1704604 Ontario Ltd. v Pointes Protection Association et al., 2016 ONSC 2884

 Heard: April 25, 2016

JUSTICE E. GAREAU

 REASONS ON MOTION

[1]               On April 25, 2016, the court heard a motion brought by the defendants for an order dismissing the action commenced by the plaintiff and for costs against the plaintiff corporation and against Jeff Avery and Patricia Avery personally as the directing minds of 1704604 Ontario Ltd. 

[2]               The grounds for the motion are fully set out in the defendants’ notice of motion, dated November 26, 2015.  The motion is brought under Section 137.1 of the Courts of Justice Act, R.S.O. 1990, c C.43.  The defendants seek an order dismissing the action by virtue of the application of Section 137.1 of the Courts of Justice Act and the provisions in that section. 

BACKGROUND

[3]               The parties to these proceedings have long been adverse in interest with respect to the proposed development of certain lands in the Pointe Louise area of Sault Ste. Marie, Ontario, which are owned by the Plaintiff. 

[4]               The proposed land development is called “Pointe Estates” which is a 91-lot subdivision in the Pointe Louise area which is in Sault Ste. Marie’s west end.

[5]               In 2006, the plaintiff approached the City of Sault Ste. Marie to begin the process of development approval.  The plaintiff made an application to the Sault Ste. Marie Region Conservation Authority seeking approval for the Pointe Louise project.  The initial application to the Conservation Authority was denied.  The Conservation Authority Board was concerned that the Pointe Estates project would interfere with the hydrologic function of the on-site wetland.  The plaintiff appealed the Conservation Authority’s refusal to the Mining and Lands Commissioner which resulted in the plaintiff arranging a site specific hydrogeological study. 

[6]               After the hydrogeological study was completed, the plaintiff renewed its application for project approval to the Sault Ste. Marie Regional Conservation Authority.  Based on the conclusions in the hydrogeological study, the Conservation Authority’s Board was satisfied that the Pointe Estates development would not pose a threat to the on-site wetland and approved the project moving forward. 

[7]               Once the Conservation Authority approval was obtained, the plaintiff applied to the Sault Ste. Marie City Council for an official plan amendment and other required variances to allow the Pointe Estates Project to proceed. 

[8]               Prior to the plaintiff’s application being heard by Sault Ste. Marie City Council, the defendants applied to the Ontario Divisional Court for Judicial Review with respect to the Conservation Board’s decision to approve the Pointe Estates’ project.  The named respondent in the Application for Judicial Review was the Sault Ste. Marie Region Conservation Authority with the numbered company 1704604 Ontario Ltd. later being added.  The named applicant was Pointes Protection Association. 

[9]               Pointes Protection Association, hereinafter referred to as the PPA, was incorporated on March 28, 2008 as a not-for-profit corporation without share capital.  The named defendants in the action before this court are alleged to be directors and executive committee members of the PPA.  The purpose of the PPA as set out in its initial website was to “provide a coordinated response for the residents of Pointe Louise and Pointe aux Pins to the Pointe Estates Development proposal”. 

[10]           In the Notice of Application to the Divisional Court for Judicial Review, the PPA seeks leave and as set out in paragraph 1(c) and (d) of the application the following:

(c)   A Declaration that the Respondent’s Resolution 103/12 and Resolution 104/12, which were passed on December 13, 2012 are illegal and invalid as they are contrary to the Conservation Authorities Act, R.S.O. 1990, c C.27 and Sault Ste. Marie Region Conservation Authority: Regulation of Development, Interference with Wetlands and Alterations to Shorelines and Watercourses, O. Reg. 176/06, as amended under the Conservation Authorities Act, R.S.O. 1990, c C.27;

(d)   A Declaration that the Respondent exceeded its jurisdiction by passing Resolution 103/12 and Resolution 104/12 with no reasonable evidence to support its decision and through consideration of factors extraneous to those set out in subsection 3(1) of Sault Ste. Marie Region Conservation Authority:Regulation and Development, Interference with Wetlands and Alterations to Shorelines and Watercourses, O. Reg. 176/06, as amended under theConservation Authorities Act, R.S.O. 1990, c C.27.

