Judge dismisses bid by federal contractor Botler AI to quash defamation lawsuit

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A government contractor whose comments about alleged procurement failures sparked federal probes has lost its bid to dismiss a defamation lawsuit filed against it by two senior public servants.

Last year, career bureaucrats Cameron MacDonald and Antonio Utano sued Botler AI, a Montreal-based software firm, alleging they were defamed by the company and its principals, Ritika Dutt and Amir Morv, after a contracting process with the Canada Border Services Agency.

According to the bureaucrats, Ms. Dutt and Mr. Morv provided testimony to MPs, gave interviews to the media, posted online comments and made allegations in a confidential report to the CBSA suggesting that the two public servants acted corruptly in managing the procurement process. Mr. MacDonald, now an assistant deputy minister at Health Canada, and Mr. Utano, a director-general at the Canada Revenue Agency, say the allegations are untrue and have imperilled their careers.

Mr. MacDonald and Mr. Utano previously worked together on IT projects at CBSA, including an initiative involving Botler’s software and on the ArriveCan app, a project that faced significant cost overruns and became the focus of several probes by government watchdogs.

Federal Court rules against two senior public servants tied to ArriveCan procurement

Botler had asked the court to dismiss the public servants’ defamation claim, asserting that it constituted “strategic litigation against public participation,” more commonly known as a SLAPP suit. In Ontario, defendants in defamation lawsuits can file anti-SLAPP motions and ask courts to dismiss the actions if they are found to have been launched for the purpose of silencing individuals speaking out on matters of public interest.

In a June 5 decision written by Ontario Superior Court Justice Stanley Kershman, the court was not persuaded that Mr. MacDonald and Mr. Utano’s defamation claim amounted to a SLAPP suit and awarded the public servants $25,000 in costs.

In 2023, Ms. Dutt and Mr. Morv went public in a story in The Globe and Mail with what they said were concerns about federal procurement and their company’s dealings with Kristian Firth, a principal for GC Strategies, an IT services supplier to Ottawa. According to Ms. Dutt and Mr. Morv, Mr. Firth subcontracted Botler through a joint venture without informing them beforehand, told them that the joint venture would be taking a “pass-through fee” from their contract, and inflated their résumés to ensure they won the contract.

According to Ms. Dutt and Mr. Morv, Mr. Firth told them he was acting at the behest of Mr. MacDonald – an allegation they also made in a 13-page report they submitted to senior executives at the CBSA.

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In his decision, Justice Kershman wrote: “The Botler Report suggested that MacDonald directed Firth’s actions, that MacDonald and Utano together shaped the procurement process, and that they received payment for their seemingly improper involvement in the procurement process.”

The judge found that Botler, Ms. Dutt and Mr. Morv should not have taken Mr. Firth at his word and were “reckless in arguing that MacDonald and Utano willingly collaborated with Firth to defraud the CBSA and receive ‘pass-through fees,’” the judge wrote.

While Justice Kershman found that Botler, Ms. Dutt and Mr. Morv’s statements were in the public interest, he concluded that Mr. MacDonald and Mr. Utano had proved they had a viable defamation claim, and that the potential harm to their reputation outweighed the public interest in Botler’s statements. Although the judge’s findings are not a final determination, like those that would be made at the end of a trial, Justice Kershman found there were grounds to believe Botler has no valid defences.

Chris Spiteri, lawyer for Mr. MacDonald and Mr. Utano, told The Globe in an e-mailed statement that the court had found there were grounds to believe the allegations against his clients were “defamatory, unverified, reckless, unsupported by any valid defence at this stage, and seriously harmful.”

“For nearly three years, Mr. MacDonald and Mr. Utano, two highly respected senior civil servants, have had to defend themselves against personal attacks, threats, career-destroying allegations, and serious reputational harm,” Mr. Spiteri wrote. “They have incurred extraordinary costs, not to avoid scrutiny, but to obtain a fair and independent review of allegations that should never have been repeated as fact.”

Ms. Dutt, meanwhile, told The Globe she was “proud of standing up for our fellow Canadians.”

“We made the extremely difficult decision to blow the whistle because it was our duty to Canada, to taxpayers, and to the integrity of public procurement,” she said in an e-mail. “Our whistleblowing exposed serious flaws in the expenditure of our tax dollars, informed numerous federal investigations, and led to widespread reforms.”

The federal government’s spending on IT services has come under scrutiny in recent years, in part because of various inquiries and investigations into the contracting process for the ArriveCan app.

The CBSA led development for the app, which served as a mandatory health-reporting tool for cross-border travellers during the COVID-19 pandemic.

The Globe first reported in the fall of 2022 that spending on ArriveCan was on pace to exceed $54-million. The Auditor-General later estimated the cost at $59.5-million. The border agency has said the initial version of the app cost $80,000, but that costs escalated as a result of multiple software updates.

The agency relied on Mr. Firth’s two-person IT company, GC Strategies, to lead the ArriveCan app project. GC Strategies has said its business model involves winning contracts and then finding subcontractors to perform the requested work.

Mr. Firth, who is not a party to the lawsuit, did not respond to a request for comment from The Globe on Monday.