COURT FILE NO.: CV-10-0406396

DATE: 20121227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

GEORGE FOULIDIS

Plaintiff

– and –

BRUCE BAKER

Defendant

Gary M. Caplan and Meredith Rady for the Plaintiff

Gavin J. Tighe, Stephen A. Thiele and Sarah Petersen for the Defendant

HEARD: November 13, 14, 15, 16, 19 and 20, 2012

J. MACDONALD, J.

reasons for judgment

INTRODUCTION

[1] The plaintiff, George Foulidis, sues for libel. The defendant, Bruce Baker, was a candidate for election as a municipal councillor in Toronto’s Ward 32, in the Beaches area of the City, where he resided and the plaintiff was engaged in business. On May 12, 2010, in the midst of his election campaign, the defendant delivered a letter to the City Clerk which was addressed to the Toronto councillors and Mayor. The plaintiff alleges that he was defamed by the letter.

[2] Tuggs Inc. operated the Boardwalk Pub in the Beaches. In 2007, after its prior long term lease with the City expired, City Council awarded to Tuggs Inc. a sole source or untendered contract to continue the operation of the Boardwalk Pub and to operate related concessions for twenty years. That decision provoked much media attention and public controversy because of the untendered nature of the contract and because of the geographical size, scope and length of the monopoly granted to Tuggs Inc. Media attention and public controversy continued into 2010 because it took the City and Tuggs Inc. that long to negotiate the terms of their new written contract. In the result, City Council was scheduled to consider approval of the Tuggs contract on May 12, 2010, the date the defendant delivered the letter in issue.

[3] The nature of the plaintiff’s relationship with Tuggs Inc. is in issue, and I will return to this. However, he was a person involved in its business and in its lease dealings with the City.

MR. BAKER’S LETTER

[4] The letter delivered by the defendant was as follows:

May 12^th, 2010

Open Letter

Tender Tuggs-GM 30.20

Dear Councillors and Mayor Miller:

I am a beach resident fighting the lease agreement between the City of Toronto and Tuggs Inc.

As a concerned beach resident and upon learning of new revelations over the deal between the City of Toronto and Tuggs Inc., I am calling on you to call in the Toronto Police to investigate.

What has transpired between the City of Toronto and Tuggs Incorporated-aka: Boardwalk Café-has new meaning when a letter was received by residents fighting Tuggs Inc’s expansion plans that alleges that Tuggs Inc’s owner, George Foulidis, has influenced Toronto City Hall for favors.

The letter was originally sent to Toronto Star reporter Paul Moloney and copied to residents fighting the expansion plans. The letter was sent from Mr. William Malamas from Richmond Hill.

Aside from the letter received from Mr. Malamas, the Toronto Life, May 11^th issue of 2010 raises further questions regarding election finance donations. Enough to ask for a full audit and a full investigation into the allegations.

Bruce Baker

(E-mail address)

(Telephone number)

[5] In his letter, the defendant referred to a letter received from Mr. William Malamas. He did not append the Malamas letter to his letter. He paraphrased it in part. The Malamas letter was as follows:

WILLIAM MALAMAS

(Address)

(Telephone number)

(E-mail address)

May 11, 2010

The Toronto Star

Attn: Paul Moloney

Re: Your article in the Toronto Star on April 29, 2010

Dear Mr. Moloney,

I read your article, published in the Toronto Star on April 29, 2010. I know George Foulidis well.

George Foulidis has disclosed to me, repeatedly, how he manages to obtain favours from the Toronto City Hall, in connection with his lease in the beaches.

Mr. Foulidis has specifically told me, that he manages to obtain, whatever favours he wants from the City, by finding the key people who are responsible in overseeing his lease with the City.

Mr. Foulidis has specifically and repeatedly told me that he pays, directly or indirectly, the key people who make decisions about his lease.

Mr. Foulidis also has told me that he attends fundraising events for councillors. He makes contributions to their election campaigns. He hires lobbyists who lobby councillors and/or key people influential with the City, in order to obtain their support in obtaining favours from the City, in connection with his lease.

Mr. Foulidis has specifically told me about his connections with the former councillor of the area and how he, always, was able to obtain his support in connection with his lease.

I know nothing as to how he obtained the support of the present councillor for the area and/or how he obtained the support of the other people from the City who oversee his lease, at the present time.

However, judging from what Mr. Foulidis has told me about the actions that he takes to obtain support from the key people who oversee his lease, I believe that the support he has, presently, obtained is not genuine.

In my opinion the RCMP, not the Toronto Police, should be called in, to investigate as to how Mr. Foulidis has obtained support from the City of Toronto, throughout the last twenty years, in connection with his lease and all the favours that he has obtained from the City, in connection with his lease, and the means that he used to obtain such favours.

If you wish to further discuss this matter with me, please contact me. I am faxing a copy of this letter to the persons or city officials noted below.

Yours truly,

William Malamas

cc. David Miller

Sandra Bussin

Adrian Heaps

Rob Ford

Giorgio Mammoliti

Denzil Minnan-Wong

Case Ootes

Joe Pantalone

(the fax numbers of the Mayor and councillors are omitted)

[6] In his letter, the defendant also referred to the Toronto Life issue of May 11, 2010. The article in that edition about election finance donations was entitled “The Boardwalk Pub could dominate refreshment sales along Toronto’s eastern beaches”. The article stated that George Foulidis was the owner of the Boardwalk Pub and referred to Tuggs Inc. as a Foulidis’ family owned company. It stated that, if City Council approves a new proposal, according to the Globe, “the refreshment monopoly will remain in place until 2028 – and the owners will pay $50,000 less in yearly rent”. The article stated that the draft agreement would go to the City Council that week. It also stated that when the Boardwalk Pub made its deal with the City in the mid 2000’s, Council “rejected competitive bids, with Beaches-East York councillor Sandra Bussin going to bat for the pub...” The article continued, “According to a 2007 article from the Post, Foulidis’ friends and family members made a combined $8,250 financial contribution to Bussin’s 2006 municipal election campaign (almost none of the contributors lived in her Ward). This was shortly before the Boardwalk Pub’s lease was extended in January 2007, even though Foulidis didn’t provide Council with any financial information. In the 2003 election, Foulidis’ business partner, wife, cousin and other associates also made a contribution of $4,000 to Bussin.”

