and Counterclaim; and

b. a proposed anti-SLAPP motion by the Defendants.

[2] The Plaintiffs consent to the Amended Amended Statement of Defence and Counterclaim in the form attached as Schedule “A” to the Notice of Motion of the Defendants dated August 31, 2023, on the basis that their consent is without prejudice to their right to plead the expiry of applicable limitation periods in response, and their right to examine on the newly amended pleading if they wish to do so. Those terms are reasonable and in any event or consented to by the Defendants.

[3] The Defendants are granted leave to amend their pleading as above. They will submit to me a draft order.

[4] The Defendants seek to bring an anti-SLAPP motion in accordance with s. 137.1 of the Courts of Justice Act to dismiss the main action and they seek to have that motion scheduled. The Plaintiffs object to that proposed motion being scheduled and seek the imposition of a case management timetable and a trial date.

[5] I was appointed Case Management Judge in respect of this proceeding last year by Justice McEwen, the then Commercial List Team Lead. I have been case managing this matter since that time and have conducted numerous case conferences with counsel for the parties relating to various procedural and interlocutory matters.

[6] Case conferences are contemplated by Rule 50.13 which gives the Court the ability to make a procedural order, give directions, make an order for interlocutory relief, or convene a hearing, among other things. It is my role to manage this proceeding in a fair and equitable way, and in a manner that most efficiently utilizes the extremely scarce judicial resources of the Commercial List.

[7] It is the strong preference of the Court to adjudicate and dispose of actions on their merits, and on the basis of a full record. In my view in this case, that means finalizing the pleadings, completing documentary production and examinations for discovery, and getting the matter on for trial as soon as possible. Virtually every step in this proceeding is hotly contested. Very little proceeds on consent and the advice and directions of the Court are consistently and repeatedly required to move the matter along and advance it in any meaningful way toward trial.

[8] This matter has already had a long and acrimonious history. The acrimony and tension continues, and regrettably the action is not nearly as advanced as it ought to be, given that it has already been pending for almost three years. There have been numerous motions and/or case conferences.

[9] This action was commenced by issuance of the Statement of Claim on December 8, 2020.

[10] On October 26, 2022, a case conference was scheduled before me at the request of the Plaintiffs, Defendants to Counterclaim, who sought the imposition of deadlines for the exchange of productions and the completion of examinations for discovery. The Defendants (James Stafford and Robert Doxtator) sought to postpone production deadlines and examinations for discovery on the basis that the Plaintiffs had sought to compel production from non-parties in other jurisdictions.

[11] I gave directions to the effect that the two tracks could and should proceed concurrently. On the consent (importantly) of the parties, affidavits of documents and productions were agreed to be exchanged no later than December 15, 2022, and examinations for discovery of all parties were to be completed no later than March 15, 2023.

[12] On December 22, 2022, another case conference before me was requested to address a number of issues relating to documentary production. Many of those issues were resolved on consent, but other issues were not. I gave directions with respect to those issues.

[13] On February 24, 2023, I conducted yet another case conference requested by the Defendants arising out of the fact that the parties had been unable to come to an agreement with respect to a final schedule for the examinations for discovery and other case management issues.

[14] Counsel for the Defendants then raised the fact that they could be in an irreconcilable position of conflict of interest as between their (then) two clients such that they may not be able to continue. I directed that if necessary, counsel should bring a motion to be removed from the record. I secured from the Trial Coordinator a fixed date of March 28, 2023 for the hearing of that motion if required. Ultimately, that motion was never brought.

[15] A second issue addressed at that case conference of February 24, 2023 arose out of the alleged conduct of one of the former law firms involved in the matter as a result of which, the Defendants alleged, the Plaintiffs had relied in their claim in part on information that had been improperly obtained.

[16] I made further directions about specific dates for the completion of examinations for discovery.

[17] On July 4, 2023, I conducted another case conference in this matter at which I addressed four issues. One of those issues was the request of the Plaintiffs that the Court fix a trial date.

