The Claim Must Have Substantial Merit
| Author | David A. Potts; Erin Stoik |
| Pages | 147-156 |
147
16
The Claim Must Have Substantial Merit
In order to proceed past the merits hurdle, the plaintiff must first prove that
their claim has substantial merit.
SUPREME COURT DISCUSSION
1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22 at paras 44–54:
[44] The question under s. 137.1(4)(a)(i) is whether the underlying proceeding
has “substantial merit.” I proceed to elucidate what “substantial merit” means
and what the responding party (i.e. plainti) needs to show in order to satisfy
its burden.
[45] I begin with an analysis of the statutory text. The legislature’s express
choice to use the specific word substantial as a qualifier must be given effect.
Indeed, the use of the word substantial functions markedly differently than
a qualifier such as having some merit, any merit, or just merit absent a quali-
fier. Black’s Law Dictionary acts as an interpretive aid in discerning the exact
meaning of “substantial,” which it defines as follows:
1. Of, relating to, or involving substance, material
in circumstances>. 2. Real and not imaginary; having actual, not ficti-
tious, existence . 3. Important, essen-
tial, and material; of real worth and importance .
(Black’s Law Dictionary (11th ed. 2019), at p. 1728)
[46] This definition of “substantial” must be read in the context of
s.137.1(4)(a)(i), in which this word modifies “merit”. Accordingly, it must be asked
what is meant by “merit”. The use of the word “merit” in the context of a
s. 137.1 motion fundamentally calls for a determination of the prospect of
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success of the underlying proceeding. Indeed, what is at stake here is the
potential dismissal of the proceeding without any opportunity to amend it:
while the threshold burden under s. 137.1(3) is concerned with identifying an
expression relating to a matter of public interest for protection, s. 137.1(4)
engages the competing interest at play—ensuring that a plaintiff with a legit-
imate claim is not unduly deprived of the opportunity to pursue it; this is why
the burden is on the plaintiff to ensure that its claim is not dismissed. Thus,
given its ordinary meaning and when read in context, “merit” refers fundamen-
tally to the strength of the underlying claim, as a stronger claim corresponds
with a weaker justification to dismiss the underlying proceeding.
[47] Legislative intent provides a further indication of how “substantial
merit” ought to be interpreted. Indeed, “statutory interpretation cannot be
founded on the wording of the legislation alone” (Rizzo & Rizzo Shoes, at para. 21).
The APR did not offer much guidance on the meaning of “substantial merit.”
It stated, however, that “the fact that a plaintiff’s claim may have only tech-
nical validity should not be sucient to allow the action to proceed” (para. 37
(emphasis added)). This was echoed in the Legislative Assembly of Ontario:
“I do not believe that a mere technical case—without actual harm—should be
allowed to suppress the kind of democratic expression that is crucial for our
democracy” (at p. 1972 (emphasis added) (Hon. Madeleine Meilleur)); “[i]t is
also important that we recognize the strain that frivolous lawsuits place on
our province’s busy court system” (at p. 1973 (emphasis added) (Mr. Lorenzo
Berardinetti)); “this legislation protects the people from frivolous lawsuits” (at
p. 1975 (emphasis added) (Mr. Randy Pettapiece)); “if someone does have a
legitimate claim that is not frivolous . . . you can still bring that type of lawsuit”
(Ocial Report of Debates (Hansard), No. 112, 1st Sess., 41st Parl., October 27,
2015, at p. 6025 (emphasis added) (Mr. Jagmeet Singh)). While I acknowledge
that the above excerpt from the APR is from the “Balancing interests” sec-
tion of that report, the consistency of the language used in the legislative
debates shows that the same concern informed the legislature’s understand-
ing of how s. 137.1 would operate. It was clearly of the view that even if a
proceeding was not merely frivolous or vexatious, or was technically valid,
this should not be sucient to allow the proceeding to continue. This is
fundamentally a question that depends on the merits of the underlying pro-
ceeding, which makes the foregoing references well-suited as an interpretive
aid under s. 137.1(4)(a)(i) given the statutory language ultimately used in the
provision. Accordingly, it is clear from the legislative context that the words
“substantial merit” are animated by a concern with making sure that, at a
minimum, neither “frivolous” suits nor suits with only “technical” validity
The Claim Must Have Substantial Merit | 149
are sucient to withstand a s. 137.1 motion. Substantial merit must mean
something more.
