words, it is a claim of substance. In my view, the claim advanced by the
plaintiff has substantial merit and is a claim that should be considered by the
 Later, at para. 50, the motion judge added a further
In my view, the threshold for the responding party [ 170 Ontario] to meet in
Section 137.1(4)(a)( i) and ( ii) of the Courts of Justice Act must be a low one
given the significant remedies in Section 137.1 and the protection for litigants
to bring legitimate claims before the court.
 The motion judge did not examine the record to determine
if there were reasonable grounds to believe that 170 Ontario’s
claim had substantial merit. In fact, he never considered whether,
in all of the circumstances, and having regard to the wording of the
agreement, the agreement could plausibly be read as precluding
Mr. Gagnon’s testimony at the OMB. Without some consideration
of the relevant principles of contractual interpretation as applied
in the circumstances, the motion judge could not properly determine whether there were reasonable grounds to believe that 170
Ontario’s claim had substantial merit: see Sattva Capital Corp. v.
Creston Moly Corp.,  2 S.C.R. 633,  S.C.J. No. 53,
2014 SCC 53, at para. 50.
 The motion judge’s failure to examine the potential merits
of 170 Ontario’s claim is explained by his interpretation of the
phrase “substantial merit” in s. 137.1(4)(a)( i) as referring to the
seriousness of the subject matter of the claim and not the potential
merits of the claim. With respect, the subject matter of a claim does
not determine whether there are grounds to believe that the claim
has substantial merit. Claims involving very serious matters can be
self-evidently devoid of any merit.
 To the extent that the motion judge’s reasons refer to the
merits of 170 Ontario’s claim, as opposed to the subject matter of
the claim, the motion judge required the claim to pass a “frivolous
or fleeting” standard. Neither word appears in s. 137.1(4)(a)( i). For
the reasons set out above, at para. 80, the “substantial merit”
requirement sets a higher bar.
 The motion judge should have considered whether, on
a proper application of the principles of contractual interpretation,
a trier could reasonably conclude that 170 Ontario’s interpretation
of the agreement, as applying to Mr. Gagnon’s testimony before the
OMB, had substantial merit in the sense that it had a real chance
of being accepted. If there were grounds to believe that 170 Ontario’s interpretation had “substantial merit”, it followed that there
were also reasonable grounds to believe that Pointes’s conflicting
interpretation of the contract did not raise a valid defence.