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BETWEEN
Plaintiffs (Appellants)
and
Defendants (Respondents)
William C. McDowell, Sana Halwani, Paul-Erik Veel and Brendan F. Morrison, for
the appellants
Christine Lonsdale, Gillian Kerr and William Main, for the respondents Canadian
Broadcasting Corporation, Charlie Agro, Kathleen Coughlin and Eric Szeto
On appeal from the order of Justice Edward M. Morgan of the Superior Court of
Justice, dated November 22, 2019, with reasons reported at 2019 ONSC 6758.
Thorburn J.A.:
A. OVERVIEW
[1] This is the appeal of an order dismissing the appellant Subway Franchise
action for defamation against the Canadian Broadcasting Corporation and certain
posts to the public, CBC represented that only approximately 50% of the DNA in
Subway chicken was chicken DNA. The report was based on test samples
Centre (“Trent”).
[3] The appellant Subway brought a $210 million action against the CBC and
Trent for defamation, and a claim against Trent only, for negligence. Subway
sought damages against CBC for loss of reputation, loss of sales, and damage to
[4] CBC and Trent each brought a motion pursuant to s. 137.1 of the CJA. CBC
sought to dismiss Subway’s entire action against it, while Trent sought to dismiss
the claim against it for negligence. The motion judge dismissed the action against
the CBC but allowed the negligence claim (which was the only subject of Trent’s
motion) to continue. He ordered Subway to pay full indemnity costs to the CBC,
[5] Both Subway and Trent have appealed. These reasons only address
Subway’s appeal of the dismissal of the action against CBC. The Trent appeal is
about issues of public interest. CBC claimed that Subway’s action amounted to a
[7] Subway claims the motion judge erred in dismissing Subway’s defamation
claim against the CBC. The motion judge held that the subject matter involves
(a) Subway did not establish that there are grounds to believe CBC has no valid
(b) The public interest favours dismissal of Subway’s action against the CBC
[11] After this appeal was heard, the Supreme Court of Canada released its
supplementary facta to address the effect of these decisions on this case. Both
parties agreed that this court’s approach in Pointes was largely affirmed by those
[12] For the reasons that follow, I would allow the appeal.
B. BACKGROUND EVIDENCE
[13] In July 2016, CBC contacted Trent to see if Trent could determine the
Trent was retained by the CBC and Matt Harnden conducted Trent’s testing.
[14] The Trent laboratory is not certified by the International Organization for
compliant with international standards for quality assurance.) Nor had Trent done
Trent’s reports.
(2) Requests for Response from Subway Prior to Airing the Program
[16] CBC was in touch with Subway’s public relations firm to advise that it was
conducting testing. On February 1, 2017, after six months of testing, the CBC wrote
to advise that they had “preliminary” results in respect of the DNA testing, to the
effect that Subway’s chicken products were 50% soy, and requested Subway’s
[17] On February 15, 2017, the CBC again wrote to Subway advising that they
would be broadcasting “next week”, and sought a response by February 17, 2017.
[18] On February 16, 2017, Subway asked for more information on the test
results and the CBC provided Subway with a copy of the tests.
noon. On February 20, 2017, Subway provided the CBC with the following
statement:
[20] The CBC provided additional information to Subway on February 21, 2017.
[22] On February 9, 2017, Dr. Hanner expressed concern about the test results:
“You need to be aware these results could easily be over-stated as the methods
(as reported) do not stand up to scrutiny because they lack detail and appear to
contain conflicting details”. (In an earlier telephone conversation with the CBC,
Dr. Hanner had stated that “DNA alone is probably not the answer”.)
