In the most recent word from the Court of Appeal for Ontario on the “anti-SLAPP” provisions of section 137.1 of Ontario’s Courts of Justice Act, Ontario’s top court confirmed that commencing a lawsuit by filing a statement of claim may constitute “public participation.” Accordingly, an oppressive and exaggerated counterclaim may amount to a “strategic lawsuit against public participation” (“SLAPP”).
In Boyer v. Callidus Capital Corporation 2023 ONCA 233, the Court of Appeal dismissed an employer’s $150 million counterclaim against a former employee, emphasizing the need to take a broad and liberal approach to the anti-SLAPP analysis. Courts must avoid an overly technical approach; instead, they should scrutinize each case to determine whether, at its core, a claim is designed to limit a person’s expression on matters of public interest.
Background
The appellant, Craig Boyer, was a senior executive with the appellant, Callidus Capital Corporation (“Callidus”), for seven years before resigning in 2016. Callidus is a corporate finance company. At the time of his resignation, Mr. Boyer was a Vice President responsible for underwriting loans and assessing potential borrowers. He cited a toxic work environment as the reason for his resignation, saying he had his files transferred, faced verbal abuse and criticism, and witnessed the physical assault of a supervisor. He subsequently commenced a lawsuit against Callidus, alleging he was constructively dismissed and denied appropriate vacation pay, stock options, and benefits.
Callidus issued a counterclaim against Mr. Boyer seeking $150 million in damages. Callidus alleged Mr. Boyer breached a fiduciary duty to the company by failing to properly monitor loans in his portfolio and by encouraging a borrower to artificially inflate its financial projections.
The Anti-SLAPP Motion is Dismissed
Mr. Boyer denied Callidus’ allegations. He brought an anti-SLAPP motion pursuant to section 137.1 of the Courts of Justice Act (“CJA”) to dismiss the counterclaim on the basis that it “arises from an expression made by the person that relates to a matter of public interest.” He argued the counterclaim was an effort to silence him. He also moved for leave to amend his statement of claim to include a claim for deferred bonuses, as well as summary judgment. All of these motion requests were heard together.
The motion judge dismissed Mr. Boyer’s anti-SLAPP motion. He accepted that Mr. Boyer’s allegations about a poisoned workplace qualified as “expression” and that the allegations “related to a matter of public interest” because Callidus was a prominent publicly traded company whose business practices had previously attracted national news coverage. However, the motion judge concluded that Callidus’ counterclaim did not arise from Mr. Boyer’s expression about Callidus’ work environment as required by section 137.1 of the CJA; instead, the claim arose from distinct allegations of misconduct and breach of fiduciary duty.
The motion judge deferred making any decision on Mr. Boyer’s request for summary judgment, holding that Mr. Boyer was prohibited under section 137.1 of the CJA from taking further steps until his anti-SLAPP motion was finally disposed of. He also denied Mr. Boyer leave to amend his statement of claim on the basis that the claim for deferred bonuses was a new cause of action that could not be added after the expiry of the limitation period.
Court of Appeal Allows the Appeal and Dismisses the Counterclaim
On appeal, the Court of Appeal held that the motion judge erred in three ways:
- It was an error in law to interpret the phrase “arises from” too narrowly under section 137.1 of the CJA;
- The summary judgment request should not have been deferred; hearing it together with Mr. Boyer’s section 137.1 motion is consistent with the goals of efficiency and economy underlying anti-SLAPP legislation; and,
- The proposed amendment of the statement of claim to include a claim for deferred bonuses was only the addition of a head of damages to his existing wrongful dismissal cause of action; it was not a new cause of action, and leave to amend should have been granted.
The Court of Appeal canvassed the test on anti-SLAPP motions. It noted that the moving party has the burden of satisfying the judge that the claim arises from an expression relating to a matter of public interest. Once that burden is met, to avoid dismissal of the claim, the claimant must satisfy the judge that:
(i) There are grounds to believe the proceeding has substantial merit;
(ii) The moving party has no valid defence; and,
(iii) The public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression.
The Court of Appeal accepted the motion judge’s finding that Mr. Boyer’s allegations in his statement of claim qualified as an expression relating to a matter of public interest. However, it held that the motion judge interpreted the phrase “arises from” too narrowly. The Court of Appeal explained that the moving party’s threshold burden is “not intended to be onerous” and there need not be a “precise level of causation” between the expression in question and the proceeding.
In concluding that Callidus’ counterclaim did not “arise from” Mr. Boyer’s expression about the toxic work environment, the motion judge failed to consider the full context, which the Court of Appeal noted to include:
- The counterclaim was thinly pleaded and issued just fifteen days after Mr. Boyer commenced his lawsuit;
- The events relied upon in the counterclaim allegedly occurred years before;
- Callidus was unable to provide any basis for the $150 million claimed in damages; and,
- Cross-examinations during the proceeding revealed Callidus’ allegations to be unsubstantiated.
This context was sufficient to connect the counterclaim to Mr. Boyer’s expression as required by section 137.1 of the CJA.
The Court of Appeal had no trouble finding that the counterclaim should be dismissed; Callidus could not show that its counterclaim had substantial merit, Mr. Boyer put several valid defences “in play,” and the balancing exercise (which the Court of Appeal referred to as the “crux” of the analysis) between the public interest in permitting the proceeding to continue and the public interest in protecting the expression, strongly favoured the latter.
The Court of Appeal emphasized that courts must determine “what is really going on” in each particular case to assess whether permitting a claim to proceed would affect freedom of expression and public discourse. Factors such as the financial imbalance between the parties, the retributory purpose behind the counterclaim, and the absence of support for the quantum of Callidus’ $150 million damage claim, demonstrated that this was an attempt to silence Mr. Boyer and to create a chilling effect for other employees.
Takeaways
The Boyer decision reaffirms the broad nature of Ontario’s anti-SLAPP legislation. Commencing a lawsuit by filing a statement of claim may constitute “public participation,” such that counterclaims can be a SLAPP. Courts must look at the full context in each case to determine whether the proceeding is an effort to limit expression on matters of public interest. An overly technical approach is not appropriate. Parties will not be able to escape the application of section 137.1 of the CJA by cleverly pleading seemingly unrelated allegations where the action (or counterclaim) is, at its core, retaliatory in nature.
The Court of Appeal has also reminded the lower courts to have regard for the principles of efficiency and economy when determining whether other motions can be heard alongside anti-SLAPP motions.
