



COURT OF APPEAL FOR ONTARIO

CITATION: Montour v. Beacon Publishing Inc., 2019 ONCA 246

DATE: 20190329

DOCKET: C64409

Doherty, Pardu and Nordheimer JJ.A.

BETWEEN

Jerry Bradwick Montour and Grand River
    Enterprises Six Nations Ltd.

Plaintiffs (Respondents)

and

Beacon Publishing Inc., o/a, Frontline Safety
    & Security, Frontline
Security Magazine, Edward R. Myers, Christina MacLean, Philip
Murray, Scott Newark, Martin Rudner, John Doe and Jane Doe

Defendants (Appellants)

Colin Baxter and Julie Mouris, for the appellants

Ryder Gilliland and Amanda McInnis, for the respondents

Heard: February 14, 2019

On appeal from the order of Justice Harrison S. Arrell of
    the Superior Court of Justice, dated November 20, 2017, with reasons reported
    at 2017 ONSC 4735.

Pardu J.A.:

[1]

The defendants appeal from the decision of the motion
    judge refusing to dismiss this defamation action pursuant to s. 137.1 of the
Courts
    of Justice Act
, R.S.O. 1990, c. C. 43,
    the Anti-SLAPP provisions
. For the reasons that follow, I would
    dismiss the appeal.

A.

Factual overview: the publication

[2]

The appellant Beacon Publishing Inc. published
    an article written by the appellant Edward. R. Myers in a magazine entitled
    FrontLine Security. The appellant Christina MacLean is the owner, general
    manager and editor of the magazine. The other appellants appeared on the
    masthead of the publication as members of the editorial board, but appear to
    have had no knowledge of or involvement in the publication. The respondent, Grand
    River Enterprises Six Nations Ltd. (GRE) is a large manufacturer of
    cigarettes, and Jerry Montour is its CEO.

[3]

The publication is in a glossy magazine style
    format, and has the appearance of a professionally produced publication. There
    is a banner across the top of the front cover reading Public Safety, Security,
    Enforcement, Emergency Management. Below that is the title FrontLine Safety
    & Security, followed by a large print heading meant to indicate the
    contents of the publication, Illicit Tobacco Why is it a Big Deal? followed
    by The World Stage, Canadas Tobacco Roads and Courses of Action:
FrontLine
    Security
11: Special Edition (2016).

[4]

The overall thrust of the publication is that
    contraband tobacco is associated with organized crime, smuggling and terrorism.
    This is made clear in the opening page of the magazine, at p. 3:

Last year in Canada, organized crime
    syphoned off nearly $3 billion from the Canadian tax base, according to
    experts. Without this fraud, taxpayers would be able to use that money for
    their own benefit rather than bolstering the crime kingpins who support
    ancillary activities such as weapons trafficking and human sex slavery. Some of
    the proceeds of illicit tobacco have been tracked to international terrorists
    and mass murderers like Mokhtar Belmokhtar (aka 
Mr. Marlboro
). January 2016 saw him take the lives of six humanitarian workers
    from Quebec during the Burkina Faso massacre of more than 20 innocent tourists.
    In 2008, he famously kidnapped and held Canadian diplomat, Robert Fowler, for 130
    days.

From a simple economic perspective, the threat
    of contraband tobacco may be counted in terms of a lost tax stream. However,
    even more dire economic consequences are at risk in our trading relationships
    around the world. Heads of State in several Latin American countries have seen
    their local economies jeopardized by illicit tobacco from Canada. These foreign
    jurisdictions deal with the drug cartels of infamy. Their partnership with
    Canadian smugglers allows the cartels to fuel their operations through cheap,
    tax-free cigarette revenue from Canada.



The law enforcement community acknowledges
    that more  not less  needs to be done to monitor the movement of all tobacco
    in Canada. The sources of raw tobacco used for contraband cigarette production
    are largely from either Southwest Ontario or the Eastern U.S. (North Carolina
    and Virginia).



