ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO: CV-12-460481
DATE: 2012-09-25

B E T W E E N:

Tony Busseri Plaintiff - and - John Doe also known as S. also known as B.P. Defendant

Alistair Crawley & Kate McGrann , for the Plaintiff
No one Appearing for the Defendant

HEARD : September 21, 2012

GOLDSTEIN J.:

[ 1 ] The plaintiff, Tony Busseri (“ Mr. Busseri ”) brought an application for an interim injunction on September 21, 2012. The defendant, John Doe a.k.a. S. a.k.a. B.P. (“Mr. B.P.”), did not appear although I am satisfied that he had notice. I granted the injunction with costs and indicated that reasons would follow. These are those reasons.

FACTS

[ 2 ] Mr. Busseri is the CEO of Route1 Inc. (“ Route 1 ”). Route 1 is a corporation that is publicly traded and listed on the TSX Venture Exchange. Route 1 provides digital security and identity management solutions to governments and the military. Route 1’s public disclosures and filings are followed by the financial industry and by members of the investing public. Route 1 is the subject of discussion on the Internet.

[ 3 ] One online public forum for discussing publicly traded companies is Stockhouse.com. Stockhouse.com maintains “bullboards”. A bullboard is a message board dedicated to a single company. Registered members of Stockhouse.com can post their comments about that company to the bullboard. There is a Route 1 bullboard. Although only registered members can post, the bullboards are accessible to non-members. In other words, anyone who can access the Internet can access the Stockhouse.com bullboards.

[ 4 ] Commencing in July 2011 “s.” has frequently posted on the Route 1 bullboard. The posts comment on Mr. Busseri’s compensation, integrity, and abilities and make the following allegations (in summary):

• Mr. Busseri is paid $635,000 per year in compensation. His compensation is paid to a consulting firm which Mr. Busseri controls. His contract was secretly extended without the knowledge of the shareholders. s. posts: “And for what? To get consultation with them which I think Tony as CEO would be providing for free”.

• Mr. Busseri is double-paid for doing nothing.

• Mr. Busseri is CEO of one company but actually working full-time at another company. The other company has a partner which is in direct competition with Route 1.

• Mr. Busseri accepts cash in a numbered account.

• Mr. Busseri drains all of Route 1’s cash. s. further posts: “Did someone mention – NUMBERED ACCOUNT IN CAYMAN ISLANDS?”

• Mr. Busseri engages in short sales of Route 1 stock. Mr. Busseri engages in stock manipulation to “pump” the price of the stock. I note as a matter of interest that s.’s allegation that Mr. Busseri shorts Route 1 stock is at odds with the allegation that Mr. Busseri falsely pumps up the price.

• Mr. Busseri fails to report his trades of Route 1 stock, as he is legally obligated to do.

• Mr. Busseri vacationed drunkenly in Hawaii at the expense of the shareholders while pretending to be on business.

• Mr. Busseri only spends one hour per day on Route 1 business.

• Mr. Busseri has committed criminal fraud in relation to Route 1.

• Route 1 shareholders should hold back from tarring, feathering, and hanging Mr. Busseri at the annual general meeting although he deserves such treatment.

[ 5 ] Mr. Busseri’s evidence is that the posts by s.are all untrue. His compensation is $360,000 per annum plus HST, which is disclosed in public filings that Route 1 is obliged to make. He states that he works full-time at Route 1 and devotes himself to the management and affairs of Route 1. He receives his compensation through a personal holding company. That fact was disclosed in a proxy circular. He states that he has never diverted assets to a numbered account in the Cayman Islands. Mr. Busseri adamantly denies engaging in fraud or stock manipulation, or failing to report trades that he is legally obligated to report. Mr. Busseri states that he travelled to Hawaii for a conference and remained for a vacation after the conference, and that the allegation that he was drunk on the beach when he was supposedly working is outrageous and false.

[ 6 ] I find as a fact that the public statements posted to the Route 1 bullboard by s. about Mr. Busseri are untrue. For reasons I set out below, I also find as a fact that Mr. B.P. is s. and that his email address is […]@yahoo.com .

[ 7 ] Mr. Busseri has never received an email from s., but he has received emails from [...]@yahoo.com containing text identical to messages posted by s.n on the Route 1 bullboard. s. has posted texts of emails on the Route 1 bullboard that he claims he emailed to Mr. Busseri. Other technical evidence provided to me associates posts on the Route 1 bullboard with the email address […]@yahoo.com . It thus appears that s. and the user of the email address […]@yahoo.com are the same person. Is that person Mr. B.P.?