[18] Another of those issues related to a proposed anti-SLAPP motion, which was raised for the first time and in respect of which counsel for the Defendants requested that a motion date be scheduled. Counsel for the Defendants submitted that they had learned only during the then recent examinations for discovery of the evidence on which the proposed anti-SLAPP motion was based, with the result that the motion was not untimely and could not have been brought earlier. The Plaintiffs vigourously objected.

[19] In the circumstances, and as reflected in my Endorsement, I was not in a position to determine the merits of any such proposed motion, or the timeliness thereof, on the basis of the limited materials before me and without even a draft Notice of Motion. I directed the Defendants to serve their proposed motion materials no later than August 15, 2023, in order that the Plaintiffs could consider their position with respect to the relief sought. I advised that I would then address the motion if necessary at today’s case conference.

[20] A third issue addressed at the July 4 case conference related to outstanding undertakings and refusals arising from the examinations that had already been completed. On the consent of all parties, the undertakings were ordered to be answered no later than August 31 and, by the same date, all parties were to confirm any refusals being maintained, and exchange comprehensive charts organizing those refusals into categories or topics as necessary and appropriate, and stating opposite each refusal or category of refusals, the basis for the refusal.

[21] With respect to the request of the Plaintiffs that a trial date be fixed, I reminded the parties that such dates were fixed by the Commercial List Team Leads but that in any event, the matter was not yet ready for trial since refusals were outstanding and all expert reports had not yet been exchanged.

[22] That brings me to the anti-SLAPP motion sought to be scheduled today.

[23] The Defendants’ anti-SLAPP motion materials were in fact delivered two weeks late on August 31, 2023. There are numerous outstanding refusals from the examinations of the Defendants, which the Plaintiffs submit are improper.

[24] The Defendants delivered one omnibus motion record in respect of both their proposed anti-SLAPP motion and the motion to amend their pleading discussed above.

[25] By Notice of Motion dated August 31, 2023, the Defendants seek to bring a motion dismissing the main action against the Defendants Robert Doxtator and James Stafford. The Notice of Motion states the following, in part, as to the grounds for the motion (paraphrased and summarized):

a. the Moving Defendants seek dismissal of this action in its entirety as against them for being a SLAPP, based on the following evidence that came to light during discoveries:

i. the Plaintiff strategically brought this lawsuit to “flex” for stakeholders and to discourage individuals from publicly criticizing the market and business strategies;

ii. the Plaintiffs do not have any probative evidence linking the Defendants to the alleged conspiracy, as any “evidence” they do have is circumstantial, manufactured, and from an unknown source; and

iii. the Plaintiffs have not suffered any damages, and in fact, had record returns and a higher asset base following the publication of the Impugned Statements (as defined below);

b. the core allegation in the [claim] is that the Defendants conspired to publish and distribute public statements anonymously and pseudo-anonymously with the predominant purpose of injuring the Plaintiffs’ business and reputations. These published public statements (the “Impugned Statements”) are:

i. tweets posted on two different Twitter accounts between August 25, 2019 and October 30, 2020;

ii. posts made on stockhouse.com by four different accounts between November 18, 2020 and March 10, 2021; and

iii. two reports or “manifestos” originally published on September 25, 2020 and June 28, 2021 currently hosted on the website www.marketfrauds.to;

c. the Impugned Statements are concerned with matters of public interest, as they all pertain to the Plaintiffs’ short selling practices and how the effect the integrity of Canadian capital markets;

d. Robert Doxtator admits to publishing some but not all of the Impugned Statements described above at paragraphs 25(b)(i) and (ii). James Stafford admits to publishing some but not all of the Impugned Statements described at paragraph 25(b)(ii). Both otherwise deny any involvement in publishing or disseminating the Impugned Statements (i.e., the balance of the Impugned Statements described above at paragraphs 25(b)(i) and (ii), and all of the Impugned Statements (i.e., the “manifestos”) described above at paragraph 25(b) (iii));

e. the Plaintiff Moez Kassam has unequivocally demonstrated the nature and purpose of this action to be strategically designed to discourage public criticism of the Plaintiffs and to “flex” for the Plaintiffs’ shareholders;

f. the harm likely to be or that has been suffered by the Plaintiffs as a result of the Moving Defendants’ expression is not sufficiently serious that the public interest in permitting the action to continue outweighs the public interest in protecting the Moving Defendants’ expression; and

g. the Moving Defendants’ motion is timely as it was brought as a result of evidence given during Mr. Kassam’s examination for discovery in April 2023, and within a year of the close of pleadings.