[11]           In paragraph two of the Grounds section of the Application for Judicial Review, the PPA set out the grounds, in part, as follows:

(a)   The applicant, Pointe Protection Association, is a non-profit group incorporated under the laws of the Province of Ontario as Ontario Corporation #001764453 which derives its membership from and represents the interests of people living in the vicinity of the Pointe Louise Wetland.

(b)   The people who are represented by the Applicant have a direct interest in this matter and will suffer particular and special damages should this development be allowed to proceed and environmental damage result.

[12]           The Application for Judicial Review was resolved between the parties by way of minutes of settlement dated September 17, 2013, executed by Peter Gagnon in his capacity as President of PPA and by an authorized representative of the Sault Ste. Marie Conservation Authority and 1704604 Ontario Ltd. (the plaintiff in the proceeding before the court).  These minutes of settlement ultimately led to a court order granted on December 17, 2013 which provided that the Application for Judicial Review be dismissed on a without cost basis. 

[13]           The minutes of settlement entered into by the parties with respect to the Judicial Review Application reads as follows:

Subject to the approval of this Honourable Court, the Parties hereto agree to settle the within Application as follows:

(1)               The within Application for Judicial Review be dismissed on a without costs basis;

(2)               The Respondent 1704604 Ontario Ltd. will not pursue any costs for the security for costs motion which was heard on August 9, 2013;

(3)               The dismissal of the Judicial Review Application will be on a “with prejudice” basis;

(4)               The Pointes Protection Association (hereinafter the “PPA”) and its executive committee members comprised of Peter Gagnon, Lou Simionetti, Pat Gratton and Gay Gartshore together with Rick Gartshore, and Glen Stortini (the named individuals hereinafter referred to collectively as the “PPA members”) undertake and agree not to take any further court proceeding seeking the same or similar relief as set out in the within Notice of Application;

(5)               The PPA and the PPA members undertake and agree that they will not knowingly make any false or untrue comments or statements to the media, electronic or print, in regards to the Pointe Estates development, Jeff Avery, Dr. Patti Avery or the Sault Ste. Marie Region Conservation Authority (hereinafter referred to as the “SSMRCA”).  For greater certainty, this would include any comments or statements as to why the PPA or the PPA members have consented to a dismissal of the within Application and any comment to the effect that the PPA and the PPA members were forced into this position by the order for security for costs made on August 20, 2013;

(6)               The PPA and the PPA members undertake and agree that in any hearing or proceeding before the Ontario Municipal Board (OMB) or any other subsequent legal proceeding that they will not advance the position that the Resolutions passed by the SSMRCA on December 13^th, 202 in regards to the Pointe Estates Development under subsection 3(1) of the Ontario Reg. 176/06 are illegal or invalid or contrary to the provisions of the Conservation Authorities Act R.S.O. 1990 c. C.27 and Ontario Reg. 176/06 being the Regulation of Development, Interference with Wetlands and Alterations to Shorelines and Watercourses or that the SSMRCA exceeded its jurisdiction by passing the above noted Resolutions with no reasonable evidence to support its decision and considered factors extraneous to those set out in subsection 3(1) of the Ont. Reg. 176/06;

(7)               The Parties consent to an order in accordance with the terms of these Minutes of Settlement or as otherwise agreed and the Parties hereto, including the PPA Members shall execute these minutes and agree to bound thereto and shall execute such further and other documentation as necessary to give effect to the terms of these Minutes of Settlement.

