Court File No.: CV – 21 – 00668718 Date: 2024-01-23

Superior Court of Justice – Ontario

Re: Jacqueline Anne Horvat and Law Society of Ontario, Applicants And: Samuel David Goldstein, Respondent

Before: Koehnen J.

Counsel: Peter Downard, Lily MacLeod for the applicants David Elmaleh for the respondent

Heard: January 19, 2024

Endorsement

[1] The applicants seek an order transferring a matter from Small Claims Court to the Superior Court of Justice. The respondent opposes the request.

[2] I am satisfied that, on the facts of this case, a transfer to the Superior Court is warranted. The Small Claims Court and its procedures are designed to dispose of matters in a summary fashion. This matter involves complex issues of general interest that are not appropriately addressed in a summary manner. The respondent’s objection to the transfer is based largely on the potential barriers to justice that a transfer could create by virtue of the longer timelines and higher cost awards in the Superior Court. While it might not be possible to eliminate those risks entirely, it is possible to substantially reduce them by imposing terms on the transfer and through effective case management.

The Facts

[3] The applicant, Jacqueline Horvat, is the Treasurer of the Law Society of Ontario. The Law Society of Ontario (the “LSO”) is the self-governing regulator that oversees lawyers in the province of Ontario. The Treasurer is the president and head of the LSO.

[4] The respondent, Samuel Goldstein, was at the time of the events in issue, an elected Bencher of the LSO. The LSO is governed by Convocation, which is composed of the Treasurer and elected, appointed and ex officio Benchers of the LSO.

[5] The events at issue in this proceeding began when the Ontario Bar Association posted a tweet announcing the appointment of a racialized woman as “the Association’s 2022 – 23 Innovator in Residence.” The tweet stated further that: “She will lead the OBA’s new career accelerator for Indigenous and racialized lawyers in emerging areas of law.” It was followed by a photograph of the appointee.

[6] In response to this, the respondent posted a tweet saying the following:

Good job @ OBAlawyers you’ve “accelerated” the career growth of one minority hire. Tick that box off. Next?

[7] The respondent’s tweet was met with negative responses on Twitter.

[8] On November 10, 2022, Treasurer Horvat responded to the respondent’s tweet in a statement posted on the LSO’s website and Twitter account stating:

As Treasurer of the Law Society of Ontario, I thought it was important to speak out in response to statements made by Sam Goldstein who is a member of Convocation, the Law Societyʼs board of directors.

In no way are the statements made by Mr. Goldstein representative of the views of the organization.

As chair of the Law Societyʼs board of directors, I am concerned about any conduct that does not reflect our organization's values, principles and commitment to equity, diversity, and inclusion in Ontario's legal professions.

All benchers are expected to abide by the Bencher Code of Conduct and all Ontario lawyers and paralegals must follow the Rules of Professional Conduct.

[9] The respondent at some point deleted his tweet. While the record before me is not clear about exactly when he did so, the suggestion is that it was before Treasurer Horvat issued her statement.

[10] In a statement to Convocation on December 1, 2022, the respondent asserted that Treasurer Horvat’s statement was libelous. While reading his statement to Convocation, the respondent served Treasurer Horvat with a libel notice. In his statement, the respondent referred to his tweet as “stupid.” At some point, the respondent apologized for his tweet although the specific timing of that is also not clear to me on the record before me.

[11] In late January 2023, the respondent filed a claim in Small Claims Court against Treasurer Horvat and the LSO claiming damages of $35,000, the monetary limit of claims permitted in Small Claims Court.

[12] The respondent’s claim alleges that Treasurer Horvat intentionally abused her position as the president and head of the LSO. The respondent claims that Treasurer Horvat acted in bad faith; with malice; with knowledge that her statement was false; in a mendacious and irresponsible manner; with an intention to damage the respondent's practice of his profession; with reckless disregard for the truth; and for the collateral purpose of enhancing her political fortunes. The respondent alleges that the Treasurer’s qualified immunity from civil liability under s. 9 of the Law Society Act thus has no application to his claim.

