The Respondent’s Action alleged that certain statements made in a filed document were defamatory. The Appellants applied to strike the claim pursuant to Rule 3.68 for disclosing no viable cause of action. The Application was initially granted by an Applications Judge but reversed on appeal by a Justice. The Appellants appealed the Justice’s decision.

The Respondent was the Appellants’ general counsel. During Account Review proceedings, the Appellants filed a pleading with their view that the Respondent had failed to act in the Appellants’ best interests and breached their professional obligations. The Appellants took the position that these statements were protected by absolute privilege because they were made in the context of a judicial proceeding. The Justice held that it was not plain and obvious that the impugned statements were protected by absolute privilege.

The Court of Appeal noted that while the ultimate determination to strike a claim under Rule 3.68 is discretionary, the question of whether a pleading discloses a cause of action or whether absolute privilege applies is a question of law to be reviewed on the correctness standard. In the present case, the impugned statements were made in a judicial or quasi-judicial proceeding, and the consideration was whether the statements were incidental to the proceedings or in the process of furthering them. While the Justice considered other contextual factors, such as the content and purpose of the statements, the Court of Appeal held that these considerations were irrelevant. Once the determination was made that the statements were made on a privileged occasion, absolute privilege applied.

The Court of Appeal determined it was plain and obvious on the record that the statements were protected by absolute privilege and, as a result, the Respondent’s claim did not disclose a viable cause of action. The Appeal was allowed, and the Action was dismissed pursuant to Rule 3.68.