Helena Guergis had been seeking general damages of $800,000, along with another $250,000 in punitive damages from each of Harper, his former chief of staff, former principal secretary, the Conservative party, and others.
In its ruling Friday, the Ontario Court of Appeal agreed the suit was an abuse of process, but also said it would have no chance of success anyway.
Guergis sued after the Canadian Human Rights Commission refused to hear her complaint against Harper and the party on the basis it had no jurisdiction to interfere with her removal from cabinet or caucus.
Among other things, she alleged defamation, conspiracy, negligence, and intentional infliction of mental suffering.
In response, Harper and the others argued they were protected by Crown or parliamentary privilege, or that their statements were not defamatory.
In any event, they argued, the suit was an abuse of process because the human rights commission had already dealt with the issue.
In a ruling last August, Ontario Superior Court Justice Charles Hackland sided with Harper and the others. He also decided Guergis's claim could not possibly succeed.
The Appeal Court agreed with Hackland.
"The statements and letters upon which the allegations of defamation are based are either not capable of being defamatory or are protected by absolute privilege,'' the court said.
"It is plain and obvious that the tort claims, including alleged defamatory statements, cannot succeed.''
The Appeal Court did give Guergis one small win: It said statements made during a TV broadcast by one of the defendants, Conservative MP Shelly Glover, could possibly be defamatory.
The court ordered Guergis to pay a total of $33,000 in costs.
According to court documents, Guergis's problems began in December 2009 when cabinet minister Lisa Raitt said she saw her use cocaine in the bathroom of an Ottawa restaurant, information that reached Harper's former chief of staff, Guy Giorno.
The problems snowballed in April 2010 amid allegations Guergis was caught up in criminal activity with her businessman husband Rahim Jaffer, himself a former top Tory MP.
In response, Harper, Giorno and his former principal secretary, Raymond Novak passed the allegations to the RCMP and conflict commissioner. The RCMP investigated but nevercharged Guergis with any crime.
Guergis, who was minister for the status of women, alleged Harper forced her to resign from cabinet on April 9, 2010. She was booted from caucus and the party would not allow her to run as its candidate in her Simcoe-Grey riding.
"This conduct was the result of negative media coverage respecting the plaintiff's spouse, and constituted a deliberate and calculated attempt to marginalize the plaintiff,'' Guergis alleged in her suit.
Guergis ran as an independent in the 2011 federal election but finished third, losing the Simcoe-Grey seat in southwestern Ontario to Conservative Kellie Leitch.
© 2013 The Canadian Press