[13] The applicants have defended the respondent’s claim. They have pleaded the defences of truth, fair comment, the Treasurer’s immunity from civil liability under s. 9 of the Law Society Act; and qualified privilege.

[14] A settlement conference occurred in the Small Claims Court action in June 2023 at which the respondent was ordered to provide full particulars of his allegations of malice and bad faith and to serve on the applicants any documentary evidence he intends to rely upon. The respondent has not yet complied with that order because it required production within 30 days of the disposition of this motion.

The Legal Principles

[15] Both sides agree that this Court has inherent jurisdiction to transfer a Small Claims Court action to the Superior Court of Justice. The key question in considering whether to transfer is whether the issues are capable of being justly and fairly resolved in the Small Claims Court proceeding. Segura Mosquera v. Rogers Communications Inc., 2021 ONCA 876 at paras. 12-14.

[16] Cases within the jurisdiction of the Small Claims Court should ordinarily be tried there unless there is prejudice to the other party that cannot be easily remedied. Ali v. Schrauwen, 2011 ONSC 2158.

[17] In determining whether it is appropriate to transfer a Small Claims Court action to this court, the court should be mindful of its obligation under rule 1.04 to “secure the just, most expeditious and least expensive determination of every civil proceeding on the merits.” Graves v. Avis Rent A Car System Inc., 1993 CarswellOnt. 472; [1993] O.J. No. 2771, 21 C.P.C. (3d) 391; Shoppers Trust Co. v. Mann Taxi Management Ltd., 16 O.R. (3d) 192 (Gen. Div.).

[18] In Segura Mosquera v. Rogers Communications Inc., 2021 ONCA 876 the Court of Appeal for Ontario approved of comments that Gomery J. (as she then was) made at first instance to the effect that the discretion to transfer should be exercised rarely, that the onus is on the party seeking a transfer, and that the considerations in such cases include:

(i) The complexity of the litigation. (ii) The role and importance of pre-trial discovery and expert evidence. (iii) Whether the case raises issues of general importance. (iv) The desire for a just and fair determination.

[19] I turn now to those considerations.

i. The complexity of the litigation.

[20] The respondent submits that the litigation is simple because it involves merely a straightforward question of whether a short statement by the Treasurer libeled him. While that is true at heart, the determination of whether that statement libeled him and the defences to it are more complex.

[21] It appears that one of the respondent’s grounds for resisting the defences in the libel action is that the Treasurer’s statement did not refer to the fact that the respondent had removed his statement from Twitter. Whether the failure to include a reference to that fact amounts to libel is a potentially legally complex issue.

[22] One of the defences of the applicants relates to the Governance Practices and Policies of the LSO. Those policies, among other things, provide that Convocation is committed to:

• governing the practice of law and the provision of legal services in a manner that will achieve a reduction of barriers created by racism, unconscious bias and discrimination;
• achiev[ing] better representation of Indigenous licensees, racialized licensees and licensees from all equality seeking groups in the legal professions”; and
• advance[ing] reconciliation, acknowledging a collective responsibility to support improved relationships between Indigenous and non-Indigenous peoples in Ontario and Canada.

[23] The Governance Practices and Policies include a Bencher Code of Conduct. The Bencher Code of Conduct provides, among other things, that: Benchers’ conduct should support the fulfilment of the LSO’s mandate, that in carrying out their responsibilities Benchers must act and be seen to act in accordance with the values and principles within the Code of Conduct and that Benchers should make it clear in any public statement whether they are speaking for the LSO or their personal capacity.

[24] The respondent submits that his libel claim has nothing to do with the Governance Principles and Policies or the Code of Conduct. While that may be, strictly speaking correct, it appears that the applicants’ defence will implicate those documents. This in turn involves the nature of the duties of the Treasurer to become involved if the Treasurer perceives that a Bencher is not complying with those policies as well as the extent of the duties, obligations and restraints that those documents may place upon Benchers.

ii. The role and importance of pre-trial discovery and expert evidence

[25] Neither side suggests that expert evidence will be a feature of the case.