[48] However, while frivolous suits are clearly insucient, “something
more” cannot require a showing that a claim is likely to succeed either, as
some parties have posited. Neither the plain meaning nor the legal definition
of “substantial” comports with a “likely to succeed” standard. The legislative
and statutory context does not support such a standard either. If “substantial
merit” requires a showing of being likely to succeed, this could unduly pre-
vent cases from proceeding to the crux of the inquiry that is the weighing
exercise under s. 137.1(4)(b). Given the importance of the weighing exercise
in the legislative history, this cannot possibly be what the legislature contem-
plated. Indeed, nothing in the legislative history—whether in the APR or in the
legislative debates—points to a “likely to succeed” standard as the threshold
for the plaintiff to prevail at themerits-based hurdle of s. 137.1. While the
plaintiff need not definitively demonstrate that its claim is more likely than
not to succeed, the claim must nonetheless be suciently strong that termin-
ating it at a preliminary stage would undermine the legislature’s objective of
ensuring that a plaintiff with a legitimate claim is not unduly deprived of the
opportunity to vindicate that claim.
[49] Therefore, I conclude from the foregoing exercise of statutory inter-
pretation that for an underlying proceeding to have “substantial merit,” it must
have a real prospect of success—in other words, a prospect of success that,
while not amounting to a demonstrated likelihood of success, tends to weigh
more in favour of the plaintiff. In context with “grounds to believe,” this means
that the motion judge needs to be satisfied that there is a basis in the record
and the law—taking into account the stage of the proceeding—for drawing
such a conclusion. This requires that the claim be legally tenable and sup-
ported by evidence that is reasonably capable of belief.
[50] Importantly, this standard is more demanding than the one applic-
able on a motion to strike, which requires that the claim have some chance of
success under the “plain and obvious” test (Hunt v. Carey Canada Inc., 1990
CanLII 90 (SCC), [1990] 2 S.C.R. 959). It is also more demanding than requiring
that the claim have a reasonable prospect of success, which is a standard that
this Court has also used to animate the “plain and obvious” test (R. v. Imperial
Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 17-20). In light of
the existence of a record, the substantial merit standard calls for an assess-
ment of the evidentiary basis for the claim—this is why the claim must be
supported by evidence that is reasonably capable of belief. This is consistent
with the APR’s references to “substantive” merit, which inherently calls for
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an assessment of the basis or evidentiary foundation for a claim. I reiterate,
however, that a claim with merely some chance of success will not be su-
cient to prevail. Nor will a claim that has been merely nudged over the line
of having some chance of success. A real prospect of success means that the
plaintiff’s success is more than a possibility; it requires more than an arguable
case. As I said in the preceding paragraph, a real prospect of success requires
that the claim have a prospect of success that, while not amounting to a dem-
onstrated likelihood of success, tends to weigh more in favour of the plaintiff.
For a judge undertaking this inquiry, it is critical to recall that a s. 137.1
motion is not a determinative adjudication of the merits of the proceeding
and, rather than having to be established on a balance of probabilities, sub-
stantial merit is instead tempered by a “grounds to believe” burden.
[51] The substantial merit standard is less stringent, however, than the
“strong prima facie case” threshold, which requires a “strong likelihood of suc-
cess” (R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 S.C.R. 196), or the
test for summary judgment, under which a legally sound claim supported by
evidence reasonably capable of belief may nonetheless raise “no genuine issue
Hryniak was admittedly decided in the context of summary judgment motions,
which call for an ultimate determination of the merits of a proceeding, that
case is relevant at this juncture in order to assess the role of s. 137.1 motions:
such motions do not exist in a vacuum and must necessarily be fulfilling a func-
tion different than other motions. Although too low a standard risks defeating
the purpose of the distinct process for dismissal established by s. 137.1, too
high a standard risks promoting a counter-productive culture whereby parties
are forced to routinely compile detailed records similar to those expected on
summary judgment motions or even trials.
