McNairn v Murphy, 2017 ONSC 1678

COURT FILE NO.: 15-65834 DATE: 2017/04/06

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DAVID MCNAIRN Plaintiff

– and –

SHANNON PATRICIA MURPHY and GABRIEL PENE Defendants

COUNSEL: Jeff G. Saikaley, for the Plaintiff Noted in Default

HEARD: February 3, 2017 (Motion for Judgment)

REASONS FOR DECISION

Beaudoin J.

Background

[1] On December 18, 2015, the Defendant, Gabriel Pene, (“Pene”) was served with the Statement of Claim and Offer to Settle. He failed to file a Defence and he was noted in default.

[2] The Defendant, Shannon Murphy, (“Murphy”) was served with the Statement of Claim and Offer to Settle on December 24, 2015. She initially appointed counsel here in Ottawa to defend the claim on April 7, 2016. She was later examined for discovery and then elected to represent herself while stating that she no longer intended to defend the action. Her defence was struck due to her failure to fulfil her undertakings and she was noted in default. Since both Defendants have been noted in default, they are deemed to admit all allegations of fact made in the Statement of Claim.

The Facts

[3] The Plaintiff, David McNairn, (“McNairn”) is a lawyer who resides and practices in Ottawa, Ontario. The Plaintiff and his wife, Heather McNairn, are the owners of a condominium unit at the Palms Condominium in Jaco, Costa Rica. They purchased their unit in April 2014. This was intended as their dream vacation property.

[4] At the time of their purchase, the property manager was a Costa Rican company named Daystar Properties Management S.A. (“Daystar”). The owner of Daystar was under investigation for an alleged $7 million fraud. Concerns about Daystar’s management of the condominium’s finances and dissatisfaction with the quality of Daystar’s property management, lead to collective action by the Palms Condominium owners and in the eventual formation of an organized Home Owners Association (“HOA”). McNairn devoted a significant number of hours towards the organization of this HOA.

[5] At an Extraordinary Owners assembly meeting of September 23, 2014, McNairn was elected the President of the Palms Condominium (HOA). A new property management contract was entered into with Jaco Vacation S.A. (“Jaco”). Scott Ryan (“Ryan”) was the owner of Jaco.

[6] In the early months of 2015, McNairn had returned to Canada and he became aware that a small number of owners had become increasingly critical of Jaco, and with Ryan, in particular. In the summer of 2015, McNairn received a phone call from Ryan who reported that he had been accosted by an owner in the parking lot of the Palms Condominium. Ryan advised him that this owner had verbally abused him with profanity, had accused him of being a thief, called him other pejorative names, and had bullied and intimidated him to the point that he felt his physical safety was threatened. McNairn then discussed these allegations with the other three members of the HOA executive with a view of determining how these allegations should be dealt with.

[7] Less than 48 hours later, Ryan emailed McNairn to give notice that he was terminating the property management contract that Jaco had with the Palms Condominium. McNairn was discouraged by these developments and he decided to resign as the HOA President and he sent an email to the Palms owners announcing his resignation on June 11, 2015 along with his reasons for doing so.

[8] On July 4, 2015, the HOA Vice-President, Shawn Quinn sent an email update to all owners including the two Defendants. Murphy replied to Quinn’s email update by relying on the “reply all” option. In total, her email was sent to 37 recipients in four different countries including two in Canada; namely, McNairn and his wife, Heather. That email was sent to the McNairn’s personal email account. That email commences with following words:

We are the new owners of 101, we arrived and found out the current management and President quit after accusations of theft .

[9] Other parts of the email made allegations that financial information Murphy had requested had not been provided, implying that something had been hidden from her. There was no question that the mention of “President” in Murphy’s email referred to McNairn since he was the only president mentioned in the text of Shawn Quinn’s email update.

