



COURT OF APPEAL FOR ONTARIO

CITATION: Laurentide Kitchens Inc. v.
    Homestars Inc., 2022 ONCA 48

DATE: 20220124

DOCKET: C69229

Benotto, Huscroft and Miller JJ.A.

BETWEEN

Laurentide Kitchens Inc.

Plaintiff (Appellant)

and

Homestars Inc.

Defendant (Respondent)

and

BETWEEN

DOCKET: C69287

Lucvaa Ltd.

Plaintiff (Appellant)

and

Homestars Inc.

Defendant (Respondent)

Gavin J. Tighe and Daria Risteska, for the
    appellants

Maanit Zemel, for the respondent

Heard: November 29, 2021

On appeal from the order of L.S. Ntoukas,
    Administrative Judge of the Small Claims Court, dated February 17, 2021.

Benotto J.A.
:

[1]

Does the Administrative Judge of the Small Claims Court have
    jurisdiction to make an order under s. 137.1 of the
Courts
    of Justice Act
,
    R.S.O. 1990, c. C.43 (
CJA
)
?
[1]
The appellants submit that she does not because the issue was determined by
    this court in
Bruyea v. Canada (Veteran Affairs)
,

2019
    ONCA 599, 439 D.L.R. (4th) 193. The respondent submits that
the jurisdiction issue decided in
Bruyea
was limited to deputy judges of the Small Claims Court and does not extend to
    the Administrative Judge.

[2]

Two appeals, heard together, raised this issue. For the reasons that
    follow, I would allow the appeals. I conclude that the Administrative Judge of
    the Small Claims Court does not have jurisdiction to make an order under s.
    137.1. That jurisdiction lies only with a Superior Court judge.

BACKGROUND

(1)

The defamation actions

[3]

The respondent Homestars Inc. operates a website, on
    which consumers post reviews of contractors and providers of home improvement
    services. Negative reviews were posted against the appellants Lucvaa Ltd. and
    Laurentide Kitchens Inc.
On May 30, 2018, Lucvaa and Laurentide Kitchens
    sued Homestars in Small Claims Court.

[4]

Homestars brought motions against each appellant
    to dismiss their actions under s. 137.1 of the
CJA
. The motions were
    scheduled to be heard before a deputy judge on April 30, 2019.

(2)

Bruyea
is released

[5]

Two and a half months after the motions were
    scheduled, the decision in
Bruyea
was released. This court concluded
    that deputy judges do not have the jurisdiction to make orders under s. 137.1
    of the
CJA.
Deputy judges are
    lawyers who are appointed by the regional senior judge of the Superior Court,
    with the approval of the Attorney General, usually for a term of three years.
Bruyea
has been followed by this court in other cases which have confirmed that
    only Superior Court judges can make orders under s. 137.1.

(3)

Application to the Superior Court

[6]

Homestars applied to the Superior Court and
    sought to have a Superior Court judge assigned to hear the motion. Under the
CJA
s. 22(3), all Superior Court judges are also judges of the Small Claims
    Court. On October 17, 2019, the matter came before a Superior Court judge in
    civil practice court. He endorsed the record that the action would remain in
    Small Claims Court and an administrative judge of the Small Claims Court
    should hear these motions.

[7]

There is one Administrative Judge of the Small
    Claims Court. As will be discussed below, this was a position created by the
    legislature in 2017.

(4)

Decision of the Administrative Judge

[8]

On February 27, 2020, the motions came before
    the Administrative Judge. The appellants challenged her jurisdiction, and it
    was argued as a preliminary matter.

[9]

In her written reasons, released a year later on
    February 17, 2021, the Administrative Judge concluded that the Superior Court
    judges endorsement settled the issue of jurisdiction, and she would hear the
    motions when the court resumed operations. The appellants appeal this
    order.

STATUTORY AND JURISPRUDENTIAL BACKGROUND

[10]

There are statutory and jurisprudential
    principles that frame the issue of jurisdiction.