[ 8 ] A Google search of […]@yahoo.com revealed a posting with that email address in a classified ad website for Saint John, New Brunswick. A search of Canada411.ca revealed that a B.P. lives at P[…] Street in Saint John, New Brunswick.

[ 9 ] The internet protocol address associated with […]@yahoo.com is registered to Kim Rathburn of P[…] Street, St. John, New Brunswick. On September 18, 2012, Ms. Rathburn confirmed by telephone to an associate at Ms. McGrann’s firm that she lives at P[…] Street in a house divided into apartment units. Ms. Rathburn does not know all of her neighbours. She further confirmed that she has a wireless Internet router. She stated that until recently it was not password protected and therefore open for access to anyone within range of the router. Ms. McGrann candidly admitted that she could not state with certainty that P[…] Street and P[…] Street are part of the same complex, but I think it is a reasonable inference. I find that the user of […]@yahoo.com accessed the Internet through Ms. Rathburn’s unprotected wireless router.

[ 10 ] It is correct that the only evidence I have before me is the evidence of Mr. Busseri, but I think it is important to note that Mr. B.P. has taken no steps to justify the posts, to defend the action, or even to deny that he is the author of them.

[ 11 ] On August 3, 2012 Ms. McGrann, Mr. Busseri’s counsel, emailed a copy of the statement of claim to Mr. B.P. at […]@yahoo.com and requested his address so that it could be personally served. Mr. B.P. promptly responded:

Do the words –

Go fuck yourself

have any meaning to you?

[ 12 ] On September 12, 2012 Ms. McGrann wrote to Mr. B.P. advising him that she would be attending court on September 17, 2012 to schedule a motion for an injunction. Ms. McGrann asked Mr. B.P. to advise whether he intended to respond, and if there were any dates that he was unavailable to attend court. Mr. B.P. promptly responded:

WHERE IS THE LAWSUIT?

WHAT HAPPENED TO THAT?

AS ALWAYS –

GO FUCK YOURSELF

[ 13 ] Ms. McGrann attended court on September 17, 2012. Mr. B.P. did not appear, send counsel, or communicate dates to Ms. McGrann. The motion for an injunction was scheduled for September 21, 2012. Ms. McGrann’s assistant sent the motion material to Mr. B.P. by email on September 18, 2012. Mr. B.P. promptly responded:

POSTED ON STOCKHOUSE TODAY. I AM NOT ALONE FOR KNOWING WHAT A SCUMBAG HE IS.

AS ALWAYS –

GO FUCK YOURSELF

[ 14 ] In the final email Mr. B.P. essentially self-identified as the author of the posts. I find as a fact that Mr. B.P. posted the comments attributed to s. on the Route 1 bullboard, and used the email address […]@yahoo.com.

ANALYSIS

[ 15 ] This application raises the following issues:

1. Does the Superior Court of Justice have jurisdiction to issue the injunction?

2. Do the posts on the Route 1 bullboard meet the test for issuing an interim injunction?

3. Will an injunction unduly constrain Mr. B.P.’s freedom of expression?

[ 16 ] The test for jurisdiction is whether there is a real and substantial connection to the legal situation or the subject matter of the litigation. Jurisdiction is established on the basis of a set of objective factors. The Supreme Court of Canada set out the factors in Club Resorts Ltd. v. Van Breda , 2012 SCC 17 , 2012 S.C.C. 17 at para. 90 :

(a) the defendant is domiciled or resident in the province;

(b) the defendant carries on business in the province;

(c) the tort was committed in the province; and

(d) a contract connected with the dispute was made in the province.

[ 17 ] Any one of these factors will be sufficient for the Superior Court of Ontario to find that there is jurisdiction. Although Mr. B.P. lives in New Brunswick, I am satisfied that Mr. Busseri has established that the tort of defamation was committed at least partly in Ontario. Mr. Busseri resides in Ontario and there is a substantial risk to his reputation in Ontario. Route 1 is publicly traded on the TSX Venture Exchange, which is headquartered in Toronto. The head office of Route 1 is in Ontario. Route 1 carries on business in Ontario. The annual general meeting will be held in Ontario. I am satisfied that there is a real and substantial connection with Ontario.

[ 18 ] An interim injunction should only be granted where:

… the words complained of are so manifestly defamatory that any jury verdict to the contrary would be considered perverse by the Court of Appeal. To put it another way, where it is impossible to say that a reasonable jury must inevitably find the words defamatory the injunction should not issue: Rapp et. al. v. McClelland & Steward Ltd. et. al. (1982), 34 O.R. 452 (H.C.).

