Endorsement

Introduction

COURT FILE NO.: CV-24-00719060
DATE: 2025-01-20
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Garth Drabinsky, Plaintiff
AND: Andrzej Kepinski and Duncan Boswell, Defendants
BEFORE: Koehnen J.
COUNSEL:

• Peter Downard for the moving defendant Duncan Boswell
• Jeffrey Larry, Braxton Murphy for the moving defendant Andrzej Kepinski
• Allan D. J. Dick for the plaintiff
  HEARD: September 16, 2024

Motions to Strike

[1] Each of the defendants moves under Rule 21.01(1)(b) for an order striking out the statement of claim for disclosing no reasonable cause of action. The defendants argue that the plaintiff's claim seeks damages for statements that the defendants made in an affidavit in another proceeding and that any such statements are subject to absolute privilege.

[2] The plaintiff argues that absolute privilege is a defence, not a basis to strike out a statement of claim. They submit that absolute privilege does not apply here because the statement at issue was not made about a party in the other action but about a non-party. In those situations, the plaintiff submits that absolute privilege is more confined and applies only if the statement in the other action had a nexus to the issues in that action, which the plaintiff submits the impugned statement did not have.

[3] For the reasons set out below, I dismiss both motions to strike. Despite its name, absolute privilege is subject to exceptions. It applies only when the statement in issue was made “in reference to the inquiry.” That is to say, it was somehow related to the action in which it was made, even if not, strictly speaking, legally relevant. The specific contours of that concept depend on the context in which the statement was made. The court has no such context here because the affidavit, motion record and pleadings in the other action are not in the record for this motion. Without that context, I cannot determine with any level of comfort that the action is bound to fail.

Background Facts

[4] The plaintiff, Garth Drabinsky, is a well-known Canadian theatre producer. In 2009 he was convicted of two related criminal offences. He was sentenced to 5 years imprisonment and was released after 17 months. The plaintiff had also been charged in respect of related matters in the Southern District of New York. Those charges were withdrawn, with prejudice. Drabinsky subsequently received a full pardon from the Government of Canada in relation to the Canadian convictions.

[5] The defendant, Andrzej Kepinski (“Kepinski”), is a businessperson and a defendant in an action issued on the Commercial List of this court, bearing court file no. CV-23-00709368-CL.

[6] The plaintiffs in that action are Hunter Milborne and corporations related to him. They claim that Kepinski owes them millions of dollars.

[7] The defendant, Duncan Boswell, is an Ontario lawyer who acts for Kepinski in the Commercial List action.

[8] Drabinsky has been a consulting advisor to Milborne since July 2023.

[9] Kepinski swore an affidavit in the Commercial List action, drafted by Boswell, in which Kepinski said that he had lent money to Milborne for use in a Broadway production that Drabinsky was producing. The affidavit suggested further that the loan would be repaid after the receipt of an American tax rebate which Milborne said would come by the end of 2022. Kepinski then went on to state in the affidavit:

147. In April 2023, upon my request for an update on the loan repayment, Milborne advised that there was a delay on the government's end in paying out the tax rebate but that funds were forthcoming. I have never received any funds in repayment of this loan and Milborne has not provided any further accounting of the funds.

148. Milborne has represented to me that Garth Drabinsky is his senior advisor. Garth Drabinsky was found guilty in 2009 of criminal fraud and forgery and sentenced to seven years in jail. I believe Milborne and his senior advisor have improperly absconded with the funds. Milborne continues to carry on business with Garth Drabinsky unrelated to our Business.

[10] In the lead up to Boswell drafting the affidavit, there were discussions about whether Kepinski had lent money to Drabinsky, Milborne or to a limited partnership. The statement of claim before me alleges that Kepinski was told that the loan was to a limited partnership and that Milborne’s lawyer gave Boswell a copy of that loan agreement before Kepinski swore the affidavit in the Commercial List matter.