[10] McNairn believed that his reputation for honesty and integrity was being attacked and he replied directly to her email on July 4, 2015. The reply was not sent to anyone else. In that email, he explained his actions on behalf of organizing the HOA and his reasons for resigning. He concluded this email by stating:

…The accusations are false, hurtful and clearly defamatory. It was very ill advised that you to repeat these allegations in an email to 36 other people.

That being said, I understand that you’re new, are concerned by the situation would like more information if you want facts and not defamatory rumours and speculation, please feel free to contact me.

[11] According to his affidavit, McNairn hoped that Murphy would realize her error, retract her statement and apologize; she did not do so. Murphy responded by simply stating that she had not received the earlier emails. On July 7, 2013, McNairn sent an email to Murphy stating that he felt that he had been defamed and that he wanted a retraction and an apology from her. This email was not sent to anyone else. He demanded that Murphy send an email to every person who had received her original email and retract the defamatory statement and apologize unreservedly to him. He also sought particulars as to how she discovered the alleged defamatory information. He expected a response by Friday, July 10, 2015.

[12] On July 7, 2015, Murphy sent an email to the 37 original recipients of her earlier email. It said:

“I received this email from this Gentleman, with regard to the statement that I had overheard.

I apologize if this hurt you in any way, I was on my deck and overheard a conversation between two people I could not see, therefore I cannot identify the parties. Please accept my apology, we just arrived and a little overwhelmed with things.

Regards,

Shannon

[13] McNairn was unhappy with that response. He believed that Murphy had aggravated the situation by copying and pasting his private email to her of July 7, 2015 and sharing it in her email to all owners. In his view, Murphy had done this to embarrass him, discredit him, curry sympathy and provoke a reaction from other dissatisfied owners. Moreover, Murphy did not acknowledge that the theft accusation was untrue nor did she retract the allegation or knowledge that she should not have made it. In McNairn’s view, Murphy did not provide an effective or genuine apology.

[14] A little more than one hour after Murphy’s email was sent, the Defendant, Gabriel Pene, sent an email to all 37 recipients in four countries, including McNairn and his wife to the email addresses in Ottawa.

[15] After introducing himself, the Pene says:

With that said, and as a fellow lawyer (though admittedly, without the impressive, bilingual title) I find Mr. McNairn’s email leaden with threats, demands, and the general bullying tone and mindset that does not comport with a “reputation for honesty and integrity” or even with the most basic principles of professional ethics. Threatening and bullying people that may not have the same legal expertise does not an honest lawyer make.

Could it be that the real issue is that Ms. Murphy is requesting copies of regulations, budgets, and financial statements that may finally allow the rest of us not “burdened” with the volunteer role of Board member to see the reality of the situation, whatever it may be?

Mr. McNairn, you’re correct we “obviously do not have the facts” Please enlighten us, what exactly is going on? Why, after resigning, are you part closed session meetings about the APPOINTMENT, not election, of a successor? Why is none of this information shared with the owners? What is the status of replacement for Jaco Vacations?

These are but a few of the many questions and issues facing all of us, and as the former president I would think your full cooperation is something that would be given as a matter of honesty and integrity.

For all of our sakes, can a meeting just be called so that everything can laid out on the table and we can all move forward, or is this endless chaos and confusion what people want?

Thank you

Gabriel Pene, 104

[16] McNairn believed that Pene’s email further mischaracterized his email to Murphy in a way that discredited and maligned him. It implied that he is not a lawyer who behaves with honesty and integrity. Pene also alleged that he had threatened and bullied a vulnerable person. The remainder of the email made veiled allegations of dishonesty and impropriety by suggesting that McNairn was hiding something and was holding financial and other information from the owners. It repeats that his behaviour falls below the standard that would be expected as a former HOA President in a matter of honesty and integrity.

[17] McNairn was deeply humiliated, embarrassed and angered by Pene’s email. Given that Pene is a lawyer, McNairn believed that his allegations of dishonest, unethical and unprofessional behaviour were likely to be accorded a higher level of credibility that they might have otherwise received. Since July 7, 2015, Pene has not taken any steps to retract his defamatory statements or to apologize for them. He has ignored all communications from McNairn’s counsel and has ignored all documents served on him in connection with this proceeding.