[26] Anti-SLAPP motions are permitted by s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c.C.43, which provides that such a motion may be brought at any time after claim is commenced. This Court and the Court of Appeal have been clear that anti-SLAPP motions must be brought in a timely manner and at an early stage of the action. The Defendant is not even required to first deliver a statement of defence. The motion records will be more abbreviated than would be expected at a later point in the proceedings: see 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685, 142 O.R. (3d) 161 (“Pointes”) at paras. 76, 77.

[27] The defendant must demonstrate that the litigation arises out of the defendant’s expression on a matter relating to the public interest. If the defendant meets that onus, the onus shifts to the plaintiff to demonstrate that its lawsuit clears the merits-based hurdle in s. 137.1(4)(a) and the public interest hurdle in s. 137.1(4)(b): Pointes, at para. 7.

[28] As stated by the Court of Appeal in Pointes, at para. 78:

Motion judges must be careful that s. 137.1 motions do not slide into de facto summary judgment motions. If the motion record raises serious questions about the credibility of affiants and the inferences to be drawn from competing primary facts, the motion judge must avoid taking a “deep dive” into the ultimate merits of the claim under the guise of the much more limited merits analysis required by s. 137.1(4)(a). If it becomes apparent to the motion judge that a proper merits analysis would be go beyond what could properly be taken within the confines of a s. 137.1 motion, the motion judge should advise the parties that a motion for summary judgment would provide a more suitable vehicle for an expeditious an early resolution of the claim.

[29] All of this reinforces the overarching requirement that such motions be brought early in the proceeding and even before the action is defended. The whole point of s. 137.1 in the first place is to permit anti-SLAPP motions as soon as such claims are brought, so that the defendants do not have to spend the resources litigating claims that ought not to have been commenced in the first place. That is why the courts have described anti-SLAPP motions as screening devices intended to be brought “at the outset of the proceeding before either the plaintiff or the defendant has had the opportunity to marshal the type of evidence that they would for a trial”.

[30] That is why such motions are not to be used as a surrogate for summary judgment: See also Lascaris v. B’nai Brith Canada, 2019 ONCA 163, 144 O.R.(3d) 211 at para. 30.

[31] To the observation of our Court of Appeal that it not be used as a surrogate for summary judgment, I would add what I think is obvious; namely that it is not to be used as a surrogate for trial when trial is around the corner.

[32] Just as the Defendants themselves submit here (see para. 25(f) above), s. 137.1 is intended to allow for the dismissal of such claims as soon as they are brought because the harm suffered by the plaintiff as a result of the expression by the defendant is not sufficiently serious that the public interest in permitting the action to continue outweighs the public interest in protecting the expression of the defendant.

[33] Here, the action is almost three years old. Mr. Stafford was added as a party in May, 2022, almost 1.5 years ago.

[34] Both Robert Doxtator and James Stafford explicitly and specifically raised the anti-SLAPP issue or potential issue in their respective Statements of Defence (see Defence of Robert Doxtator at paras. 3 and 11 filed March 26, 2021; Defence of James Stafford at paras. 24 – 28 with explicit reference to s. 137.1 filed June 28, 2022). Yet no such motion was ever brought.

[35] Voluminous productions including thousands of documents have been exchanged. Multiple days of examinations for discovery have already been completed. Equally voluminous answers to undertakings have been provided together with supplementary productions. Other refusals remain outstanding. Numerous motions and case conferences have been conducted, and at the most recent case conference the Plaintiffs requested that the Court fix a date for the trial of the action.

[36] And now, the motion is proposed for the first time as I, in my capacity as case management judge, have been providing directions to the parties to clean up the remaining matters so that the action is ready for trial as soon as possible.