While partisan
    politics saw the death of this initiative, the proposed study is important.
    Recent law enforcement activities have unearthed a dangerous network of
    organized criminal groups that handle different parts of an international
    smuggling ring that starts in the tobacco growing fields in Canada and the
    U.S., then moves to the manufacturing operations on aboriginal reserves, and
    finally makes its way into the international smuggling networks.

[5]

This theme is reinforced by multiple, prominent
    references connecting terrorism and tobacco smuggling.

[6]

Part 2 of the publication focuses on Canada, and
    links criminal activity to contraband tobacco, at p. 9:

In the past five
    years, some progress has been made but much of the
status quo
continues. Moreover, some disturbing new trends are emerging that
    suggest our internal challenges have leaked across our borders and are causing
    problems to governments and communities abroad. To make matters worse, last
    year some provinces increased the tax on tobacco products and the federal
    government recently announced plans to introduce plain packaging. While these
    and other measures go far in regulating lawful products, they are, in fact,
welcomed by the criminal element
as an opportunity to gain further competitive advantages in the
    marketplace. In this section, as we look at how the illicit trade of tobacco is
    currently positioned within our borders, our focus is almost exclusively on
    illicit cigarettes manufactured in Ontario and Quebec and the factors driving
    this criminal and lucrative trade.

[7]

Specific references to the respondent corporation
    follow. Immediately beside the above passage, linking crime to cigarettes
    manufactured in Ontario, is a photograph of Putters cigarettes, a brand
    manufactured by the respondent corporation with the caption Do you smoke
    contraband cigarettes? and showing the results of an online poll conducted by
    a newspaper.

[8]

The publication goes on to connect the
    respondent corporation to smuggled goods in Costa Rica and in Mexico, at pp. 18-19:

Costa Rica

A team of journalists from Costa Rican
    newspaper,
Diario Extra
, travelled to Canada
    to investigate the growing trend of cigarettes being smuggled into their
    country. Specifically, the team visited Grand River Enterprises, a tobacco
    manufacturer on Six Nations in Ohsweken, Ontario. The report by
Diario
    Extra
suggested that Grand River Enterprises is known by
    Costa Rican authorities in connection with smuggled products and organized
    crime. An official quoted by the newspaper says there have been an increasing
    number of investigations involving the Seneca brand of cigarettes, which is
    manufactured by Grand River Enterprises, and that it was becoming one of the
    biggest smuggled goods in our country.

Mexico



Another media outlet in Mexico,
El
    Financiero
, picked up on the same theme and published a
    7-minute exposé for television on the problem of contraband tobacco in Mexico.
    The report indicates that 17% of cigarettes sold in Mexico are contraband, and
    contends that the main supplier is Grand River Enterprises, a manufacturing
    plant in Six Nations.

The
El
    Financiero
report estimates that 1.87 million of Mexicos
    population is supplied by contraband cigarettes. This is a dedicated market and
    a lucrative base that is being exploited by criminal enterprise for illicit
    gain. For many in Canadas political system, it is important that they become
    informed and understand the direct links of this criminal activity to Canadas
    legislation, regulation and other government polices.

[9]

Finally, at p. 23, the publication went on to
    connect both respondents to black market cannabis cultivation:

Fanning the Flames

Diversifying the Black
    Market



In July last year,
Vice News
reported that federal law enforcement officers in the United States seized more
    than 12,000 cannabis plants from two farming operations on tribal land in
    California. The connection to Canada is that the operation was allegedly
    financed by Jerry Montour, CEO Grand River Enterprises, a cigarette
    manufacturer based in Six Nations, Ontario. The article suggests that Montours
    alleged connection is one of the first seemingly concrete examples of the
    tobacco industry diversifying its portfolio.

[10]

FrontLine Security normally publishes four times
    a year, and has a circulation of about 16,000. This was a special edition of
    the magazine that was produced in addition to its normal publication schedule. It
    is published both in hard copy and online. According to the appellants, it is
    distributed to members of Parliament and Cabinet, provincial legislatures, and
    industry executives in the fields of national and border security, policing,
    infrastructure security, IT security, emergency preparedness and tax and trade
    policy.