[7] The defendant did not append the Toronto Life article to his letter and did not paraphrase its contents. Rather, he said that the article “raises further questions regarding election finance donations”.

THE PLAINTIFF’S LAWSUIT

[8] The Statement of Claim pleads that the Baker letter is libellous in its entirety, false, and suggests by its plain and ordinary meaning and by way of implication and innuendo that: (1) the plaintiff has been involved in criminal and/or fraudulent activity and should be the subject of a police investigation; (2) the plaintiff has bribed City officials for favours to be bestowed on him; and (3) the plaintiff’s conduct is irresponsible and reprehensible.

[9] The Statement of Claim also pleads that the defendant was actuated by malice. The particulars include that the defendant has been on a campaign to destroy the plaintiff’s reputation and has repeated the libel numerous times, and that in his election campaign, the defendant has republished the libel in part to discredit the then incumbent candidate. The incumbent candidate for election was Ms. Bussin.

WHAT THE PLAINTIFF MUST PROVE

[10] In this case, the plaintiff bears the onus of proving the following 3 matters, on the balance of probability:

1. That the defendant wrote and published the letter in issue;

2. That the letter refers to the plaintiff, and

3. That the letter is defamatory of the plaintiff.

Writing and Publishing the Letter

[11] The defendant admits that he prepared the letter in issue and delivered it by hand to the City Clerk so that it could be forwarded to City councillors and the Mayor. Clearly, the words of the letter are his. He published the letter in the legal sense by the aforesaid distribution of it.

Does the letter refer to the plaintiff?

[12] The letter mentions both Tuggs Inc. and George Foulidis. George Foulidis is named. That is an explicit personal reference to him regardless of whether Tuggs Inc. is also mentioned, and regardless of any connection between the two which is mentioned.

[13] The law has developed a two-part test which reflects the fact that, unlike this action, libel actions often have been tried by a jury. The first part, a question of law, is whether the words complained of are capable of referring to the plaintiff. The second part, a question of fact which the jury would decide only if the trial judge were to answer the first part in the affirmative, is whether the words in question would lead reasonable people to conclude that they did refer to the plaintiff, see: Fraser v. Sykes 1973 CanLII 153 (SCC), [1974] S.C.R. 526 (S.C.C.) and Knupffer v. London Express Newspaper Ltd. [1944] A.C. 116 (H.L.) at para. 121.

[14] The first part of the test is merely a formality here. The plaintiff is mentioned by name and clearly the first part of the test is satisfied. As the above description of the second part of the test states, it is determined from the vantage point of the reasonable person reading the words in issue. It is a common sense test, which presumes that the words in issue will be read reasonably and understood in accordance with their usual and ordinary meaning and in accordance also with any additional meaning provided by the context in which they were written. The primary context is the Baker letter itself. Reasonable persons would consider the whole of the letter, so that both the words therein and the ideas expressed may be considered in the light of the whole. In my opinion, reasonable persons reading the Baker letter would conclude that it refers to the plaintiff because he is mentioned by name, regardless of whether Tuggs Inc. is also mentioned.

Is the Baker letter defamatory of the plaintiff?

[15] Mr. Peter Downard states in “Libel” 2d edit., Markham, Ont.: LexisNexis Inc., 2010, at para. 3.01 that:

“(t)he classic statement of the law is that words are defamatory if they tend to cause the plaintiff to be regarded by reasonable persons with hatred, contempt, fear or ridicule[^1]. Words are also defamatory if they impute improper and disreputable conduct, even though an ordinary person might not regard that conduct with hatred, contempt, fear or ridicule”.

[16] The Baker letter did not state explicitly for whom the alleged favours were obtained, or about whose election finance donations there were questions. In my opinion, the statement “Tuggs Inc.’s owner George Foulidis has influenced Toronto City Hall for favours”, read reasonably and in the context of the whole of the letter, probably would have been understood by reasonable persons as stating that George Foulidis, in his capacity as Tuggs Inc.’s owner, influenced the City government to obtain favours in respect of Tuggs Inc.’s contract with the City. Further, I am of the view that reasonable readers, reading the statement that further questions are raised about “election finance donations”, and having regard for the context provided by the whole of the letter, probably would have understood that the Baker letter made no reference to the person whose election finance donations were in issue because that information had been provided elsewhere in the letter: it was George Foulidis, in his capacity as owner of Tuggs Inc., whose contract with the City he is said to have influenced favourably. Further, I am satisfied that reasonable readers, having regard for the whole of the letter, probably would have taken from it that the defendant was implying that the questions about Mr. Foulidis’ election finance donations related to the aforesaid influence.

[17] Regardless of whether the reasonable reader of the Baker letter had some knowledge of the Tuggs Inc. controversy, the Toronto Life Article of May 11, 2010 or the election finance contribution issues mentioned therein as previously reported by the Post in 2007, I conclude that the reasonable reader would have understood that Mr. Baker had said:

• I am fighting the lease agreement between the City and Tuggs Inc.,

• Something new has come up about this: a letter from William Malamas which alleges that George Foulidis, in his capacity as Tuggs Inc. owner, has influenced the City to obtain favours in respect of Tuggs Inc.’s contract with the City.

