



COURT OF APPEAL FOR ONTARIO

CITATION: Grist v. TruGrp Inc., 2021 ONCA
    309

DATE: 20210511

DOCKET: C68144

Lauwers, Miller and Nordheimer
    JJ.A.

BETWEEN

Geoff Grist, Pauline Grist and
    Brook Restoration Ltd.

Plaintiffs (Appellants)

and

TruGrp Inc., Alexander McMullen
    and Christian Brannan

Defendants (Respondents)

Derek J. Bell and Katelyn Ellins, for
    the appellants

Damien Buntsma and Richard K.
    MacGregor, for the respondents

Heard: December 1, 2020 by video conference

On appeal from the judgment of Justice Grant
    R. Dow of the Superior Court of Justice, dated February 5, 2020, with reasons
    at 2020 ONSC 347.

REASONS
    FOR DECISION

OVERVIEW

[1]

The respondents Alexander McMullen and Christian Brannan were employees
    of the appellant Brook Restoration Ltd. (Brook), a building restoration company.
    McMullen and Brannan left Brook to start a competing business, the respondent TruGrp
    Inc. (TruGrp).

[2]

Litigation followed. In March 2018, Brook sued McMullen and Brannan for
    various causes of action, including breach of fiduciary duty, misappropriation
    of confidential information, and interference with economic relations, later
    amending their claim to include TruGrp as a defendant (the Brook action). In March
    2019, the respondents sued Brook, Brooks officers Geoff Grist and Pauline Grist,
    and Brooks counsel for defamation, among other causes of action (the TruGrp action).
    The TruGrp action was discontinued.

[3]

In July 2019, the appellants brought the present action alleging, among
    other claims, defamation. The respondents responded with a motion under 137.1
    of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, to dismiss it as a
    Strategic Lawsuit Against Public Participation (SLAPP).

[4]

The motion judge allowed the motion and dismissed the appellants
    action. For the reason given below, we do not agree that the July 2019 action
    is properly characterized as a SLAPP. Accordingly, for the reasons given below,
    the appeal is allowed and the order dismissing the action is set aside.

BACKGROUND

A.

The TruGrp Action

[5]

Under the Brook action, the appellants counsel sent preservation
    letters to TruGrps contractors directing them to preserve any relevant evidence.
    In March 2019, in response to the preservation letters, the respondents sued
    the appellants and their counsel for defamation, civil conspiracy, and unlawful
    interference with economic relations. The next month, the respondents
    discontinued the TruGrp action.

B.

The OLRB Application

[6]

In May 2019, The Operative Plasterers and Cement Masons International
    Association of the United States and Canada, Local 598 (the Union) initiated an
    Ontario
Labour
Relations Board (the OLRB) application
    against Brook and TruGrp. The OLRB application was unrelated to the Brook and
TruGrp

actions. It was
centred
on whether TruGrp was Brooks successor employer under
    the
Labour Relations Act, 1995
, S.O. 1995, c. 1, Sched. A, and therefore
    bound to the same collective agreements as Brook. Geoff Grist, Pauline Grist,
    and the appellants counsel in the Brook Action were not parties in the OLRB proceeding.

[7]

When TruGrp filed its response to the Unions Application, it attached the
    statement of claim from the discontinued TruGrp Action. Brook alleged that the response
    and attached statement of claim contained false and defamatory statements about
    Brook, Geoff Grist, Pauline Grist, and the appellants counsel. TruGrp argued
    the statement of claim was relevant to establishing that TruGrp was not a
    successor employer. The statements to which the appellants objected include the
    following allegations:

·

the appellants and their counsel sent the
    preservation letters to intimidate potential customers and others from doing
    business with the respondents. These letters were also intended to deceive their
    recipients;

·

the appellants illegally put pressure on the
    Union to bring the related employer application before the OLRB; and

·

the appellants initiated frivolous and vexatious
    legal proceedings against former employees who set up competing firms, or firms
    operating in a related stream of the restoration industry, in order to cause
    irreparable economic and reputational harm to those competing firms.

[8]

Brook demanded that TruGrp withdraw from its OLRB response the
    discontinued statement of claim and the allegedly false statements. TruGrp refused.
    The Union, with Brooks support, moved to strike the impugned portions of TruGrps
    Response. The OLRB dismissed the motion to strike.