[11]

The respondents plead that the magazine included
    multiple defamatory meanings, including that GRE smuggles illegal tobacco
    products, is helping finance terrorists through the sale of contraband
    tobacco products, is a criminal organization, smuggles its brands into
    Costa Rica, supplies contraband cigarettes to nearly 1.87 million individuals
    in Mexico, does business with Latin American drug cartels and foments
    corruption.

B.

Decision of the motion judge

[12]

The motion by the appellants, to summarily
    dismiss the action pursuant to s. 137.1 of the
Courts of Justice Act
was
    dismissed. In coming to this decision, the motion judge concluded that the vast
    majority of the issues dealt with in the publication are matters of public
    interest, particularly the issues surrounding contraband tobacco:
Montour
    et al v. Beacon Publishing Inc. et al,
2017 ONSC 4735, at paras. 16-22. He
    also found that there was no doubt that the words complained of were published
    and named the respondents. He indicated that [t]he words state that the plaintiffs
    smuggle contraband tobacco and that they are involved with organized crime. Such
    words are clearly defamatory. I therefore conclude that the claim has
    substantial merit:
Montour
, at para. 24. Those findings are not in
    issue on this appeal.

[13]

The motion judge dealt with four defences raised
    by the appellants: (1) justification, (2) responsible communication, (3) qualified
    privilege and (4) fair comment. He concluded that none of the defences were
    made out on the evidence before him. I will now turn to those defences
    individually and briefly summarize the motion judges holding on each.

(1)

Justification

[14]

The motion judge rejected justification because
    the appellants pleaded only a broad generalization that these statements were
    true in substance and in fact as of the date of publication and because the appellants
    relied on other publications which had expressed what they say were similar
    views:
Montour
, at paras. 27-28. The motion judge cited the repetition
    rule from
Grant v. Torstar Corp.
, 2009 SCC 61, [2009] 3 S.C.R. 640,
    at para. 119, which holds that repeating a libel has the same legal
    consequences as originating it. This rule reflects the laws concern that one
    should not be able to freely publish a scurrilous libel simply by purporting to
    attribute the allegation to someone else.

(2)

Responsible communication

[15]

The motion judge rejected the responsible
    communication defence at paras. 31- 32 of his reasons:

[31] Alleging that
    someone is a smuggler of tobacco and associated with organized crime is clearly
    a serious allegation of criminal activity. On the record before me the due
    diligence to verify these allegations was non-existent other than relying on
    the comments of others. Contraband tobacco as an issue is of public importance
    but there was no urgency in producing the article that would justify failing to
    verify the facts as reported. The sources for the comments about the Plaintiffs
    were other articles that had been published. Those articles were not fact
    checked in any manner that has been shown in the record before me.

[32]
Grant
states at para. 116 in most cases, it is inherently unfair to publish
    defamatory allegations of fact without giving the target an opportunity to
    respond. I conclude, based on the record before me, that the Plaintiffs side
    of the story was not sought. I also conclude that it was not reported in the
    Defendants article, when referring to another publication
El
Dario,
that
    it had been reported in that article that the Plaintiffs had denied any
    involvement in contraband tobacco. Likewise the article of the Defendants did
    not report the fact that the cultivation of marijuana was legal on tribal lands
    in California as reported in the
Vice

News
which was used as a
    source.

(3)

Qualified privilege

[16]

The motion judge found that the defence of
    qualified privilege was not made out on two grounds. First, the motion judge
    held that the defence was not generally available to publications that are
    broadly distributed:
Montour
, at para. 35. Second, the motion judge
    found that the appellants were under no duty to communicate the information
    about the respondents in the publication, and certainly under no duty to report
    uncorroborated allegations of smuggling contraband tobacco by the respondents:
Montour
,
    at para. 37.