• In addition, related questions about Tuggs Inc.’s owner, George Foulidis’ election finance donations are raised in a Toronto Life article in the May 11, 2010 issue.

• I am concerned and urge you to call in the Toronto Police to investigate and I ask for a full audit and a full investigation.

[18] The Baker letter calls on the councillors and Mayor to “call in the Toronto Police to investigate”. The reasonable person knows that there are other investigators who are able to make full inquiries into contentious issues. The reasonable person would have regarded a call for a police inquiry as inferring that the person requesting it had reason to suspect that the influencing of City government for favours probably was criminal in nature. Consequently, I am satisfied that the reasonable person would have understood the Baker letter as inferring that the defendant suspected that there were grounds for asserting that Mr. Foulidis probably had engaged in criminal conduct in his influencing of City government. The letter, read reasonably, speaks of the defendant’s suspicion that there were grounds and not belief in the existence of reasonable and probable grounds because it calls for the Malamas and Toronto Life allegations to be investigated.

[19] If I were of the view that reasonable persons would not have regarded the defendant as having implied suspicions of criminal conduct by his call for a police investigation, the result would not be different. At the least, the statement that Mr. Foulidis influenced City government for favours in respect of the contract between the City and the company he owned is an imputation of disreputable conduct. Either way, I am satisfied that the Baker letter is defamatory of Mr. Foulidis. The particular sting of the libel is the statement that he influenced City government for favours, inferentially in respect of Tuggs Inc.’s contract with the City, in a manner which merits a police investigation. The letter is also defamatory in asserting that there are questions about Mr. Foulidis’ election finance donations, which, inferentially, are related to the aforesaid influence.

[20] The plaintiff has therefore proven his case, subject to determining whether the defendant has proven any of the defences which he has raised. Three consequence flow from this conclusion: defamatory words are presumed to be false (WIC Radio Ltd. v. Simpson 2008 SCC 40, [2008] 2 S.C.R. 420 (S.C.C.) at para. 1) and malicious (Adam v. Ward [1917] A.C. 309 (H.L.)), and general damages are presumed (Murphy v. Alexander (2004) 2004 CanLII 15493 (ON CA), 236 D.L.R. (4th) 302 (Ont. CA) at p. 311).

MR. BAKER’S DEFENCES

[21] Mr. Baker pleads and relies upon three defences:

1. that the contents of his letter are fair comment;

2. that his letter was written on an occasion of qualified privilege; and

3. that his letter was “responsible communication on a matter of public interest”.

He bears the burden of proving his defences on the balance of probability.

[22] At this point, I wish to note that the defendant did not plead the defence of ‘justification’, which is that the assertions he published about Mr. Foulidis are true. Consequently, there was no evidence led in this trial that Mr. Foulidis had influenced or attempted to influence City government in any way. Mr. Foulidis denied doing that. This case turns on the legal meaning and effect of the repetition of those unproven allegations.

FAIR COMMENT

[23] The common law test for the fair comment defence is as follows, based on WIC Radio (supra), at para. 28:

(a) The comment must be on a matter of public interest.

(b) The comment must be based on fact.

(c) The comment, though it can include inferences of fact, must be recognizable as comment.

(d) The comment must satisfy the following objective test: could any person honestly express that opinion on the proved facts?

(e) Even though the comment satisfies the objective test, the defence can be defeated if the plaintiff proves that the defendant was subjectively actuated by express malice.

[24] In Ontario, the Libel and Slander Act, R.S.O. 1990, c. L-12, s. 23 applies to the fair comment defence. This section states:

23. In an action for libel or slander for words consisting partly of allegations of fact and partly of expression of opinion, a defence of fair comment shall not fail by reason only that the truth of every allegation of fact is not proved if the expression of opinion is fair comment having regard to such of the facts alleged or referred to in the words complained of as are proved.

[25] In the Baker letter, it is necessary to distinguish comment from fact. The defence of fair comment applies only to the comments and not to any assertion of fact. See Barltrop v. Canadian Broadcasting Corporation (1978) 1978 CanLII 2145 (NS CA), 86 D.L.R. (3d) 61(N.S.C.A.) at p. 75; leave to appeal to the Supreme Court of Canada refused; (1978), 23 N.R. 447; Boys v. Star Printing and Publishing Company (1927) 1927 CanLII 813 (ON CA), 60 O.L.R. 592 (Ont. C.A.) at p. 676. Nonetheless, the facts asserted, proven to be true to the extent that s. 23 of the Libel and Slander Act requires, are an important part of the fair comment defence.

[26] A comment is characterized by being generally incapable of proof, such as a deduction, inference, conclusion, criticism, judgment, remark or observation. See WIC Radio (supra) at para. 26. It is a matter of opinion. See Cherneskey v. Armadale Publishers Ltd. [1978] 1 S.C.R. 1067 (S.C.C.) at p. 1072.

[27] The perspective of the reasonable person reading the letter is used in distinguishing between comment and assertions of fact. See WIC Radio (supra) at para. 27. In addition, only the letter itself and no extrinsic facts should be used in determining what is comment and what is fact. See Telnikoff v. Matusevitch [1991] 4 All E.R. 817 (H.L.) at p. 824.

