COURT OF APPEAL FOR ONTARIO

CITATION: Foulidis v. Ford, 2014 ONCA 530

DATE: 20140708

DOCKET: C56537

MacPherson, Watt and Benotto JJ.A.

BETWEEN

George Foulidis

Plaintiff (Appellant)

and

Robert Ford

Defendant (Respondent)

Paul J. Pape and Andrea M. Bolieiro, for the appellant

Gavin J. Tighe and Stephen Thiele, for the respondent

Heard: May 20, 2014

On appeal from the judgment of Justice John A. B. MacDonald of the Superior Court of Justice, dated December 27, 2012, with reasons reported at 2012 ONSC 7189, 2013 ONSC 7189, 114 O.R. (3d) 58, and the costs order dated June 10, 2013, with reasons reported at 2013 ONSC 2787.

MacPherson J.A.:

A. INTRODUCTION

[1] During a municipal election campaign in 2010, Councillor Robert Ford, a candidate for mayor of the City of Toronto, was interviewed by the editorial board of the Toronto Sun newspaper. In the interview, Mr. Ford made critical comments about a City contract with a restaurant on City property.

[2] George Foulidis was involved in the operation of the restaurant. He sued Mr. Ford for libel.

[3] After a six-day trial, J.A.B. Macdonald J. of the Superior Court of Justice dismissed Mr. Foulidis’ action.

[4] Mr. Foulidis appeals. His appeal raises two main issues: was Mr. Foulidis the target of Mr. Ford’s remarks, and were the remarks defamatory?

B. FACTS

(1) The parties and events

[5] In the summer of 2010, Mr. Ford had been a city councillor for Ward 2, Etobicoke-North, for almost 10 years. He was a candidate for the position of Mayor. His platform called for greater accountability and transparency at City Hall and fewer in-camera sessions and ‘back-room’ deals.

[6] The corporation Tuggs Incorporated (“Tuggs”) owned and operated the Boardwalk Pub and concessions in the Beaches area of Toronto. The restaurant was on City property. It was built and operated pursuant to a 20 year lease with the City commencing in 1987.

[7] George Foulidis was not an officer or director of Tuggs. His brother Konstantinos was the President, Secretary and a director of Tuggs from 1993 to at least 2011. However, George Foulidis was involved in the operation of the restaurant.

[8] George Foulidis took the lead in attempting to negotiate an extension of the lease beyond 2007. He dealt with the relevant City authorities from 2006 to 2010.

[9] On May 12, 2010, City Council voted to approve the Tuggs lease for another 20 years. The contract that flowed from this vote was sole-sourced and untendered. On June 2, 2010, Mr. Foulidis signed the new lease on behalf of Tuggs.

[10] The Tuggs deal with the City was controversial because of its sole-sourced, untendered nature. Through the late spring of 2010, the deal attracted a substantial amount of media attention.

[11] On August 10, 2010, Mr. Ford, and his brother Doug Ford, met with the editorial board of the Toronto Sun to discuss his campaign. The meeting lasted about 75 minutes. A 30 page transcript was prepared. Mr. Ford was asked about the Tuggs-City deal. This part of the interview covers less than one page of the transcript. The relevant parts are:

Q: Rob, you… I think I spoke with you yesterday, there are a number of things being rammed through at the next City Council meeting, um, you know, you know I’ve written about the Foulidis contract. There are a number of other things… leasing deals which I’ll be writing about. All kinds of um, things. Um, first of all how do you feel about that and second of all, as Mayor, I mean is it possible for you to undo any of this stuff, after the fact?

ROB FORD: Absolutely. Absolutely it is. Let me ask you one question, how did David Miller get elected?

Q: On a bridge. On a bridge.

ROB FORD: That’s exactly how he got it. The $2 bridge that ended up costing millions. And so, he said that you can undo anything that’s been done.

Q: The Foulidis deal?

ROB FORD: Wha… On the Tuggs?

Q: Yes.

ROB FORD: Absolutely. It’s in camera, obviously, its confidential, I wish that you guys knew what happened in camera, which a lot of you do, obviously, but these in camera meetings, there’s more corruption and skullduggery going on in there than I’ve ever seen in my life. And…and if Tuggs isn’t, I don’t know what is. And I can’t accuse anyone, or I can’t pinpoint it, but why do we have to go in camera on a Tuggs deal?

DOUG FORD: There is a culture of corruption down there and we’re going to put an end to it.

ROB FORD: So, I wish, I wish I could tell you the stuff that’s happened behind closed doors. The things the media does not know.

ROB FORD: So, a lot of these issues… sorry Andy… A lot of these issues don’t have to go in camera. And if that Tuggs deal doesn’t stink to high heaven I…I.