(5)

Statutory principles

[11]

The statutory framework is found in ss. 137.1,
    87.2 and 24 of the
CJA.

Section 137.1

[12]

Section 137.1 was enacted in 2015 to promote and
    protect freedom of expression on matters of public interest by allowing a
    defendant to move at an early stage to dismiss proceedings that adversely
    affect that expression. The section is as follows:

Dismissal
    of proceeding that limits debate

Purposes

137.1

(1) The
    purposes of this section and
sections 137.2
to
137.5
are,

(a) to encourage individuals to
    express themselves on matters of public interest;

(b) to promote broad participation
    in debates on matters of public interest;

(c) to discourage the use of litigation
    as a means of unduly limiting expression on matters of public interest; and

(d) to reduce the risk that
    participation by the public in debates on matters of public interest will be
    hampered by fear of legal action. 2015, c. 23, s. 3.

Definition, expression

(2) In this section,

expression means any
    communication, regardless of whether it is made verbally or non-verbally,
    whether it is made publicly or privately, and whether or not it is directed at
    a person or entity. 2015, c. 23, s. 3.

Order to dismiss

(3) On motion by a person
    against whom a proceeding is brought, a judge shall, subject to subsection (4),
    dismiss the proceeding against the person if the person satisfies the judge
    that the proceeding arises from an expression made by the person that relates
    to a matter of public interest. 2015, c. 23, s. 3.

No dismissal

(4) A judge shall not dismiss a
    proceeding under subsection (3) if the responding party satisfies the judge
    that,

(a) there are grounds to believe
    that,

(i)
    the proceeding has substantial merit, and

(ii)
    the moving party has no valid defence in the proceeding; and

(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. 2015, c. 23, s. 3.

No further steps in proceeding

(5) Once a motion under this
    section is made, no further steps may be taken in the proceeding by any party
    until the motion, including any appeal of the motion, has been finally disposed
    of. 2015, c. 23, s. 3.

No amendment to pleadings

(6)

Unless a judge
    orders otherwise, the responding party shall not be permitted to amend his or
    her pleadings in the proceeding,

(a) in order to prevent or avoid an
    order under this section dismissing the proceeding; or

(b) if the proceeding is dismissed
    under this section, in order to continue the proceeding. 2015, c. 23, s. 3.

Costs on dismissal

(7) If a judge dismisses a
    proceeding under this section, the moving party is entitled to costs on the
    motion and in the proceeding on a full indemnity basis, unless the judge
    determines that such an award is not appropriate in the circumstances. 2015, c.
    23, s. 3.

Costs if motion to dismiss denied

(8) If a judge does not dismiss
    a proceeding under this section, the responding party is not entitled to costs
    on the motion, unless the judge determines that such an award is appropriate in
    the circumstances. 2015, c. 23, s. 3.

Damages

(9) 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. 2015,
    c. 23, s. 3.

[13]

As provided for under s. 137.2(2), the s. 137.1
    motion is to be heard within 60 days after the notice of motion is filed with
    the court. Section 137.1(5) provides that the s. 137.1 motion stays the
    underlying defamation action until the motion has been finally determined,
    including on appeal. Section 137.1 also provides provisions for the imposition
    of costs and damages.

[14]

The detailed process to determine whether a s.
    137.1 motion will succeed involves a framework and a shifting burden that was
    described in
1704604 Ontario Ltd. v.
Pointes
    Protection
Association
,
2020 SCC 22,
449 D.L.R. (4th) 1, at para. 18:

