



COURT OF APPEAL FOR ONTARIO

CITATION: United Soils Management Ltd. v. Mohammed, 2019 ONCA
    128

DATE: 20190220

DOCKET: C64197 and C65260

Doherty, Pardu and Nordheimer JJ.A.

BETWEEN

United Soils Management Ltd.

Plaintiff (Appellant)

and

Katie Mohammed

Defendant (Respondent)

AND BETWEEN

United Soils Management Ltd.

Plaintiff (Appellant)

and

Kayt Barclay

Defendant (Respondent)

William A. Chalmers, for the appellant

Jean-Marc Leclerc and Sabrina Callaway, for the
    respondents

Heard: February 11, 2019

On appeal from the order of
    Justice Thomas R. Lederer of the Superior Court of Justice, dated July 25, 2017
    with reasons reported at 2017 ONSC 4450, and the order of Justice Janet Wilson
    of the Superior Court of Justice, dated April 19, 2018, with reasons reported
    at 2018 ONSC 1372.

REASONS FOR DECISION

[1]

These appeals were heard together
    and thus we provide one set of reasons addressing both appeals. We will set out
    the facts of each case and then engage in our analysis as it relates to both
    cases.

Katie
    Mohammed

[2]

The appellant provides site remediation,
    excavation and special materials disposal services throughout southern Ontario.
    It has operated a gravel pit near Stouffville since 2007.

[3]

In late August 2016, the
    Whitchurch-Stouffville Town Council approved an amendment to the appellants
    license that expanded its dumping rights at the gravel pit site and, in
    particular, allowed it to dump material collected from small quantity sites and
    from hydro-vac trucks.

[4]

Some people, including two members
    of the Town Council, expressed concerns that the amendment permitted the dumping
    of material in the site that could compromise the long term integrity of the
    local water supply. There were long-standing concerns about the safety of the
    water supply in the community.

[5]

Both respondents shared these
    concerns. Ms. Mohammed took to Facebook. She posted and commented on two private
    Facebook group pages over about a three day period. In at least three of those postings
    or comments, she referred to the dumping of the material from the hydro-vac
    trucks into the gravel pit site as potentially poisoning our children.

[6]

A few days after the first
    postings, Ms. Mohammed received a letter from the appellants lawyer demanding
    an immediate retraction and apology. The letter also contained a libel notice.

[7]

On the same day, Ms. Mohammed
    deleted the word poison from the various Facebook postings and added a
    comment to each post retracting her defamatory and slanderous statements. She
    also apologized. A day or two later, she received the appellants statement of
    claim alleging libel and seeking damages of $100,000. The appellant also sought
    aggravated damages of $10,000; punitive damages of $10,000; special damages in an
    amount to be determined; and costs on a substantial indemnity basis.

[8]

Ms. Mohammed brought a motion
    under s. 137.1 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43 (the 
CJA
) for an order dismissing the appellants action. The
    motion judge allowed the motion and dismissed the appellants claim. He found
    that:

·

Ms. Mohammeds statements related to a matter of public interest
    under s. 137.1(3) of the
CJA
.

·

The appellant had failed to meet its onus under either s. 137.1(4)(a)(i)
    (the substantial merit provision) or s. 137.1(4)(a)(ii) (the valid defense
    provision).

·

The appellant had also failed to meet its onus under s.
    137.1(4)(b) (the public interest balancing provision).

[9]

The motion judge awarded damages
    to Ms. Mohammed pursuant to s. 137.1(9) in the amount of $7,500.

[10]

Finally, the motion judge awarded
    costs of the proceeding to Ms. Mohammed on a full indemnity basis. In doing so,
    he applied the presumption in favour of costs on a full indemnity basis set
    out in s. 137.1(7). The motion judge fixed those costs at $122,286.94. The
    costs were referable to the entire proceedings and included about $30,000 in
    costs awarded on three motions that the appellant had brought earlier in the
    course of the proceedings.

[11]

The appellant appeals from the
    judgment dismissing the action, claiming legal errors in respect of each step
    of the motion judges analysis under s. 137.1. The appellant also appeals
    from the damage award to Ms. Mohammed. The appellant further seeks leave to
    appeal from the costs order. It does not contend that the motion judge erred in
    awarding costs on a full indemnity basis, but argues that the quantum is so
    excessive as to warrant appellate intervention.


