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Torts - SLAPP - Bad Faith Damages Against a SLAPP Plaintiff [CJA s.137.1(9)]. Yates v. Iron Horse Corporation
In Yates v. Iron Horse Corporation (Ont CA, 2026) the Ontario Court of Appeal allowed a plaintiff's SLAPP appeal, this brought against a refusal by the motion court "to dismiss the respondents’ counterclaim against the appellant for $2.5 million for damages for defamation".
Here the court considers the unique CJA s.137.1(9) provision allowing damages against to the SLAPP plaintiff where their claim is dismissed, and their bad faith (or an improper purpose) in bringing the action is found:Damages
[68] The appellant asks this court to assess damages in her favour pursuant to s. 137.1(9) of the CJA. That provision provides:If, in dismissing a proceeding under this section, the judge finds that the responding party brought the proceeding in bad faith or for an improper purpose, the judge may award the moving party such damages as the judge considers appropriate. [69] This court considered the interpretation to be given s. 137.1(9) in United Soils Management Ltd. v. Mohammed, 2019 ONCA 128, 53 C.C.L.T. (4th) 1, at paras. 34-35, leave to appeal refused, [2019] S.C.C.A. No. 121 (Mohammed), and [2019] S.C.C.A. No. 153 (Barclay):The wording of s. 137.1(9) is somewhat problematic. On one view, the wording of s. 137.1(9) would seem redundant, as a finding that an action has been commenced for the purpose of unduly limiting expression on matters of public interest would seem to qualify as one that has been brought for an improper purpose. On another view, the wording of s. 137.1(9) could be seen as an effort to separate out a subset of SLAPP cases which go beyond simply reflecting an effort to limit expression and include active efforts to intimidate or to inflict harm on the defendant.
A review of the “Anti-SLAPP Advisory Panel Report to the Attorney General”, dated October 28, 2010, supports the latter interpretation. In that report, the Advisory Panel recommended, at para. 46:[T]he court should not be required to make findings as to bad faith or improper motive on the part of the plaintiff in deciding a motion under the special procedure. If in a particular case, however, the court is satisfied on the record before it that an action has been brought in bad faith or for an improper motive, such as punishing, silencing or intimidating the defendant rather than any legitimate pursuit of a legal remedy, an additional remedy should be available for this improper conduct. In such circumstances, the court should have the power to award damages to the defendant in such amount as is just. [Emphasis added]. [70] The appellant has led evidence to show that Mr. St. Martin’s actions “go beyond simply reflecting an effort to limit expression and include active efforts to intimidate or to inflict harm” on the appellant. In his communications with the appellant, Mr. St. Martin admitted to using litigation for strategic purposes, and did so in an intimidating fashion. One compelling example of this is a series of text messages:Hey Dead beat, just a warning. If I hear from another person that I sold you a biz with debt I will be suing you for defamation. We both know it was an asset sale with no debt. I will be showing everyone our agreement so the more you pin your failures on me, the more you look like a fool. And I will sue. We know how much I like to do that. So smarten up asshole. First you steal a biz from me, then you tell people your failure was my fault?? Your ego is next level. I'm glad you signed that personal guarantee - that's for sure. I will be moving forward on the conversion charges. Enjoy, we are just getting started. You are a fucking loser. A complete fucked up failure and a thief. A great big, fat, sloppy loser. Bankrupt before you are 30. Something to be proud of. This whole city is laughing at you Vice President. I guess hanging out with coke head hookers 24/7 rubbed off on you. I'm guessing most of my money went up your nose, the rest on hamburgers. Robin Yates, Vice President of failures and bankruptcy. What a joke you are.
Just a side note, ken is still in biz and thriving so you aren't even close to being as smart as ken. The guy YOU thought was stupid has just ran circles around you with his eyes closed. He started with nothing compared to you and yet he is doing well and you are a broke thief. Guess that puts your IQ into perspective. I'm just so happy you signed that personal guarantee on the loan. Wow. [71] In these texts, Mr. St. Martin threatened twice that he would sue the appellant, used abrasive language, and made claims that he has now admitted are false. In the course of these intimidating statements, he wrote, in reference to suing, “We know how much I like to do that.” As well, at para. 34 of her damages and costs decision, the motion judge found that Mr. St. Martin and Iron Horse are “parties with money who are familiar with the legal system and who have used litigation in the past to intimidate others.”