In brief, s. 137.1
    places an initial burden on the moving party  the defendant in a lawsuit  to
    satisfy the judge that the proceeding arises from an expression relating to a
    matter of public interest. Once that showing is made, the burden shifts to the
    responding party  the plaintiff  to satisfy the motion judge that there are
    grounds to believe the proceeding has substantial merit and the moving party
has no valid defence
, and that the
public interest in permitting the proceeding to continue
    outweighs the public interest in protecting the expression
. If the
    responding party cannot satisfy the motion judge that it has met its burden,
    then the s. 137.1 motion will be granted, and the underlying proceeding
    will be consequently dismissed. It is important to recognize that the final
    weighing exercise under s. 137.1(4)(b) is the fundamental crux of the analysis
     legislative debates emphasized balancing and proportionality between the
    public interest in allowing meritorious lawsuits to proceed and the public
    interest in protecting expression on matters of public interest. Section
    137.1(4)(b) is intended to optimize that balance. [Emphasis added.]

[15]

The evidence before the motion judge must comply
    with the section to establish the expression of public interest, the merits of
    the claim, the validity of the defences and then the proper balancing and
    proportionality between public interest in allowing the matter to proceed and
    protecting expression. This typically involves an exchange of affidavits,
    cross-examinations and extensive submissions.

Sections 87.2 and 24

[16]

In 2017, the
Burden Reduction Act
, 2017, S.O. 2017, c. 2

amended
    the
CJA
to create the position of Small Claims Court Administrative
    Judge. Ten years earlier, the Civil Justice Reform Project had recommended that
    an administrative judge be appointed to ensure that trial and settlement
    conferences lists were properly organized in the Small Claims Court. The
    official debates refer to creating the position of Small Claims Court
    administrative judge to improve our Small Claims Court processes and ensure
    that any dispute, big or small, is handled fairly and smoothly by our courts.
[2]


[17]

When the
Burden Reduction Act
was
    passed, s. 87.2 was added to the
CJA
:

Small Claims Court
    Administrative Judge

87.2

(1) The
    Lieutenant Governor in Council may, on the recommendation of the Attorney
    General, appoint a person who meets the qualifications set out in
subsection 42 (2)
as Small Claims Court
    Administrative Judge. 2017, c. 2, Sched. 2,
s. 18
.

[18]

The qualifications in s. 42(2) are those for a
    provincial court judge.

[19]

Section 24 of the
CJA
was also amended
    to add the Administrative Judge in s. 24(2)(c):

Composition of court for
    hearings

24

(1) A proceeding
    in the Small Claims Court shall be heard and determined by one judge of the
    Superior Court of Justice. R.S.O. 1990, c. C.43, s. 24 (1);
    1996, c. 25, s. 9 (17).

Other judicial officials who
    may preside

(2) Despite subsection (1), a
    proceeding in the Small Claims Court may also be heard and determined by,

(a)  a provincial judge who was
    assigned to the Provincial Court (Civil Division) immediately before the 1st
    day of September, 1990;

(b)  a deputy judge appointed
    under
section 32
; or

(c) 
    the Small Claims Court Administrative Judge appointed under
section 87.2
. 2017, c. 2, Sched. 2,
s. 3
.

(6)

Jurisprudential principles

[20]

This court has considered ss. 327.1 and 24(1)
    and (2) of the
CJA
in connection with the jurisdiction to make the
    order in question here.

[21]

In practice, virtually all matters in the Small
    Claims Court are heard by deputy judges. In
Bruyea
the issue before
    this court was whether a deputy judge of the Small Claims Court has jurisdiction
    to make an order under s. 137.1
.
Writing for the court in
Bruyea
,
    Nordheimer J.A. reviewed the structure of the Small Claims Court and the
    specific provisions of s. 137.1.

At para. 12, he wrote the following:

Of importance for the current issue is the
    wording of s. 137.1(3) that reads:

On motion by a
    person against whom a proceeding is brought, a
judge
shall, subject to subsection (4), dismiss the proceeding against the person if
    the person satisfies the

judge
that the proceeding arises from an expression made
    by the person that relates to a matter of public interest. [Emphasis added.]

Subsections
    137.1(4), (6), (7), (8) and (9) also all refer to judge.

