Earlier this fall, the Ontario Superior Court of Justice released its decision in Canadian Thermo Windows Inc. v. Seangio.¹ Justice Myers dismissed the Plaintiffs’ defamation action holding it was a strategic lawsuit against public participation (i.e, a “SLAPP suit”) and awarded the Defendants full indemnity costs of $164,186.76 plus nominal damages of $2,500. This decision serves as a cautionary tale about commencing a lawsuit in hopes of silencing critics on matters of public interest.

Background on SLAPP suits and anti-SLAPP motions

Strategic lawsuits against public participation or SLAPP suits are lawsuits that aim to have a chilling effect on people and organizations speaking out about matters of public interest. Ontario’s Courts of Justice Act provides a mechanism to mitigate such proceedings: anti-SLAPP motions. Anti-SLAPP motions offer defendants a way to summarily dismiss such proceedings with significant consequences to plaintiffs who bring such claims.

In order to succeed in anti-SLAPP motion, the defendant must first “satisfy the judge that the proceeding arises from an expression relating to a matter of public interest”.² If the defendant meets its burden, the burden shifts to the plaintiff to convince the court that there are “grounds to believe” that the proceeding has substantial merit and the defendant has no valid defence in the proceeding. If the plaintiff is successful in meeting that burden, the plaintiff must also establish that “the harm likely to be or have been suffered by the [plaintiff] as a result of the [defendant’s] expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression”.³ If the plaintiff cannot meet its burden, the action is dismissed.

If the defendant is successful in dismissing the action, it is presumptively entitled to 100% of its legal costs.

The lawsuit

Canadian Thermo Windows Inc. and Shaul Goldenberg (the “Plaintiffs”) sued Aldwyn Seangio and Alison Shraishi-Seangio (the “Defendants”) for defamation relating to negative customer reviews. Shortly after the Defendants purchased windows from the Plaintiffs, the Defendants began experiencing water leakage in their house. Frustrated with the Plaintiffs’ service, the Defendants published negative reviews online.

In response to these reviews, the Plaintiffs served a libel and slander notice and commenced an action for defamation. The Defendants responded by bringing an anti-SLAPP motion. In response, the Plaintiffs tried to discontinue the proceeding. The Defendants resisted this attempt to discontinue the proceeding because they wanted to recover their costs of bringing the motion.
 
In finding in favour of the Defendants, the Court held that the posts on the online review pages constituted expression on matters of public interest. The Court also held that there were no grounds to believe that defences of truth and fair comment were not valid because: i) there was no evidence adduced by the Plaintiffs challenging the “true belief” of the Defendants about the content of the review; and ii) there were triable issues of facts, such as credibility determinations and findings of bad faith or malice.

The decision can best be summed up by Justice Myers’ noteworthy passage:

I also find that this litigation was likely retributive in design. The plaintiffs' lawyers knew or ought to have known that an anti-SLAPP motion was a possible answer to a defamation action for an online review. The plaintiffs' decision to try to abandon the claim when confronted with this motion lays bare their motivation. Whether other online reviewers had the wherewithal to retain counsel in face of the plaintiffs' libel notices, this one did. And when the defendants came forward with an obvious answer to the claim based on clear precedents, the plaintiffs folded like a cheap suit. The plaintiffs say they did not want to incur the cost of the process. But they refused to engage in a summary process to resolve the case because they insisted that the defendants take down their reviews. They want to control the public narrative and tried to use this lawsuit to do so. (emphasis added)⁴

In obiter, the Court held that the “harm” to the Plaintiffs was not substantial enough to outweigh the public interest in the Defendants’ expression because: i) the proceeding commenced under Simplified Procedure, which is limited to damages under $200,000 suggesting that any losses suffered are modest; and ii) the Plaintiffs wanted to discontinue the proceeding. The Court was not satisfied with the Plaintiffs’ evidence on damages finding that they offered no evidence of any resulting net income loss from the Defendants’ posts.

Implications of the decision for businesses

While a negative review can be disruptive for your business, a poorly conceived defamation lawsuit can be even more costly. As we see in Canadian Thermo Windows Inc. v Seangio, where the Court awarded over $160,000 in costs and $2,500 in damages to the Defendants, anti-SLAPP motions can be extremely costly for unsuccessful plaintiffs. Plaintiffs should be mindful of the risks before launching a defamation suit. If they do intend on proceeding with the claim, they must be armed to respond to such a motion.

Please reach out to a member of Dentons’ Technology, New Media and Intellectual Property Group if you are considering commencing a defamation lawsuit. This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.

¹ Canadian Thermo Windows Inc. v. Seangio, 2021 ONSC 6555 [Canadian Thermo].
² Courts of Justice Act, RSO 1990, c C-43, s 137.1(3) [CJA].
³ CJA, ibid, s. 137.1(4)(b).
4 Canadian Thermo at para 134.