(8)               The Parties further agree that these Minutes of Settlement or a signed copy sent in an electronic format (PDF or otherwise) may be executed by the Parties in counterparts and delivered by electronic transmission or in an electronic format so that the signed copy sent by electronic transmission or in an electronic format is as binding upon the Parties as a signed copy of these Minutes of Settlement with the original signatures of the Parties and that there is no necessity to deliver a copy of these Minutes of Settlement with the original Settlement signed in electronic format in counterparts shall be deemed to be an original of the Minutes of Settlement.  For purposes of these Minutes of Settlement the “Parties” shall be deemed to include the PPA Members as defined in paragraph 4 above.

The undersigned certify that the Minutes executed herein and any Order constituted to does not affect the rights of any person under disability.

            Dated at the City of Sault Ste. Marie, this 17 day of September, 2013.  

[14]           The most relevant portions of the Minutes of Settlement with respect to the motion before this court are paragraphs 2 and 6.  It should also be noted that the dismissal of the Judicial Review Application was on a “with prejudice” basis.

[15]           The plaintiff’s application to the City of Sault Ste. Marie for an official plan amendment to permit the Pointe Estates project to proceed was held by City Council on July 15, 2013.  The application of the plaintiff was defeated by a 7 to 4 vote margin.  The plaintiff launched an appeal of the City Council’s decision to the Ontario Municipal Board (OMB) on July 26, 2013.

[16]           The PPA was granted party status on the OMB proceedings on March 11, 2014.  This was done with the agreement and consent of the plaintiff numbered company.  The OMB hearing itself took place before Member Blair S. Taylor commencing on November 18, 2014.  The hearing lasted approximately three weeks.

[17]           The PPA participated as a party at the OMB hearing and was represented by the same counsel who prepared the Divisional Court application and negotiated the terms of the Minutes of Settlement which resolved that application.

[18]           The defendant Peter Gagnon, as the President at the PPA, was called as a lay witness at the OMB hearing and testified in opposition to the Pointe Estates Development.  The plaintiffs allege that the tenor of Mr. Gagnon’s evidence was that the Pointe Estates Development would result in a loss of wetland area and cause significant environmental damage.

[19]           The evidence given by Peter Gagnon was objected to by the plaintiff’s counsel at the OMB hearing.  Member Taylor ruled that the OMB would not usurp any jurisdiction held by the Conservation Authority, but would permit Mr. Gagnon to give evidence concerning the wetland to the extent this issue was relevant to the determination of the Pointe Estates planning merits.

[20]           Member Taylor of the OMB released his written decision on February 27, 2015 in which he dismissed the application by the plaintiff for development approval.  At paragraphs 147, 148 and 149 of his decision, Member Taylor states:

The Board is required pursuant to s. 51(24) to have regard to the criteria laid out in s. 51(24) of the Planning Act. 

The Board has done so and the Board finds that:

(a)   The development applications do not have appropriate regard for the effective development on matters of provincial interest as is referred to in s. 2 of the Planning Act;

(b)   That the proposed development is not in the public interest as it relates to the loss of coastal wetland;

(c)   That the plan does not confirm to the official plan;

(d)   That the suitability of the lands for which it is proposed to be subdivided is not appropriate.

Thus the Board will not grant draft plan of subdivision or draft plan of condominium approval for the development applications.

[21]           The plaintiff alleges that the defendants breached the Minutes of Settlement and, in particular, paragraph 6 of the Minutes of Settlement by Peter Gagnon giving evidence at the OMB hearings, particularly on the issue of the wetlands which had been considered and dealt with by the Sault Ste. Marie Conservation Authority prior to giving its approval.

[22]           On September 4, 2015, the plaintiff commenced an action against the defendants alleging breach of contract and for damages arising from that breach.

[23]           Within that action is the motion brought by the defendants for an order dismissing the action brought by the plaintiff by virtue of the application ofSection 137.1 of the Courts of Justice Act. 