[22]

Nordheimer J.A. concluded that the use of the
    word judge without reference to deputy judge was a clear marker that deputy
    judges do not have jurisdiction to make the order. He found at para. 26 that the
    Small Claims Court must find its jurisdiction in a statute and therefore [a]bsent
    express statutory authority, the Small Claims [C]ourt has no jurisdiction.

[23]

Bruyea
was
    referred to by this court in
Nanda v. McEwan
, 2020 ONCA 431, where the
    Chief Justice concluded, at para. 12, that only a Superior Court judge had
    jurisdiction to make the order:

Subsequent to the
    motion judges decision, this court held in
Bruyea v. Canada (Veteran
    Affairs)
, 2019 ONCA 599,
147 O.R. (3d) 84
, that a deputy judge of the Small Claims Court has no jurisdiction
    to make an order under
s. 137.1
, as that jurisdiction rests with a judge, meaning a Superior
    Court judge.

[24]

In
Ontario College of
    Teachers
v. Bouragba
,
2021 ONCA 508, at paras. 6-8, this court, in considering the proper appeal
    route for a s. 137.1 order, also confirmed that only a Superior Court judge has
    jurisdiction to make the order:

Mr. Bouragba submits that an appeal of the
    Order lies to this court pursuant to
CJA
s.
    6(1)
(d), which states that an appeal lies to the Court
    of Appeal from  (d) an order made under
section
    137.1
.

We disagree.
An order made under
section
    137.1

within the meaning of
CJA
s. 6(1)(d) is an
    order made by a judge of the Superior Court of Justice. This is clear from
    the language of s. 137.1
, which authorizes a judge to make orders
    that: (i) dismiss a proceeding (
s. 137.1(3)
); (ii) refuse to dismiss a proceeding (
s.
    137.1(4)
); (iii) amend a pleading (
s. 137.1(6)
); (iv) award costs (s. 137.1(7)
    and (8); or award damages to the moving party (s. 137.1(9)). [Emphasis added.]

ISSUE ON APPEAL

[25]

The issue on appeal is whether the
    Administrative Judge of the Small Claims Court has jurisdiction to make an
    order pursuant to s. 137.1 of the
CJA
.
[3]

[4]

ANALYSIS

[26]

I come to the conclusion the Administrative
    Judge does not have the authority to make an order under s. 137.1. I say this
    for three reasons: (i) the authority was not given by statute; (ii) this court
    has determined that only Superior Court judges have the jurisdiction; and (iii)
    the s. 137.1 process is not consistent with the rules and procedures in the
    Small Claims Court.

[27]

I will address each reason in turn.

(7)

No statutory authority

[28]

In 2017, the
Burden Reduction Act
amended
    the
CJA
to create the position of Administrative Judge. Section 137.1 had
    been in effect for two years. Although the legislature made other consequential
    amendments to the
CJA
to reflect this change, the legislature did not
    amend
s. 137.1(3)
to include the Administrative
    Judge. For ease of reference, s. 137.1(3) provides:

On
    motion by a person against whom a proceeding is brought, a
judge
shall, subject to subsection (4), dismiss the
    proceeding against the person if the person satisfies the
judge
that the
    proceeding arises from an expression made by the person that relates to a
    matter of public interest. [Emphasis added.]

[29]

The respondent submits that this does not matter
    because, in effect, the Administrative Judge should be considered a provincial
    court judge. The
CJA
provides that her qualifications and compensation
    for the position are the same as a provincial court judge. Section 87.2(1)
    provides that the Administrative Judge must meet the qualifications set out in
subsection 42(2)
,
    which are the qualifications for a provincial court judge. Section 87.2(7) of
    the
CJA
provides that the Administrative Judge is deemed to be a
    provincial judge for purposes of compensation:

Compensation

(7) The
    salary, pension benefits, other benefits and allowances of the Small Claims
    Court Administrative Judge are subject to the recommendations of the Provincial
    Judges Remuneration Commission and, for the purpose, the Small Claims Court
    Administrative Judge
is deemed to be
a provincial
    judge under the framework agreement set out in the Schedule to this Act. 2017,
    c. 2, Sched. 2,
s. 18
. [Emphasis
    added.]

