sept. 16. 2020

1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22

1704604 Ontario Ltd. c. Pointes Protection Association, 2020 CSC 22 (CanLII)

Judgement released September 10, 2020

Unanimous decision (written by Justice Côté).

Key Takeaway

This case provides clarification on how to interpret the framework set out in s. 137.1 of the CJA, and guidance on how to adjudicate anti-SLAPP pre-trial motions more generally.

Introduction

In 2015, Ontario amended the Courts of Justice Act by introducing ss. 137.1 to 137.5, occasionally referred to as anti-SLAPP legislation. These provisions were aimed at mitigating the harmful effects of strategic lawsuits against public participation ("SLAPPs"), which are lawsuits initiated against individuals or organizations that speak out on an issue of public interests as an indirect tool to deter them, or other potential interested parties, from participating in public affairs.

Pointes Protection and six of its members relied on s. 137.1 of the CJA to bring a pre-trial motion to dismiss a $6 million action for breach of contract initiated against them by 170 Ontario, a land developer. The action was brought in the context of Pointes Protection's opposition to a proposed subdivision development by the developer. Pointes Protection's s. 137.1 motion was dismissed by the motion judge, who allowed the developer's action to proceed. The Court of Appeal allowed the subsequent appeal, and dismissed the developer's lawsuit. The developer then appealed to the Supreme Court.

Verdict: Appeal Dismissed. Pointes Protection's motion to dismiss 170 Ontario's breach of contract action against it was granted.

Factual Background

The appellant, 170 Ontario wanted to develop a 91-lot subdivision in the city of Sault Ste. Marie. Pointes Protection Association and six members of its executive committee make up the respondents. They are a not-for-profit corporation created to provide a coordinated response to 170 Ontario's development proposal on environmental grounds.

170 Ontario got approval for their development from the Sault Ste Marie Region Conservation Authority (SSMRCA), but Pointes Protection challenged this decision and called for judicial review. The review application was settled out of court, with the settlement agreement imposing several limitations on Pointes Protection's future conduct. In particular, they agreed to not to comment further on the SSMRCA and not to take another action against 170 Ontario seeking the same relief.

170 Ontario's development proposal was denied by the Sault Ste Marie City Council. They appealed this decision to the Ontario Municipal Board. The President of Pointes Protection, Mr. Gagnon, subsequently testified at this hearing against 170 Ontario, and the City Council's decision was upheld, putting an end to the development. 170 Ontario proceeded with a breach of contract action against Pointes Protection, claiming that the President's testimony violated their settlement agreement in the judicial review matter.

Pointes Protection did not file a statement of defence, but instead brought a motion under section 137.1 of the Courts of Justice Act (the anti-SLAPP motion) to dismiss the breach of contract action. Several appeals later, this brings us to the current matter before the Supreme Court.

What is an Anti-SLAPP Law and What is its Purpose?

Strategic Lawsuits Against Public Participation (or "SLAPPs") refer to lawsuits initiated against individuals or organizations that speak out on issues of public interests. SLAPPs are used primarily to limit the expression of others. The claim is merely a "facade" for the plaintiff, who is manipulating the judicial system to limit an opposing party's speech and deter that party, as well as other potentially interested parties, from participating in public discourse.

Examples of of SLAPP suits in the past have included injunctions against climate activists, groups opposed to local residential developments, and critics of politicians.

With SLAPPs on the rise, several provincial legislatures enacted laws to mitigate their harmful effects. These laws are known as "anti-SLAPP legislation." Ontario's version came into force in November 2015; the Protection of Public Participation Act, 2015, which amended the Courts of Justice Act by introducing sections 137.1 to 137.5.

The purpose of the Act was written into the legislation itself: to encourage, promote, and protect the participation by the public in debates on matters of public interest. The mechanism by which the Act accomplishes this is to allow judges to dismiss lawsuits that limit expression on matters of public interest in an inexpensive and expedient manner, without the need for a full trial.