THE LEGISLATION

[24]           Section 137.1 of the Courts of Justice Act is a relatively new provision.  It received Royal Assent on November 3, 2015 and applies to any proceedings commenced after December 1, 2014.  Given the legislation’s recent passage, this court is offered little jurisprudential assistance with respect to the interpretation and application of the provisions of Section 137.1.  I was surprised to find this legislation buried in the Courts of Justice Act given the substantive nature of its provisions and the significance of the remedies provided in it.  I would have thought that it would be stand-alone legislation or part of the legislation to which it is most applicable, such as the Libel and Slander Act, R.S.O. 1990 C.L. 12.  I also found the provision of Section 137.1 of the Courts of Justice Act awkwardly drafted which is also surprising given the drastic effect of its provisions. 

[25]           Provisions similar to those in Section 137.1 of the Courts of Justice Act are commonly referred to as anti-SLAPP provisions; SLAPP refers to Strategic Lawsuit Against Public Participation.  The aim of the legislation is to preserve the right of citizens to express themselves freely on issues of public interest and importance without being under the threat or spectre of court proceedings.  As set out in Section 137.1(1) of the Courts of Justice Act,

The purpose of this section and section 137.2 to 137.5 are:

 

(a)   to encourage individuals to express themselves on matters of public interest;

(b)   to promote broad participation in debates on matters of public interest;

(c)   to discourage the use of litigation as a means of limiting expression on matters of public interest; and

(d)   to reduce the risk that participation by the public in debates on matters of public interest will be hampered by fear of legal action.

[26]           Section 137.1 creates a two-part test.  Section 137.1(3) sets out what the moving party must first establish as follows:

(3) On motion by a person against whom a proceeding is brought, a judge shall, subject to subsection (4), dismiss the proceeding against the person if the person satisfies the judge that the proceeding arises from an expression made by the person that relates to a matter of public interest. 

[27]           Section 137.1 of the Courts of Justice Act contains a definition for the word “expression” but regrettably no definition for the phrase “a matter of public interest”.  The word “expression” is defined in Section 137.(1) as “any communication, regardless of whether it is made verbally or non-verbally, whether it is made publicly or privately, and whether or not it is directed at a person or entity”. 

[28]           Section 137.1(3) of the Courts of Justice Act provides that a judge shall dismiss the proceeding if the test in that section is met subject to the provisions in subsection (4).  The onus is on the moving party to meet the test in Section 137.1(3).  If this is established, the onus then shifts to the party responding to the motion who must satisfy the test set out in Section 137.1(4) failing which the action shall be dismissed.  Section 137.1(4) of the Courts of Justice Act reads as follows:

A judge shall not dismiss a proceeding under subsection (3) if the responding party satisfies the judge that,

(a)   There are grounds to believe that,

(i)     The proceeding has substantial merit, and

(ii)   The moving party has no valid defence in the proceeding; and

(b)   The harm likely to be or have been suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.

Applying Section 137.1(3) to the Facts of this Case

[29]           As I previously indicated, the term “expression” as it applies to Section 137.1(3) is defined as “any communication, regardless of whether it is made verbally or non-verbally, whether it is made publicly or privately, and whether or not it is directed at a party or entity”.   The activity that gives rise to the action before the court is the testimony given by the defendant, Peter Gagnon, on behalf of the defendant Pointes Protection Association at the hearing involving the application brought by the plaintiff before the Ontario Municipal Board.   The statements made by Peter Gagnon in his testimony before the Ontario Municipal Board are clearly an “expression” made by him as defined in Section 137.1(2) of the Courts of Justice Act.  I am entirely satisfied that the evidence given by Mr. Gagnon at the OMB hearing meets the first part of the test in Section 137.1(3) being “an expression made by the person”. 

[30]           Having said that, the defendants as the moving part on this motion must also satisfy its onus with respect to the second part of the test in Section 137.1(3), namely, that the expression “relates to a matter of public interest”. 

