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Bad Faith - SLAPP. Sheridan Retail Inc. v. Roy
In Sheridan Retail Inc. v. Roy (Ont CA, 2026) the Ontario Court of Appeal dismisses a plaintiff's appeal (though allowing the costs appeal), here brought against a successful defendant's CJA s.137.1(3) SLAPP dismissal motion regarding an action that was first advanced in defamation and some economic torts - but then re-focussed to center on a trespass that the defendant engaged in to gather photo evidence of their allegations.
Here the court considers the requirements of the 'bad faith damages' provision under CJA s.137.1(9) ['Dismissal of proceeding that limits debate - Damages']:4. DID THE MOTION JUDGE ERR BY AWARDING DAMAGES?
[99] Section 137.1(9) permits motion judges to award damages on the following limited terms:(9) 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. [100] Requiring “bad faith” or “an improper purpose” means that damages are appropriate only in the subset of SLAPP cases that “go beyond simply reflecting an effort to limit expression and include active efforts to intimidate or to inflict harm on the defendant”: 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). Damages may be presumed to arise “from the use of a SLAPP lawsuit” and medical evidence is not necessary to support a claim for damages: United Soils, at para. 36.
[101] The motion judge awarded $25,000 in damages after correctly cautioning herself to do so only to compensate Mr. Roy, not to punish or sanction SRI: see United Soils, at para. 38. She concluded that the “significant damages” award she identified was appropriate given:(1) The stress and anxiety Mr. Roy suffered from SRI’s treatment and the lawsuit;
(2) SRI belittled and ridiculed Mr. Roy and his family during the public consultation process;
(3) SRI intimidated Mr. Roy by threatening legal action in the lead up to City Council’s vote on the redevelopment project;
(4) SRI engaged in overly aggressive litigation tactics, including by suing for $300,000, filing an irrelevant 1600-page expert report, and seeking to prune its claim on the eve of the motion; and
(5) SRI imposed a chill on Mr. Roy’s public expression such that he chose not to engage in SRI’s appeal of City Council’s decision. [102] SRI argues that the motion judge erred by applying an incorrect test for awarding damages and by making palpable and overriding errors in arriving at each of the findings that she relied upon. I would not give effect to this ground of appeal.
[103] I see no basis for concluding that the motion judge misapplied the test. She did not ground her damages award in the mere fact, inherent in all successful anti-SLAPP motions, that the proceeding sought to suppress expression. She found that SRI used the lawsuit, with its extravagant damages claim and the massive opinion it secured, to intimidate Mr. Roy, and that SRI conducted itself in what she clearly considered to be a bullying fashion to stop his public participation. These findings satisfy both the “bad faith” and “improper purpose” prerequisites.
[104] I have also considered each of the challenges SRI makes to the reasonableness of the motion judge’s factual findings and I am unpersuaded that they demonstrate palpable errors, let alone overriding ones.
[105] Ultimately, the decision to award damages was a discretionary one that we must defer to, whether we would have imposed damages or not: 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685, 142 O.R. (3d) 161, at para. 47, aff’d 2020 SCC 22, [2020] 2 S.C.R. 587. I would not interfere and would deny this ground of appeal.
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