(4)

Fair comment

[17]

The motion judge cited
Grant
for the
    principle that the defence of fair comment applies to statements of opinion,
    but not fact. He found this defence was not made out because the allegations
    about the respondents were expressed as statements of fact, not opinion:
Montour
,
    at para. 38.

C.

Errors alleged

[18]

The appellants do not challenge the motion
    judges conclusions that the statements about the respondents were defamatory, nor
    do they challenge his conclusions about responsible communication, qualified
    privilege or fair comment. However, the appellants submit that the motion judge
    erred in three respects:

1.

He failed to balance the public interest in
    protecting the expression embodied in the appellants article about contraband
    tobacco, against what they submit is minimal harm, if any, suffered by the respondents.

2.

He erred in concluding that presumed damages
    could amount to harm suffered by the respondents, where there was no evidence
    of financial loss, nor any specific evidence that the reputation of the respondents
    was diminished on account of the actions of the appellants.

3.

He erred in concluding that the defence of
    justification asserted by the appellants was insufficient to bar continuation
    of the action.

D.

analysis

(1)

Standard
    of Review

[19]

The motion judge did not have the benefit of the
    six decisions released by this court in August 2018 and his decision does not
    precisely track the analytical framework established in those authorities:
1704604
    Ontario Ltd. v. Pointes Protection Association
, 2018 ONCA 685, 142 O.R.
    (3d) 161;
Able Translations Ltd. v. Express International Translations
    Inc.,
2018 ONCA 690, 428 D.L.R. (4th) 568;
Armstrong v. Corus
    Entertainment Inc
., 2018 ONCA 689, 143 O.R. (3d) 54;
Fortress Real
    Developments Inc. v. Rabidoux
, 2018 ONCA 686, 426 D.L.R. (4th) 1;
Platnick
    v. Bent
, 2018 ONCA 687, 426 D.L.R. (4th) 60,
Veneruzzo v. Storey
,
    2018 ONCA 688, 23 C.P.C. (8th) 352.

[20]

As explained in
Pointes Protection
at paras.
    96-97, a motion judges decision is owed deference, absent an identifiable
    legal error, or palpable and overriding factual error:

[96] The public interest
    evaluations required under s. 137.1(4)(b) cannot be reduced to an
    arithmetic-like calculation. It would be misleading to pretend they can be. The
    assessments are qualitative and, to some extent, subjective. Because the
    balancing of the competing public interests will often be determinative of the
    outcome of the s. 137.1 motion, and because the analysis contains an element of
    subjectivity, it is crucial that motion judges provide full reasons for their
    s. 137.1(4)(b) evaluations.

[97] If a motion judge provides
    full reasons, an appeal court must defer to the motion judges balancing of the
    competing interests under s. 137.1(4)(b), absent an identifiable legal error,
    or a palpable and overriding factual error. Deference is important, as there is
    no reason to think that a simple recalibration of the competing interests by an
    appeal court will provide a more accurate assessment.

(2)

The balancing of public interest in expression
    against the harm caused by publication

[21]

Section 137.1(4)(b) of the
Courts of Justice
    Act
provides that a judge shall not dismiss a proceeding under subsection
    (3) if the responding party satisfies the judge that:

(b) the
    harm likely to be or have been suffered by the responding party as a result of
    the moving partys expression is sufficiently serious that the public interest
    in permitting the proceeding to continue outweighs the public interest in
    protecting that expression.

[22]

As indicated earlier, the motion judges reasons
    do not precisely track the analytical framework that was later established in
Pointes
    Protection
. However, I rely on his findings in relation to the defences of
    responsible communication and qualified privilege to the extent they are
    relevant to this balancing exercise.

[23]

While the motion judge found that the subject of
    contraband tobacco was a matter of general importance, he observed that the
    statements about the respondents were highly defamatory, uncorroborated
    allegations published with non-existent due diligence, and that there was no
    public interest in receiving such allegations:
Montour
, at paras.
    31-33.