[52] It is therefore important to recognize how s. 137.1 motions differ
from summary judgment motions, as briefly touched on in the preceding sec-
tion. Section 137.1 motions are made at an earlier stage in the litigation process,
with much more limited evidence and corresponding procedural limitations
(see s. 137.2). As a result, a motion judge deciding a s. 137.1 motion should engage
in only limited weighing of the evidence and should defer ultimate assessments
of credibility and other questions requiring a deep dive into the evidence to a
later stage, where judicial powers of inquiry are broader and pleadings more
fully developed. This is not to say that the motion judge should take the motion
evidence at face value or that bald allegations are sucient; again, the judge
should engage in limited weighing and assessment of the evidence adduced.
This might also include a preliminary assessment of credibility—indeed, the
The Claim Must Have Substantial Merit | 151
legislative scheme allows limited cross-examination of aants, which suggests
that the legislature contemplated the potential for conflicts in the evidence
that would have to be resolved by the motion judge. However, s. 137.1(4)(a)(i)
is not an adjudication of the merits of the underlying proceeding; the motion
judge should be acutely conscious of the stage in the litigation process at which
a s. 137.1 motion is brought and, in assessing the motion, should be wary of
turning his or her assessment into a de facto summary judgment motion, which
would be insurmountable at this stage of the proceedings.
[53] Finally, in determining the ambit of “substantial merit”, the statutory
context of s. 137.1 must be borne in mind: even if a lawsuit clears the merits-
based hurdle at s. 137.1(4)(a), it remains vulnerable to summary dismissal as a
result of the public interest weighing exercise under s. 137.1(4)(b), which pro-
vides courts with a robust backstop to protect freedom of expression.
[54] In summary, in light of the foregoing analysis, to discharge its
burden under s. 137.1(4)(a)(i), the plaintiff must satisfy the motion judge
that there are grounds to believe that its underlying claim is legally tenable
and supported by evidence that is reasonably capable of belief such that
the claim can be said to have a real prospect of success.
Grant v Torstar Corp, [2009] 3 SCR 640 at para 28:
[28] A plaintiff in a defamation action is required to prove three things to
obtain judgment and an award of damages: (1) that the impugned words
were defamatory, in the sense that they would tend to lower the plaintiff’s
reputation in the eyes of a reasonable person; (2) that the words in fact
referred to the plaintiff; and (3) that the words were published, meaning that
they were communicated to at least one person other than the plaintiff. If
these elements are established on a balance of probabilities, falsity and dam-
age are presumed, though this rule has been subject to strong criticism . . . The
plaintiff is not required to show that the defendant intended to do harm, or
even that the defendant was careless. The tort is thus one of strict liability.
The substantial merit requirement has been met in the following cases:
Bent v Platnick, 2020 SCC 23 at para 100:
[100] Ultimately, Dr. Platnick’s claim quite clearly satisfies the three criteria for
making out a claim for defamation. His claim is legally tenable and supported
by evidence that is reasonably capable of belief, such that it can be said to
have a real prospect of success. Thus, there are grounds to believe that Dr.
Platnick’s defamation claim has substantial merit under s. 137.1(4)(a)(i).