[26] The applicants submit that the absence of pretrial discovery is a major impediment to the proper trial of this case. Oral discovery is not available in the Small Claims Court. In addition, documentary discovery in Small Claims Court is limited to production of documents on which a party will rely. In the Superior Court, production obligations extend to all relevant documents regardless of whether a party intends to rely on them.

[27] The applicants note that the respondent has spoken of his history of issues with the Treasurer as part of the context in which his allegations of malice, bad faith and the Treasurer enhancing her political fortunes must be understood and will be presented at trial. This history takes the matter beyond a review of a single statement issued by the Treasurer and a determination of whether that statement is libelous.

[28] Both sides suggest that the other is guilty of political grandstanding. It appears that the issue arises in the context of an ongoing political debate within the bar and Benchers about the appropriate scope of the LSO’s mandate. That is an issue of some nuance and complexity which makes this action more complex than an ordinary $35,000 libel action. The nuances to which this more complex dynamic give rise, in my view, warrant the additional step of discovery to ensure that the case is disposed of justly and fairly in light of the complexities it raises.

[29] The respondent argues that the Treasurer and LSO have not put forward any evidence about the need for discovery. I do not view that as an evidentiary matter but more as a matter of legal argument.

iii. Whether the case raises issues of general importance

[30] The respondent concedes that the case raises issues of general importance. As noted, this is far more than a simple $35,000 libel case. It is a matter that arises against the backdrop of a debate within the bar about the proper role of the LSO. It is a debate that will likely involve the interpretation of the LSO’s Governance Policies and Bencher Code of Conduct. Both sides concede that these issues are matters about which Courts have not previously opined.

[31] These are clearly matters that go well beyond the interests of the individual parties and extend to the bar of Ontario and the general public at large. Although the Small Claims Court has an important role to play in the administration of justice in Ontario, it was not envisaged or designed as a forum in which matters of general public importance were to be litigated. Its judges are lawyers who sit as Deputy Judges of the Small Claims Court on a part-time basis. They are paid on a per diem basis. The statutory mandate of the Small Claims Court is to “hear and determine in a summary way all questions of law and fact…” Courts of Justice Act, R.S.O. 1990, c. C.43.

[32] Serious issues of general public importance should not be determined in a summary way. To do so would prejudice the parties and the public at large. Matters of that nature warrant the protections that the institutional design and procedures of the Superior Court afford.

[33] It has been held that serious allegations bearing on the policies and practices of public institutions are matters of general importance and weigh in favour of transferring the action. Farlow v. Hospital for Sick Children at para. 36-39.

iv. The desire for a just and fair determination

[34] The respondent raises a number of issues that he submits makes it unjust to transfer a Small Claims Court action to the Superior Court. The gist of his submission is that proceedings in the Superior Court generally take much longer and are much more expensive than proceedings in Small Claims Court.

[35] There is force to the respondent’s submissions in this regard. If, for example, the respondent were unsuccessful in Small Claims Court, his costs would be limited to 15% of the amount claimed. There is no such limit if the matter were transferred to this court. In this regard, the respondent notes that for this motion alone, the applicants have submitted a bill of costs that shows actual costs of $46,830. In other words, their costs on a single motion exceed the total value of the claim. The respondent submits that threatening a litigant with that sort of cost exposure imposes a serious barrier on access to justice. The respondent notes that he practices criminal law in a two person firm while the applicants have available to them financial resources derived from the considerable income earned from the annual fees of Ontario’s 57,000 lawyers and approximately 11,000 paralegals.

[36] The respondent also notes that the applicants have in the past suggested that they would bring an anti-SLAPP motion under section 137.1 of the Courts of Justice Act to preclude this action from proceeding. That section is aimed at dismissing actions that seek to restrict the ability of individuals to express themselves freely on matters of public interest. The argument of the applicants in this regard would be something to the effect that the respondent’s libel action is an effort to prevent the applicants from expressing themselves on a matter of public interest.

[37] The respondent’s arguments in this regard have merit and are ones of legitimate public concern. It seems to me, however, that while those concerns cannot be entirely eliminated, they can be reduced to the point where they no longer pose the threat to access to justice that the respondent fears.