[28] Criterion (c) of the fair comment defence requires that a comment be recognizable as a comment. The author of a letter therefore bears an onus to make clear that his or her words are a comment and not an assertion of fact. See Telnikoff v. Matusevitch (supra). The burden therefore rests on the defendant to show what is comment in his letter. If he fails to establish that an aspect of his letter is comment, it may be regarded as an assertion of fact which cannot be protected by the fair comment defence. See Hunt v. Star Newspaper Co. [1908] 2 K.B. 309 (C.A.) at p. 320. Consequently, comment must not be so mixed up with assertions of fact that the reasonable reader is unable to distinguish the two. See Leenen v. Canadian Broadcasting Corporation (2000), 2000 CanLII 22380 (ON SC), 48 O.R. (3d) 656 (S.C.J.) at pp. 699-700; affirmed (2001), 54 O.R. (3d) 612 (C.A.); leave to appeal to the Supreme Court of Canada refused, [2001] S.C.C.A. No. 432.

[29] Consequently, if it is asserted that a person is heartily detested or that he has engaged in disgraceful conduct but no reference is made to facts which support those statements, the statements will be regarded as statements of fact even though they appear conclusory. See Murphy v. LaMarsh (1970) 1970 CanLII 784 (BC CA), 18 D.L.R. (3d) 208 (B.C.C.A.); leave to appeal to the Supreme Court of Canada refused [1971] SCR ix; Kemsley v. Foot [1952] A.C. 345 (H.L.) at pp. 356-357.

[30] In the case of at bar, the defendant based his letter on what others had said: Mr. Malamas in his letter and the Toronto Life magazine in its article. He neither enclosed nor recited the full contents of either. He paraphrased the first and described part of the subject matter of the second. A person making a comment may refrain from referring to the whole of the facts on which he comments provided that enough information is included to identify the factual basis of the comment. As Lord Oaksey explained Kemsley v. Foot (supra), “it is not, in my opinion, a matter of importance that the reader should be able to see exactly the grounds of comment. It is sufficient if the subject which ex hypothesi is of public importance is sufficiently and not incorrectly or untruthfully stated.” As Lord Denning M.R. described it in London Artists Ltd. v. Littler, (1969) 2 Q.B. 375 (C.A.) at p. 391, the facts set out correctly must be those which go to the “pith and substance of the matter.” Consequently, if the facts are in an article which the defendant mentions and summarizes, the defence of fair comment is available for his comments only if his summary of the article’s assertions of fact is adequate. See Telnikoff v. Matusevitch (supra); Renouf v. Federal Capital Press of Australia Pty. Ltd. (1977), 17 A.C.T.R. 35 (S.C.). Proof of the existence of the article as summarized, if summarized adequately, is all that is required. The defendant is not required to prove the truth of the assertions in the article.

[31] The most defamatory aspect of the Baker letter is the assertion that the plaintiff influenced City government for favours in respect of Tuggs Inc.’s lease with the City, a matter which merits police investigation. Of that, I conclude that his statement that “… Tuggs Inc.’s owner, George Foulidis, has influenced Toronto City Hall for favours”, is based on the Malamas letter and is properly regarded as an assertion of fact. The Malamas letter’s content is the underlying fact to which he refers, in expressing the opinion or comment that a police investigation is merited.

[32] Is this paraphrasing of the Malamas letter an adequate summary of it? I think it is. Applying the law to which I’ve referred, I conclude that the essence of the Malamas letter is that George Foulidis obtains favours from the City in respect of his lease by paying key City officials. The defendant paraphrased this by saying that “Tuggs Inc.’s owner George Foulidis has influenced Toronto City Hall for favours”, inferentially in respect of Tuggs Inc.’s lease. The only aspect of Mr. Malamas’ allegation that is left out is the means by which the plaintiff is said to have obtained influence, namely bribery. Nonetheless, I am satisfied that the defendant mentioned the heart of the allegation: the use of influence to obtain favours in respect of the lease. What the defendant did say is sufficient, in my view, to permit the readers of his letter to make up their own minds about his comments.

[33] The second defamatory aspect of the Baker letter is his assertion that there are questions about the plaintiff’s election finance donations which, inferentially, are related to the aforesaid influence. His words in his letter were that the Toronto Life article “raised further questions regarding election finance donations”. In my opinion, this is an assertion of fact, about which the defendant commented that a full audit and a full investigation should occur.

[34] Is this assertion of fact in the Baker letter an adequate summary of the Toronto Life article in issue? Much of that article consists of the history and import of the dealings between the City and Tuggs Inc. in respect of its lease. It was not necessary to state that. Leaving that out kept nothing from the readers of the Baker letter. It was addressed to Toronto councillors and the Mayor who knew that history and knew of the monopoly they had granted to Tuggs Inc.

[35] The remaining substantial issue in the Toronto Life article was the election finance issue. The Toronto Life article gave details, asserting that Mr. Foulidis’ family, friends and associates made the donations, specifying total amounts, and that the donations were paid to a councillor who supported giving the lease to Tuggs Inc. The article did not state that the plaintiff made those donations. It is a reasonable inference from the article that the plaintiff made the donations through other people. Similarly, the defendant did not state in his letter that the plaintiff made the election finance donations to which he referred. He inferred that. Consequently, the imputation in the defendant’s letter mirrors the imputation in the article to which he referred. The essence of the statements about election finance donations is, in each case, the connection between Mr. Foulidis as the owner of Tuggs Inc., the donations to election finances and the resulting benefits conferred by the City government in respect of the Tuggs Inc. lease. The details omitted in the letter, being the agents used by the plaintiff, the total amounts donated and the recipient are peripheral, in my opinion. I am satisfied that the Baker letter contains an accurate and adequate summary of this essence because it was sufficient to allow the intended readers thereof to form their own conclusions about the merits of the defendant’s comments.

[36] In my opinion, the Baker letter asserted the following facts and comments:

Facts:

1. I am a Beach resident fighting the lease agreement between the City of Toronto and Tuggs Inc.

2. William Malamas has sent a letter to persons fighting Tuggs Inc.’s expansion plans.

3. That letter alleges that George Foulidis, Tuggs Inc.’s owner, has influenced Toronto City Hall for favours in respect of the aforesaid lease.