[24]

On the other hand, at paras. 42-43, he found
    that the allegations of criminality were so serious, that they would likely
    damage anyones reputation and standing in their community, and that the respondents
    had shown credible and compelling evidence of harm:

[42] The
    plaintiffs are a leading native Canadian company and its principal Mr. Montour,
    is a high profile indigenous entrepreneur within the native community. The
    Publication was targeted at the Plaintiffs suppliers and the content remains
    on the Internet. The defendants have not apologized or retracted the alleged
    defamatory statements nor removed the allegations from the internet. The
    allegations of criminal conduct, and the association with organized crime, are
    serious allegations which would likely damage anyones reputation and standing
    in their community.

[43] I conclude that the Plaintiffs
    have shown credible and compelling evidence of harm which appears reasonably
    likely to be proved at trial based on the record before me.

[25]

The motion judge repeatedly recognized that
    there is a public interest in the subject of contraband tobacco. The appellants
    submit that the article was a serious one, and that the magazine is a shoestring
    operation run out of Ms. MacLeans basement. This litigation will, they say,
    be ruinous for them in circumstances where they are up against well-funded,
    experienced litigators. They assert that the libel chill resulting from this
    action will deter them from publishing future articles of public interest, and
    that there is no public interest in a trial.

[26]

I would not interfere with the motion judges
    balancing of the competing interests. He essentially concluded that the
    defamatory remarks were very serious and that the harm suffered by the
    respondents outweighed the public interest in protecting the expression of the
    appellants.

(3)

The absence of evidence of financial loss by the
    respondents

[27]

The appellants also submit that the motion judge
    erred in assessing whether the harm suffered by the respondents was serious.
    The appellants point out that the individual respondent must be treated
    separately from the respondent corporation. The appellants argue that a
    corporation cannot suffer from hurt feelings, and rely on
Walker et al. v.
    CFTO Ltd. et al.
(1987), 59 O.R. (2d)
    104 (C.A.),
at p. 113:

A companys entitlement to damages in defamation
    has recently been summed up in Carter-Ruck, Libel and Slander [citation
    omitted] in the following terms:

As was made
    clear by Lord Reid in
Lewis v. Daily Telegraph Ltd
., 
A company cannot be injured in its feelings, it can only be
    injured in its pocket. Its reputation can be injured by a libel but that injury
    must sound in money.
 Whilst Lord Reid went on to say
    The injury need not necessarily be confined to loss of income; its goodwill
    may be injured,
a company, which is unable at
    trial, some two or three years after the original defamatory publication, to
    point to the slightest hiccup in its trading figures, may be hard pressed to
    persuade a court that even an unpleasant libel has seriously injured its
    reputation. Unlike a personal plaintiff, it cannot tug the jurys heart strings
    by describing its distress and humiliation on reading the defamatory words
. [Emphasis added.]


[28]

The appellants argue that since the respondent
    corporation admits that it has suffered no financial losses, the only possible
    assessment the motion judge could have made about the nature and quantum of the
    respondent corporations damages is that there are none. It submits that the
    respondent corporation has simply relied on bald assertions that the
    publication may damage its relationship with tobacco farmers, and that it will
    raise concerns within the Six Nations community. The publication was hand
    distributed to farmers in the area who supplied tobacco to the respondent
    corporation.

[29]

In
Hill v. Church of Scientology of Toronto
, [1995] 2 S.C.R. 1130,

the
    court indicated at p. 1196: general damages in defamation cases are presumed
    from the very publication of the false statement and are awarded at large. The
    appellants argue that these presumed damages are insufficient evidence of harm
    for the purposes of the balancing required by s. 137.1(4)(b).

