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DISPOSITION WITHOUT TRIAL - Lack of jurisdiction

Thursday, September 10, 2020 @ 3:52 PM  


Appeal by 1704604 Ontario Limited (170 Ontario) from a decision of the Ontario Court of Appeal. 170 Ontario wanted to develop a subdivision in Sault Ste. Marie. In order to do so, it was necessary for 170 Ontario to obtain the approval of both the Sault Ste. Marie Region Conservation Authority (SSMRCA) and the Sault Ste. Marie City Council (City Council). The respondent Pointes Protection Association (PPA) was a not-for-profit corporation created to provide a co-ordinated response to 170 Ontario’s development proposal on behalf of affected residents. PPA opposed the proposed development, particularly on environmental grounds. 170 Ontario successfully obtained the SSMRCA’s approval, which PPA then contested by bringing an application for judicial review of the SSMRCA’s decision. While that application was pending, 170 Ontario sought approval from the City Council. Its application to the City Council was rejected, and it appealed to the Ontario Municipal Board (OMB), which granted PPA standing to participate. The parties settled the judicial review proceeding by way of minutes of settlement (Agreement). PPA’s judicial review application was dismissed on consent without costs, and PPA was restricted from taking any other court proceeding seeking similar or the same relief. At the OMB hearing of 170 Ontario’s appeal, Peter Gagnon, the president of PPA testified that 170 Ontario’s proposed development would result in a loss of wetland area and in environmental damage to the region. The OMB dismissed 170 Ontario’s appeal and upheld the City Council’s refusal of its development plan. 170 Ontario initiated a breach of contract action against PPA, alleging that Gagnon’s testimony before the OMB violated the Agreement. PPA brought a motion under s.137.1 of the Courts of Justice Act to have the action dismissed. The motion judge dismissed PPA’s motion and allowed 170 Ontario’s action to proceed. The Court of Appeal reversed that decision. The appellate court disagreed with the motion judge’s findings on s. 137.1(4)(a) and (b) and found that the motion judge erred by not examining the record and considering the relevant principles of contractual interpretation. The Court further held that 170 Ontario’s action lacked substantial merit and that 170 Ontario could not meet its burden on any of the other s. 137.1(4) prongs. The appeal was allowed, and 170 Ontario’s action was dismissed.

Held: Appeal dismissed. Gagnon’s testimony constituted an expression that related to a matter of public interest. His testimony focused on the environmental impact of a proposed private development. 170 Ontario’s breach of contract action arose from that expression. Therefore, PPA met its threshold burden under s. 137.1(3) of the Act. 170 Ontario’s action lacked substantial merit. It was based solely on a breach of the Agreement. Applying the customary principles of contractual interpretation, 170 Ontario’s action was not legally tenable and supported by evidence that was reasonably capable of belief, such that its claim could be said to have a real prospect of success. The Agreement restricted PPA’s expression only as it related to the SSMRCA’s decision and to judicial review of that decision. There was nothing in the plain language of the Agreement which could possibly foreclose PPPA from advancing an argument, as here, that did not pertain to the SSMRCA’s decision. Even if there were grounds to believe that 170 Ontario’s action had merit, the action should be dismissed because the harm, if any, to 170 Ontario resulting from the expression and the corresponding public interest in permitting the proceeding to continue did not outweigh the public interest in protecting PPA’s expression. It was not possible to conjecture that harm was caused to 170 Ontario by Gagnon’s testimony before the OMB. His evidence was merely one of many contributing factors in its ultimate dismissal of 170 Ontario’s appeal. The public interest in protecting Gagnon’s expression was significant. He was providing evidence regarding a matter of local and ecological significance. The express purpose of s. 137.1 of the Act was to “encourage” and “promote” public participation in debates on matters which invited that kind of public attention. Reducing the risk that participation by the public in debates on matters of public interest would be hampered by fear of legal action was an express statutory purpose set out in s. 137.1(1). The Court of Appeal was correct in dismissing 170 Ontario’s underlying breach of contract action.

1704604 Ontario Ltd. v. Pointes Protection Association, [2020] S.C.J. No. 22, Supreme Court of Canada, R. Wagner C.J. and R.S. Abella, M.J. Moldaver, A. Karakatsanis, S. Côté, R. Brown, M. Rowe, S.L. Martin and N. Kasirer JJ., September 10, 2020. Digest No. TLD-September72020012-SCC