[37] Moreover, it is now proposed to be brought largely on the basis of the improper motive of the Plaintiff as, the Defendants submit, evidenced by Mr. Kassam’s desire to “flex for his shareholders” (see paras. 25(a)(i) and (e) above). That is clear from both the Notice of Motion and the submissions of counsel for the Defendants made today. Yet the Defendants submit that the motion has been brought only now because (as noted above at para. 25(g)) they only obtained the necessary evidence about the alleged “flex for shareholders” on Mr. Kassam’s examination for discovery conducted in April of this year.

[38] However, that assertion flows from an audio recording of Mr. Kassam surreptitiously taken by Robert Doxtator that has been in his (Doxtator’s) possession since October, 2020 and was included in his own productions made in this proceeding long ago.

[39] That the Defendants have had that information for a long time and indeed since before this action was commenced almost three years ago is clear from the Defences themselves as excerpted above – the Defendants pleaded that very point. The fact that there has been a change of counsel does not alter the fact that this issue has been alive in the eyes of the Defendants since before the commencement of the action.

[40] At the case conference today, I inquired of counsel for the Defendants as to what evidence was elicited on the recent examination for discovery that provided the foundation for the proposed motion only now. The answer was that it was only on the recent examination that Mr. Kassam acknowledged that the voice on the recording was his.

[41] I cannot accept this as a response to the patent untimeliness of the proposed motion. The Defendants could easily have brought the motion as soon as the action was commenced and file the evidence of the recording as an exhibit to an affidavit presumably from Mr. Doxtator attesting to the veracity of the recording. It would then be up to the Plaintiffs to file an affidavit from Mr. Kassam in response to the motion either admitting or denying the record. Either way, there was no reason to wait over two years to bring the motion. I am not persuaded that there is any new evidence elicited on the recent examinations for discovery that is relevant to the issue of the timeliness of this motion.

[42] In short, there is no screening function to be performed here before the resources are spent on prosecuting or defending an action. That work has to a large extent already been done. The imposition of a stay now, at this late stage, pending a final determination of an anti-SLAPP motion, is not accretive to the fair and expeditious determination of all issues on the merits.

[43] Moreover, it is clear to me that such a motion, at this stage, would involve precisely the sort of deep dive that the Court of Appeal cautioned against in Pointes. Issues of credibility are going to be central.

[44] Finally, there is an incongruity in the position of the Defendants who at once both deny making many of the Impugned Statements (including the manifestos) and deny any involvement in the alleged conspiracy, and yet also seek to bring the motion explicitly on the basis that, as required by s. 137.1, the statements of the defendants should be protected as a public interest.

[45] The Defendants raised many issues in their case conference brief, but in my view, and as I advised counsel at the case conference, the issues raised are, in my view, largely issues for trial. The Defendants may be correct in what they submit, and if they are, the action may be dismissed.

[46] All the more reason to get this matter on for trial in order that all of the issues can be explored, on a full evidentiary record, to arrive at a proper, fair and equitable determination on the merits. An anti-SLAPP motion, brought at this late stage, will only delay that merits determination. Moreover, I am concerned given the allegations of mischief by various parties to this action, and the level of acrimony between and among the parties, that time is of the essence and that additional time has so far served only to yield more disputes and further allegations. The parties need to get on with the matter now.

[47] Exercising my case management function over this proceeding, I decline to schedule the motion.

[48] The parties are directed to agree forthwith on a proposed case management timetable which provides completion dates for all remaining steps required to get this matter ready for trial, including any additional pleading amendments arising as a result of the Amended Amended Statement of Defence and Counterclaim ordered on consent today, additional production and discovery obligations and any other matters.

[49] If the parties cannot agree on such a timetable, they may request a further case conference before me and I will impose one, although reluctantly, as I remind the parties of the expectations of litigants and counsel on the Commercial List. I implore the parties to agree to an expeditious timetable. The parties are entrenched in their respective positions and confident in those positions at trial. All counsel purport to be in agreement that the matter should be tried as soon as possible. I agree, and I urge them in the strongest possible terms to agree on a schedule for all pretrial matters.

[50] Once those steps have been completed, the Commercial List Team Leads can fix a trial date.

Osborne J.