What is the test for a claim for punitive damages in a defamation action brought by a plaintiff against a defendant who published defamatory material in their statement of defence?

I do not regard that passage—which is qualified in its terms—as intended to have as wide an application as counsel submitted. It specifically requires a nexus with other factors in the case. No examples were provided by the learned judge but, perhaps, one might be where a defendant has been found to have knowingly and maliciously published defamatory material which was repeated and elaborated on in the statement of defence; cf., Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130. Whether or not this is correct, I do not find any sufficient nexus, or other reason, that would justify a claim for punitive damages based on the plaintiff’s allegations in paragraphs 45 and 46 of the statement of claim. I have found that the claims in those paragraphs should not at this stage be characterized as frivolous or vexatious and, even if they are not sustained at trial, I do not believe that their inclusion could support an award of punitive damages. There is nothing in the counterclaim to detract from the absolute privilege that attaches to statements in pleadings and, in consequence, the plaintiff’s motion is granted.