[18] As a result of these allegations, McNairn has experienced stress, anxiety and adverse health effects. At one point in January 2016, his stress and anxiety spiked and led him to have difficulty sleeping and his doctor prescribed medication for stress and to address his sleeping difficulties.

[19] In August 2015, McNairn instructed his counsel to write to Murphy and Pene in an effort to resolve this matter. There was no response. As a result, he commenced his legal proceedings on August 18, 2015.

[20] Despite some misgivings, McNairn and his wife returned to Costa Rica to vacation between December 29, 2015 and February 1, 2016. They had to cut their vacation short and returned to Canada early.

[21] McNairn has made applications for a judicial appointment both for the Superior Court of Justice and for the Ontario Court of Justice. In both applications, he felt it was necessary to disclose the details of this litigation as well as the defamatory allegations by Murphy and Pene.

[22] Moreover, McNairn reports that Murphy and Pene, in conjunction with a few other owners, have taken actions against the Palms Condominium, which were intended to discredit him and to put pressure on him not to carry on with this litigation. In his view, each significant step that he has taken in the litigation resulted in some action against the Condominium in Costa Rica. For example:

• When Plaintiff’s counsel sent a letter to Murphy and Pene proposing a resolution of this matter on August 15, 2015, the owner who allegedly abused Ryan retained a Costa Rican lawyer (Retana) who drafted legal documentation seeking to have McNairn examined under oath in Costa Rica. The documentation alleged that the Condominium would not provide financial information to which the abusive owner was entitled, and that the Condominium had been managed improperly. Notwithstanding that this documentation was signed on August 24, 2015, no action was taken to move forward with the matter.
• An Extraordinary Owners Assembly of the Palms Condominium was held on August 31, 2015 to approve a lease of a small part of the Condominium’s common property for a cell phone tower to a Costa Rican telecommunications company. This lease had been negotiated by Ryan under McNairn’s leadership. Retana was retained by Murphy as her proxy. He was also retained as the proxy for the abusive property owner. Retana disrupted and obstructed the meeting and voted against the proposal on behalf of his clients and the resolution to approve the lease was narrowly defeated.
• Using Retana as his lawyer, the abusive owner commenced conciliation proceedings against the Condominium Corporation in September 23, 2015. The Condominium incurred substantial legal fees which had to be paid by the owners collectively.
• In December, 2015, Murphy and Pene were served with the Statement of Claim in this action. The legal documentation prepared by Retana in August 2015 was then served on the Condominium on January 15, 2016. Retana sought to have McNairn appear in Costa Rica on February 9, 2016 for examination under oath. McNairn and his wife were in Costa Rica on holidays at that time. McNairn had to prepare a detailed response to the allegations for the condominium’s lawyers and travel to the Costa Rican capital to meet them. Feeling that their vacation was ruined, he and his wife returned to Canada on January 23, 2015. As it turned out, the Condominium’s lawyers responded to the legal proceedings in Costa Rica and it was not necessary for him to appear in Costa Rica for the examination.
• In March, 2016, the abusive owner had a telephone conversation with the Treasurer who reported the details of that conversation to McNairn. The abusive owner stated he was angry that McNairn was pursuing his friends, Murphy and Pene, and that he would keep legal proceedings going against the Condominium as long he wanted to.
• On June 1, 2016, McNairn’s counsel examined Murphy for discovery via video link and sought production of information and documents relating to the Costa Rican legal proceedings. McNairn believed that these documents would show that Murphy and Pene were abusing the Costa Rican judicial system in order to discredit him and aid Murphy in her defence of this action. Murphy subsequently assumed her own representation; failed to comply with her undertakings and withdrew from any participation in the litigation.

The Issues

A. This Court’s jurisdiction over this matter. B. The availability of default judgment. C. Were the statements defamatory to McNairn? D. Are there any defences available to the Defendants? E. McNairn’s damages.

