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A judge has dismissed a construction company’s defamation suit against The Globe and Mail, citing a new Ontario law aimed at protecting freedom of expression. The case is the first major test of how the legislation applies to investigative journalism.

But Ontario Superior Court Justice Edward Morgan did so reluctantly. He said that because The Globe had a valid defence of fair comment on a matter of public interest, he was obliged to dismiss the lawsuit. But he said doing so seemed to defeat the purpose of the new law, which is to stop lawsuits being used as a tool of intentional intimidation.

“I am not satisfied that this conclusion truly fulfills the legislative purposes” of the new law, he wrote in a 17-page decision released on Wednesday. “In requiring an otherwise serious and meritorious claim to be dismissed because at this stage a potential defence cannot be eliminated,” the law risks tipping the balance further in the publisher’s favour than the legislature intended. “The goal is to foster free expression on matters of public interest, but not to ‘create a safe space’ for defamation.”

In 2015, Ontario passed the Protection of Public Participation Act. It is known as an anti-SLAPP law − one of several in North America aimed at protecting individuals and the news media from lawsuits intended to silence them. (SLAPP stands for strategic lawsuit against public participation.)

Bondfield Construction Co. Ltd. sued The Globe for defamation over five articles in a seven-part series in 2015 and 2016 which revealed links between that company’s president and a senior executive at St. Michael’s Hospital in Toronto. That St. Michael’s executive had been complicit in a financial fraud when he was employed by Infrastructure Ontario. Bondfield had been awarded a $300-million contract by the hospital.

The Globe asked Justice Morgan to reject the lawsuit under the 2015 anti-SLAPP law. The Globe’s lawyers describe the case as the first test of a major lawsuit against a large media company under that law. (Several smaller cases are currently before the Ontario Court of Appeal.)

Under the anti-SLAPP law, Bondfield had a relatively high burden, Justice Morgan said, to show why its suit should continue when the stories that were the subject of the lawsuit touched on the public interest.

Bondfield needed to show that its defamation suit has substantial merit; that The Globe has no valid defence against that lawsuit; and that the harm suffered by Bondfield outweighed the public interest in protecting The Globe’s freedom of expression in publishing the stories at issue.

Bondfield said the articles had a “devastating” effect on its reputation and caused it to lose business. Justice Morgan accepted that the articles harmed the company’s reputation, and were therefore defamatory, though he said the company may have lost business over its president’s decision-making, as opposed to the reports themselves.

The Globe raised the defence of fair comment and responsible communication. Justice Morgan accepted that the fair-comment defence was possible. “The existence of a fair comment defence assures the success of The Globe’s motion,” he wrote. Citing what he described as “omissions” in the reporting, however, he said he wasn’t sure whether the articles qualified as responsible journalism.

Justice Morgan also ruled that the harm done to the company outweighed the public interest in the reports themselves. While The Globe said the lawsuit cast a “libel chill” on subsequent reporting on the same subject, Justice Morgan was skeptical.

The Globe greeted the court ruling as a positive development.

“Investigative journalism takes time,” David Walmsley, the paper’s editor-in-chief, said. “And in this case, the effort didn’t end with the publication of the story. Instead, hundreds if not thousands of hours were committed to defending the accuracy and fairness of our work. The effort forced us to delay unrelated investigations as we mounted a defence of our journalism. This court victory is the culmination of one of the most time-consuming, expensive and labour intensive pieces of pretrial litigation The Globe and Mail has ever been involved in.”

Kevin O’Brien, a lawyer representing Bondfield, said the company intends to appeal the ruling, adding: “Bondfield is obviously disappointed in the result. However, Bondfield is heartened that the judge expressly acknowledged that its claim has substantial merit, and he was deeply critical of The Globe’s reporting.”

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