Slander of Title or Property Involving Malicious Statements or Improper EncumbrancesPage last modified: September 16 2022
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What Does Slander of Property Mean?
Slander of Property, Whether Such Property Is Realty or An Object, Is a Civil Law Tort That Occurs When False Information Is Spread About the Property or An Improper Lien or Encumbrance Is Registered Against the Property So to Maliciously Stigmatize and Devalue the Property.
Understanding What Constitutes As Slander of Title or Property Including Statutory Law Rights, Among Other Issues
Slander of person, known as defamation, is a much more commonly understood concept; however, slander of property, or even slander of title of property, can also occur. Generally, slander of title of property occurs when statements or documents, including documents usual to a legal process, such as liens or encumbrances, are improperly and maliciously used to cast a stigma upon property thereby making the property less valuable or less saleable. Examples of slander of property can involve the spread of rumours that a house is haunted; Manitoba Free Press Co. v. Nagy, 39 S.C.R. 340 or the registration of a security interest on an automobile; Osman Auction Inc. v. Murray, 1994 CanLII 8911.
The Common Law
As a common law cause of action, slander of title of property contains various elements which are stated within the case of Almas, et al, v. Spenceley, 1972 CanLII 609 wherein the Court of Appeal for Ontario stated:
In an action for slander of title the following elements must be proved:
(1) that the defendant published words in disparagement of the plaintiffs' property;
(2) that such words were false;
(3) that such words were published with actual malice;
(4) that the plaintiffs sustained special damages as a result.
The proof of malice requirement, and the extent for which proof of the malice must be proven, was well reviewed and explained by the Supreme Court within the S. & S. Industries Inc. v. Rowell,  S.C.R. 419, case wherein it was said:
A review of the English authorities cited and others convinces me that certainly under the common law action of slander of title mala fides was a necessary element. The matter was put concisely by Baggallay L.J. in Halsey v. Brotherhood:
It appears to me that an action for slander of title will not lie unless the statements made by the defendant were not only untrue, but were made without what is ordinarily expressed as reasonable and probable cause, and this rule applies not only to actions for slander of title strictly and properly so-called with reference to real estate, but also to cases relating to personality, or personal rights or privileges.
Baggallay L.J. continued at p. 390:
Therefore, what we have to consider is whether there is any thing to shew that what the Defendant has stated was stated without reasonable and probable cause, even assuming it to be untrue, a question upon which at the present moment we have no means of forming an opinion.
It must be remembered that in Halsey v. Brotherhood the Court of Appeal was considering an appeal from the judgment of Jessel M.R., reported in (1880), 15 Ch. D. 514, by which at the commencement of the trial and before any evidence was heard the action was dismissed. The pleadings alone were considered and indeed the dismissal was without prejudice to the bringing of a fresh action.
Bowen L.J. in Skinner v. Perry, speaking of the common law and equity rights apart from subsequent statutory provisions, said:
At common law there is a cause of action whenever one person did damage to another wilfully and intentionally, and without just cause or excuse. Under that class of action came the action of slander of title, whether the subject of the slander was real or personal property. If a man falsely and maliciously—because the malice would show there was no just cause—made a statement about the property of another which was calculated to do, and which did do, damage to the other in the management of that property, an action would lie at Common Law, and the damages would be recoverable; and at Chancery, I suppose, that even if you could not prove actual damage had occurred, the Court might, if actual damage was likely to occur, prevent the wrongful act by injunction.
This view was held by the courts in England despite the recognition of the difficulty in proving malice on the part of the defendant.
Lord Coleridge L.C.J. said in Halsey v. Brotherhood, supra, at p. 389:
I feel strongly that there is great force in what Mr. Ince has said about the difficulty in which a plaintiff may be placed by the conduct of a person in the position of the Defendant. I do not pretend to be able to answer his observations on that head, but unless there is mala fides, it is one of those instances in which the law, in the interests of society, permits an injury to be done without any remedy commensurate with it.