A. Jurisdiction

[23] The emails in issue were sent to 37 recipient in at least 13 known jurisdictions; Ontario, Costa Rica, the United Kingdom and at least 10 U.S. states. This court may properly exercise jurisdiction over this matter pursuant to the Supreme Court of Canada decision in Club Resorts Limited v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572.

[24] The first basis for the exercise of jurisdiction by a Canadian court is the traditional private international grounds which include the defendant’s presence in the jurisdiction or consent to submit to the court’s jurisdiction. The Court in Club Resorts held that the real and substantial connection test does not oust the traditional private international law grounds for the exercise of jurisdiction. [1]

[25] The application of the traditional private international grounds for jurisdiction is demonstrated in Stoymenoff v. Airtours PLC (2001), 17 C.P.C. (5th) 387 (Ont. SCJ.) where the court held that the defendant had submitted or “attorned” to the jurisdiction of the Ontario Superior Court of Justice by delivering pleadings, serving an affidavit of documents, and participating in examinations for discovery.

[26] The second basis for the exercise of jurisdiction by a Canadian Court is a real and substantial connection test. This test is concerned with whether there are factors or situations (“presumptive connecting factors”) which link the subject matter of the litigation and the defendant to the forum. The real and substantial connection test involves at least one and possibly two stages of analysis:

a. determining whether there are any “presumptive connecting factors” that would establish jurisdiction; and

b. determining whether the court should decline jurisdiction on the basis of forum non-conveniens; but only if this issue is raised by the defendant .

[27] In Club Resorts, the Supreme Court identified a non-exhaustive list of four “presumptive connecting factors” including that the tort was committed in the province where the litigation is occurring. The Court observed that “All presumptive connecting factors point to a relationship between the subject matter of the litigation in the forum such that it would be reasonable that the defendant would be called to answer legal proceedings in that forum.” [2]

[28] Once jurisdiction is established by the existence of a presumptive connecting factor which is not rebutted, the litigation proceeds before the court of forum. The court cannot decline to exercise its jurisdiction unless the defendant invokes the doctrine of forum non-conveniens and this Court is properly seized of the claim.

[29] I am satisfied that the Court may properly exercise jurisdiction over this matter on the basis of not only traditional private international law but also on the basis of the real and substantial connection test.;

a. Jurisdiction may be properly exercised over Murphy on traditional private international law grounds because she has attorned to the jurisdiction of Ontario Superior Court of Justice by submitting a Statement of Defence, retaining legal counsel in Ottawa, delivering an affidavit of documents, disclosing documents and being examined for discovery.

b. Jurisdiction may also be exercised over both Defendants because the real and substantial connection test is satisfied. Both Defendants commended the tort of defamation in Ontario by sending their defamatory emails to one person other than McNairn – namely, to McNairn’s wife in Ottawa, Ontario. Accordingly, this presumptive connecting factor has been established under the first stage of the real and substantial connection test. Moreover, neither Murphy nor Pene is defending this action and both have been noted in default. A forum non conveniens issue has not been raised.

B. Default Judgment

[30] Rule 19.02(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 permits a plaintiff to move for judgment against a defendant who has been noted in default in respect of any claim for which default judgment has not been signed. A motion for judgment must be supported by affidavit evidence if the claim is for unliquidated damages.

[31] In this case, both Defendants have been noted in default and the facts alleged in the Statement of Claim are deemed to have been admitted. An affidavit sworn by McNairn fully supports the claims and McNairn is entitled to judgment.

C. Liability

[32] The Supreme Court of Canada in Grant v. Torstar, 2009 SCC 61, [2009] 3 S.C.R. 640 concluded at para. 28 that a plaintiff in a defamation action is required to prove three things to obtain judgment and an award of damages:

a) that the impugned words were defamatory, in the sense that they would tend to lower McNairn’s reputation in the eyes of a reasonable person;

b) that the words in fact referred to McNairn;

c) and that the words were published, meaning that they were communicated to at least one person other than McNairn.