[30]

This court dealt with the assessment of harm in
    this context in
Pointes Protection
, at paras. 88-91:

[88] The harm suffered or likely to
    be suffered by the plaintiff as a consequence of the defendants expression
    will be measured primarily by the monetary damages suffered or likely to be
    suffered by the plaintiff as a consequence of the impugned expression.
However,
    harm to the plaintiff can refer to non-monetary harm as well. The preservation
    of ones good reputation or ones personal privacy have inherent value beyond
    the monetary value of a claim. Both are tied to an individuals liberty and
    security interests and can, in the appropriate circumstances, be taken into
    account in assessing the harm caused to the plaintiff by the defendants
    expression:

Hill v. Church of Scientology of Toronto
, [1995] 2
    S.C.R. 1130, at paras. 117-21;
Blencoe v. British Columbia (Human Rights
    Commission)
, 2000 SCC 44, [2000] 2 S.C.R. 307, at paras. 79-80.



[90] On the s. 137.1 motion, the plaintiff must provide a basis
    upon which the motion judge can make some assessment of the harm done or likely
    to be done to it by the impugned expression. This will almost inevitably
    include material providing some quantification of the monetary damages. The
    plaintiff is not, however, expected to present a fully-developed damages brief.
    Assuming the plaintiff has cleared the merits hurdle in s. 137.1(4)(a), a
    common sense reading of the claim, supported by sufficient evidence to draw a
    causal connection between the challenged expression and damages that are more
    than nominal will often suffice.

[91] The plaintiff cannot,
    however, rely on bald assertions in the statement of claim relating to damages,
    or on unsourced, unexplained damage claims contained in the pleadings or
    affidavits filed on the s. 137.1 motion. The motion judge must be able to make
    an informed assessment, at least at a general or ballpark level, about the
    nature and quantum of the damages suffered or likely to be suffered by the
    plaintiff: see
Able Translations Ltd. v. Express International Translations
    Inc.
,
2016 ONSC 6785, 410 D.L.R. (4th) 380
, at
    paras. 85-95, affd 2018 ONCA 690;
Thompson v. Cohodes
, 2017 ONSC 2590,
    at paras. 33-38. [Emphasis added.]

[31]

A serious libel does not always manifest itself
    in financial losses. Recall that in
Hill v. Scientology
false
    allegations of criminal contempt against a lawyer resulted in general,
    aggravated and punitive damages totaling 1.6 million dollars, even without
    evidence linking any financial loss to the defamatory remarks. It is often
    difficult for a plaintiff to link reputational harm to financial loss, or to
    lead testimonial evidence of the actual impact of a particular defamation upon
    reputation.

[32]

In
Lachaux v. Independent Print Ltd.
, [2017] EWCA Civ 1334, [2018] 2 W.L.R. 387,
the
    England and Wales Court of Appeal dealt with a statutory provision intended to
    limit actions for defamation and create a higher threshold for making out a
    defamation claim. The statute provided that a statement is not defamatory
    unless its publication has caused or is likely to cause
serious
    harm
to the reputation of the claimant:
Defamation Act 2013
(UK), c. 26, s. 1 (emphasis added).

[33]

In
Lachaux
the court noted the difficulty
    of proving consequential damages flowing from harm to reputation, at para. 28:

In this context, however, and as is borne out
    by numerous statements in the authorities, there often may in practice be
    little in the way of available positive evidence to establish the harm to
    reputation occasioned: see, for example, the observations of Warby J in
    paragraph 55 of his judgment in
Ames v. Spamhaus

Project
    Limited
[2015] EWHC 127 (QB), [2015] 1 WLR 3409 where he
    said:

 but as
    practitioners in this field are well aware, it is generally impractical for a
    claimant to seek out witnesses to say that they read the words complained of
    and thought the worse of the claimant.

[34]

In
Pointes Protection
the court made it
    clear that s. 137.1 was not intended to fundamentally change the law of
    defamation, as it does not alter the substantive law as it relates to claims
    based on expressions on matters of public interest: at para. 46.

[35]

Sometimes a false statement may reasonably be
    supposed to have such a serious impact upon reputation that harm may be
    presumed, and weighed in the balance for the purposes of s. 137.1(4). Allegations
    meant to be taken seriously of significant criminal activity might fall within
    this category.