[ 19 ] In Canada Metal Co. Ltd. v. Canadian Broadcasting Corporation (1975), 7 O.R. (2d) 261 , [1975] O.J. No. 539 (Div.Ct.) the Court stated:

For at least one hundred years and certainly since the leading cases of William Coulson and Sons v. James Coulson and Co. (1887), 3 TLR 846 and Collard v. Marshall, [1892] 1 Ch. D. 571 , and perhaps above all, in the leading case of Bonnard v. Perryman , [1891] 2 Ch. D. 269 , it has been universally and consistently held by British and Canadian Courts that such an interim injunction will never be granted where the defendant expresses his intention to justify unless the words in question are so clearly defamatory and so obviously impossible to justify that the verdict of a jury accepting a plea of justification as a defence would of necessity have to be set aside as a perverse finding on appeal.

[ 20 ] I note that in this case Mr. B.P. has done the opposite of expressing his intention to justify his words.

[ 21 ] In Beidas v. Pichler (2008), 294 D.L.R. (4 th ) 310 , [2008] O.J. No. 2135 (Div.Ct.) Justice Murray, summarized the law as follows:

16 In his treatise Injunctions and Specific Performance (2nd ed. 1992 (loose-leaf)), Robert Sharpe says the following, at paras. 5.40-5.70 (pp. 5.2-5.4):

There is a significant public interest in the free and uncensored circulation of information and the important principle of freedom of the press to be safeguarded.

The well-established rule is that an interlocutory injunction will not be granted where the defendant indicates an intention to justify [i.e. prove the truth of] the statements complained of, unless the plaintiff is able to satisfy the court at the interlocutory stage that the words are both clearly defamatory and impossible to justify.

... it seems clear that the rule is unaffected by the American Cyanamid case and that the balance of convenience is not a factor.

25 … As Robert Sharpe says in the passage from Injunctions and Specific Performance quoted above: "The well-established rule is that an interlocutory injunction will not be granted where the defendant indicates an intention to justify [i.e. prove the truth of] the statements complained of, unless the plaintiff is able to satisfy the court at the interlocutory stage that the words are both clearly defamatory and impossible to justify." Justice Sharpe clearly sets out that the onus is on the plaintiff at the interlocutory stage to satisfy the court that the words are both clearly defamatory and impossible to justify…

26 … Under either Canada Metal Co. Ltd or RJR-Macdonald Inc., where a plaintiff seeks injunctive relief, it is incumbent on the plaintiff to prove irreparable harm. The plaintiff's obligation is to convince the court that irreparable harm will be suffered and such proof is a condition precedent for obtaining relief.

27 Evidence of irreparable harm must be clear and not speculative…

[ 22 ] Although all three members of the Divisional Court panel wrote separate decisions, none disagreed with Justice Murray’s summary of the law.

[ 23 ] The Court of Appeal, in Colour Your World v. Canadian Broadcasting Corporation (1998), 38 O.R. (3d) 97 , [1998] O.J. No. 510 (C.A.) described the nature of a defamatory statement:

14 I take as my starting point the following definition of defamation:

A defamatory statement is one which has a tendency to injure the reputation of the person to whom it refers; which tends, that is to say, to lower him [or her] in the estimation of right-thinking members of society generally and in particular to cause him [or her] to be regarded with feelings of hatred, contempt, ridicule, fear, dislike, or disesteem. The statement is judged by the standard of an ordinary, right-thinking member of society. Hence the test is an objective one ...

(R.F. Hueston & R.A. Buckley, Salmond on the Law of Torts, 21st ed. (London: Sweet & Maxwell, 1996) at 140 citing Sim v. Stretch 1936, 52 T.L.R. 669 at 671, and Vander Zalm v. Times Publishers (1980), 109 D.L.R. (3d) at 531, 535, 543).

15 The standard of what constitutes a reasonable or ordinary member of the public is difficult to articulate. It should not be so low as to stifle free expression unduly, nor so high as to imperil the ability to protect the integrity of a person's reputation. The impressions about the content of any broadcast - or written statement - should be assessed from the perspective of someone reasonable, that is, a person who is reasonably thoughtful and informed, rather than someone with an overly fragile sensibility. A degree of common sense must be attributed to viewers.