DOUG FORD: …How about a 20 year untendered bid at a lower cost and then you find out the owner’s contributing to the guys who are voting for him.

ROB FORD: That’s illegal. You call the police to investigate that.

[12] Two days after the interview, the Toronto Sun published a news story relating to it written by reporter Jonathan Jenkins:

Contract for Beaches eatery ‘stinks to high heaven’

JONATHAN JENKINS City Hall Bureau

City council’s decision to award an untendered, 20-year contract to Boardwalk Pub operator Tuggs Inc. smacks of civic corruption, Councillor Rob Ford says.

“If Tuggs isn’t, then I don’t know what is,” Ford told the Toronto Sun’s editorial board.

“I can’t accuse anyone or I can’t pinpoint it, but why do we have to go in-camera on the Tuggs deal?”

“These in-camera meetings, there’s more corruption and skullduggery going on in there than I’ve ever seen in my life.”

Tuggs owner George Foulidis did not respond to requests for comment from the Sun.

Sandra Bussin, the local councillor who has defended Tuggs in the past recused herself form the most recent vote on the contract in June, also declined to comment.

Both were provided with a transcript of Ford’s remarks by email.

Bussin received more than $12,000 from Foulidis and people associated with him in campaign contributions in 2003 and ’06.

City staff had recommended putting the food and drink concession at the eastern Beaches up for public tender after Tuggs’ first contract expired but councillors opted instead to negotiate with the firm.

A belated attempt to re-open the deal at council’s June meeting failed to get the necessary two-thirds support.

“It’s confidential and I wish you guys knew what happened in-camera,” Ford said. “I wish I could tell you the stuff that happens behind closed doors.”

He said the Tuggs deal “stinks to high heaven” and if he is elected mayor on Oct. 25 – he told the Sun he’s now leading the race with 35% support, according to his campaign polls – he might try to break the contract.

“You can undo anything that’s been done,” Ford said. “If it’s going to save (money) in the long run, then I’m going to do it. If there’s a short-term cost for a long-term gain, then that’s what’s going to happen.”

Doug Ford, Rob’s brother and campaign manager who is also running for council in Ward 2, said the system at City Hall is broken.

“There’s a culture of corruption down there and we’re going to put an end to it,” Doug said.

“If this was Chicago or anywhere in the States, they’d be in front of a grand jury and they’d be indicted and they’d be in jail right now.”

He said it’s unthinkable that a private business would agree to a 10-year lease, let alone a 20-year lease, for such a business.

[13] On October 6, 2010, Mr. Foulidis issued a Statement of Claim in which the principal claim was that Mr. Ford’s words were false and defamatory.

(2) The trial judgment

[14] The trial judge dismissed the action. He said that Mr. Foulidis needed to prove four things on the balance of probability to prove libel in this case: (1) Mr. Ford spoke the words in issue; (2) Mr. Ford published the words in issue to one or more third parties; (3) the words in issue referred to Mr. Foulidis; and (4) the words in issue were defamatory of Mr. Foulidis.

[15] The trial judge recorded that the first two propositions were not in issue. Mr. Ford accepted the accuracy of the words attributed to him and he gave the interview to the Toronto Sun in the context of his mayoral campaign, knowing that his words would be published.

[16] The trial judge held that Mr. Foulidis had not proved the third and fourth propositions.

[17] With respect to the third proposition, the trial judge applied the relevant two-part test: (1) were Mr. Ford’s words capable of referring to Mr. Foulidis; and (2) if ‘yes’, would Mr. Ford’s words lead reasonable people to conclude that they did in fact refer to Mr. Foulidis: see Sykes v. Fraser, 1973 CanLII 153 (SCC), [1974] S.C.R. 526, and Knupffer v. London Express Newspaper Ltd., [1944] A.C. 116 (H.L.). He answered ‘Yes’ to the first question and ‘No’ to the second question.

[18] With respect to the fourth proposition, the trial judge concluded that Mr. Ford’s words were not defamatory. He reasoned, at paras. 38 and 44:

The reasonable person, having read fairly all of the defendant’s assertions in the article in issue, both quoted statements and accurate paraphrasing, likely would have understood him to have said:

(1) I sense or suspect corruption in Tuggs Inc.’s deal with the City

(2) However, I’m unable to say that anyone did anything wrong

(3) My sense or suspicion of corruption is based on the Tuggs deal having been considered by the City “in camera”

(4) In camera meetings are where more corruption and skullduggery goes on than I’ve ever seen

(5) However, I don’t know what actually took place.

In my opinion, the reasonable reader would have concluded that the statements in issue, read as a whole and understood as aforesaid, did not defame the plaintiff, even if is assumed that the statements were about him… The words in issue leave no doubt about their meaning, when read reasonably and in their context. The defendant voiced only a suspicion of corruption which he, immediately and in clear terms, admitted was without factual foundation or insufficient for him to be able to say that anyone had done anything wrong. In my opinion, he clearly and explicitly prevents any defamatory meaning being perceived in his suspicion of corruption.

