Vitriol or Value? ONCA Provides Direction on Anti-SLAPP Analysis

Vitriol or Value? ONCA Provides Direction on Anti-SLAPP Analysis

Introduction

In Thorman v. McGraw,[1] the Ontario Court of Appeal clarified section 137.1(4)(b) of the Courts of Justice Act and further narrowed the class of public expression deemed worthy of protection under Ontario’s anti-SLAPP legislation.

Background

In December 2013, the respondent entered into an agreement with the appellants to renovate her bathroom. The respondent was dissatisfied with the appellants’ work and posted highly critical online reviews about the appellants and their businesses. Some of these postings referred to the appellants as fraudsters and scammers. The appellants subsequently commenced an action against the respondent, seeking over $500,000.00 in damages for defamation. The action was dismissed after the respondent successfully brought a motion under section 137.1 of the Courts of Justice Act.[2] The appellants appealed the dismissal of their action, while the respondent cross-appealed, seeking to increase the costs awarded by the motion judge.

Section 137.1 of the Courts of Justice Act

Commonly referred to as the anti-SLAPP (strategic lawsuits against public participation) provision of the Courts of Justice Act, section 137.1 was enacted to prevent individuals from weaponizing lawsuits to silence expression on matters of public interest.[3]

A motion under section 137.1 of the Courts of Justice Act requires the moving party to establish on a balance of probabilities that (1) the underlying proceeding arose from an expression they made that (2) relates to a matter of public interest.

Once the moving party satisfies the threshold burden, the burden shifts to the responding party, who must satisfy the merits-based hurdle and public-interest hurdle. This is done by demonstrating on a balance of probabilities that (1) there are grounds to believe their claim has substantial merit and (2) that the moving party has no valid defences. The responding party satisfies the public-interest hurdle by establishing that (1) they have suffered harm or are likely to suffer harm, (2) such harm was suffered as a result of the moving party’s expression, and (3) the corresponding public interest in allowing the underlying proceeding to continue outweighs the deleterious effects on expression and public participation.[4]

The underlying action will be dismissed under section 137.1 if the moving party satisfies the threshold burden and the responding party fails to satisfy both the merits-based hurdle and public-interest hurdle.[5]

Motion Decision

The motion judge found that the respondent’s expression under section 137.1(3) related to a matter of public interest as a consumer review. He further held that the appellants had met their onus under section 137.1(4)(a) in that the appellants’ action had substantial merit, the respondent had no valid defences, and the respondent’s statements indicated an intention to cause harm to the appellants.

Nonetheless, the motion judge held that the appellants failed to satisfy section 137.1(4)(b). He found that the underlying action bore hallmarks of a SLAPP and that the appellants’ damages were nominal. The motion judge, therefore, dismissed the action, holding that the appellants had not met their onus in showing that they had suffered any harm from the respondent’s reviews. In doing so, the motion judge ultimately concluded that “the public interest in allowing their defamation claim to proceed is outweighed by the public interest in protecting the respondent’s expression to warn fellow homeowners about unreliable contractors.”[6]

The appellants appealed the motion judge’s decision to the Ontario Court of Appeal, arguing that the motion judge erred in his analysis of the fourth criterion under section 137.1(4)(b). Specifically, the appellants submitted, inter alia, that the motion judge misapprehended the law in relation to the question of reputational harm and damages and failed to analyze the qualitative nature and motivation of the respondent’s expression.

Appeal

The Court of Appeal agreed with the appellants, holding that the motion judge erred in his application of section 137.1(4)(b).[7]

The Correct Approach Under Section 137.1(4)(b)

Section 137.1(4)(b) is considered the pivotal portion of the section 137.1 analysis, as it engages with the overarching concern that anti-SLAPP legislation seeks to address, its purpose being to “function as a mechanism to screen out lawsuits that unduly limit expression on matters of public interest.”[8] Section 137.1(4)(b) necessitates a two-stage analysis – a harm analysis and a weighing analysis.[9]

For the harm analysis, motion judges must analyze whether the harm was suffered or is likely to be suffered as a result of the moving party’s expression.[10] Both monetary and non-monetary harm can be relevant to establishing the existence of harm and that the moving party’s expression caused the harm.[11] Harm does not need to be monetized to meet this threshold.[12] At this stage, a plaintiff must simply “provide evidence for the court to draw an inference of likelihood in respect of the existence of the harm and the relevant causal link.”[13]

Once it has been determined that the plaintiff suffered or is likely to have suffered harm caused by the defendant’s expression, the question becomes whether the harm outweighs the public interest in protecting the expression.[14] At this stage, motion judges are to look to the fundamental values underlying freedom of expression under section 2(b) of the Canadian Charter of Rights and Freedoms, namely “the search for truth, participation in political decision making, and diversity in forms of self-fulfillment and human flourishing.”[15] The closer the expression is to any of those section 2(b) values, the greater the public interest is in protecting it.[16]

To assess the public’s interest in protecting the expression, motion judges are to engage in a qualitative analysis of said expression, including the motivations behind it.[17] While the Ontario Court of Appeal and Supreme Court of Canada highlighted several factors that may be helpful in the weighing analysis, Côté J. advised that:

“the only factors that might be relevant in guiding that weighing exercise are those tethered to the text of s. 137.1(4)(b), which calls for a consideration of: the harm suffered or potentially suffered by the plaintiff, the corresponding public interest in allowing the underlying proceeding to continue, and the public interest in protecting the underlying expression”[18]

Accordingly, there is an open-ended nature to section 137.1(4)(b), which allows courts to pull back the curtains to genuinely assess how a particular lawsuit affects freedom of expression and its corresponding influence on public discourse in a pluralistic democracy.[19]

Motion Judge’s Analysis Under Section 137.1(4)(b)

The Court of Appeal determined that the motion judge erred in his application of section 137.1(4)(b) for three main reasons.