4. In addition, a recent Toronto Life magazine article raises questions about election finance donations.

5. These are allegations.

Comments:

1. I think these are new revelations about the deal between the City of Toronto and Tuggs Inc.:

a. The Malamas letter gives new meaning to what happened between the City of Toronto and Tuggs Inc., and

b. The Toronto Life article raises further related questions.

2. So, I think you should:

a. Call in the Toronto Police to investigate,

b. Do a full audit, and

c. Do a full investigation.

[37] Since the assertion that the plaintiff has influenced Toronto City Hall for favours is a statement of fact, not comment, the defence of fair comment cannot protect it. Similarly, the other assertions of fact are not protected by this defence.

[38] Of the comments in the Baker Letter, the opinion that the Toronto Police should be called in to investigate was in respect of a matter of long standing public controversy and concern, namely the dealings between the City of Toronto and Tuggs Inc. Quite apart from that, the opinion that there were grounds to suspect that that relationship involved criminal conduct in governmental processes raised matters of public interest. The comment was based on fact (the Malamas letter). The Malamas letter was proven to exist. The facts were adequately summarized. The opinion was recognizable as comment. The nature of the underlying fact as summarized was such that any person could honestly express the opinion that police should investigate the issue. This comment is properly regarded as a fair comment. I will consider the issue of express malice subsequently.

[39] The comment that there should be a full audit and a full investigation in respect of election finance donations inferentially related to the Tuggs deal with the City was also in respect of a matter of long standing public controversy and concern. Quite apart from that, the assertion of election finance issues connected to favours in respect of Tuggs Inc.’s contract with the City which should be fully audited and fully investigated also raises issues of public interest and concern. The comments are based on assertions of fact, namely the Toronto Life article. The assertions of fact are proven because the Toronto Life article was proven to exist. The comments are recognizable as comments. Based on the facts, I am satisfied that any person could honestly say what the defendant said as comment. The defence of fair comment therefore applies to these comments. I will address express malice later.

[40] The only remaining factual assertion is that the defendant was, at the time, a Beach resident fighting the lease agreement between the City and Tuggs Inc. This is proven by the defendant’s own testimony.

[41] Since the factual premises contained in the Baker letter are proven to be fact, s. 23 of the Libel and Slander Act does not need to be considered in this case.

QUALIFIED PRIViLEGE

[42] A qualified privilege may be found when the occasion upon which a defamatory statement is made justifies it. In other words, qualified privilege applies to the occasion upon which impugned words are spoken and not to the words themselves: see Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 (S.C.C.) at para. 143.

[43] Qualified privilege was defined as follows by Lord Atkinson in Adam v. Ward, [1917] A.C. 309 (H.L.) at p. 334:

“… a privileged occasion is … an occasion where the person who makes a communication has an interest or duty, legal, social or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential.”

This definition was adopted by the Supreme Court of Canada in McLoughlin v. Kutasy 1979 CanLII 39 (SCC), [1979] 2 S.C.R. 311 at p. 321 and applied by the Court in Hill (supra) at para. 143 and in Botiuk (supra) at para. 78.

[44] If defamatory words are spoken on an occasion of qualified privilege, the privilege will be lost if the words exceed the limits of the duty or interest which give rise to the privilege: Hill (supra) at paras. 146-147.

[45] The interest or duty of the maker of a communication, which is the first part of the test, cannot exist in some general, free-floating form. The interest or duty of the maker must be to communicate to the person or persons to whom the communication is made. To find such an interest or duty is thus to find also what the proper scope of it is, namely the person or persons to whom the maker of the communication owed the duty to communicate the information in issue. The same is also true in respect of the second part of the test. The person or persons to whom the communication is made must have a corresponding interest or duty to receive the information communicated. Again, to find such an interest or duty is to find also what the proper scope of it is, namely the person or persons who had an interest in receiving, or a duty to receive the information communicated.

[46] As well, if defamatory words are spoken on an occasion of qualified privilege, the privilege will be lost if the speaker does not have an honest belief that what he says is true: see Jones v. Bennett 1968 CanLII 126 (SCC), [1969] S.C.R. 277 per Cartwright J. (as he then was) at p. 284, RTC Engineering Consultants Ltd. v. Ontario, (2002) 2002 CanLII 14179 (ON CA), 156 O.A.C. 96 (C.A.) per Laskin J.A. at p. 101.

[47] Lastly, if defamatory words are spoken on an occasion of qualified privilege, the privilege will be lost if the words are spoken with actual malice: see RTC Engineering (supra).

[48] The defendant bears the burden of proving that he spoke on an occasion of qualified privilege. That requires him to prove, on the balance of probability:

1. To whom he communicated what he said,

2. that he had an interest in communicating, or a duty to communicate what he said to these persons, and

3. that those persons had an interest in receiving, or a duty to receive his communication.

[49] In Grant v. Torstar Corp. 2009 SCC 61, [2009] 3 S.C.R. 640 McLachlin C.J. for the Court analysed the then current state of defamation law in order to determine whether additional protection was necessary for “public communicators” in reporting matters of fact. In addressing qualified privilege at para. 34, McLachlin C.J. commented on “the conservative stance of early decisions, which struck a balance that preferred reputation over freedom of expression…”.