[38] During oral argument, I asked both parties whether the concern about an anti-SLAPP motion could not be addressed by having me impose terms to the effect that no such motion could be brought if the proceeding were transferred to the Superior Court. The respondent urged me to impose such a term. The applicants do not object to any such term.

[39] The higher costs associated with Superior Court proceedings can also be managed. During oral argument I asked the parties for their reaction to a term on any possible transfer that would limit costs in the Superior Court to those available in Small Claims Court.

[40] The applicants objected, arguing that such limitation would be prejudicial to them. I do not accept that argument. It is the applicants who want to move the matter into Superior Court. There is a legitimate concern that moving the matter to the Superior Court can impose cost obligations that may create barriers to access to justice.

[41] The respondent has limited his claim to $35,000. Without opining on the merits of that claim, if it were successful, it is unlikely to generate damages of more than $35,000 given the law of libel and nature of damage awards in Ontario. In that light, the respondent’s choice of the Small Claims Court is appropriate and would not appear to be motivated by any strategic or tactical factors in his choice of forum. In those circumstances, it does not strike me as unfair to limit the LSO’s ability to seek costs against the respondent limited to the maximum available in Small Claims Court.

[42] The respondent submits that any such order is still unfair to him because it obliges him to incur the additional costs associated with a Superior Court proceeding, like discovery, without having the ability to seek compensation for them. In my view, this too can be managed. I order that, if the respondent is successful in the proceeding, he will be entitled to claim costs against the applicants in an amount that is not limited by the maximum available in Small Claims Court but in an amount that he would ordinarily be entitled to claim in a Superior Court proceeding.

[43] Although this may treat two litigants unequally, and, at first blush, appear to be unfair, I am satisfied that it is consistent with principles of fairness. It is the applicants who wish to transfer the matter to Superior Court. If the respondent is in fact successful in his action, he should not be limited to the costs of a Small Claims Court proceeding when the additional costs he incurred are those that arise out of procedures that the applicants wanted. The costs of a proceeding in Superior Court will be substantially more burdensome to the respondent than they will to the applicants. In this regard, I note for example that although the applicants’ partial indemnity costs of this motion were $28,339, The respondent’s partial indemnity costs were $4,609. In this light, the applicants are exposed to significantly less risk than is the respondent. If in fact the respondent succeeds in his action, he should never have been exposed to those higher costs in the first place. Compensating the respondent for those higher costs diminishes the possibility that a transfer to the Superior Court impedes access to justice. To the extent that this ruling exposes the applicants to any abuse on the costs front, that abuse can be controlled by the trial judge’s cost award.

[44] In the interim, the respondent will be funding those higher costs himself and must still contend with the longer delays associated with the proceeding in Superior Court. Those risks can also be managed.

[45] Both sides agree that the trial of this matter could be completed within 5 days if examinations in chief were replaced by affidavits. Both sides are prepared to do so. On that basis, at the time of writing these reasons, I would be able to give the parties a fixed trial date within 13 months. While not necessarily speedy, I have no information before me about the waiting time for trials in Small Claims Court. I will also remain seized of this matter as case manager. I will make myself available to assist the parties in arriving at a case timetable should they have any difficulties and will fix a trial date for them as soon they have completed their case timetable. I will also make myself available to resolve any issues that arise in case conferences without the need to bring formal motions. In that regard, I address the parties to Miller v. Ledra et al., 2023 ONSC 4656 for a discussion about the use of case conferences in lieu of formal motions.

Disposition and Conclusion

[46] For the reasons set out to qualify order as follows:

i. The respondent’s Small Claims Court action against the applicants bearing Court file number SC 230000054 is transferred to the Ontario Superior Court of Justice. ii. The Treasurer and the LSO shall not bring a motion under section 137.1 of the Courts of Justice Act in the Superior Court action. iii. If the Treasurer and the LSO are successful in the action, their costs shall be limited to costs that would be available had the action remained in Small Claims Court. iv. Costs shall be payable in the cause.

[47] I shall remain seized of the matter. If the parties require assistance to resolve any issues that arise, they may approach me for a case conference to resolve them.

Released: January 23, 2024 Koehnen J.