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[23] However, on February 11, 2017, Dr. Hanner sent a follow up email to the
CBC to say that “I am happy with the follow up report and am pleased that they
acknowledge that they are reporting DNA ratios and that they cannot be taken as
[24] The Marketplace program was televised on February 24, 2017, the online
article reporting on the broadcast was published the same date, and a number of
Challenge”. The program compared the chicken content in chicken products sold
[28] In an interview between Agro and Ben Boher, a food scientist, Agro stated
that:
website called “What’s in your chicken sandwich? DNA tests show Subway
sandwiches could contain just 50% chicken”. The article reads in part as follows:
[31] On March 1 after the Marketplace program had aired, Dr. Hanner advised
[32] That same day, the CBC posted an online, post-publication follow-up story
entitled, “Subway defends its chicken”. The story included Subway’s own test
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results. The article concedes that DNA testing is “nuanced” and does not reveal
percentages, and explains that Subway’s own laboratory tests showed a 1% soy
CBC Marketplace story, as the story was widely reported or referenced throughout
[34] Certain Subway internal communications indicated that Subway at one time
considered that the Marketplace Report had only had a small impact on sales.
suffered significant financial losses. There was also evidence that Subway had
the CBC and Trent on January 4, 2018. In the Claim, Subway sought damages
against the CBC and its employees for defamation in the amount of $210 million.
[36] On September 24, 2019, the CBC brought a motion to dismiss the claim for
defamation against the CBC and its named employees, pursuant to section
Meilleur, was to “quickly identify and deal with strategic lawsuits, minimizing the
emotional and financial strain on defendants …and strike a balance that will help
ensure abusive litigation is stopped but legitimate action can continue”. (Legislative
[39] Consistent with these objectives, the motion judge need only conduct a
out of an expression that relates to a matter of public interest. Section 137.1 of the
[43] If the expression is found to relate to a matter of public interest, the onus
[45] He then correctly noted that once the “public interest” threshold is crossed,
the onus shifts to the responding party (in this case, Subway) to establish that the
[46] The motion judge accepted that Subway’s claim has substantial merit. He
held that:
(a) The CBC established that the communications are expressions on matters
[48] The issues to be determined on this appeal are whether the motion judge
erred in deciding that Subway has not satisfied its onus to establish that:
(a) There are grounds to believe CBC has no valid defence; and
(b) The public interest in protecting the expression outweighs Subway’s likely
harm.
[49] Subway also claims CBC should not have been awarded costs of the
(1) The First Issue: S. 137.1(4)(a): Whether Subway established that there
(a) Applying the wrong test in deciding whether there were grounds to believe
(b) Assessing the claim as though he were the ultimate trier of fact, not a motion
Defence
[51] Pointes and Bent, the two seminal decisions on the subject of s. 137.1 of the
CJA, had not yet been released when the motion judge delivered his reasons.
[52] Findings of “‘substantial merit’ and ‘no valid defence’ should be seen as
[53] The plaintiff is only “required to show that there is a basis in the record and
the law — taking into account the stage of the proceeding — to support a finding
that the defences … do not tend to weigh more in [the defendant’s] favour.”
[54] “Grounds to believe” means “something more than mere suspicion, but less
Citizenship and Immigration), 2005 SCC 40, [2005] 2 S.C.R. 100, at para. 114;
[55] Given the early stage of the proceeding, that damage assessment can be
an ongoing process, and that such motions are meant to weed out clearly defective
claims, there is only a limited assessment of the evidence from the motion judge’s
or inferences to be drawn from competing primary facts, the motion judge must
avoid taking a “deep dive” into the ultimate merits and instead, engage in a much
[56] “A determination that a defence ‘could go either way’ in the sense that a
reasonable trier could accept it or reject it, is a finding that a reasonable trier could
reject the defence.”: Bondfield Construction Company Limited v. The Globe and
[57] As Cavanagh J. so aptly put it: “Where a trier could reasonably conclude
that the defendants did not conduct a sufficiently diligent investigation… a trier
[58] The defence of responsible communication will apply where the publication
is on a matter of public interest, and the publisher diligently tried to verify the
(g) whether the defamatory statement’s public interest lay in the fact that it was
Grant v. Torstar Corp., 2009 SCC 61, [2009] 3 S.C.R. 640, at para. 126.
Corporation, 2015 BCSC 215, at paras. 498-530 and Grant, at para. 122.