[50] It has been recognized for many years in Canada that freedom of expression is the “very life blood of our freedom and free institutions”. See Price v. Chicoutimi Pulp Company 1915 CanLII 66 (SCC), [1915] 51 S.C.R. 179 at p. 194. While, this case is not governed directly by the Canadian Charter of Rights and Freedoms, the evolution of the common law should be informed and guided by Charter values. The Charter, section 2(b) states:

Everyone has the following fundamental freedoms:

(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

In R. v. Keegstra 1990 CanLII 24 (SCC), [1990] 3 S.C.R. 697, Dickson C.J. spoke about s. 2(b) in the context of the political process as follows at pp. 763-4:

“The connection between freedom of expression and the political process is perhaps the lynchpin of the s. 2(b) guarantee, and the nature of this connection is largely derived from the Canadian commitment to democracy. Freedom of expression is a crucial aspect of the democratic commitment, not merely because it permits the best policies to be chosen from among a wide array of proffered options, but additionally because it helps to ensure that participation in the political process is open to all persons.

[51] The circumstances surrounding the delivery of the Baker letter define the occasion. I find the circumstances to be as follows, based on the defendant’s evidence which I find to be credible and reliable in large measure. When he filed his nomination papers to run for councillor in January, 2010, the defendant was vaguely aware of Tuggs Inc. and of some public controversy over donations. He thought the contract between Tuggs Inc. and the City had been signed in 2007. By April 2010, he was aware that issues involving the Tuggs Inc. contract with the City were still pending. He began to investigate. In the defendant’s mind, the Tuggs deal became an issue in his election campaign in about April 2010, I find.

[52] Part of the defendant’s motivation in writing the letter in issue related to his political campaign. His campaign literature included the slogan “Let’s take back the Beach!” followed by the statement “Bussin gave it away for 20 years”. Elsewhere, this literature referred to “the 20 year sole-sourced monopoly on our Beach”. Given the public controversy surrounding Tuggs Inc. and its sole source contract with the City in the Ward in which the defendant was running, this was a reference to the Tuggs Inc. contract with the City. The Baker letter was in part an attempt by the defendant to involve himself in this issue in a manner that would make him appear worthy of public support in his quest to become the Ward’s councillor.

[53] As the defendant stated in his letter in issue, he was also “fighting the lease agreement” between the City and Tuggs Inc. There were two major reasons for this. First, Mr. Baker believed that the Tuggs Inc. lease seriously compromised the interests of Mr. John Morrison of “Not So Pro” Sports who represented numerous volleyball players who would be displaced by the Tuggs Inc. monopoly. Second, the defendant believed that it was very serious that City staff had “hung on to” the Tuggs Inc. contract from the time of City Council’s initial approval in 2007 until 2010, without disclosing that the deal had not been signed in 2007.

[54] The defendant knew that City Council was scheduled to consider approval of the Tuggs contract on May 12, 2010. Then, on May 11, 2010, he read the Toronto Life article and became aware of a councillor’s comment, quoted therein, that the Tuggs deal “stinks to high heaven”.

[55] The event which was the primary motivation for the defendant writing and delivering his letter to the City was the Malamas letter, which came to him by e-mail at approximately 7:00 p.m. on May 11, 2010. While the defendant had no idea who Mr. Malamas was, he read and re-read his letter and found the contents to be alarming and shocking. He also described the contents as “unbelievable”. From the context, I am satisfied that he used this word in the modern sense which means “beyond the imagination” or “astonishing”. He understood that Mr. Malamas was making allegations but thought that he, Malamas, was “party to the knowledge”, meaning, I infer, that he understood that Mr. Malamas had heard the plaintiff make the admissions mentioned in the Malamas letter.

[56] Even though Mr. Malamas put his telephone number and address on his letter, the defendant did not attempt to talk to him about his allegations.

[57] Time was relatively short because City Council would consider the Tuggs Inc. contract the next day. The defendant’s conclusion was that Council couldn’t decide the issue of the Tuggs lease without first investigating these allegations or Council would be making a decision without the full facts. The defendant wanted to ensure that Council as a whole would be aware of these allegations, and he wanted the truth or lack of truth in them to be investigated. The defendant didn’t call the police himself because he concluded that they were not going to investigate on the basis on him receiving the Malamas letter.

[58] Having written in his letter to Council that he was fighting the Tuggs. Inc. lease, the defendant was cross-examined on the assertion that his plan was to stop City Council from voting and thereby “take back the Beach” in order to advance his election prospects. Mr. Baker confirmed that he was fighting the Tuggs lease because he didn’t like the process surrounding it and because he was trying to protect John Morrison’s interests. However, he was adamant that he was not attempting to stop the vote and was not fighting the lease per se.

[59] Having considered Mr. Baker’s testimony in the context of the evidence as a whole, including his demeanour as a witness, my conclusions are as follows. Having decided to seek election as a Ward 32 councillor, the defendant increasingly became aware of a significant Ward 32 issue: Tuggs Inc.’s lease with the City. It became an election issue for him because clearly it was an issue which a number of Ward 32 voters wanted to address and potentially rectify through the upcoming municipal election. The defendant sought to demonstrate that he was worthy of the support of Ward 32 electors. He sided with John Morrison, who represented numerous volleyball players in the Beaches who would be displaced by Tuggs Inc.’s monopoly because he wanted to earn their support.

[60] The defendant knew that City Council would debate approval of the Tuggs Inc. lease on May 12, 2010. When he received the Malamas letter on May 11, 2010 at about 7 p.m., its content shocked the defendant and propelled him to write and deliver the letter in issue. It is correct that he made no effort to verify the contents of the Malamas letter before delivering his own letter to the City. In my opinion, anything which the defendant could have done in the short time available would have been superficial and meaningless, in terms of getting to the bottom of Mr. Malamas’ serious allegations. If he had telephoned Mr. Malamas to make inquiries, he would be in no different position. He would still be in possession of assertions made by Mr. Malamas. It was suggested that if the defendant had researched Mr. Malamas through his brother’s law office, where he worked in a non-legal capacity, he could have discovered on websites such as that Mr. Malamas had sued the plaintiff, and thereby become aware that Mr. Malamas had an animus against the plaintiff. However, the plaintiff has failed to prove that any legal website including contained any information about any such law suit, at the relevant time.