Kayt Barclay

[12]

As was the case with Ms. Mohammed,
    Ms. Barclay was also concerned about the activities of the appellant. In a
    Facebook group, she posted a message in which she said that a councillor, who
    had voted in favour of the amendment, was in the pocket of United Soils.

[13]

Less than four hours after the
    Facebook post was made, the President of the appellant personally e-mailed Ms. Barclay,
    copying United Soils lawyer. He told Ms. Barclay that he had instructed his
    lawyer to sue her for libel and that he looked forward to that process.

[14]

Two days later, Ms. Barclay received,
    by process server, a letter enclosing a Notice of Libel and demanding that she
    immediately post, for the period of seven consecutive days, a public
    retraction and apology on Facebook. The Notice of Libel alleged that Ms. Barclays
    words were made with the intention of bringing political pressure against
    United Soils.

[15]

Ms. Barclay deleted the Facebook
    post. She was not able to post the requested retraction and apology because the
    Facebook group was shut down. Days later, Ms. Barclay was served at her home with
    a statement of claim, claiming damages of $100,000 for libel; aggravated
    damages of $10,000; punitive damages of $10,000; special damages in an amount
    to be determined; and costs on a substantial indemnity basis.

[16]

Ms. Barclay also moved under s.
    137.1 to dismiss the action against her. The motion judge allowed the motion
    and dismissed the appellants action. She found that Ms. Barclays post related
    to a matter of public interest; that the appellant had not met its onus of
    proving that its claim had substantial merit (as in her view Ms. Barclays post
    was not defamatory with respect to the appellant); that, in any event, the
    appellant had not proved that Ms. Barclay had no valid defence to the
    proceeding; and, finally, that the appellant had failed to prove that it had
    suffered, or was likely to suffer, any harm, such that the public interest in
    permitting the proceeding to continue outweighed the public interest in
    protecting Ms. Barclays expression.

[17]

The motion judge awarded Ms.
    Barclay $20,000 in damages pursuant to s. 137.1(9). She also awarded Ms.
    Barclay her full indemnity costs, pursuant to s. 137.1(7), in the amount of
    $126,438.55.

[18]

The appellant appeals from the
    motion judges order dismissing its action against Ms. Barclay. As in the
    companion appeal with respect to Ms. Mohammed, it argues that the motion judge
    erred in her analysis with respect to s. 137.1 in dismissing its action against
    Ms. Barclay. It also challenges the motion judges damages and costs awards.

Analysis

[19]

Both motion judges heard and
    decided the s. 137.1 motion before this court released a series of judgments
    interpreting s. 137.1 in some detail: see
1704604 Ontario Ltd. v.
    Pointes Protection Association
, 2018 ONCA
    685, 142 O.R. (3d) 161 and the related cases that were released simultaneously.
    Some of the motion judges analyses have been overtaken by
Pointes
and those related authorities.

[20]

In light of the significant
    developments in the case law since the motion judges released their reasons, we
    see no need to engage in a detailed consideration of those reasons. Whatever
    may be said about the correctness of their analyses in respect of s.
    137.1(4)(a) (the substantial merit and valid defense provisions), the appellant
    cannot succeed on these appeals unless it satisfies this court that the motion
    judges each reached the wrong conclusion in respect of s. 137.1(4)(b), the
    public interest balancing provision.

[21]

Section 137.1(4)(b) required the
    motion judges to dismiss the appellants lawsuits unless the appellant could
    demonstrate that the harm suffered by it, or likely to be suffered by it, as a
    result of the respondents statements was sufficiently serious that the public
    interest in permitting the appellants lawsuit to go forward outweighed the
    public interest in protecting the respondents freedom of expression. This
    court considered the factors relevant to the balancing process described in s.
    137.1(4)(b) in
Pointes
, at paras.
    85-98;
Able Translations Ltd. v. Express International Translations
    Inc.
, 2018 ONCA 690, at paras. 37-44; and
Fortress
    Real Developments Inc. v. Rabidoux
, 2018
    ONCA 686, 426 D.L.R. (4th) 1, at paras. 42-52.

[22]

Any monetary damages suffered by a
    plaintiff, or likely to be suffered by a plaintiff, as a consequence of alleged
    defamatory statements is a key feature in the assessment of the harm suffered
    or likely to be suffered by the plaintiff:
Pointes
,

at para. 88. The appellant offered no
    evidence of any monetary damage suffered by it. While damages are presumed if
    defamation is established, there is no presumption about the nature or quantum
    of that damage. On this evidence, there is no reason to think that any damages
    awarded to the appellant would be anything more than modest, if not nominal.