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Further Examples from Other Courts
• BW (Brad) Blair v Premier Doug Ford, 2020 ONSC 7100 at para 24
• Niu v Cao, 2020 ONSC 5407: the court found that the plaintiff had shown
that the case had substantial merit at 3(ii), including the fact that there
were grounds to believe that the statements referred to the plaintiff at
paras 68–74
• 910938 Ontario Inc v Moore, 2020 ONSC 4553 at paras 23–31
• Hamlin v Kavanagh, 2019 ONSC 5552 at paras 39–53
• Ferreira v Da Costa, 2019 ONSC 1853 at paras 29–33
• Canadian Standards Association v PS Knight Co Ltd, 2019 ONSC 1730 at
paras 38–45
• Sokoloff v Tru-Path Occupational Therapy Services Ltd, 2019 ONSC 4756
at paras 34–40
• Kenaidan Contracting Ltd v Lancaster Group Inc, 2019 ONSC 4482 at
paras 61–67
• Labourers’ International Union of North America, Local 183 v Castellano,
2019 ONSC 506 at paras 27–40
• Platnick v Bent, 2018 ONCA 687
• Paramount v Johnston, 2018 ONSC 3711 at para 52
• Lascar is v B’nai Brith Canada, 2018 ONSC 3068 at paras 42–46
• New Dermamed Inc v Sulaiman, 2018 ONSC 2517 at para 35
• Bondfield Construction Co v The Globe and Mail, 2018 ONSC 1880 at para 44
• Montour v Beacon Publishing Inc, 2017 ONSC 4735 at paras 23–24
• Rizvee v Newman, 2017 ONSC 4024 at paras 68–79
• Thompson v Cohodes, 2017 ONSC 2590 at paras 13–16
There is a useful discussion about the determination of the defamatory
meaning requirement in anti-SLAPP proceedings in Mazhar v Farooqi, 2020
ONSC 3490 at paras 44–55. See also:
• Lyncaster v Metro Vancouver Kink Society, 2019 BCSC 2207 at paras 30–37
• Hobbs v Warner, 2019 BCSC 2196 at paras 149–163
• Neufeld v Hansman, 2019 BCSC 2028 at paras 77–83
There have been cases where no express reference to the plaintiff was
made in the expression, but it was still found that the reference did indeed
refer to the plaintiff. For example, in Niu v Cao, 2020 ONSC 5407, the court
found that the case had substantial merit at 3(ii), including the fact that
The Claim Must Have Substantial Merit | 153
there were grounds to believe that the statements referred to the plaintiff,
at paras 68–75.
See also:
• Ferreira v Da Costa, 2019 ONSC 1853
• Labourers’ International Union of North America, Local 183 v Castellano,
2019 ONSC 506 at para 79
CLAIMS THAT DO NOT HAVE SUBSTANTIAL MERIT
In the following circumstances, the plaintiff’s case was dismissed as the judge
found that the claim did not have substantial merit.
Words Were Not Defamatory
United Soils Management Ltd v Mohammed, 2017 ONSC 4450 at paras 20–22 and 26:
Does the proceeding have substantial merit?
[20] The adjective “substantial” is important. It confirms the superior value
being attributed to the desire that people feel free to take part in our public
discourse. The acceptance that an action such as this one has merit (may, on
its own terms, succeed) is not enough to displace that value:
. . . Satisfying a judge that there are grounds to believe the claim has
“substantial merit” requires that the judge be satisfied that there is
credible and compelling evidence supporting the claim as being a ser-
ious one with a reasonable likelihood of success. . .
[21] To my mind there is no merit to this action much less “substantial
merit”. To determine whether the words complained of are defamatory, the
plaintiff must show the main thrust, or “defamatory sting,” of those words. In
every defamation action, the trier of fact must determine the defamatory
sting from both the plain meaning of the words complained of and from
what the ordinary, reasonable person would infer from them in the context
in which those words were published.
[22] As perceived by counsel on behalf of United Soils Management Ltd.,
the word “poison,” used as it was here in association with the word “children,”
cannot be understood in any context other than as referable to a criminal
act. He referred to the Criminal Code. Poisoning another person is a crime: . . .
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[26] To make the point that there was only one way to understand the
meaning of “poison” and that the explanation provided by Katie Mohammed
was inconsistent with that meaning, counsel attempted to distinguish the
verb “contaminate” as in “contaminate groundwater” from the verb “poison”
as in “poison our children”. He drew an allusion to a bowl of candies. If all the
candies were red and a single yellow candy was introduced it would serve to
“contaminate” the uniform colour of the contents of the bowl. On this founda-
tion “contamination” is benign whereas “poison” kills people. This is simplistic
in the extreme and I do not accept it as demonstrative of what the ordinary,
reasonable person would infer from these words as they were used by Katie
Mohammed. Groundwater is not candy and if the wrong things are disposed
of such that they come in contact with groundwater, more than its colour
may change. People may drink the water and be harmed. The word “poison”
can also be used with a nonthreatening intention. In some social circles the
command “choose your poison” is nothing more than asking what another
person may wish to drink and the expression “poisoning the well” alludes to
the biasing of an argument, understanding or position. The use of the word
“poison” in these contexts does not deny its common meaning. Rather it is a
figurative, as opposed to literal, use of the word to ask a question or make a
point in a more flamboyant or unusual way. The ordinary, reasonable person
has little diculty in making the distinction. What this underscores, is that the
meaning to be taken does depend on the context.
