Tag Archives: defamation of character

Huge Defamation Damages Awarded to Nova Scotia Businessmen Against US Blogger for ‘Cyber Libel’

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by  Michael V. Coyle, JD*

In a written decision released on August 7, 2012, the Supreme Court of Nova Scotia awarded damages of $425,000, plus an injunction, plus costs against a US-based blogger for the defamation of two Nova Scotia business owners and their company.

The judgement includes rare awards of both aggravated and punitive damages and an injunction prohibiting the blogger from publishing or posting any comments or images on the internet about the businessmen or their company and a “mandatory injunction” requiring him to remove the defamatory comments or images from any web sites on which he had posted them and to remove any links to those sites.

It all began when a mainstream US newspaper in Louisiana published a story about an allegedly corrupt local politician. The allegations were that the politician was involved in kickbacks, money laundering and fraud while in office. The story erroneously identified the two NS businessmen as being involved with the corrupt politician and the article falsely stated that their Nova Scotia company was owned by that politician.

When the newspaper found out that those allegations against the Nova Scotia businessmen and their company were untrue, it printed a full retraction and it apologized to them.

The blogger, however, continued, despite the retraction, to repeat those false allegations and he took it much further. He said in his blogs that the businessmen had misled a Canadian government funding agency and had committed perjury in litigation here. He said that the business was verging on bankruptcy and would soon close because of the investigation of the corrupt Louisiana politician and his inability to continue to support it.

The blogger claimed that the Nova Scotia businessmen were involved in a series of failed businesses and that they are con men and liars. He claimed that they had pulled strings to get the story retracted in the US. His allegations were laced with anti-gay rhetoric and homophobic comments and images.

He did not defend, or even formally acknowledge, the defamation suit against him in Nova Scotia, instead he continued to publish false and hateful allegations against the two business owners even as the case was before the Court. He said in his blogs, right up to the day of the hearing, that the two were improperly using the legal system by suing him for defamation.

Because the blogger failed to file a Defence to the lawsuit, the businessmen were awarded “default judgement” against him, without a trial. That meant that the statements made by the businessmen in their claim were deemed to be proven. They then asked the Court to hold a hearing to determine the damages.

Notice of that hearing was sent to the blogger but he ignored it. The judge was clearly not amused.

After hearing evidence from the two businessmen about the impact these defamatory statements had on them, personally and on their business, the judge ordered the blogger to pay damages for defamation of $50,000 to the company, plus another $100,000 to each of the businessmen. On top of that, she ordered him to pay each of the businessmen another $50,000 for “aggravated damages” plus another $25,000 to each of them as “punitive damages”.

Because the businessmen were not represented by a lawyer (although one of them had legal training but was not a practising lawyer) she fixed costs at only $2,000, plus expenses.

In awarding damages, the judge made special mention of the fact that the defamation in this case was carried out entirely on the internet, which she clearly held to be an aggravating factor. She quoted with approval an Ontario Court of Appeal judge who said in an earlier case:

“Is there something about defamation on the Internet – ‘cyber libel’, as it is sometimes called – that distinguishes it, for purposes of damages, from defamation in another medium? My response to that question is ‘Yes’.”

That judge went on to say:

“Communications via the Internet is instantaneous, seamless, inter-active, blunt,  borderless and far-reaching. It is also impersonal, and the anonymous nature of such communications may itself create a greater risk that the defamatory remarks are believed…”

In rebuke to those who may think that you can get away with anything on the internet, the Ontario appeal court judge continued, with the obvious approval of the Nova Scotia judge:

“Any suggestion that there can be no effective remedy for the tort of defamation (or other civil wrongs) committed by the use of the Internet (or such wrongs must simply be tolerated [as] the price to be paid for the advantages of the medium) is self-evidently unacceptable.”

This case makes it clear that ‘cyber libel’ will not be tolerated in Nova Scotia and that those who commit it against Nova Scotians will pay dearly for it.

While the damages awarded in this case – particularly the aggravated and punitive damages – may seem small by US standards (the plaintiffs were asking for total damages in the $1 million range), by Canadian and Nova Scotia standards they are huge. The fact that both aggravated and punitive damages were awarded at all by a Nova Scotia court is remarkable in itself.

The judge in this case paid careful attention when assessing damages to the intensity and repetition of the defamation, the homophobic slurs and images that accompanied it and the deliberate, calculated attack on the character and reputations of the individual Plaintiffs and the clear intent to cause harm to their business. That the Defendant was thumbing his nose at the Court by refusing to acknowledge the Court’s jurisdiction while continuing to issue his defamatory statements, even as the Court was hearing the case, certainly did not help his cause.

The fact that there was no Defence filed and that notice of the damages hearing was given to the Defendant and he still did not appear means that an appeal would be, from a practical perspective, virtually impossible.

For information about how this case might apply in your situation, please contact me.