[36]

In
Lachaux
, the court referred to this
    possibility at para. 72:

[72] A
    presumption, whether rebuttable or irrebuttable, arises before and irrespective
    of consideration of the evidence. An inference arises after and in consequence
    of consideration of the evidence. Thus at law, in cases of libel (and some
    cases of slander) there is a presumption of damage: which presumption has in my
    view, as will be gathered, not of itself been displaced by the 2013 Act. But
    there is no presumption, at law, of
serious
damage in a libel case. Accordingly that, under s. 1(1), has to be proved. The
    point nevertheless remains that serious reputational harm is capable of being
    proved by a process of inference from the seriousness of the defamatory
    meaning. [Emphasis in original.]

[37]

The
Lachaux
court concluded at para. 79
    that [w]hether in any given case the [defamatory] imputation is of sufficient
    gravity as of itself to connote serious reputational harm (quite apart from the
    question of consequential or special damage) could be assessed at the
    screening hearing under the
Defamation Act 201
3 (UK).

[38]

Many of the recommendations of the 2010 Report
    of the Anti-SLAPP Advisory Panel to the Attorney General were adopted by the
    legislature:
Pointes Protection
,
at para. 28; Anti-SLAPP Advisory Panel,
Report to the Attorney General
(Ontario:
    Ministry of the Attorney General, 2010). That panel recognized at paras. 36-37
    of its report that other interests that could conflict with freedom of
    expression also deserved vindication through the legal process:

[36] The fact that a legal action
    may have an adverse effect on the ability of persons to participate in
    discussion on matters of public interest should not be sufficient to prevent
    the plaintiffs action from proceeding. The protection and promotion of such expression
    should not be a cover for expression that wrongfully harms reputational,
    business or personal interests of others.

[37] Conversely, the fact that a
    plaintiffs claim may have only technical validity should not be sufficient to
    allow the action to proceed. If an action against expression on a matter of
    public interest is based on a technically valid cause of action but seeks a
    remedy for only insignificant harm to reputation, business or personal
    interests, the actions negative impact on freedom of expression may be clearly
    disproportionate to any valid purpose the litigation might serve.

[39]

This observation is reinforced in
Pointes
    Protection
,
at para. 88,
    where this court indicated:

The preservation of ones good
    reputation or ones personal privacy have inherent value beyond the monetary
    value of a claim. Both are tied to an individuals liberty and security
    interests and can, in the appropriate circumstances, be taken into account in
    assessing the harm caused to the plaintiff by the defendants expression.

[40]

Here, the impugned publication connected the respondents
    to organized crime, terrorism and tobacco smuggling. The presumed harm
    resulting from such serious statements may be weighed in the balance for the
    purposes of s. 137.1(4) even where there is no evidence of pecuniary loss, or
    direct evidence about damage to reputation. A trier of fact might conclude that
    one or both of the plaintiffs suffered significant harm, as did the motion
    judge, even in the absence of direct evidence of pecuniary loss.

[41]

For the purposes of the Anti-SLAPP motion, I
    would not differentiate between the corporate and individual respondents in
    this case. The individual respondent is so closely identified with the
    respondent corporation he founded, that a trier could conclude that defamatory
    statements about the corporation tarnish him to the same degree. In these
    proceedings, it would serve no purpose at this stage to screen out the action
    by one plaintiff, but not the other.

[42]

The motion judge did not err in considering this
    presumed damage to reputation flowing from serious allegations of considerable
    criminality.

(4)

Justification

[43]

The appellants argue that they met their
    evidentiary burden by putting the defence of justification in play. They submit
    that the onus then fell on the respondents to satisfy the motion judge that
    there were reasonable grounds to believe that none of the defences advanced
    were valid. The appellants submit that a trier could conclude that their
    allegations were true, thereby validating the defence of justification. They
    point to the fact that the individual respondent admitted an association with
    marijuana farming operations in California. What the appellants publication
    did not mention was that American federal authorities permitted cultivation and
    sale of medical marijuana on tribal lands, as was reported by
Vice News
.
    The implication of the reference in the publication was that the respondents were
    involved in criminal activity.