[33] The Court went on to hold that if these elements are established on the balance of probabilities, falsity and damage are presumed. McNairn is not required to show that the defendant intended to do harm, or even that the defendant was careless. The tort of defamation is one of strict liability. If McNairn proves the required elements, the onus shifts to the defendant to advance a defence in order to escape liability.

[34] Here, the elements of the tort of defamation are established by the facts. First, the impugned statements in Murphy’s email alleging theft or criminal behaviour, and in Pene’s email alleging behaviour that is dishonest, lacking in integrity and unethical, are false and would lower McNairn’s reputation in the eyes of a reasonable person. The first element of the tort of defamation is established.

[35] The reputation of a lawyer is of paramount importance; to clients, to the members of the legal profession to the judiciary and to the public. A good reputation is a cornerstone of the lawyer’s professional life. In Hill v. The Church of Scientology, [1995] 2 S.C.R. 1130, the Supreme Court of Canada remarked upon the potentially insidious effect of the defamatory allegations of criminal behaviour on a lawyer.

[36] In this case, the facts demonstrate that the defamatory statements made by both Murphy and Pene, in their emails, refer to McNairn, thereby establishing the second element of the tort of defamation. Finally, both Murphy and Pene’s defamatory emails were published since they were sent to 36 people including McNairn’s wife who received the emails in Ottawa Ontario.

[37] Since all elements of the tort of defamation are established by the facts and on the balance of probabilities, falsity and damage to McNairn’s reputation are not only presumed, they are established by the evidence. The Defendants, both who have been noted in default, have no defence.

D. Damages

[38] This action was commenced by a process under the simplified procedure. Therefore, any damages awarded may not exceed $100,000 against each Defendant, exclusive of interest and costs. In defamation cases, it is open to the Court to award general damages, aggravated damages and/or punitive damages.

General Damages

[39] General damages in defamation cases are be assumed from the very publication of false statements and are awarded at large. McNairn need not show a loss. In Mina Mar Group Inc. v. Divine, 2011 ONSC 1172, Justice Perrell noted that general damages in defamation cases can serve three functions;

a) to console the plaintiff for the distress suffered in the publication of the defence

b) to repair the harm to the plaintiff’s reputation including, where relevant, business reputation and

c) to vindicate the plaintiff’s reputation.

[40] He identified the following six factors in determining general damages: [3]

a) The plaintiff’s position and standing;

b) the nature and seriousness of the defamatory statements;

c) the mode in extent of the publication;

d) the absence or refusal to retract the defamatory statement or to apologize for;

e) the conduct and motive of the defendant;

f) the presence of aggravating or mitigating circumstances

[41] In Hill, Supreme Court knowledge that an award of general damages should allow for the sad truth that no apology, retraction or withdrawal can ever be guaranteed to completely undo the harm that a defamatory statement has done or the hurt it has caused. [4]

[42] In Barrick Gold Corp. v. Lopehandia, 71 O.R. (3d) 416 at para. 34, the Court of Appeal observed that the fact that the defamation occurred in “cyberspace”- on the Internet or by email is particularly significant. Communications via the Internet such as email, are potentially more pervasive than other forms of communication since control over its distribution is lost in numerous people may have access to it email containing a defamatory statement may be set by recipient to others who in turn may send it to an even larger audience. The Internet has the extraordinary capacity to replicate a defamatory statement, in the sleep. As a result, the mode in extent of publication, is particularly significant consideration in assessing general damages and Internet defamation cases.

Aggravated Damages

[43] Aggravated damages may be awarded in defamation cases in circumstances where the defendant’s conduct has been particularly high-handed, malicious or oppressive, thereby increasing the plaintiff’s humiliation and anxiety arising from the defamatory statement.

