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Claims against politicians dismissed with full indemnity costs

Friday, July 22, 2022 @ 1:51 PM | By Stephen Thiele


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Stephen Thiele
Court decisions rendered in connection with a defendant’s motion for dismissal brought under s. 137.1 of the Courts of Justice Act (CJA) continue to highlight that a plaintiff can face severe cost consequences if the defendant succeeds. Under s. 137.1(7) of the CJA, a defendant who successfully moves to dismiss a plaintiff’s action is presumptively entitled to recover his or her costs on a full indemnity basis. Although the presumption can be rebutted, the plaintiff’s failure to do so can leave it with a hefty costs award.

In Volpe v. Wong-Tam, 2022 ONSC 4071, the plaintiffs were unable to rebut the presumptive costs award contained in s. 137.1(7) and thus have been left with a costs award against them in excess of $380,000.

The plaintiffs had sued two Toronto city councillors, four Catholic school board trustees and a social media organization and its journalist for defamation, misfeasance in public office, inducing breach of contract and wrongful interference with economic relations over actions taken and comments made in response to a series of 28 articles written by the individual plaintiff and published by the corporate plaintiff about a decision of the Catholic school board.

With respect to the defamation claim, the plaintiffs broadly contended that the defendants’ statements tended to the lower their reputation in the eyes of a reasonable person. The individual plaintiff, more specifically, contended that the defendants had characterized him as being homophobic, transphobic or anti-LGBTQ2S+. The corporate plaintiff, more specifically, contended that it lost advertising revenue because of the defendants’ conduct.

Under s. 137.1(4)(a) of the CJA, a plaintiff defending against a s. 137.1 motion for dismissal of his or her claim must show that the claim has substantial merit and that the defendant has no valid defence. The plaintiffs were unable to satisfy this conjunctive test.

While the court found that the defamation claim had substantial merit, the court found that the plaintiffs had to establish that there were grounds to believe that the various defences raised by the defendants were not valid defences.

The plaintiffs’ other causes of action lacked substantial merit.

These findings were enough to dismiss the plaintiffs’ entire action, but, in any event, the court found that the plaintiffs had also failed to meet their burden under s. 137.1(4)(b) of the CJA. Under this section, the plaintiffs had to establish on a balance of probabilities that the harm suffered by them was sufficiently serious that the public interest in permitting their action to continue outweighed the public interest in protecting the defendants’ expression.

Despite their entire claim being dismissed, the plaintiffs argued that costs should only be awarded against them on a partial indemnity basis. The plaintiffs submitted that:

  • the action bore no hallmarks of an anti-SLAPP lawsuit; and
  • the nature of the claim supported an award of costs on a lesser scale than full indemnity costs.

With one exception, the court noted that the plaintiffs had accepted that the costs sought by each set of lawyers acting for the various defendants was reasonable.

The court also noted that one lawyer acted pro bono for a defendant.

With respect to the plaintiffs’ first argument, Levant v. DeMelle, 2022 ONCA 79, describes the hallmarks of an anti-SLAPP lawsuit as follows:

  • there is “a history of the plaintiff using litigation or threat of litigation to silence critics”;
  • there is “a financial or power imbalance that strongly favours the plaintiff”;
  • there is “a punitive or retributory purpose animating the plaintiff’s bringing of the claim”; and
  • there is “minimal or nominal damages suffered by the plaintiff.”

In dismissing the plaintiffs’ action, the court had expressly found that the plaintiffs had failed to prove any specific damages, as alleged. Accordingly, the plaintiffs failed to establish that there were no indicia of an anti-SLAPP lawsuit.

With respect to the plaintiffs’ second argument, the court found that there were no other reasons to depart from the presumptive full indemnity scale for multiple reasons.

First, it was found that the defendants did not act with malice, intentionally or in bad faith.

Second, none of the general costs principles under Rule 57.01 of the Rules of Civil Procedure that could justify a costs award on a partial indemnity scale were shown to apply.

Third, as found in Niagara Peninsula Conservation Authority v. Smith, 2018 ONSC 127, a finding that a plaintiff’s defamation claim has substantial merit is insufficient to displace the presumption that full indemnity costs apply to the dismissal of such an action under s. 137.1 of the CJA.

On the issue of the excessiveness of costs claimed by one of the defendants, the court concluded that her costs were within the range of costs sought in similar complex anti-SLAPP motions.

As well, the hours worked by this defendant’s lawyer were within the range of hours worked by the lawyers who acted for the other  defendants. The average time worked by the various lawyers was 171.66 hours. The lawyers for this defendant worked 185.8 hours on the matter.

For the defendant whose lawyer worked on a pro bono basis, costs were awarded to her on a substantial indemnity basis. It has been determined in cases such as 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 82 O.R. (3d) 757 (C.A.) and Raimondo v. Ontario Heritage Trust, 2017 ONSC 6121 that parties represented by pro bono lawyers are entitled to costs. Such awards:

  • ensure that parties are not free to abuse the judicial system without threat of costs sanction; and
  • promote access to justice.

When enacting s. 137.1 of the CJA, the legislature made a conscious decision to create the presumption that a party bringing a successful motion thereunder was entitled to receive full indemnity costs. An action that effectively gags a defendant’s expression is serious. As explained in Levant, s. 137.1(7) is intended, among other things, “to deter the commencement of SLAPP actions,” and “to reduce the adverse impact on constitutional values of unmeritorious litigation.”

Accordingly, this case once again cautions a plaintiff who wants to commence a claim that involves an expression on a matter of public interest, such as a defamation claim, to carefully consider the merits of his or her action and whether the defendant or defendants will have valid defences. A plaintiff must also consider whether his or her action will outweigh the public interest in protecting a defendant’s (freedom of) expression. This latter consideration is particularly important in cases involving political issues and actions targeted at politicians.

Like the plaintiffs in Volpe, a plaintiff’s failure to undertake this analysis at an early stage can end up being very costly.

Stephen Thiele is the director of legal research at Gardiner Roberts. He primarily works closely with the dispute resolution lawyers, providing advice, value-added analysis and opinions on a wide range of litigation matters.

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