[11] After reciting these facts, the statement of claim states in paragraph 21:

21. The Statements made by the defendants as against the plaintiff were entirely extraneous to Kepinski’s allegations that he loaned funds to Milborne that were not repaid. They further have no relevance or nexus or relationship to the Action or the Motion. They were made for an entirely improper purpose without any semblance of necessity to advance the Kepinski parties’ position in the Action or the Motion.

[12] The Amended Statement of Claim specifically alleges that absolute privilege does not apply to the impugned statements. [1]

The Test on a Motion to Strike

[13] To succeed on a motion to strike under Rule 21.01(1)(b), the moving party must demonstrate that, assuming the facts pleaded in the claim are capable of being proven, it is nevertheless “plain and obvious” that the pleading discloses no reasonable cause of action. [2] In considering the issue, the court must read the statement of claim generously.

[14] The threshold to strike a claim is high. [3] Where a reasonable prospect of success exists, the matter should be permitted to proceed. [4]

[15] Claims should not be dismissed because they are novel. This recognizes that as the law evolves, “actions that yesterday were deemed hopeless may tomorrow succeed.” [5]

Absolute Privilege

[16] The concept of absolute privilege accepts that statements made on certain limited occasions should be immune from legal attack. As a general rule, absolute privilege applies to statements made in the course of judicial or quasi-judicial proceedings. [6] As a result, statements made in litigation are generally exempt from actions for libel or slander. [7] The protection of counsel extends to statements contained in documents such as written pleadings, [8] factums, [9] and other written submissions. [10]

[17] The Canadian decision that addresses absolute privilege most comprehensively is that of the Saskatchewan Court of Appeal in Duke v. Puts. [11] In Duke, the court began by referring to the policy behind the privilege as being rooted in the need for participants in the justice system to speak without fear of consequences. [12] Broad application of the principle promotes that value, protects the search for truth and secures the “free and fearless conduct of judicial proceedings.” [13]

[18] Duke also noted, however, that exceptions to the privilege have been long recognized. By way of example, it quoted from the 1876 case of Seaman v. Netherclift [14] where Lord Cockburn stated:

If there is anything as to which the authority is overwhelming it is that a witness is privileged to the extent of what he says in course of his examination. Neither is that privilege affected by the relevancy or irrelevancy of what he says; for then he would be obliged to judge of what is relevant or irrelevant, and questions might be, and are, constantly asked which are not strictly relevant to the issue. But that, beyond all question, this unqualified privilege extends to a witness is established by a long series of cases, the last of which is Dawkins v. Lord Rokeby, Law Rep, 7 H.L. 744, after which to contend to the contrary is hopeless. It was there expressly decided that the evidence of a witness with reference to the inquiry is privileged, notwithstanding it may be malicious; and to ask us to decide to the contrary is to ask what is beyond our power. But I agree that if in this case, beyond being spoken maliciously, the words had not been spoken in the character of a witness or not while he was giving evidence in the case, the result might have been different. For I am very far from desiring to be considered as laying down as law that what a witness states altogether out of the character and sphere of a witness, or what he may say dehors the matter in hand, is necessarily protected. I quite agree that what he says before he enters or after he has left the witness‑box is not privileged, which was the question in the case before Lord Ellenborough in Trotman v. Dunn, 4 Camp. 211. Or if a man when in the witness-box were to take advantage of his position to utter something having no reference to the cause or matter of inquiry in order to assail the character of another, as if he were asked: Were you at York on a certain day? and he were to answer: Yes, and A.B. picked my pocket there; it certainly might well be said in such a case that the statement was altogether dehors the character of witness, and not within the privilege. [15] (emphasis added)

[19] At this point, then absolute privilege protects statements that are legally irrelevant to the litigation but are somehow made “with reference to the inquiry.” As Lord Bramwell J.A. explained later in the same case:

...the words “having reference to the inquiry” ought to have a very wide and comprehensive application, and ought not to be limited to statements for which, if not true, a witness might be indicted for perjury, or the exclusion of which by the judge would give ground for a new trial; but ought to extend to that which a witness might naturally and reasonably say when giving evidence with reference to the inquiry as to which he had been called as a witness. [16] (emphasis added)

[20] The court in Duke went on to trace the test of “with reference to the inquiry” and its broad application into more modern authorities [17] and provides a further example of its application quoting More v. Weaver: [18]

...Suppose a client, who has quarrelled with the builder who is building a house for him, goes to his solicitor to discuss the position, and in the course of the interview he makes statements regarding the builder which are untrue. Those statements would ... be absolutely privileged. But suppose in the middle of the conversation the client, being of a gossipy nature, says, “Have you heard that Jones has run off with Mrs. Brown?” that would not be relevant to the discussion. [19]

[21] The approach of the Saskatchewan Court of Appeal in Duke has been followed by courts in Canada [20] and other common law jurisdictions. [21]

[22] The concept of absolute privilege raises additional concerns when statements are made about non-parties to the litigation. When a statement is made about a party, the judge in that proceeding can make a finding about the allegation and thereby exonerate the party if appropriate. A party also has the ability to move to strike portions of a pleading and can seek cost consequences. [22] A non-party has no such remedies. Although, on the one hand courts understandably want to protect freedom of expression in litigation in order to get at the truth, at the same time, they do not want to have litigation used as a free-for-all to make defamatory statements against non-parties without allowing the non-party any recourse. This would run contrary to the point of the privilege which is to promote the pursuit of truth. [23]

[23] The issue then is whether the impugned statements were made “with reference to the inquiry” in the Commercial List affidavit, motion or action.

[24] If Kepinski were concerned about the disappearance of his funds, one can see why he might craft a narrative that associates someone convicted of fraud (Drabinsky) with Milborne. That could, to use the language of Lord Bramwell in Seaman v. Netherclift [24] be something a “witness might naturally and reasonably say when giving evidence with reference to the inquiry” even though it might not be relevant from a strict legal perspective. Whether that is the case, however, depends on the overall context in which the statement is made.

[25] Courts have recognized that making a determination about absolute privilege may require evidence from the parties to understand their intent, the reason for which the statement was put into the document and the context in which the statement was made. [25]

[26] I have no such context on this motion. The affidavit in which the impugned statements are made is not before me. Although evidence is not admissible on a motion to strike, documents that are expressly referenced in the statement of claim are incorporated into it by reference and could have been put before the court on this motion. Doing so would have allowed the court to review the affidavit and have a better sense of the extent to which the impugned statements were truly extraneous to the purpose of the affidavit or whether they were the sort of statement that a “witness might naturally and reasonably say when giving evidence with reference to the inquiry” and therefore fall within absolute privilege.

[27] While it is not certain whether having the affidavit would make a difference to the analysis, the absence of the affidavit or any other context makes me unwilling to strike the statement of claim at this early stage. I simply cannot determine whether the impugned statements have a sufficient nexus to the Commercial List action or the motion in which the affidavit was filed. All I have are isolated statements from the affidavit devoid of the context of the claim and defence in the Commercial List action, the notice of motion in the Commercial List action and the affidavit itself. In those circumstances it is far too easy for one side or the other to take comments out of context. In those circumstances I cannot say that it is plain and obvious that the claim is bound to fail.

Does Boswell Fall into a Different Category?

[28] Boswell submits that counsel should be afforded greater protection under absolute privilege than others.

[29] I agree that the policy concerns involving lawyers are more acute than those involving non-lawyers. Litigation lawyers are, by definition, involved in matters of controversy. They are required to make statements about parties and non-parties regularly. They are often required to make statements under tight time pressure which does not afford the opportunity to fully consider all of the potential ramifications of a statement or to consider whether and how the statement could be refined to more closely reflect a nexus to the litigation at issue. They are instructed to take certain positions by their clients and may be obligated to follow those instructions.