CURRENT PROCEEDINGS

[9]

In July 2019, the appellants commenced this action against the
    respondents, based on the respondents use of the impugned expressions in their
    OLRB pleadings. The appellants sought damages for defamation, unlawful
    interference with economic and contractual relations, and abuse of process.

[10]

In
    response, the respondents brought a motion under s. 137.1 of the
Courts of
    Justice Act
to have the appellants action dismissed as a SLAPP. The respondents
    argued this action was an attempt to limit the respondents freedom of
    expression on matters of public interest. Primarily, the respondents argued the
    impugned expressions contained in the discontinued statement of claim related
    to a matter of public interest because they spoke to the appellants pattern of
    using litigation to gain an economic advantage over competitors, affect the
    union certification process, and interfere with employees freedom of
    association.

[11]

The
    motion judge allowed the anti-SLAPP motion and dismissed the appellants action
    on the basis that TruGrps response in the OLRB application constituted an expression
    made in relation to a matter of public interest:

there is a public interest in how the
    operation of restoration work in the province in conducted. It is also in the
    public interest with regard to the involvement in retaining other businesses to
    do that type of work. This includes businesses that are subject to collective
    bargaining or workers represented by unions and activities within the
    jurisdiction of the OLRB. The parties to the action before me raise allegations
    of prohibited practices such as price covering.

[12]

Having
    found that the respondents met their threshold burden, the motion judge considered
    whether the appellants could
show
, pursuant to s.
    137.1(4)(a), that the action had substantial merit and that the respondents had
    no valid
defence
. Although the motion judge concluded
    that the appellants action had substantial merit, he held that the appellants failed
    to show the respondents had no valid
defence
.

[13]

In
    concluding that the appellants failed to show the respondents lacked a valid
defence
, the motion judge held that the impugned expression
    fell within the doctrine of absolute privilege. He recognized that absolute
    privilege would not apply if the expression was not made for the purpose of the
    OLRB proceeding. However, he concluded that the discontinued statement of claim
    added value to TruGrps position before the OLRB. He found that TruGrp
    referenced the preservation letters and Brooks allegations against TruGrp in
    order to support TruGrps position that it was not Brooks successor employer. Consequently,
    the motion judge found that TruGrps response in the OLRB proceeding, which
    included references to the discontinued statement of claim, fell under the
    protection of absolute privilege.

[14]

Finally,
    the motion judge concluded that the harm Brook suffered from TruGrp including
    the discontinued statement of claim in the response was not sufficiently
    serious to warrant permitting the action to proceed.

ISSUES ON APPEAL

[15]

The
    appellants effectively argue that the motion judge made three errors:

1.

the motion judge characterized the respondents
    expression too broadly for the purposes of analysis under s. 137.1(2) and further
    erred in concluding that the expression was a matter of public interest;

2.

the motion judge erred in interpreting the merits test; and

3.

the motion judge erred in finding the appellants did not tender sufficient
    evidence of harm to permit the action to proceed.

ANALYSIS

Is the
    expression a matter of public interest?

(1)

Principles

[16]

To
    satisfy the threshold requirements under s. 137.1(3), the moving party must show
    (i) the proceeding arises from an expression made by the moving party, and (ii)
    the expression relates to a matter of public interest:
1704604 Ontario
    Ltd. v. Pointes Protection Association
, 2020 SCC 22, 449 D.L.R. (4th) 1, at
    para. 21. Here, there is no dispute that the pleadings constitute expression.
    This appeal turns on whether the respondents expression relates to a matter of
    public interest.

[17]

The
    purpose of s. 137.1, as explained in
Pointes
, is to circumscribe
    proceedings that adversely affect expression made in relation to matters of
    public interest, in order to protect that expression and safeguard the fundamental
    value that is public participation in democracy: at para. 30. It is not a new
    form of summary trial on the merits of a defamation action but is instead meant
    to provide an early and cost-effective means of ending litigation brought by a plaintiff
    to silence a party who has spoken on a matter of public interest:
Sokoloff
    v. Tru-Path Occupational Therapy Services Ltd.
, 2020 ONCA 730, 153 O.R.
    (3d) 20, at para. 47. Its paradigmatic application is to prevent others from silencing
    persons who are speaking on matters that have significance beyond themselves.

