Defamation Action Commenced in Bad Faith Results in Full Indemnity Costs Award

by Marie Boisvert

In Canadian Thermo Windows Inc. v. Seangio, 2021 ONSC 6555, the plaintiffs, a window company and its principal was ordered to pay costs of $164,186 to former customers who posted negative reviews of the quality of the products received and their experience with the company. The plaintiffs sued for defamation claiming that the reviews incorrectly represented their products and customer service practices. The defendants sought for the dismissal of the action in reliance of the anti-SLAPP provisions under section 137.1 of the Court of Justice Act (“the Act”). The night prior to this motion, the plaintiffs filed a notice of discontinuance.

The first issue before the court was then whether the plaintiffs were procedurally permitted to discontinue the action in light of the anti-SLAPP motion. The plaintiffs argued that the defendants, contrary to the requirements under section 137.1 of the Act, could not seek costs on full indemnity basis as they failed to book a motion date prior to serving their notice of motion. As such, the motion was never “made”. If an anti-SLAPP motion is deemed to be “made”, a stay is granted until the motion is disposed of, and the parties are barred from taking any further steps in the proceeding.

The court determined that such a motion “must be considered “made” when the moving defendant has done all that it can do unilaterally to deliver the formal documents to commence the process under the Rules and any applicable Practice Direction”. The motion brought by the defendants in response to the defamation suit was made when the defendant delivered a Requisition to Attend Civil Practice Court, meaning that the notice of discontinuance previously filed by the plaintiffs was deemed ineffective.

Relying on the framework offered by the decision of the Supreme Court in 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, the court turned to the merits of the anti-SLAPP motion. A defendant holds the burden of proof to demonstrate that the expressions are a matter of public interest. The criticisms made were not considered personal attacks, as alleged by the plaintiffs. Rather, they were determined to be matters to which “a segment of the community would have a genuine interest in receiving information” about. Of note, Justice Myers points out that in addition to comments on the quality of the products of a said business, the “behaviour of the manager and owner during a meeting to deal with a customer’s complaint is a proper part of a review of the business’s customer service”.

If the burden is met by the defendants, the claim will be dismissed unless the plaintiffs can show that there are “grounds to believe” that the claim has “substantial merit”, and the defendants have “no valid defence in the proceeding”. The real issue was whether the defendants had a valid defence as to the truth of the statements made. Due to the lack of expert evidence and cross-examinations conducted, it could not be ruled out that the content of the reviews was true. The court also briefly touched on “the harm suffered by the plaintiffs [as] against the public interest in the defendants’ expression”. The plaintiffs were not able to demonstrate that their alleged loss in revenue was the direct cause of these reviews.

The action was dismissed as against the defendants and the court upheld the presumption that they were entitled to costs on a full indemnity basis totaling $164,186. In other words, the defendants were awarded the total extent of their legal costs for the litigation. Additionally, the defendants benefited from an award in damages of $2,500. Justice Fred Myers was clear that the action was brought in an obvious attempt to bully the defendants to remove their reviews. The court noted that this case was exactly the type of action the anti-SLAPP legislation aimed to prevent.