[44]

The test for evaluating whether there is a valid
    defence within the meaning of s. 137.1 was outlined in paras. 83 - 84 of
Pointes
    Protection
:

[83] I would add two further observations with respect to the
    no valid defence requirement in s. 137.1(4)(a)(ii). That provision requires
    the plaintiff to satisfy the motion judge that there are reasonable grounds to
    believe that the defendant has no valid defence to the plaintiffs claim. The
    section would be unworkable if the plaintiff were required to address all
    potential defences and demonstrate that none had any validity. I think the
    section contemplates an evidentiary burden on the defendant to advance any
    proposed valid defence in the pleadings, and/or in the material filed on the
    s. 137.1 motion. That material should be sufficiently detailed to allow the
    motion judge to clearly identify the legal and factual components of the
    defences advanced. Once the defendant has put a defence in play, the persuasive
    burden moves to the plaintiff to satisfy the motion judge that there are
    reasonable grounds to believe that none of the defences put in play are valid.

[84] My second observation relates
    to the word valid. I would interpret valid as meaning successful. The onus
    rests on the plaintiff to convince the motion judge that, looking at the motion
    record through the reasonableness lens, a trier could conclude that none of the
    defences advanced would succeed. If that assessment is among those reasonably
    available on the record, the plaintiff has met its onus.

[45]

Here, the appellants statements linking the respondents
    to criminal activity are based on statements attributed to others, which are of
    unknown value, which do not obviously support the conclusions expressed by the appellants.
    For example, the translation of the Mexican newspaper article relied upon by
    the appellants, to connect the respondents to contraband tobacco, is of unknown
    quality, and the article could be read as suggesting that the respondent
    corporation was not associated with contraband at the time. The appellants also
    suggest that a study by a major accounting firm supports the allegation that the
    respondent corporation smuggled tobacco and was involved with organized crime. This
    study does not on its face support the allegation that the respondent
    corporation was smuggling contraband tobacco or was involved in organized
    crime.

[46]

Further, this study was commissioned by another
    tobacco company, a competitor to the respondent corporation. The study cautions
    that the accounting firm has not sought to establish the reliability of the
    information sources by references to other evidence, and that the report was
    only designed to benefit the company who commissioned the study.

[47]

There are many other problems with the other
    source material relied upon by the appellants which I need not explore in
    detail.

[48]

The respondents assert that they are careful to
    comply with the many regulations controlling the sale of tobacco products in
    Ontario and Canada. There is no evidence of any domestic prosecution of the respondents
    from violation of those regulations.

[49]

As was discussed earlier, the appellants
    statements that link the respondents to criminal activity rely on problematic
    source material, much of which is of an unknown value. As such, a reasonable trier
    could conclude that the appellants did not have a valid defence of
    justification.

E.

Conclusion and disposition

[50]

The respondents have satisfied their onus to
    show the following:

1.

A reasonable trier could conclude that the action has substantial
    merit;

2.

A reasonable trier could conclude that there are no viable defences;

3.

The harm suffered by the respondents as a result of the appellants expression
    is sufficiently serious that the public interest in permitting the action to
    proceed outweighs the public interest in protecting that expression.

[51]

Accordingly, I would dismiss the appeal with
    costs to the respondents in the agreed sum of $20,000, inclusive of HST and
    disbursements. In the event any issues remain regarding costs awarded by the
    motion judge, the parties may make brief written submissions in that respect,
    due from the appellants within 30 days after the date of release of these
    reasons, and from the respondents within 15 days thereafter.

G. Pardu J.A.

I agree Doherty
    J.A.

I agree I.V.B.
    Nordheimer J.A.

Released: March 29, 2019

DD