[44] Like a general damages that are compensatory nature, the assessment of aggravated damages requires a consideration of the entire conduct of the defendant prior to the publication of the defamatory statement and continuing through to the inclusion of trial. For aggravated damages to be awarded there must be a finding that the defendant was motivated by actual malice which increased the injury to the plaintiff, either by spreading further afield the damage to the reputation of the plaintiff, or by increasing the mental distress and humiliation of the plaintiff. [5]

[45] Factors relevant to an assessment of aggravated damages include:

a) whether the defendant retracted the defamatory statement tendered apology;

b) whether there was a repetition of the defamatory statement;

c) whether the defendant’s conduct was calculated to deter the plaintiff from proceeding with the defamation action;

d) whether the defendant conducted a prolonged or hostile cross-examination or pleaded a justification which the defendant knew was bound to fail;

e) the general manner in which the defendant presented his case; and

f) the conduct of the defendant at the time of the publication of the defamatory statement.

Punitive Damages

[46] Punitive damages may be awarded situations where the defendant’s misconduct is so malicious, oppressive and high-handed that it offends the Court’s sense of decency. Punitive damages bear no relation to what the plaintiff should receive by way of compensation. Their aim is not compensate the plaintiff, but rather to punish the defendant. Punitive damages are the means by which the court expresses its outrage for the egregious conduct of the defendant.

[47] Punitive damages should only be awarded in those circumstances for the combined award of general and aggravated damages would be insufficient to achieve the goal of punishment and deterrence.

Jurisprudence on Damages in Defamation Cases

[48] In Daboll v. DeMarco, 2011 ONSC 1, the defendant made negative comments about the plaintiff lawyer in local shopping and community papers and Internet websites and the Ontario Superior Court awarded general and aggravated damages amounting to $50,000.

[49] In Buckle v. Caswell, 2009 SKQB 363, 341 Sask. R. 281, aff’d in 2010 SKCA 116, 362 Sask. R. 141., the defendant published defamatory statements about the plaintiff on her blog alleging that the plaintiff had grown and used marijuana, used cocaine, had misappropriated funds, had been disbarred, had breached the public trust and abused his office and position, and was dishonest and despicable person. The plaintiff was awarded $50,000 for general damages and would have been entitled to an additional award of aggravated damages but these were prevented since the application was commenced under the simplified procedure rules which limited damages to $50,000.

[50] In Awan v. Levant, 2014 ONSC 6890, aff’d in 2016 ONCA 970, the defendant lawyer, who was also a journalist and commentator, published nine posts on his blog which defamed the plaintiff, a law student by accusing him of being a liar. The action was also brought under the simplified rule and therefore damages were limited to $100,000. The Court made a global award of $80,000 consisting of $50,000 in general damages and $30,000 in aggravated damages and the Ontario Court of Appeal upheld those damage awards.

[51] In Loh v. Yang, 2006 BCSC 1131, the defendant defamed the plaintiff lawyer by alleging that he was that dishonest as a lawyer, as a federal political candidate and as a high profile community leader. She published these allegations on Internet websites, and a written notice of the media conference, and on the placard that she wore to the plaintiff’s law office. The British Columbia Supreme Court made global award of damages of $85,000; consisting of general damages of $50,000, aggravated damages of $25,000, and punitive damages of $10,000. The court also awarded special costs.

[52] In Rodrigues v. Rodrigues, 2013 ABQB 718, the defendant, a lawyer in India, defamed priest by alleging that he had sexually molested and 13-year-old girl. The defamatory allegations were made in internet postings read by persons in Alberta and in emails sent to recipients in Alberta. The court held: “a statement made by a lawyer about legal matters carry significant weight and has a greater potential to be accepted as true thereby increasing the potential for damages”. The court awarded general damages in the amount of $75,000 and $50,000 in aggravated damages. The court did not award punitive damages, feeling that the award of general and aggravated damages were sufficient to achieve the goal of punishment. The court awarded costs on a solicitor and client basis to the plaintiff.