[23]

Nor is there any evidence of any
    reputational harm done to the appellants business. There is no suggestion that
    the appellant, a corporation, suffered any damage to, or was likely to suffer
    any damage to, its business reputation as a result of the respondents Facebook
    posts.

[24]

The extent of any harm suffered or
    likely to be suffered by the appellant is also significantly diminished by the
    very limited circulation of the alleged defamatory comments. In both instances,
    they were posted only for a few days and to a limited audience of likeminded
    individuals also concerned about potential damage to the environment.

[25]

Further, in the case of Ms.
    Mohammed, the timely and unqualified apology, and retraction of the offensive
    portions of her posts, is a crucial factor in assessing harm caused or likely to
    be caused to the appellant. The apology goes a long way to eliminating any
    possible future harm to the appellants reputation from the posts. To the
    extent that the appellant claims to have taken legal action to vindicate its
    good name, the unqualified and timely apology by Ms. Mohammed would seem to
    achieve that vindication.

[26]

While the appellant can point to
    little, if any, harm or potential harm, both respondents make a strong case for
    protecting their freedom of expression. The statements related to a matter of significant
    public importance. They were also part of an ongoing political dialogue in the
    local community. Democracy thrives through open and public debate on matters of
    public policy. Strong citizen involvement in those debates can only strengthen
    our democracy. Although both respondents can properly be criticized for the
    particular words used  poisoning our children and in the pocket of United
    Soils  there can be no doubt that both the subject matter of their concerns,
    and the manner in which they advanced those concerns, constituted expression
    that engaged the public interest.

[27]

The appellant has the onus of
    demonstrating that the harm suffered or likely to be suffered by it was
    sufficiently significant to show that the public interest in allowing the
    appellant to proceed outweighed the public interest in protecting the
    respondents expression. On these records, the appellant cannot meet that onus
    in either case.

[28]

The proceedings were properly
    dismissed on the basis that the respondent had not met its onus in respect of
    s. 137.1(4)(b).

Damages

[29]

A separate issue arises on both of these appeals and that is the proper
    application of s. 137.1(9). That section reads:

If, in dismissing a proceeding
    under this section, the judge finds that the responding party brought the
    proceeding in bad faith or for an improper purpose, the judge may award the
    moving party such damages as the judge considers appropriate.

[30]

The motion judge awarded Ms. Mohammed damages of $7,500. In doing so he
    found that prior motions brought by the appellant were an objective
    demonstration of improper purpose:
Mohammed
, at para. 78. The motion
    judge also pointed out that the appellant instituted the proceeding
    notwithstanding that Ms. Mohammed had apologized, as demanded by the appellant.
    He found that this was a continuation of its desire to intimidate:
Mohammed
,
    at para. 78.

[31]

In fixing the amount of damages, the motion judge noted that there was
    no medical evidence in support of Ms. Mohammeds claim that she suffered stress
    as a result of the proceeding being instituted against her. He also noted that
    there was no other corroborating evidence of any adverse effects on Ms.
    Mohammed. Nevertheless, the motion judge accepted that the proceeding
    unnecessarily caused Ms. Mohammed stress that affected her day-to-day life:
Mohammed
,
    at paras. 79-80.

[32]

In the case of Ms. Barclay, the motion judge awarded her damages of
    $20,000. The motion judge found that the action was brought in bad faith and
    for an improper purpose of stifling public debate around a crucially important
    public issue:
Barclay
, at para. 136. The motion judge found that Ms.
    Barclay had suffered personal anguish as a result of the action:
Barclay
,
    at para. 136.

[33]

The motion judge also found, in the alternative, that s. 137.1(9) would
    permit an award of punitive damages in the same amount. She found that the
    appellants conduct warrants denunciation and deterrence:
Barclay
,
    at paras. 134, 136.

[34]

The wording of s. 137.1(9) is somewhat problematic. On one view, the
    wording of s. 137.1(9) would seem redundant, as a finding that an action has
    been commenced for the purpose of unduly limiting expression on matters of
    public interest would seem to qualify as one that has been brought for an
    improper purpose. On another view, the wording of s. 137.1(9) could be seen as
    an effort to separate out a subset of SLAPP cases which go beyond simply
    reflecting an effort to limit expression and include active efforts to
    intimidate or to inflict harm on the defendant.