[30]

The reference to ss. 42(2) and 87.2(7) does not
    assist the respondent.
On the contrary, these amendments
    show that the legislature was alive to changes that were required as a result
    of s. 87.2 and chose not to amend the definition of judge in s. 137.1(3). This
    is a marker of an intent to omit the jurisdiction. By providing that the
    Administrative Judge have the same
qualifications
and be
paid
in accordance with provincial court judges, the Legislature did not expand
    jurisdiction to s. 137.1. Rather, for purposes of compensation only, the
    Administrative Judge is deemed to be a provincial court judge.

[31]

The respondent further submits that s. 24(2)
    provides the authority for the Administrative Judge to make orders under s.
    137.1. For ease of reference, I include the relevant portion of the section
    again:

(2) Despite subsection (1), a
    proceeding in the Small Claims Court may also be heard and determined by,

(a)  a provincial judge who
    was assigned to the Provincial Court (Civil Division) immediately before the
    1st day of September, 1990;
[5]

(b)  a deputy judge
    appointed under
section 32
; or

(c) 
    the Small Claims Court Administrative Judge appointed under
section 87.2
. 2017, c. 2, Sched. 2,
s. 3
.

[32]

The respondent submits that the words may also be
    heard and determined by give the Administrative Judge authority to make orders
    under s. 137.1.

[33]

I do not agree.

[34]

First, s. 24 does not confer the authority to
    make orders under s. 137.1. Note that deputy judges are also included in s. 24(2)(b).
    If the respondents submission were correct, jurisdiction would also be
    conferred on deputy judges. We know from the analysis in
Bruyea
that
    deputy judges do not have jurisdiction.

[35]

Second,
the
respondents
    position would effectively expand the Administrative Judges authority beyond
    that of the Small Claims Court. For example, she would have the power to grant
    injunctions or appoint receivers. This too was considered and definitively
    dealt with in
Bruyea
,

at paras. 17 and 18:

Further, if one was to accede to the
    suggestion that the use of the term judge in the
CJA
was intended to
    include deputy judges, then that result creates difficulties with respect to
    other sections of the
CJA
. One such section is
s. 101(1)
of the
CJA
which reads:

In the
    Superior Court of Justice, an interlocutory injunction or mandatory order may
    be granted or a receiver or receiver and manager may be appointed by an
    interlocutory order, where it appears to a j
udge
of
    the court to be just or convenient to do so. [Emphasis added.]

Since the Small
    Claims Court is a branch of the Superior Court of Justice, if the term judge
    includes deputy judges, then
s. 101(1)
would give authority to deputy judges to grant injunctions or
    appoint receivers. To my knowledge, it has never been suggested that the Small
    Claims Court has ever had jurisdiction to grant interlocutory injunctions or to
    appoint receivers, nor am I aware of any case where the Small Claims Court has
    purported to exercise that jurisdiction. Indeed, in
936464 Ontario Ltd
    c.o.b. Plumbhouse Plumbing & Heating v. Mungo Bear Ltd.
(2003), 74
    O.R. (3d) 45 (Div. Ct.), it was concluded that the Small Claims Court is not
    empowered to grant any other form of equitable relief, such as injunctions:
    at para. 29.

[36]

This reasoning with respect to deputy judges
    applies equally to the Administrative Judge.

(8)

This courts decisions have settled the issue

[37]

The respondent submits that
Bruyea
is
    limited to deputy judges and does not apply to the Administrative Judge. As I
    have outlined, the analysis in
Bruyea
is equally applicable to the
    Administrative Judge.