[19] Having concluded that Mr. Foulidis was not the target of Mr. Ford’s words and that the words were not defamatory, the trial judge declined to address the defences of qualified privilege, fair comment, and responsible communication on a matter of public interest, as well as the issue of express malice. He did say that if he had found that Mr. Ford’s words defamed Mr. Foulidis, he would have assessed general damages at $20,000.

[20] In a costs order dated June 10, 2013, the trial judge awarded costs to Mr. Ford and Bruce Baker[^1] jointly on a partial indemnity basis fixed in the amount of $135,750, plus disbursements of $9,095.62, plus HST where applicable.

[21] Mr. Foulidis appeals both the trial judgment and the costs order.

C. Issues

[22] The appellant raises four issues[^2]:

(1) Did the trial judge err by concluding that Mr. Ford’s words did not refer to Mr. Foulidis?

(2) Did the trial judge err in concluding that Mr. Ford’s words were not defamatory?

(3) Are any defences available to Mr. Ford?

(4) Did the trial judge err in awarding costs to Mr. Ford?

D. Analysis

(1) The target of Mr. Ford’s words

[23] The appellant contends that the trial judge err by concluding that Mr. Ford’s words during the interview with the Toronto Sun did not refer to Mr. Foulidis. Although Mr. Ford’s words referred to the “Tuggs deal”, and not to Mr. Foulidis, the appellant contends that the reasonable reader of the Toronto Sun article would have known that corruption behind the Tuggs deal really meant corruption by the person negotiating the Tuggs deal, namely, Mr. Foulidis.

[24] For several reasons, I do not accept this submission.

[25] First, it is important to underline the fact that in the brief portion of the interview giving rise to this defamation action, Mr. Ford never uses Mr. Foulidis’ name. He refers to “Tuggs” or the “Tuggs deal” four times, but never to George Foulidis. Yet the plaintiff, the only plaintiff, is George Foulidis, not Tuggs Inc.

[26] Second, the appellant’s attempt to interpret Mr. Ford’s words as linking Tuggs to the appellant is tenuous. The transcript reads:

Q. The Foulidis deal?

ROB FORD: Wha… On the Tuggs?

That is the entire extent of the alleged link. After this answer, Mr. Ford refers only to Tuggs and the Tuggs deal. In my view, a fair inference is that Mr. Ford regards the target of his critical comments as the entity known as Tuggs, not Mr. Foulidis personally.

[27] Third, the trial judge accepted “Mr. Ford’s evidence that he barely recognized Mr. Foulidis’ name when asked about ‘the Foulidis deal’ by the Sun, and that he did not know him personally.” Having heard the testimony of Mr. Ford and Mr. Foulidis, about whom the trial judge said “I am left with serious doubt about the credibility and reliability of his testimony”, the trial judge was entitled to reach this conclusion.

[28] Fourth, although Mr. Ford used strong language in his criticism of the Tuggs deal, the focus of his comments was on the role of City Council in approving the deal. For example, his use of the words “corruption” and “skullduggery” was in the context of his complaint about in camera meetings at City Council.

[29] Fifth, Mr. Ford used strong limiting language – “I can’t accuse anyone” – that suggests, again, that his focus was on the City Council process, not Mr. Foulidis.

[30] Sixth, the trial judge concluded that “Mr. Foulidis has failed to prove his assertion that he is either the face of Tuggs, or its alter ego. On the evidence, I find that he has failed to prove that he was the person, and was seen as the person with management control of Tuggs Inc.” On the basis of the evidence reviewed by the trial judge, including Mr. Foulidis’ testimony and various Tuggs corporate documents, this conclusion was certainly open to the trial judge; it supports the respondent’s position that Mr. Foulidis was not the target of Mr. Ford’s words.

[31] Seventh, the link between Tuggs and Mr. Foulidis was drawn explicitly by Jonathan Jenkins, the reporter, in his story in the Toronto Sun.

[32] In the end, we are left with a lone and puzzling plaintiff, George Foulidis. Where is Tuggs Inc.? We are also left with a lone and puzzling defendant, Robert Ford. Where is the Toronto Sun or even Doug Ford who said in the same interview: “How about a 20 year untendered bid at a lower cost and then you find out the owner’s contributing to the guys who are voting for him”? Viewed in context, it cannot be said that the trial judge erred by concluding that Mr. Foulidis was not the target of Mr. Ford’s words.

(2) Mr. Ford’s words – defamatory?