[72] As for proof of damages, in United Soils, this court stated, at para. 36:We would make two observations regarding the approach taken by the motion judges in these cases with respect to this issue. First, we do not view it as necessary for a defendant to adduce medical evidence in order to support a claim for damages. While medical evidence might be of assistance in determining the proper quantum of damages to be awarded, in certain cases, such as the ones here, it may be presumed that damages will arise from the use of a SLAPP lawsuit. Both of the respondents were individuals inexperienced in litigation, who would understandably suffer the stress and anxiety associated with being the subject of a proceeding of this type. This is especially true given the intimidating nature of the conduct of the appellant. [73] The motion judge found in her damages and costs reasons, “I think it likely that some of the strain described by [the appellant] was due to the counterclaim in the Yates Action and the stress and costs of bringing an anti-SLAPP motion against parties who use hardball litigation tactics”: at para. 43. The motion judge specifically reduced her award of damages under s. 137.1(9) in the motion dismissing Mr. St. Martin’s action for defamation and malicious prosecution because some of the appellant’s stress and anxiety was attributable to this action instead: at para. 45. Moreover, as stated in United Soils, at para. 38, s.137.1(9) is limited to harm suffered specifically as a result of the proceeding that was not permitted to continue. The appellant’s success or lack thereof in pursuing her claim has no bearing on whether the counterclaim was used to intimidate and harass her. As such, if she is successful with her action, there is no risk of a duplication in damages.
[74] In her damages and costs reasons, the motion judge noted that Mr. Yates sought general damages of $50,000 and the appellant sought general damages of $50,000 plus special damages of $183,535.14 for lost employment income. The motion judge awarded the appellant’s father $25,000 in damages and the appellant $20,000 in the action for defamation and malicious prosecution which the motion judge had dismissed under s. 137.1 of the CJA. It is implicit from her reasons that, for the most part, the motion judge valued the stress and anxiety that the appellant experienced as a result of the counterclaim at $5,000. Turning to the lost income claim, the motion judge was unable to reach a conclusion at this stage of the proceedings based on the record before her. She therefore ordered that the lost income claim be addressed as part of the determination of the action. I see no reason to interfere with the motion judge’s assessment in that regard. Accordingly, I would award the appellant $5,000 in s. 137.1(9) damages in relation to the dismissal of the counterclaim and refer the lost income claim to the Superior Court of Justice to be determined or resolved as part of the appellant’s action. . United Soils Management Ltd. v. Mohammed
In United Soils Management Ltd. v. Mohammed (Ont CA, 2019) the Court of Appeal considered awards of damages against a SLAPP plaintiff:[19] Both motion judges heard and decided the s. 137.1 motion before this court released a series of judgments interpreting s. 137.1 in some detail: see 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685, 142 O.R. (3d) 161 and the related cases that were released simultaneously. Some of the motion judges’ analyses have been overtaken by Pointes and those related authorities.
[20] In light of the significant developments in the case law since the motion judges released their reasons, we see no need to engage in a detailed consideration of those reasons. Whatever may be said about the correctness of their analyses in respect of s. 137.1(4)(a) (the substantial merit and valid defense provisions), the appellant cannot succeed on these appeals unless it satisfies this court that the motion judges each reached the wrong conclusion in respect of s. 137.1(4)(b), the public interest balancing provision.
[21] Section 137.1(4)(b) required the motion judges to dismiss the appellant’s lawsuits unless the appellant could demonstrate that the harm suffered by it, or likely to be suffered by it, as a result of the respondents’ statements was sufficiently serious that the public interest in permitting the appellant’s lawsuit to go forward outweighed the public interest in protecting the respondents’ freedom of expression. This court considered the factors relevant to the balancing process described in s. 137.1(4)(b) in Pointes, at paras. 85-98; Able Translations Ltd. v. Express International Translations Inc., 2018 ONCA 690, at paras. 37-44; and Fortress Real Developments Inc. v. Rabidoux, 2018 ONCA 686, 426 D.L.R. (4th) 1, at paras. 42-52.
[22] Any monetary damages suffered by a plaintiff, or likely to be suffered by a plaintiff, as a consequence of alleged defamatory statements is a key feature in the assessment of the harm suffered or likely to be suffered by the plaintiff: Pointes, at para. 88. ...