[ 24 ] In my view, the posts to the Route 1 bullboard are clearly defamatory and designed to injure Mr. Busseri’s reputation. They are intended to convey the impression that Mr. Busseri is an over-paid, under-worked, fraudster who is running the company into the ground for his own benefit, while taking secret commissions, hiding them offshore, and vacationing in Hawaii at company expense. The implicit incitement to violence is especially troubling. Mr. B.P. has made no attempt whatsoever to justify these posts, despite being given the opportunity to do so. Mr. Busseri adamantly and forcefully denies the allegations in the posts and has provided evidence to refute them. Mr. B.P. continued to post defamatory statements to the Route 1 bullboard even after he was given notice of this litigation and was, to put it mildly, dismissive of this Court’s process.

[ 25 ] Although Mr. Busseri need not establish that the balance of convenience favours granting the injunction, he must establish that the posts will cause irreparable harm. In Barrick Gold Corp v. Lopehandia (2004), 71 O.R. (3d) 416 , 239 D.L.R. (4 th ) 577, [2004] O.J. No. 2329 (C.A.) Blair J.A. stated:

[30] In the Internet context, these factors must be examined in the light of what one judge has characterized as the "ubiquity, universality and utility" of that medium. In Dow Jones & Company Inc. v. Gutnick, [2002] H.C.A. 56 (10 December 2002), that same judge - Kirby J., of the High Court of Australia -- portrayed the Internet in these terms, at para. 80:

The Internet is essentially a decentralized, self-maintained telecommunications network. It is made up of inter-linking small networks from all parts of the world. It is ubiquitous, borderless, global and ambient in its nature. Hence the term "cyberspace". 4 This is a word that recognizes that the interrelationships created by the Internet exist outside conventional geographic boundaries and comprise a single interconnected body of data, potentially amounting to a single body of knowledge. The Internet is accessible in virtually all places on Earth where access can be obtained either by wire connection or by wireless (including satellite) links. Effectively, the only constraint on access to the Internet is possession of the means of securing connection to a telecommunications system and possession of the basic hardware. [emphasis added].

[31] … Communication 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: see Vaquero Energy Ltd. v. Weir, 2004 ABQB 68 , [2004] A.J. No. 84 (Alta. Q.B.) at para. 17 .

[32] These characteristics create challenges in the libel context. Traditional approaches attuned to "the real world" may not respond adequately to the realities of the Internet world. How does the law protect reputation without unduly overriding such free wheeling public discourse? Lyrissa Barnett Lidsky discusses this conundrum in her article, "Silencing John Doe: Defamation and Discourse in Cyberspace", (2000) 49 Duke L.J. 855 at pp. 862-865:

… Although Internet communications may have the ephemeral qualities of gossip with regard to accuracy, they are communicated through a medium more pervasive than print, and for this reason they have tremendous power to harm reputation. Once a message enters cyberspace, millions of people worldwide can gain access to it. Even if the message is posted in a discussion forum frequented by only a handful of people, any one of them can republish the message by printing it or, as is more likely, by forwarding it instantly to a different discussion forum. And if the message is sufficiently provocative, it may be republished again and again. The extraordinary capacity of the Internet to replicate almost endlessly any defamatory message lends credence to the notion that "the truth rarely catches up with a lie" . The problem for libel law, then, is how to protect reputation without squelching the potential of the Internet as a medium of public discourse [emphasis added].

[ 26 ] The posts meet the test of irreparable harm. The evidence indicates that they have been viewed over 500,000 times. The extent to which the posts have been disseminated further is unknown and unknowable. Mr. Busseri will have enormous difficulty countering them. The posts have generated discussion and concern among Route 1 shareholders, analysts, and the financial industry in general. Individuals have raised the allegations in the posts directly with Mr. Busseri. Route 1 shareholders have contacted Mr. Busseri as a result of the posts in order to express concern about them. Mr. Busseri has obvious and legitimate concerns that the posts will generate further baseless discussion and further harm his reputation at the Route 1 annual general meeting.

[ 27 ] A n injunction will not constrain Mr. B.P.’s freedom of expression. What is being enjoined are defamatory posts. Public discussion of the activities of publicly traded corporations and their managers are rightfully and properly the subject of discussion on the Internet. Members of the public have every right to post and share their thoughts and opinions, but the invention of the Internet has not repealed the law of defamation.

DISPOSITION

[ 28 ] As noted, on September 21, 2012 I granted the injunction with costs against Mr. B.P..

GOLDSTEIN, J.

DATE: September 25, 2012

COURT FILE NO: CV-12-460481
DATE: 20120925

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N:

Tony Busseri Plaintiff - and - John Doe also known as S. also known as B.P. Defendant

JUDGMENT GOLDSTEIN J.

Released: September 25, 2012