Statute Law Right of Action For Misuse
In some circumstances, a statutory cause of action for slander of title of property also exists, such as per the Land Titles Act, R.S.O. 1990, c. L.5 as well as the Construction Act, R.S.O. 1990, c. C.30, among others. Unlike the common law slander of title cause of action, liability may arise under the statutory cause action without the requirement to prove malice or recklessness. Specifically, the Land Titles Act and the Construction Act respectively state:
132 A person who registers a caution without reasonable cause is liable to make to any person who may sustain damage by its registration such compensation as is just, and the compensation shall be deemed to be a debt due from the person who has registered the caution to the person who has sustained damage.
35 (1) In addition to any other ground on which the person may be liable, any person who preserves a claim for lien or who gives written notice of a lien in the following circumstances is liable to any person who suffers damages as a result:
1. The person knows or ought to know that the amount of the lien has been wilfully exaggerated.
2. The person knows or ought to know that he or she does not have a lien.
Interestingly, at least in respect to the condition of failure of reasonableness as prescribed within the Land Titles Act as shown above, liability will arise only where it is proven that the encumbrance, caution on dealing in a property, or a Certificate of Pending Litigation, was frivolous, vexatious, or otherwise improper. The issue of burden of proof of unreasonableness was explained within the case of WED Investments Limited v. Showcase Woodycrest Inc., 2021 ONSC 237 wherein it was said:
 The burden of proof is on the moving party, in this case the defendants, to demonstrate that the caution and CPLs were registered “without reasonable cause” or “without a reasonable claim to an interest in the land.” In Mormick Investments Inc. v. Khoury, 1985 CarswellOnt 3830,  O.J. No. 1072 (H.C.J.) (“Mormick”), Henry J. commented on these two provisions as follows, at para. 17:
It is implicit in these two provisions that the Legislature has, by creating the right to compensation or damages, intended to provide a remedy to the injured party for what is essentially an abuse of the legal process of registration (which the Court of Appeal in Tersigni v. Fagan described as a process of the court). Whether the registration of the cautions in this case amounts to an abuse of process requires consideration of the surrounding circumstances, and the state of mind of the registering party, through its principal Mr. Kaiser, at the time when the cautions were registered.
 Subsequently, in Moon v. Metropolitan Toronto Assn. for Community Living, 1989 CarswellOnt 597,  O.J. No. 1050 (H.C.J.), Carruthers J. summarized the test as follows at para. 21:
I was referred to two decisions which considered the wording of the predecessor to that section, then found in the Judicature Act, R.S.O. 1980, c. 223 and essentially the same. They are: Micro Carpets Ltd. v. De Souza Developments Ltd. (1980), 1980 CanLII 1865 (ON SC), 29 O.R. (2d) 77, 19 C.P.C. 118, 112 D.L.R. (3d) 178 and Ribic v. Weinstein (1982), 1982 CanLII 3170 (ON SC), 26 R.P.R. 247, 140 D.L.R. (3d) 258. The first is a decision of Robins J.A. and the second that of Grange J.A., and both were made when each of them were members of this Court. On the basis of their observations I cannot conclude that the counterclaims should succeed. For my present purposes I refer to that portion of the judgment of Grange J.A., as he then was, found at 267 [D.L.R.] of Ribic. It reads:
Nor can I find that Ribic violated the more stringent test of 'without a reasonable claim to title to or interest in the land' as found in s. 38(4) of the Judicature Act. At the time of obtaining the lis pendens, Lepage was withholding the $10,000 deposit and that alone would justify the action. Moreover, I do not believe the legislature intended that every untenable claim would result in liability to the claimant. I think what the legislature had in mind was 'reasonable' as opposed to 'frivolous' or 'vexatious', or as Robins J. put it in Micro Carpets Ltd. et al. v. DeSouza Developments Ltd. et al. (1980), 1980 CanLII 1865 (ON SC), 29 O.R. (2d) 77 at p. 78, 112 D.L.R. (3d) 178 at p. 180, 'spurious'.
The cause of action known as slander of title or property may arise as a common law concern such as issues involving malicious utterances or publications used to stigmatize the sale of realty or chattels and thereby affect the salability or merchantability or the value of the realty or chattels. Additionally, improper use of statutory lien processes may also result in liability. Interestingly, when a statutory process is misused, liability may arise without the requirement to prove malice; however, generally, for liability to arise from the misuse of a statutory process, there may, and likely is, a requirement to prove an unreasonable misuse.