Appellant’s case against respondents sought damages for harassment, fraud, human rights violations
The Ontario Court of Appeal awarded damages under s. 137.1(9) of Ontario’s Courts of Justice Act, 1990 (CJA) upon dismissing the respondent’s counterclaim against an appellant who had sought damages for harassment, fraud, and violations of Ontario’s Human Rights Code, 1990.
The appellant, who had worked for the individual respondent, filed police complaints against him. A criminal prosecution against the individual respondent alleged criminal harassment, obstruction of justice, and forgery (two counts). The individual respondent pleaded guilty to one charge, and the Crown withdrew the other three.
An online article published in October 2020 concerned the criminal prosecution. In an interview quoted in the article, the appellant said the individual respondent had forged a promissory note and a fake lawyer’s letter and sent her derogatory and threatening emails after they had a contractual dispute.
The appellant said she believed the individual respondent posted an advertisement with her picture and phone number on websites associated with prostitution. The appellant expressed disappointment that the Crown had dropped three charges against the individual respondent, who had received a conditional discharge.
The appellant posted hyperlinks to the article and comments about its contents on social media, as well as an unfavourable review of the respondent corporation’s working conditions on another website.
In March 2022, the appellant commenced the proceeding numbered CV-22-88865 against the respondents. Seeking over $2 million in damages, she alleged that:
In April 2022, the respondents brought a counterclaim in response to the appellant’s action in CV-22-88865. In the proceeding numbered CV-22-89405, the respondents brought their own action against the appellant.
The appellant filed an anti-strategic lawsuit against public participation (SLAPP) motion under s. 137.1 of the CJA to dismiss the respondents’ counterclaim and action in CV-22-88865 and CV-22-89405.
On July 18, 2023, in Yates v. Iron Horse Corporation and St. Martin, 2023 ONSC 4195, Justice Sally A. Gomery of the Ontario Superior Court of Justice partly granted the anti-SLAPP motion.
The motion judge dismissed the respondents’ action seeking damages for defamation and malicious prosecution, but declined to dismiss their counterclaim seeking $2.5 million in damages for defamation.
On appeal, the appellant sought damages under s. 137.1(9) of the CJA, which permitted a judge granting an anti-SLAPP motion to award the moving party damages if they determined that the respondent brought the proceeding in bad faith or for an improper purpose.
Last Jan. 23, in Yates v. Iron Horse Corporation, 2026 ONCA 38, the Court of Appeal for Ontario allowed the appeal, dismissed the counterclaim, and referred the lost income claim to the Superior Court, which would resolve it as part of the appellant’s action.
The appeal court awarded the appellant $5,000 in s. 137.1(9) damages in connection with the dismissal of the counterclaim, as well as $10,000 in appeal costs.
The appeal court ruled that the motion judge’s findings – including that the counterclaim had a SLAPP’s hallmarks and that the respondents had a history of strategically using threatened or actual litigation – all favoured dismissing the counterclaim.
The appeal court noted that the judge relied on the respondents’ interest in seeking redress, without evidence of harm and causation of harm, and on the overlap between the claim and the counterclaim. The appeal court deemed the reliance on these matters misplaced.
The appeal court held that the judge’s reliance on the respondents’ interest in seeking redress, absent evidence of harm and causation of harm, ignored the statutory text of the harm analysis.
The appeal court determined that the overlap between the claim and the counterclaim had no relation to the harm analysis or the public interest in protecting the appellant’s expression. The appeal court added that the overlap on its own could not anchor a refusal to dismiss the counterclaim.
Given that the appeal succeeded on a weighing exercise under s. 137.1(4)(b) of the CJA, the appeal court saw no need to address the remaining appeal grounds relating to the analysis of defences.