[18]

The
    scope of s. 137.1s protection is set using the concept of the public interest.
    This is a concept that many have found difficult to apply. The most detailed exploration
    of the concept is provided in
Grant v. Torstar
, 2009 SCC 61, [2009] 3
    S.C.R. 640, in the analogous context of the law of defamation. That case emphasizes
    that the public interest is not a descriptive concept: it is not a matter of
    ascertaining what the public, or any subgroup, believes to be interesting, entertaining,
    or worth their attention: at para. 102. Instead, there is necessarily a
    normative aspect to what is genuinely a matter of public interest:
Sokoloff
,
    at para. 18. That is, the statement must address an issue about which the
    public has some substantial concern because it affects the welfare of citizens,
    or one to which considerable public notoriety or controversy has attached:
Grant
,
    at para. 105, citing Raymond E. Brown,
The Law of Defamation in Canada
,
    loose-leaf, (2008-Rel. 3) 2nd ed. (Scarborough: Carswell, 1999), vol. 2, at pp.
    15-137 and 15-138. Again, the fact of notoriety or controversy is not
    sufficient in itself  one must assess the reason for the notoriety.

[19]

The
    public interest includes such matters as the establishment, use, allocation,
    and maintenance of shared public goods, and therefore protects discussion and
    advocacy about the distribution of benefits and burdens of social life. But the
    public interest is not necessarily limited to matters of shared public life:
Grant
,
    at para. 106. There is, after all, a public interest in maintaining peaceful
    relations between persons in society and in drawing attention to acts of injustice.
    But the resolution of purely private disputes between more or less equalsdisputes
    that have no immediate bearing on the rights or obligations of otherscan seldom
    be a matter of public interest:
Sokoloff
, at para. 19.

(2)

Application

[20]

The
    appellants argue that the motion judge erred by characterizing the relevant expression
    as the response as a whole. Thus, he held that there is a public interest in
    how the operation of restoration work in the province is conducted, as well as
    in retaining other businessesincluding businesses that are subject to
    collective bargaining and workers represented by unions and activities within
    the jurisdiction of the OLRBto perform restoration work.

[21]

The
    motion judge erred by failing to analyze the specific statements that were the
    subject of the appellants action. This includes the allegedly defamatory
    statements in the statement of claim appended to the response, as well as the
    11 paragraphs in the response repeating the points made in that attachment. It
    is only these statements that constitute the relevant expression for the
    purposes of the s. 137.1 motion. The remaining statements contained in the response
    and the appended statement of claim were not the subject of the appellants
    action, and the appellants had not attempted to use legal process to prevent or
    discourage the respondents from making those statements. The whole of the response
    provides relevant context for understanding the 11 paragraphs itemized in the
    defamation action and can be considered for that purpose. However, the
    expression that is the relevant subject matter for the motion is the 11
    paragraphs in the response and the portions of the statement of claim from
    which those paragraphs originate.

[22]

The
    subject of those paragraphs, summarized above, is best characterized as an allegation
    that a building restoration business engaged in conduct that was tortious and
    contrary to
labour
law, in order to harm its competitors
    and gain an unfair advantage.

[23]

We
    agree with the appellants that the motion judge erred in finding the expression
    relates to a matter of public interest. Activity that unfairly reduces
    competition is a matter of public interest, in the sense that justice requires that
    such actions be proscribed for the common good. But that does not mean that every
    occurrence of this type of misconduct is a matter of public interest, having
    significance to anyone other than the parties involved and the institutions established
    to resolve their disputes. The nature of the respondents expression is fundamentally
    a private dispute, to which s. 137.1 does not apply.

[24]

In
    light of our finding, the respondents s. 137.1 motion fails at the s. 137.1(3)
    threshold stage. Accordingly, it is not necessary that we address the other
    issues raised by the appellants.

[25]

There
    is no reason why the appellants action should not proceed to adjudication. In
    so holding, however, we should not be taken as having expressed any opinion on
    the merits of that action.

DISPOSITION

[26]

The
    appeal is allowed, the order below is set aside, and the action is restored. If
    the parties are unable to agree on the costs of the appeal, they may each file
    written submissions, not to exceed three pages, and a bill of costs, within 14 days.

P. Lauwers J.A.

B.W. Miller J.A.

I.V.B. Nordheimer J.A.