See also United Soils Management Ltd v Mohammed, 2019 ONCA 128 at paras
8, 16, and 20.
In Papa v Zeppieri, 2018 ONSC 7068, Copeland J explained in detail where
several different statements published in different forms ranging from social
media, to flyers, to advertisements are not defamatory. See para 54:
[54] Even if the statements could reasonably be found to have some minimal
defamatory sting, in my view a reasonable jury could only find that the defend-
ant has a valid defence of fair comment.
See also:
• Able Translations Ltd v Express International Translations Inc, 2018 ONCA
690 at para 25; Able Translations Ltd v Express International Translations
Inc, 2016 ONSC 6785 at paras 70 & 71
• Kett v Elston, 2018 ONSC 2991 at para 18
The Claim Must Have Substantial Merit | 155
• Progressive Conser vative Party of Ontario v Karahlios, 2017 ONSC 7696
at para 59
• Niagara Peninsula Conservation Authority v Smith, 2017 ONSC 6973 at
paras 11 and 77
Expression Did Not Reference Plaintiff
In certain cases, the plaintiff failed to prove that the statement in question
in fact referenced them.
McQueen v Reid, 2018 ONSC 1662 at para 25:
[25] The statement of claim alleges that the statement was calculated to dis-
parage the reputation and character of the plaintiff, and that it would have
a negative impact on his business relationships and livelihood. Because the
statement refers to the Authority as a whole and the subsequent reference
to Mr. McQueen does not refer back to the earlier comment, it is dicult to
see how the impugned statement could have been calculated to disparage the
plaintiff. I find that the plaintiff has failed to demonstrate, with compelling
and credible evidence, reasonable grounds to believe that the proceeding has
substantial merit.
See also Able Translations Ltd v Express International Translations Inc, 2016
ONSC 6785 at para 71.
Defamation Claim Failed on All Counts
DEI Films Ltd v Tiwari, 2018 ONSC 4423 at paras 50–51:
[50] In my opinion, DEI Films fails on all accounts; namely: (1) DEI Films’
action does not have substantial merit; (2) Mr. Tiwari and CMR 101.3 have the
defences that there was no defamatory statement, justification, and fair com-
ment; and (3) the harm suffered by DEI Films that can be connected to even
assuming a defamatory statement is not suciently serious that the public
interest weighs in favour of allowing the action to proceed.
[51] This is not a close call. There was nothing said expressly or said by
innuendo that was defamatory, and there is no evidence that a broadcast
less than three days had any effect on DEI Film’s ticket sales. Any suggestion
that CMR 101.3, whose principal was unaware of the concert until after the
event, was motivated by malice is absurd. And any suggestion that Mr. Tiwari
was motivated by malice is silly and contrary to the facts that establish that
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Mr.Tiwari was unaware of Mr. Panesar’s animus toward him and that Mr.
Tiwari was supportive of the concert going forward. The notion of a conspir-
acy to injure DEI Films by a broadcast of a matter of obvious public interest is
not supportable and this idea is just a feeble and failed effort to find a scape-
goat for the poor attendance at the concert. There was no defamatory state-
ment, and indeed the Defendants might well have succeeded on a motion
under Rule 21 that there was no reasonable cause of action pleaded. Even
assuming a defamatory statement, it is not serious enough to justify allowing
the action to proceed.
No Substantial Merit in Breach of Contract
• 1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22
No Substantial Merit in Negligence
In Subway Franchise Systems of Canada, Inc v Canadian Broadcasting Corpor-
ation, 2021 ONCA 25, the Court of Appeal dismissed the claim by Subway
against Trent in negligence as not tenable in law at para 131:
[131] The question of whether a duty of care is owed is a question of law, as
are the components of the duty of care analysis, including the question of
proximity: Maple Leaf (SCC), at para. 24. Subway’s negligence claim lacks a real
prospect of success. It is not legally tenable.
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