The Plaintiffs, two Calgary Police Service employees, sued the Defendants, a civilian and his lawyer, for defamation (the “Defamation Action”). The Defendant, Hardy, and his lawyer, Bates, filed a Statement of Claim in a previous Action which contained allegations of corruption, abuse of process, and serious police misconduct (the “Statement of Claim”). They then provided copies of the Statement of Claim to the media for publication. The previous Action was settled in 2023. The allegations contained in the Statement of Claim were never tried or determined by a Court. The publication of the Statement of Claim was the basis of the Defamation Action.

Hardy applied for Summary Judgement, dismissing the Defamation Action, because the underlying Action was settled. The Plaintiffs applied to strike that Application as an abuse of process, as Hardy had previously applied for Summary Judgement in 2019 and was unsuccessful.

Hardy argued that the Summary Judgement Application was not an abuse of process because it was founded on new evidence, being the Settlement of the underlying Action. On this issue, Justice Eamon held that the Summary Judgement Application was substantially different from the first, and thus was not an attempt to re-litigate the issues.

The Plaintiffs relied on Rule 4.27 to support their argument that acceptance of a Formal Offer to Settle is not an admission, and therefore the Summary Judgement Application was an abuse of process. On this alone, the Court did not find the Application to be abusive.

The Plaintiffs also argued that Hardy amending his Statement of Defence to include a general plea of truth (i.e., that his actions were not defamatory because the statements made in the Statement of Claim were true) was an abuse of process. Justice Eamon did not agree with this argument.

The Court considered Rules 4.24 and 4.25, which set out the requirements for Formal Offers to Settle and acceptance of such Offers. Eamon J. also considered Rule 4.29, which describes the Cost consequences of failing to accept a Formal Offer to Settle. In analysing these Rules, the Court found that the purpose of Rule 4.29 was to promote settlement and prevent needless litigation.

In determining the scope of the previous settlement, Justice Eamon considered the differences between the old Rules of Court and the current Rules. Rule 4.27(3), unlike old Rule 172, does not specifically provide that all proceedings with respect to matters specified in an acceptance are to be stayed. In reflecting on old rule 225(2) and current Rule 4.36(5), the Court held that “a settlement utilizing a discontinuance without costs precludes relitigating the same causes of action in subsequent actions”. The Court held, however, that the Defamation Action was not a re-litigation of the previous Settlement. Similarly, Justice Eamon concluded that settlement did not give rise to issue estoppel, as that would go beyond the intention of Rule 4.29.

In conclusion, Justice Eamon found the Defamation Action to be separate and distinct from the prior Action, and dismissed both the Summary Judgement Application and the Cross-application alleging abuse of process.