[61] While it would have been preferable if the defendant had made some effort to verify Mr. Malamas’ serious allegations, I do not regard the absence of it as evidence that the defendant was not acting responsibly and in the interests of Ward 32 electors in writing and delivering his letter in issue. That is because, on the evidence, I can see nothing which the defendant could have done to get to the bottom of these serious allegations in the time before the Tuggs lease would come before City Council for a vote. That is also because the defendant recognized the importance of verifying the accuracy of Mr. Malamas’ serious allegations. That is why the thrust of his letter to the City was to call for a police investigation and an audit of what he knew to be mere allegations.

[62] In short, I am satisfied that Mr. Baker wanted to be a councillor, wanted to be and to be seen before the election as a worthy voice on behalf of Ward 32 at City Council, and wanted to ensure that serious allegations about the integrity of City processes were known to City Council when it still had the opportunity to do something about those concerns, prior to its final consideration of Tuggs Inc.’s lease.

[63] It was suggested in argument that Mr. Baker stood to gain personally from his letter because, if he stopped Council from voting on the Tuggs Inc. lease, that would help him to argue that he had taken back the Beach and thus to build his election prospects. This potential personal benefit was said to take the occasion upon which he wrote and delivered his letter beyond any possible qualified privilege.

[64] While I am satisfied that the defendant was acting in the public interest and for the benefit of Ward 32 electors, there probably would have been some personal advantage if Council were to defer final consideration of the Tuggs Inc. lease while inquiries were made. However, I would describe any such benefit as entirely collateral. I do not accept as valid the argument that such collateral personal advantage means that the defendant was acting beyond the scope of any duty or interest which might give rise to qualified privilege. That is because it is difficult to conceive of anyone who stands for elected office in Canada who, if popular support is won by his or her actions during the campaign, would not derive at least some personal satisfaction from that. In my view, some personal satisfaction and some personal benefit are likely the inevitable by product of either running for, or achieving elected office. In any event, the argument that gaining votes is a personal gain, divorced from the electoral process, runs counter to that process. Elections are won by attracting the most voters. Seeking voter attention as a candidate is the first step in winning such popular support. In my view, the Baker letter was an appropriate part of the defendant’s effort to be, and to be seen as worthy of the support of Ward 32 electors. It was also an appropriate attempt to ensure that City Council had timely notification of serious allegations which touched on the integrity of City processes.

[65] The plaintiff also argued that qualified privilege cannot apply because the defendant delivered his letter to the wrong parties. That is because a call for a police investigation should have been sent to the police. I do not think this is correct. The defendant testified credibly that he delivered his letter to Council because any request from them for a police investigation was more likely to be successful. In any event, he also called for an audit and a full investigation in addition to a police investigation, both of which Council was capable of having conducted.

[66] In any event, the case of Jackson v. Allen (1923) 24 O.W.N. 177 (C.A.) is authority for the proposition that where there has been loose management of the affairs of a municipality, including a lack of proper accounting and accountability, a person actuated by a desire to serve the public interests has a right to make complaint to the Council and to demand an investigation. In Pherrill v. Sewell (1908), 12 O.W.R. 63 (C.A.), ratepayers petitioned Council to take action in respect of what they considered to be a house of ill repute. Boyd, C. stated for the Court at pp. 65-66 that the Council represents the whole community, the petitioners were ratepayers, and both have a common interest in the maintenance of public morality. He outlined steps which Council could have taken, including requesting police involvement “which would be more effective if emanating from the Council than from the initiation of any individual.” Speaking of the ratepayers he also stated “[t]hey may have honestly believed that the Council would take the matter up, and that the Council had sufficient interest therein to justify at least an application for that purpose. This condition of affairs brings the occasion well within the large meaning of privilege given by the cases.” Other statements in the judgment establish that the privilege in issue was qualified privilege. In Corbett v. Jackson (1844), 1 U.C.Q.B. 128 (C.A.), a complaint was made to the municipal Council in respect of the electoral misconduct of a sheriff, who interfered with voting. The court held that the municipal Council was a proper place to make such a complaint.

[67] I conclude that the defendant had a legitimate interest in directing his letter to City Council for the reasons he did, calling for investigations into serious allegations of unknown and, for him, unascertainable reliability which were reasonably seen as putting in question the integrity of the governmental processes for which City Council was responsible. The members of City Council who received the Baker letter had a corresponding interest and, given the serious nature of the allegations which impugned the integrity of the processes for which Council was responsible, a duty to receive it. Leaving aside the issue of express malice, I conclude that the Baker letter was delivered on an occasion of qualified privilege.

Responsible Communication on a Matter of Public Interest

[68] This defence was developed in Grant v. Torstar Corp. 2009 SCC 61, [2009] 3 S.C.R. 640. At paragraph 85 of the reasons, McLachlin C.J. for the Court spoke of this defence as one “that would allow publishers to escape liability if they can establish that they acted responsibly in attempting to verify the information on a matter of public interest.”