*Michael Coyle is an experienced lawyer, mediator and arbitrator based in Kentville, Nova Scotia. Information and opinion expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and tips, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012

 

 

 

 

Defamation Of Employee Costs Employer $60,000

Defamation and Wrongful Dismissal 

by Michael V. Coyle, JD*

A  Nova Scotia employer was recently ordered to pay a wrongfully dismissed employee over $60,000 in damages, costs and interest for defamatory statements the employer made – including a statement made to EI about why they dismissed the employee. This comes on top of the employee’s reinstatement ordered by the Labour Standards Tribunal, with 18 months back pay.

The plaintiff was the Chief Bar Steward with a branch of the Royal Canadian Legion with over 11 years service. The employer believed that he had been selling draft beer at “Happy Hour prices” outside of Happy Hour, causing the employer to suffer a loss of profits on its bar sales. In the Legion’s view, that loss of revenue was tantamount to theft, so they fired him.

The employee first went to the Labour Standards Tribunal and won reinstatement, with 18 months lost wages, when the employer was unable to prove just cause for his dismissal. There was never any suggestion that the employee had personally gained in any way from his alleged misconduct. The employee then sued the employer for defamation in the Supreme Court.

The employer stated on the ROE that he was dismissed for “willful misconduct or criminal conduct”. When the employees appealed the denial of his EI benefits, the Legion wrote to EI that his conduct “may be considered fraudulent”. Further, at a branch general meeting, the Audit Committee chair reported that the fired employee had been involved in what they considered to be the “misappropriation of funds”. The word in the community was, as one witness put it, that the fired employee had been caught with his “hand in the cookie jar”.

The Court rejected the employer’s claim it had “qualified privilege’ in its statements to EI, saying that while the first statement on the ROE (“wilful or criminal misconduct”) may have been ambiguous (because it was a check-box on the ROE), there was nothing ambiguous about the second statement to EI that the employee’s actions “may be considered fraudulent”. The Court was not at all impressed with the weasel words “may be considered”.  As the judge bluntly put it: “This is a serious allegation, and the use of the word “may” does not, in my view, mitigate from the imputation of criminal conduct. The statement is defamatory.”

So too was the report on the matter given by the Audit Committee chair at the general meeting. In both cases the employer was either deliberately attacking the employee’s reputation for honesty and integrity by imputing criminal conduct, or it was being reckless about how such statements would be understood in the community. In either event, the statements were held to be defamatory.

The Court also pointedly rejected any suggestion that because the Legion is a non-profit body, it should receive special treatment in the Court. The Judge quoted authority that, “A non-profit or benevolent corporation is liable for its torts, including libel and slander, the same as any other corporation.” The same law applies, of course, to small businesses.

Analysis

This case reminds us that defamatory statements are judged, not merely by the words used, but also by what they imply about the person who is defamed. The law books are full of cases where people thought that by using clever wording they could avoid a defamation suit. The question is not merely “What words were used?”, rather the Court will also ask itself, “What would a reasonable person in the community think that those words really meant?”

This case also reminds us that employers should be very careful what they say about their reasons for termination. Some employers believe that taking an aggressive posture with EI is a good strategy. The theory is (and I’ve heard this many times, sometimes attributed to lawyers) that if they can prevent the fired employee from getting EI that will improve the employer’s position in a wrongful dismissal suit.

Some  employers believe, or are advised,  that clever wording like “may be considered” will shield them from the legal consequences of their statements.

On the other hand, the theory goes, if the employer takes a more objective stance with EI, that will simply encourage the employee to file a wrongful dismissal claim. That theory is misguided and this case shows that it can be very dangerous. I always remind employers that whether a former employee gets EI is a matter between that employee and the Government. The employer does not have to take a position on that matter and it is often very unwise, as this case shows us, for the employer to do so.

The truth is that statements of this nature made by employers are often simply emotional responses to the hurt feelings surrounding the dismissal. Some employers will even try to justify their aggressive statements to EI by saying that they have a “moral duty” to see that the fired employee is deprived of EI benefits.

Small business and community organizations are particularly prone to this thinking because of the highly personal nature of their employment relationships and the level of hurt feelings that naturally arise when things go wrong. Unfortunately, many employers do not get objective legal advice on terminations because they see no need to talk to a lawyer about somthing that seems so obvious to them. That can be a costly mistake.

This case demonstrates the importance of obtaining specialized legal advice, preferably before the termination. Legal advice should not be reserved for “doubtful” termination cases but, as this case shows, objective legal advice is just as important where the employer firmly believes that dismissal is justified.

Obviously, with the benefit of hindsight, the Legion branch should have known that it did not have legal grounds to dismiss the plaintiff in this case.  That would have avoided the whole long and expensive mess. It certainly should have been more cautious in its statements to EI and should never have made the statements it did attacking the employee’s honesty and integrity, even at a closed general meeting. They should have sought and heeded legal advice, even if it was not what they wanted to hear at that particular time.

The result of the case is that the fired employee is still working at the Legion, with 18 months back pay in his pocket, plus $60,000 in damages, interest and costs for defamation. The Legion, of course, had to bear its own legal costs throughout, both before the Labour Standards Tribunal and in the Supreme Court. My guess would be that, altogether, it probably cost the Legion something in the neighborhood of $100,000 or more.

For more information about this case and how it might apply in your personal situation, please contact me for advice.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012