[31]           As I indicated above, the phrase “relates to a matter of public interest” is not defined in Section 137.1 of the Courts of Justice Act.  In the context of defences available in a defamation action, and whether the publication is a matter of public interest, the Supreme Court of Canada considered the phrase “matters of public interest” in the case of Grant v. Torstar Corp., 2009 SCC 61 (CanLII), [2009] 3 S.C.R. 640.  At paragraphs 103, 104 and 105 of that case, McLachlin, C.J. speaking for the court states:  

[103]   The authorities offer no single “test” for public interest, nor a static list of topics falling within the public interest (see, e.g. Gatley on Libel and Slander (11^th ed. 2008), at p. 530).  Guidance, however, may be found in the case on fair comment and s. 2(b) of the Charter.

[104]   In London Artists, Ltd. V. Littler, [1969] 2 AII E.R. 193 (C.A.), speaking of the defence of fair comment, Lord Denning, M.R., described public interest broadly in terms of matters that may legitimately concern or interest people:

There is no definition in the books as to what is a matter of public interest.  All we are given is a list of examples, coupled with the statement that it is for the judge and not for the jury.  I would not myself confine it within narrow limits.  Whenever a matter is such as to affect [page 686] people at large, so that they may be legitimately interested in, or concerned at, what is going on; or what may happen to them or to others; then it is a matter of public interest on which everyone is entitled to make fair comment. [p. 198]

            [105]   To be of public interest, the subject matter “must be shown to be one inviting public attention, or about which the public has some substantial concern because it affects the welfare of citizens, or one to which considerable public notoriety or controversy has attached”; Brown, vol. 2, at pp. 15-137 and 15-138.  The case law on fair comment “is replete with successful fair comment defences on matters ranging from politics to restaurant and book reviews”: Simpson v. Mair, 2004 BCSC 754 (CanLII), 31 B.C.L.R. (4^th) 285, at para. 63, per Koenigsberg J.  Public interest may be a function of the prominence of the person referred to in the communication, but mere curiosity or prurient interest is not enough.  Some segment of the public must have a genuine stake in knowing about the matter published. 

[32]           The plaintiff as the responding party to the motion argues that the dispute between the parties is a private interest dispute over land development in a particular area of Sault Ste. Marie, Ontario.  The plaintiff argues that the matter of whether the parties were engaged in a public interest dispute was dealt with and decided by Justice Robert Del Frate on the motion for security for costs brought by the plaintiff against the defendants in the proceedings before the Divisional Court.  In dealing with this motion, Justice Del Frate makes the following comments at paragraphs 21, 22, 23 and 24 of his Reasons as follows:

[21]      Although there are situations where certain public interest litigators may be shielded from costs, this is not one of them. 

[22]      The motives of the members of the PPA may be altruistic; however, the issues involved in this litigation relate to the interests of only a minority of the residents of this subdivision.  Of some 115 eligible members, only 27 members are part of this corporation.  The vast majority of the residents have not expressed an interest in the proceedings and one can infer that they are satisfied with the development proceeding.  This is especially true considering the amount of publicity that this particular project has entertained in that community.  The minority has been very vocal and active in objecting to this project.  They have accessed the Conservation Authority, have attended council meetings and have involved the media.

[23]      This development does not have any impact on the corporate litigant but may have some impact on the members of the PPA.  Accordingly, the named party does not have any personal, proprietary or pecuniary interest in the outcome of this litigation.  Obviously, the impact of this development will be felt by the members of the PPA. 

[24]      The project involves a localized area of Sault Ste. Marie and will not have repercussions for the general public.  Its opposition appears to reflect a NIMBY “Not in My Backyard” attitude.  The members seem to want to protect the neighbourhood even though the great majority of the neighbourhood has shown no interest in opposing the project.  From its incorporation in 2008, the PPA has been able to garner only 27 members. 

[33]           I am mindful of the fact that Justice Del Frate was dealing with a motion for security for costs and whether the PPA could be shielded from costs as a “public interest litigant” and not deciding whether the matter before him was one of “public interest”.  I am also mindful of the fact that Justice Del Frate’s decision is an interlocutory decision in a separate proceeding and in no way is binding authority on me. 