[53] In Warman v. Grosvenor, 92 O.R. (3d) 663 (S.C.J.), the defendant made numerous defamatory Internet postings about the plaintiff, some of which caused plaintiff to fear for his safety. The defendant in that case was found liable for defamation and assault. Because the action was commenced under the simplified procedure, the court moderated its award of damages to $20,000 in general damages and $10,000 and aggravated damages. The plaintiff was also awarded costs on a substantial indemnity scale.

[54] In Fuda v. Conn, 2009 CarswellOnt 224 (Ont. S.C.J.), the court found that a circular to shareholders suggesting that the plaintiff had violated laws, had questionable financial issues and was involved in various unsuccessful legal proceedings constituted defamation. Although the circular was published once, it had the potential of being distributed broadly on the Internet. The court awarded $50,000 in general damages and $20,000 in aggravated damages in addition to special damages and costs.

[55] In Bains v. 1420546 Ontario Inc., 2011 ONSC 3686, the defendants published a defamatory article in a Punjabi competing community newspaper with serious allegations of criminal activity by the plaintiff. The plaintiff was a businessman and a journalist in this close-natured community and the court held that he suffered a significant harm to his reputation. The defendants were noted in default during the proceedings. This case demonstrates that a defamatory publication of serious allegations within a small community can have significant repercussions on a well-established individual. The plaintiff was awarded $50,000 in general damages and $25,000 in aggravated and punitive damages.

Analysis

[56] In applying these cases to the facts at hand, I note that McNairn is a respected lawyer in Ottawa Ontario and has been a member of the bar for 29 years. He has reached a point in his legal career that he has aspired to a judicial appointment. In 2014, he volunteered to become the President of the Palms Condominium HOA. He led the HOA during a very time-consuming and challenging process of replacing the property manager and hiring a new one. A number of condominium owners expressed their gratitude for what he had done. He resigned in June 2015 after the actions of an abusive owner caused the property manager to terminate its services. Prior to the defamation by Murphy and Pene, McNairn enjoyed an unblemished reputation.

Murphy

[57] The allegations by Murphy that she had heard that McNairn had resigned as HOA President because he had been accused of theft was false and had no foundation in fact whatsoever. This was an attack on the honesty and integrity of McNairn. McNairn was shocked, angered and hurt and by Murphy’s allegation. With the click of a mouse, Murphy smeared and diminished his good reputation. She then did little to reverse the damage that she had done. She did not retract her earlier statement nor did she acknowledge it was false. By attaching McNairn’s email to hers, her apology was of little use since it only set the stage for Pene’s subsequent defamatory allegations.

[58] McNairn experienced stress, anxiety and adverse health effects which required him to see his doctor for medication for stress and to address his sleeping difficulties. As a result of the effects of these emails, McNairn is now self-conscious about visiting his condominium in Costa Rica, a place that was supposed to be a dream vacation home. During a vacation at his condominium between December 2015 and January 2016, some owners who had previously been friendly with McNairn did not speak to him. Other owners still speak to McNairn, but seem to have a more negative attitude towards him.

[59] Murphy’s defamatory email was sent to 37 Palms Condominium owners. These people were his friends, neighbours and fellow owners. Within that small community, virtually everyone knew about the defamatory allegations made against him.

[60] McNairn has been required to disclose this litigation and the underlying allegations in his applications for judicial appointments. This matter is not a positive feature of his candidacy. It was deeply embarrassing for McNairn to make these disclosures to his references.

[61] The defamatory email will always exist in cyberspace and McNairn cannot exercise any control over the further transmission and republication of the defamation.

[62] At the time of the defamatory email, McNairn and Murphy had never met. Murphy was a new owner and yet she repeated defamatory information in an email and sent it to 37 owners. She had made no attempt to assess or confirm the veracity of the information she had heard. She did not consider the damaging effects the defamatory allegations would have on McNairn. Murphy’s actions amount to a reckless disregard for the truth and to the potential damage she could cause to McNairn’s reputation.

