Earlier this week, the Ontario Court of Appeal released its decisions in Subway Franchise Systems of Canada, Inc. v Canadian Broadcasting Corporation,[1] allowing appeals of two anti-SLAPP motion decisions. The Court of Appeal’s approach to the analysis on this type of motion – which permits the early dismissal of a lawsuit that is brought to stifle public participation rather than vindicate a legitimate claim – significantly expands the reach of this powerful procedural tool.
The action arises out of a February 2017 episode of the Canadian Broadcasting Corporation’s television show “Marketplace”, which featured an investigative report on the content of chicken sandwiches sold by Subway, among other fast food chains. Subway’s chicken sandwiches were reported to be made of “only slightly more than 50% chicken”. Subway commenced litigation against CBC for defamation, as well as Trent University (which ran the laboratory that tested the sandwiches) for defamation and negligence. Subway alleged that Trent made statements on the Marketplace episode that were false and that the laboratory testing was inaccurate and careless.
CBC and Trent brought anti-SLAPP motions pursuant to s. 137.1 of the Courts of Justice Act. On a s. 137.1 motion, a court will consider whether to dismiss a proceeding on the basis that it unduly limits freedom of expression on matters of public interest using a two-part test. First, the moving party must establish that the proceeding arises from an expression that relates to a matter of public interest. Second, to defeat the motion, the responding party must establish that there are grounds to believe that the proceeding has substantial merit, the moving party has no valid defence, and the harm likely to be or have been suffered by the responding party is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.[2] CBC and Trent sought to dismiss some or all of Subway’s claims against them on the basis that Subway’s action was aimed at chilling public discussion on matters of consumer protection.
CBC was successful in its motion: the motion judge dismissed Subway’s entire action against it, with full costs payable to CBC. Trent, which only sought to dismiss the negligence claim against it, was unsuccessful in its anti-SLAPP motion, and was ordered to pay Subway’s costs of the motion on a partial indemnity scale.[3]
Subway appealed the dismissal of its action against CBC. Trent appealed the dismissal of its anti-SLAPP motion.
The Court allowed Trent’s appeal and dismissed Subway’s negligence claim against Trent. In doing so, the Court expanded the interpretation of the anti-SLAPP test in two significant ways, which appear to go beyond what is contemplated on the face of s. 137.1:
- The Court found that Subway’s negligence claim arose from an expression on a matter of public interest, not only based on Trent communicating the results of its research to CBC, but also because Trent was carrying out its testing of Subway’s products for the purpose of CBC broadcasting the results.[4] It appears the Court may have found this element of the anti-SLAPP test to be satisfied even where the moving party did not itself make the relevant expression, but instead relied on an expression made by another party that had some nexus to the claims made against the moving party. Such an approach would exceed the stated scope of s. 137.1(3), which allows a judge to dismiss a proceeding against the moving party where the moving party satisfies the judge “that the proceeding arises from an expression made by the person that relates to a matter of public interest” [emphasis added].
- The Court applied the anti-SLAPP mechanism to dismiss only part of a proceeding against the moving party. Trent brought its anti-SLAPP motion in respect of Subway’s negligence claim against it, but not in respect of the defamation claim. This meant that even with Trent’s success at the Court of Appeal, Subway’s defamation claim would continue against Trent. This approach appears to go beyond the wording of s. 137.1(3), which contemplates the anti-SLAPP mechanism being used to dismiss “the proceeding against the person”, not a claim or only part of a proceeding.[5] It is also difficult to reconcile this approach with the courts’ reluctance to grant partial summary judgment due to concerns about substantively determining only part of a proceeding while the remainder of the proceeding continues on.[6]
The Court’s decision on Trent’s appeal is also noteworthy because it is one of the first decisions applying the Supreme Court of Canada’s recent decision in 1688782 Ontario Inc. v Maple Leaf Foods Inc., which restricted the avenues of recovery for pure economic loss in tort clams.[7] In its negligence claim against Trent, Subway sought recovery for pure economic loss. The Court of Appeal, following the SCC’s guidance in Maple Leaf Foods, found that Trent owed no duty of care to Subway. Subway was unable to establish grounds for a relationship of proximity. There was no evidence of any expectations, representations, reliance, or statutory obligations as between Trent and Subway. There was nothing fulfilling the purpose served by the requirement for an undertaking of responsibility by the defendant and reasonable and detrimental reliance by the plaintiff in other cases of negligent performance of services. As such, there were no grounds to believe that Subway’s negligence claim had substantive merit for the purposes of the anti-SLAPP analysis.
Subway’s appeal was also successful: the Court of Appeal reversed the motion judge’s decision and allowed Subway’s action to continue against CBC. The Court found that the motion judge had made two key errors in applying the anti-SLAPP test on CBC’s motion. First, the Court found that the motion judge applied too high a standard in assessing whether there were grounds to believe that CBC had no valid defence. A responding party need only demonstrate that there is a basis in the record to support a finding that the defence(s) put in play by the defendant do not tend to weigh more in the defendant’s favour.[8] Subway met that threshold. Second, in assessing whether the harm likely to be suffered by Subway was sufficiently serious such that the public interest in permitting the proceeding to continue would outweigh the public interest in protecting the expression at issue, the motion judge failed to appreciate the evidence of significant reputational and financial harm to Subway.[9]
The Court of Appeal’s approach to these appeals reflects an expansive view of s. 137.1 of the Courts of Justice Act, in respect of both the moving and responding parties’ burdens on anti-SLAPP motions. The decision in Trent’s appeal has the potential to expand the scope of “expression” that may ground an anti-SLAPP motion, and permits the use of s. 137.1 to dismiss only part of a proceeding, beyond the plain text of the statutory provisions. Meanwhile, the decision on Subway’s appeal makes clear that a responding party to an anti-SLAPP motion should be given a fair shake, and courts should not impose unduly high standards on, or discount the harm suffered by, a plaintiff. It is expected that anti-SLAPP motions will continue to grow in popularity, and may start to be viewed as a less onerous alternative to seeking a dismissal through a summary judgment motion, rather than a specialized procedural tool designed to address the risk of abusive use of the litigation process.
[1] 2021 ONCA 25; 2021 ONCA 26
[2] Courts of Justice Act, RSO 1990, c C.43, s 137.1(3)-(4).
[3] Subway v CBC, 2019 ONSC 6758 [motion decision]; Subway v Canadian Broadcasting Corporation, 2020 ONSC 1263 [costs].
[4] 2021 ONCA 25 at paras 41-45.
[5] Courts of Justice Act, RSO 1990, c C.43, s 137.1(3).
[6] See, for example, Way v Schembri, 2020 ONCA 691 at paras 16-18.
[7] 2020 SCC 35.
[8] 2021 ONCA 26 at paras 72-73.
[9] Ibid at paras 95-105.