[69] The defence was developed in a media case. In considering whether to change the law, McLachlin C.J. referred at paragraph 38 to “broadening the defences available to public communicators, such as the press, in reporting matters of fact”. After concluding that this new defence should exist, McLachlin C.J. considered at paragraph 96 to whom the defence should be available. The court observed that “the traditional media are rapidly being complemented by new ways of communicating on matters of public interest, many of them online, which do not involve journalists. These new disseminators of news and information should, absent good reason for exclusion, be subject to the same laws as established media outlets.” McLachlin C.J. then stated “I agree with Lord Hoffmann that the new defence is “available to anyone who publishes material of public interest in any medium””, citing Jameel v. Wall Street Journal Europe SPRL, [2006] UKHL 44 at para. 54.

[70] In my view, there are several related reasons why this defence is not available to the defendant. This case does not involve either traditional media or new media dissemination of information. It involves communication which is almost antiquated in nature: a letter, delivered by hand. The letter was not published generally, as is the case with media publication, but to a select and focused few. Further, in a case of widespread media publication, the defence of qualified privilege is often unavailable. That was a reason given in Grant v. Torstar (supra) for the development of this new defence. In this case, the defence of qualified privilege is available to the defendant. In my view, it adds unnecessary complexity to this area of the law to hold that this important new defence is available to a non-media defendant to whom the defence of qualified privilege has been found to apply.

Express Malice

[71] The defendant has proven that the words in issue were published on an occasion of qualified privilege and in addition, that some of those words were fair comment. A finding that the defence of qualified privilege applies leads to a presumption that the defendant acted in good faith, which rebuts the malice presumed from the publication of the libellous words.

[72] Since the defendant has proven the applicability of the defence of qualified privilege, the plaintiff’s action will fail unless the plaintiff proves, on the balance of probability that the defendant acted with malice defined as follows. That finding would also defeat the partial fair comment defence.

[73] The type of malice which, if proven, overcomes both the defences of qualified privilege and fair comment is referred to as express malice, malice in fact or actual malice, in order to distinguish it from the malice which is presumed from the publication of libellous words. See Davies & Davies Ltd. v. Kott (1979) 1979 CanLII 42 (SCC), 2 S.C.R. 686 (S.C.C.).

[74] What the plaintiff must prove on the balance of probability is that the defendant’s dominant motive for publishing the libel was express malice. See Horrocks v. Lowe [1975] A.C. 135 (H.L.) at p. 149, cited with approval in Hill v. Church of Scientology of Toronto 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 (S.C.C.) at para. 144. The Court also described express malice in Hill (supra), at paragraph 145. It is commonly understood as spite or ill-will. It includes any indirect motive or ulterior purpose which, for example in the case of qualified privilege, conflicts with the sense of duty or the mutual interest which gives rise to the privilege. It is also present when it is proven that the defendant spoke dishonestly, or in knowing or reckless disregard for the truth. In WIC Radio (supra), a fair comment case, the Court referred at paragraph 1 to express malice as actuating the defendant “for an indirect or improper motive not connected with the purpose for which the defence exists”, citing Sun Life Assurance Co. of Canada v. Dalrymple 1965 CanLII 9 (SCC), [1965] S.C.R. 302 (S.C.C.) at p. 309.

[75] In my opinion, the plaintiff has failed to prove express malice. I won’t repeat my findings about why the plaintiff did what he did and how that was directed to serving the interests of the public, both in advancing the interests of Ward 32 electors and in urging City Council to cause or to make inquiries into the Malamas and Toronto Life allegations. These were his dominant motives, in my opinion. I am satisfied that any incidental personal gain as a candidate or otherwise which might have been derived by the defendant from his letter was not in conflict with the duty/interest equation which is the basis for my finding that the defendant wrote his letter on an occasion of qualified privilege. Similarly, I am satisfied that any incidental personal gain as a candidate or otherwise was sufficiently connected to the purpose for which the defence of fair comment exists, namely to ensure robust and candid commentary on matters of public concern, that it cannot be seen as establishing express malice.

[76] The defendant also did not knowingly or recklessly disregard the truth of what he stated in his letter. He was careful to refer to the content of the Malamas letter and to the Toronto Life election finance assertions as allegations. He did not hold them out as truth to be accepted. To the contrary, he called for investigation of them. He was neutral about their factuality and concerned to have it subjected to inquiry. I have already commented on the short period of time he had before City Council would vote, and how limited his opportunities were for productive inquiry into the facts.

Conclusion

[77] The words in issue as published by the defendant were defamatory of the plaintiff but were published on an occasion of qualified privilege. The defence of fair comment also applies to some of his words. The plaintiff has failed to prove that the defendant’s actions were motivated by express malice. The defendant was therefore legally entitled to publish the letter in issue to City councillors and the Mayor. The plaintiff’s action will be dismissed. I will make a contingent assessment of damages.

Damages

[78] In respect of general damages, I adopt my statements of the relevant legal principles in Foulidis v. Ford, 2012 ONSC 7189, which was tried together with this action. I also adopt my findings in respect of the plaintiff’s credibility, and my findings of fact about him. I assess general damages at $22,500.

[79] The plaintiff has failed to prove an entitlement to aggravated or punitive damages.

Order

[80] The action is dismissed.

[81] If the parties are unable to resolve costs, the defendant’s written costs submissions limited to seven pages in Factum format plus all necessary docket and disbursement information shall be delivered within 30 days of the release of these reasons. The plaintiff’s written costs submissions, similarly limited, shall be delivered within 60 days of the release of these reasons.

Mr. Justice John Macdonald

Released: December 27, 2012

COURT FILE NO.: CV-10-0406396

DATE: 20121227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

George Foulidis

Plaintiff

– and –

Bruce Baker

Defendant

REASONS FOR JUDGMENT

J. MACDONALD J.

Released: December 27, 2012

[^1]: Botiuk v. Toronto Free Press Publications Ltd. 1995 CanLII 60 (SCC), [1995] 3 S.C.R. 3 (S.C.C.) at para. 62.