[60] The motion judge acknowledged that if Subway is able to establish that a
trier of fact could reject the CBC’s defence of responsible communication, the case
[61] He also acknowledged that his role was only to conduct a “limited merits
probabilities that there are reasonable grounds to believe CBC has “no valid
[62] The motion judge held that Subway did not satisfy its onus to show there
succeed because:
(b) Trent ran multiple tests on the Subway products all of which found that
Subway’s chicken had substantially more plant DNA than the others;
(c) CBC retained an outside expert in DNA testing who confirmed that Trent’s
(d) CBC provided the results to Subway and asked them to respond. Subway
had ample time to respond to the CBC before the program was aired;
(e) Subway’s only response was that its chicken was supplied by a third-party
source and all chicken items are inspected by the Canadian Food Inspection
Marketplace Report;
(g) Subway declined to supply its own test data to the CBC;
(h) Subway refused to appear in the CBC broadcast on February 24, 2017; and
(i) After the program was aired, on March 1, 2017, the CBC posted an online,
story included Subway’s own test results. The article concedes that DNA
testing is “nuanced” and does not reveal percentages, and explains that
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products.
(e) Analysis and Conclusion of the First Issue: Whether there are
[64] It is agreed that the claim has substantial merit. Moreover, CBC concedes
that a high degree of diligence was required, given the severity of the allegations
and their likely impact on Subway: Reasons of the motion judge, para. 56.
[65] The motion judge held that the CBC exercised due diligence before
publishing the findings and that Subway did not establish grounds to believe the
[66] In so finding, the motion judge erred in law by applying a standard that was
higher than the standard articulated by the Supreme Court in its recent decisions.
[67] In Bent at para. 103, the Supreme Court held that a plaintiff need only
demonstrate “that there is a basis in the record and the law — taking into account
the stage of the proceeding — to support a finding that the defences [the
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defendant] put in play do not tend to weigh more in [the defendant’s] favour.”
(emphasis in original).
the defence of responsible communication at this stage, does not tend to weigh
[70] Later in the legal proceeding, Dr. Rainer Schubbert, Subway’s expert on
DNA methods and food testing, testified that there were serious flaws in the tests
[71] Questions were raised about the reliability of the findings and the results.
The CBC concedes that a high degree of due diligence was required given the
information. Had more due diligence been conducted before its dissemination, the
[72] There is therefore a basis in the record to support a finding that the defence
of responsible communication does not tend to weigh more in CBC’s favour at this
[73] For these reasons, I find the motion judge erred in law by applying a
standard higher than the standard articulated in the recent Supreme Court cases
and Bent, the second issue must therefore be addressed as, in order to allow the
[75] To satisfy the public interest factor at s. 137.1(4)(b) of the CJA, Subway must
establish that “the harm likely to be or have been suffered by [Subway] as a result
of the [CBC’s] expression is sufficiently serious that the public interest in permitting
expression.”
(c) Considered the scope of Subway’s losses not in terms of the estimates of
(d) Failed to consider that this case does not bear the four hallmarks of a SLAPP
at para. 98.
[77] Subway contends it suffered significant loss of reputation, lost sales and
legal fees and its objective was simply to seek redress for those losses resulting
from allegedly false reporting. Subway submits it has no history of using litigation
[78] The CBC questions the extent of the harm suffered, notes Subway’s
extensive resources, and contends that Subway “brought its substantial financial
clout to bear on pursuing a damage claim that is out of all proportion to its realistic
losses, with the aim of silencing its critics such as CBC”: motion judge’s Reasons,
at para. 91.
[79] CBC takes the position that, “The disconnect between the amount claimed
[80] Section 137.1(4)(b) is the core of the s. 137.1 analysis. The stated objective
[81] Summary procedures such as this, are intended to avoid the need for a trial
where it is clearly unnecessary to achieve a fair result. They are not meant to
its own right in a democracy — affects, in turn, freedom of expression and its
[83] In assessing the harm likely to be suffered by a plaintiff, both monetary and
[84] The court in Pointes cited with approval the words of then Attorney General
[85] Neither reputational harm nor monetary harm is more important than the
other. Nor is harm synonymous with the damages alleged. The text of the provision
does not depend on a particular kind of harm, but expressly refers only to harm in
[86] A plaintiff must simply “provide evidence for the motion judge to draw an
inference of likelihood in respect of the existence of the harm and the relevant
power imbalance, punitive purpose, and minimal damages suffered. The potential
chilling effect on future expression and the defendant’s history of advocacy in the
[88] The motions judge noted that, “CBC’s estimate of the audience for the
CBC’s Marketplace Report is in the range of 858,000 viewers.” The CBC story was
also reported in publications such as USA Today, New York Post, Breitbart News,
pop culture reference, apparently complete with a joke about the issue on the
States to be in the range of $52.3 million, in Canada in the range of $1.5 million,
and Subway claims legal costs of dealing with the fallout are in the range of
$500,000.