[34]           Having said that, I find the comments of Justice Del Frate salient and significant, especially his observations that PPA has only 27 members out of an eligible 155 members, that the impact of the development will be felt by the members of the PPA and his comments in paragraph 24 of his decision that “The project involves a localized area of Sault Ste. Marie and will not have repercussions for the general public”. 

[35]           Mr. Justice Del Frate rejected the following position advanced by the PPA as set out in paragraph 13 of his decision which reads, in part,

...It is acting for the benefit of society in that its actions may prevent the destruction of the environment in this particular wetland.  Accordingly, it should be considered a public interest litigant. 

[36]           There is evidence before the court that the proceeding before the Ontario Municipal Board attracted considerable media attention with over 50 newspaper articles or editorials during the time the matter was being considered by both the City of Sault Ste. Marie and the Ontario Municipal Board.  These various articles are found at Tab 28 to 31 of the Motion Record of the Defendant.  Do these articles reflect mere curiosity or are they an indication that the public has a genuine interest in knowing about the matter?  This question is not an easy one to answer. 

[37]           When it has been convenient for the plaintiff to do so, it has taken the position on various pleadings in various proceedings involving the parties that the issues transcend the parties and affect the public as a whole.  For example, in the plaintiff’s notice of motion for leave to appeal the OMB decision to the Divisional Court, the plaintiff states at paragraph 2.12, “The matters for which the applicants seek leave to appeal are of grave importance not only to the parties in the proceedings but to the public at large.”  (Tab 27 of the motion record of the defendant).  Furthermore, in the affidavit of Dr. Patricia Avery, sworn on January 8, 2016, she states at paragraph 14, “Bringing a Florida-style canal system development to Sault Ste. Marie carries with it a number of community benefits.”  Dr. Avery goes on to discuss in detail the benefits to the community if the project proceeds in paragraphs 24 and 25 of her affidavit.   Also pleaded at paragraph 37 of the plaintiff’s notice of motion for leave to appeal the OMB decision is the following:

The evidence before the Board was that the project has a value to the community in excess of 100 million dollars and would centralize development in the rural area of the City as well as provide for an opportunity for recruitment of people to the City of Sault Ste. Marie.  These are issues of significant public importance for the Algoma District.  (Tab 27 of the motion record of the defendant). 

[38]           The expression made by Peter Gagnon was made on an environmental issue in a public forum before a public body.  The OMB Member Taylor speaks of the public interest in his February 27, 2015 ruling, at paragraph 148 in setting out that one of the reasons for refusing the planning proposal of the plaintiffs, was “that the proposed development is not in the public interest as it relates to the loss of coastal wetland”. 

[39]           The issues addressed at the OMB hearing and testified to by Peter Gagnon dealt with the environmental impact of the proposed development.  I conclude on the evidence before me that this was a matter of public interest to the community of Sault Ste. Marie and that it affected the community at large.  This was more than a “not in my backyard” type of private interest dispute. 

[40]           On the facts and the evidence before me, I conclude that the evidence of Peter Gagnon at the hearing before the Ontario Municipal Board was “an expression made by a person that relates to a matter of public interest” and accordingly that the defendants as the moving party have satisfied the onus as set out in Section 137.1(3) of the Courts of Justice Act.  That being the case, I must dismiss the proceeding unless the plaintiff as the responding party in the motion can satisfy me that all of the grounds set out in Section 137.1(4) have been established.  The onus shifts to the plaintiff once the defendants have met their onus as set out in Section 137.1(3). 