[38]

In any event, post-
Bruyea
this
    court has stated that only Superior Court judges have the jurisdiction to make
    orders under s. 137.1: see
Nanda v. McEwan
, at para. 12

and
Ontario College of Teachers
, at para. 7
.

[39]

The Administrative Judge is not a Superior Court
    judge.

[40]

The respondent submitted that the endorsement of
    the Superior Court judge conferred jurisdiction on the Administrative Judge. I
    do not agree. In light of the jurisprudence, he had no authority to do so. In
    any event, it is clear from the record that the attendance in  what is usually
     a busy practice court involved scheduling. The jurisdiction issue was not
    brought to his attention.

[41]

I turn to the final reason that the
    Administrative Judge lacks jurisdiction.

(9)

Section 137.1 and the Rules of the Small Claims
    Court

[42]

A third reason confirms my view that the
    legislature did not intend to confer jurisdiction on the Administrative Judge.
    The s. 137.1 process is not consistent with the rules and procedures in the
    Small Claims Court.

[43]

The Small Claims Court is a branch of the
    Superior Court of Justice. The court embodies the foundations of access to
    justice: informality, affordability, timely resolution, accessibility for
    self-represented people and active judicial engagement. By providing access to
    justice, the court has an important role in the administration of justice for
    the province. The court handles nearly half of the civil disputes in the
    province. It provides a cost-effective forum for civil disputes involving less
    than $35,000. To achieve these objectives, all questions of fact and law are to
    be determined in a summary way. Rule 1.03(1) of the
Rules of the Small
    Claims Court
, under the
CJA
, provides:

These
    rules shall be
liberally construed
to
    secure the
just, most expeditious and least
    expensive determination
of every proceeding on its merits in
    accordance with section 25 of the
Courts of Justice Act.
O. Reg.
    258/98, r. 1.03 (1).

[44]

These hallmarks of the Small Claims Court, as
    enshrined in its rules, are incompatible with the provisions of s. 137.1. A s.
    137.1 analysis requires the detailed process of shifting burdens with respect
    to merits, proportionality and public interest, which involves exchange of
    affidavits and cross-examinations. Motions are not encouraged in the Small
    Claims Court. The
Rules of Small Claims Court
do not provide for
    cross-examination on affidavits. Under s. 137.1, costs of an unsuccessful
    motion are presumptively full indemnity. The limit on costs for a motion in
    Small Claims Court, absent special circumstances, is $100. The limit on costs
    after trial is 15% of the award. Small Claims Court jurisdiction is limited to
    $35,000. Contrary to these limits of Small Claims Court, s. 137.1 provides
    extensive powers with respect to damages.

[45]

The s. 137.1 motion must be heard within 60 days
    and stays the underlying action. Appeals go directly to the Court of Appeal. This
    does not comply with r. 1.03.(1) of the
Rules of the Small Claims
    Court
.

[46]

The Small Claims Court provides timely justice
    to litigants in matters under $35,000. I conclude that the legislature did not
    intend to inject complex interim proceedings into its summary process. Doing so
    would frustrate the objectives of the
Rules of the Small Claims Court
.

CONCLUSION

[47]

For these reasons, the appeals are allowed with
    costs to the appellants in the amount of $15,000 all inclusive.

Released: January 24, 2022 MLB

M.L. Benotto J.A.

I agree Grant Huscroft J.A.

I agree B.W. Miller J.A.





[1]
Commonly referred to as the Anti-SLAPP provision.



[2]
Official Report of Debates (Hansard) October 5, 2016



[3]

The respondent had submitted that the order under appeal was
    interlocutory and so the proper appeal route was to the Divisional Court. Because
    the issue engaged jurisdiction, the panel heard the appeal.



[4]
The respondent has framed the issue before this court as
    disrespectful to the Administrative Judge personally because it implies that
    she is not real judge. These submissions were ill founded. The issue is a
    question of law: jurisdiction.



[5]

This provision is of no moment since currently there are no
    such provincial court judges.