[91] The motion judge accepted that the controversy became well known.
[92] The motion judge noted however that CBC’s scepticism that a Canadian
broadcast and publication would have such an impact in the United States, was
CBC claims they disclose that Subway concluded the broadcast and online
publication had some small impact on sales in Canada, but that bad weather was
the primary factor affecting Canadian sales post-Marketplace Report. In the United
States, a much bigger market, it did not appear to the Subway representatives on
that calls that the Marketplace Report had any noticeable impact on sales.
[93] Moreover, he held that “I cannot dismiss the [CBC]’s explanation out of
hand” that “Subway is using litigation as an intimidation tactic to chill any further
paras. 95 and 98, that in assessing the public interest in protecting the expression,
the interest,
[95] With this in mind, the question is whether the motions judge erred in law in
the manner in which he considered the harm Subway likely suffered, and in his
(c) that this proceeding does not bear the indicia of a SLAPP suit.
products are only half chicken in both Canada and the United States, assuming
those statements are false, is evidence from which one can infer that Subway likely
[98] Moreover, while some Subway representatives may have told franchisees
that Subway’s financial losses were smaller than the losses subsequently
calculated by Subway’s expert, the disconnect between that evidence was not a
some expert evidence that supported an inference that Subway may have suffered
reputational and financial harm. As Doherty J.A. said in this court’s decision in
Pointes at para. 78, “If the motion record raises serious questions about the
credibility of affiants and the inferences to be drawn from competing primary facts,
the motion judge must avoid taking a ‘deep dive’ into the ultimate merits of the
claim under the guise of the much more limited merits analysis required by
s. 137.1(4)(a).”
the fact that Subway is a large enterprise absent evidence that the proceeding was
[101] The fact that the alleged losses at this stage while substantial, are
considerably less than pleaded, does not mean they are not substantial. In any
event, the expert assessment of damages to date may not represent all losses as
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of the date of trial and the amount pleaded represents the maximum allowable
possibility that this was a SLAPP suit, the decisions of the Supreme Court in Bent
and Pointes hold that the s. 137.1(4)(b) stage involves a public interest weighing
exercise and not simply an inquiry into the hallmarks of a SLAPP: Pointes, at
arising from a defamatory statement may form part of the public interest weighing
inquiry: Bent, at para. 171. Here, there is no evidence of ulterior motive, abuse of
appropriate weight to the public interest in seeing harm arising from defamatory
statements remedied and the public interest in protecting the type of expression in
which CBC engaged. At the heart of the action is CBC’s ability to rely on the
deter others from expression, but should deter others from making remarks without
[104] For these reasons, I find the motion judge erred in law by engaging in an
[105] At this stage of the proceeding, the public interest in allowing the action to
[106] Subway submits that, in the event that the judgement is not set aside, leave
should be granted to appeal the Costs Award. Subway claims the award was
excessive and did not take into account the fact that the motion judge found the
claim had substantial merit. Subway claims the appropriate award should have
been $250,000.
with the result that CBC’s motion to dismiss the action against it is dismissed.
Accordingly, the motion judge’s costs order in favour of CBC must also be set
aside.
[108] Section 137.1(8) provides that the presumptive rule is that a failed motion to
dismiss attracts no costs order, unless the judge considers such an order to be
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appropriate. As the action will now proceed, it is not appropriate to order costs of
[109] For the above reasons, I would allow the appeal and allow the action to
[110] Subway is entitled to partial indemnity costs of this appeal. If the parties are
unable to agree on the quantum of costs of this appeal, they are to make brief
written submissions of no more than three pages, also within ten days of the