[63] Her email apology was of limited value. Her inclusion of McNairn’s personal email to her was calculated to further embarrass McNairn, to curry sympathy from other owners, and to undermine the genuineness of her apology. It was designed to provoke a response favourable to her from other owners. This is indeed what she got. Pene’s defamatory email which included allegations of dishonesty, lack of integrity and unethical behaviour against McNairn is exactly what Murphy expected. This conduct amounts to malice.

[64] After being served with the Statement of Claim, Murphy delivered a Statement of Defence in which again she defamed McNairn. Murphy alleged in para. 4 of the Statement of Defence that McNairn was being “prosecuted in Costa Rica” for his actions as President of the Palms Condominium HOA. This allegation is false. This was a deliberate attempt to deter McNairn from pursuing his action. At her examination for discovery, Murphy undertook to provide McNairn with certain information and documents. Approximately 60 days after Examination for Discovery, Murphy suddenly indicated that she no longer wished to defend the action and her counsel was removed from the record. Although Murphy was ordered by this Court to fulfil her undertakings, she disregarded this Court’s order and her Statement of Defence was struck.

[65] Murphy, along with Pene, have supported or have been involved in legal proceedings in Costa Rica; the intent of which was to deter McNairn from pursuing this defamation action. Almost every major step taken in this action has resulted in a small group of owners, including Murphy and Pene, taking some action in Costa Rica.

[66] For these reasons, an award of aggravated damages is appropriate in that Murphy’s conduct has increased McNairn’s humiliation and anxiety and has continued to damage his reputation. Moreover, this conduct also gives rise to punitive damages in order to punish Murphy, to act as a deterrent, and to express the Court’s disapproval of her conduct.

Pene

[67] The defamatory statements made by Pene about McNairn are extremely serious. His defamatory email of July 7, 2000 is mischaracterizes the content of McNairn’s second private email to Murphy. As a lawyer, Pene would know that there is nothing improper in McNairn’s second private email to Murphy. Despite this, Pene characterized McNairn’s second private email to Murphy as being laden with threats and demands, and having a general bullying tone that does not comport with a reputation for honesty and integrity or even with the most of the basic principles of professional ethics. Pene capped off this email with the innuendo that McNairn had not been cooperative, was acting improperly and was hiding information from condominium owners. None of what Pene said was true or a reasonable characterization of the content of McNairn’s private second email to Murphy.

[68] Pene’s defamatory email to the condominium owners significantly amplified the damage already caused to McNairn’s reputation by Murphy’s defamatory email. Coming from a lawyer, Pene’s mocking, defamatory allegations of threatening behaviour, dishonesty, lack of integrity and unethical behaviour are likely to be given the level of credence that they may not otherwise be accorded.

[69] Pene failed to retract or apologize for his defamatory statements and he has ignored all communications from McNairn’s counsel, all attempts to resolve this matter or respond to all documents served on him in this litigation.

[70] While Murphy’s conduct can perhaps be characterized as reckless, Pene’s conduct must be regarded as calculated. Given the lack of the relationship between McNairn and Pene, it is difficult to draw any other inference than that Pene’s actions were deliberately calculated to cause harm to McNairn and justify a finding of malice.

Conclusion

[71] Having regard to the seriousness of the statements made in emails, and the actual malice and extent of the defamation made by an individual in the legal profession, I assess damages as follows:

• As against the Defendant, Murphy: $50,000 in general damages, $10,000 in aggravated damages, $10,000 in punitive damages
• As against the Defendant, Pene: $70,000 general damages, $10,000 in aggravated damages, and $10,000 in punitive damages

[72] McNairn is entitled to pre-judgment and post-judgment interest as well as costs. I fix his costs on a substantial indemnity basis in the amount of $20,000 as against the Defendant, Murphy and in the amount of $4000 as against the Defendant, Pene.

Mr. Justice Robert N. Beaudoin Released: April 6, 2017