In the recent decisions of Park Lawn Corporation v Kahu Capitals Partners Ltd. (Park Lawn Corporation), the Ontario Court of Appeal may be signaling a shift in Ontario’s anti-SLAPP regime. In 2015, the Ontario legislature introduced the Protection of Public Participation Act. The purpose of this Act was to provide an efficient and cost-effective manner for defendants to dismiss Strategic Lawsuits Against Public Participation – also known as SLAPP suits. Though the goal of the legislation was to protect public interests and freedom of expression, the Court in Park Lawn Corporation seems to be indicating the overuse of the regime is ultimately preventing it from fulfilling the goals for which it was implemented.
Anti-SLAPP Motions
SLAPP suits are traditionally seen as a lawsuit started by a wealthy, often corporate, plaintiff with the intention of intimidating and/or silencing the defendant through the threat of, among other things, the risk and costs associated with a legal defence. SLAPP suits are most commonly brought as defamation or libel claims and the ultimate goal is to put an end to public criticism. This has historically affected advocates and activists in their ability to raise awareness regarding important public interest matters. To address this problem, Section 137.1 of the Courts of Justice Act (CJA) was implemented with the goal being to dismiss SLAPP suits that limit freedom of expression on matters of public interest, while still allowing legitimate claims to continue to trial.
Section 137.1 of the CJA allows a defendant to seek the dismissal of a proceeding at any time, and generally early in the process before large amounts of legal costs are incurred. This is done by way of motion, commonly referred to as an anti-SLAPP motion. To be successful, a defendant must satisfy a judge that the proceeding arises from an expression made by a person that relates to a matter of public interest. Once this has been proven, the burden reverses onto the plaintiff. In order for the main claim to avoid being dismissed at this stage, the plaintiff must show:
- The main proceeding has substantial merit;
- The defendant has no valid defences in the main proceeding; and
- The harm likely to be suffered by the plaintiff as a result of the defendant’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.
In Ontario, costs are generally awarded to the successful party of a motion on a partial indemnity basis. As one of the main goals of the anti-SLAPP regime is to ensure costs on anti-SLAPP motions remain reasonable, the anti-SLAPP rules include a cost regime that differs from Ontario’s standard cost rules in court proceedings. The anti-SLAPP regime presumes that a defendant who is successful in their anti-SLAPP motion, meaning that the main claim is dismissed by the court, is entitled to recover their full legal and other costs from the plaintiff. Alternatively, if the defendant is unsuccessful in their anti-SLAPP motion, meaning that the main claim is allowed to continue, the presumption is the plaintiff is not entitled to recover any of their legal or other costs incurred in responding to the motion.
Park Law Corporation v Kahu Capitals Partners Ltd.
In Park Lawn Corporation, the Court of Appeal was asked to review the judgment of an unsuccessful anti-SLAPP motion, where a defamation claim had been allowed to proceed. In addition to appealing the dismissal of the motion, the appellants were also appealing the cost award. The Court of Appeal dismissed the appeal in its entirety but took time to address the cost award made by the lower court. Despite the cost presumption laid out in the CJA, the lower court had awarded the defendant (plaintiff by counterclaim) $31,012.44 in costs on a partial indemnity basis for successfully defending the motion. Notably, the plaintiff had spent over $376,000.00 on the motion alone.
In upholding this decision, the Court discussed how the presumptive cost provisions in the CJA can incentivize parties to bring anti-SLAPP motions without the fear of cost consequences, which may have played a role in the large number of anti-SLAPP motions that have been before the courts over the past few years. As a result, anti-SLAPP motions have become unintentionally expensive and time-consuming. In making these comments, the Court provided some guiding principles to consider for parties partaking in an anti-SLAPP motion, including that:
- Anti-SLAPP motions are a screening procedure and are not intended to act as an alternative for a full trial of the issues. The primary focus of the parties should be weighing the potential harm suffered by one party because of the expression against the public interest in protecting the expression.
- As a guideline, parties should not incur costs over $50,000 in these motions. This requires counsel to keep the issues being argued narrow.
- Wherever possible, anti-SLAPP motions should be heard no later than 60 days after the notice of motion is filed, to keep the scope limited.
- A motion judge’s decision on an anti-SLAPP motion is entitled to significant deference, and appealing anti-SLAPP decisions should be done with caution.
In discussing the decision of the lower court to award costs to the plaintiff, the Court simply noted that although there is a presumption against awarding costs for the plaintiff, motion judges may award costs as they see reasonable, and the Court of Appeal will not interfere with such decisions unless they are plainly wrong or there is an error in principle.
Though not actively discouraging parties from bringing anti-SLAPP motions, Park Lawn Corporation is a clear message from the Court of Appeal that parties should be mindful of how they are proceeding in anti-SLAPP motions, and they will not discourage cost awards contrary to the presumptions in the CJA should they be appropriate.
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DISCLAIMER: This article is for general information purposes only and is not (and should not be construed as) legal advice. All of the foregoing is subject to legal and accounting advice based on the particular circumstances of each potential client.
