Defamation claims are increasingly common additions to civil disputes in Ontario. This has led to an explosion of appellate jurisprudence over our “Anti-SLAPP” rules – motions available under Section 137.1 of the Courts of Justice Act whereby defendants can seek to dismiss “strategic litigation” intended to stifle free expression on matters of public interest. Since 2020, the Court of Appeal for Ontario has heard over 15 appeals from anti-SLAPP decisions.[1] Unfortunately, having the benefit of two detailed decisions from the Supreme Court of Canada in 2020[2] clarifying the law on these motions has done little to deter these appeals.
In Park Lawn Corporation v Kahu Capital Partners, 2023 ONCA 129, the Court of Appeal for Ontario has sought to temper the appropriate use (and misuse) of these motions.
QUICK FACTS[3]
Park Lawn is Canada’s largest funeral home and deathcare enterprise. As part of its business, it receives pre-need funds deposited by customers. These funds are then held by third-party trustees and managed by third-party investment managers. Kahu was one such investment group that managed some of Park Lawn’s trust funds.
In June 2020, Park Lawn commenced litigation against its former CEO, COO, and Chair (Andrew Clark), alleging, among other things, self-dealing and misuse of certain company trust funds. This litigation was settled shortly thereafter, in January 2021, with no admission of liability nor any payment of damages.
In May of 2021, Park Lawn then sued Kahu (among others), alleging that they knowingly assisted Mr. Clark in his alleged misuse of company trust funds. Mr. Clark was not named as a party in this subsequent litigation. After the Statement of Claim was filed, Park Lawn’s new CEO (Bradley Green) made statements to Funeral Service Insider, an industry newsletter, reiterating his “moral and ethical duty” to speak out about Mr. Clark’s misconduct in order to “caution” the industry. When Kahu filed its responding pleading in July of 2021, it joined Mr. Green as a co-defendant by counterclaim and alleged defamation for his statements in the newsletter.
FAILED ANTI-SLAPP MOTION
Park Lawn and Mr. Green brought an anti-SLAPP motion to dismiss the defamation counterclaims. In dismissing Park Lawn’s motion, the motion judge relied heavily on the third part of the anti-SLAPP test in probing the competing interests and unique factual circumstances at play. One major concern noted by the court was the strategic nature of the anti-SLAPP motion itself. Not only was Park Lawn attempting to relitigate claims based on allegations it had already settled against Mr. Clark, but its motion also sought to prevent Kahu from pursuing a defamation claim based on the same facts and issues that Park Lawn was seeking to litigate in its own claims. Ultimately, the motion judge was unwilling to dismiss Kahu’s defamation claims since the expression at issue “and the motivation behind it” did not warrant protection under the anti-SLAPP regime.[4]
REINING IN STRATEGIC LITIGATION
In upholding the motion judge’s decision, the Court of Appeal for Ontario reemphasized the underlying purpose of these motions. The “crux” of the analysis must turn on the balancing of interests unique to each case.[5] These motions are not meant to be a “trial in a box” involving an overly granular analysis of the merits of the defamation claim pleaded; they are a screening procedure where the court should “step back and ask what is really going on” to weed out strategic or abusive litigation.[6]
So what was “really going on” in Park Lawn? Ironically, a concern about the strategic misuse of these anti-SLAPP motions themselves.
The Court of Appeal for Ontario went out of its way to criticize the trend of anti-SLAPP motions becoming increasingly common, expensive, and time-consuming – and, as a result, open to abuse. After noting that Park Lawn had sought $376,567.78 in full indemnity costs for its motion (not including any appeal costs), the court came down firmly in stating that full indemnity costs on an anti-SLAPP motion should generally not exceed $50,000.[7] The court also encouraged the bar and lower courts to strive to follow the 60-day timeline “required” for hearing these motions under s. 137.2(2), a further reminder that these motions are meant to be limited in scope.[8]
The court also agreed that the overlap between Park Lawn’s underlying claims and the defamation counterclaim revealed certain tactical motivations behind the motion that did not warrant protection.[9] Since both sets of claims were based on the same facts and issues, Park Lawn’s motion would not materially impact the cost of the litigation going forward, even if they were successful.[10] More importantly, if the motion were granted, it would prevent Kahu from claiming damages in defamation even if Park Lawn was ultimately unsuccessful in proving its own allegations and vindicating Mr. Green’s published comments. While the court was careful to clarify that it remained possible for an anti-SLAPP motion to be successful where the defamation is pleaded in a counterclaim,[11] it is clear from their commentary that such a case would need heavily slanted circumstances favouring the protection of the expression at issue.
As the justice system continues to grapple with the “plague” of increased litigation costs,[12] Park Lawn reminds us of the importance of stepping back and thinking critically about when it’s really worth swinging for the motion fences.
[1] See Park Lawn Corporation v. Kahu Capital Partners Ltd., 2023 ONCA 129, para 1 (“Park Lawn”).
[2] 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22; Bent v. Platnick, 2020 SCC 23.