Applying Section 137.1(4) to the Facts of this Case

[41]           The action of the plaintiff is based on an allegation of breach of contract based on the breach of the minutes of settlement related to the testimony of Peter Gagnon at the Ontario Municipal Board hearing.  The allegation clearly set out by the plaintiff is that the wetlands issue was decided by the Conservation Authority, the defendants agreed not to revisit that issue by virtue of the minutes of settlement dated September 17, 2013 and did so by the testimony of Peter Gagnon at the Ontario Municipal Board thereby breaching the contract that governed the relationship of the parties.  As is alleged in paragraph 50 of the statement of claim:

Notwithstanding the provisions of the minutes of settlement and the caution provided by the OMB, Peter Gagnon, who was called as a lay witness, used the OMB hearing as an opportunity to present his own opinion evidence to explicitly impeach the SSMRCA’s approval.  Mr. Gagnon thereby resurrected and raised the exact same issues that the defendants previously raised in their Judicial Review Application.  This was contrary to the minutes of settlement.

[42]           The plaintiff’s statement of claim is 29 pages containing 94 paragraphs.  The statement of claim is specific and detailed as to the claim being made against the defendants and the basis for that claim.

[43]           Paragraph 137.1(4)(a)(i) reads that in order for a judge not to dismiss the proceeding the responding party must satisfy the court that,

(a)   there are grounds to believe that,

(i)     the proceeding has substantial merit.

It is regrettable that the legislature saw fit to use the word “substantial” which is not defined in the section.

[44]           The Oxford Dictionary defines the word “substantial” as “of considerable importance, size or worth” and “real and tangible rather than imaginary”. 

[45]           Although the term “substantial” itself is not defined in Black’s Law Dictionary, the term “substantial damages” is defined as “a considerable sum awarded to compensate for a significant loss or injury”.

[46]           Although in no way binding on this court, the High Court of New Zealand in the case of Riveroaks Farm Limited v. Holland, H.C. Tauranga CIV-2010-470-584, dealt with the phrase “allegations or objections by that party that are without substantial merit” in a costs appeal.  In paragraph 9 of that decision, the New Zealand court states:

The mere fact that an allegation or argument by the Tribunal will not itself expose the party concerned to liability for costs.  In many cases a party will advance a claim or argument that requires careful consideration by the Tribunal, but which is ultimately rejected.  Such a claim may properly be characterized as of substance, as opposed to lacking substance.  In other words, they are “substantial”.  In my opinion, the legislature has used the expression “substantial merit” in s. 91(1)(b) in that sense, as denoting claims which do require serious consideration by the Tribunal.

[47]           The claim of the plaintiff involves the sanctity of agreements made between parties.  This is not a claim that is frivolous or fleeting.  It is a claim of importance involving a serious matter to be considered by the court.  In other words, it is a claim of substance.  In my view, the claim advanced by the plaintiff has substantial merit and is a claim that should be considered by the court.  The plaintiff has met the first test for consideration inSection 137.1(4)(a)(i) of the Courts of Justice Act. 

[48]           With respect to the second test to be satisfied by the responding party in the motion to dismiss under Section 137.1(4) of the Courts of Justice Act,the responding party must satisfy the court that “the moving party has no valid defence in the proceeding” (Section 137.1(4)(a)(ii) of the Courts of Justice Act).  The defendants have yet to file a statement of defence in the proceedings.  In the motion material the defendants raise defences such as absolute privilege and whether a party can contract out of absolute privilege thereby waiving this right.  It seems to me that parties have the ability to waive rights or limit rights by way of separate contractual obligations.  That was certainly the conclusion reached by the Supreme Court of the State of Minnesota in the case of Middle-Snake-Tamarc Rivers Watershed District v. James Stengrim,  (2010) 784 NW 2d 834, 839.  In that case the court finds on page 13 of the judgment that, “pre-existing legal relationships, such as those based on a settlement agreement where a party waives certain rights, may legitimately limit a party’s right to public participation”. The Minnesota court goes on to say later in the same paragraph, “In a situation such as the one present here, a district court has the authority to deny defendant’s anti-SLAPP motion where a defendant has entered into a settlement agreement and contractually agreed not to hinder the establishment of a project, thereby waiving certain rights to public participation, but retaining others, and the court determines that there are genuine issues of material fact about the settlement agreement’s effect on the defendants’ public participation rights.”  