[30] While all of that may call for a more generous application of the concept to counsel than to others, Boswell has not taken me to any authority that immunizes counsel against the general limitations of absolute privilege. In addition, the law recognizes that claims for the “abuse of civil proceedings may lie independently of the law of defamation” even against counsel. [26] Although the claim does not refer to abuse of process, that principle would tend to belie the concept that counsel are exempt from liability for statements made in the course of litigation, regardless of the circumstances. That takes us back into the same contextual analysis that is required more generally when considering absolute privilege. The need for that contextual analysis leads me to dismiss the motion brought by Boswell for the same reasons as I dismiss the motion brought by Kepinski.

[31] The defendants raise two further arguments to strike the statement of claim. First, they note that paragraph 21 of the statement of claim alleges that the impugned statements had no nexus with the Commercial List action. They submit that this is a statement of fact which must be taken as true for the purposes of this motion to strike the statement of claim. I disagree. Whether those statements had a nexus with the Commercial List action is either a question of law or a mixed question of fact and law which is not taken as true for purposes of this motion.

[32] Second, Boswell submits that the statement of claim should be struck out because it is based on the Rules of Professional Conduct and cites two cases for the proposition that courts will not enforce those Rules. [27] I read those cases differently. Those cases stand for the proposition that there is no cause of action for breach of the Rules of Professional Conduct. Drabinsky is not, however, claiming damages for breach of the Rules of Conduct. He is claiming damages for defamation. While the purpose for which Drabinsky pleads the Rules is not entirely clear, on a generous reading of the claim they strike me as being there as a benchmark for lawyer conduct to demonstrate that a lawyer cannot hide behind their professional status as a defence to their behaviour.

Conclusion and Costs

[33] For the reasons set out above, I dismiss the motions to strike out the statement of claim. Given the need in the applicable legal tests for contextual analysis, it would appear that what the defendants are really asking for is summary judgment in the guise of a motion to strike.

[34] All three parties have posted cost outlines on Case Center. The plaintiff seeks costs on a partial indemnity scale in the amount of $15,038.00. This comes to almost the same amount that Boswell would have sought of $15,866.90 had he been successful. Kepinski’s costs had he been successful come to $5,301.96. Although Kepinski’s costs are lower, his role on the motion was clearly subsidiary to Boswell’s. Kepinski largely adopted Boswell’s submissions and therefore incurred far lower costs. I have reviewed Drabinsky’s costs outline and am satisfied that the time spent and fees charged were reasonable. Their proximity to the costs incurred by Boswell strengthens my view in this regard and demonstrates that the amount sought is within the reasonable expectation of the parties. I therefore award the plaintiff its costs of the motion which I fix on a partial indemnity scale at $15,038.00.