First, the motion judge unduly focused on the hallmarks of a SLAPP lawsuit. His consideration of section 137.1(4)(b) predominantly focused on how the appellants took actions to silence critics – a hallmark of a SLAPP. While the indicia of a SLAPP might be relevant to costs and the appropriateness exception under section 137.1(8), the Court of Appeal found that the motion judge’s consideration of those factors distracted him from the relevant issues that needed to be decided on the merits of the motion.[20]

Second, the motion judge failed to consider reputational harm. The motion judge found that the appellants had not met their onus in showing they had suffered harm from the respondent’s expression primarily because they failed to prove actual damages and that any damages awarded would likely be nominal. This demonstrated a reversible error, as the motion judge only focused on the monetary harm pleaded by the appellants and failed to consider how the respondent’s allegations of fraud were potentially very harmful to the appellants’ professional reputations.[21] Moreover, the Court of Appeal rejected the respondent’s submission that the inference of reputational harm should only be confined to the most heinous allegations, such as pedophilia or terrorism.[22] The Court of Appeal opined that calling individuals scammers and fraudsters who take money without completing work is “clearly damaging to the appellants’ professional reputation as construction professionals.”[23]

Third, the motion judge failed to complete the weighing exercise. The motion judge was required to analyze whether the respondent’s expression was qualitatively worthy of protection, which includes a consideration of the respondent’s motive for the expression.[24] The motion judge’s finding that the public interest in the respondent’s expression outweighed the public interest in allowing the appellants’ action to continue was flawed because he never qualitatively assessed the public interest in the respondent’s expression under section 137.1(4)(b).[25]

Court of Appeal’s Analysis Under Section 137.1(4)(b)

The motion judge committed legal and analytical errors. Therefore, the Court of Appeal set aside the order and conducted the section 137.1(4)(b) analysis afresh.

(a) Harm Analysis

While they did not quantify their losses, the appellants submitted that they had lost business due to the respondent’s alleged defamatory postings on websites such as HomeStar and Reddit. As noted previously, some of these comments referred to the appellants as scammers and fraudsters who take money from customers without starting or completing work. The Court of Appeal considered the damning nature of the respondent’s reviews to be so blatant that the likelihood of significant harm to the appellants’ professional reputations could be inferred.[26] Hence, the Court of Appeal found that the appellants had met their burden of demonstrating the likelihood of significant harm.

(b) Weighing Analysis

The Court of Appeal held that the vitriolic nature of the respondent’s reviews and comments deserved little, if any, protection as a matter of public interest to consumers of construction services.[27] The Court noted that the respondent could have expressed her dissatisfaction with the appellants’ services without resorting to defamatory language. Moreover, the Court of Appeal agreed with the motion judge’s finding that the respondent was motivated by malice to run the appellants out of business.

When weighing the public interest considerations, the Court of Appeal found that the public interest in allowing the action to proceed due to the potential of significant harm to the appellants’ business reputations outweighed the minimal public interest in protecting the respondent’s unnecessary personal attacks. In allowing the appeal and dismissing the cross-appeal, the Court noted that this was not a case where the appellants tried to vindictively or strategically silence the respondent. Instead, it was no more than a private dispute in which the appellants legitimately sought damages for harm suffered as a result of the respondent’s alleged defamatory comments.[28]

Key Takeaways

The Thorman decision shows that motion judges must strictly follow the Supreme Court’s section 137.1 framework before dismissing an action as a SLAPP. Courts cannot satisfy the section 137.1(4)(b) criterion by simply holding that the underlying action should be dismissed due to bearing the hallmarks of a SLAPP. Rather, motion judges need to consider reputational harm and conclude the section 137.1(4)(b) analysis by examining whether the respondent’s expression was qualitatively worthy of protection.

The Thorman decision is also particularly notable because it narrows the class of public expression deemed worthy of protection under section 137.1(4)(b). Specifically, courts will consider disparaging online reviews worthy of little, if any, protection under section 137.1. In this sense, Thorman also protects the integrity of section 137.1, as it prevents individuals from hiding behind anti-SLAPP legislation to defeat valid defamation claims.

 

[1] 2022 ONCA 851 (“Thorman”).

[2] Courts of Justice Act, R.S.O. 1990, c. C.43 s. 137.1 (“CJA”).

[3] Thorman, supra note 1 at para. 3; 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22 at paras. 1, 2-4, 16 (“Pointes”).

[4] CJA, supra note 2 at s. 137.1; Pointes, supra note 3 at paras. 16-18.

[5] Ibid.

[6] Thorman, supra note 1 at para. 5.

[7] Ibid at paras. 6-7.

[8] Thorman, supra note 1 at para. 9; Pointes, supra note 3 at para. 62.

[9] Ibid at para. 10; Ibid at paras. 139-142.

[10] Thorman, supra note 1 at paras. 11-12.

[11] Ibid.

[12] Pointes, supra note 3 at paras. 145, 154.

[13] Ibid.

[14] Thorman, supra note 1 at para. 13.

[15] Ibid at para. 14; Pointes, supra note 3 at para. 77.

[16] Ibid.

[17] Thorman, supra note 1 at para. 15.

[18] Pointes, supra note 3 at paras. 78-82.

[19] Ibid.

[20] Thorman, supra note 1 at para. 21.

[21] Ibid at para. 23.

[22] Ibid at para. 26.

[23] Ibid.

[24] Ibid at para. 27.

[25] Ibid.

[26] Ibid at para. 29.

[27] Ibid at para. 30.

[28] Ibid at para. 32.

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