Court File and Parties

BRACEBRIDGE COURT FILE NO.: CV-22-153-00 DATE: 20231109 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Eleanor Coulson and Patrick Coulson Moving Parties/Defendants by Counterclaim – and – Leonard Alexander Ojha, 1964856 Ontario Inc., Alexander Muskoka (Gravenhurst) Inc. and Alexander Muskoka Operations (Gravenhurst), Respondents/Plaintiffs by Counterclaim

Counsel: Mark Vernon, Counsel, for the Moving Parties/Defendants by Counterclaim Michael Lesage, Counsel, for the Respondents/Plaintiffs by Counterclaim

HEARD: In Writing

Costs Decision

HEALEY J.:

[1] The plaintiffs, Eleanor and Patrick Coulson, brought a motion pursuant to s. 137.1 of the Courts of Justice Act, R.S.O. 1990, c. C.43 to dismiss the counterclaim of the defendant, Alexander Muskoka (Gravenhurst) Inc. (“AM Gravenhurst”). Their motion was dismissed on the basis that they were unable to meet their burden under s. 137.1(3) to show that the expressions in question relate to a matter of public interest.

[2] AM Gravenhurst asks that this court award costs of the motion in its favour on a partial indemnity basis in the amount of $34,697.67.

[3] The Coulsons ask that this court adhere to the presumption against costs set out in s. 137.1(8) of the Courts of Justice Act, which provides:

If a judge does not dismiss a proceeding under this section, the responding party is not entitled to costs on the motion, unless the judge determines that such an award is appropriate in the circumstances.

[4] Since the anti-SLAPP provisions came into effect, there appears to be a shift in the jurisprudence from the Court of Appeal toward finding that a cost award “is appropriate in the circumstances”, particularly where the motion is dismissed at the s. 137.1(3) stage: see Veneruzzo v. Storey, 2018 ONCA 688; Sokoloff v. Tru-Path Occupational Therapy Services Ltd., 2020 ONCA 730; Dent-X Canada v. Houde, 2021 ONSC 7433, aff’d 2022 ONCA 414; Park Lawn Corp. v. Kahu Capital Partners Ltd., 2022 ONSC 4451, aff’d 2023 ONCA 129.

[5] However, as articulated by Perrell, J. in Park Lawn, at para. 11, additional justification is needed beyond the mere fact that an anti-SLAPP motion is dismissed to award costs against the moving party, otherwise the statutory purpose of s. 137.1(8) would be undermined.

[6] In Veneruzzo, at para. 39, the Court outlined the considerations underlying why it may be appropriate for the court to exercise its discretion to award costs when the moving party has been unable to meet the initial public interest threshold:

The purpose underlying the costs provisions in s. 137.1 disappears when the lawsuit has none of the characteristics of a SLAPP, and the impugned expression is unrelated to a matter of public interest. In those circumstances, it is not the initial lawsuit challenging the expression that represents a potential misuse of the litigation process, but rather the s. 137.1 motion. A costs order denying a successful respondent its costs on a s. 137.1 motion, even though the lawsuit was not brought for an improper motive and the claim did not relate to a matter of public interest, could be seen as encouraging defendants to bring meritless s. 137.1 motions.

[7] However, in Sokoloff, at paras 45 and 46, in obiter the Court outlined additional considerations:

(i) although the dismissal of a motion at the s. 137.1(3) threshold stage is a relevant consideration in determining whether to award costs to a plaintiff, it is not determinative of the appropriateness of a costs order; (ii) an award of costs may be easier to justify in cases in which the assertion of the public interest is wholly lacking in merit, and less so in cases in which the moving party may have an arguable basis to assert that their expression relates to a matter of public interest; (iii) every case is different, and this is a developing area of the law; and (iv) The presence of traditional SLAPP indicia may still be relevant to the issue of costs.

[8] In this case I am not awarding costs to the responding party for several reasons. The first is that the Coulsons had an arguable case under s. 137.1(3). The decision that none of the expressions met the test was only reached after considerable debate and deliberation. There was a public interest component to the expressions, as outlined at para. 69 of my Reasons for Decision, dated October 17, 2023.

[9] Second, there is nothing in the record before me to convince me that the Coulsons brought this motion to gain any strategic advantage, delay the matter or to deliberately increase AM Gravenhurst’s costs. To the contrary, their motivation in bringing the motion appears to have been what compels most anti-SLAPP motions, which is to attempt to bring a quick ending to a claim that is perceived as having been brought for an improper purpose. The plaintiffs did not prolong the hearing of the motion, file extraneous material or engage in unnecessary cross-examinations.

[10] Third, AM Gravenhurst’s counterclaim does bear some of the hallmarks of a SLAPP as described in Platnick v. Bent, 2018 ONCA 687, at para. 99. There is very clear evidence of AM Gravenhurst using a legal process against the Coulsons in the past, when AM Gravenhurst made a complaint to the Town of Gravenhurst about dead or dying trees on the property line. This complaint resulted in the Town issuing a Property Standards Order against the Coulsons, and an expenditure of their efforts and money to resolve the matter. On the conclusions of AM Gravenhurst’s own expert, it was excavation done on AM Gravenhurst’s development land that put the trees in that state. The referral to the Town appears to have been strategic and malicious.

[11] The record also makes clear that Mrs. Coulson’s insistence on compliance with the Minutes of Settlement was either treated dismissively by the defendants or their agents, or as time went on, with threats of legal action beginning with correspondence in August 2022 from the defendants’ former counsel. There has been an attempt both in the material and during submissions to portray Mrs. Coulson as unreasonable, which is a difficult position for AM Gravenhurst to take when it so obviously forged ahead with its development plans without a tree preservation plan having been completed nor any fence installed to protect the trees on the boundary line and on the Coulsons’ property, contrary to the Minutes. There appears on the record to be a punitive or retributory purpose underlying the counterclaim.

[12] Last, while the s. 137.1(3) conclusion eliminated the necessity for further analysis, the evidence pointed toward AM Gravenhurst having significant problems with establishing that there were grounds to believe that their counterclaim has substantial merit, including that any of the alleged breaches of the Minutes by the Coulsons’ have caused AM Gravenhurst to suffer damages. Currently, its evidence compiled in the record is not compelling.

[13] For these reasons, this court orders that each party shall pay their own costs of the motion.

[14] The costs incurred by each party for this motion are disproportionate to the potential value of their respective claims. If the litigation continues, the costs will become, as is so often the case, the largest impediment to settlement. Counsel and the parties are urged to attempt to resolve this litigation through mediation at the earliest opportunity.

The Hon. Madam Justice S.E. Healey

Released: November 9, 2023