Date: January 20, 2025
Mark L. Koehnen

Footnotes

[1] Amended Statement of Claim at paras. 20-22.
[2] R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 17; Hunt v. Carey Canada Inc..
[3] Atlantic Lottery Corp Inc v. Babstock, 2020 SCC 19 at para. 90 (per Karakatsanis J, dissenting in part, but not on this point); Fernandez Leon v. Bayer Inc., 2023 ONCA 629 at para. 8.
[4] R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 17; Atlantic Lottery Corp Inc v. Babstock, 2020 SCC 19 at para. 90; PMC York Properties Inc. v. Siudak, 2022 ONCA 635 at para. 32.
[5] R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 at para. 21.
[6] Elliott v. Insurance Crime Prevention Bureau, 2005 NSCA 115 at para. 112; 1522491 Ontario Inc. v. Stewart, Esten Professional Corp., 2010 ONSC 727 at para. 34; Salasel v. Cuthbertson, 2015 ONCA 115 at para. 35.
[7] Fabien v. Margulies; Salasel v. Cuthbertson, 2015 ONCA 115 at para. 35.
[8] Salasel v. Cuthbertson, 2015 ONCA 115 at para. 35; Big Pond Communications 2000 Inc. v. Kennedy.
[9] 1522491 Ontario Inc. v. Stewart, Esten Professional Corp., 2010 ONSC 727 at para. 34.
[10] Leighton v. Canada (Attorney General), 2012 BCSC 961 at paras. 16-21.
[11] Duke v. Puts, 2004 SKCA 12.
[12] Duke v. Puts, 2004 SKCA 12 at para. 56 quoting Munster v. Lamb, [1883] 11 Q.B.D. 588.
[13] Duke v. Puts, 2004 SKCA 12 at para. 56 quoting Raymond E. Brown, The Law of Defamation in Canada, 2nd ed. (looseleaf) (Scarborough: Carswell 1999) at pp. 12-38 to 12-41.
[14] Seaman v. Netherclift (1876), 2 C.P.D. 53.
[15] Seaman v. Netherclift (1876), 2 C.P.D. 53 at 56-57.
[16] Seaman v. Netherclift (1876), 2 C.P.D. 53 at p. 60.
[17] Such as: Raymond E. Brown, The Law of Defamation in Canada, 2nd ed. (looseleaf) (Scarborough: Carswell 1999) at pp. 12-38 to 12-41 note 57 at p. 655, Fn. 622; R.F.V. Heuston and R.S. Chambers, Salmond and Heuston on the Law of Torts, 18th ed. (London: Sweet & Maxwell 1981) cited in Duke at paras. 56–57.
[18] More v. Weaver, [1928] 2 K.B. 520.
[19] More v. Weaver, [1928] 2 K.B. 520 at 525; quoted in Duke at para. 57.
[20] See for example: Wilson v. Switlo, 2011 BCSC 1287 at paras. 389-396, aff’d Wilson v. Williams, 2013 BCCA 471; MMJ v. MDJ, 2000 SKCA 53 at paras. 8-18; Tuharsky v. O’Chiese First Nation, 2024 ABKB 511 at para. 46; Donovan v. Waterloo Regional Police Services Board, 2019 ONCA 845 at para. 17; Halsbury’s Laws of Canada, Defamation (Peter A. Downard, contributor) (2023 Reissue: online version), “Absolute Privilege”, (III.2)(3)(d), “Communications in the Legal Process: Witnesses”.
[21] Note that other common law jurisdictions do not apply absolute privilege to gratuitous, irrelevant statements. In the United Kingdom, see e.g. Smeaton v. Butcher [2000] EMLR 985 at para. 26; Iqbal v. Dean Mans Solicitors & Ors (No 2) [2013] EWCA Civ 149 (“Iqbal”). Notably, Iqbal cites Duke as an authority on this point. In the United States, see e.g. Brown v. Maxwell, 929 F3d 41, 53 (2d Cir 2019) at para. 53, note 47 (to qualify for privilege, a statement must be “material and pertinent” to the questions involved); Gugliotta v. Wilson, 168 AD 3d 817, 819 (2d Dept 2019) at 312 (absolute privilege will not apply to immaterial statements).
[22] MMJ v. MDJ, 2000 SKCA 53 at para. 9.
[23] MMJ v. MDJ, 2000 SKCA 53 at para. 18. See also William H. Bezold, “The Privilege Barring Civil Liability for Libel in Pleadings” (1954) 36 Marq L Rev 299 at 299.
[24] Seaman v. Netherclift (1876), 2 C.P.D. 53 at p. 60.
[25] MMJ v. MDJ, 2000 SKCA 53 at para. 18.
[26] Amato v. Welsh, 2013 ONCA 258 at para. 34, citing Halsbury’s Laws of England, vol. 28, 4th ed. (London, U.K.: Butterworths, 1997), at para. 97; Curtis v. McCague Borlack LLP, 2024 ONCA 729 at paras. 15-16.
[27] Tataryn v. Diamond & Diamond, 2021 ONSC 2624 at paras. 21-23; Brown v. WeirFoulds LLP, 2024 ONSC 3429 at para. 35.