How An Anti-SLAPP Motion Works

Section 137.1 of the Courts of Justice Act places a burden on the defendant in a lawsuit (what we will call the moving party on an anti-SLAPP motion) to prove to the motion judge that the case arises from expression relating to a matter of public interest. The definition of what is "public interest" is defined broadly and generously.

Once proven, the burden shifts to the plaintiff (and the responding party on the motion) to prove to the judge that their case has substantial merit and the moving party has no valid defence. They must also show that the public interest in permitting the case to go forward outweighs the public interest in protecting the expression.

If the moving party meets its burden and the responding party fails, then the motion will be granted and the underlying case dismissed. The Court notes (and is informed by the history of the debate around the legislation) that the final balancing exercise and consideration of the public interest is the most important part of the analysis.

The Test (Summarized)

Moving Party (aka the defendant in the underlying case)

The moving party has the burden to show on a balance of probabilities that (i) the underlying proceeding does arise from its expression, regardless of the nature of the proceeding and (ii) such expression relates to a matter of public interest, defined broadly.

Responding Party (aka the plaintiff in the underlying case.

The burden then shifts to the responding party to show (i) that there are grounds to believe its claim is legally sound and supported by evidence such that it has a real prospect of success. Once its established established they have a valid claim, (ii) they prove that none of the moving party's defenses are valid. Finally, (iii) the responding party must prove on a balance of probabilities that it likely has suffered or will suffer harm, such harm is a result of the expression, and (iv) that the public interest in allowing the underlying case to continue outweighs the negative effects on expression and public participation.

Application to This Case

Applying the framework originally set out in this case, the Court determined that the s. 137.1 motion by Pointes Protection should be granted and the underlying contract action by 170 Ontario should have been dismissed.

The Court found found that 170 Ontario's action lacked merit, and any harm suffered by the corporation and any public interest in allowing the case to go forward did not outweigh the public interest in protecting Pointes Protection's expression.

Question 1: Did the Action Arise from the Moving Party's Expression on a Mater of Public Interest?

Mr. Gagnon, the President of of Pointes Protection, testified verbally in a public forum, therefore meeting the definition of expression. The testimony was also related to a matter of public interest, being focused on the environmental impact of a proposed private development. Therefore, the answer to the first questions is yes.

Question 2: Does the Underlying Action Have Substantial Merit and Does the Moving Party Have No Valid Defense?

The Court stated that 170 Ontario's breach of contract action lacked substantial merit. Interpreting the plain language of 170 Ontario's agreement with Pointes Protection, the Court determined that the interpretation advanced by 170 Ontario was invalid. The language of the agreement restricts Pointes Protection's expression only as it relates to the decision by the SSMRCA, and the judicial review of that decision. There is nothing that prevented Pointes Protection from testifying at the OMB hearing, and 170 Ontario should have known this.

Since the underlying action has no substantial merit, it was not necessary for the Court to consider whether Pointes Protection had any valid defenses.

Question 3: Is the Public Interest in Letting the Action Continue Outweighed by the Public Interest in Stopping it?

The Court considered whether, even if the action by 170 Ontario had substantial merit, the possible harm to the public interest in letting the action continue. They determined that the public interest in protecting Pointes Protection's expression was greater, and the action should have been halted regardless.

170 Ontario was unable to convincingly show any harm that it might have suffered as a result of Mr. Gagnon's expression. The public interest in allowing the proceeding to continue is therefore at the very low end of the spectrum.

The public interest in protecting Mr. Gagnon's expression, on the other hand, is significant. First, the public has a strong interest in the subject matter of the expression, which relates to the ecological impact and environmental degradation associated with large-scale development. Second, the form of expression was testimony before an adjudicative tribunal, which should be granted a substantial level of protection.

Weighing the public interest in each outcome, the Court thus determined that 170 Ontario could not establish on a balance of probabilities that the public interest in allowing the proceeding to continue outweighed the public interest in protecting Pointes Protection's expression.