Absolute Privilege: Does It Protect Against Defamatory Comments About Third Parties?

The Alberta Court of King’s Bench, in Tuharsky v. O’Chiese First Nation and Poole Lawyers, has ruled that it is a triable issue as to whether a third party can commence an action for defamation arising from statements made in pleadings and in a fee review hearing. The application to strike that claim was dismissed on the basis that it is unclear as to whether absolute privilege applies in those circumstances.

Background

The plaintiff in this action was the former General Counsel for the O’Chiese First Nation (O’Chiese). O’Chiese had engaged a law firm to pursue litigation that was not successful, but had ceased using that law firm and had retained another law firm to commence an action against the former law firm claiming negligent representation, an alleged conflict of interest, and excessive fees in their retainers with O’Chiese. The former law firm denied the claims in its Statement of Defence.

O’Chiese’s Reply to the Statement of Defence focused on the relationship between O’Chiese, its former law firm, and the General Counsel, who was not a party to the proceeding. The Reply named the General Counsel personally, impugned her legal abilities, and alleged that she was acting without authority in instructing O’Chiese’s former law firm, that she conspired with another person to mislead O’Chiese, and that her relationship with that other person was suspect and improper.

O’Chiese’s new counsel also applied for an appointment to review all legal accounts rendered by its former law firm. The Review Officer found the fees charged by O’Chiese’s former counsel were reasonable and stated that O’Chiese’s new counsel came “extremely close” to making “inappropriate and unfounded allegations” that the General Counsel and another person had an “improper” relationship. The General Counsel thereafter filed a claim for defamation against, among others, O’Chiese and their new counsel. The defamation claim was based on the pleadings against the former law firm and the fee review hearings.

The defendants brought an application to strike the General Counsel’s Amended Statement of Claim on the basis that the claim was defeated by the doctrine of absolute privilege. The Applications Judge agreed and struck the Amended Statement of Claim, but that decision was overturned by the Alberta Court of King’s Bench.

The Appeal Decision

On appeal, the Court confirmed that absolute privilege attaches to communications made “during, incidental to, and in the processing and furtherance of, judicial or quasi-judicial proceedings.” While there was no dispute that the statements were made in judicial and quasi-judicial proceedings, the main question was whether the statements were made “during, incidental to, and in the processing and furtherance” of those proceedings.

The Court held that because absolute privilege must be viewed contextually, the Court must assess how the statement “fits” into the proceedings and whether the statement was made within a “recognized step.” That may include assessing the purpose of a statement to determine whether it was “sufficiently related” to the proceedings. The Court noted that even if a statement was made within an occasion of absolute privilege, the same statement repeated in circumstances unconnected to the proceedings may not attract absolute privilege. Ultimately, the Court held that the making of the statement must be examined holistically and contextually to determine if there was an underlying connection between the making of the statement and the judicial or quasi-judicial proceeding. Given the unique circumstances of this matter, that was not clear.

The Court held that a statement made about a non-party will not automatically disqualify it from absolute privilege. However, making a statement about a non-party may be unconnected to a claim and thus the protection of absolute privilege may not apply. Ultimately, the Court held that it was not plain and obvious that absolute privilege applied because it was arguable that not all statements about the General Counsel were made during, incidental to, and in the processing and furtherance of the claim. The Court held that the lack of clarity required further exploration and findings on a full record. As a result, the Court set aside the Order striking the claim.

Key Takeaway

The doctrine of absolute privilege may not protect otherwise defamatory statements made about a third party who is not a party to the proceedings when those statements are insufficiently related to the proceedings.

Counsel should be circumspect in drafting pleadings which contain irrelevant or gratuitous statements, unconnected to the claim, about persons who are not parties to the action.

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