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Damages
[29] A separate issue arises on both of these appeals and that is the proper application of s. 137.1(9). That section reads:If, in dismissing a proceeding under this section, the judge finds that the responding party brought the proceeding in bad faith or for an improper purpose, the judge may award the moving party such damages as the judge considers appropriate. [30] The motion judge awarded Ms. Mohammed damages of $7,500. In doing so he found that prior motions brought by the appellant were “an objective demonstration of improper purpose”: Mohammed, at para. 78. The motion judge also pointed out that the appellant instituted the proceeding notwithstanding that Ms. Mohammed had apologized, as demanded by the appellant. He found that this was “a continuation of its desire to intimidate”: Mohammed, at para. 78.
[31] In fixing the amount of damages, the motion judge noted that there was no medical evidence in support of Ms. Mohammed’s claim that she suffered stress as a result of the proceeding being instituted against her. He also noted that there was no other corroborating evidence of any adverse effects on Ms. Mohammed. Nevertheless, the motion judge accepted that the proceeding unnecessarily caused Ms. Mohammed stress that affected her day-to-day life: Mohammed, at paras. 79-80.
[32] In the case of Ms. Barclay, the motion judge awarded her damages of $20,000. The motion judge found that the action was brought in bad faith and for an improper purpose “of stifling public debate around a crucially important public issue”: Barclay, at para. 136. The motion judge found that Ms. Barclay had suffered “personal anguish” as a result of the action: Barclay, at para. 136.
[33] The motion judge also found, in the alternative, that s. 137.1(9) would permit an award of punitive damages in the same amount. She found that the appellant’s conduct “warrants denunciation and deterrence”: Barclay, at paras. 134, 136.
[34] The wording of s. 137.1(9) is somewhat problematic. On one view, the wording of s. 137.1(9) would seem redundant, as a finding that an action has been commenced for the purpose of unduly limiting expression on matters of public interest would seem to qualify as one that has been brought for an improper purpose. On another view, the wording of s. 137.1(9) could be seen as an effort to separate out a subset of SLAPP cases which go beyond simply reflecting an effort to limit expression and include active efforts to intimidate or to inflict harm on the defendant.
[35] A review of the “Anti-SLAPP Advisory Panel Report to the Attorney General”, dated October 28, 2010, supports the latter interpretation. In that report, the Advisory Panel recommended, at para. 46:[T]he court should not be required to make findings as to bad faith or improper motive on the part of the plaintiff in deciding a motion under the special procedure. If in a particular case, however, the court is satisfied on the record before it that an action has been brought in bad faith or for an improper motive, such as punishing, silencing or intimidating the defendant rather than any legitimate pursuit of a legal remedy, an additional remedy should be available for this improper conduct. In such circumstances, the court should have the power to award damages to the defendant in such amount as is just. [Emphasis added]. [36] We would make two observations regarding the approach taken by the motion judges in these cases with respect to this issue. First, we do not view it as necessary for a defendant to adduce medical evidence in order to support a claim for damages. While medical evidence might be of assistance in determining the proper quantum of damages to be awarded, in certain cases, such as the ones here, it may be presumed that damages will arise from the use of a SLAPP lawsuit. Both of the respondents were individuals inexperienced in litigation, who would understandably suffer the stress and anxiety associated with being the subject of a proceeding of this type. This is especially true given the intimidating nature of the conduct of the appellant.
[37] That observation does not mean that damages will naturally follow in every case where the action is dismissed. The exact limits to the circumstances justifying an award of damages must await further development of the law surrounding s. 137.1. Whether an award of damages is warranted should also take into account the presumption that costs will be awarded on a full indemnity basis. Such an award may, in some cases, address the harm to a defendant that arises from a SLAPP proceeding.
[38] Second, we do not view the wording of s. 137.1(9) as being so broad as to encompass punitive damages awards. In our view, the thrust of s. 137.1(9) is to provide compensation for harm done directly to the defendant arising from the impact of the instituted proceeding. The section is not intended to provide wide-ranging authority for the court to sanction the conduct of the plaintiff through a damages award, such as an award for punitive damages. Any need to sanction the conduct of the plaintiff is already addressed through the provision in s. 137.1(7) of a presumptive award of full indemnity costs.
[39] All of that said, we do not see any basis for interfering with the damages awards that were made in either of these cases. There was evidence of harm to Ms. Mohammed and Ms. Barclay arising from these proceedings. Each of the motion judges gave reasons for the conclusions that they reached regarding the quantum of damages to be awarded. There is no palpable and overriding error in either of their conclusions that would warrant intervention by this court.
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