[49]           Although the Minnesota case of Middle-Snake is not binding on this court and the court should treat jurisprudence from other jurisdictions with caution, this case is very much in line factually with the case at bar and the comments contained therein are useful and enlightening. 

[50]           The defendant has not pleaded its defence in this proceeding.  Without a pleading there is no way for the court to be satisfied that it has a “valid defence” in the proceeding and I am not satisfied that the defendant has a “valid defence” based on the material before me on the motion.  In my view, the threshold for the responding party to meet the test in Section 137.1(4)(a)(i) and (ii) of the Courts of Justice Act must be a low one given the significant remedies in Section 137.1 and the protection for litigants to bring legitimate claims before the court.

[51]           In considering all of the evidence before me on the motion, I am satisfied that the responding party has satisfied its onus under Section 137.1(4)(ii) of the Courts of Justice Act. 

[52]           That brings me to the third test that the responding party must satisfy under Section 137.1(4)(b), namely,  “The harm likely to be or have been suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest is permitting the proceeding to continue outweighs the public interest in protecting that expression.” 

[53]           Although the action brought by the plaintiff is about an alleged breach of contract, it is also very much about how the court intends to treat agreements made between parties in an effort to settle litigation.  The court does not have to look any further than the comments of Justice Susan Lang of the Ontario Court of Appeal to appreciate the sanctity given in litigation to agreements made between parties and the importance that they attract.  In Mohammed v. York Fire and Casualty Insurance Co., 2006 CanLII 3954 (ON CA), [2006] O.J. No. 547 at para. 34, Justice Lang stated,

Minutes of settlement are a contract.  A consent judgment is binding.  Both are final, subject to reasons to set them aside.  Finality is important in litigation.  This is so for the sake of the parties who reached them bargain on the premise of an allocation of risk, and with an implicit understanding that they will accept the consequences of their settlement.  Finality is also important for society at large, which recognizes the need to limit the burdens placed on judicial resources by re-litigation. 

[54]           There is an important public interest and policy interest raised by the plaintiff in this litigation.  In my view, this is litigation that must be permitted to continue and not be arbitrarily dismissed in its initial stages.  The harm suffered by the plaintiff by the defendant’s expression or evidence at the OMB hearing is significant and serious as is set out clearly in paragraph 101 of the plaintiff’s factum filed in this motion.

[55]           In my view, the public interest in allowing the litigation to continue and permitting the issues related to the minutes of settlement and the finality of agreements made between parties to be adjudicated outweighs the public interest in protecting the right of Peter Gagnon to freely express himself by giving evidence before the Ontario Municipal Board.

[56]           In summary, although I am satisfied that the defendants as the moving party in the motion before me has met its onus under Section 137.1(3) of theCourts of Justice Act, I am also satisfied that the plaintiff as the responding party in the motion before me has met its onus under Section 137.1(4) of the Courts of Justice Act.  Accordingly, I am not prepared to dismiss this action under Section 137.1 of the Courts of Justice Act and the motion dated November 26, 2015 brought by the defendants for that relief is dismissed.

COSTS

[57]           With respect to the issue of costs of the motion, subsection (8) of Section 137.1 of the Courts of Justice Act provides as follows:

If a judge does not dismiss a proceeding under this section, the responding party is not entitled to costs on the motion, unless the judge determines that such an award is appropriate in the circumstances.

[58]           I am not satisfied that costs should be awarded on this motion to the plaintiff even though it was successful on the motion.  The motion was somewhat novel in that it involved recently enacted provisions of the Courts of Justice Act and in no way was the motion frivolous or without merit.  It was a motion that had to be brought and argued.

[59]           Accordingly, each party shall bear their own costs of the motion.

 

 

 

 

Justice E. Gareau

 

Released:   May 9, 2015