[33] The appellant submits that the trial judge erred by concluding that Mr. Ford’s words were not defamatory. The appellant asserts that the trial judge did not assess those words from the perspective of the reasonable reader. Instead, he focussed on a single phrase with vague meaning – “I can’t accuse anyone, or I can’t pinpoint it” – and wrongly concluded that it neutralized the overall defamatory imprint of the words taken as a whole. In a vivid summary of his position, the appellant asserts that these words “have as much neutralizing effect on the rest of Ford’s words as lipstick does on a pig.”

[34] I begin with some basic propositions.

[35] First, words are defamatory if their publication tends to lower a person in the estimation of right-thinking members of society, or exposes a person to hatred, contempt or ridicule: see Botiuk v. Toronto Free Press Publications Ltd., 1995 CanLII 60 (SCC), [1995] 3 S.C.R. 3, at para. 62.

[36] Second, whether words are defamatory will be assessed on the basis of their ordinary meaning, taking into account the surrounding circumstances, including the occasion of speaking and the relationship between the parties: see Raymond E. Brown, Brown on Defamation, 2d. ed., looseleaf (Toronto: Carswell, 2010), at para. 5.3(1)(a).

[37] Third, the decision of the fact finder as to whether impugned words have a defamatory meaning is entitled to substantial deference on appellate review: see Simao v. Hankook Ilbo et al., 2012 ONCA 175, 348 D.L.R. (4th) 472, at para. 22.

[38] Against this backdrop, I see no basis for interfering with the trial judge’s conclusion that Mr. Ford’s words were not defamatory of Mr. Foulidis. The trial judge carefully and comprehensively examined Mr. Ford’s actual words, their ordinary meaning, and the context in which they were delivered. He concluded that Mr. Ford “voiced only a suspicion of corruption”, that the focus of his words was on the decision-making process at City Council and that the word “corruption” was linked to Council’s in camera meetings, and, importantly, that Mr. Ford explicitly disavowed accusing anyone of corruption, thereby “clearly and explicitly prevent[ing] any defamatory meaning being perceived in his suspicion of corruption.” In my view, this analysis and conclusion were entirely open to the trial judge.

[39] In the end, it deserves to be noted that two people spoke in the brief portion of the Toronto Sun interview dedicated to City Council’s approval of a sole-sourced, untendered 20 year renewal of a lease with Tuggs.

[40] Robert Ford spoke principally about the City Council process, criticized it sharply, did not mention Mr. Foulidis or use language suggestive of him, and explicitly stated that he was not accusing anyone of corruption.

[41] Doug Ford said: “how about a 20 year untendered bid at a lower cost and then you find out the owner’s contributing to the guys who are voting for him.”

[42] In my view, there is a world of difference between these two sets of words. The appellant sued Robert Ford; he did not sue Doug Ford. He lost his lawsuit, in part because the trial judge found that Robert Ford’s words were not defamatory of him. I see no basis for interfering with the trial judge’s decision in this regard.

(3) Defences and Malice

[43] In light of my conclusions on the first two issues, it is not necessary to address the issues of possible defences and malice.

(4) Costs

[44] The appellant seeks leave to appeal the trial judge’s costs award in favour of the respondent. The appellant contends that even if the appeal is dismissed, this court should find that Mr. Ford’s words were abusive and insulting and should express its disapproval by denying Mr. Ford his costs of the trial.

[45] I am not persuaded by this submission. Mr. Foulidis was not the target of Mr. Ford’s words. Mr. Ford’s words were not abusive or insulting towards Mr. Foulidis. There is nothing to disapprove.

E. Disposition

[46] I would dismiss the appeal. The respondents are entitled to their costs of the appeal which I would fix, in accordance with counsels’ agreement, at $27,651 for Mr. Ford and Mr. Baker in the companion appeal jointly.

Released: July 8, 2014 (“J.C.M.”)

“J.C. MacPherson J.A.”

“I agree David Watt J.A.”

“I agree M.L. Benotto J.A.”

[^1]: Mr. Baker is the defendant in a companion defamation action, Foulidis v. Baker, 2012 ONSC 7295, and the respondent in a companion appeal, with reasons released concurrently today.

[^2]: Three weeks after the appeal hearing, on June 10, 2014, counsel for the respondents wrote a brief letter to the court submitting that this appeal and the companion Foulidis v. Baker appeal should be dismissed because they should have been brought in the Divisional Court, not in this court. The appellant disagreed and submitted a factum in support of this court’s jurisdiction on June 12, 2014. The respondents made reply submissions, affirming their previous position, on June 16, 2014. I agree with the appellant’s analysis on this issue. This court has jurisdiction to hear both appeals, this appeal as of right, and Foulidis v. Baker by virtue of s. 6(2) of the Courts of Justice Act, R.S.O. 1990, c. C. 43.