[35]

A review of the Anti-SLAPP Advisory Panel Report to the Attorney
    General, dated October 28, 2010, supports the latter interpretation. In that
    report, the Advisory Panel recommended, at para. 46:

[T]he court should not be required
    to make findings as to bad faith or improper motive on the part of the
    plaintiff in deciding a motion under the special procedure.
If in a
    particular case, however, the court is satisfied on the record before it that
    an action has been brought in bad faith or for an improper motive, such as
    punishing, silencing or intimidating the defendant rather than any legitimate
    pursuit of a legal remedy, an additional remedy should be available for this
    improper conduct.
In such circumstances, the court should have the power to
    award damages to the defendant in such amount as is just. [Emphasis added].

[36]

We would make two observations regarding the approach taken by the
    motion judges in these cases with respect to this issue. First, we do not view
    it as necessary for a defendant to adduce medical evidence in order to support
    a claim for damages. While medical evidence might be of assistance in
    determining the proper quantum of damages to be awarded, in certain cases, such
    as the ones here, it may be presumed that damages will arise from the use of a SLAPP
    lawsuit.  Both of the respondents were individuals inexperienced in litigation,
    who would understandably suffer the stress and anxiety associated with being
    the subject of a proceeding of this type. This is especially true given the
    intimidating nature of the conduct of the appellant.

[37]

That observation does not mean that damages will naturally follow in
    every case where the action is dismissed.  The exact limits to the
    circumstances justifying an award of damages must await further development of
    the law surrounding s. 137.1.  Whether an award of damages is warranted should
    also take into account the presumption that costs will be awarded on a full
    indemnity basis.  Such an award may, in some cases, address the harm to a
    defendant that arises from a SLAPP proceeding.

[38]

Second, we do not view the wording of s. 137.1(9) as being so broad as
    to encompass punitive damages awards. In our view, the thrust of s. 137.1(9) is
    to provide compensation for harm done directly to the defendant arising from
    the impact of the instituted proceeding. The section is not intended to provide
    wide-ranging authority for the court to sanction the conduct of the plaintiff
    through a damages award, such as an award for punitive damages. Any need to
    sanction the conduct of the plaintiff is already addressed through the
    provision in s. 137.1(7) of a presumptive award of full indemnity costs.

[39]

All of that said, we do not see any basis for interfering with the
    damages awards that were made in either of these cases. There was evidence of
    harm to Ms. Mohammed and Ms. Barclay arising from these proceedings. Each of
    the motion judges gave reasons for the conclusions that they reached regarding
    the quantum of damages to be awarded. There is no palpable and overriding error
    in either of their conclusions that would warrant intervention by this court.

Costs

[40]

In each of these appeals, the appellant sought leave to appeal the costs
    award made. In each instance, the appellant submits that the amount of costs
    awarded was excessive and that the motion judges failed to carry out the
    requisite analysis of the costs claimed and determine whether those costs were
    reasonable.

[41]

We do not see any grounds, much less strong grounds, on which we could
    conclude that either of the motion judges erred in exercising their discretion
    in fixing costs such that leave to appeal should be granted:
Brad-Jay
    Investments Ltd. v. Szijjarto

(2006), 218 O.A.C. 315 (C.A.), at
    para. 21;
Sawdon Estate v. Watch Tower Bible and Tract Society of Canada
,
    2014 ONCA 101, 119 O.R. (3d) 81, at para. 77. It was acknowledged that the
    motions were complex and that considerable time was spent on them. The amounts
    awarded, given that they were on a full indemnity basis, were not unreasonable.

[42]

We do, however, agree with the appellant that there remains an
    obligation on a motion judge, when determining the quantum of costs under s.
    137.1(7), to undertake the same type of analysis that is required when fixing
    costs in any other context. Just because the award is on a full indemnity basis
    does not mean that the successful party is entitled to whatever costs were
    incurred. The quantum must still be fair and reasonable for what was involved
    in the particular proceeding:
Boucher v. Public Accountants Council for the
    Province of Ontario
(2004), 71 O.R. (3d) 291 (C.A.), at para. 26. The
    award must also be proportionate to the importance and complexity of the
    issues, and to the amount involved, in the proceeding: see r. 1.04(1.1),
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194.

Conclusion

[43]

The appeals are dismissed. The motions for leave to appeal from the
    costs awards are dismissed. The respondents are entitled to the costs of the
    appeals, each in the amount of $30,000, inclusive of disbursements and HST.

Doherty
    J.A.

G.
    Pardu J.A.

I.V.B.
    Nordheimer J.A.


