Nyg å rd International Partnership v. Canadian Date:, 2012 MBCA 8

Citation: Nyg å rd International Partnership v. Canadian Date: 20120130 Broadcasting Corp. et al., 2012 MBCA 8 Docket: AI 11-30-07606 IN THE COURT OF APPEAL OF MANITOBA Coram : Chief Justice Richard J. Scott Mr. Justice Michel A. Monnin Mr. Justice Alan D. MacInnes B E T W E E N : NYG Å RD INTERNATIONAL ) R. L. Tapper, Q.C. and PARTNERSHIP ) C. C. Wullum ) for the Appellants (Plaintiff) Respondent ) ) - and - ) R. I. Good and ) D. A.

Simpson CANADIAN BROADCASTING ) for the Respondent CORPORATION, DAVID STUDER and ) TIMOTHY SAWA ) ) Appeal heard and (Defendants) Appellants ) Decision pronounced: ) January 23, 2012 - and - ) ) PATRICK PROWSE and DANA NEAL ) Written reasons: ) January 30, 2012 (Defendants) ) SCOTT C.J.M. 1 The appellants (the CBC defendants) appeal to this court from the decision of a Court of Queen’s Bench motions court judge dismissing their application to strike out the respondent’s (Nyg å rd) statement of claim.

The CBC defendants allege that the proceedings are frivolous, vexatious and an abuse of process contrary to Rule 25.11 of the Queen’s Bench Rules. At the conclusion of argument, we dismissed the appeal with costs. These are our reasons for doing so. 2 On March 13, 2009, Nyg å rd sued the CBC defendants, alleging that they interfered with its contractual relations, induced breaches of contract or otherwise interfered with Nyg å rd’s economic interests, converted proprietary information or engaged in a conspiracy.

This took place, according to the statement of claim, when the CBC defendants induced certain existing or former employees of Nyg å rd to breach the provisions of their employment contracts by providing CBC with confidential information, which eventually formed the basis of a major television expos é concerning Nyg å rd’s business practices. 3 In their defence, the CBC defendants deny, inter alia , that they were aware of any confidentiality agreements or fiduciary duties that might pertain between Nyg å rd and its employees or that they induced or caused any employee to breach their contractual obligations.

They further assert that Nyg å rd’s action “constitutes libel chill,” in that it is attempting to suppress the right of freedom of expression without a proper or valid basis, relying on s. 2(

b) of the Canadian Charter of Rights and Freedoms (the Charter ). 4 The CBC defendants then moved to strike out the statement of claim on the grounds earlier referred to. They did not include as a ground that the statement of claim disclosed no reasonable cause of action. 5 Before this court, the CBC defendants argued that since the recent decisions of the Supreme Court in Grant v. Torstar Corp. , 2009 SCC 61 , [2009] 3 S.C.R. 640, and Quan v. Cusson , 2009 SCC 62 , [2009] 3 S.C.R. 712 (see, as well, Globe and Mail v.

Canada (Attorney General), 2010 SCC 41, [2010] 2 S.C.R. 592), it cannot be doubted that the rights encompassed under the freedom ofexpression guarantee in s. 2(

b) of the Charter include not only the right to disseminate information, but to gather it. Without the basicright to obtain the information, there can be no dissemination. 6 In reality, the CBC defendants say this is an action in defamation and should be treated as such. This being so, a newdefence of responsible communication on matters of public interest (see Grant) is available to the CBC defendants in defamationproceedings.

In particular, emphasis is placed on paras. 83-85 of Globe and Mail, which stand for the proposition that the media’sability to do research and further investigation should be facilitated, and not thwarted by actions such as this, which is a pre-emptiveinterference with the media’s ability to gather information in the public interest. 7 In oral argument before this court, the CBC defendants stressed that, in their opinion, there were no facts pled to supportthe allegations contained in the statement of claim that the CBC defendants wrongly induced the Nygård employees to breachconfidentiality.

In other words, they now asserted that the statement of claim disclosed no reasonable cause of action. 8 The submission that the statement of claim is deficient in this regard is incorrect.

The motions court judge was entirelyright when she concluded (at para. 31): The claim alleges that by inducing current and former employees of Nygard International to breach their duties the CBC defendantsintentionally interfered with the plaintiff’s economic interests thereby causing damage. 9 Nygård says that the cause of action is for breach of the “economic torts,” as pled, and that the media does not have anunrestricted right to gather information by unlawful means, which is what occurred here. 10 What the CBC defendants’ submissions overlook is that this is an application to stop the Nygård action in its tracks withouthearing any evidence.

This can only be done where “there is no probable justification at law for the claim advanced” (Kreiner v. AuditorGeneral (Man.), 2007 MBCA 154 at para. 3, 220 Man.R. (2d) 302). Similarly, Bartmanovich et al. v. Manitoba Crop Insurance Corp.et al. (1995), (MB KB), 103 Man.R. (2d) 89 at para. 8 (Q.B.), aff’d (1996), (MB CA), 107Man.R. (2d) 157 (C.A.), makes it clear that pleadings can only be struck out as being frivolous or vexatious if there is no probablejustification at law and where there is an ulterior purpose for the action.

This principle applies with equal force when it is argued that thestatement of claim discloses no reasonable cause of action. Abuse of process only occurs when there has been a violation of thefundamental principles of justice. 11 Furthermore, this is an appeal from a discretionary decision of a motions court judge. In order to succeed, the CBCdefendants must demonstrate that the decision was clearly wrong or there was a clearly unjust result. See Towers Ltd. v. Quinton’sCleaners Ltd. et al., 2009 MBCA 81 at para. 28, 245 Man.R. (2d) 70, and Hozaima v.

Perry et al., 2010 MBCA 21 at paras. 16-17, 251Man.R. (2d) 148. 12 We are not prepared to interfere with the exercise of the motions court judge’s judicial discretion. We see no error in theprinciples that she applied in the exercise of her discretion, nor in the result.

Simply put, evidence is required to determine the extent ofthe CBC defendants’ knowledge, if any, concerning the contractual obligations of the Nygård employees and the nature and extent of thealleged inducements. 13 We do not disagree with the CBC defendants’ submission that “the point at issue, being the media’s right to investigate andgather information without undue interference at the pre-publication stage, is an important issue.” But we do not accept that the decisionshould occur “now,” at the pleading stage, as the CBC defendants argue, absent the context and factual matrix to enable the court toproperly and fully adjudicate upon all the issues between the parties. 14 In the result, the appeal is dismissed with costs. _____________________________ C.J.M.

I agree: _______________________________ J.A. I agree: _______________________________ J.A.